House of Representatives
11 June 1970

27th Parliament · 2nd Session

Mr SPEAKER (Hon. Sir William Aston) took the chair at -10 a.m., and; read .prayers.

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Mr KILLEN .presented, from certain citizens of the Commonwealth. (a. petition showing that the Commonwealth Parliament has acted . to remove some inadequacies in the Australian education system; that a major inadequacy. at present in Australian education is the lack of equal education opportunity for all; that 200,000 students from universities,- colleges of advanced education and other tertiary institutions, and .their parents, suffer severe penalty from inadequacies in the Income Tax Assessment Act 1936-1968; and that Australia cannot afford to hinder the education of ‘these 200,000 ‘Australians:

The petitioners pray that the House of Representatives will make’ legal provision for the allowance of personal education expenses as a deduction from income for tax purposes, the removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students, an increase in the amount of deduction allowable for tertiary education expenses and the exemption of non-bonded scholarships for part time - students from income tax.

Petition received and read.

Interest Rates

Mr BENNETT presented from certain citizens of Western Australia a petition showing that the recent increase in the interest rate on Government bonds has caused hardship to the thousands of home buyers throughout the State due to the subsequent increase in interest rates on mortgage contracts by home lending institutions.

The petitioners pray that the House of Representatives will give earnest consideration this most vital matter.

Petition received and read.

Social Services

Mr LUCHETTI presented from certain citizens of New South Wales a petition showing that due to higher living costs, persons on social service pensions are finding it extremely difficult to live in even the most frugal way. The petitioners therefore call, upon the Commonwealth Government to increase the base pension rate to 30% of average weekly male earnings, plus supplementary assistance in accordance with ACTU policy, and by so doing give a reasonably moderate pension. The average weekly earnings for adult male unit wage and salary earner means the figures issued from time to time by the Commonwealth Statistician and published quarterly.

The petitioners pray that the House of Representatives will take immediate steps to bring about the wishes expressed in the petition so that citizens receiving social service pensions’ may live their lives in dignity.

Petition received.

Social Services


-presented from certain citizens of -New South Wales a petition showing that due to higher living costs persons on social service pensions are finding it. extremely difficult to live in even the most frugal way. The petitioners therefore call upon the Commonwealth Government to increase the base pension rate to 30% of average weekly male earnings, plus supplementary assistance in accordance with ACTU policy and by so doing give a reasonably moderate pension. The average weekly earnings for adult male unit wage and salary earner means the figures issued from time to time by the Commonwealth Statistician and published quarterly.

The petitioners pray that the House of Representatives will take immediate steps to bring about the wishes expressed in the petition so that citizens receiving social service pensions may live their lives in dignity.

Petition received.


Mr HAMER presented from certain residents of Victoria a petition showing that our national symbol, the red kangaroo, is, through shooting for commerce, being reduced to a numerical level where, if the shooting is not stopped, the animal will become extinct. Reports from scientists, conservationists, tourists, graziers and shooters confirm that State Governments are unable effectively to enforce legislation to control shooting and that kangaroos are already extinct in many areas where they once were prolific.

Science has established that kangaroos seldom come into direct competition for forage with sheep; there is, therefore, no reason why this unwarranted killing, which is branding us internationally as barbarians, should be allowed to continue. The residents of this nation want the kangaroo, which can be found nowhere else, In the world, to be part of the Australian landscape. They believe that tourists, who will play an increasing part in the national balance of payments, want this too.

The petitioners pray that the House of Representatives will ban the export of products made from kangaroos, and quickly pass the legislation necessary to make the kangaroo a protected animal throughout Australia, the culling of herds for the protection of the few property owners genuinely threatened by excessive number, or for. the welfare of kangaroos themselves, to be carried out by or under direct supervision of Government officers.

Petition received and read.

Social Services

Mr JACOBI presented from certain electors of the Division of Hawker a petition showing that, due to higher living costs, persons on social service pensions are finding it extremely difficult to live in even the most frugal way. The petitioners therefore call upon the Commonwealth Government to increase the base pension rate to 30% of average male earnings, plus supplementary assistance in accordance with ACTU policy and by so doing give a reasonably moderate pension. The average weekly earnings for adult male unit wage and salary earner means the figures issued from time to time by the Commonwealth Statistician and published quarterly.

The petitioners pray that the House of Representatives will take immediate steps to bring about the wishes expressed in the petition so that citizens receiving social service pensions may live their lives in dignity.

Petition received and read.


Mr TURNER presented from certain citizens of the Commonwealth a petition showing that the Commonwealth Parliament has acted to remove some inadequacies in the Australian education system; that a major inadequacy at present in Australian education is the lack of equal education opportunity for all; that 200,000 students from universities, colleges of advanced education and other tertiary institutions, and their parents, suffer severe penalty from inadequacies in the Income Tax Assessment Act 1936-1968; and that Australia cannot afford to hinder the education of these 200,000 Australians.

The petitioners pray that the House . of Representatibes will make legal provision for the allowance of personal education expenses as a deduction from income for tax purposes, the removal of the present age limit in respect of the deduction for education, expenses and the maintenance allowance for students, an increase in the amount of deduction allowable for teritary education expenses, and the exemption of non-bonded scholarships for part time students from income tax.

Petition received.

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– Honourable members will be pleased to know that we have present in the gallery this morning a delegation of 5 visitors of the Yugoslav Federal Assembly led by Mr Milos Minic, VicePresident of the Assembly. I am sure thi House would want me to extend to these honourable gentlemen a very warm welcome.

Honourable members. - Hear, hear!

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-I ask the Prime Minister a question, ls it a fact that the Liberal Party’s Federal Council has attacked the Federal Government over high interest rates imposed on home owners? ls it also a fact that as a remedy the Council proposes that interest on first mortgage housing loans up to SI 2,000 be allowed as a tax deduction? Is he not aware that so far as tax deduction benefits are concerned, the bigger the income the bigger the benefit? Has there been any estimate of the cost of the proposal? If not will he give an undertaking that there will be such an investigation?

Prime Minister · HIGGINS, VICTORIA · LP

– Since the question seems to be based entirely on Press reports of a private meeting it appears to me that it is not one which is properly within my province to answer.,

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– I ask the Treasurer whether he has seen reports, which have been given very wide .coverage, suggesting that the Government is’ seeking to introduce legislation to double the pensions of members of Parliament. Does he agree that such reports are a gross distortion of the true position? Is it not a fact that what the Government is seeking to do is to place members of Parliament on an equal basis in regard to superannuation- -with every, other section of the community, particularly retired public servants and retired members of the Defence forces? Is it not a fact that members of Parliament constitute the only section of the community who have their superannuation rates halved if they accept an office of profit under the Crown? Further, is it not a fact that retired’ members of Parliament are paid not pensions but superannuation for which they contribute of their salary?


– 1 am not quite certain about “ which reports the honourable member has in mind. He is fight in pointing put that any fund to which employees contribute as much as 11 1/2% of their salaries is superannuation. For the most part such superannuation is bought at considerable cost to the individual. Regarding the recent legislation, the House will remember that it removed the disability facing retired Commonwealth public servants and, more particularly, retired members of the Defence forces so that they could accept Crown employment without reduction of their superannuation benefits. The superannuation had been earned by payments over the years and had nothing to do with their subsequent employment. The superannuation was a right they had previously gained. The object of the recent draft Bill which I brought before the House is to apply to former members of Parliament the same principle as that which Commonwealth public servants and retired members of the defence forces have enjoyed for some years.

For some time past representations have been ‘ made by honourable members from both sides of the House to make the position of members of Parliament similar to that of retired public servants and exservicemen receiving payments from the Defence Forces Retirement Benefits Fund. The Bill put before the House represents proposals worked out and agreed to by the Parliamentary Retirement Trust on which all honourable members are represented. We have since learned from the Leader of the Opposition that this provision does not enjoy the support of a good many honourable members on the other side of the’ House. Because of this the legislation will not currently be proceeded with.

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– I direct a question to the Minister representing the Minister for Civil Aviation. It he aware of protests being lodged by licensed aircraft maintenance engineers at proposals of the Department of Civil Aviation and employers to alter the system of licensing aircraft mechanical engineers? Is he also aware that engineers claim that the proposal to have engineers dependent on employers for renewal of licences for certain types of aircraft could lead to a loss of their independence and a clearing of aircraft when they doubt the safety of the aircraft if the aircraft engineers feel that their jobs could be at stake? Will he, in the interests of public safety, ensure that all aircraft maintenance engineering qualifications remain under the total control of the Department of Civil Aviation?

Minister for National Development · DARLING DOWNS, QUEENSLAND · LP

– I feel that I can give an assurance to the House regarding safety operations in any field of civil aviation. The broad matter raised by the honourable member is not within my knowledge but I will see that the question is referred to my colleague in another place and a suitable reply obtained.

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Mr Kevin Cairns:

– My question is directed to the Attorney-General. I ask”: In which treaties or conventions to which Australia has given assent in the past has it been a fundamental and proximate requirement that relations of sovereignty between the Commonwealth and the States be altered? In which treaties or conventions currently being negotiated are such requirements proposed to be imposed upon this country? If there are none can the AttorneyGeneral assure the people of Australia that he will seek to support the traditional attitude that matters of the distribution of power, authority and sovereignty between the Commonwealth and the States will remain a domestic matter?

Attorney-General · BEROWRA, NEW SOUTH WALES · LP

– 1 think the honourable member has asked me 4 questions, of which 2 are of an extremely detailed nature and 1 ask him to treat them as being on notice. In view of the fact that the other 2 questions, the third and the fourth, would appear to depend for a proper answer upon the answers to the first and second questions. I will deal with them when I have answered the questions which I will treat as being on notice.

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– I ask the Minister for Defence whether it is his intention to make a statement on the acquisition of the Phantom aircraft before the Parliament rises.. If so, will he table in the Parliament details of (he contractual arrangements, as was done in September 1968 for the FI 1 1 aircraft?

Mr Malcolm Fraser:

– If I may seek a point of clarification from the honourable member, did he ask me to table in the Parliament details of the contractual arrangements-

Mr Barnard:

– The details of the contractual arrangements for the purchase of the Phantom aircraft as was done in the case of the FI 1 1 aircraft in 1968.

Mr Malcolm Fraser:

– I thought the honourable’ member was asking ‘me about documents which were in fact tabled in 1968. There could be some misunderstanding by the honourable member because what the Commonwealth has been investigating and what the special RAAF evaluation team under the leadership of the Deputy Chief of the Air Staff, Air ViceMarshal Read, went to the United States of America to examine and report on was the lease offer made by the United States Government to the Australian Government. Of course this had inherent in it the long term possibility, if later events made it necessary or desirable, of the conversion of that lease offer to a purchase. The honourable member asked me would i table the documents relating to the acquisition of the Phantom aircraft. He is jumping ahead too fast, lt has not been long since Air Vice-Marshal Read has been back in Australia. My Department and the Department of Air have been examining the report very closely. In fact I have only very recently been able to circulate a submission to Cabinet concerning these matters. Whether a statement can be made during this sitting of Parliament will depend on what flows from that, as the honourable member would well know. If it is possible to make a statement to the House on this matter I will, but with the limited time remaining for this sitting it might be unlikely.

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Mr Lionel Bowen:

– My question is directed to the Prime Minister. Does the New South Wales Government receive a tax reimbursement of a mere SHI a head from the $550 a head collected by the Commonwealth? Has this percentage of reimbursement meant a very severe restriction of State facilities, including education and health? Does the Government intend to increase the allocation this year? If so, will that mean an increase in the present taxation or the imposition of new taxes? What objection has the Government to sharing with the States the soft taxes such as customs duty, excise and company tax and at the same time giving to the States the right to levy their own income taxes subject to the Commonwealth priority of levy and collection in that field?


– I think that in regard to the first part of the question the best way I could answer it would be to send the honourable member the transcripts of various Premiers Conferences al which these matters have been raised. In reply to the second part of the question, which asks what is likely to happen in the future, I think that the honourable member will have to wait until we have another Premiers Conference.

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– Can the Minister for National Development report to the House the progress of the investigation into the proposed Pikes Creek Dam which has been supported jointly by the New South Wales and Queensland governments and which is to be constructed with Commonwealth financial assistance under the national water resources programme?


– The honourable member for Gwydir and the honourable member, for Maranoa have raised this matter on a number of occasions not only in the House but also in discussion. They also introduced a deputation to me a couple of months ago. At that time I indicated to the deputation that I expected that in about two months time we would have completed our studies and I would be in a position to make a submission to the Government for consideration. We undertook very substantial survey work on the site.’ That has been completed. My understanding, without checking on the position; is that the evaluation of the survey work is now being completed. I would expect in a very short time to receive a submission from the Department in relation to this matter. After consideration I- will prepare ‘the matter as quickly as possible for submission to the Government. I can assure the House that everything possible is being done to expedite this work which I know is important to the. two governments concerned.

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– My question is directed to the Prime Minister. In honour of the visit to Australia next September of His Holiness the Pope will the Prime Minister use his good offices to persuade the State governments to remove all restrictions on the well known and popular game of housie-housie?

Mr Gorton:

– I do hot think that that comes within my administration.


-Order! It is not a matter that comes within the Prime Minister’s ambit.

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– Has the Treasurer seen a report from the President of the National Building Association, Mr Hannaford, that housing commencements have been reduced by 25% in all States and by 45% in Western Australia due to the increase in bond rates which is reflected in other interest rates and consequently in the building industry? Incidentally, the latest report shows a 75 per cent reduction in commencements. Has this also caused hardship to thousands of home buyers throughout the State due to increased interest rates on mortgage contracts? ls he aware that his Government has done more damage to the building industry in Western Australia than he alleges the industrial trouble in the “building industry in New South Wales has caused? Will he give urgent consideration to this vital matter as requested in the many petitions presented to this Parliament on this subject?


– I am not sure that 1 have seen this statement or a copy of it. But I have seen other statements by the same gentleman. I am aware that house building has fallen rather further and faster in Western Australia than in other States. It is true also that the building industry in Western Australia has been under such pressure and has been so active for so long that it has produced probably more houses per head relative to those seeking houses than any other State has produced. So, quite apart from any other factors, we would expect just for sheer physical reasons that some decline in demand and in construction would have occurred in Western Australia. But this reduction would not necessarily be connected with interest rates. This requirement in Western Australia, I would say, would be more likely due to the lesser funds which the permanent building societies have been able to collect in deposits-

Mr Webb:

– Caused by the high interest rates.


– The honourable member regards cause as rather simpler than the many factors that are at work in Western Australia. But there are factors in Western Australia which are conducive to some falloff, quite apart from any monetary factors which are now operating.

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– Has the Ministerin.Charge of Aboriginal Affairs seen a statement made by Mrs Kath Walker, as reported in the Brisbane ‘Courier-Mail’ of Tuesday this week, in which she claimed thai the Minister and the Minister for Conservation, Marine and Aboriginal Affairs in Queensland had disregarded the decisions made by the Townsville conference on Aboriginal affairs at its recent meeting? I was under the impression that this conference was an outstanding success and; that the decisions reached were of value. I ask: Did the Minister disregard these decisions and. if so, I would certainly like to know why?

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

– I believe that the honourable member is correct in saying that the conference, which was held in his electorate, . was in point of fact a success. But 1 do point out that the conference was called as the result of activities of the Office of Aboriginal Affairs and was paid for by the Office of Aboriginal Affairs. The conference has produced a report which is being studied by me at present. It will not be ignored.

The meeting was attended by some 60 Aboriginal delegates who came from church missions and government communities. They were chosen by the local Aboriginal councils and the delegates from country towns were elected by Aboriginal members of their communities to act as their representatives. The proceedings were entirely under Aboriginal control. But we did have observers present who have brought back to me an account of the conference, which I have here, as well as an account of the resolutions passed at that conference.

It is unfortunately true that no Aboriginal can claim to speak for all Aboriginals. In Queensland, for example, a regrettable difference of opinion has arisen between various Aboriginal organisations. It is not true that from all Aboriginals we get the same kinds of desires and the same kind of advice. But I can assure the House and the Aboriginals of Queensland-

Mr Bryant:

– Why not? You do not get the same kinds of desires and the same kind of advice from all sections of the Liberal Party at all.


– I beg your pardon?

Mr Les Johnson:

– Why should the)’ not have the same desires and ideas or whatever it is?


– I did not hear the interjection by the-


-Order! The question has been asked. AH interjections are out of order.


– I agree with you entirely, Mr Speaker. Although it is regrettable that the Aboriginals have different desires in this matter and in other matters, the Government will take full account of their views, because what we are trying to do is to act in the interests of the Aboriginals. That is the over-riding principle of the Office of Aboriginal Affairs and of this Government in its policy.

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– I address a question to the Prime Minister. In 1960 the Menzies Government considered but rejected my predecessor’s suggestion that the Parliament appoint a select committee to inquire into and report upon Australia’s political, economic, social and educational responsibilities in the Territory of Papua and New Guinea. After that, the Territory’s Legislative Council and first House of Assembly appointed constitution committees and the present House of Assembly has appointed a further committee which has conferred with him and me and some of his colleagues and mine. I ask -him: In view of the mounting interest now shown in the Territory by members of both sides of this House, and in view of his own forthcoming visit there, has his Government reconsidered the proposal for a select or standing committee on New Guinea of either this House or both Houses?


– The Leader of the Opposition has pointed out that the people of New Guinea themselves have appointed a constitutional committee which has been working for some time and with which I have conferred and 1 think with which he has conferred, lt would appear to me that that committee, which is going to report on and suggest the matters which might happen in New Guinea, should continue its work, which would then give an opportunity for debate, if necessary, here without us appointing another committee on top of it.

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– I ask the Minister for the Navy a question supplementary to an earlier question concerning the apprehension of foreign owned vessels committing offences in waters contiguous to the Australian coast. What instructions have been given to the Navy in such circumstances? What law enforcement agency can take action if the offence is a breach of a State law?

Minister for the Navy · MORETON, QUEENSLAND · LP

– The matter literally bristles with difficulties and I have no wish, to tranquillise the honourable gentleman in any way but, to use language at least blessed by practice in this place, the matter is very much under review. The difficulty stems from 2 basic facts. Firstly, in the Convention on the Territorial Sea and Contiguous Zone there is no definition of what is the breadth of the territorial sea.

Mr James:

– I rise on a point of order, Mr Speaker. Frequently you have ruled questions out of order because they have sought a legal opinion. I suggest that this is seeking a legal opinion and is giving this young lawyer, able seaman Killen-


-Order! There is no substance in the point of order.


– I am delighted that the ex-detective sergeant has spotted a clue. The breadth of the territorial sea is not defined, but impliedly it is because the breadth of the contiguous zone can be no further than 12 miles from the base line from which the territorial sea is taken. My colleague, the Minister for Primary Industry, administers the Acts relating to fishing, but the Convention on the Territorial Sea and Contiguous Zone does not in any way give to the coastal state - I am talking now about the contiguous zone - power to deal with fishing. It refers to offences relating to fiscal, customs, immigration or sanitary provisions.

Mr Whitlam:

– The coastal state being the Commonwealth of Australia?


– Yes. I used the term state’ in its international context, not in its provincial context at all.

Mr Whitlam:

– You are not speaking of British colonies like the Australian States?


– No. I am indebted to the Leader of the Opposition for his timely question. No less an authority than Sir Gerald Fitzmaurice, who for many years was legal adviser to the British Foreign Office, has expressed the view that it is not open to the national or the coastal state to pursue out into the high seas vessels that have committed offences against fishing provisions in the contiguous zone. The law - and I say this subject to what my friend the Attorney-General may say on it - is in a tantalisingly complex and rather confused state. I have under personal consideration the operational instructions at present issued to the Royal Australian Navy regarding offences which may be committed in proximity to the national or the coastal state. A few weeks ago I referred to the doctrine of hot pursuit. I know that that term is rather redolent of our somewhat more frolicsome days. Nevertheless it remains a term which is a term of art and gives rise to complexity and to great difficulty and, in terms of our international existence, to sensitive relations with other states. I should like the honourable member for Boothby and the House to know that subject to the Attorney-General’s view on what I have said this morning I will at the earliest opportunity seek to present to the Government my own views on what should be the operational instruction to the Royal Australian Navy. At present the circumstances depend upon its essential good sense for the maintenance of the laws of the coastal state.

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– I address my question without notice to the Minister for Labour and National Service. Has the Minister noted the recent provocative manifesto of the Metal Trades Industry Association on industrial relations? In particular, has he noted the reference therein to discrimination by victimisation against applicants for employment who have no ticket of leave or certificate of industrial innocence from a preceding employer? In view of the progress made in current negotiations on penal sanctions in our arbitration system, and as a further step to true arbitration replacing coercion, will the Minister consider specific legislation prohibiting such victimisation by any employer or group of employers?

Minister for Labour and National Service · BRUCE, VICTORIA · LP

– Last Friday I did see a Press report of a resolution passed by the Metal Trades Industry Association. La:er I was asked to comment, but I declined to do so because the report seemed to be so much at odds with what I believed to be the view of the Metal Trades Industry Association as expressed to me personally by its President and its Acting President at a dinner a few days earlier. I refused to comment on the report until I had seen the text of the resolution. In the meantime a union officer who, I think, is termed the secretary of the Metal Trades Unions Association in Sydney had responded to the Press report.

Mr Connor:

– Quite temperately, too.


– Well, he did respond to the report and he based the response upon what was said to be the contemporaneous statement made by the Metal Trades Industry Association. This matter came to notice within a day or two of the President of the Association going overseas and on Monday last the Acting President, Mr Scotsford, communicated with me and told me that he would later that day issue a Press statement in which it would be made clear that the resolutions first given publicity on the Friday had actually been passed in April - I think it was on 27th April. They were passed at a time prior to dispute settling procedures being finalised between working parties from the Australian Council of Trade Unions, the National Employers Policy Committee and the Government on 6th May.

So on Monday last a Press statement was issued by the Metal Trades Industry Association stating that the resolution had been before the dispute settling procedures committee and that now the Association was very anxious to give the dispute settling procedures a full opportunity to be incorporated at all levels of industry and that the Association believed that the dispute settling procedures properly applied and observed by all parties would do what 1 have suggested they would do, that is, provide a medium of communication for conciliation and where necessary arbitration. Also, I believe they will bring about the possibility of a great deal more industrial peace than has been the case until now. Finally, I remind the honourable gentleman that last May the Government called for restraint by all parties while the discussions were proceeding. In fact, the Metal Trades Industry Association has exercised restraint for more than a year and is still exercising restraint. 1 must say that 1 am most appreciative of the Association’s efforts, for without that restraint the dispute settling procedures could not, I am sure, have been brought to a conclusion.

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– My question is directed to the Attorney-General. Is it a fact that one of the Bills now before the House, namely the Territorial Sea and Continental Shelf Bill, will take sovereignty from the States in certain areas that are now shown on Commonwealth produced maps as State territory - that is, areas acquired by the States since federation by reclamation, port or harbour development or any enlargement of internal waters as a result of the 1958 convention on the continental shelf? Also, is it a fact that the Government has in mind handing back the sovereignty of these areas to the States in a later Bill yet to be introduced? Is this a case of Cabinet hath taken away and Cabinet hath given: blessed be the name of Cabinet?


– If 1 may say so, with respect to the honourable member, it is not correct to talk in terms of the Territorial Sea and Continental Shelf Bill taking anything from the States. If the Bill is a valid legislative act it will not take anything away: It will merely declare and enact what the Commonwealth conceives to be, and will argue to be, the legal position, namely that the sovereignty in respect of these areas is in the Crown in right of the Commonwealth.

As I recall it, the second part of the honourable member’s question relates to internal waters. The Bill provides, 1 think clearly enough for anyone who reads it carefully to understand, that it will have no application to internal waters as they existed at federation. The Commonwealth does not have it in mind to assert, and the Bill does not so provide, any sovereignty over internal waters such as Sydney Harbour or Port Phillip. In answer to a question without notice I cannot deal specifically with the honourable member’s point concerning areas marked on existing maps. As I do not have the maps in my mind’s eye, I think it would be rather perilous for me to attempt to answer that part of the question. If the honourable member wishes me to do so, I shall certainly look into it and give him an answer either informally outside the House or on notice. I forbear answering the comment which with due respect to the honourable member was perhaps rather in the nature of a rhetorical comment and which was contained in the last part of his question.

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– 1 ask the Minister for National Development: Do the tender documents for the nuclear power station at Jervis Bay contain reactor sm;ig criteria? If so, do the criteria cover the accidental and unavoidable release of radioactive matter and set safety standards for the protection of employees and the public? Will the Minister table the tender documents?


– I would have extreme difficulty in tabling the tender documents because, as I think the honourable member has read in the Press during the last couple of days, we expect the total weight of paper in the documents that will be received next Monday to be about 7 tons. I would hesitate to ask the staff of the House to handle documents of that magnitude. However, the preparation of the tenders in the first place was a matter which was long, involved and fairly costly, as will be the tender documents which will be received in both respects. They will also be long, involved, complex and costly. Safety is of course completely covered. I have stated in this House on previous occasions that the standards which are laid down by the Australian Atomic Energy Commission on behalf of the Government are as high as those in any other country, and indeed certain standards are higher. But in addition to that we subscribe to the safeguard standards laid down by the international agency. We in Australia should be proud that at the moment the chairman of the world agency is an Australian - the Chairman of the Australian Atomic Energy Commission. So we have a very close affiliation with the formulation of these world standards for safety. I can assure the House and the honourable member that these will be adhered to very rigidly. As 1 indicated previously, I have undertaken that after consideration of the tenders has been finalised and the Government has considered a contract, a full statement will be made to the House on all aspects of the contract and other matters relating to safety and ecology.

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– Is the Treasurer aware that the chief objective of ‘he Murray Valley Development League is, as the name suggests, the development of the Murray Valley? Does he know that the League is a non profit organisation covering regions of the Murray Valley in Victoria, New South Wales and South Australia and has its headquarters at Albury in New South Wales? Will the Treasurer during the pre-Budget discussions give urgent and, I hope, favourable consideration to allowing donations to the League to be claimed as taxation deductions?


– 1 have become over the years acutely aware of the existence of the body to which the honourable member refers. Apart from what we have heard from other sources, the honourable member has reminded the House for some years while 1 have been here of the existence of this body and its aspirations. It is not alone. In fact, 1 know of almost no aspect of Commonwealth taxation on which I do not have a long and deep file containing a well argued case for taxation concessions. I can assure him that the Murray Valley Development League and its various off-shoots in different sectors are not exceptions, and all these submissions will be considered carefully at Budget time. If the honourable member thinks he can add anything to what is already known I would be pleased if he would write to me.

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– I ask the Minister for Labour and National Service whether the Government regards the engineering profession as vitally important to the national economy. Are proportionately fewer people now entering the profession? Have the many representations from a wide variety of sources convinced the Minister of the existence of seething unrest and industrial dissatisfaction among engineers because of denial of salary justice and professional status? Can the Minister indicate before Parliament enters the recess what steps are being taken to avert the industrial action now threatened as a last resort by this most responsible body of professional men?


– Of course the engineering profession is vital to the development of this country. There are in the community a wide range of professions, of contributing workers, skilled and unskilled, of management and technologists. The whole range of them is vital. I am not to be heard to say that any particular section of them is more important than the other, for everybody contributes according to his capacity and training. The overall problem is to lift the capacity of each individual through training and through encouragement. As to the major thrust of the question - that is, a suggestion implicit in it that the Government or 1 can intrude in the matter and force a higher rate of pay - there is no authority whatever for me or the Government to do so. As far as the employees in the Public Service are concerned, it is a matter for the Public Service Board as a statutory body, and I have never heard the Opposition suggest it should not continue. In regard to employees in the private sector, it is for the Commonwealth Conciliation and Arbitration Commission after negotiation with their own employers. A case went before the Commission, was argued over a period of time and a decision was given. My constant reply to the Association has been that it must seek improvement in the conditions for its members through the normal processes. I understand that the Association of Professional Engineers has lodged claims with the Public Service Board for increases and that dates have been fixed by the Public Service Board and the officers of the Association for further consideration of the claim by the two bodies.

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Return to Writ


– I have received a return to the writ that I issued on 20th April for the election of a member to represent the Australian Capital Territory to fill the vacancy caused by the death of Mr James Reay Fraser. By the endorsement on the writ it is certified that Keppel Earl Enderby has been elected.

New Member Affirmed

Mr Keppel Earl Enderby was introduced and made and subscribed an affirmation of allegiance as member for the Australian Capita] Territory.

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- Mr Speaker, I desire to make a personal explanation. I claim to have been misrepresented.


-The honourable member may proceed.


Mr Speaker, you will remember that yesterday when the honourable member for Bennelong (Sir John Cramer) asked a question I raised the point that it was covered by Question No. 1119 on the notice paper. This report appears in the Press this morning in the column written by Mungo Maccallum:

Sir John Cramer . . . threw one up to the Minister for Education and Science, Mr Bowen, and Mr C. H. Webb (A.L.P., W.A.) said he was bloody sure this one was on notice because he’d put it there himself.

I never used the word bloody because it is unparliamentary. It is a word I never bally well use.

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– In accordance with the provisions of the Public Works Committee Act 1969, I present the report relating to the following proposed work:

Post Office Administrative Centre, Stage 1, Brisbane, Queensland

Ordered that the report be printed.

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The following Bills were returned from the Senate without amendments:

Australian Institute of Marine Science Bill 1970.

States Grants (Universities) Bill 1970.

Canned Fruits Export Marketing Bill 1970.

International Monetary Agreements Bill 1970.

Port Augusta to Whyalla Railway Bill 1970.

page 3340


Motion (by Mr Snedden) - by leave - agreed to:

That Mr Corbett, Mr Foster, Mr Graham, Mr Hamer, Mr Les Johnson, Mr Keogh and Dr Solomon be members of the Publications Committee.

page 3340



– As chairman of the Public Accounts Committee, 1 present the 117th report relating to your Committee’s11 0th report. I also present the 118th report relating to expenditure from the Consolidated Revenue Fund for the financial year 1968-69. Mr Speaker I seek leave to make a short statement.


– Is leave granted? There being no objection, leave is granted.


– In each year since 1952, particular attention has been directed by your Committee to an examination of the Estimates and related expenditure performances of the departments of the administration. Because an inadequate standard of estimating has wide ramifications, it has not only been excess spending that has attracted our attention but also the excess provision of funds. Such overprovisions have been highlighted as undesirable, miselading and perhaps unfair to other departments whose financial needs might not have been met fully. At the same time, as the 118th Report shows, there are cases where expenditure variations from the Estimates are acceptable because they have arisen from circumstances that could not have been reasonably foreseen when the Estimates were formulated, or have arisen from other factors wholly beyond the control of the departments concerned. However, evidence taken in this inquiry revealed that certain departments have sought funds prematurely in the original appropriations either because they have failed to be guided by their own experience in the areas where expenditure is to occur, or because they have applied for funds without making a reasonably based assessment of the expenditure that might be involved.

In these circumstances your Committee believes it is timely for departments to be reminded again of the principles relating to estimating that have been formulated by the Department of the Treasury and endorsed by your Committee. These principles are:

  1. Each individual estimate should represent a realistic assessment of the amount that is expected to be spent during the financial year, having regard to the information available to the department when the estimate is formulated.
  2. Estimates should not include amounts for proposals that are so far from firm that it is not possible to know what payments, if any, will be made during the financial year.
  3. Where an item relates to a recurring expense such as office services and travelling expenses, the estimate should be formulated on the basis of experience, wisely evaluated.
  4. Estimates for supplies and services must be based on current costs. No provision or margin should be included for possible increases in those costs.
  5. All continuing expenditure in particular must be closely examined in order to eliminate items that are no longer required.

The importance of skilful estimating by all concerned cannot be over-emphasised.

The 118th report shows that there were shortfalls in expenditure which arose from delays in the placing of orders, administrative laxity, misunderstandings and clerical errors. Your Committee hopes that all departments will remain vigilant to ensure that problems of this nature are minimised. Your Committee would also invite attentionto the fact that some witnesses appeared before us inadequately briefed on matters of fact referred to in departmental submissions. This is time wasting and we would hope that the Secretary of the Public Service Board will again circularise ail

Permanent Heads regarding the importance of thorough briefing and accuracy of departmental submissions by those officers in departments who are likely to be concerned with the preparation of material for us or who may be required to appear in person at future public hearings. We would remind the Parliament that under the provisions of its establishing Act, your Joint Committee of Public Accounts does have very wide terms of reference, independence of action and the requirement to report directly to the Parliament itself. We believe that the work of the Public Accounts Committee over the past 17 years has been a significant factor in ensuring that the Parliament has the means of maintaining an appropriate role in the financial administration of the Commonwealth. I commend the Reports to honourable members for personal reading and move that they be printed.

Ordered that the Reports be printed.

page 3341


Archives Repository, Villawood, New South Wales

Minister for Customs and Excise · Hotham · LP

– I move:

That in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to Parliament:

Construction of archives repository at Villawood, New South Wales.

The proposal includes the construction of a single storey repository and a 2-storey office section as stage 1, and a large 3-storey repository as stage 2. The estimated cost is $4m. In reporting favourably on the proposal the Committee recommended that only air conditioning which will guarantee the reduction of airborne acid pollution to acceptable levels should be used. The Department of Works proposes to measure present pollution levels and estimate future trends prior to preparing detailed designs of the air conditioningplant. The plant will be designed to produce air of purity suitable for long term storage of documents and the installation will be fully tested for performance prior to acceptance from the contractor. Upon the concurrence of the

House in this resolution, detailed planning can proceed in accordance with the recommendations of the Committee.

Question resolved in the affirmative.

page 3341


Motion (by Mr Snedden) proposed:

That Order of the Day No. 1 be postponed.


-Order! The question is that the motion be agreed to. I think the ayes have it.

Mr Hayden:

– No. The Minister cannot take out the Grievance debate.


-Order! The motion was carried.

Mr Daly:

– No. Give us a fair go.I ask for leave to make a short statement on this matter.


-Is leave granted?

Mr Snedden:

– To make a statement on what?

Mr Daly:

– To make a short statement on this matter.

Mr Snedden:

– Very well.


– Leave is granted.


– I ask the Minister for Labour and National Service (Mr Snedden) to recommit this motion. There is no indication on the blue sheet giving the daily programme that Order of the Day No. 1 was not to proceed. Although that document is not taken to give the exact programme for the day there was no indication, as far as I am aware, to the Deputy Leader of the Opposition (Mr Barnard), who represents the Opposition in these matters, that the Grievance debate would not be proceeded with. I suggest that the Minister should recommit this proposal because to abolish Grievance Day is something that the Opposition will object to, and the Opposition would have objected if it had known that this was the intention of the Minister. The Opposition opposes this motion and I ask the Minister to recommit it.


-Order! In view of the circumstances I will withdraw the motion and my ruling. I suggest that the honourable member for Grayndler should be treated as having spoken to the motion which is now before the House.

Mr Snedden:

– If I may have the indulgence of the House, although I do not wish to close the debate-


– If you speak now you will close the debate.

Mr Snedden:

– I ask the indulgence of the House so that I may answer the points raised by the honourable member for Grayndler.


-Order! Is leave granted? There being no objection, leave is granted.

Minister for Labour and National Service · Bruce · LP

– As I understand the Standing Orders, they require that Grievances be noted as Order of the Day No. 1 Government business, on each alternate Thursday of a sitting, and that is the reason why it appears on the daily programme. As to the point raised by the honourable member that no indication had been given that the Grievance debate would not be proceeded with, it was my understanding that everybody was aware that the debate would not proceed today. I had given instructions on my side of the House, and I understood that they had been relayed to the other side of the House, that in fact the Grievance debate would not proceed today.

Mr Daly:

Mr Speaker-


-Order! The honourable member may not speak twice to the motion. He has already spoken on one occasion.


– I ask for leave to make a brief comment on the Minister’s statement.


– There being no objection, leave is granted.

Mr DALY (Grayndler) - by leave- In view of what the Minister has just said which more or less implies that the Deputy Leader of the Opposition (Mr Barnard) who represents the Opposition in these matters, was aware that there would not be a Grievance debate today. I have asked a member of the Opposition to get the Deputy Leader of the Opposition in order that he might speak on this matter. It is complete news to me and to all honourable members on this side of the House. I suggest that if an arrangement was made we on this side should have been told about it. If no arrangement had been made I would assume that the debate would continue in the normal way. It is rather surprising for the Minister to move this motion now. Honourable members have given up a tremendous amount of their own time because they have in these sittings had to go on with so much Government legislation. A Grievance debate is one opportunity which honourable members on this side of the House have to put forward certain views. I suggest to the Minister that he withdraw the motion and permit the grievance debate to proceed. We have stayed in this chamber until very late at night dealing with Government legislation and the least that could be done is for the Minister to extend his courtesy to honourable members on this side.


– I ask for leave to make a short statement.


-Order! The honourable member for Wilmot will be speaking to the motion if he speaks now.


– This decision to postpone Order of the Day No. 1, the Grievance Day debate, has come as a complete surprise to me, as the Opposition Whip, and also as far as 1 know to the Government Whip. We tried to obtain some clarity on this matter yesterday and also in the early hours of this morning. We could not obtain any information from anyone about it. We saw that it was on the daily programme for today, as is normal on each alternate fortnight.

Six Opposition members are prepared to take part in this debate and they have been for the past fortnight. To put this motion before the House without a moment’s notice to honourable members has meant that I have had had to dash out of the chamber and contact the honourable member for Dawson (Dr Patterson) so that he would be here in time for the next item which he had expected would not come on before this afternoon. The Government is not giving us a fair go. It is especially unfair to the Whips who have a hard enough time to keep up with the movements of the Government and its thinking. I voice my strong protest at the decision of the Leader of the House (Mr Snedden) to wipe out the Grievance Day debate for this day.

Mr Snedden:

– There seems to be a misunderstanding here. There has never been any doubt in my mind-


– -Order! If the Leader of the House speaks now he will be closing the debate.

Mr Barnard:

– I want to speak on this matter, Mr Speaker.

Mr Snedden:

– I seek leave to make a further statement.


-Order! Is leave granted? There being no objection, leave is granted.

Mr SNEDDEN (Bruce- Minister for Labour and National Service) - There was never any doubt in my mind that there would not be a Grievance debate this morning. The Government Whip and his Deputy have known that there would not be a Grievance debate today. It is my understanding that this was also known to the Opposition. The Deputy Leader of the Opposition (Mr Barnard), told me that he did not realise it. I think the difference lies in the fact that under the Standing Orders the Grievance Day debate is required to be listed on the notice paper. Some misunderstanding has arisen here. It is on the notice paper because the Standing Orders require it to be on the notice paper. I am entitled to move that there be no Grievance Day debate. In the circumstances and as it seems that some members of the Opposition have speeches prepared for a Grievance Day debate I am prepared to withdraw my motion and to allow the debate to continue for an hour.


– I appreciate the fact that the Leader of the House (Mr Snedden) has recognised that there has been some misunderstanding. I want to make it perfectly clear that I did not understand that the Grievance Day debate would be withdrawn this morning. If that was the intention of the Minister it was not conveyed to mc. I fully understood that the debate would take place this morning. There has apparently been some misunderstanding. I do not deny that the Minister may have thought that this information had been conveyed to me. I assure him that I and honourable members on this side of the House had a clear understanding that there would be a Grievance Day debate. For that reason we drew up a list of speakers and those speakers have prepared their speeches. In all fairness to those honourable members I think the Minister should withdraw his motion.

Mr Snedden:

– I ask for leave to withdraw my motion.


-Is leave granted? There being no objection, leave is granted.

Mr Snedden:

– I withdraw my motion. 1 indicated that I am prepared to allow the debate to run for an hour.


-The question now is:

That grievances be noted.


– I wish to bring to the notice of the Treasurer (Mr Bury) and also to members of the Government a request by many people who live on the west coast of Tasmania, and also many organisations in that area, for a transfer of this region from zone B to zone A for income tax concessions. Zonal concessions in respect of various areas were brought in 25 years ago. They are included in section 79a of the Income Tax Assessment Act. Sub-section (1.) provides that for the purpose of granting to residents of the prescribed area an income tax concession in recognition of the disadvantages to which they are subject because of uncongenial climatic conditions, isolation and high cost of living in Zone A and, to a lesser extent, in Zone B certain deductions shall be allowed.

I repeat that determination of the zoning of an area stems from 3 conditions - uncongenial climatic conditions, isolation and the high cost of living experienced in these areas. The west coast of Tasmania has enjoyed zone B concessions for some 25 years. Over the past 20 years various organisations, including the Tasmanian Labor Government, have been endeavouring to convince the Government of the need to transfer this area from zone fi to zone A. It is obvious that up till now we have had very little success in this regard. We have been unable to convince the Government of the disabilities in this area. Apparently they are not to be compared with the disabilities’ of people living in zone A areas such as Mount Isa, the Northern Territory and the northern areas of Western Australia. Most of zone A consists of places where water is scarce and temperatures are high. T believe, on the other hand, that constant rainfall and low temperatures are a greater threat to health than the conditions experienced in those zone A areas. The average rainfall on the west coast of Tasmania varies from 120 inches at Lake Margaret to 80 inches a year at Rosebery. Low temperatures and high humidity mean that clothes are difficult to dry and moulds flourish. Lung and throat complaints mean a definite loss of labour to the mines and are serious enough to have caused the Commonwealth health authorities to check on the high incidence of hospital patients there compared with the rest of Australia.

Labour is attracted by high pay and bonuses, but because of the unsuitable climate, the high cost of living and isolation, men are quick to leave even though it means a drop in wages. The turnover of the labour forces is about 50%. I doubt whether employers in zone A areas can show a greater turnover. I cannot stress too much that a turnover of labour like that must be a true indication of the unfavourable conditions under which people on the west coast of Tasmania live. If people will not stay in the area despite the high wages then it must be because of the disadvantages for which the zone allowance is paid. This means that these disadvantages are present in a high and marked degree.

Isolation is less a problem that it was before, but only because good roads have been built. However, roads can be blocked by snow falls, rock falls, fog or mist. Mail can take up to 2 days to get to and from Hobart. The high cost of living is a fact of life on the west coast of Tasmania. The long roads through uninhabited areas cause the whole burden of the transport cost to fall on the towns of the west coast. This cost is increased by a transport zone tax which effectively cuts off the west coast from the north-west coast. Grocery items are from 5c to 10c higher per article than the same goods in Burnie. The 10,000 people in the area must be given some incentive to stay longer. A more stable work force would allow expansion within the area, which in turn would mean better amenities and higher economic returns by the businesses in the area. It is important for the economy of Tasmania that the mining, forestry and fishing sections of the west coast should receive all possible assistance to allow for efficient utilisation of their assets and to give sufficient incentive to continue opening up this area.

Wide areas of the west coast south of Queenstown are uninhabited and open to prospectors only during the dry months. They have never been properly explored or prospected. There are few areas anywhere in Australia which are as little known and as little prospected as this area. The incentive of a zone A allowance might well trigger a movement which would allow all the west coast of Tasmania to be utilised economically. There seems little doubt that the zone B allowance is not sufficient to cover the climatic disabilities of the west coast, although perhaps the high cost of living and the isolation are not comparable with those in zone A areas on the mainland, lt is an exciting prospect that the mining, fishing and timber cutting industries could be given sufficient incentive to make labour more freely available, which in turn would open up more land on a permanent basis and create new fishing ports with the hope that farming would gradually increase as the mines depleted their mineral assets.

It seems that the zone allowance is an allowance to encourage the opening up of new areas. When introducing the original Bill in this place in 1945 Mr Chifley indicated that this scheme was designed to offer people some kind of inducement to establish themselves in the remote areas of Australia. The Tasmanian Government in recent years has done a lot to open up the West Coast with its improvements of old roads and the building of new roads. Roads alone will not make this a popular place in which to live. A tax incentive, such as a zone A allowance will assist and should lead finally to the recoupment of tax lost, plus the permanent profit of an increase in population and a corresponding increase in the wealth of Tasmania as well as corresponding benefits to Australia as a whole.

In support of this argument for the transfer of the West Coast area of Tasmania from a zone B allowance to a zone A allowance, I refer also to the award banded down by Mr Commissioner Clarkson in relation to the gold and metalliferous mining industry. At page 11 of the document in which this matter is set out. Mr Commissioner Clarkson takes note of the disabilities under which the people who live in this area work, or refers, at least, to a certain predominant work force in the area. He was required to inquire into this work in the mining fields on the whole of the West Coast area. He introduced a special industry allowance as a compensatory factor to .those people. I quote briefly from the award made by Mr Commissioner Clarkson in relation to the gold and metalliferous mining industry. He said:

The Commission has decided to include in the total wages and not as a separately identifiable amount compensation for all the circumstances in which the work is performed. This compensation has been designed on an averaging basis to cover all of the common incidents of working in mining areas, some of which are isolation, somewhat limited medical and dental and hospital facilities, limited secondary education facilities, higher cost of goods and services, climatic conditions and healing costs, limited entertainment facilities and limited shopping facilities …. 1 maintain that these are the requirements which the Income Tax Assessment Act lays down for any area of Australia to qualify for a zone allowance classification. In particular, if these matters are recognised by Mr Commissioner Clarkson in granting this award, we maintain that they should be recognised by the Government in the transfer of this area from a zone B allowance classification to a zone A allowance classification. The award for this industry has a special loading to compensate these people for isolation, the high cost of living, limited educational facilities and so on. This award applies only to miners working in the mines on the West Coast of Tasmania. Some recognition by the Government of this special area would be necessary because many other forms of employment in the professional field, semi professional field, shop keepers and various related services that go to make this area an economic community are to be found there.

So, I do bring to the notice of the Treasurer and the Federal Government this morning the latest request made by the many people and by the many organisations on the West Coast of Tasmania - an area in my electorate - for the transfer of this section of Australia from a zone B allowance classification to a zone A allowance classification. I ask also that consideration be given by the Government to the inclusion of King Island, which lies halfway between Tasmania and Victoria and which suffers much the same dis abilities as those which I have outlined concerning the West Coast of Tasmania, among those areas that receive this taxation concession.


- Mr Deputy Speaker, in introducing the subject with which I intend to deal, I desire to read a question that I asked on 15th May 1970 of the Treasurer (Mr Bury). As reported at page 2240 of Hansard, I said:

I address a question to the Treasurer. Is it a fact that a taxpayer who receives only, say, 20% of his income from primary production is regarded for taxation deduction purposes as a primary producer and receives primary producer taxation deductions calculated on his total income, irrespective of its source? If so, 1 ask: Will the Treasurer investigate means of correcting this anomoly?

Some people may not regard this as an anomoly, but 1 do for the simple reason that these taxation deductions are special taxation deductions for primary producers with the objective of assisting our great primary industries.

I will give one instance of what I mean. A block of land of perhaps 500 acres or 600 acres - it could be even 1,000 acres - in a rough state comes up for sale and is put to auction. When it is offered, let us assume that a man with a big income - a big city business man - bids for that land. Such a person can pay much more for that land than can a young man in this country yet we desire that young men should have the opportunity to take part in primary industry. Usually, a property such as this, needs clearing, seed beds must be prepared and other things must be done to bring it to a stage ready for production. The cost of all those things that must be done is a taxation deduction in the year in which the money is spent on those things.

So, the man with the very big income spends the money on these improvements and receives the taxation deduction. The taxation deduction is based on his very large income. What is the position of the young man buying such a property with very little money and hoping to start out in life in this way? For the first few years after he purchases the property, he would not have any income at all. He would be working to clear the property, to prepare the seed beds or to do whatever was required to bring that property up to the stage when it would be ready for production. He would not have any income. He would not receive the benefit of taxation deduction. The taxation deduction varies according to a person’s income. Therefore, a city business man with a large income is placed in a position in which he enjoys a much more favourabe advantage in this respect than does the young man or anyone else who wants to start out in life on such a property. I think that is an anomoly. It is the anomoly to which I was referring.

We know also that the businessman who buys this type of property is generally speaking an absentee owner. This is not something to be desired. So many matters come into our consderation of this problem that are against the interests of the primary producer and of course favour the big business man. Because of these things, I thought that the best thing that I could do was to put the subject up to the Treasurer so that he might look into it to try to overcome the anomolies to which I have referred by making the law provide that a man has to receive, for instance, at least 80% of his income - I put that figure forward, but it is subject to change - from primary production to be entitled to the taxation deduction. That would cut across the possibility of some opportunists coming into primary industry just to secure taxation deduction.

It has been said that, at the present time, the situation is changing and that a lot of business men would not wish to buy into land. But is this true? We know that the value of land has fallen considerably and that few sales are being made throughout the country. The very few sales that are being made are at figures at least 50%, 60% and perhaps even 70% lower, in certain areas where certain products are grown, than the prices would have been 3 years or 4 years ago. So, a dual advantage awaits the big city business man who buys into land at this time. He builds up property. He has a capital gain in the actual value of the property. There is always the chance that primary industry will be in recession for a very short period only. I hope that this is so. If it is, the big city business man has the chance that the property will increase in value.

Now. primary producers up and down this country think that this is an anomaly

I agree with them, or they agree with me - which every way honourable members like to put it. I think that this anomoly is something that should be overcome in the way in which I have suggested.

Mr Crean:

– Will the honourable gentleman give us the answer that the Treasurer gave to his question?


– Yes. I will do that. The honourable member for Melbourne Ports has asked me to give the answer that the Treasurer gave. I did not intend to take up time by reading this answer because I have another subject with which I wish to deal. But, as the honourable member is a friend of mine, I will do so. The Treasuer said:

As with so many other matters, this matter is not quite as simple as it appears on the surface. It so happens that a good many primary producers do have a taxable income from their nonfarming activities that is greater than their taxable income from farming activities. Their farm income in the first place is written down considerably for taxation purposes by very numerous deductions for primary production which the Government has built up over the years in the taxation laws.

In many cases, people whose lives are spent on farms and farming properties do gain greater income out of some outside investment than they do out of farming income per se. This is particularly so al the moment. A large number of people who may be thought of nominally as Pitt Street farmers are in fact genuine full time primary producers who have been unfortunate particularly in the last few years not to earn as much income from this strenuous activity as they have from a perhaps limited number of investments which they have been able to acquire.

That was certainly not the answer I was seeking as a practical solution to the problem I put forward. This morning I asked a question which honourable members seemed to greet with some levity. I said that the chief object of the Murray Valley Development League was, as its name suggests, the development of the Murray Valley. Of course it has other objectives, too. I asked the Treasurer whether he would give urgent consideration, when Budget discussions were taking place, to permitting donations to this League to be allowable as taxation deductions. From its headquarters in Albury the League works in regions along the Murray Valley. Committee members and voluntary helpers of the League in the regions receive no pay whatever. The League is a non-profit organisation. Its slogan indicates that it seeks to have a million people in the Murray Valley, and this is not beyond the bounds of possibility.

This great fertile valley should be developed and members of the League are dedicated to that proposition. With more water becoming available development should accelerate. If my suggestion of piping water came into operation, as it surely will, still more water would be available. We lose too much water through evaporation and seepage. Piping would give us 50% more water from the present storages and would, therefore, duplicate all the storages in Australia. The fertile soil in the Murray Valley will grow almost anything if given water. It can grow crops that we can export, and most crops can be grown best under irrigation. Even wheat, which we grow on dry land, can give a bigger yield if water is available. Fat lambs, fat cattle and everything that is dependent on a good supply of water can be produced in the Murray Valley and development of the Valley in New South Wales, Victoria and South Australia will do much to lift Australia’s

Standard of living, to the benefit of this great Commonwealth.


– I wish to raise a grave issue which, if it is indicative of how young men are treated in the Services, merits full investigation. If the facts that I will mention are indicative of the general situation is it any wonder that there is dissatisfaction in the Services? This is a blatant case of a denial of natural justice. I refer to the case of Aircraftsman Glen Allan Piper who on 21st March 1969 at 17) years of age enlisted and signed on voluntarily for 6 years service in the Royal Australian Air Force. He was so keen to enlist that he even concealed a ruptured spleen that he had as a young lad and with which he is still troubled. His present age is 18£. He is presently serving detention of 28 days at Holsworthy. He is the youngest man in Holsworthy. He is a shade older than my second son.

Let me recount his history. On enlistment he was sent to Point Cook for his initial training as a fireman in the rescue squad. During the course of that training he was hit by the metal section of a fire hose. He was admitted to hospital and was prescribed sleeping tablets by the medical officer. After he was discharged from the hospital he took them and he overslept. He was caught 3 hours late on duty by the Service police. He was charged and sentenced to 3 days confinement to barracks. Subsequently this young lad of 18 years of age went to Williamtown with the rescue squad. Part of his duties involved rescuing or attempting to rescue pilots from crashed planes. On one occasion a pilot tried to eject from a Sabre jet. He was ejected but his parachute did not open and he fell straight into the ground. This young lad of 18 had to pick him up. The pilot was just like a lump of jelly, with every bone in his body broken. What effect must that have had on an 18-year-old?

He applied for discharge in the formal manner on 2 separate occaions. Even at Point Cook he applied for a discharge. This was recommended by his warrant officer but his application for discharge was ripped up in front of him and thrown into the waste paper basket. Further applications for discharge were dealt with in a similar summary fashion. This young lad reached the stage where he could not stand it any more. He was almost broken mentally and physically. He went absent without leave for 7 weeks. He went to his father in New Guinea. His father is a senior officer in the Public Service of New Guinea; he is third in charge of his department. He is a man I know well and respect. After 7 weeks in New Guinea there were family consultations about the boy surrendering and trying to get back on a proper keel in the Services. In my view at that time the lad, psychiatrically, should not have been allowed back, but they went to see a Wing Commander Carter, the resident Royal Australian Air Force officer in New Guinea who told them that in his opinion the boy would be dealt with sympathetically by his commanding officer and not sentenced to Holsworthy. But what happened? The boy surrendered voluntarily at 7 a.m. on 28th May on this advice and on the advice of a padre. He was taken back to Townsville by RAAF plane with 2 flight sergeants of the Service Police. Let me tell honourable members in the boy’s own words what happened to him at Townsville. He said:

At the moment I am in gaol. No open arrest like they promised.

This was a reference to Wing Commander Carter’s advice. He continued:

I have to sit in this gaol for 3 days. Next time listen to me Dad.

This was the young lad writing to his father. He continued:

I think you have no chance in the world of getting me out of this outfit. So far they have just treated me like a wanted criminal.

He continues - and this shows his state of mind:

They would nol even give me a biro in case I might stab someone, and then they wonder why people get their back up against the RAAF.

I ask the honourable members to pay attention to his next statement. He said:

Last night I hardly got any sleep as they would not turn the light off in the cell all night.

Last Saturday afternoon i interviewed him at Holsworthy and checked this out thoroughly. He asked for the light to be turned off but they gave him the light on treatment similar to the cold water treatment. This was the Townsville incident.

I refer now to his treatment at Williamtown. He arrived at Williamtown on a Friday afternoon. What did they do to him? They locked him in a cell and left him there all night with a minimum of blankets. On Saturday they left him in the cell all day. He had no exercise and was not let out for 5 seconds. On Sunday they let him out for 20 minutes exercise. On Monday he remained in the cell until 3 p.m. when he was marched before the commanding officer of the Williamtown base. Group Captain Meldrum. He was marched in under an escort led by Warrant Officer Stibbard.

This lad had been told that the hearing would not take place until Wednesday but on Monday he was marched in to the commanding officer and found that it was the real thing. He had a five minute hearing and was sentenced to 28 days’ detention - the maximum the commanding officer could impose. Legally it is doubtful that an Air Force commanding officer can impose the maximum sentence. In the army 7 days is the maximum sentence a CO. can impose. Later this lad was subjected to further humiliation. While he was away his kit was stolen and after sentence a Warrant Officer Stibbard demanded SIO of the money that had been filched from him when he was first put in the cells. The reason given by Warrant Officer Stibbard was that the money was for three pairs of R.A.A.F. socks and that there were no Service socks on the base. What rot! Further humiliation occurred at the public post office when this lad was ringing his father in New Guinea to tell him that he had been sentenced. He was further humiliated when they made him give them $6 to buy a pair of service boots to wear to Holsworthy.

This lad was keen to enlist in the Air Force, lt is any wonder that now he is keen to get out? I have in front of me a letter from the lad’s father who has asked me to do anything I can to get this lad out. This morning I received a telegram from the father, who is in Port Moresby. The telegram reads, ‘Advised late Wednesday that Glen was admitted to Ingleburn Military Hospital last Monday.’ This lad was admitted to Ingleburn Military Hospital after I saw him on Saturday. Why, 1 do now know. I demand of the Minister that this matter should be fully investigated. The whole facts should hit the light of day. This lad should be examined by a psychiatrist before he is completely ruined. He is almost ruined mentally now. Will this lad have to be broken down completely before anything is done for him? Have we reached such a low ebb? Is that the way our Services should be run? To my mind it is not.

Minister for the Navy · Moreton · LP

– The honourable member was courteous enough to inform me earlier that he proposed to raise this issue. I had the opportunity to ask my colleague the Minister for Air (Senator DrakeBrockman), whom 1 represent in this House, to give me the file on the matter. I have looked at the file. The honourable member started off by saying that this issue was a denial of natural justice. I respect any person who makes that claim but I expect a person making that claim to substantiate it. It is not merely by way of instinct but also by way of discipline that I warm to any suggestion that there has been any denial of natural justice, that a person has not had the opportunity to be heard. I can think of nothing worse than a person not being able to put his own view forward in his defence. I say, with no sense of animosity whatever, that on this issue the honourable member has allowed his sense of passion to dominate what might be described as his sense of perception. The honourable member referred to this young lad who joined the Royal Australian Air Force at the age of 18 years. He is not alone in that.

Mr Martin:

– He was seventeen.


– Seventeen? I was 18 when I went off to the last lot of international sports. When a person goes into one of the Services he enters into a contract, and that contract must be honoured. A person just cannot go into the Services, be it the Air Force, Navy or Army, and whistle against all authority. The Services cannot be run on those lines. This is a hard, practical world, and 1 am sure the honourable member for Banks would not argue that anyone in the Services should be able to say to a corporal or a petty officer, ‘Well you can go to Bourke’ and expect to get away with it. The Services could not be run on those lines. This lad joined the Air Force at 17 years of age. Obviously he found himself to be incompatible to that service. As a result of his sense of incompatibility he absented himself for 7 weeks. That is the fact, and he is not the first such absentee in history. He committed an offence by absenting himself without leave. To put it in Service vernacular, servicemen cannot expected to shoot through for 7 weeks and get away with it. Of course, when apprehended this lad had to atone for his sin.

Mr Martin:

– He was not apprehended: he surrendered.


– Be it surrender or apprehension, he had to atone for his misdemeanour, this breach of Service discipline. He was asked by his commanding officer, as was his right, whether he wished to be court martialled. I have always said that I make no admissions and sign no confessions. Looking back on the past I remember that I have had that question put to me.

Mr Foster:

– Did you accept a courtmartial?


– No, 1 was too cunning for that. I preferred to say, ‘All right, I will face my music here.’ All servicemen charged with an offence are asked whether they want to have a court martial. Most of them hope that the CO. happens to be in a good mood, so they say, ‘No, 1 will face the music here.’ That question was put this lad and he said, in short, that he would accept what his commanding officer had to say.

The honourable member has said that the hearing took only five minutes. What would he expect it to take? Five hours? This lad surrendered himself, made an admission that he had been absent without leave for 7 weeks and was before his commanding officer. Does the honourable member expect some elaborate investigation to be made in this case?

Mr Martin:

– The commanding officer said that he had made up his mind before the hearing.


– That is nol on. The lad said to the commanding officer that he would accept the summary justice of the commanding officer, and subsequently he was awarded 28 days detention, lt might be a matter of judgment as to whether in all the circumstances that sentence was adequate or severe. It was the commanding officer who saw the person, who formed an opinion and who had all the circumstances under review and he would be the only person in a position to make an assessment. I have often listened to people criticise a judge or magistrate who has handed down a sentence, some saying the sentence was severe, others saying it seemed inadequate. Until you are there and you are the person who has the responsibility of making the decision you do not know (he full and real position. Having regard to the fact that this young man absented himself without leave for 7 weeks and told the Air Force it could go its own way it would be unreal to expect the commanding officer to say: ‘Well now, this is most kind of you. I will submit your name for the next honours list.’ That would be entirely unreal. If a case could be made out for this lad on medical grounds then it should be done. A case can not be made out on the basis that this person was absent without leave for 7 weeks and that his commanding officers sentenced him to 28 days detention. I am sure that my colleague the Minister for Air would be happy to listen to any argument the honourable member might advance on medical grounds. But I ask him to bear in mind the simple dominant fact that the Services cannot be run along the lines of a church bazaar.


– I seek an explanation of some matters from the Minister for National Development (Mr Swartz) representing the Minister for Civil

Aviation (Senator Cotton). I refer to a matter I have raised in this House before concerning the possibility of a runway for civil planes or alternatively RAAF planes in the Londonderry-Richmond area. At that time I pointed out that I had heard that a preliminary land survey had been carried out in the region, and strong rumours were floating around the district that the survey could relate to future civil aircraft requirements for Sydney. The following morning, in reply to a question asked by the member for Mitchell (Mr Irwin), the Minister for National Development (Mr Swartz) said:

No ground surveys for an additional major commercial airport in the Richmond area have been carried out by the Department of Civil Aviation.

That night the honourable member for Mitchell, being more specific in referring to that question said, as reported in Hansard:

There is nothing in the suggestion about the establishment of an aerodrome in the area.

He was quite specific. After that, as I was not satisfied and as I mentioned here early last Friday morning, I wrote to all the various departments and found, of course, that each one of them passed the buck to the other. Finally, after 2i months, I received an admission from the Department of Works and from the Department of Air that a preliminary ground survey had been carried out in the area, but they said that this referred to Royal Australian Air Force requirements and not to those of civil aviation. I make that point.

Once again I wish to emphasise that the local rumours were at all times that the survey did relate to a proposal to put in a runway for civil requirements. Also, I wish to make the point that the runway was to join at one end of the existing east-west runway at Richmond and to run generally in a southerly direction for 13,500 feet, which is a very long runway capable of taking the biggest aeroplanes likely to arrive in this country. That runway would not only pass through parts of Richmond, including the agricultural college grounds, but it would also run through Londonderry. The approach to the runway would run into an area called Cranebrook, which is within a couple of miles of Penrith. Let us not kid ourselves about this: The aircraft noise in areas such as Werrington, Cambridge Park, St Marys, and Mount Druitt, which are in my electorate, and in the areas of Richmond, Windsor and Penrith in other electorates would be very considerable indeed.

When I spoke in the adjournment debate early last Friday morning, I made the point that there had been considerable evasion in relation to the matter and that I was endeavouring to obtain as much information as I could. I also said that I had found it most difficult to obtain the information because of the evasion. I emphasised that I thought that perhaps we had not heard the last of the matter and that further information could eventually become available. Having made that speech last Friday morning, I received only last Monday, strange to say, a letter from the Penrith City Council asking me to take action in regard to civil aircraft runway requirements in this area. The Council had written to the Minister for Civil Aviation (Senator Cotton) on 1st December stating:

Advice has been received through the Department of Lands in connection with a proposed extractive industry portions 145, 146, and part 324 Londonderry Road, Londonderry -

And this is in the Penrith municipality -

Pointing out that the Department of Civil Aviation has advised the Department of Lands that the area covered by the proposed mineral lease is within an area currently being investigated in relation to Sydney’s future aviation, and the Department of Civil Aviation -

I ask honourable members to note the reference to that Department - has requested that any action on the application be deferred until the investigations are completed.

Honourable members should keep in mind that the Minister for Civil Aviation had written to me as follows in a letter dated 21st May: lt is again confirmed that no such land survey has been initiated by my Department.

When sending me that correspondence, the Penrith City Council attached a letter from the Minister for Civil Aviation to the Council stating:

The Federal Government has set up an interdepartmental committee to examine and report to it on the necessity for and suggested location of any additional airport which may be required to supplement Sydney (Kingsford-Smith) Airport when the aircraft traffic there reaches saturation point. This Committee is investigating a number of possible sites within a reasonable distance of Sydney and the Penrith area is included in these.

Evasiveness has taken place, and misleading statements have been made. I realise that suggestions made have not been direct statements, different interpretations on the suggestions being possible. However, in the first instance, the suggestion was made that nothing had been done in regard to any large airport. Later there were suggestions that this particular area had been considered only for RAAF requirements. Now correspondence from the Minister to the Penrith City Council has come to light that definitely indicates that an interdepartmental committee has been looking at the Penrith area - the Londonderry area comes within the Penrith municipality - in relation to a future runway to service civil aviation requirements.

I ask the Minister to explain this evasiveness and the misleading statements. I ask that the Penrith City Council, which has made this request, be allowed to submit evidence to the interdepartmental committee before any decisions are made on future aerodromes in the Sydney area. I also ask for a definite statement as to the Government’s intentions in regard to a civil airport in the Sydney region. Too much evasiveness has occurred; it is time the Minister came forward and was a little bit frank with this Parliament and with the people as a whole.

Finally, I point to the need to establish a Parliamentary select committee to assist in the selection of a site for the next airport in the Sydney region. Until that is done, I think this secrecy and the great problems associated with not giving full facts to the Parliament and the people will create many problems for this Parliament and for the Government, and will also raise grave doubts in the minds of many people throughout the length and breadth of the Sydney area and beyond.


– First, I should like to thank the honourable member for Mitchell (Mr Irwin), who is of course an ex-Royal Air Force pilot from the First World War, for withdrawing from this Grievance debate to give me the opportunity to take part. I think that most honourable members and a large number of visitors to Parliament House are aware of the Austin Byrne exhibition that has been on display in Kings Hall for the past 2 weeks. This exhibition has given promi nence to Sir Charles Kingsford-Smith and crew members who flew with him in the Southern Cross’. The exhibition is a priceless collection of records of the ‘Southern Cross’ and our courageous pioneers who flew in this remarkable aircraft. This aircraft was a 3-engine Fokker with 3 Wright Whirlwind engines developing approximately 220 horsepower each, lt had a wing span of approximately 23 metres and a cruising speed of about 100 miles per hour. Total fuel capacity of this aircraft was 1.080 gallons, giving it an endurance of 37 hours and a range of approximately 3,230 miles, which was remarkable for an aircraft of that time.

The ‘Southern Cross’ circumnavigated the world. It was the first aircraft to do so. This is remarkable, as very few navigational aids were available in those days. I consider the flying, navigational and maintenance skill of Kingsford-Smith. Ulm, P. G. Taylor and other crew members who flew in this aircraft on their pioneering world flight with little more to assist them than instinct, sheer courage and a display of great pioneering spirit - a far greater achievement than landing the first men on the moon. This exhibition in Kings Hall would not have been possible but for Austin Byrne, who at considerable personal expense, has dedicated the last 30 years of his life to arranging this historic collection of Kingsford-Smith, Charles Ulm and Southern Cross’ records. All those interested in aviation owe Austin Byrne a great deal.

I want to give a few statistics concerning early aviation in the day of Australian pioneers. It is not generally known that when the Federal Government, through Sir Archdale Parkhill, the then Minister for Defence, acquired the ‘Southern Cross’ on behalf of the Commonwealth of Australia he made a solemn promise that it would be housed in Canberra. That was on 18th July 1935 - 35 years ago. This is the most famous aircraft in aviation history. At that time it was known right throughout the world, lt was then forgotten for 22 years. Owing to the endeavours of Mr Bruce White, a brother of Sir Thomas White, and a few enthusiasts an annexe was built at Brisbane Airport and the aircraft is housed there today. We must not forget that Smithy and Ulm flew the ‘Southern Cross’ on their great pioneering flight of the Pacific from the United States of America to Australia and not to any particular city. For those reasons it is felt amongst the early pioneers that the ‘Southern Cross’ should be housed in Canberra. This also applies to the Vickers Vimy in which Sir Ross and Keith Smith with Shiers and Bennet, their mechanics, blazed the trail from England to Australia in 1919. Owing to the efforts of a few loyal citizens this aircraft is now housed in an annexe at Adelaide Airport. 1 would like to suggest that the Government accept the Byrne collection and the Kingsford-Smith/Charles Ulm-‘Southern Cross’ tribue to Australian aviation. I also suggest that an historical areonautical centre be planned to house these and other valuable aviation records. The time is now overdue to begin this project. It is 5 1 years since Ross and Keith Smith blazed the trail from England. It is now 42 years since KingsfordSmith and Charles Ulm were the first to fly the vast Pacific Ocean from the United States of America to Australia and later made the first crossing of the Tasman to New Zealand and the first east-w,:st crossing of the Atlantic. Had Harry Hawker, prior to Lindberg’s flight, had a little more petrol and not gone down in the sea in sight of Ireland, Australians would have pioneered every trans-ocean flight in the world, including those across the Indian Ocean and the South Pacific.

Any further delay in coming to a decision will rob posterity of the memories of those still living and who also retain very valuable records of the finest pioneer pilots of their time and are ready and willing to give when there is somewhere to house these aircraft and the records. These early pioneers have so much to give if a historical aeronautical centre is available. Tradition is something that we in this country sadly neglect. Young people are being deprived of the wherewithal to inspire them and stimulate their desire to play their part to further the illustrious record of those who made aviation history. We cannot afford to pass this opportunity over and go on procrastinating and forget the days of the world’s greatest aviation pioneers. For those reasons I would like to see a historical aeronautical centre planned for Canberra as soon as possible.


– 1 had intended in this grievance day debate to deal with a matter relating to cottages for the aged, but I am now awaiting confirmation of information I received earlier this morning. I realise that the time granted to me in this debate is extremely short. Therefore I want to raise in this House the matter of the late Private Larsson, who was unfortunately killed in Vietnam last Saturday. On behalf of the parents of this soldier I wrote to the Minister for the Army i.Mr Peacock) early in January requesting that this soldier not be sent into active combat in Vietnam because of his extremely poor eyesight. The soldier, as the Minister informed me, was transferred from hi< then regiment, the 7th Battalion, into the 5th Battalion and he was in due course boarded. Finally I received from the Minister the following letter:

I refer again to your personal representations concerning Private S. G. Larsson and his proposed posting to Vietnam.

All members of the Army, whether regular soldiers or national servicemen have the same liability to serve overseas should the needs of the Army require it.

The member’s medical condition has been investigated by officers of my Department in Eastern Command and he was medically boarded on 3 February 1970 and was found to be tully fit for service everywhere. His eye condition is .orrected by the wearing of spectacles, which are obtainable from any source, including Vietnam.

Private Larsson will be issued with 2 pairs ot spectacles in accordance with normal Army practice. This is to ensure that if one pair of spectacles is damaged, a replacement pair is immediately available. Let me assure you that no soldier would be permitted to serve in an operational area if it was felt his medical condition would endanger either his own life or that of his colleagues.

Careful consideration has been given to Mr and Mrs Larsson’s request but I cannot accede to their wishes, even though I can readily understand their anxiety and, in fact, the anxiety of any parents whose son is required to serve in an operationa area.

In earlier correspondence I pointed out that Private Larsson was in need of glasses of a type requiring specially ground lenses which were not readily available. The fact that the Army, having its wilful way, directed this soldier back to the 7th Battalion, into Vietnam and into a combat zone would leave a very real thought for ever with his next of kin, his parents and his brothers and sisters, that he probably .lied as ; result of this poor vision. I understand he lost his life through a mine explosion in Vietnam.

It would be very interesting to know, and there should be some form of inquiry to establish, whether this did occur.

With the short time that is available to me I also wish to read a letter which was directed to the Prime Minister (Mr Gorton) and of which I received a copy. The letter is from the late soldier’s father and it says:

Thirty years ago, you andI were engaged actively in a conflict on an issue that was beyond doubt. We fought for freedom from individual oppression and tyranny, andI was proud to be an Australian.

A short while ago, I was informed that my son was killed in action in Vietnam.

In Vietnam there emerged a terrible armed struggle between the peoples of one race - father against son, brother against brother, each fighting desperately for principles I no longer understand, but it was a family struggle, which in the final event will only be resolved between the people of Vietnam.

Yet into this conflict, Mr Prime Minister, powerful neighbours intruded, and so you committed Australia. You felt that by armed force, your ideals might be thrust upon these people. Through your intrusion, you and your colleagues introduced into Australia, the very principles against which I was prepared, with others, to die if necessary.

This is your Australia, Mr Prime Minister, and 1 no longer have pride in being an Australian.

Into the conflagration that is Vietnam, you sent my son, a man whom you knew that without his glasses, could not see a hand held four feet away, or a car at 30 feet, and whom you told could see reasonably well with glasses. You advised him to keep them clean, yet in the torrid humidity of Vietnam, you could not tell him how.

He went, Mr Prime Minister, because you told him it was right and honorable.

Was it, Mr Prime Minister? Why? For whom?

A thousand questions flood my mind. How do I answer his young widow, or my children?

Did he die to further the political ambition of yourself or your colleagues? Or was it to allow you to ingratiate yourself upon the leaders of the most powerful, yet most hated and feared nation in the world today?

DoI answer them that it is the cowardice of men too proud to admit to a horrible tragic error?

Wherein lies the truth Mr Prime Minister, and how long must this carnage of Australian manhood continue How many more must die under the conditions you have chosen to impose. What is the truth? Why? For what?

In the depthless horror of sorrow and grief. I turn to my friends and ask, but none can tell me, none can answer, so I must turn to you.

Perhaps if in the interests of human justice, and of truth, the news media and journals of our day can find the courage to publish my letter to you,I may find truth, or perhaps, Mr Prime Minister, time may show that my son did not die in vain.

Stan Larsson

Question put -

That the grievances be noted.

The House divided. (Mr Deputy Speaker - Mr P. E. Lucock)

AYES: 57

NOES: 51

Majority . . . . 6



Question so resolved in the affirmative.

page 3354


Second Reading

Debate resumed from 5 March (vide page 149), on motion by Mr Anthony:

That the Bill be now read a second time.


– The Loan (War Service Land Settlement Bill) is one of those Bills which come before the Parliament each year in order to authorise the raising of loan funds. This Bill this year relates to the authorisation of loan funds amounting to $4. 5m for war service land settlement in Western Australia, South Australia and Tasmania during the 1969-70 financial year. As indicated in the second reading speech of the Minister for Primary Industry (Mr Anthony), the money will be made available to the 3 States concerned as follows: Western Australia, $l.9m; South Australia, $ 1.964m; and Tasmania $654,000. Of the estimated requirement of $4.5m, about $4m will be needed directly by the settlers to finance working expenses, for stock and for plant, wherever necessary. As was stated, this sum of $4m is expected to be matched by repayments of advances made to settlers during the early years of the scheme.

This debate is held each year and honourable members on both sides of the Parliament take the opportunity to refer at length to some of the experiences of the preceding 12 months or those experiences which have become apparent as the years go by relating to the specific problems of closer settlement, particularly war service land settlement. I now move the following amendment to the motion: ‘That the Bill be now read a second time’:

That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: whilst not opposing the provisions of the Bill, the House is of opinion that a Select Committee of the House should be appointed to inquire into all aspects of War Service Land Settlement in Australia in order to formulate guidelines for any future land settlement scheme’.

The Rural Reconstruction Commission met during the closing stages of World War II, and after the war, and very thoroughly investigated the performance of war service land settlement in Australia after World War I. It met with the admirable object in mind of attempting to ascertain the great mistakes made after World War I. The war service land settlement scheme was referred to commonly as a disaster, lt was the aim of the Commission to see that those mistakes were not repeated after World War II.

The Rural Reconstruction Commission laid down certain guidelines which would help the Commonwealth and the agent States concerned with the war service land settlement scheme. In the main, many of the guidelines laid down proved to be of great value. Then it became apparent that there were serious problems in the field of war service land settlement closely associated with any closer settlement scheme, such as it was. Although the basic assumptions underlying the commencement of the scheme by the Commonwealth and the agent States were such that the guidelines were principles to be followed - and they were followed - it became apparent very soon after the first settlers went onto the land that problems were arising. Those problems have become magnified in certain areas, of course, and in certain farming industries and land types.

The honourable member for Braddon (Mr Davies) will follow me in this debate on behalf of the Opposition. He has lived with this problem in Tasmania, at King Island, for the past decade. He knows the great difficulties being suffered by soldier settlers in that part of Australia. He has mentioned those problems in this House on many occasions, not only on behalf of the settlers but also on behalf of all people concerned with closer settlement. 1 do not think there is a more emotional type of activity carried on by a government than closer settlement, particularly when it involves taking land from one person to give to another. One of the first jobs I had when I joined the Bureau of Agricultural Economics in 1949 was to go to Coomealla in connection with certain problems of war service land settlement in that area. Emotionalism was not as great a problem there as it was in Western Australia and the grazing areas of New South Wales where large tracts of land simply were taken away, sometimes at quite unfair prices so far as the owners were concerned; nevertheless the problem was emerging. There have always been the knockers who have said that land settlement would fail. Every closer settlement scheme that has been undertaken in Australia has been criticised by these people. Of course, some of the schemes have failed; there is no doubt about that. The one thing that can be said about war service land settlement after the Second World War is that it illustrates the lack of adequate planning. Adequate planning is essential in land settlement and 1 will deal later with the closer settlement scheme in Queensland known as the brigalow scheme for which there was planning over a great number of years. Before any closer settlement was actually adopted most of the basic answers were known.

In a war service land settlement scheme it is difficult to know at any point of time what the variables will be. The size of the farm itself is material. No person can accurately predict whether, because of its size, it will be a success. Ten years ago sheep properties running 3,000 sheep were in a reasonably good financial position, but today, because of the increase in costs and the static or declining real price of wool, properties of the same capacity are on the breadline in terms of income. This has happened to a lot of war service land settlement people. When the size of the farms was determined just after the Second World War the determination was based on conservative estimates and favoured the settler. We did not want peasant farms; we wanted larger farms or middle sized farms. But nobody could forecast what would happen in terms of the 2 crucial variables - costs and prices. The cost-price squeeze which has hit heavily major sections of the primary industry has also hit war service settlers. As has been pointed out in this House time and again, it does not matter how efficient a farmer might be in terms of productivity per acre, per manhour or net income per acre or whatever it might be, unless he has sufficient gross income which is directly correlated to the size of his farm he will be unable to support his family at a reasonable standard of living and amortise his assets in the farm.

I just mention these variables in passing. 1 am quite certain that everybody learns by mistakes and that the administrators of the war service settlement scheme have also learnt by the mistakes which they have made. Just after the War there was a tremendous amount of emotional pressure exerted on governments to settle people on the land. On the one hand there were the ex-servicemen returning to civilian life who wanted a piece of land. They saw the big grazing areas which were often held by the landed gentry and this is the land upon which they fixed their eyes. Tremendous pressure, particularly in New South Wales, was applied on governments to cut the land up as fast as was possible so as to get those men and their families on the land. One basic fact which must be learnt from any closer settlement scheme whether i. be a war service or civilian scheme is the great need for financial equity. The person who goes on the land today with practically no money is heading for disaster. This is something which all governments and all political parties should heed. It is just airy fairy idealism to think that a person can develop land today with a small amount of money behind him.

I suppose that in the history of all civilian land settlement schemes in Australia the lack of money to develop the land has been the most important factor which has caused failures. Even in the highly favourable brigalow scheme - highly favourable in terms of planning and resources - a few failures have occurred. Those failures were due principally to the fact that the people did not have sufficient capital when they first went on to the land. Then came the drought period and the people were even more heavily in debt. It took those people some years to recover from the effects of the drought, and, faced with the large principal and interest repayments, they had no chance of recovering. In effect, they had a chain around their necks and they had no possible hope of recovery.

I think I have said sufficient to illustrate the point that in any closer settlement scheme it is essential to have proper planning. It is for that reason that I wish to refer further to the brigalow scheme. That scheme was rejected as a war service land settlement scheme for a number of reasons, including technical ones; yet it consists of the greatest areas of undeveloped fertile soils in Australia. One day it will be the richest agricultural livestock area in Australia an a large scale, under dry land conditions. The soils, as we know, are amongst the most fertile in their natural state in Australia. Despite the temptation to rush into the scheme and to pull down the brigalow it was not until the1960s that both the Queensland Government and the Commonwealth Government had sufficient technical knowledge and planning know-how to reach a decision that the development of the brigalow for closer settlement would be a success. Let us contrast it with some of the other closer settlement schemes, including war service settlement. In the first instance there was the virgin brigalow - Acacia harpophylla - which is a tremendously difficult wattle to handle. They are colonies of trees through their root system, and if they were ring-barked there would be immense re-growth. If the scrub were pulled the same thing could happen if there was not a successful burn. There were technical problems which had to be overcome.

I recall in 1950 going to a place called Cypress Downs which is very close to where the honourable member for Maranoa (Mr Corbett) lives. The first experiment involving hormone spraying of brigalow took place in that district. The experiment was carried out in conjunction with the Queensland botanist Selwyn Everest. It was a partial success in terms of killing the parent trees but the re-growth was such that it ruled out this type of large brigalow eradication. After that initial experiment further experiments were made until it was realised that the only successful way to clear brigalow country was with ball and chains, or chains alone, to stack the timber in wind rows, to get a good body of native pasture and then to get hot burn. If the finance were available the land was then ploughed. That was the only successful way to eradicate the re-growth of brigalow. Alternatively if a person had good animal husbandry conditions he could stock the land heavily, particularly with sheep, and control the suckers in this way.

The second step involved work by agricultural scientists and economists on testing the economics of the carrying capacity ot the land itself and the productivity per acre or number of acres. This went on for a number of years in various parts of the brigalow country. I can recall going to a place called Giligulgul in Queensland where one of the first men to do crop fattening of cattle on brigalow land was considered by many people to be a crank. He was called a crank because he put the plough into brigalow soil. That was unheard of in that part of the country. The only people who ploughed were farmers, not graziers or cattle men. But this man soon showed the people in the Miles district who was making the money. The same thing happened at Cypress Downs at Bendemeer. The plough went into brigalow soil. This then became the commercial answer to the experimental tests. It showed quite conclusively that the development of this type of soil under those conditions was a most successful operation.

From there on the experiments spread further into the lighter rainfall areas with the different types of brigalow - the acacias, wilgas and other varieties like that. Over a period of years it became apparent that this type of country was suitable for high productivity. In its virgin state it was running about a beast to 60 acres and under most difficult conditions. Brigalow trees can grow to a density of six thousand trees an acre. The costs of clearing were very low. The people who were clearing with D8 and D9 tractors, and later with chains, soon showed the others in the area what could be done. The low cost clearing in association with excellent soils, the quick establishment of Rhodes and other grasses produce a heavy carrying capacity in comparison with the virgin areas. The stage was set for a major closer settlement scheme, but that stage was not reached until the technical and scientific planning had been finalised.

The next step was for the agricultural economists to come in and give their verdict not only on the scheme and the different soil types but also on whether or not a farmer who went there would be successful under certain assumptions. This was done in conjunction with people skilled in transport economics. Good roads were essential. The whole scheme crystallised into a major civilian land settlement scheme. It was thoroughly investigated by the Bureau of Agricultural Economics in conjunction with the State departments. The end result was a Cabinet decision. The right honourable member for Fisher (Mr Adermann) was the Minister in charge of the scheme at the time. A Cabinet decision was given to go ahead with this civilian scheme. If there is one criticism of the brigalow scheme it is, as I said before, that there is a great temptation for people to go onto the land today without having enough capital. To develop fully for agriculture a block of 12,000 acres, 50% of which contains brigalow, would cost, over time, Si 50.000. Any person starting from scratch and trying to amass that amount of money on credit has not got a hope. What he does is struggle along, hoping that it will rain and that prices will stay up. If anything untoward happens, as it did in a closer settlement scheme that had 2 years of drought, the unfortunate people without capital reserves simply become further and further in debt. But this does not detract from the efficiency of such a scheme when there is proper planning. The people who had finance behind them, as was the case with the war service land settlement and brigalow, have not looked back, unless there was something physically wrong with the property.

The brigalow scheme will be one of the most successful closer settlement schemes in Australia because it was properly planned and was based on scientific research over a number of years. The one thing which could make a project fail would be the farmers having insufficient money behind him. The absurd practice of trying to settle people without money on the land must be stopped. It is no good saying that the Government will give them loans at low interest rates or at no interest charge. If they have not enough money to go on to the land now and do the basic work and have some cash reserve the chances of failure are very high. Yet large numbers of people come, I suppose, to every member of Parliament, point to some fellow and say: ‘Look, he has too much land. Why can I not have some of it?’ The answer is: ‘You can buy some of it if you want to and are prepared to pay the price.’ The next thing they say is: ‘I have not any finance. I want to get some money from the Development Bank.’ One has to sit down patiently, show them a set of figures and budgets, and tell them that they are facing a hopeless proposition without adequate finance. The days of the axe and the bark hut and living off the land are over. One has to have finance to go into any settlement scheme, whether it be a war service land settlement scheme or a civilian land settlement scheme.

The reason for moving this amendment is that there are lessons to be learnt from First World War experience and Second World War experience, and from other closer settlement schemes in Australia such as Humpty Doo, Esperance and the brigalow scheme. We have living examples to compare and to learn from. The amendment is designed to enable us to sit down and study past experience so that guidelines can be laid down for the future and so that we can learn from our mistakes. In conclusion I want to say one thing about closer settlement. As I said early in the piece it is an emotional type of objective. I suppose that everyone who has some leaning towards the land would like to own a farm. Of course, a lot of people on farms these days would like to get off them. It is a way of life which is recognised only by those who are close to the soil. Great philosophic arguments are starting to develop about the size of farms. Other than markets, the most urgent, pressing problem for this Government or any State government is the position of the small farmer. That is the case not only in Australia but also overseas. What is to become of the small farmer? All political parties are on his side; he is regarded as the salt of the earth, the backbone of the nation. We must protect the small farmer. I have said so myself and I think it is a high ideal. When one looks at the cold, hard facts of economics and technology and the substitution of capital for labour one has to face the fact that the small farms must become bigger. There is no other answer. I do not mean that they must jump in size from A to Z, but the small farm must become bigger.

This problem faces the sugar industry, with which I am closely concerned at ‘he present time. The small farms are efficient but costs, including labour costs, are going up. When one substitutes capital for labour by buying harvesting machines worth about $25,000 to $30,000, the farmer finds himself pressed financially. The rates of interest, depreciation and amortisation are such that these people will be down the drain in terms of repayment unless they can get good seasons every year. But if they amalgamated with their neighbours they would become more efficient in terms of the use of resources and in terms of net income.

How do we tell people these things? lt is a most difficult thing to do. This is a way of life for them. Yet, closer settlement is something which, in some areas such as the brigalow areas in Queensland that I have mentioned already, still should be carried on. This can be done, provided the properties are not too small. Let me point out the fallacy in this respect. The fault of many closer settlement schemes has been to try to settle too many people on the land. It is far better to have 20 prosperous farmers than to have 23 starving farmers in the one area. It might be just one or two extra farms which makes the difference in planning.

This problem must be faced. It is no good running away from it. We are all guilty in this respect because we often put politics before facts. It is up to us. We must face the fact that, in every primary industry in Australia today, the size of farms, particularly the situation of the small farmer, is becoming one of the most impressive problems. Irrespective of what government is in power, a decision which forces people to amalgamate will not be one seen favourably by those people. This does not mean that 1 believe necessarily in the plantation type of agriculture. I have this type of agriculture in my own area. It is highly efficient. One has only to go to the estates at Fairymead and Bingera to see it in operation.

If one looks at the computer work carried out by the Colonial Sugar Refining Co. at the stage when consideration was being given as to whether sugar could be grown on the Ord River - not economically but physically - the agronomy study snowed that the optimum size of an irrigated farm was of the order of 500 acres. That finding would absolutely shock most cane farmers. A cane farmer would be shocked to be told that that was the best size for a sugar farm. But when heavy capital involvement in plant and machinery was taken into account, it became evident that this was a sound answer. Would the Government put forward a proposal such as this? We are all politically biased in this regard. We try to settle on the land in a certain area as many people as we can.

This has been the greatest possible mistake that has been made in closer settlement schemes throughout the world.

What is the answer? In closer settlement, if an area is made too big, we are criticised. If an area is too small, we are criticised also. I remember the position that arose in relation to the brigalow scheme. The Queensland Government wanted the average size of each holding to be based on 800 head of beef cattle. The Commonwealth Government showed imagination and courage here, lt did not take long for the Commonwealth through its officers and their investigations to convince their equivalent officers in the Queensland Government that that type of property was doomed to failure in the end if anything serious happened to beef prices. Farms of that size would operate with a too high risk factor. The result was a substantial increase in the area of each block so that those farms could almost double their carrying capacity. This meant, in terms of net income, that instead of having a dozen struggling blocks in that scheme we have 7 or 8 prosperous ones. The Brigalow scheme has proved to be highly successful.

I wish to conclude on that point. There are lessons to be learned in regard to closer settlement. We, both in government and opposition, can and should learn from the mistakes of the past. We should try to see that these mistakes are not repeated. The variables in agriculture are such that no person is able to say at this time which is the best type of farm to get into in terms of agriculture. No-one is able to say what is the right size for a farm. We do not know what will happen to wool through the use of synthetics or what will happen to the beef industry because of the use of synthetics. Already, synthetic products are on the market - soya beans and so forth - which are substitutes for beef. 1 have tasted some of them. I did not like them. The point is that, every time prices come into consideration, people seem to develop tastes for such substitutes. One thinks of the position with margarine and butter. People have developed these tastes. Once substitutes are introduced, it is the thin edge of the wedge. Has anyone the right to stop them? Again, that is the question.

Have we the right to stop margarine coming into the country to replace the market for butter?

Mr Anthony:

– If it is in the public interest, yes.


– My views on this matter are well known. As long as this country has large settlements which are dependent on the dairy industry for their existence and where jobs are involved, an obligation exists to support that industry unless some equivalent alternative is proposed. This is a difficult problem. I emphasise that the problem is the great difficulty in being able to forecast accurately in advance what will happen in terms of land. Any person who goes on the land today goes on under a great risk. If that person goes on as a new farmer with insufficient capital, the chances are that, unless he is favoured in the first 10 years of development with good seasons and reasonably good prices, he runs the grave risk of failure. This has been the history of closer settlement schemes throughout Australia since the first such schemes were started.

Mr DEPUTY SPEAKER (Mr Jarman)Is the amendment seconded?


– 1 second the amendment. I would suggest, Mr Deputy Speaker, that this would be a convenient time at which to suspend the sitting.

Sitting suspended from 12.58 to 2 p.m.

Mr DAVIES Prior to the suspension of the sitting we heard a very constructive speech from the honourable member for Dawson on war service land settlement and closer settlement generally. He referred to the early mistakes and the effects of those mistakes on the war service land settlement scheme and compared this policy with the brigalow scheme. The initial planning of the brigalow development areas was correctly carried out before the settlers went on to the blocks. Of course it makes a tremendous difference when proper planning is carried out. While the honourable member was speaking I was thinking to myself that we had this type of problem on King Island where the earlier settlements at Pegarah were in a very rough state when the settlers first went there. When the settlement authorities went north to Reekara they had learnt to benefit by their mistakes, and the properties were reasonably well developed for the settlers to go on.

This of course leaves us with a problem, and I intend to develop this later in my speech. I would like now to relate this problem to the remarks made by the honourable member for Dawson. Immediately after the war, because of pressure from the Returned Services League bodies, other local organisations and men who had come back from the war and were anxious to get on to settlement blocks, the settlement authorities were inclined to let them go on to these areas before they were fully developed and ready for the settler. We know in our own case how the settlement authorities approached the settlers and practically gave them unlimited advances for improvements to the properties. These should have been carried out by the settlement authorities before the settlers were allowed to go on to the blocks. We find now that these unlimited advances are a rope around the neck of the settlers when they come to settling up, when they are anxious to get the option price and to find out what they owe the settlement authorities in order to gain ownership nf the property. I will refer to some cases in which these people have received tremendous bills :n relation to these advances. The responsibility should not really belong to the settler; it should be wholly and solely the responsibility of the settlement authorities, because after all they are the people who made the mistake of allowing these people to go on to the blocks well before the blocks were properly developed.

This brings up another very interesting facet to which the honourable member for Dawson referred, and that is the need for equity for the settlers in these properties. Of course it is only too true that this is one of the great problems that is causing a lot of confusion and a lot of mental anxiety to settlers in my area. It is true, as the honourable member for Dawson said, that T have lived with this problem now for a decade or some 12 years. These settlers are in rather isolated areas. It is remarkable that when a senator is first elected or a member is first elected to a State house of parliament he is keen to go to these people and tell them that he intends to carry on with great crusading zeal to put everything right in these areas. But soldier settlement becomes a political hot potato before long and it is dropped. These people in the settlements have very few friends in State Parliaments or in Federal Parliament to advance their arguments.

At the outset I must pay tribute to the right honourable member for Fisher (Mr Adermann). When he was Minister for Primary Industry and in charge of war service land settlement, he came to King Island on 2 occasions. The people there always speak with a great deal of affection for him because he realised the problems that were there. He made an advance of f 750,000 for redevelopment and an advance of £750,000 for write-offs to assist these people and to try to correct the mistakes that had been made earlier by the settlement authorities. This amounted to some $3m in today’s currency, lt was a very good shot in the arm for these people and a good attempt to correct the earlier mistakes and to get the settlement of this area back on to its feel. Of course, this has flowed over into other settlements and redevelopment was carried out under the jurisdiction of the then Minister for Primary Industry. So when speaking on matters of war service land settlement 1 always like to pay a tribute to him for the work that he did, the knowledge that he had, and the sympathetic attitude with which he approached the problems of these people. 1 supported the amendment moved by the honourable member for Dawson, the terms of which are as follows:

Whilst not opposing the provisions of the Bill, the House is of opinion that a Select Committee of the House should be appointed to inquire into all aspects of war service land settlement in Australia in order to form guidelines for any future land settlement scheme.

We have been seeking such an inquiry for a long time because we believe that it will give us the guidelines for any large scale land development undertaken by the Government in the future. More importantly, as it pertains to the present it will provide us with a formula and a determination to wind up the present scheme, making sure that the settlers involved receive their just entitlements for the work they have done on their farms. An inquiry would answer many questions that have been concerning us for years, and I intend to pose some of these questions during this debate on the Bill before the House to provide additional funds for war service land settlement. This Government has persistently stalled off all requests for an inquiry. The State Congress of the Returned Services League and then the National Congress and later the National Executive of the RSL sought a royal commission into all aspects of war service land settlement. This was refused in the first instance by the then Minister for Primary Industry, the right honourable member for Fisher, and then by the former Prime Minister, the late Mr Harold Holt. This refusal has been confirmed by the present Minister for Primary Industry (Mr Anthony). The late Mr Harold Holt advised us that Cabinet had rejected the request for the royal commission, but, as 1 have pointed out before, wc find this difficult to follow because a Mr Peter Ireland reported to the annual meeting of the RSL in February 1968 that the present Prime Minister (Mr Gorton), who was at that time a senator and a senior Cabinet Minister in the Holt Government, had advised a Liberal Party meeting at Launceston that he had never heard of any discussion in Cabinet for a possible royal commission into war service land settlement.

The RSL has not dropped this issue. At its State Congress held on 30th May last year in Devonport it carried unanimously a vote of no confidence in the present Minister for Primary Industry for his handling of his Department. I sometimes feel sorry for him because he inherited the whole sorry mess from the right honourable member for Fisher, who previously had inherited it from the honourable member for Chisholm (Sir Wilfrid Kent Hughes). The honourable member for Chisholm, when he was in charge of war service land settlement, said when introducing a Bill such as this in 1954 that the scheme would end in 5 years. An inquiry such as we seek would tell us why this prediction that the scheme would end in 1959 was wrong and what were the circumstances and conditions that have prolonged the agony for the further 1 1 years to date. Last year the Senate carried a motion for an inquiry. It was moved by Senator Drury on 11th September last year as an amendment to the

Repatriation Department estimates, it sought an inquiry into the operation and inadequacy of the War Service Land Settlements Act. 1 repeat that the motion was carried by the Senate but the inquiry has never been instituted by this Government. The Legislative Council of Tasmania has set up a select committee to inquire into war service land settlement. At present this committee is actively engaged in taking evidence. It has been to many of the settlement areas in my electorate; it has been to King Island. It has taken evidence in several other parts of Tasmania as well.

Mr Duthie:

– Has it taken evidence from you?


– Not yet, my friend. The terms of reference for the Tasmanian committee are as follows:

  1. The administration o£ war service land settlement in relation to the amount of rent and other commitments demanded from settlers and the option of purchase price of properties.
  2. The responsibility for, and the basis upon which option prices should bc determined.
  3. Whether the basis of fixing option prices preserves sufficient equity to settlers having regard to the effluction of time since holdings were occupied.
  4. Any other matters incidental to the above terms of reference.

The chairman of the Committee, the Hon. C. B. M. Fenton. M.L.C., arranged to visit the other 2 agent States, South Australia and Western Australia, recently because he was naturally keen to obtain some first hand information on war service land settlement in those States. Tasmanian parliamentary officials made the necessary appointments for him in Adelaide and Perth. When he arrived in Perth the official representing war service land settlement in that State telephoned Mr Fenton the night before the interview was to take place to say that the Crown Law Department had instructed him not to discuss ::ny matters with Mr Fenton.

When 1 questioned the Minister for Primary Industry about this refusal to cooperate he indicated by way of a subsequent letter to me, for which 1 thank him, that at the time of the proposed interview in Perth he had not received certain legal advice. This is very strange indeed. I cannot quite comprehend it because the Perth official said that he was under instructions from the Crown Law Department. The Minister in his letter said that this official was a temporary officer. The answer stated:

Whilst this officer is very comp.’tail in the work required of him, he would not he in a position to comment on the policy determined for the War Service Land Settlement scheme anil it would be unfair bo.h to the officer and the Committee to expect him to give evidence.

It is nol for the Crown Law Department to determine whether he is competent to give evidence. Mr Fenton made it quite clear in arranging for the discussion in Perth that the gentleman was not required to give any evidence as referred to in the Ministers letter. He was simply to have some discussion with Mr Fenton. We were quite upset when the official in Western Australia informed the chairman of the Tasmanian committee that under instructions from the Crown Law Department he was not even to see Mr Fenton. I am pleased to note in this letter of 21st May that the Minister is prepared to make an officer of his Department available to give evidence to the Tasmania parliamentary committee. I hope the Minister for Primary Industry will see that his departmental officers are prepared to give all the evidence which the Tasmanian committee requires. I fail to see why any evidence which this committee requires should be withheld for any reason. I think the Commonwealth should co-operate with the State people. (A disturbance occurring in the public gallery) -


-Order! I request the people who are demonstrating, kindly to leave the gallery. (The disturbance continuing) -


– -Order! I request the Serjeant-at-Arms and the police constable to remove the demonstrators. (The disturbance continuing) -


-Order! I request the police to take the appropriate action. (The disturbance still continuing) -


-Order! I suspend the sitting of the House. 1 direct that the galleries, including the Press gallery, be cleared. The sitting of the House will be resumed on the ringing of the bells.

Sitting suspended from 2.18 to 2.55 p.m.


Mr Speaker, before the sitting was suspended I was asking the Minister for Primary Industry, who is at the table, whether he would support the Opposition by permitting his officers to give evidence before a Tasmanian parliamentary committee inquir ng into all aspects of war service land settlement. I was supporting the amendment moved by the honourable member for Dawson for the appointment of a committee to lay down guidelines for any future large scale land development projects. I have repeated on many occasions that I am not interested in having a witch hunt, but I certainly would like to probe the cost structure of the war service land settlement scheme, the reasons for the long delay in completing the scheme, the reasons for the change in accounting procedure instituted some 10 years ago and whether there is any connection between this and the insistence by the Commonwealth on having a finger in the pie in determining the valuation at which the farms are offered to the settlers.

Valuations have been carried out, or. are in the process of being carried out. The Commonwealth calculates this figure as the return it can expect to receive from settlers. This is set against the total cost of the scheme in the 3 agent States of Western Australia, South Australia and Tasmania. The difference, or the excess costs as they are termed, is to be found by the Commonwealth and the 3 agent States in the proportion of three-fifths to be found by the Commonwealth and two-fifths to be found by the States. We want to know why the Commonwealth took over the legal right of the States to determine valuations and whether this was done to dummy up the valuations and so reduce the gap between what the authorities receive from the settlers and the total cost of the scheme. We know that the Commonwealth does interfere because I have in my files a letter signed by Mr A. B. Wherrett, the Acting Director of War Service Land Settlement in Tasmania, addressed to a settler and advising him that: the Commonwealth Director of War Service Land Settlement has instructed that the option prices of these properties to you be increased.

Any inquiry such as we seek would deter.m,ne why it became necessary for the Commonwealth to move in on the State of Tasmania and to take away from it the legal right to fix the valuations for the farms in Tasmania. But one would think that a reasonable Minister would of his own accord set up a committee to inquire into the allegation that I made last year and that he would immediately set about trying to clear officers of his Department and officers of the Commonwealth Taxation Branch of any allegations of dummying the figures to suit the books. For the sake of the record 1 will read again from the letter from the King Island branch of the Returned Services League addressed to the State Secretary of the RSL in Hobart. The letter stated:

The King Island Sub-Branch has been supplied with information by a member of the Valuation Branch -

I remind the Minister that this was an officer of the Commonwealth Taxation Branch - which indicates that the valuations as supplied by the Valuation Branch have been corrupted by the War Service Land Settlement Authority. The officer concerned stated that, while he would not advise an individual to contest these valuations on legal grounds, because of the legal costs involved, he would like to see an organisation such as the Returned Servicemen’s League take up the case.

I know that the Minister will deny and deplore the allegation that the figures have been corrupted, as he did recently when a member of the Tasmanian Parliament raised this same issue in that Parliament. But the plain fact is that the charge was made by an officer of the Valuation Branch of the Commonwealth Taxation Branch and only a properly constituted committee, whether it be an inter-departmental committee or whether it be a committee functioning out in the open, as we request, would be able to determine whether the allegations against the War Service Land Settlement Authority are correct or not. That is all we ask. Let us clean up this matter now once and for all. Surely any responsible Minister would want to know whether there was any foundation in these serious charges of playing around with or dummying the figures. If there is nothing to hide why not agree to this committee of inquiry and clear up the smell once and for all.

We are all aware that there is a huge deficit that must be mct by the Commonwealth and the States. The latest figures available to me indicate that 1,017 farms were developed in Western Australia at an average cost of $52,000 each. The excess costs in Western Australia total $21m of which the State of Western Australia will have to find $8. 5m and the Commonwealth $l2.5m. In South Australia 1,028 farms were developed at an average cost of S39,000 each. The excess costs in South Australia total S9m of which the State of South Australia will have to find S3. 5m and the Commonwealth $5. 5m. The total cost of the scheme in Tasmania is approximately S49m to date. The excess costs - that is, over and above the cost of development - total $32m. of which the State of Tasmania has to find $12. 8m and the Commonwealth almost $20m. The average cost per occupied farm in my electorate varies from §156,000 for a dairy farm of about 125 acres at Togari to $121,500 on King Island, $73,000 for a farm at Meunna and $55,000 per occupied farm at Mawbanna.

Under the terms of the War Service Land Settlement Agreement, the farms must be offered to the settlers at the cost of development or at market value, whichever is the lesser value. From the cost of development figures that I have just given, it is quite clear that the farmers are to get their properties at market valuation. Now we come to the illegal practice to which I have referred. J would like the Minister again to tell me why the Commonwealth will not allow the State to fix the valuations when the legislation clearly allows for the State to carry out this function. Please do not give me the weak excuse which has always been advanced in the past by some of the Minister’s departmental advisers, that the Commonwealth interferes with the rights of the States simply because of the amount of finance that is involved. This clearly implies that the Commonwealth cannot trust the States. Like many others, I would like to know what has happened in the Minister’s past dealings with the States to bring about this state of affairs. Is this linked with the change of accountancy procedure which the Minister introduced some 10 years ago? I think this Parliament has a right and a duty to set up a committee of inquiry to look into these matters, amongst others that I have raised.

There is no doubt that the Minister’s Department has been interfering with the valuations. In answer to a question at last year’s State RSL Congress, the Acting Director of the War Service Land Settlement in Tasmania admitted that he did not see the valuations because they had to go straight to Canberra. I have referred in this House before to the wide disparity between the value which the Minister’s Department puis on properties and the market value that we consider should be acceptable to the authorities. The former Treasurer for Tasmania. Mr Reece, advised us in answer to queries that the capital value placed on a property by the State Valuation Branch could be considered as a reasonable market value for the property. Here then is the valuation as provided for in the War Service Land Settlement Agreement. All that we nsk the Minister to do is to accept this market valuation which is on the basis of walk in, walk out, and subtract from it the value of the stock, plant and structures. As we all know these are covered by separate accounts under the war service lands settlement scheme. Then you would subtract also an acceptable figure for the value of the improvements carried out by the settler from the time of occupation up to the date of valuation. The State valuations are available. We know the nature of the stock, plant and structures accounts because these are kept within the Department. All that remains is to obtain a figure for the value of the settler’s improvements. With this information we could bring the scheme to an end, with justice being done to the settlers.

I intend to give only one example of the tremendous disparity between the Commonwealth valuation for option to purchase and the State Treasury valuation of the same farm - both valuations being taken in the same year. 1 remember quoting a text book on valuation procedure which has now been accepted for study in universities. It clearly states that for these purposes there cannot be 2 valuations of a property in the one year. I quote this one case. The Commonwealth set the value for the dirt on this farm - the soil only - at $23,604. The State valuation for the dirt and all the structures, the plant and equipment, was only $14,500. So the Commonwealth department is saying, in effect, that it values the soil on this farm at $9,000 more than the State value of not only the soil but the stock, plant, house, dairy, hay barns, sheds and all the fences as well. These valuations were made in the same year. How stupid is this situation. This is only 1 case: I could quote dozens. Surely we are entitled to query the method of valuation and to try to find out the reason for the Commonwealth valuation being so high not only in this 1 case but in dozens of cases. When, on top of this, a valuation officer says that the figures are being corrupted, surely we are entitled to a parliamentary inquiry to determine this question among all the other matters that are of concern to the wellbeing of the settlements.

In his second reading speech the Minister recalled that one of the basic principles of the scheme was the concept that lack of capital was not to debar an otherwise eligible ex-serviceman from participating in war service land settlement. The settlers and the Labor Party maintain that the Government has failed to provide for a settler with no capital to meet his commitments and to live. We hold that in most cases the settler became over-committed with advances to carry out works on the farm that should have been carried out before he took possession. In commencing my remarks I referred to this matter and drew attention to comments made by the honourable member for Dawson who led for the Opposition in this debate. He spoke on this aspect. I pointed out quite honestly that it was due to pressures from the Returned Services League and other organisations that the Government pushed these settlers onto the properties.

Once the settlers got their properties the land settlement authorities came around and said: ‘We think you need a big dam here and more fences there. You can have as much money as you like. Just apply for an advance’. However, what do we find today? I need instance only 1 case out of dozens. On 1st May 1970 the State valuation on the property concerned was $22,000 on a walk-m walk-out basis. The value of the plant is $1,500 and of the stock $8,000. If anyone wanted to buy this property at the present market valuation - the State valuation - he would have to pay $31,500. But what does the Commonwealth Government want from the settler? The Minister has referred to more money being made available for advances under this Bill. In the case that I am citing there is an amount of S21.138 for advances, an option price of $10,760 and other charges of $4,176 making a total amount owing to the war service land settlement authority of $36,074. If he sells the property at the current valuation of $31,500, God knows where he will get the $4,500 that he will still owe to the authorities to clear his debt. How can he clear his indebtedness? Is it any wonder that some of these settlers are neurotic?

I have no desire to discuss the humanitarian grounds on which I advance this case because I could easily get carried away, but some of these chaps are in a serious condition mentally. Many settlers are affected by the mental strain and concern they suffer when they get accounts like this. This is not an isolated case; there are dozens of similar cases where settlers are saddled with the advances that were handed out to them with no strings attached. When they first settled on their properties money flowed like water and they could secure advances for this, that and the other and naturally they accepted those advances.

As honourable members know, a person did not need qualifications to take up a property after the war. Provided a man was an eligible ex-serviceman who had signified a desire within 5 years of his discharge to go onto a property, he could take up a property. Today, because of the action of the authorities in giving settlers unlimited advances, there is a day of reckoning. The advances are billed against them and these chaps have no hope at all of meeting their accounts. The honourable member for Dawson spoke about equity in a property. We can understand the mental concern of these chaps who after giving the best years of their lives to a property - 25 years - find they have no equity whatever in it. As a matter of fact if they got out and got reasonable prices for their properties they would still owe money to the war service authorities in respect of their farms.

These people live in rather isolated communities. It is quite true that when a man becomes a new senator, a new State member or, sometimes, a member of this House he tends to be a crusader. He is keen and will do everything for these people, but because not many political votes are involved and because war service land settlement is a hot political potato, he finds he can do little. He is told that the settlers have been given everything on a plate and should be able to make a go of it. A new member finds this attitude. He is told: ‘Oh, you cannot touch them. They are all right’. I know that I have lost quite a few friends in fighting for these people, but 1 will continue to fight for them every year. I am convinced of their sincerity. I am convinced of the genuineness of their cause. 1 want to see a committee of inquiry, or at least some change made in the valuations. I want the Commonwealth to accept the State valuation figures which are based on a walk-in walk-out basis. Once this is done I want the Commonwealth to subtract the value of the plant and stock and also to give a reasonable assessment for the improvements curried out by these settlers who have been there for the best years of their life.

I commend to the Government the amendment moved by the honourable member for Dawson for the selling up of such a committee, which would provide in future that we could at least lay down guidelines so that we would not make the mistakes that we have made over the years since land settlement was instituted after the Second World War. I commend to the Minister the reading of a book by Mr Hooper, a retired World War I veteran, which is to be published at the end of this year. It will contain many chapters on the inadequacy of the treatment given to war service land settlers up to the present time.


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


– I strongly and sincerely support the amendment moved on behalf of the Opposition. The amendment does not negate the provisions of the Bill but calls for the setting up of a select committee of the House to inquire into all aspects of war service land settlement in Australia to formulate gu:delines for any future land settlement scheme. lt is important that this bc done. I make an appeal, in no sense carping criticism of what has gone on in the past but simply as a constructive measure to delineate some of the problems which have emerged after a half century of soldier settlement in Austral’a. for the amendment to be supported. Soldier settlement is not a new proposal. It can be found in the annals of

Rome where the legions, when they returned and dispersed, were settled both at home and abroad.

I live in an area which was developed largely after World War L on the basis of soldier settlement. It is an area of development based on irrigation, it provides many lessons as to what can be done to make soldier settlement more effective and more efficient. Some of the concepts thai were adopted after the First World War in the Mumimbidgee area arc concepts that still are worth exploring today. There was the concept of specialised training which was so necessary for the men who were to go onto farms. There was the selection of an elite corps of men who were sent to Californian irrigation areas to learn some of the advanced techniques which we d’d not have in Australia at that lime. They came buck as community leaders and farm leaders. There could be many good lessons to be learned, but there were also many difficulties that arose due to economic conditions and also because it was a great experiment in arid zone development - perhaps the greatest experiment in arid zone development that we have had. Since World War II there has been further settlement of ex-serv cemen in that area and in the south. Perhaps the outstanding example of land settlement in the past 2 decades has been the Coleambally area. I want to make some reference to that development as I feel it offers lessons from which we can all learn. Also it lends support to the idea that we should be having a comprehensive look at what has been done in the past half century. The major problems that have arisen have not been entirely wrapped up in the financial provisions and in the decisions that were made, even as to farm sizes. A lot of the difficulties have arisen just because we did not have the technical know-how and technical services were not available. When wc think back and realise that it is only perhaps in the past 20 years that we have gained knowledge and understand ng of the soil pH we can see how serious errors in assessment of soil suitability could easily have been made. I should like to give an example of this.

Recently a group of agronomists, field officers and experienced growers of the crops desired looked at 6,000 acres of land that might have been put under intensive culture and irrigation. They gathered and examined the soil type and agreed that this was ideal soil for the purpose in mind. This group said that the soil was suitable and of outstanding quality for this particular intensive culture. Not 20 years ago, in fact not even 10 years ago, the assessments of the technical people concerned on that day, together with the views of the people in the industry, would have been sufficient. Those combined assessments would have sufficed to indicate that this soil should be set aside for the purpose desired. People would have been allocated farms, or they would have drawn farms, in that 6,000 acre parcel of land. In fact, what happened was that the soil was further examined and subjected to chemical analysis particularly. It was found that under intensive culture with irrigation its structure would break down. So had we proceeded with the plans for the development of that land we would have been putting people onto blocks of land that would have failed them. The failure would in this instance not have been due to anything other than lack of technical knowledge of the soil and its reaction to intensive culture. I do not bring this forward to blame anyone but to show that the state of knowledge had advanced to a degree where we were able to see a mistake which we did not make.

As all of us in this House listened to the honourable member for Braddon (Mr Davies) we must have had some feeling for him inasmuch as he was describing what had happened in human terms as a result of mistakes, some administrative and some technical. I want to draw attention particularly to this sort of error, and I do not do so in any narrow spirit of criticism but to emphasise the need for some overall assessment and an inquiry along the lines we have suggested. Earlier 1 mentioned that probably the most outstanding closer settlement scheme in the whole of the Commonwealth is at Coleambally. Coleambally is rather a big word if one has not beard it before and perhaps it is easier to remember it if one knows that it means ‘two swallows on the wing9. This was a scheme devised under the auspices of the New South Wales Government of the time and the Minister for

Conservation of the time, the honourable A. G. Enitcknap. The scheme was designed to utilise 500,000 acre feet of the 1,200,000 acre feet additional water supplies that would come from the Snowy scheme. The planning of this scheme was carried out by the Blowering committee. This committee was a body that brought together people from various Commonwealth and State departments, the Treasurer, the Reserve Bank and a wide range of technical expertise. This was the planning body for what is today the largest single land settlement scheme in the nation. In terms of farm numbers it is five times the size of the Ord River scheme. Originally the planning envisaged 1,000 new farms - large area farms for rice, wheat and sheep propositions and horticultural farms. The concept was attacked and described as a white elephant, and one public figure referred to it as a new Gallipoli. Despite all the prophets of gloom it has developed in an outstanding way and today the area boasts 250 farms and a new town. In fact, the newest town in the nation has been born at the hands of the Murrumbidgee shire which took over the project initially planned by State authorities.

Coleambally is moving forward and in that area today one can learn lessons of a technical and administrative nature, lessons that are needed to be learnt about closer settlement. Even today in Canberra there are lessons to be learnt at an exhibition at the Monaro Mall where one can see the story of soldier settlement. A very fine exhibition of soldier settlement products and its epic is on display from the Murrumbidgee. Coleambally has received some soldier settlers. Young men who have returned from Vietnam have settled there. In this regard there are queries which must be posed. The young man who goes to Vietnam and returns is given an indication of his repatriation rights. It is intimated to him that $6,000 closer settlement loans are available. These young men have served and have done the job required of them. They are given certain rights and promised certain privileges. We must see that the promises are kept and the privileges duly accorded. However, when a young man applies as an ex-serviceman from Vietnam to enter the ballot for a Coleambally farm he has to go through a very close examination. He makes a written application and he must have a basic amount of money, as well as managerial and farm experience. His application is considered by the New South Wales Irrigation Commission and if the applicant measures up to the criteria applied then he may enter the ballot. If he succeeds in the ballot he can be allocated a farm. However, it is only a provisional allocation, and he must appear before a tribunal to substantiate the claims he makes in his application. If he cannot prove his financial position and his possession of plant and equipment and his managerial experience to the satisfaction of the tribunal he loses the farm he hrs drawn in the ballot. I can cite one case which illustrates the difficulty to which I wish to draw attention. This is the case of a young man who had all the necessary qualifications - youth, cash and managerial experience - and who is approved by the State authorities and therefore allocated a farm. He is cross-examined by the State tribunal, which conducts its hearings in a firm and stern way, and his application is confirmed. This man is then able to go to private bodies and obtain plant and equipment. He is able to go to the private banking systems and get some support. He thinks to himself: ‘The State Government of New South Wales has approved me, the private instrumentalities have approved me and my application has been confirmed.’ He has some equity to offer, although not much, so he thinks surely the Commonwealth Government will play its part. As security is required he offers a mortgage over his plant and equipment and a bill of sale over his farm. He is anxious that the Commonwealth should have its safeguard for the money put forward. However, the conditions of the safeguard are proving too stringent and too hard. The query 1 pose is that if we are going to have resettlement loans administered by the Department of Primary Industry and if we are going to recognise the debt due to the men who have returned, then we have to at least match the State and the private sector with the resettlement loan which the man has been led to expect.

Therefore, I ask the Minister to examine the cases to see whether the Commonwealth can match the confidence in the young men concerned that has already been shown by the State and also by the private sector. This is just one aspect of the settlement concerned.

Earlier, 1 mentioned the real problem that arises in relation to technical knowhow. I want to pose another problem as another reason for supporting the amendment proposed by the Opposition and which provides for an inquiry. Not very long ago a parcel of settlement in the Riverina was opened up that was based on sandhills and on the utilisation of well-drained deep sands for citrus production. All the technical know-how pointed to the location of this land being ideal for the recommended purpose, and so people took up these farms and have been established on them now for some time. However, despite the technical know-how that was given to them and despite the best knowledge available, although the trees were planted, grew and looked most luxurious, there was no fruit. So, we have this inexplicable development in the face of all the know-how that we believed we had - know-how which was the basis of recommendations in most cases and which of course influenced the settlement itself. Therefore, we now find that there is a need to look at these people in relation to reconstruction.

One might ask: Is this not a most wasteful procedure? It is not wasteful at all. After all, the State, which is the public authority in this instance, went ahead in good faith and the farmers entered on the blocks in good faith. Although both parties have done their best, because we have had inadequate know-how there is a need for reconstruction, and I do not think there is any need to apologise for that opinion. The only thing that needs to be done, as the member for Braddon so eloquently :-ai..l, is that we must recognise this fact. I do not see why there should be any difficulty about (hat because, if there is a need to reconstruct, it should be recognised that the reconstruction should be carried out as quickly and efficaciously as possible.

Dealing with Coleambally again, I point out that the land in this area has been brought into production perhaps mere quickly than land has been brought into production in any other part of Australia. Not too long ago I had the privilege of. arranging an inspection by air and land by Sir John Crawford, who knows the Mumimbidgee particularly well and who, perhaps has had reason to query some of the claims for development that have been made in the Coleambally area. In fact, what ho found was an extraordinary base of development. He found that new land was being brought into cultivation and production more quickly in this area than in any other area of which he knew, and certainly far more quickly than it was in the older Murrumbidgee Irrigation Area. Therefore, lessons can be learnt from this development, and those lessons can be learnt from the problems as well as from the successes.

Bearing in mind the spirit that dominates us - I hope it still does - in relation to closer settlement, I believe we have no reason to apologise for the fact that we have accepted a dictum which I have found rather quaintly expressed by my good friend Mr Charles King, who is chief of agricultural marketing economics in New South Wales and who wrote an outline of closer settlement in that State. According to him, Governor Macquarie - and we go back now to one of the great developers of the then infant nation - judged ‘that it was better for the people to be settled on small farms of their own rather than to work for hire on large estates’. Of course, the reign of Macquarie was from 1809 to 1821, and it took much training and agitation to give people in the countryside their independence. They have achieved it, but one may ask whether we have moved forward at all from the point reached all those years ago. We have: The concept of the farm size has had to be re-examined. Of course, it must be reexamined, as has been recognised. I should say that one principle that should be applied and generally accepted is the optimum technology. If this is applied, I believe we can get a sound reconstruction, which is needed in some instances, based only on size. But size is not the only answer.

I have endeavoured to point out that, in relation to land use, a man can be given 10 times the area he has at present and, if the land use recommended has been wrong, this will only multiple his troubles 10 times. It is not only just a question of size. Sometimes capital also is involved; sometimes a man is affected by matters beyond his control, such as the imposition of wheat quotas; and at other times problems arise associated with the man himself. All of these things mean that, within the concept of closer settlement, a great many variables exist. A great many matters must be given close and specific attention. If this is to be done systematically and properly, I believe we will need the sort of select committee that has been recommended today. After all, we have to find answers to some of the questions.

I agree entirely that this should not be a witch hunt. I may say also that such a select committee may dispose of some of the economic myths, one of the greatest of which is that the bigger is the best. The position is just not so, and 1 should like to see a select committee appointed so that this particular matter can be brought forward and dealt with on a technical level, far too often in parliamentary debates there is neither the time nor the opportunity to go deeply into some of these questions. If we accept this myth, which I may say has been propagated with great enthusiasm in certain quarters, we will run into the kind of trouble that was run into in the Union of Soviet Socialist Republics 20 years ago - in fact, it could be 40 years ago-when that country followed exactly the principle that the bigger is the best. Of course, the Russians found that the law of diminishing returns took over at a point which they were not able to establish and which they had not previously established. I am not quite clear, from the technical journals, whether they have reached a final solution now in relation to farm size in the various crops and industries.

Certainly there is no need for us to approach the appointment of any select committee of inquiry on the basis that we will not need in future closer settlement or occupation of the countryside, nor do we need to abandon the need for further settlement. The only thing I would say is that, in looking to the future, we will have to see the marrying of the concepts of urban decentralisation and rural settlement and development. I believe this will have to come, because at present we often plan in isolation. I make no apology for repeating the term ‘economic apartheid’ which I have used regularly. I use that term to mean simply that planning for farms is being done in an isolated way. There is a batch of settlements in an area. Perhaps there is the ad hoc development of Sydney or Melbourne in terms of suburbs, but there is no real coherent plan of decentralisation that would involve not only primary but also secondary and tertiary industries.

I think that planning for the future will have to proceed on this basis so that discussion becomes not a discussion for rural people alone and not a discussion for urban people alone but a discussion for the 2 together, marrying the concepts that we of the Opposition, at any rate, are espousing in terms of planned development for the future.

An inquiry such as has been suggested would give us the raw material for the decisions that we have to make in this regard. It would enable us to look in depth at the current problems which are facing so many of the soldier settlers due to circumstances, in most cases, far beyond their control, such as governmental and technical decisions.Here we could have a medium whereby we could learn the lessons that have to bc learned and give the assistance necessary for reconstruction which in many cases is urgent. Secondly, the committee of inquiry could examine the whole ramifications of soldier settlement with a view to determining guidelines for future development. If we set up the committee of inquiry as suggested and proceeded on this 2 pronged attack for information and guidance, we could do a great deal to demolish some of the economic myths that are perpetrated at the present time. It could do a great deal to give us the basic raw material for the political and administrative decisions that we will have to make in the future. I hope the Government will give close and sympathetic consideration to this proposal which has been put forward in a most constructive way with only a desire to have the future planned better and to learn from the mistakes of the past.

Debate (on motion by Mr Giles) adjourned.

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Message received from the Senate intimating that the Senate does not press the request for amendments which the House of Representatives has not made, but requests the House to amend the Bill as set out in Schedule A annexed. The Senate also informs the House that the amendments set out in Schedule B annexed have been made bv the Senate to the Bill.

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Requests bv the Senate for Amendments consequent upon consideration of message No. 51 of the House of Representatives

No. 1 - Page 12, after clause 20, insert the following new clauses: 20a. The heading to Division 3 of Part V. of the Principal Act is amended by inserting before the words “Insured Patients” the word “Certain”. 20b. Section 47 of the Principal Act is amended by omitting sub-section (2.) and inserting in its stead the following sub-section: - “(2.) Commonwealth benefit under this Division in respect of any day is not payable to the organization unless and until the organization has paid to the contributor, or to the proprietor on behalf of the contributor, otherwise than by way of hospital fund benefit, an amount equal to the amount of Commonwealth benefit.”. 20c. Section 49 of the Principal Act is amended by adding at the end thereof the words “or under Division 4a of this Part”.’.

No. 2 - Page 12, after clause 21, insert the following new clauses: 21a. The heading to Division 4 of Part V. of the Principal Act is repealed and the following heading inserted in its stead: - “Division 4. - Certain Uninsured Patients, and Pensioners, in Approved Hospitals.”. 21b. Section 53 of the Principal Act is amended -

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amendments made by the senate. as amendedconsequentuponconsideration of Message No. 51 of the House of Representatives

No.1 - Page 2. clause 4. leave out the clause, insert the following clause: “4. Section 3 of the Principal Act is amended -

PartII. - National Health Services (Sections 7-11).’ and inserting in their stead the words -

Part II. - National Health Services (Sections 9-1 1).’; and

Division 3. - Insured Patients in Approved Hospitals (Sections 46-52).

Division 4. - Uninsured Patients and Pensioners in Approved Hospitals (Sections53-55).’ and inserting in their stead the words -

Division 3. - Certain Insured Patients in Approved Hospitals (Sections 46-52).

Division 4. - Certain Uninsured Patients, and Pensioners, in Approved Hospitals (Sections 53-55).

Division 4a.- Patients Treated without Charge in Approved Hospitals (Sections 55a-55b).’.”

No. 2 - Page 8, clause 16, line 32, after “amended”, insert “ - (a)”.

No. 3 - Page 9, clause 16, at end of clause add the following paragraph: “(c) By adding at the end of thereof the following sub-section: - (6.) There shall be a right of appeal on the determination of the Minister under the last preceding sub-section by a contributor to the jurisdiction which determined or would have otherwise heard his claim for compensation or damage.’.”.

No. 4 - Page 9, clause 19, lines 37 and 38, sub-section (4.) of proposed section 29a, leave out “during the Minister’s pleasure”, insert “for a period of three years but he shall be removable by the Minister in any case of misconduct or incapacity”.

No. 5 - Page 10, clause 19, lines 7 and 8, subsection (3.) of proposed section 29b, leave out “during the Minister’s pleasure”, insert “for a period of three years but he shall be removable by the Minister in any case of misconduct or incapacity”.

No. 6 - Page11, clause 19, line 12, sub-section (4.) of proposed section 29d, after “Act,”, insert “in accordance with the said recommendation,”.

No. 7 - Page 12, after clause 19, insert the following new clause: “19a. Section 32 of the Principal Act is amended by adding at the end of sub-section (1.) the words ‘and (he conditions of the agreement shall be reviewed at least once every two years’.”.

No. 8 - Page 12, after clause 19, insert the following new clause: “19b. After section 35 of the Principal Act the following section is inserted: -

No. 9 - Page 17, after clause 23, insert the following new clause: “ 23a. Section 69 of the Principal Act is amended -

No. 10 - Page 18, clause 25, leave out the clause, insert the following new clause: “25. Section 73 of the Principal Act is amended -

No. 11 - Page 19, clause 27, after paragraph (g) of sub-section (2.) of proposed new section 76a. insert the following paragraphs: “(ga) details of how the reserve fund has been invested; (gb) details of direct or indirect interest in shareholdings held by directors of the fund in organisations in which the fund’s reserves have been invested; and”.

No, 12 - Page 31, after clause 46, insert the following new clause: “46a. Section 101 of the Principal Act is amended -

Minister for Health · Barker · LP

– I move:

In Committee

Motion (by Dr Forbes) agreed to:

That the requested amendments be agreed to.

Resolution reported; report adopted.

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Minister for Customs and Excise · Hotham · LP

-I move:

The Customs Tariff Proposals whichI have just tabled relate to proposed amendments to the Customs Tariff 1966-1969. The amendments, which will operate from tomorrow, incorporate changes arising from the Government’s adoption of recommendations by the Tariff Board in its interim report under the inquiry on plastic products, etc. in relation to alginic acid and its derivatives, and also recommendations by the Special Advisory Authority in his report on artificial Christmas trees. A copy of this speech is being distributed to honourable members so that they can, if they wish, read it with me. A short glossary of unusual terms is included in the normal detailed summary of tariff changes currently being distributed to honourable members.

On alginates the Tariff Board has recommended duties of 30%, ad valorem, under the Preferential Tariff, with the General Tariff to be set in accordance with international commitments. On artificial Christmas trees the Special Advisory Authority found that urgent action is warranted to protect the Australian industry manufacturing these products in relation to the importation of artificial Christmas trees, branches, foliage and the like. He recommended a temporary additional duty on these goods of 37½%, ad valorem, under the General Tariff and a temporary additional duty under the Preferential Tariff to be set in accordance with international commitments. This means that the temporary duty under the Preferential Tariff will be 35%, ad valorem. The temporary duty is in addition to existing duties of 7½%, ad valorem, General Tariff and Free Preferential Tariff on these goods. Tariff proposals No. 12 also include some changes of an administrative nature only. I commend the Proposals to honourable members.

Debate (on motion by Dr Cairns) adjourned.

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Reports on Items

Minister for Customs and Excise · Hotham · LP

-I present the following report by the Tariff Board:

Alginic acid and its derivatives.

This report is an interim report under the Board’s inquiry on plastic products, etc.

Pursuant to statuteI present also the Special Advisory Authority report on:

Artificial Christmas trees.

Ordered that the reports be printed.

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Ministerial Statement

Minister for Customs and Excise · Hotham · LP

[3.44J - by leave - In the past few months the subject of Australian censorship of both films and literature has been widely discussed in newspapers and magazines and On radio and television. There have been numerous meetings on censorship at universities and other places. There have been cases of picketing of theatres by an organised movement against censorship, lt has become clear that the Australian public now has a livelier interest in the subject than at any previous time. Because the community is so clearly indicating its wish to be more concerned with the principles and systems of Australian censorship, I decided that I should make a statement to the House on the present censorship position and on the Government’s attitude to a controversial and sometimes emotional matter.

I should like to remind honourable members that Australian censorship laws are administered under regulations made by the Parliament. The responsibility does not lie merely with the Minister of the day, nor with the public servants charged with the task of interpreting and applying the regulations. The responsibility stems from the Parliament which, in a social matter of this kind must, from time to time, carefully examine the legislation and its application in the light of current community needs; and I remind the House that the regulations have stood on the statute book, in virtually the same form, since Federation. I am reliably informed that this is the first major statement on censorship to be made in this chamber since 1938, although there have been very occasional statements made in the Senate. It would be trite for me to observe, and to enlarge on the observation, that we have seen great social changes in the past 32 years, lt would be unnecessary, and probably tedious, to give the House in this statement a detailed history of social and cultural attitudes and their shifts during that period. Suffice to say that the rate of change has quickened as the years have gone by. stimulated by a variety of events and factors. We are now conscious of an almost daily change. Many deplore the bewildering pace of social development as we enter the 1970s; some deplore that there is any development at all. Be that as it may, we must face reality and we must examine censorship and. indeed, all social and cultural matters affecting the community at large, against conditions and attitudes as they are, at the particular time.

Philosophy of Censorship

The concept of censorship is abhorrent to all men and women who believe in the basic freedoms. As a philosophy censorship is evil and is to be condemned. Yet all communities, from the most primitive to the most advanced, have had, and still have, taboos which are scrupulously observed for one reason or the other. Within every community there is a body of opinion which accepts - indeed, seeks - some protection from the onslaught of unacceptable practices aud material which is the concomitant of total freedom. Censorship, in some form or other, to a greater or lesser degree becomes, what I might term, a necessary evil. Because of this, I firmly believe that the process of censorship should be open to public scrutiny unci that its workings should not be hidden from view. I believe that we should have the courage to let (he public into our councils for in the matter of censorship our councils concern the public.

In ‘The Tenure of Kings and Magistrates’ Milton wrote: ‘None can love freedom heartily, but good men; the rest love not freedom, but licence.’ I ask which of us that dearly cherishes freedom would welcome complete licence in the community? There is in each of us our own censor, a censor of behaviour, of attitudes and morals. Even in countries well known for so called permissiveness, some material is stringently censored. John Stuart Mill in Liberty’ wrote: ‘The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number is selfprotection’. If a community believes that the untrammelled circulation of certain material is objectionable to itself as a community, then it has the right, through a democratically established government, to protect itself. Mill wrote further: The liberty of the individual must be thus far limited: He must not make himself a nuisance to other people.’ It may be argued that the private actions of the individual are of no concern to others; but if these actions, or the material or equipment which accompanies them, are morally outrageous to the community at large then it is reasonable to say that the individual is making a nuisance of himself.

Censorship for Whom and of What?

It is important to establish for whom censorship is applied. Is it for people who demand it? Or is it for others on behalf of whom people demand it? Obviously people v/ho object to certain words, sights or behaviour can censor the offending acts by avoiding them. No one is forced to hear, or see or do anything they do not wish to do. However, many such people, responsible members of a community, approve of censorship for other people, especially for the young. It is equally important to establish what is to be censored. I think we should all recoil at the suggestion of censorship of facts - political censorship or censorship of knowledge has no place in democratic society at peace. Two broad matters of human experience are traditionally subject to censorship - sexual behaviour and violence. In earlier years the criterion was whether or not the depiction of scenes of such matters ‘were likely to encourage depravity’. Although these words are still embodied in our laws, the criteria applied now are those of ‘community standards’. In other words what level of sexual behaviour, bodily exposure or violence is the community prepared to tolerate in its books, films, or on its television screens?

I call for a balanced judgment to be made by the community in assessing what is or is not offensive to it. There does seem to be an obsession with sexual matters today. Let me explain that. If an explicit love-making scene is left in a movie, hundreds of letters are written by outraged parents to the Minister for Customs and Excise or to the Commonwealth Film Censorship Board. I do not quarrel with their right to do that but I ask: Is it consistent to object obsessively to love-making scenes and yet allow evils such as hate, greed, envy, calumny and violence to be depicted in minute detail with not a pen raised in anger?


– I thank the honourable member.

Community Standards

I revert to community standards: What is obscene to the community? A thoughtful book published last year in the United States of America - ‘Obscenity and Public Morality’ - suggests that the essence of obscenity lies in making public that which is private, in trading on intimate physical processes and acts or on physical-emotional states, thereby degrading the human dimension of life to a sub-human or merely physical level. The book goes further: It says that televised scenes of the suffering of wounded soldiers, or televised interviews which seek to exploit the reaction of victims of emotional crises for public titillation are obscenities as gross as any sexual display. Such scenes are not regarded per se as obscene - only when shown out of context. 1 recall the case of a book entitled ‘Fabric of Terror’ which was a factual account of atrocities committed by African against African. This book was initially prohibited in Australia because it contained photographs of the most revolting treatment of human beings. Mutilation, castration and other savagery were vividly pictured. On appeal to me as the Minister, the book was released because it seemed to me that within the context of the book the pictures could not be classed as obscene. I regard the censoring of facts as the most damaging potential of censorship control. Overwhelming reasons are needed for it to be justified.

Community standards are most difficult to define. In fact, one may ask whether community standards’ exist at all. Are they representative of the standards of the entire adult population or are they a broad assessment of what people believe to be right? Let me quote a case of film censorship to illustrate my point. In a film entitled The Killing of Sister George’ there was originally an explicit lesbian love scene which ran for about 5 minutes. In Australia - as in Britain and in New Zealand - some 3 minutes were censored. Most members of the Parliament saw those 3 minutes at the film night arranged some weeks ago. Had we been able lo restrict showings of that film to over-21 audiences, there would, I believe, still have been an overwhelming vote to censor those 3 minutes of film. Yet I have to ask: ls that a correct assessment of community standards? As far as films are concerned, who should establish the standards - those who regard motion pictures as an art form, those who regard them as entertainment, or those who have other interests in the medium? Could we reasonably suggest that those who have no interest :n films at all - non-moviegoers - should have no say in the establishment of community standards on film making? These are questions which must be answered if the community standards test is to mean anything, In the ensuing debate, I should like to hear the views of members on this specific point. 1 believe that community standards can be understood and defined only if there is continuing public discussion of censorship and only if a broad and representative section of the adult population makes its views known.

Effect of Sex and Violence in Films and Publications

An argument frequently offered against censorship is that sex and violence in films and books and in other forms of communication, artistic or otherwise, have no effect on people. Until recently there has been little evidence proffered to link crime, social misdemeanours or deviations with exposure to pornography, violence and so on. There have been suspicions of a link and a general idea that pornography and excessive violence are not good influences; but no strong scientific or analytical evidence has been forthcoming. The findings of the Eisenhower Commission on the Causes and Prevention of Violence are significant. Referring to violence in television programmes, the Commission states that it is reasonable to conclude that a constant diet of violence has an adverse effect on the human character and attitudes. Television violence is a contributing factor to violence in society. The Commission recommended that television stations reduce the amount of violence portrayed in their programmes and advocated more research by television networks in programme planning.

Two of the Commission’s recommendations have a universal relevance and I commend them to the Australian public. Those recommendations are, firstly, that parents should make every effort to supervise the children’s television and to assert basic responsibility for the moral development of their children; and secondly, that parents should encourage greater public expression of both their disapproval of objectionable programmes and support for those they like. Parents must not opt out of this fundamental responsibility with th? wish that governments will assume it for them.

Degree of Government Responsibility

Some of the Commission’s recommendations may well support the anti-censorship argument, that is, the matter is one for personal responsibility. Nevertheless we have to realise that individuals are members of a political state, which can be defined as a natural society, freely established by individuals for their common good under the direction of a governing authority. The English philosopher John Locke wrote:

The body politic is formed by a voluntary association of individuals; it is a social compact, by which the whole people covenants with each citizen, and each with the whole people that all be governed by certain laws for the common good.

In a democracy then, the elected government is vested with authority to make laws and to impose obligations for the common good and public welfare. On the other hand, the government has an obligation to protect the general community from both the abuse of power and the selfish desires of minority groups within the community. However, thu first question which arises in political philosophy concerning government is: What is the proper degree of control or regulation of the lives of the people by a government? This question arises because while men possess the natural need to live in an organised society for mutual protection, advancement and welfare, they are also individuals and seek personal property and demand what they refer to as natural or civil rights.

Consequently, the harmony which the common good principle suggests is never achieved. Instead, every democratic society is confronted by continual conflicts of interests between individuals, organisations, pressure groups and the State. It is such conflicts which the government has to try to resolve in the light of its obligation to the community as a whole. Honourable members will realise that because of these conflicts, together with uncritical acceptance of censorship by many, it is exceedingly difficult to establish community standards.

The Roth Report

Some idea of the difficulties can be gained by studying the Roth v. United States case of 1957 which established that works of real value to society shall not be censored as obscenity, that a book shall not be judged by the impact of a few passages on a special class of persons, and that the standards of judgment shall be those of our time. The common law rule to emerge from the Roth case was, basically, whether to the average person applying contemporary standards the dominant theme of the material taken as a whole appeals to prurient interest. That common law rule is interesting because it is quite different from the law in Australia.

The Law in Britain and the United States of America

In Britain, the Obscene Publications Act 1959 refers to persons who are likely, having regard to all relevant circumstances, to read, use or hear the matter and not to the average person. The British law is concerned with material which is, if taken as a whole, such as to tend to deprave and corrupt. The United States law is, conversely, concerned with material which appeals to prurient interest of the average person. The legislation of other countries is different again.


– That sort of interest by which some people are excited by pornography.

Censorship in Australia

It has been said that Australia is censoring more and more. If the rate of censorship is examined against the degree of permissiveness in modern films and publications it will be found that Australia is censoring less and less. However, community standards are broadening at a slower rate than the rate of permissiveness, not only in content but in themes attempted. The gap between the 2 grows wider. It should be noted that in the case of literature censorship the courts are the final arbiter. In only 1 case brought before the courts has a customs decision on literature censorship been reversed. A great deal has been done in recent times to keep the censorship system up to date and to ensure that not only the wishes of the community are satisfied but also that art forms in Australia are not unnecessarily inhibited. Action has been taken to encourage all interested authorities to think and act along broadly similar lines. I list some of the steps which have been taken:

A National Literature Board of Review was established just over 2 years ago and an agreement reached between Commonwealth and States on uniform literature censorship. The membership of the Board is broadly based so that the views of a wide variety of community interests are represented. The cyclical review of prohibited books by the Board has resulted in a number of releases. This process is continuing and the period between reviews is decreasing.

Concessions have been made to film festival authorities to restrict to a minimum the censorship of festival films on the basis that festival audiences will be adults who attend because of their interest in the art of the film. These concessions are open to argument because it may appear that special privileges are being granted to a small section of the community.

Examples of censored films have been shown to members of Parliament, representatives of mass media and church representatives.

The regulation prescribing any censorship for Australian films to be exported has been withdrawn.

A simplified and open system has been devised to enable members of Parliament to examine prohibited literature.

Discussions have been held on the introduction of an X’ or ‘R’ certificate. I have been particularly concerned by the absence of a restricted classification for films- the ‘X* or ‘R’ certificate. By this means films can be examined for censorship for adult audiences. For restricted classification to be effective. State legislation is necessary to ensure that young people under the specified age are not admitted to theatres at which restricted films are showing. This is turn calls for co-operation on the part of the exhibitors, and I am in the process of inviting State Ministers to discuss this, problem again. I am encouraged by their willingness to meet and talk.

A full-scale revision of the film censorship regulations is under way, - with special regard to the appeal system. A number of the provisions in the existing regulations is considered to be out of tune with conditions of today.

The criteria emphasis has been ‘shifted from ‘the tendency to deprave and corrupt’ to the community standards, which is the tacit involvement of the community.

I am about .to authorise the regular release of titles of feature films rejected and the length and nature of cuts made in feature films. The information will be released monthly by means of a bulletin issued by the Chief Film Censor. The first of these bulletins will cover the month of May and will be issued during . the coming week. The bulletin will also disclose the nature of the censored material.

The Future

Mr Deputy Speaker, I mentioned earlier that every democratic society is confronted from time to time by conflicts of interests; it is my duty to bring to the notice of this House that a conflict of interest exists in Australia today on the question of censorship. This conflict may never be completely resolved but the Government believes that we must at least try to maintain open and thoughtful debate and to involve all parties concerned - the public, the Parliament, and the Government. This is why 1 have made this full statement.

I believe that censorship though undesirable, is necessary: censorship should be open to public scrutiny; the amount of censorship should be as little as possible, within the limits set by community standards; and in the ultimate, all members of the community, especially parents, I repeat, have the prime responsibility in censorship; the community simply cannot sit back and expect the Government to protect it.

To keep Australian censorship laws in step with the sociological development of the nation and to administer them in a sensible and modern fashion presents daunting problems. Neither the Minister nor the boards and officials involved in this onerous task can be confident of achieving these objectives unless information and opinions are- obtained from the community at large. We must all recognise, however, that in the end, because of the subjective nature of this matter, the solution will be a compromise drawn from the mass of varying and conflicting opinion held by the individual members of. the community, lt is, in the end, their responsibility.

Mr Deputy Speaker, I present the following paper:

Censorship - Ministerial Statement, 11 June 1970.

Morion (by Mr Killen) proposed:

That the House take note of the paper.


– by leave- Mr Deputy Speaker, when we speak of censorship we are talking about the moral values of a society. These of course come from our social mores and in turn are based on the conventions which have developed by a society over the ages. There is nothing immutable about these moral values.. Although some may give the appearance of being enduring because they have been of such long standing within a society, in fact it is quite wrong to think in terms of absolutes in relation to human behaviour or the standards which a society adopts in relation to that behaviour, lt is surprising, therefore, to find from the statement of the Minister for Customs and Excise (Mr Chipp) that it has been 32 years since a discussion has been held in this House on the subject of censorship. I commend him for bringing this matter forward for discussion.

I rather suspect that all too often in the past the subject of censorship has been regarded amongst politicians as something akin to a putrefying mullet upon a particularly steamy summers day. Yet this is a quite unreasonable and indeed irresponsible attitude for people in our position. We are concerned about the standards of conduct in society and the sorts of prohibitions which we adopt in relation to that conduct. lt often happens that people’s behaviour standards, their needs and the direction they are taking have in fact gone well beyond the constrictions which are demanded by the conventional standards and which we have imposed upon them by legislative means. 1 believe this is the case on the subject of censorship. With so much discussion about the subject today it seems fairly clear that there are many misconceptions on this subject in relation to its needs and the benefits or otherwise which it gives to a community. But let me repeat before [ proceed to discuss this subject to any extent that I do warmly welcome the statement of the Minister. He has posed some provocative questions and sunken his teeth into what could very well be some controversial issues. I have no doubt that when his statement receives publicity he will receive abundant mail from various members of the community indicating their attitudes one way or the other.

I am interested to see in his statement that he hopes to open up the processes of censorship in the community. I do not know explicitly what he has in mind. A little later 1 will refer to the situation in New Zealand and to what I think we ought to do. But certainly it is desirable that when decisions are made on subjects such as this there ought to be an open discussion. Indeed, I hope when we return from the winter recess that we have a free, full and candid discussion in this House on this important subject, lt is a matter which involves for all of us, I would expect, an issue of conscience, and we ought to bc free as possible to express our point of view on the matter. I perhaps ought to indicate my attitude on this subject. First of all, there is some concern about the effects of exposure to brutality upon a person’s personality development. The Minister mentioned the President’s committee of inquiry, headed by Dr Eisenhower, on this subject. I have read the report and I note the comments he has made on this subject. But there are other works too which seem to indicate that there is concern that in fact there may be some deleterious effects on the personality development of certain classes of people, especially in certain age groups as a result of extended exposure to this sort of matter.

So far as censorship relating to sexual matters is concerned, from what 1 have read there is absolutely no evidence at all to justify a continuation of censorship on these matters. From what I have read - 1 will put my case a little later - I have become convinced, and I would be happy to support the view here, that we should not have censorship on subjects related to sexual matters where adults are concerned. Let us look quickly at the situation of censorship in this country today. I expect from what the Minister has said that he wants to do something constructive about censorship. The current situation highlights a mess of conflict, confusion, inconsistency and irrationality.

Let me deal, as an example, with the kinds of forces we have as censors in Queensland. We have the Department of Customs and Excise, the Post Office, the Australian Broadcasting Control Board, the National Literature Board of Review, the Film Censorship Board, the State Literature Review Board and the State police. There are 7 bodies in all. On top of these, of course, we have in the final result the State Government and the Federal Government, if they want to effect some sort of influence on these matters. But just imagine the confusion, the conflict and the duplication that arises from the proliferation of these bodies. From what I. can discover, on none of these bodies is there a qualified psychologist, psychiatrist, criminologist or sociologist. Yet these would seem to be the people we ought to have serving on these bodies. Again, just how well qualified are the censors in the community? In saying this I am reminded of the old phrase: Who censors the censors? Tn any event, let us consider the Department of Customs and Excise. This Department has had some splendid moments when it has called sternly for the withholding of imported books until they were thoroughly investigated.

Let me give some of the titles of these books. One was called: Trouble Over a French Wife*. This turned out to be a cook book. Another one was entitled: ‘Fun in Bed’, which turned out to be a book on games for sick children. ‘Your Game and Mine’ turned out to be a discussion on tennis. My colleague, the honourable member for Hindmarsh (Mr Clyde Cameron) will be interested in this particularly enticing title: ‘Between Man and Man’, lt was a book on philosophy, and that is why it would be of interest to him. This indicates the rather peculiar way in which censors have been known to act. It indicates in my opinion that there is a need for better informed people and more realistic procedures than has been the case, at least on some occasions in the past, to handle this important area of the community’s civil liberties, of its right to express itself and to inform itself.

I can never understand why in the Australian community we are so frightened of ideas. It does not matter a dot whether the Fascists, the Communists, the Social Creditors of the Henry George Leaguers are spreading their ideas. Let them spread them. They are only ideas and we have nothing to fear from them. Yet from what I can see there seems to be evidence that this spillover of censorship does in fact move beyond sexual matters and beyond matters of brutality into what are actually political matters. But I am ‘ wandering away from the qualifications of people who censor. We often call upon the hapless policeman, who is not educated for this fairly delicate role in our society and which calls for a high degree of judgment based on, I feel, a well informed mind drawing on a reservoir of education over some years. In a Melbourne court a few years ago we had the classic case of the book ‘We were The Rats’. The vice squad sergeant was under cross-examination and he was asked: ‘Have you heard of Byron?’ He replied: ‘No.’ He was asked: ‘He was a Lord?’ The answer was: ‘Yes, I have heard of him.’ The next question was: ‘Do you know whether he was a member of Lord Mountbatten’s staff for the South East Asia command?’ He replied: ‘I do not know.’ Do you know whether he was a war correspondent?’ He answered: ‘I know he was a writer, but I am sot sure if he was a war correspondent.’ Then he was asked: Have you heard of Shelley?’ He said: ‘1 know a man in Sydney named Shelley, but I take it you refer to an author or something?’ The next question was: ‘Have you heard of Chaucer? ‘No’, he said. ‘Never met him in the vice squad?’ he was asked. No’, he replied. The witness said that the word ‘bloody’ offended him. He admitted he did not know the meaning of the word pornographic.

Again in the State of Victoria the vice squad censured the gaming squad at a display at the police exhibit at the Royal Show by disfiguring playing cards which the gaming squad had set up depicting a naked woman. A member of the gaming squad is reported to have claimed that the vice squad did this only because the gaming squad had a better display than the vice squad. This is humorous. But it is also stupid because people’s rights are interfered with because of this sort of thing. But they are interfered with not only in this particular area. The new apocalypse school of poetry is probably the best example of how irrational we have been in handling censorship. In 1944 the ‘Angry Penguins’ a literary publication dedicated to promoting what was called the new apocalypse school of poetry, suddenly unearthed a celebrated and immortal Australian poet named Ern Malley. Unfortunately the person who was publishing this and who ought to remain anonymous - although most people knew who he was - did not realise that MacAuley and Stewart were responsible for slogging a lot of lines together out of context from various poems and creating this poetry of the mythical Malley which was lauded by the people who were promoting this school of poetry. But the police excelled themselves. A police sergeant seized the publication. The person who was publishing the poetry appeared in court and was subsequently convicted for producing obscene work. The upshot was that the policeman received a commendation for good police work.

The Minister says that censorship in our society involves subjective values. Indeed it does. What I regard as something which ought to be censored is not necessarily what somebody else would regard ought to be censored. When one gets into this area of complete ridiculousness which affects the rights of the people in the community, then one must pose a grave question about the censorship which exists in the community. Our behaviour towards censorship has been somewhat inconsistent. By 1928 the complete list of banned works of literature was made up of 3 books: Balzac’s ‘Droll Stories’; cheap editions of Boccaccio’s Decameron’, and cheap editions of

Rabelais. By the 1930s blue nosed puritanism had apparently afflicted us and 5,000 books appeared on the banned list. A Victorian State member of Parliament suggested that the only way to counter the appeal of ‘filthy and boldly pornographic books like “Ulysses” was to encourage more early and happy marriages’. Today only a few hundred books appear on the banned list. As the Minister has indicated, we have become less restrictive in applying censorship in the community.

There we were in 1928 with only 3 books on the banned list and no one was being polluted or corrupted by the other books which were available. By the 1930s 5,000 books were on the banned list. We had this intellectual constriction. Now only a few hundred books are on the banned list. Most of those 5,000 books presumably are available and in circulation. The quality of intellectual behaviour in the community is much higher than it has ever been, just as in 10 years time it will be even higher than it is today. No evidence exists that people were undermined, that their morality was completely destroyed, or that the fibre of this community was sapped because these books were available. What happens when these books are released from the banned list? Often they recede into obscurity or survive unspectacularly as in the case of Lady Chatterly’s Lover’. The irrationality of it all. Colonel Sheppard, the Australian publisher of ‘The Trial of Lady Chatterly’ could not import the book so he could print it. He posted the book to himself page by page from England. It was an awfully expensive exercise. It was legal to do this page by page. Bill if he posted that book in toto he would have broken the law.

At one stage I read the ‘ABZ of Love’ which is a small encyclopaedia of love. I recommend it to young marrieds; it is quite a responsibly informed book on heterosexual relations for society. For a considerable number of years that book was banned in Australia. I made representations on behalf of people who had had the book sent to them from England, where it could be read. They found it was seized when it arrived here. If I were in England a week earlier 1 could have read it and nothing would have happened to mc, but when I arrived in Australia presumably I would have been undermined, my morals would have been destroyed. This is utter rubbish, because the book has now become available in Australia unless, of course, sou live in that particularly blue nosed State of Queensland where it has been banned under the peculiar laws which exist there. Beardsley’s art prints have been banned in that State. I believe they are about to be banned in New South Wales although I am not clear on that. There has been some court action. These art prints and the ‘ABZ of Love’ have been available and in circulation in the community for some time and there is no evidence that they have destroyed people’s moral standards.

An example of the immaturity of Australian society is the film ‘Ulysses’ which was endorsed by the United States Catholic League of Decency as morally unobjectionable for adults,. This film cannot bc seen here, lt can be seen in the United Kingdom and New Zealand. I assume we do not have the maturity to withstand the onslaught of this sort of thing. It is self-contradictory. Joyce’s ‘Ulysses’, Huxley’s ‘Brave New World’ and Hemingway’s ‘Farewell to Arms’ are now freely available, as is Baldwin’s Another Country’. There has been no breakdown in society

I can give honourable members the irrationality of censorship from my personal experience. While I ani in thi.s Parliament it would seem that I am suddenly steeled with a special quality in my character derived because I walk through the lobbies of Parliament House and thus I can read banned books. I remember the first banned book I. read which was ‘Lolita’. I had to wait 3 or 4 weeks for it because my friend the honourable member for Hindmarsh (Mr Clyde Cameron) had it ahead of me. I put myself on an equal footing with him. I read it because, like him, 1 was concerned about the social implications of the banning of this work; that was all. I obtained it from the Library. I placed an order which was written into a book. One day a winsome young female tiptoed up to me and whispered in a very suggestive way: “That book you wanted is available’. To read that book I had to go into a room with one of the attendants. When we got into the room the door was locked and the book produced. But members of Parliament have improved since those days because now they are able to take the book home for a week or two.

What I am putting is the absolute stupidity upon which a lot of our censorship laws are based and the way we apply these restrictions.

I can remember the Sunday ‘Truth’ in Queensland a few years ago writing about the ‘Kama Sutra’ and saying that only one volume was available in Queensland and that volume was locked away in the vault of the public library and only those authorised - there were very few of them - such as research students in some fields of social medicine were allowed to see it because any ordinary member of the community would be so enraged that he could not be trusted in the general community. Anyone who has had a look at the ‘Kama Sutra’ or even read it must have a great deal of patience and perseverence to do so. I think he would find it a fairly dull sort of publication. Indeed, the argument can be put forward legitimately on the basis of psychiatric research that among those who stridently call for censorship of sexual matters there are those who have a problem of repressed sexuality. This is the way this ought to be looked at. There is no evidence that people have been morally corrupted because of exposure to these works. The Kinsey Institute of the United States in an exhausive study of 15,000 sex offenders showed that there was no casual relationship between pornography and sex offences. Indeed, it suggested that the very fact that some people displayed an inability to obtain normal fantasy release through sublimation when exposed to these works distinguished them - these were sex offenders - from the normal people in society. At San Quentin goal in recent times there was a survey of 50 sex offenders. It was discovered that none had read pornography and indeed that most of them were unable to read.

Of course, we have the case of Denmark where in fact a commission of sociologists, psychologists and educationists reported that there is no evidence that erotic realism promoted juvenile delinquency and other forms of anti-social behaviour such as sex crimes in our society. Since censorship on sexual matters has been lifted in that community there is in fact no evidence to relate exposure to these matters to an upsurge in sexual behaviour. In fact, it seems to be quite the contrary. What is going to be an offensive or obscene matter - and I hark back to what I said earlier - is pretty much in the minds of people who are exposed to these things. A friend of mine who is a sociologist told me of a classic case when he was at one of the penitentiaries in the United States of America about 5 or 6 years ago. At this establishment he was applying the rhonschach test or the ink blotter test on some of the inmates. As he was leaving one of the inmates said: ‘Goodbye doc, it was great having you here today. Don’t forget to bring back some of those dirty pictures next week when you return’.

There is no evidence to relate casual sexual offenders to exposure to these matters. I would like to quote from Dr Bray who is now the Chief Justice of South Australia. The work he has carried out on censorship was published in the ‘Australian Library Journal’ of June 1968. He said:

It has fallen to my lot to discuss with a good many offenders, juvenile and adult, the reasons for their acts but I have never known any of them to ascribe his downfall to a perusal of the works of Ovid, Petronius, Chaucer, Rabelais, Joyce, D. H. Lawrence, Norman Lindsay, Erskine Caldwell or Henry Miller.

Indeed, such evidence is not available. We ought to shield children in our society if necessary but this does not mean that we therefore must deprive adults by reducing their intellectual diet to that appropriate for a juvenile level. United States Justice Frankfurter had this to say:

The State insists that by thus guaranteeing the general public against books not too rugged for grown men and women in order to shield juvenile innocence, it is exercising its power to promote the general welfare. Surely, this is to burn the house to roast the pig. The incidence of this enactment is to reduce the adult population of Michigan to reading only what is fit for children. [Extension of time granted.]

I will conclude on the point: What ought to be done in Australia regarding censorship? We need a uniform law on censorship. For this to be established, of course, is not without its problems. We have several States and we have varying attitudes of enlightenment within those States extending all the way across the spectrum of an informed mind and a tolerant mind from Premier Dunstan in South Australia to Sir Henry Bolte in Victoria. I leave it to people to place them at the appropriate extremes of the scale. We need, of course, as the Minister is proposing, ‘X’ or ‘R’ certificates for films. But more important than anything else we need some sort of tribunal. Perhaps I could best sum up my attitude about what ought to be done by this tribunal by putting my argument in this way: Censorship laws should conform to the general principle that adults should be entitled to read, hear and view what they wish in private or public and that persons and those in their care should not be exposed to unsolicited material which is offensive to them. Thai is, they make a free choice on this. If I go to a film such as ‘Married Couple’ and I do not like it because there is a 4-letter word I walk out. If I am interested in a film I should be allowed to stay and watch it. But no-one is flinging this out on the streets for display. lt is something about which I make a private decision. The general public is noi exposed against its will to films shown in a public theatre - it is something people choose to do. Similarly, if I pick up a book and read it and there is something erotic in it, of course if it is well written it will stimulate me just the same as something sad will make me sad. lt is a failure on the part of the author if he docs not achieve this sort of result. Bui if I do not like that book 1 shut it. I put it away. No-one is forcing me to read a book or to see a film or a show.

Mr Chipp:

– ls the honourable member suggesting that there be no censorship of books or films at all for adults?


– Yes, indeed I am. I believe in this on sexual matters although I have some reservations about violence at this stage. In order to implement these principles a judicial tribunal should be established to hold public hearings and to give published reasons on its conclusions. Commonwealth laws on censorship, imported books, records and films should be altered accordingly.

I understand that in New Zealand there is an interesting arrangement. In that country there is an indecent publications tribunal. Of course, (his is related only to publications. The tribunal consists of 5 men and the chairman is a barrister or solicitor of the Supreme Court. The decisions of this tribunal in practice have all been taken openly and publicly. People have a right to put their point of view or to refer matters to the tribunal. At the end of 3 years any matter previously decided upon by the tribunal can be resurrected for further decision by the tribunal1. So we have in New Zealand a much freer intellectual climate. In that country books are available which are not available here.

The Other Victorians’ by Steven Marcus is an impeccable academic work. Although it is classed as pornographic i believe it has been written for academic purposes. This hook has been constructed at academic level, lt is nol rubbish, lt is not aimed to be pornographic in the generally accepted crude sense of the word. This academic work is available in New Zealand and in other countries. But it is not available here. We do not even know why it is not available in Australia. I believe it ought to be made available in our community. The fundamental weakness in the censorship argument is that it implies we can only be kept good and pure and virtuous if we arc kept in ignorance. In other words virtue can find ils justification and preservation only in ignorance. 1 find this completely unacceptable as a proposition.

Who are the censors? The people who are always upholding censorship are concerned about other people’s standards in society and never about their own. They do not become corrupted by exposure to these things but others may become corrupted. 1 would like to quote from the Arts Council report to the British Government in 1969. This article sums up the position so appropriately. If slates:

In the light of all this it becomes less mysterious (hat nobody appears to lind in himself an cample of a person actually depraved by erotica. Nobody seems even 10 have met such a person. Far more people claim to have seen u ghost. So discussion tends to centre on a hypothetical, unencountered them’ in contrast to incorruptible ‘us’.

The basic philosophical issue for our democratic society is that there are rights for minorities, lt Ls no: a democracy that is run by a majority which believes that a decision made by the majority must at all times bc upheld, even whore it arises as a result of moral standards which become somewhat osified in a conservative environment because they have not been subjected to critical scrutiny as frequently and as intensively as should be desirable in a liberal society. 1 would like to quote an extract which reads:

Morality is not prompted by chanting copy book maxims, or by drawing a grossly over-simplified black and white picture of life. Moral insight requires a deep and subtle understanding of human beings and how they think, feel and behave, in all their variety.

And again:

It is not for the author to be didactic, but for the reader …

I accept this as a principle. I find censorship today in Australia a mass of confusing and conflicting laws, and of censorship bodies. I have doubts about the qualifications of many people who are censors. I find that there is much inconsistency in the way in which censorship practices are applied. I find that there is an inability in the law to define obscenity as, indeed, there must be because after all it is a subjective term. Fox very nicely puts the subject in his work ‘The Concept of Obscenity’ when, in his introduction, he states:

The author of any work on obscenity very quickly realises that he is in no better position than the delegates to the Geneva Conference on the Suppression of the Circulation and Traffic in Obscene Publications who discovered that they could not define obscenity, ‘ . . . after which, having triumphantly asserted that they did not know what they were talking about, (they) settled down to their discussion’.

Frankly, this is the problem we face when we discuss this matter. There are also philosophical values of the rights of minorities in a free society. I think that by now my attitude on censorship is reasonably clear.

Debate (on motion by Mr Giles) adjourned.

page 3382


Second Reading

Debate resumed (vide page 3369).


– Since the debate on this Bill commenced earlier this afternoon we have experienced some periods of interruption, some’ unfortunate and some due to machinery matters. I do not intend to develop the case for small farmers, as has been done this afternoon, because I think there is a great need to differentiate between the terms of this Bill, insofar as it aims to set up schemes for those who have in the past returned from war service, and civilian schemes, such as at Coleambally in the Murrumbidgee Irrigation Area and others that perhaps will eventuate around the Ord River and elsewhere. I cannot support the Opposition’s amendment, which reads:

That the House is of the opinion that a select committee of the House should be appointed to inquire into all aspects of war service land settlement in Australia in order to formulate guidelines for any future land settlement scheme.

The main reason why I would not support the amendment in this form is that there are really 3 fields in which land settlement schemes can originate. The first is a national scheme or series of schemes throughout the nation for one purpose or another. One can refer to the past history of war service land settlement as an example of a national scheme for some national reason; in that instance to resettle ex-soldiers in many occupations, including on the land. In passing one must note that they should not be under any disability through lack of finance. Such schemes are somewhat peculiar and I trust that we have seen the last of massive national schemes based on a surplus of ex-servicemen applicants. I say this not only for the reason I have suggested, or implied, but because of the obvious fact that such national closer settlement schemes based on such a premise surely are uneconomic in this day and age.

At the second level we have seen closer settlement schemes operated by a variety of State governments. This, of course, is marginally away from the substance of the Bill. One thinks of Coleambally, where I gather there are some Vietnam exservicemen who have applied in the normal civilian way for a block of land and under conditions applying to such applications. One can think of more tragic closer settlement schemes, such as the one at Heytesbury in Victoria, which cut right across the national interest in producing more of a surplus commodity which we cannot sell. It is for these reasons that I do not think we can proceed with such governmental schemes in the future - at any rate not for many years to come.

The third category represents the private closer settlement scheme. I instance the Golden Heights scheme of citrus production in the Waikerie area of my electorate. Private enterprise - and this gets back to the only aspect in which I find myself in complete agreement with the honourable member for Riverina (Mr Grassby) - is able to take advantage of technological breakthroughs and can use every modern means. lt will do much better than would a select committee of this House or any other House. Private enterprise has access to the proper scientific references. Its techniques will always be better than any government scheme mounted with yards of red tape and tons of technocrats all brawling among themselves as to which is right or wrong, and frequently without (he competence within the scheme to come to a proper rational decision. The future of closer settlement schemes is well demonstrated today by a series of thoroughly up to date private enterprise schemes, some of great worth.

The question as to whether a national scheme should be permitted with government finance and under government control can perhaps be answered by comparing a fine war service land settlement scheme, such as at Loxton in South Australia, with the MIA scheme which was mounted not much later. In spite of all the work done in depth at Loxton, new practices implemented within a few years have proved that up to more than double the productive capacity per farm can be achieved. So the situation at Loxton is in direct contrast to the situation in the MIA scheme. For these sorts of reasons I cannot go along with, nor can I see the need for, the type of statistical information that I think the Opposition is probably after through its amendment. All of us who have war service land settlement schemes in our electorates are well aware of the problems. Some of the areas have responsible associations representing them. I instance the Upper Murray Ex Servicemen’s Land Settlement Association in the Cooltong-Loxton-Loveday area in my electorate. These associations differentiate between the problems specifically concerned with war service land settlers on the one hand and the general farming community on the other hand.

One can get awfully tangled up if one tries to overlap a problem that exists in a war service land settlement area with the situation of a person who has purchased his own farm from his own savings and who, quite rationally, feels that it is wrong to give too many financial advantages to a settlement scheme of one sort or another. 1 do noi personally go along with that thought because if there is one principle that the Government stands for it is that those who inconvenience their lives to serve their nation should receive a certain degree of priority. This has been the Government’s aim in the past in relation to war service schemes. However, to advert to the Association to which I have just referred, over the years we - and I refer to myself and the Association working together - have been successful n getting cheap loan funds available for drainage purposes. A problem arose with drainage in the Loxton area, for many technological reasons, some time after the area was settled.

With much help from the Minister at the table we have succeeded in getting funds available very early in the piece for another technical change - the taking away of overhead sprinklers, with the high salinity degree running in the River Murray in a drought, and moving towards undertree sprinkler irrigation systems. This has been greatly appreciated in areas at the lower end of the Murray which are apt to be troubled with sludge from other States and other irrigation schemes further up the river, in spite of the efforts of previous Ministers for National Development who have valiantly succeeded in stopping salt entering the mainstream of the Murray by 2 worthwhile projects further upstream. These are 2 things we have achieved and we are grateful for them.

I turn to the problem of appeals for review of valuation. I should like to read one or two comments that, fortuitously enough, have arrived today, addressed lt) me. One letter reads as follows:

The review of valuations got away to a very poor start. The information required by the reviewing officers. T. Colquhoun . and W. Gilchrist, was so comprehensive that none of the appellants was able to supply sufficient information. They were told a form setting out the required information would be sent out. Whilst it is nol a statutory declaration, it has to be factual, and many settlers have not the records to comply fully. Taxation only requires records to be kept for 7 years, and some have been destroyed by fire, mice, silverfish and dampness due to being stored in their Nissen huts and whether it is a valid point or not, most settlers don’t keep detailed analysis books.

That rather seems to be a failing in my area at present, which I regret. Historically this goes back to a meeting with the Association. With help from myself and Senator

Laucke, a meeting was arranged between the Federal Minister for Primary Industry on one hand and the State Minister for Lands on the other. We appreciate the consideration shown by both parties to our attempt to bring them together. This review of valuations was agreed to and is subsequently taking place, so one must say that despite the gloomy comments made by the writer of that letter at least we achieved an appeal for review of valuations.

I have spoken on previous occasions about arrears. It is hard to differentiate between the total problem in a small farming area and war service land settlement problems. Therefore I think I will dispose of that matter for the time being and come back to it on another occasion when more time is available. J am referring to problems listed by the Upper Murray ExServicemen’s Land Settlement Association on 10th August 1969 and forwarded to the Minister at that time. The next problem I refer to relates to a settler who wishes to sell. The Association has said that another war service land settler should be able to buy the improvements and any financial equity that the settler has to offer, to the value on the open market, and assume the obligations by way of existing mortgage repayment over the remainder of the term. I am most gratified to have received quite recently from the Minister a letter on this matter, which says:

I refer further to my discussion with the representatives of the Upper Murray Ex-Servicemen’s Land Settlement Association in March this year and now advise that I have reached agreement with South Australia that a war service land settlement settler be allowed to purchase the lease of a property of a fellow settler on the basis of the unmatured balance owing under first mortgage being transferred from the vendor to the purchaser subject to the following conditions:

The conditions are in my view extremely valid and I do not intend to weary the House by reading them. I point out here yet another partial success in the Association’s dealings with the Minister, who has been able to grant some of the requests made.

I will finish these brief comments by referring to the problem of equity. 1 am afraid I shall have to omit mention of many topics, some of which have been covered by the honourable member for Braddon - although I think in many cases he somewhat over-exaggerated the case. In all closer settlement schemes, whether civilian or war service, where there is a massive reconstruction programme we must in future face up to this problem of equity. We have a problem which I think can be isolated from the generality of problems encountered by small farmers in these areas. This is the problem of people - exservicemen of your age and my age and perhaps a little older - getting to a stage where although they have worked fruitfully and well have no prospect in many cases of getting any equity if ill health were to overtake them. Indeed, where age prohibits the degree of active work necessary to run efficiently one of these farms as set up by the land development executive in years gone by, people are affected. It is hard to differentiate, but I am not at all sure that this Government would not be well advised to look at the entire equity problem of war service land settlement in relation not only to that equity but to the implication of the total debt of, might I say, the average settler. It has been done before and I believe the time will come when we will have to do it again and will have to wipe off some of the arrears incurred by a settler who has put forward a lifetime of honest work but finishes up with no equity whatever.

I believe that not only would this Government be well advised to look at this problem but also having tried to solve the problem, to equate an area of responsibility, financial or not. in respect of States, other than the major States, which went their own way in these matters. The Government should in these small States equate the field of responsibility. I believe the State Governments would negotiate quite fairly on this basis and that this would overcome one of the worst features of war service land settlement schemes. In South Australia we have had divided control in the settlement of Cooltong, where the State provided headworks. There has been a complete breakdown. At Loxton, almost next door, the headworks were set up by the Commonwealth Government. Here we have 2 adjoining settlements where completely different conditions apply. Divided authority is no good and I request the Government to look carefully at this matter.

I do not believe that the Opposition’s amendment could have much effect on the information capacity or statistical potential of the facts bearing on this matter. This is a war service land settlement Bill and I do not believe we will have a similar scheme to that in the future. I believe that these things are becoming specific and individualistic from one area to another and they should be considered in that light. People should maintain their equity in these properties and indeed so should their children to come, if in due course they are to take over these blocks. I conclude by saying as a generalisation that great problems exist, but my area has achieved a certain amount of success through the efforts of the local Land Settlement Association. I am quite proud of the sensible fashion in which they have put forward their views and I am most grateful for the courteous consideration given by the Minister and his office in relation to the few successes we have certainly had.


– I welcome the opportunity to support the amendment moved by the honourable member for Dawson (Dr Patterson) to have established a select committee to review the operation of soldier settlement in Australia. I believe the committee should be established for many reasons. I listened with much interest to the honourable member for Angas (Mr Giles) who, T believe, in the concluding part of his speech made out a very good case for a committee of the kind suggested in the amendment to be set up to investigate war service land settlement in Australia. The member for Angas spoke about equity and about how important it was for the Government to look at this one problem area that is common to the war service land settlement scheme in. most of the States where it has been instituted. The honourable member said quite properly and correctly that many ex-servicemen whose applications for a property under the War Service Land Settlement Agreements Act have been accepted, and who have devoted their career and interest to the property and have worked hard, have failed to obtain any equity in the property. Obviously, as the Act stands at present, they will never be able to get any equity in their property. This is one area in which problems arise. As the war service land settlement scheme is constituted at present, many other areas that need to be investigated can be referred to.

I appreciate the fact that we are very close to the end of a session. Normally I would hesitate to enter into a debate about war service land settlement, but in recent years I have found that there are now so many problems afflicting young people who have accepted a property under the war service land settlement scheme that the Government will obviously have to face up to this situation in the only way in which I believe it can be dealt with. The Government must set up a select committee of this House with sufficient power to investigate the problem areas that have been referred to not only by the honourable member for Angas but also by honourable members on this side of the House such as the member for Dawson, who moved the amendment for the Opposition, the member for Braddon (Mr Davies) and others.

I believe most honourable members can appreciate the problems that have existed in recent years in relation to the war service land settlement scheme. Of course, there have been cases where the scheme has proved to be an unqualified success. But that matter also has been referred to already by other members and I do not want to canvass it at this stage. Currently a select committee of the upper House in Tasmania is investigating the war service land settlement scheme as it operates in that State. Having fully investigated the question of war service land settlement in Tasmania, that committee will obviously be able to report to the Tasmanian Government on the situation that now exists in that State. But it will be limited to that State. As the member for Angas said, we all acknowledge that there are problems in relation to war service land settlement, but they are not confined to Tasmania: They are common wherever the war service land settlement scheme has been established under the Act. Therefore, this committee’s report will have limited use. For these reasons, the Opposition points out that a committee of this kind should have the opportunity to investigate war service land settlement on a much wider basis than in one State.

This Bill provides for loan raising of $4,500,000 for soldier settler projects in Western Australia, South Australia and Tasmania. The bulk of this loan raising is earmarked for working expenses, replacement of plant, and new stock and plant. The remainder is for development of irrigation holdings in South Australia. Therefore the Bill is mainly a machinery measure, lt will provide necessary funds and is not opposed by the Opposition. In his second reading speech, the Minister for Primary Industry (Mr Anthony) made the crucial point that many settlers bad been unable to improve their financial position to the stage where they could operate without borrowing. Lacking security to obtain conventional credit, they needed access to credit from within the scheme. This, disability applied particularly to settlers offered farms in recent years, and unquestionably this is one of the main problems afflicting those who have been allotted properties under the Act.

The Minister acknowledges that a problem exists in relation to the additional finance needed to improve and expand properties. Again, this is another area for investigation by a select committee of the type proposed by the Opposition. The war service land settlement scheme has operated since 1945, when it was formulated by a conference of Commonwealth and State Ministers. In subsequent years. Commonwealth funds have been allocated to the scheme by annual appropriations. The Commonwealth has been responsible for the policy direction of the scheme and its general supervision. It has financed a major share of the cost, with the State governments paying the cost of the administration of their side of the scheme and meeting a contribution to the capital cost. In many ways, the scheme has been successful. After World War 1 the planners of the scheme learnt the lessons from soldier settlement scheme that caused considerable economic hardship. Settlers who were fortunate enough to get their land in the years immediately after the war and to establish themselves before the rises in commodity prices of the 1950s were particularly successful. In the main, these settlers were more skilled in the techniques of agriculture than their predecessors of World War I. They were given better holdings and, because the scheme was administered with extreme care - some might even say caution in some States - there were fewer failures.

In recent years the picture has changed somewhat. Later settlers have not had the good fortune of those who got in early. Some of the land opened was of a marginal character and could not be made to pay, and in other cases holdings were too small to be an economic proposition. The success of the scheme has varied immensely from State to State and from region to region. Even in Victoria, which perhaps provides the most successful example of soldier settlement, there have been remarkable fluctuations in the effectiveness of the scheme from settlement to settlement. Earlier, the honourable member, for. Braddon, the honourable member for Dawson and the honourable member for Riverina gave examples of the operation of the scheme. I should like to refer briefly to the operation of the scheme on Flinders Island, which has one of the largest concentrations of soldier settlement farms in Tasmania. The original plans for soldier settlement on the Island provided for 112 to 120 farms. Eighty-four were occupied. At present 76 are occupied and 2 are unoccupied, so there have been some absorptions. A considerable number of settlers have left for economic reasons; they went bankrupt or their farms were sold. The new farms are from 700 acres to 1,000 acres of pasture compared with the original farms which ranged from 535 acres to 700 acres. It is not surprising that only the new farms have anything like the carrying capacity as assessed originally by the Agricultural Bank of Tasmania.

The area of the Flinders Island holdings compares favourably with those in the rest of Tasmania. However, valuations on Flinders Island are much higher which means that rent and rates are higher. Rents work out at about three times higher than those on mainland Tasmania while rates are about one-and-a-half times as high. Yet the potential sale value of a holding in Tasmania is double that of a Flinders Island holding. In addition, the settlers on Flinders Island face heavy freight costs to Launceston and Hobart and to Tasmania generally. There are also social difficulties arising from lack of educational facilities and little employment for school leavers. This is an example of the wide differences which can exist in the operation of the scheme and how inequities can arise even in the operation of a scheme within one State.

The whole national scheme for soldier settlement represents a massive investment at all levels of government. In the 3 States affected by this legislation - Western Australia, South Australia and Tasmania - the Commonwealth has invested about S300m. Much of this has been repaid, but it gives an idea of the scale of investment in the scheme. This scheme has operated for 25 years. We believe it is time for an assessment of what has been achieved, what the problems are and what the potential is for the future. We are entering an era when the concept of closer settlement is looked on with increasing disfavour. This may be one of the cyclical swings which have always dominated rural land policy in this country.

The trend of Government policy is towards the amalgamation of smaller uneconomic holdings into more viable economic units. An example was the marginal dairy farms reconstruction scheme which was debated in this House last week. Undoubtedly there is marginal land in the soldier settlement schemes and there are uneconomic holdings. This has provoked occasional flare-ups in settlements where soldier settlers have got into difficulties. We believe it timely that the scheme be completely reviewed and a blueprint for its future drawn up. For this reason, as I have already pointed out to the House, the honourable member for Dawson has moved on behalf of the Opposition that a select committee of this House should be appointed to investigate the problems that have arisen in relation to the war service land settlement.

Many of the arguments that were put forward by the honourable member for Angas in relation to the problems, as he saw them, in war service land settlement can be applied to all of the States involved under the scheme. Certainly there arc areas for a full and frank investigation by a competent committee which would have the opportunity to investigate fully these matters on the spot - whether it is a question of the size of the property; whether the properties should be enlarged; whether there should be an amalgamation of properties. I know that the Minister must have some understanding of the situation in Tasmania particularly in relation to King Island - the scheme that was referred to earlier this afternoon by the honourable member for Braddon - and in relation to Flinders Island. The schemes on both islands are not succeeding, and they are not succeeding because of some of the problems that have already been referred to in this House this afternoon.

In the opinion of honourable members on this side of the House, if, after a period of 25 years, the problem is to be dealt with effectively it can be dealt with only on the basis of the kind of investigation that is envisaged in the amendment which was moved by the honourable member for Dawson. Surely if it is competent for the Government in Tasmania to appoint a select committee to investigate war service land settlement in that State, because there is an awareness of the problems that afflict those who occupy properties in that State, there must be a general acknowledgment - indeed I believe there is by honourable members and by the Minister - that there are problems in relation to war service land settlement that can be solved only by a general investigation; not by seeking the advice of departmental officers in relation to the properties that have already been developed but by having a full investigation into the areas to which I have referred during the course of this address. It is a question of finance: - whether some of the liability should be written off; whether the expenses now being incurred by farmers of occupied properties under the Act are beyond their resources; whether they are able to meet their commitments including the high rents to which I referred in relation to the properties on Flinders Island; whether they are able to meet their commitments as a result of the general fall in rural prices which has been the subject of debate in this House in recent weeks.

  1. believe that a case has been made out for the Government to give very serious consideration to the appointment of a select committee along the lines suggested by the Opposition which, I believe, would at least be a guide to the Government to look at the war service land settlement scheme as a whole and to consider the problems that now exist , in relation to the scheme. This would give the Government the opportunity to provide the remedies that will be needed to bring back the scheme to an equitable basis or to place those who are now on properties on at least an equitable basis.
Minister for Primary Industry · Richmond · CP

– in reply - The Bill before the House is a machinery Bill. It is the annual appropriation for war service land settlement, an appropriation Bill which has come before this House each year since it was created in. .1945. The Opposition, along with members on this side of the House, has expressed its support for the Bill and the purposes of the appropriation. However the Opposition has added an amendment which proposes the establishment of a select committee to examine all aspects of war service land settlement in Australia in order to formulate guidelines for any future land settlement schemes. Whilst I am not critical of this amendment and can see some meaningful purpose in it. 1 can also see some difficulties and that, in some cases, it is not necessary. So for the present I take the point of view of opposing that part of the amendment. Before directing my remarks to the amendment I would like to make a few comments about the Bill and some of the remarks made by honourable members.

This Bill provides for an appropriation mainly to help with the settlers carry-on finance for stock, plant and general working expenses. The actual development expenditure is tapering off. The Commonwealth now provides 100% of the money for the agent States which contain the only areas where war service land settlement is being carried out. To date, the Commonwealth has provided $320m for all agent States which represents an expenditure of $260m. This money is lent to settlers on very attractive terms of 3i%. When one considers the ruling interest rates today, that is indeed an attractive rate for the borrowing of money.

The honourable member for Dawson (Dr Patterson) leading for the Opposition and, J believe, the honourable member for Braddon (Mr Davies) mentioned that the Returned Services League had applied to the Commonwealth for an extension of the existing war service land settlement scheme to include national servicemen. This was put to me. I have replied to Mr Keys, the National Secretary of the Returned Services League stating that the Commonwealth was not able to agree to the proposal, mainly on the ground that the recipients for reestablishment benefits would gain an advantage far greater than that offered exservicemen who might be re-established in other areas of the community. To save time in this debate, with the concurrence of honourable members I incorporate in Hansard the letter that I have written to Mr Keys. It reads: 10th March, 1970

Dear Mr Keys,

Further to my letter of 23«t February, I am writing to you concerning the League’s proposal for the inclusion of a laud settlement scheme among the benefits available to National Servicemen on their discharge. 1 have read, with a great deal of interest, the submission on this subject which accompanied your letter. I appreciate that a considerable amount’ of thought and research has gone into the preparation of this document and I commend the League for this.

As you are doubtless aware, I am vitally interested in any matter relating to the farming community and look very sympathetically on any proposal made to me for its welfare. Many of the points made in your submission, particularly those regarding ‘hard headed’ selection of potential settlers, the desirability of adequate training and the backing of settler’s bona fides by requiring some of their own capital to be invested in the farm, appeal to me hut I feel one of the most salient points included in your submission is the cost at establishing a settler on a property which will stand up to the vicissitudes and current problems besetting rural production, even when farms are under experienced management. I would agree wilh you that the costs of establishment set out in your submission are probably minimal.

This naturally makes me wonder whether such a scheme as you propose has a reasonable application to National Servicemen. 1 have a great deal of respect for the abilities of the agc group represented by the National Servicemen and have little doubt that they would take advantage of the technical advances made in agriculture and the services available for dissemination of this knowledge. But I must keep some perspective in my appraisal of the position.

I feel sure you would agree that those participating in a land settlement scheme such as you propose would be the recipients of assistance far greater than any other benefits available as re-establishment benefits for National Servicemen. From information given to me, it seems that a very minor proportion of those serving in the Regular Army Supplement could possibly participate in a land settlement scheme when the factors for selection arc recognised.

Perhaps one guide to this is the fact that over the last 2i years in excess of 20,000 National Servicemen have been discharged but applications for agricultural loans number only 400. Een supposing all these applicants would he accepted as suitable for land settlement - and this is open to doubt - it will be appreciated that a very small proportion of National Servicemen would be given the extensive benefits associated with the scheme.

However sympathetically I look at your proposal, it seems to me the wide discrepancy in the capital requirement for each settler compared with that of the benefits which are available to the vast majority of National Servicemen makes it, if not impractical, somewhat unrealistic.

As you will recall, the League has made representations for a land settlement scheme on previous occasions but the Government has not acceded to them. I regret to say that I am not convinced that the decision previously conveyed should be varied.

Yours sincerely, (J. D. ANTHONY)

  1. G.W. Keys Esq., National Secretary, Returned Sevrices League of Australia, P.O. Box 303, CANBERRA CITY. A.C.T. 2601

The honourable member for Braddon spoke in detail today on the question of war service land settlement. His electorate incorporates considerable numbers of settlers, especially the area of King Island where continuing criticism of this scheme has been voiced over a good many years. I know that my predecessor, the right honourable member for Fisher (Mr Adermann) did visit King Island and meet the settlers. I know that he made arrangements which alleviated some of their problems. I, too, when I first became Minister for Primary Industry visited King Island to try to learn their problems and to help. This has been an issue of contention more so at King Island than anywhere else in Australia so far as I know. I think that it is unfortunate that this question never seems to be able to be resolved completely.

The honourable member for Braddon questioned why the Commonwealth and not the States was making the valuation for war service land settlement purposes. I answer the honourable member by saying that the relevant legislation passed in1952 empowers grants to be made to the States for war service land settlement on such conditions as the Minister determines. Among the conditions laid down in 1953, and still operative, is provision that valuations would be made by agreement between the Commonwealth and the State concerned. This agreement still applies. It includes Tasmania. The fact is that valuations are agreed valuations. In Tasmania the field work involved in determining the value for option purposes is carried out by the taxa tion valuers. These officers carry out their duties objectively. This statement is substantiated by the fact that the valuations placed by these same valuers on land that is offered for sale as being surplus to war service land settlement needs are almost always reached and nearly always exceed the reserve price put on the land for option purposes.

The objective valuation made for option purposes becomes basic data from which is deducted the value of structures already purchased by the settler. To a large extent, those values of structures are the 1946 values, a basis that is most favourable to the settler. The figure arrived at after deducting these sales values of structures becomes the option price. So the settler in Tasmania, when exercising his option, has the right of either taking the market value or accepting the cost of actually providing the holding, whichever is the less. That is how options are determined.

The honourable member for Braddon mentioned various difficulties and cited different holdings. I would hope that the present committee that has been set up by the Tasmanian Government would be examining these questions which have been brought up by the honourable member for Braddon. A Commonwealth officer has been made available by me to provide information and to answer questions. Originally the position was that the only officer available was a relatively junior officer from Western Australia. The Crown Solicitor’s Office informed me that no obligation was imposed on Commonwealth officers to provide information. This officer certainly did not have the capacity or the experience to speak on any areas that might involve policy, and therefore I was not prepared to make him available. But I have agreed to make a more senior officer available. I hope that this meets the needs of the Tasmanian committee. I give the honourable member for Braddon an assurance that when that committee eventually presents its findings I will take note of those findings. So I think it would be most inappropriate for a Commonwealth committee to be set up at the moment while this other committee is doing a job in Tasmania.

The honourable member for Braddon also mentioned an accusation by Mr Chisholm, a member of the Tasmanian

House of Assembly, made last year to the effect that there was a semblance of corruption in the way in which valuations were determined by Commonwealth officers in relation to the valuations that were declared by officers of the State Government At that time I replied in a Press statement to Mr Chisholm’s accusation. No further disputation has arisen about this point. I am sorry that the honourable member brought it up today in the terms in which he stated it today. The valuations that he talked about are valuations by the State for rating purposes. These are generally unimproved values. If one looks at State values and Commonwealth values - or market values as is the case with the Commonwealth - one sees a considerable difference between them, with the State unimproved values being considerably less than the market value. That is the reason why a discrepancy may be found between the two values.

The Australian Labor Party has suggested a committee to look into the general question of war service land settlement. I have said that I would have to oppose that at this time. I oppose it because the record of the Government on war service land settlement gives no reason for a general inquiry. Demands by eligible settlers in the agent States for land have been satisfied. In South Australia there was a limited number of world-be settlers who did not obtain blocks due to land being held very tightly in that State, a lack of suitable areas of Crown land and a decision not to become more heavily committed to horticulture or viticulture under irrigation because of concern about the future outlook of these industries and about limited water availability. Any eligible South Australian applicant who did not receive a block in that State was given the opportunity to apply in Western Australia.

The Government does not claim to be free from difficulties. There are pockets where problems exist. However, for the most part the current problems are industrywide - not confined to the scheme - in relation to which settlers under the scheme have been making representations to me. I will state some of them. One is the economic situation in recent years of settlers in the Mount Barker area of Western Australia. This is clearly a case of an industry prob lem - the low prices being received for wool, mutton and wheat in the region. Another is a series of issues which have been raised by the Upper Murray Ex-Servicemens Land Settlement Association. On 3 occasions 1 have received deputations from that Association, as mentioned by the honourable member for Angas (Mr Giles) this afternoon, the most recent being in March this year. Action has been taken to meet the Association’s request for more flexible provisions governing the transfer of leases. When that deputation last saw me and 1 told it what the Government was prepared to do, the representatives expressed their appreciation of the new arrangements. Their claims for a review of leasehold valuations are currently being examined by a team comprising senior Commonwealth and senior State officers.

Settlers in what is known as Zone 5 in South Australia - the north western portion of the south east - are appealing to the court against the increase of the provisional rentals for their blocks. The case was listed for hearing in Adelaide and it commenced yesterday, so it would be most improper to have an inquiry on this issue while the matter is before a court. The problem facing settlers on Kangaroo Island is an industry problem but it is accentuated by freight charges. The South Australian Government however gives a subsidy to help settlers on Kangaroo Island with the problem of freight charges. Continued representations by Tasmanian settlers against the prices determined for their blocks which they would have the option to convert from leasehold to freehold, is a matter I mentioned earlier. On both King Island and Flinders Island one of the very great difficulties facing the settlers is the high cost of transport and freight charges. The Commonwealth is giving subsidy atd to those settlers to reduce their freight costs.

Mr Barnard:

– Not on Flinders Island.


– To the King Island settlers.

Mr Barnard:

– I suggest that the Minister keep the record straight


– I will. I hope I have straightened it for the honourable member. Again this is a question which I imagine the committee will consider. In other words, leaving aside the groups whose difficulties derive from industry problems in general, the difficulties of the other limited areas are currently being dealt with in one way or another. A select committee of the House of Representatives would be a sheer duplication of the work already being done. The number of complainant settlers is very small when compared with the 3,000 exservicemen re-settled under this scheme in the agent States and about 9,000 settlers in Australia as a whole. For the reasons I have outlined I must oppose the amendment moved by the honourable member for Dawson on behalf of the Opposition.

Question put.

That the words proposed to be omitted (Dr Patterson’s amendment) stand part of the question.

The House divided. (Mr Deputy Speaker - Mr P. E. Lucock)

AYES: 54

NOES: 50

Majority . . . . 4



Question so resolved in the affirmative.

Amendment negatived.

Original 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 Anthony) read a third time.

page 3391


Bill returned from the Senate with a message indicating that the Senate had agreed to the Bill as amended by the House of Representatives at the request of the Senate and with amendments indicated by the annexed Schedule (vide page 3369).

Motion (by Dr Forbes) agreed to:

That the amendments be taken into consideration in the Committee as a Whole forthwith.

In Committee

Motion (by Dr Forbes) agreed to:

That amendments Nos 1 and 2 be agreed to.

Minister for Health · Barker · LP

– I move: i That amendment No. 3 be disagreed to.

The amendment provides for an appeal against a determination of the Minister under sub-section (5.) of section 21 of the principal Act. The appeal is expressed to be either to the jurisdiction which determined the claim or, if the claim was not determined by a court, to the jurisdiction which would otherwise have heard the claim, in a case where the claim has been determined by a court the appeal would be inoperative because the power of the Minister to make a determination is limited to cases where there has been a settlement of a claim by the parties. In a case where there has been such a settlement, it is not clear to what court the appeal may be taken. The appeal is therefore unsatisfactory. In any case, the nature of the Minister’s power is such that the expense and delay of an appeal is not warranted.


– The reason for the Opposition moving the amendment in the first instance and, 1 take it, the reason why the Senate accepted the amendment, was that the provision refers to cases where workers compensation claims, third party claims or cases of that nature have arisen. It also refers to cases where somebody has been injured and medical expenses have been incurred. In the case of an actual claim for damages being successful, I assume that in all cases there would be a statement by the court as to what proportion of the damages awarded would be in settlement for medical expenses. But in the case of a claim being settled this is not clear. An amount of, say, $1,000 may be awarded to. the claimant. It is then open to dispute whether this was in acceptance of part of the injury, all of the injury, pain and suffering, or one of the other issues that may have been involved. It may be in settlement of some damage to material property (bar could have been involved. Under the present legislation it is up to the Minister to decide. Section 21 (5.) provides:

For the purpose of this section, the Minister may determine that (he whole or a specified part of a payment in settlement of a claim for compensation or damages shall be regarded as being in respect of” medical expenses incurred by a contributor.

In some cases medical expenses can of course be a very large amount. They could amount to some thousands of dollars. Under the present legislation the amount that would have to be refunded may also be very significant because if the claim is covered by medical benefits and hospital contribution fund returns, the total cost to the patient may be relatively small - $5 or a little over. But if the claim is accepted as having been covered by workers compensation or third party insurance the person is not entitled to the refund, ft will therefore be necessary for that person to pay a very large amount of money to the hospital and to the medical attendants. We therefore feel that there should be some method of appealing against the Minister’s decision, if, for example, the whole amount of the money was intended for compensation for the actual medical expenses incurred and none of it was for pain and suffering or other expenses incurred. We have therefore moved this amendment:

That there shall be a right of appeal on the determination of the Minister under the last preceding sub-section by a contributor to the jurisdiction which determined or would have otherwise heard his claim tor compensation or damage. I cannot see the argument of the Minister that it is not clear as to which jurisdiction it would be, because if a cl’aim is settled after it was originally instituted, surely it must be put before a certain jurisdiction. I do not know the exact procedure. If we want to persist with the amendment do we vote against the motion by the Minister for the disagreement and at the same time foreshadow that if that motion is defeated we would move an amendment, or does it become automatic? Could 1 have some guidance on this point? Is there any need to foreshadow the amendment?

The DEPUTY CHAIRMAN (Mr Drury) - There is no need to foreshadow the amendment.

Question resolved in the affirmative.

Amendment disagreed to.

Motion (by Dr Forbes) proposed:

That amendments Nos 4, 5, 6 and 7 be agreed to.


– I do not want to delay the Committee in discussing these amendments. After all these four have been agreed to. The provision relating to the term of appointment of a member of the Specialist Recognition Advisory Committee and Specialist Recognition Appeal Committee is quite sensible because it exists for a set period of 3 years and provides for the removal of a member earlier if necessary. These committees may be formed from nominees from a variety of bodies who have an interest in the health scheme. Throughout our health services we have a number of such committees. One of the greatest dangers is that many of these committees members have held appointments from time immemorial. The trouble is that they do become remote from the immediate problems they are supposed to be dealing with. They are set up in a special position and feel that they have real perogatives In fact they have become as remote as the stars .from the real needs of the functioning of the committee. The Australian Labor Party welcomes this limitation and this regular review which will be carried out. The other recommendations will have some force.

Amendment No. 7 is not in the same generic group of amendments because the last amendment deals with a review of the agreement with the Australian Medical Association in relation to pensioner medical services. One might’ question at times whether the Australian Medical Association will effectively represent the general practitioner who carries out this agreement because it is only this section of the pensioner medical service which is provided at the moment. A regular review is needed because of changing conditions, and some of those changing conditions will be that no longer will honorary services exist at many of our government hospitals. The Australian Medical Association, many of the colleges concerned with specialists, and universities have indicated that they want to see the honorary system go. Hospital administrators have said the same thing. The need will develop for more reviews of this particular service, lt seems to be a sensible provision that a review should take place at least once every 2 years.

Amendments agreed to.

Dr FORBES (Barker- Minister for Health) [5.481-1 move:

That amendment No. 8 be disagreed to.

The amendment provides for an. appeal against the disallowance by the Minister of a claim by a medical practitioner in respect of services rendered to pensioners under the pensioner medical service. In disallowing a claim the Minister acts in accordance with the report of a committee of inquiry constituted by medical practitioners. In making the report the committee considers whether the number of services given were appropriate having regard to generally accepted medical standards of treatment. The basis of its investigation is, therefore, medical and not legal. An appeal to a court from the determination of the Minister is therefore inappropriate.


– If honourable members look at sections 34, 35 and 37 of the principal Act they will notice that the committee of inquiry which the Minister has referred to can do 4 things. Section 34(1.) provides, inter alia:

If a Committee of Inquiry . . . reports that … a medical practitioner -

should have been, or should be, paid an amount or a rate less than the amount or rale of fees or allowances prescribed by the regulation; or

should not have been, or should not be, paid any amount,

Section 35 provides that arising out of the inquiry the medical practitioner may be reprimanded or have his agreement terminated. In other words, A possibilities exist. The Minister has always accepted the proposition that there should be a right of appeal against the final 2 possibilities which exist as a result of a decision of a committee of inquiry that a doctor should not have done certain things.

The Australian Labor Party is suggesting that in addition to his right of appeal on those 2 points there should also be a right of appeal when his money is not paid or when the amount of money due to him is reduced .significantly. Surely in both cases the decision must be partly based on professional grounds. I understand that repeatedly both things will happen, that the medical practitioner will be dealt with under sections 34 and 35. In other words, the amount of money due to him will be reduced or not paid at all and he will be reprimanded or his agreement terminated. Both these points come into it and yet he is entitled to appeal on only one of them. 1 cannot say why there should be this distinction and why there should not be the right of appeal on both grounds.

Amendment disagreed to.

Motion (by Dr forbes) agreed to:

That amendment No. 9 be agreed to.

Minister for Health · Barker · LP

– I move:

That the amendment No. 10 be disagreed to, but that, in place thereof, the following sub-clause be added to clause 25 of the Bill: (2.) Section seventy-three of the. Principal Act is further amended by adding at the end thereof the following sub-sections: “(7.) Where the Minister grants an application for registration of an organisation, he shall, within one month after he has so granted the application, publish in the Gazette a notification to that effect setting out -

the name of the organisation;

the name of the State or Territory to which the registration relates;

the date of registration;.

the fact that the registration is subject to the conditions set out in section seventythree B of this Act; and ‘

if the grant is subject to any other terms or conditions - those other terms and conditions. “(8.) Where the Minister refuses an application for registration, of an organisation, he shall, within one month after he has so refused the applica-‘ tion, publish in the Gazette a notification of the refusal. “(9.) Where the Minister takes action in pursuance of sub-section (6.) of this section in relation to an organisation, he shall, within one month after so taking action, publish in the Gazette a notification, setting out -

the name of the organisation;

particulars of the action so taken, including

where a term or condition has been varied - the term or condition as so varied;

where a term or condition has been revoked - the term or condition so revoked; or

where a term or condition has been added - the term or condition so added; and

the date on which the action was taken.”.’.

This amendment is directed to section 73 of the principal Act which deals with the registration of medical and hospital benefits organisations. It provides, firstly, for the Minister to grant registration subject to such terms and conditions as he thinks fit or refuse registration after considering a report of the Registration Committee as set out under section 70. Secondly it provides for the Minister to revoke or vary the terms and conditions of registration, and, thirdly, for a register of organisations to be maintained and not be open for inspection except by a person authorised by the Minis ter. The amendment is directed to 3 different aspects of this particular section. Firstly, it provides for registration or refusal of registration to be by regulation and, secondly, for the register of hospital and medical benefits organisations to be open for public inspection, and thirdly, in line with the first point, to provide for variation of the terms and condition of registration to be by regulation. In moving the amendment the other place had in mind that the machinery connected with the registration of organisations should include provision for parliamentary and public scrutiny of the Minister’s action. Although it is the Government’s view that the registration of organisations should be viewed as a normal administrative process, and therefore legislative processes are not appropriate, the Government has no reason not to make the Minister’s actions in regard to the registration of organisations open to public scrutiny. It is felt that the use of regulations as proposed by the other place is inappropriate and in lieu thereof I have moved a further amendment on behalf of the Government proposing that provision be made for notification in the ‘Gazette’ of (a) the new registration of organisations together with the terms and conditions that the Minister imposes on them; (b) refusals to register organisations; and (c) the variations that are made to the terms and conditions applicable to organisations. I believe that such a provision will meet more appropriately the objectives sought by the Senate amendment.


– I think that the important part of the amendment which the Government is not accepting is that which seeks to add the words: a register shall be open for public inspection’. I suppose that amendment No. 10 and amendment No. 11, with which one of my colleagues will be dealing, are the most political of the amendments. In other words, we are dealing with the politics of the funds. We are dealing with people who support the Liberal Party which is in office - the people who are completely, devoted to the Government’s so-called voluntary health insurance scheme. The whole crux of the matter can be seen in the action of the Minister for Health (Dr Forbes) in not accepting the proposition that the register shall be open for public inspection.

Dr Forbes:

– The terms and conditions of registration will be open for public inspection. They will be published in the Gazette’.


– But will the names of the directors be made public? Will the method of election inside the organisation be made public? Will the articles of association be made public? As the Minister knows, recently 1 asked him a question on notice about the Hospitals Contribution Fund of Australia. I had found it impossible to obtain a copy of its articles of association. The Minister suggested in his reply that 1 get in touch with the New South Wales body responsible for company registration.

Let us be quite clear about what is happening. We have so-called democratic funds such as the Hospital Benefits Association of Victoria’ of which 4 of the 53 directors are elected by the contributors. These funds are called democratic because, in this instance, 4 out of 53 directors are elected and the other 49 are not elected. On the other hand, we have the so-called undemocratic organisations such as the Medical Benefits Fund of Australia and the Hospital Contributions Fund of Australia in which none of the directors are elected by the contributors. The contributors to these New South Wales funds are even unable to find out the position of the funds. It is obvious to me that the Liberal Party is trying to protect these directors who are to a large extent Liberal Party supporters, and of course are using fund money- contributors money - to support the Liberal Party. Even the recent report of the Senate Select Committee on Medical and Hospital Costs, known as the Wedgwood Committee, which was released by the Minister’s own supporters in the other place, has agreed that some $20,000 a year is contributed by-

The DEPUTY CHAIRMAN (Mr Drury) - Order! I ask the honourable member to confine his remarks to the amendment before the Committee.


– 1 am referring to the fact that the register is not to be open for public inspection. The amendment moved by the Opposition is being disagreed with. I suggest that the register should be open for public inspection and that it should be possible for us to find out who the directors are, who are the people who are paying $20,000 a year into a fund which is being used for purely political purposes.

Sirring suspended from 6 to 8 p.m.


– Before the suspension of the sitting I was referring to amendment No. 10 which the Government has accepted in part. The main change that the Government proposes is to delete that part of the clause which provides that a register shall be open for public inspection. I was making the point that this was another example of how the Government protects its supporters in the hospital and medical benefit funds. As I have already said, even the Wedgwood report on the funds, which was issued since this Bill was before us last, admits that all the large funds, except the Hospital Contributions Fund of New South Wales, pay $20,000 a year for propaganda against the Labor Party. The point made in that report was that although the Hospital Contributions Fund does not do anything of the sort the other funds contribute to the Voluntary Health Insurance Council. The Hospital Contributions Fund runs its own organisation called the Office of Health Care Finance and spends more than $20,000 each year of its contributors’ money there.

I have in my possession a booklet that was sent to me in the last few weeks. It has a religious picture on the cover and beneath it is its title The Second Blessing’. It is a very impressive booklet. Beneath the title appears the words:

An appraisal of voluntary health insurance as the ideal method for financing the costs of essential health care.

Mr Daly:

– That will cost a few bob.


– lt will, as the honourable member for Grayndler points out. The booklet is straightout propaganda for the Liberal Party’s health scheme. It makes continuous political points, and only political points. The important thing is that it uses contributors* money to do this. If the contributors had a say this would bc all right, but as I have pointed out the funds are completely undemocratic. The most democratic of them, the Hospital Benefits Association of Victoria, has 4 elected directors out of 53 directors. The maximum number of directors representing contributors is 4, and usually those 4 are appointed at stacked general meetings and are usually employees of the funds. With the Hospital Contributions Fund of New South Wales and the Medical Benefits Fund of New South Wales there is no pretence at their having elected members. There is no pretence of holding annual meetings or of revealing how the funds are run and who decides what amount of moneys will be devoted to propaganda.

I do not blame the Government for trying to protect the position, and it is doing this by deleting the provision that the register shall be open for public inspection. Information as to who runs these funds will not be available to the public. In many instances the directors of the funds are prominent members of the Liberal Party. They are members of the Australian Medical Association Federal and branch councils. In the case of the Voluntary Health Insurance Council, which is the propaganda organisation of many of these funds, the President and spokesman is Sir Charles Rieger who, until last week, was Federal President of the Australian Medical Association. Honourable members can see that there is no attempt made by these funds to have the average cross-section of the community represented on their directorates.

Dr Gun:

– He is interested only in patient care.


– Yes. In the case of the Medical Benefits Fund of New South Wales 13 of its 24 directors are members of the Australian Medical Association and a large number of them are also members of the branch council of the AMA. I am pointing out these significant features just to draw the Committee’s attention to the reason why the Minister has not accepted the proposition that the register should be open for public inspection. I think it is ridiculous and an affront to the public which is expected to subscribe to these funds; otherwise they get no benefit. Government money is used to support funds which, in turn, donate part of that money for political propaganda for the Liberal Party. In other words taxpayers’ money is being used for straightout political propaganda. One of the main issues at the last Federal election was the question as to whether Australia would have a so-called voluntary health insurance scheme or the Labor Party’s alternative health insurance scheme. This money is spent, as I have said repeatedly, because it is the Minister’s continuous intention to protect his political supporters in the funds and not to let the public find out who is running the funds.

Question resolved in the affirmative.

Minister for Health · Barker · LP

– I move:

That amendment No. 11 be disagreed to, but that, in place thereof, the following paragraph be inserted after paragraph (g) of sub-section (2.) of the proposed new section 76a: (ga) details of how the reserves of the fund have been invested; and’.

This amendment would add 2 additional items of information to the 7 already included in the new section 76a, set out in clause 27 of the Bill, which insurance organisations will be required to furnish to the Director-General and which the Director-General will subsequently include in a report to be tabled in the Parliament. The 2 new items of information that the amendment would add to sub-section (2.) are: (ga) details of how the reserve fund has been invested;

And: (gb) details of direct or indirect interest in shareholdings held by directors of the fund in organisations to which the fund’s reserves have been invested; and

As I said in the House on 14th May it is relevant to keep in mind the various types of organisation that are registered under the National Health Act. Numerically the main group of organisations are those registered under State law as friendly societies. The second important group includes the larger organisations registered under State law as guarantee companies. Other State law exists, such as legislation applicable to co-operative societies, charities and benefit associations, which applies to organisations which are not friendly societies or guarantee companies. It follows that the majority of organisations, and certainly the larger ones, are to a greater or lesser extent subject to dual control under the National Health Act and under appropriate State legislation.

It is also relevant to point out that provision has been made in the draft section for the Minister to require organisations to submit additional information and for the Director-General to include such additional information in the report. This provides for the flexibility that is so necessary, and means that all the information that subsequently proves to be desirable to have included in the report can be included. Because of this provision it was not necessary to provide for an exhaustive list in the Bill at this point of lime, lt is agreed that the first amendment proposed relating to the investment of reserves would add to the value of the report which will be tabled in the Parliament and for this reason the Government is willing to accept the amendment. However, while if is the Government’s intention to exert close supervision of the activities of registered organisations, the second amendment goes further than can reasonably be tolerated in our society. lt is a serious and unwarranted intrusion into the private affairs of the directors of the funds who are public spirited men working, in large part, in a voluntary capacity. They give up a great deal of their time lo these organisations and it would be inequitable to have their affairs published annually in the report of the activities of the organisations. I cannot state too strongly the Government’s opposition to and rejection of this amendment. Recently there has been a lot of talk about the possibility of using fund reserves for ancillary benefits. This amendment is partially related to funds reserves. I am reminded that the honourable member for Barton (Mr Reynolds), when this Bill was before the House on a previous occasion, raised in a very trenchant manner the question of the timetable proposed by the Government for its undertaking in respect to a review of the various services or a review of the possibility of bringing into the national health scheme those services which are paramedical in nature. This matter came’ up in particular in respect to refraction tests done by optometrists and the relationship to refraction tests done by ophthalmologists. ) should like to take this opportunity to say ro the honourable member that the Government is sincerely undertaking this review as a matter of urgency. However, there are considerable implications involved not only in relation to whether or not one should bring optometrists into the scheme but to the whole range of paramedical services - and there are quite a number of them. Considerable cost implications are involved and many problems related to cost and which might involve over-servicing. Also, consideration must be given to the means by which it would be most desirable to bring these matters into the national health scheme, should the Government eventually decide to do so. Therefore 1 cannot give any undertaking to the honourable gentleman that this will happen quickly. 1 can say, however, that we are giving a great deal of time to the matter and I shall take the curliest opportunity to put the results of this review before the Government so that it may decide ils attitude to this possible expansion of the national health scheme.

Dr CUN (Kingston) [8.I4J- Mr Chairman, I oppose the Minister’s motion. Should the Committee vote against the proposal I shall follow up by moving that the Senate’s amendment be accepted by the Committee. This is a rather sad remnant of the original amendment which 1 moved when this Bill came before the Committee some weeks ago. The original amendment, which concerned inclusions in the report tabled in the Parliament, was:

  1. In proposed section 76a, subsection (2.) omit paragraph (h). insert the following paragraphs: (hi names of all shareholders in the fund and the equity held by each in thai fund and the names of all directors of that fund;

    1. details of how the reserve fund has been invested;
    2. details of direct or indirect interest in shareholdings, held by directors of the fund in organisations in which the fund’s reserves have been invested: and
    3. such other information as the Parliament requires to be included.

The Senate saw fit to delete 2 of those items from the amendment, and the amendment as returned to this Committee contains only the 2 sections dealing with details of how the reserve funds of each insurance organisation have been invested and also whether there is any common directorship between any insurance fund and any fund in which the reserves of the insurance organisation have been invested.

I shall not go through all the reasons for which this amendment was moved in the first place but, briefly, it followed an investigation I made on my own behalf of an insurance organisation in South Australia. 1 was concerned that the identity of shareholders of that fund was not open to public scrutiny. 1 concede the points the Minister makes about intrusion into a person’s private life, about what shareholdings people have got and about what equity they might have. If this were just a matter of an ordinary public company this might be a fair attitude. It might also be a fair attitude if this were voluntary health insurance in the true sense, but it is not. The contributor, that is, the patient, is compelled to contribute to a voluntary health scheme if he is to receive any benefit from the Government. A patient is compelled to belong to a private insurance organisation in order to receive his rebate from the Commonwealth Government - for which he has paid by way of taxation. That is why I feel justified in saying that the contributors to each fund should know exactly who it is who controls their moneys. I was disappointed that the Senate saw ‘fit to delete the first sub-clause of the amendment relating to the names of all shareholders in the fund and the equity held by each shareholder in the fund. It would be interesting to know how much equity each shareholder held in the fund for his right to direct where the reserves - the contributors’ funds - are going to go. For all we know each might hold only one 20c share in a particular insurance fund yet this would give him the right to control many hundreds of thousands of dollars which accumulate as reserves of the fund.

Dr Klugman:

– In 1936 it was £2.


– I have heard of a particular fund in Adelaide where a director may hold even less than that but I shall not go into that because I do not have accurate documentation of that; I was unable to obtain it. I cannot see why people should be compelled to contribute to such a scheme without having any right of control over their own money. I cannot see why they should be blackmailed, which I think is the appropriate word, into joining such a fund under a threat of having Commonwealth funds withheld from them. I find the explanation given by the Minister unsatisfactory. I will not go over the reasons again, but if the Committee votes against the amendment of the Minister I shall move accordingly that the amendment be accepted by the Committee.

Mr Les Johnson:

– Like the honourable member for Kingston (Dr Gun) I feel disappointed that the Government has been unprepared to meet the very considered viewpoint determined in another place about this matter. It is true, as the honourable member has pointed out, that an amendment was moved in this Committee on a previous occasion. That amendment required much closer scrutiny than what the Senate has now called for. The honourable member for Kingston has enunciated the requirements which were involved in that amendment. I should like to refresh the memory of the Committee with the recommendations of the Senate, the amendment that has come from another place to this place and to show in contrast the part that is proposed to be eliminated in accordance with the Minister’s speech made a short time ago. The Senate has asked for details of how the reserve fund has been invested. I understand that that part of the amendment is acceptable to the Government. Then from the Senate has come a proposal that we should also seek, require and write into the legislation a provision making it necessary to provide details of direct or indirect interest in shareholdings held by directors in a fund in organisations in which the fund’s reserves have been invested. I understand from what the Minister has said that the Government is not prepared to accept that provision. I rise to speak because I believe that this Committee, and no doubt the country at large, is entitled to a better explanation as to why the Government is so intent on eliminating that particular provision. After all, we live in an era when these things are under suspicion and, in my view, justifiably under suspicion. We have heard recently of involvements in Comalco, for instance. When we come to public funds, in my view the public has a right to know precisely who is involved and to what extent. There should not be any reason at all foi the Government to be intent on clouding over the provision and the availability of this kind of information. 1 think honourable members will recall that the Nimmo Committee has looked closely at this matter and has made recommendations about it. In its report, that Committee gave close and detailed attention to the reserves held by funds. I am not sure what amount these reserves represented; I think they are about $70m at present.

Dr Gun:

– They would have gone well above that.

Mr Les Johnson:

– They have gone well above that? This is a large sum of money, and how is it employed? The Nimmo Committee took a sample group of these organisations - a ‘representative group’ was the term the Committee used - and they showed reserves of $52.8m. They showed that 3.61% or $l.9m was invested in shares, 10.9% or S5.8m in debentures, 8.2% or $4.3m in mortgages, and 1.4% or $1.74m in other investments.

Dr Klugman:

– That comes from OPSM

Mr Les Johnson:

– Whether or not it is from OPSM, which is the organisation that make glasses. I do not know but I think we have a right to know. I am concerned to note that the yield from all these investments amounted to only 5%. The fact of the matter is that even the Commonwealth seeks a higher interest on its money these days and requires everyone else to get more for their money. I think the shareholders and the people represented by voluntary health insurance funds also have an expectation of receiving a higher yield, if that is the way the country is to be run.

The Minister had something to say about the matter on 4th March this year when he referred to the investment of fund reserves. I bel:eve he has jettisoned and repudiated the stand he took earlier. He said that the friendly society funds were already required to confine their investments to trustee investments and that many open funds also substantially followed this practice. He also said that the Government had closely examined this proposal and had concluded that funds had generally displayed a proper sense of responsibility in the matter of investments. It has also been noted, he said, that the non-trustee investments, which some funds hold, have generally produced good returns. That varies with what I showed a moment ago in terms of statistics. The Minister also said that the Government had therefore decided not to adopt the recommendation but to permit some degree of flexibility in the matter of investments.

I remind the Minister of the recommendations of the Nimmo Committee in this regard; they were most unambiguous and forthright. In fact, they gave rise to the amendment first moved by the member for Kingston, subsequently moved in another place and now moved on 2 occasions in a repetitive sense - in an insistent sense. Honourable senators in another place believe that this is a most important matter. They regard it as important for the same reason the member for Kingston regards it as important and that the recent Nimmo Committee regarded it as being important. That Commitee states:

We recommend that a condition of registration applicable to all organisations bc that their investments bc confined to trustee securities under the laws of the Stale in which the organisations are located.

There is no provision at all that requires that. The Committee continued as follows: That the investments of organisations be limited to trustee investments under the laws of the Stale in which they are located.

We wonder why one part of this amendment has been accepted while the important part - that is, the details of direct or indirect interests in shareholdings held by directors - is not being upheld by this Government.

Dr Klugman:

– They are Government supporters.

Mr Les Johnson:

– Yes indeed. We. are talking about pecuniary interest. In any held of government starting with the basic form of government - local government - pecuniary interest is something that must be manifested, something that must come to the surface. Any alderman or councillor in any shire in this country has to reveal his pecuniary interest. Yet we find on this occasion the Government upholding a situation that is at variance with and is the complete negative of this well-established Australian practice. People have a right to be inquisitive about these things and to ask: Is it possible for people who are directing voluntary insurance funds to be in a position where they manipulate these funds? If they manipulate them, what amount of extra benefit accrues to them?

In another place we do not have a predominance of Labor Party people at all. This proposal has been dealt with twice in that chamber and, in the wisdom of honourable senators in that place it has been sent back to us twice. I submit that the reason why it has come back with such dedicated insistence is that the principle is so well established and that the Minister, if he intends to depart from it, is obligated to give to this Parliament reasons why we are heading off in some other direction. It is the job of this Government to protect the public: It is not its job to protect people with private interests, to protect shareholders, or to allow people to hide behind the cloak of obscurity. I strongly recommend with the utmost enthusiasm that the Minister, if necessary, defer consideration of the matter until he has a chance to have another look at the enormous ramifications. I think it will be a sad day indeed for Australia, as we head off again into another era of voluntary insurance with large sums of money to be accrued, if we make it possible for funds to bs invested in a way that could be against the best interest of the contributors and the Australian public at large.


– I wish to say a few words to support the amendment that has been discussed, and to oppose the amendment that has been moved by the Minister. What people do not realise or what the Government refuses to realise is that the real mystery men on the Australian business scene are the directors of the health and medical’ benefit organisations. There is no method of election, and no-one knows their background. We do not know whether they are appointed on their ability or by virtue of their contacts or whether or not they are appointed as a result of services rendered to the person in control of the fund. In this Parliament I have mentioned the case of Mr Huxley, who is now serving 20 years hard labour as a result of a $5.5m fraud to which he pleaded guilty. He was appointed to the Hospital Contributions Fund in NSW because he nominated the director of that fund - Mr Turner - as a member of the Art Gallery Society of NSW. Why should we not know if this is the method of electing directors, where these funds have been invested, and also the association these people have with the organisations?

Dr Forbes:

– He was the representative of the Lewisham Hospital! as I have told you repeatedly on notice.


– I am not concerned about that.

Dr Forbes:

– He was the representative of the Lewisham Hospital.


Mr Turner knows I made this allegation.

Dr Forbes:

– Tell us what you know about the Lewisham Hospital.


– I made this allegation, and Mr Turner has never written to me denying it, has never asked me to withdraw it, and has never objected to it. I think his silence exemplifies his guilt and the reason why that man was appointed. That brings me to the point where I ask why we should not have known, for instance, Huxley’s association with the organisation. Why should we not know what every director is associated with? The very fact that this matter has been sent back to this place twice by another place proves, as the honourable member for Hughes (Mr Les Johnson) said a moment ago, that it should be carried in this place.

Dr Klugman:

– On the voices.


– On the voices. When all is said and done, there are a lot of fair weather fighters on the Government side - the rebels.

The DEPUTY CHAIRMAN (Mr Drury) - Order! I suggest to the honourable member for Grayndler that he confine his remarks to the clause before the Committee.


– I am doing so. 1 have mentioned that this has been sent back twice from another place, and those who voted twice for it to come back to this House are fair weather rebels from your Party, Mr Deputy Chairman, who apparently send things back only when they realise that something should be done in the public interest and they try to escape their responsibilities. Why is the Minister always covering up for these directors? The amendment he has moved excludes completely what we want to insert, namely, details of direct or indirect interests in shareholdings held by directors of the fund in organisations in which the fund’s reserves have been invested be made known. What if H. G. Palmer of other days had been a director? Why should we not have known whether a man like that intended to invest these funds in his organisation that went haywire and lost millions? I cast no reflection on those directors of funds who have integrity, but nobody knows who is a Huxley and who is not because nobody knows them, nobody knows how they are elected, yet we are supposed to give them an open book so far as the investment of huge amounts of funds is concerned.

Mr Hayden:

– The Prime Minister would not let them hold shares in Comalco.


– The Prime Minister (Mr Gorton) as you know, Mr Deputy Chairman, would not let his Ministers hold shares in Comalco, and quite rightly. That displays integrity of a high order. Why should we not expect the same from directors of organisations I ke this? As the honourable member for Robertson (Mr Cohen) has said, they are faceless men. They are friends of people many of whom are very wealthy and powerful people with great connections in business.

The DEPUTY CHAIRMAN (Mr Drury) - Order! I think the honourable member is getting rather wide of the point.

Mr Hayden:

– No fear. This is the crucial point of this amendment.


– If I might answer your point, Mr Deputy Chairman, I would ask you to read the amendment to clause 27 which I am discussing. It reads in pari as follows:

Clause 27, page 19, line 23, proposed section 76a, sub-section (2.), omit paragraph (b), insert the following paragraphs -

Listen closely to this, Mr Deputy Chairman -

  1. details of how the reserve fund has been invested;
  2. details of direct or indirect interests in share holdings held by directors of the fund in organisations in which the fund’s reserves have been invested.

The point I make with due deference to you, Mr Deputy Chairman, is that we believe that the business connections of directors of these funds in the business world should be known. 1 have mentioned cases. It was Huxley in one but it could have been H. G. Palmer. It might be Comalco or any other organisation. Why should we not know their affiliations in order to determine where these moneys are being invested? This is a logical argument. It is relevant to the clause and terribly important to the Australian people. I cannot imagine why the Minister has always covered up for the funds. A committee in another place has revealed that they have been fleecing the public and $35m has to be given back to the contributors. The people responsible for this are the directors and we want to know the ramifications of their business interests. It is terribly important. After all, for ail we know Huxley could have been operating their account with the Rural Bank. But probably nobody knew that he was a director of that organisation at that time. Nothing in this legislation is more important than to know the background of the directors, where they invest their moneys, whether they are associated with the funds, whether there are interlocking directorates and whether everything is above board. I know that the Minister is a man of integrity and I believe that the last thing he would want to do would be to take out this amendment which has been sent back twice from another place. That in itself is clear proof of the substance of the clause.

Mr Les Johnson:

– It rarely happens.


– It has rarely happened. The other place has gone under in nearly everything else that mattered but it has insisted on this amendment because 7 members of the Liberal Party in that House believe that there should be some control over the activities of these people and that the public is entitled to know their ramifications. If the Minister at the table was adjudicating on contracts and other matters relating to his Department he would not for a minute be tied up in companies with which he was negotiating. It would not be within his principles to do it nor would it be within the principles of any member of the Ministry for that matter. But here we are allowing a director of this fund to be a director of a fund and to invest its money in organisations with which he is associated. At the same time we are giving him a protection, a safeguard and a right that is denied every other reputable member of the community associated with the handling of public funds. For some reason or other the Government is covering up. I suppose - I just make passing reference to this - that maybe some funds went into the Government’s coffers for its election campaign.

The DEPUTY CHAIRMAN (Mr Drury) - Order! I ask the honourable member to confine his remarks to the clause before the Committee.


– I was only making passing reference, Mr Deputy Chairman. I can appreciate your sensitivity on that point.

The DEPUTY CHAIRMAN (Mr Drury) - Order! Is the honourable member making a reflection on the Chair?


– Certainly not. Not for a minute would 1 do that with you, Mr Deputy Chairman. 1 believe that the Government has a responsibility to endorse this amendment. The very fact that this particular section has been taken out in its entirety proves that pressure has been exerted from some source or other to protect the faceless men of the business or medical world, namely, the directors of these organisations. We are not asking for much. If the directors were elected by a vote of the people concerned and if we knew who they were, we would probably know their qualifications for the job and the ramifications of their investments before they stood for election. But we are asked to accept a blank cheque. The Hospitals Contribution Fund comes along with twenty or thirty directors picked out of a hat for services rendered. Nobody knows who they are or what they are. They might be brainy; they might be silly; they might be bright; they might be anything. We are not told anything about them and, although millions of dollars are being invested, the Government refuses to write into legislation this amendment as a safeguard for the public and for contributors’ funds. I can see no justifiable reason for this amendment not being adopted and, like honourable members on this side of the chamber, I will be interested to hear the Minister make an explanation in regard to it.

For once - far be it for me to do it too often - I commend those limited rebels of the Liberal Party in another place who sent this amendment back twice because for once they have cast an intelligent vote in the interests of the people to see that the people are protected. Therefore I ask that the House adopt the amendment that has been moved and reject the amendment moved by the Minister because I think that integrity, public interest and contributors’ interests demand that this amendment be inserted in order to protect their finances, their funds and the reputation of all associated with them.


– I wish to add my protest to that of my colleagues on this section of the amendment suggested by the Senate and which has been omitted. Firstly, the Minister for Health (Dr Forbes) in his statement said that because these gentlemen, who are directors of the funds, give very substantial time in a voluntary capacity to them - no one will deny that perhaps they do give substantial time in a voluntary capacity - it would be an unfair intrusion into their private affairs to expect their holdings, or those of their families, in any organisation in which the fund’s reserves have been invested to be revealed. How much of an intrusion is this when we are dealing with public moneys?

Does the Minister criticise those Liberal State governments who apply a similar rule to those men giving very substantial voluntary service in local government? Does he criticise his colleagues in those parliaments for preserving the rule that such voluntary workers must reveal any direct or indirect interest they have in organisations with which their voluntary bodies - municipal councils or shire councils - deal? Is he critical of that? This has been going on for many years and has been the subject of all-party inquiries in various States which have invariably confirmed the opinion that where public money is involved and where men are giving voluntary services there must be a protection in relation to any direct or indirect interest that any of the men serving in a voluntary capacity might get out of it. It is difficult for us on this side of the chamber to appreciate the Minister’s weak arguments. All the precedents in this sense are against what he has to say. In fact our very commonsense is revolted by the attitude that is taken. Why, even men who work in voluntary capacities on hospital boards of management, if they so much as have the slightest commercial interest in any contract for food or other supplies for that hospital for which they work voluntarily immediately declare their interests, walk out of meetings on such matters and take no part in such discussions.

As one of my colleagues has mentioned, this is an area in which investments are in excess of $70m. This is a very rich area of investment. Perhaps it is a very rich area of reward for someone who could influence the flow of those investments. Such a situation may not exist. But should not the public which has invested its money in or paid its money into these organisations be protected against that possibility? Is it an unfair intrusion into the private affairs of these people to expect them to have their integrity guaranteed in these circumstances?

Mr Reynolds:

– One would think that they would demand it.


– I would have thought that they would have demanded that their integrity be preserved. Workers in local government and councillors - in Victoria at any rate - demand that their integrity be preserved in this way. Even if their interest may be as remote as that of belonging to a voluntary body that may receive a municipal grant, these people believe that their integrity should be protected by a declaration of their interests.

Here we have these enormous funds whose holdings are to be promoted further by what the Government is doing in this legislation. These funds will be able to enlarge and to expand their empires. The status of those who hold office in these organisations will be increased. Yet, the Government proposes to deny to the public and to contributors to those funds the protection which this portion of the amendment seeks to give. No doubt should exist in the mind of anybody that persons in a position of influence in these funds can so direct the investment of reserves in a way which would benefit themselves directly or indirectly.

This is not an unreasonable request. This is not an unfair intrusion into the affairs of those people. Surely they would be willing to accept such an intrusion because they are so charitably minded in taking on this voluntary service. It does not mean that their whole financial affairs are displayed to the world. It merely means that if money from these reserve funds is invested in any organisation with which they are connected, that fact is declared. A statement of their financial position is not required. In no way are they disadvantaged. I think that it is a matter of great regret that the Government shows such lack of commonsense in regard to this matter con cerning the protection of the public and those persons who work voluntarily in these organisations.

Motion (by Dr Forbes) agreed to:

That the question be now put.

Original question put:

That Senate’s amendment No. 1 1 be disagreed to.

The Committee divided. (The Deputy Chairman - Mr E. N. Drury)

AYES: 52

NOES: 42

Majority .. ..10



Question so resolved in the affirmative.

Or FORBES (Barker - Minister for Health) [8.50] - I move:

The 2 proposed amendments included in amendment No. 12 are directed to the Pharmaceutical Benefits Advisory Committee.

The DEPUTY CHAIRMAN (Mr Drury) - Order! Amendment No. 1 1 was put and voted on by the Committee.

The DEPUTY CHAIRMAN- Order! No. lt was put and carried on the voices.

The DEPUTY CHAIRMAN- The question had already been decided upon by the Committee. There is no substance in the point of order.

The assessment of the comparative clinical efficacy of particular drugs, which is an important function of the Pharmaceutical Benefits Advisory Committee, is a matter of judgment. There may often be divergent views even among the experts in the field. A prime example of differing views having been expressed on the mode of treatment that should be used for a relatively common condition, is in the case of the management of asthma. The obligation to give and have published the reasons for recommendations would add considerably to the burdens associated with being a member of the Committee and would, I am convinced, lead to difficulties in obtaining suitable people to accept membership. I am sure that if the recommendations of the Committee were tabled in Parliament this would intensify public controversy between medical practitioners and other experts on the merits and demerits of certain drugs. Apart from anything else, this could well cause concern and loss of confidence on the part of patients undergoing a particular course of treatment.

Avenues are already open in professional journals for doctors and other experts to express their views on the non-inclusion of a drug in the pharmaceutical benefits list, and it is by this means that opinions should be aired. All honourable members will see that divulgence of the reasons behind Pharmaceutical Benefits Advisory Committee recommendations would have important disadvantages and, therefore, the Government cannot accept the second proposed amendment for the tabling in Parliament of the recommendations of the. Committee.


– The Minister’s reasons are not acceptable to the Opposition. We maintain the carefully considered position we took up when this amendment was first moved in this place and in another place. The Minister’s reasons are not new although he has now elaborated slightly on them. First of all, he said that this amendment would place added burdens on the members of the Pharmaceutical Benefits Advisory Committee if they were required to give specific reasons for excluding a drug from the pharmaceutical benefits list. What are those added burdens? The first is that the Committee would have to commit to writing succinctly in a report to this Parliament the scientific and medical grounds on which it refused the inclusion of the drug. The second burden the Minister referred to, only in an oblique fashion, was that it would be a deterrent to people accepting a position on the Committee if they knew that this report was to come before the Parliament.

The Minister has said that there is room for discussion about drugs excluded from the list to take place in the medical journals. Let us take a specific example. Let us assume that the drug called phenylbutazone, which is a popular drug for use in rheumatic and joint conditions, has been excluded from the list. This has occurred. Questions would then be asked in this Parliament, the reasons for the exclusion would be given, the drug would later be added to the list but no reasons would be given for this despite the fact that the reasons for its exclusion in the first place and as reported to this Parliament still existed. Let us further suppose that the reasons given were that this drug was a dangerous drug and must be used with care. I confidently submit - anybody with commonsense will agree - that that was not the true reason or the drug would never have been restored to the list at a later date. All that I, the Opposition and the Senate ask is that the sensible, true, scientific, medical reason be made public.

Mr Whittorn:

– Nonsense.


– Nonsense? What is the amendment seeking? I shall read what the Opposition is seeking:

When the Committee recommends that drugs and medicinal preparations should not be made available as pharmaceutical benefits … the reasons for the recommendations, shall be laid before each House of the Parliament within 14 sitting days . . .

The honourable member can call that nonsense if he wishes but I think it is perfectly fair. I ask him: Is a scientific reason nonsense? The Minister said that exclusions could be debated in medical journals. That is true. But the debates in the medical journals can speculate only as to the reasons in the minds of the advisers on the Committee for the exclusion of a drug. Such speculation is quite fruitless because there is no way of asking the people on the Committee. That the Government has accepted the first part of the amendment requiring names and qualifications to be published is a step forward and virtually an admission by the Government that this should be done. The amendment provides: The names and the qualifications of those persons appointed under the foregoing provisions shall be published in the ‘Gazette’.

Honourable members will recall that when we first suggested this amendment in this place the Government said it would be intolerable because people would never go on a committee if their names and their qualifications were made public and people could get at them. We said quite rightly that most of the important drug firms, who are the ones who really want to get at these officers and to influence them to change the drug list, already have found out who they are. So the Minister has not made a very major concession to the drug firms by saying that their names shall be published. But I submit that he has made a concession in this House, to the Senate, to this Opposition and to the people who are saying; We should know not only their names but also their reasons as reasonable, scientific and experienced medical men. If these reasons are not forthcoming we can only assume that the Government has some reason for hiding them*.

The Minister says that if these reasons were published it would cause needless concern and loss of confidence among patients. I would just like him to have a look at his files some time and look at the correspondence he has received concerning the exclusions of drugs from this pharmaceutical benefits list. I would like him to analyse it and ascertain the percentage of those letters that are showing confidence and preventing the concern of patients. I would submit that this very secrecy is causing their concern. If anything has caused that loss of confidence it is the very secrecy of these reasons for excluding drugs from this list. The only way to restore this confidence and to remove that concern is for the patients to be assured that these things have, been thrashed out in the light of day and not by people selected by the Government in secrecy to make secret decisions under the influence of officers of the Minister’s Department. These officers can go along and say, and I am sure that this is what happens, although Ministers of Health consistently have denied it: ‘You know this is rather an expensive drug. The bil’l is rising every year. Doctors are a little inclined to prescribe this a bit freely. Be very careful how freely you place this in the hands of doctors. If you must really put it on the free list, hedge it around with a few restrictions. Make it available only to pensioners.’ That was done with this same drug - phenylbutazone.

After it had been denied to everybody there was such an outcry from pensioners who suffered from these joint conditions that it was placed back on the list, for pensioners only. It was still a dangerous drug. The reason the Minister had given was still there. It was a dangerous drug and should be used carefully; but of course such care does not have to be taken with pensioners because they cannot afford to pay for a private prescription. It had to be made free for them. The Minister’s reason does not ring true. It does not jibe with the facts It is inadequate. We stand by our original contention. We stand by the amendment from the Senate, that the whole of the Senate’s recommendations should be accepted by this House and that when the committee recommends that a drug should not be made available, the reasons shall be laid before the Parliament within 14 sitting days. This is a reasonable, humane and democratic request. Any man on that advisory committee who is worth his salt will not use this as an excuse to resign. In fact, it will be an incentive to a man of honour to go on and justify his decisions as to which drugs are made available to the public of Australia.

Mr Les Johnson:

– I support the honourable member for Capricornia (Dr Everingham) in his contention that the situation in regard to this matter should be expressed more clearly and be above board. I am pleased to note that half the battle has already been won. It is not very long ago that the Minister contended in the Committee of this House that it was unreasonable to expect the names of the doctors who sit on this committee to be known to the public. In a matter of a week or 2 he has completely reversed his attitude in this regard. The previous contention was that the doctors concerned would be inundated with representations from pharmaceutical companies and the like. Now, the amendment provides that these doctors’ names are to be published in the Commonwealth ‘Gazette’.

The Opposition sensibly enough contended that anyone - particularly the big drug companies with all the resources at their disposal - would find out in any case who were the people who decide which drugs should come on to the free medicine list of this country. The Minister refused to accept the counsel and fairly sensible contention that was being made by the Opposition. But the matter has come from another place on several occasions, and the sheer weight of numbers and the sheer insistence by the other place has caused a further evaluation and a capitulation by the Minister and the Government. Apparently there has not yet been sufficient pressure in regard to this other matter. How many honourable members sitting in the Committee tonight have received representations from patients, and especially from doctors? The doctors are the more significant ones, particularly those who contend that a drug is essential to the wellbeing of a patient and that because of its price it ought to be included in the free list.

Often we make representations to the Minister. We receive a reply to the effect that the Committee has determined that there is a substitute that is available in respect of a certain drug. But the doctor steadfastly says: ‘I have conducted clinical trials in regard to this and other patients, and I refuse to accept this. In the interests of my patient I still want you to continue your efforts to get this particular drug included in the free medicine list.’ We are talking in terms of very big money when we talk about these things, and not only the wellbeing of people, as significant as that is. In fact, there can be nothing more significant than this. We are now in an era of increasing accountability. Members of the public have an expectation about accountability. People cannot sit in remote places any more, pontificating and dropping decisions from great heights, without expecting others to say: ‘Why have you done that?’ I believe that this principle applies to the matter under consideration.

The rights of the subservient and the rights of the citizen are expanding. The rights of the medical profession, of the pharmacists and of the people in these allied fields are expanding. Indeed, the rights of the manufacturers themselves ought to be expanding. They ought to have the opportunity to know why their drug has not been accepted if it measures up to therapeutic and other standards. There are some people in this country who are very well informed about these things and who contend that the brand name system which seems to be predominant in regard to drugs on the free medical list is doing a great disservice to the people of this country. They contend that we are paying for brand names. Lots of people say we would be much better off to have a generic system, that we should use generic names instead of brand names, and that if we did this we would save a great deal of money.

I remember raising this matter in the House some years ago. I had good advice from people who were well informed on the matter, and it received a lot of attention from the then Minister for Health, who has since passed on. As a consequence of these representations we were able to save this country many millions of dollars. We established that the same drug under various trade names was being financed by the Commonwealth in relation to the pensioner medical scheme and the free medical scheme. It was found that there was an enormous variation of price being paid not only by the public but also by the Government itself. As I say, because of the rationalised approach many millions of dollars were saved.

I want to draw attention to the enormous financial consequences that are involved in this matter. According to the annual report of the Department of Health the total cost of pharmaceutical benefits in 1968-69, including patients’ contributions on prescription benefits available to the general public, amounted to $136m. This indicates the highly competitive state of the matter that we are talking about. If a drug is admitted to the free medical list by this committee it may be worth hundreds of thousands of dollars. We know the highly competitive state that exists. The drug companies in this country are in the main sycophants of overseas companies. About 95% of the 120 major drug companies in this country are subsidiaries of overseas concerns. If one conducts a study into these matters one can ascertain that drugs produced are obtainable more inexpensively in other countries than they are made available in Australia by the same company. A bonanza is operating in Australia for drug companies.

I believe it is necessary to contrive a means by which these things should be brought under close scrutiny. This House has made some inroads into this principle tonight in several ways. We have decided that the people who make the decisions are no longer to be obscured or hidden from public view. I believe it is necessary that their decisions should be exposed. Mr Chairman, I draw your attention to the fact that last year, according to the DirectorGeneral’s report, 44 new items were added to the list and there were 71 new strengths and forms of existing benefits. Although that number is considerable it can be established that they represent an infinitesimal proportion of the number of submissions made to this Committee. I do not care what the Committee is nor how well informed it is. Like most citizens I am not prepared to concede any rights, any decision making, to anyone unless I have an opportunity of knowing the reasons why they arrive at those decisions. I believe it is even more important when the matter involves this country in such enormous amounts of money. Last year the overall benefit prescription volume increased by $5m or 9% to $60m. It amounts to many millions of dollars.

I believe that pharmacists, doctors and others who are involved professionally in this industry take the view that the more exposure there is the better. The Minister has said that to do so would intensify public controversy. I think they are the very words he used. Would there be something wrong with a development of this kind? What is wrong with intensifying public controversy when life and death are involved? What is wrong with requiring people to account for themselves when somebody contends that certain drugs are necessary and a committee in an obscure back room is saying that it is not necessary to include such drugs on the list? One wonders why the Minister is so prone to see virtues in such a situation.I strongly recommend that the Committee should give the recommendations from another place the utmost support so that these matters can be ventilated and the whole matter of determining which drugs are made available to pensioners and people who benefit from the free medicne scheme can receive the ventilation and public examination which it deserves.

Question resolved in the affirmative.

Resolution reported; report adopted.


That Mr Holten. Mr Kelly, and Dr Forbes be appointed a committee to draw up reasons for the House of Representatives disagreeing to amendments Nos 3 and 8 of the Senate.

Minister for Health · Barker · LP

– On behalf of the committee I present the reasons for the House of Representatives disagreeing to the amendments of the Senate. (Thereupon the Clerk read the reasons as follows):

Reason of the House of Representatives for disagreeing to Amendment No. 3 of the Senate

The amendment provides for an appeal against a determination of the Minister under sub-section (5.) of section 21 of the principal Act. The appeal is expressed to be either to the jurisdiction which determined the claim or, if the claim was not determined by a court, to the jurisdiction which would have otherwise heard the claim. In a case where the claim has been determined by a court, the appeal would be inoperative because the power of the Minister to make a determination is limited to cases where there has been a settlement of a claim by the parties. In a case where there has been such a settlement, it is not clear to what court the appeal may be taken. The appeal is, therefore, unsatisfactory. In any case, the nature of the Minister’s power is such that the expense and delay of an appeal is not warranted.

Reason of the House of Representatives for disagreeing to Amendment No. 8 of the Senate

The amendment provides for an appeal against the disallowance by the Minister of a claim by a medical practitioner in respect of services rendered to pensioners under the pensioner medical service. In disallowing a claim the Minister acts in accordance wilh the report of a Committee of Inquiry constituted by medical practitioners. In makingthe report the Committee considers whetherthe number of services given were appro priate having regard to generally accepted medical standards of treatment. The basis of its investigation is, therefore, medical and not legal. An appeal to a court from the determination of the Minister is, therefore, inappropriate.

Motion (by Dr Forbes) agreed to:

That the committee’s reasons be adopted.

page 3408


Second Reading

Debate resumed from 21 May (vide page 2541), on motion by Mr Chipp:

That the Bill be now read a second time.

Dr J F Cairns:

– This Bill can be divided into 4 main parts.I do so for convenience. There are a number of items on which tariff changes are being made. They are based on Tariff Board reports on gelatine and animal glues; floor and wall coverings; gloves and mittens; secateurs; electric circuit breakers and switch units; and lastly the very sinister sounding gang slitting machines. They are nol at all sinister. They are machines for cutting mild steel sheets. These changes arose out of Special Advisory Authority reports. This is also the case with cherries preserved by sugar - drained, glaced or crystallised. All these items were introduced into the last Parliament and validated by it. The Opposition did not oppose the items at the time and does not oppose them now.

The second part of the Bill is designed to implement changes which arise out of Tariff Board reports on time switches and movements and parts therefor, compressed gas cylinders, almonds, flexible metal tubing, piping and transmission shafts, taximeters, belts, belting and woven cotton fabrics, drawing, measuring and calculating instruments, syringes, injection or puncture needles, and chlorine and sodium hydroxide or caustic soda, and in addition Special Advisory Authority reports on metal working machine tools, vegetable oils, and curtain hooks of base metal.I do not want to summarise the changes in that section. They were at one stage presented to honourable members in Press releases from the Minister for Trade and Industry (Mr McEwen). Also, they are summarised at the back of the Minister’s second reading speech. Therefore, I will not waste time in referring to the actual tariff changes that are proposed. Looking at the reports and at some of the changes in this section I cannot say that 1 am satisfied - this is not an unusual situation - that the changes ought to be made. The Tariff Board reports in a number of cases arc not adequate. But the changes are not of very great significance and the Opposition will not oppose what is recommended in rh’s section.

The third part of the Bill, as 1 separate it, consists of changes that are being introduced as a result of an agreement reached by the Governments of Australia and New Zealand which arc to be added to Schedule A of the New Zealand-Australia Free Trade Agreement. The goods affected are mainly iron and steel. I include in this part of the Bill changes in tariffs on goods that are the products of cottage industries in a less developed country. These products appear in the Second Schedule. The Opposition does not oppose any of these tariff changes. What I would call the fourth part of the Bill is that which implements the tariff changes which follow from the Tariff Board report on man made fibres and yarn and tyre cord and tyre cord fabric. This report proposes significant reductions in tariff. The Government has accepted this recommendation and the legislation before us gives effect to that decision. The Opposition will not vote against the second reading of the Bill but will move in the Committee stage for the omission of the 13th Schedule of the Bill to indicate our opposition to these proposals and to separate that opposition from the fact that we do not oppose other parts of the Bill. If our amendment is not carried we will vote against the third reading of the Bill. So there will be 2 divisions in the next hour and a half.

Following the issuing of this report of the Tariff Board and the Government’s acceptance of it, the Textile Council of Australia published a full page advertisement in Australian newspapers, lt is a long time since a Tariff Board report was received in this way. I want to quote from this newspaper advertisement certain very significant criticisms of the report on man made fibres and yarn, lyre cord and tyre cord fabrics. Firstly, the Textile Council of Australia is the organisation of all lextile manufacturers, it carries, and should carry, very considerable authority in the industry and with the Government. The Council in its advertisement first of all said:

The Board in ite Report again acknowledged the importance of the industry . .

But it says that the new rates of duty are unrealistic in their protective incidence compared to duty applying in other countries. I will give some details of that in a few minutes. Secondly, the Council states:

Much of the material and evidence on which the Board’s report is based was prepared and submitted to the Board nearly 2 years ago.

The Council said that the report is out of date. Thirdly, the Council states in its advertisement:

The Report does not permit the Government to assess the soundness of the Board’s recommendations.

I will refer to this matter also in a minute. 1 would like to say that this also is my own conclusion about the report and that it is a conclusion that I have frequently staled over several years about Tariff Board reports. Some evidence obtained by the Tariff Board in its inquiries is confidential and we in the Parliament and the Government do not know what that evidence is. But judging the Board by the evidence in the reports, this report in my opinion is quite inadequate for the Government to decide whether the Board’s recommendation is a proper one or not. 1 agree with the Textile Council of Australia on that conclusion.

Fourthly, the Council says that the Tariff Board has made a number of serious errors of judgment in this report. 1 can identify and will mention some of them if I have time during the course of this debate. The fifth point made is that the Textile Council joins with practically every other industry organisation in Australia to say that the Board’s report places considerable weight upon the so-called effective duty rate. The advertisement states:

The Council believes that this economic theory has no relation to everyday commercial practice, and that ils application to the manmade fibre textile industry is unsound.

That is a very significant and fundamental criticism. I have seen enough of the way that the Board has gone about its work to agree with that conclusion. The Council then compared the new rates of duty that will prevail if this legislation is carried. There will bc a 10% preferential rate applying to such countries as the United

Kingdom and Canada and a 20% general rate applying to the rest. Rates of 10% and 20% are very low rates of tariff. They are much below the rates that the Board has been expressing in the last couple of years as an indication of a fair level of protection. The comparable duties in the United Kingdom are 14% and 3d per lb. In Canada the preferential rate is 20% to 22i%. The general rate in that country is 35% plus 20c per lb. In the United States the rate is 45% plus 12.5c per lb, 50% plus 13.5c per lb and 65% plus 45c per lb. In Australia the duties are 10% and 20%. Those people who talk about comparative trade advantages and a highly protected Australian secondary industry should look to the United States for comparative purposes. We have an industry that will be protected by 10% and 20% while comparable rates for the United States are 35%, 45%, 50% and 65% plus additional amounts. In Japan, a country that is supposed to be highly competitive and to which normally the Tariff Board could be expected to pay some attention, the comparable rate is 17£%. It is about the same as that in Australia. I do not want later to hear arguments that the Australian rates are high.

Let us consider another point raised by the Textile Council of Australia. It appears to the Council that the Board’s report has not taken sufficient account of the fact that the development of the textile industry, including fibre production, depends upon Australian manufacturers maintaining their share of the market. The developments that may come from this may make a serious difference to that situation. Finally, the matter for general concern, as the Textile Council calls it, is that other Australian manufacturing industries will be concerned with matters relating to this Tariff Board report. This may be an indication that the Textile Council is saying to other industrial groups: ‘You had better have a look at what is happening’. I will say more about this in a few minutes.

The Textile Council asked for a withdrawal of this legislation until the matter can be reviewed. That is the position taken by the Textile Council and the day before yesterday I asked the Minister for Trade and Industry (Mr McEwen), who never takes part in these debates but who is said to be responsible for what happens and who is never in the House except at question time for the House to examine or to bear from him, his explanation as to why it occurs. Because of this extraordinary separation of responsibility for tariffs the Minister for Customs and Excise (Mr Chipp) handles the matter in the House but the Minister for Trade and Industry is responsible and we can never reach him. He is away somewhere in an office. He may come in for a division if he is not paired, but that is all we see of the responsible Minister. In answer to my question he said:

I am familiar with the grave doubts expressed by the Australian Textile Industry.

He said that he was aware of the grave doubts and he looked as though he were aware of them. He looked grave himself. He said that he was going to take no notice of what the industry said and if it so happened that any harm looked like being done to the industry it could make an immediate application and an inquiry by the Special Advisory Authority would be set under way and an emergency duty could be provided.

This is a new way of making tariffs. This is the experimental approach. I do not think that we have had an example of this so far. The Australian Labor Party will not accept the experimental approach in the making of tariffs. Irreparable damage may be done and I oppose this action for that reason. But I oppose it also mainly for the reason - and I will say much more about this presently - that I believe that the Tariff Board is not now equipped to know whether an industry is economic and efficient and is not able to report to the Government so that the Government itself can know from that report whether an industry is economic and efficient. That is the main reason why we are opposing this schedule.

An examination of this report shows that there is little evidence in it justifying any reduction in tariffs. The report reads something like the judgment of some judges on the bench. If we read through the reports of their judgments we see how they go carefully through the evidence but we cannot judge what side they are going to come down on until right at the end when they make their decisions. There is no indication in the judgments which way they are going until they give the reason.

If they gave the very opposite reason at the end and reached the opposite judgment it would still be equally as logical. This Tariff Board report discusses the condition of the industry and leaves one in doubt as to how it is going to come down until it finally gives the recommendation. If the recommendation had been just the opposite it would have fitted the report just as well and just as logically. Of course, 1 knew what the recommendation would be before 1 read the report so it rather spoiled the report. Most people like to keep a mystery until the end and when one reads a murder mystery one does not like to know who has done it until the end. I felt rather frustrated with this report because it was a mystery all the way through, but 1 knew the killer’s name before I picked up the report. It was very disappointing for me. 1 should have liked the name of the murderer concealed until the end, but I knew it before I started the report. I could never have guessed from reading the report who was going to be held guilty until finally it emerged.

It is clear from the report that imports can reach Australia in large volumes and at lower prices than similar products can be produced in Australia. This is not disputed by me or by anyone else, but that fact is usually an argument for a tariff, not an argument against it, provided the Australian industry is economic and efficient. In this case the Board reports that there is no reason to doubt that the industries under review are, in general, technically efficient. The fact that there may be a large volume of imports coming to Australia at lower prices than we can produce them would normally be a reason to protect that efficient industry, but apparently in this case it is a reason to reduce the protection. Honourable members can understand from this example how difficult it is to arrive at what the recommendation is going to be until the recommendation is reached. In this case it is about the opposite to what would normally be expected. Not only do I think that this industry is efficient, but I would agree with the Board that it is apparent that industries in this field in Australia are as efficient as their parent companies overseas; and overseas their parent companies and their competitors are protected by a tariff as high as or higher than the Australian tariff.

There is much humbug about the attitude of some of the critics of Australian tariffs who assume, because they do not know, that countries like Japan and America are much less protected and that their world competition has such a powerful and beneficial effect. But 1 do not think there is another country in this field that is not more adequately protected than is Australia. Japan is one of the most adequately protected countries, not only by tariffs but by all sorts of other measures. This idea that the cost of a product reaching the port has some kind of validity as a measure of efficiency is the kind of rubbish that should have gone out with Little Red Riding Hood. The assumption that underlies the attitude of a lot of critics is the assumption of perfect competition. If we assume perfect competition, there is validity in this, but perfect competition never existed and anything close to it never existed. In the field of international trade it is more absent than it is in any other field. I will have a look at some of the special reasons for this in relation to this industry in a minute or two. Before I do so I point out that it is apparent also that this industry is as efficient as other sections of Australian industry. In the case of the largest of the producers in this industry the report shows that in 1967 the value of production per employee exceeded $10,000 per annum. I am quite sure that if all those wheat farms we have heard so much about in the past week or two were turning out $10,000 per annum per employee, and more, they would be in a much better position than they are in. I am sure also that the dairy farms which are in difficulties would not need so much assistance if they were turning out $10,000 per annum per employee. This figure is high for Australian industry in general. It would seem that the main base upon which the Tariff Board has arrived at its conclusion - and there is nobody here to defend the Tariff Board-

Mr Chipp:

– You must be joking.

Dr J F Cairns:

– Well, is there? There is no one here to defend the Minister for Trade and Industry.

Mr Chipp:

– You said the Tariff Board.

Dr J F Cairns:

– I said the Tariff Board. Is there anyone here to defend it?

Mr Kelly:

– Yes, indeed.

Dr J F Cairns:

– All right. Is there anyone here to defend the right honourable the Minister for Trade and Industry?

Mr Kelly:

– Yes, indeed.

Dr J F Cairns:

– The former Minister for the Navy is a Goliath indeed. He is at least back in his element. Those aircraft carriers and destroyers with which be was previously associated now have to look after themselves, but he is again back in his element. It would seem that the main bases on which the Tariff Board has arrived at this conclusion are referred to at pages 9, 10 and 11 of the report. Page 9 of the Tariff Board Report on Man-Made Fibres and Yarn, Tyre Cord and Tyre Cord Fabric, states:

Textile Organon’ estimated that world capacity to produce non-cellulosics would rise by 29 per cent. … by December 1970; it expected nylon capacity to increase by 21 per cent. . . . In the same period, the world capacity to produce cellulosics was expected to increase by 4 per cent. . . .

Courtaulds said that the world over capacity to produce cellulosics was between 10 and IS per cent of total capacity. .

There is great excess capacity in this industry in a number of countries, but not in Australia. The Tariff Board report sees a downward price movement and at page 10 it discusses this under the heading Overseas Price Movements’:

While prices of cellulosics have remained fairly stable, prices of non-cellulosics have continued the downward trend which was evident at the previous inquiry.

The evidence suggested that prices of nylon staple fibre and major warp knitting yams in Britain and the United States of America fell by more than 40 per cent between 1960 and 1967, compared with a fall of about 30 per cent in prices of major bulking yarns.

The argument appears to be that there is great capacity in other parts of the world - excess capacity - which will lead to more fibres coming onto the world market and that consequently prices will fall; therefore the Australian industry has to be compared with this development and the Australian industry is therefore not inefficient and economic compared with this development. It is quite apparent that this over-capacity is the result of a lack of wisdom in the planning of industries overseas. It is clear, as the Tariff Board reports at page 10, quoting Fibremakers the largest company in this industry, that the cost reduction factor which is the essence of the situation arises from such factors as the adoption of new and improved technical developments and/or profit reductions stemming from chaotic or disruptive pricing conditions caused by vast excess capacity. The report chooses to quote from evidence submitted by Peerless Mills which opposed any increase in tariff. I do not think anyone asked for a reduction in the tariff. Some manufacturers in other parts of the industry opposed an increase, but I do not think anyone asked for a reduction. The Board referred to evidence presented by Peerless Mills which included a quotation from a paper given by F. H. Gruen, Professor of Agricultural Economics at Monash University. A summary of what the Professor said is set out in the report, and reads: technology for production of synthetic fibres was no longer difficult to obtain; « there was a growing number of world producers of synthetic fibres; costs of production would continue to fall;

It is apparent that vast excess capacity and disruptive pricing conditions are the main factor in the oversea situation. They may operate to reduce prices and costs but sooner or later excess capacities and disruptive pricing conditions will change. In the meantime the Australian industry can be seriously damaged by the existence of these things. As I have said, this situation is usually taken as an argument for protection and not as an argument for the reduction of protection.

Mr Chipp:

– Change in what way?

Dr J F Cairns:

– I think that already there are signs in Japan of reduction in capacity. There are reports that the Japanese textile industry, particularly the man made fibres part of it, is now a most unprosperous industry and that there are cutbacks. It is apparent that they have gone into a far greater capacity than was reasonable or necessary and it is clear that capital will be taken out of the industry. This is usually given as an argument against the future of Australian wool exports, because the Japanese textile industry is not supposed to be in a condition to be able to pay any more for Australian wool than it is now paying. However, there has been plenty of evidence of excess capacity in Japan and there is evidence also of a cutback. If this occurs it may be only a temporary situation and it may change within a year or so. A position such as this is usually taken to be a reason for maintaining a tariff so that the problems caused by a perhaps temporary excess capacity might disappear and the industry in Australia will not be damaged while it is operating. I have examined this report and I am satisfied that there is not sufficient in it either to justify the recommendation the Tariff Board has made or to justify the Government accepting that recommendation. Consequently the Opposition will vote against the Thirteenth Schedule and finally against the third reading.

In conclusion I wish to make a few general remarks about tariff policy. Tariff policy in Australia has for a long time been the subject of controversy, but it has been a very sterile controversy. Over many years few changes have been made. Tariff making in Australia has. I think, shown few changes or innovations since the Tariff Board was established.’ However, recently there has been a change. Until recently no one could doubt that the Board and the Government would stand behind any Australian industry that was economic and efficient and ensure its continuance as a source of income and employment for Australians. No section of industry and no section of the public could in the past have doubted that. However, the change I mentioned is that this is no longer the case. The Tariff Board has shown thai it wants to reduce tariffs, sometimes by considerable amounts, over a wide range of goods. When this became apparent last year the Minister for Trade and Industry came into this chamber one night in his very confident manner and dismissed the Board and the course that it intended to follow as shown in its report of the year before. There would be none of this, said the Minister. Neither he nor the Government would accept any of it; it would be the Government and not the Tariff Board that would make tariff policy. However, on the first occasion the matter has come into question it is the Board thai has won and the Minister who has submitted.

Recently this Government has been Government of retreat, lt has retreated from its stand in relation to tariffs, as I am indicating; it has retreated from its stand about introducing a civilian alternative to conscription; and it has retreated from its stand in regard to the off-shore oil and mineral legislation, lt is a Government of retreat. The Minister may have been outvoted in the Cabinet. From the way he answered the first question I asked him some weeks ago, I thought that he might have been indicating that he had been outvoted in the Cabinet on accepting and implementing the report on man-made fibres, because he answered the question in a way that made it possible so to interpret it. I have seen him doing that .sort of thing now for quite a number of years. In this case the Board has recommended a substantial reduction of tariffs for a significant Australian industry. The Minister admits that he is aware of grave doubts in the industry and of extensive public criticism of the report by the Board. Industry representatives have been to see the Minister and, although it may have been quite unusual, he saw them; but he did nothing to prevent the implementation of the Board’s report. I believe that the Board has won and the Minister has lost. Where now is the Minister who proudly boasted in this House that he had no room for fancy theories and would never allow protection to be taken from an Australian industry that was economic and efficient and which provided employment and income for Australian workers? This is for the Minister to answer.

The Australian Labor Party stands for a number of principles in this matter. The first is that we will guarantee protection to Australian industries that are efficient and economic. The second is that we do not consider that protection can be solved by abstract theories of free trade or protection that often assume conditions of competition that do not and never have existed in real life. Next, we believe that a correct decision can bc made about protection only if we know the facts. We do not know the facts now, as the Tariff Board is not equipped to ascertain them. Recently the Prime Minister said:

To enable the Government to exercise its responsibility for tariff policy, it is clearly necessary that it should have available to it in the Board’s reports the fullest possible knowledge of all the elements relevant to each particular case.

I submit that the Government docs not have, in the Tariff Board’s reports, the fullest possible knowledge of all the elements relevant to each case. I suppose that in no report of the Board that I have seen has this standard ever existed or even been approached. Recently, the Minister for Trade and Industry said:

The advisory body has to assemble all the facts. Then it has to reach conclusions or judgments which will stand against the facts. Lastly, in reporting its conclusions, the advisory body must draw attention to all the relevant facts on which those conclusions were based and explain why, in the light of those facts, the conclusions were reached.

The Tariff Board does not do that, lt has never done it, and it has not done it in this case. The advisory body has never done this, either. Indeed, in reading some of its most significant reports, one can never be sure in which direction the facts one can find are pointing. Often the facts would fit conclusions directly opposite to those adopted by the Board. I believe that the report we are examining here is an example of that.

I submit that at least 2 important changes must be made soon, because several changes in the Australian industrial structure have to take place. It will be impossible to maintain the industrial structure in anything like its present form, as it will be impossible to maintain the structure of primary industry in anything like its present form. I believe that we must have properly equipped boards or commissions of inquiry in each field, both for primary and secondary industry, to examine, find the facts and make the recommendation. The Australian Country Party is not adequate as a board of inquiry into the condition of primary industry. It is not proper that the Country Party should make the recommendations for assistance to primary industry: It is proper that a properly equipped, objective board or commission should be operating for this purpose. These boards or commissions must be fully equipped to ascertain all the facts and to weigh and measure them accurately.

The Tariff Board must have more qualified staff and must be computerised. I am not criticising one member of the Tariff Board or of the staff of the Board for any lack of efficiency or for any personal deficiencies. It is merely that, first, the Board is not equipped to ascertain the facts. Secondly, the board or commission that makes the inquiry must extend its inquiries into the inter-relation of the industry in question with other industries. In particular, it must trace the product through wholesaling and retailing, for it is astonishing that hardly a significant manufactured product in Australia today does not come to a price, before it reaches the consumer, that is 3 or 4 times the price when it leaves the factory. It is ridiculous to talk about efficiency in production if one is looking only at the factory. It is time we looked at the wholesaling and retailing situation to ascertain why there is such a fantastic increase in the price by the time the goods reach the consumer. Thirdly, the inquiry must be continuous. There is little hope of ascertaining the facts when the Board makes a stab at them for a few days every few years.

In this case, the Board met, I think, once in Sydney and once in Melbourne for 2 to 4 days. It met twice in its public inquiries. It made private inquiries and obtained information from overseas. It sat around desks and talked to people. But that is just an amateurish way of trying to solve the problem. It is ridiculous to meet for 3 or 4 days in public in Melbourne and 3 or 4 days in public in Sydney, then make some private inquiries and produce a report about a significant Australian industry. That is a horse and buggy concept and it should have been thrown out when that age ended.

In the case of the greater part of Australian industry protected by tariff there has been no inquiry for years or no inquiry at all. I am sure the honourable member for Wakefield will agree with that statement. As the Tariff Board is at present equipped I suppose it would take about 25 years to cover the field. How can we talk about what is economic and efficient in such a situation? It is just humbug. It is an amateurish sort of situation.

The Australian Labor Party will not continue to support tariff making in those circumstances. As soon as Labor becomes the Government we will make all those changes necessary to equip those whose duty it is to obtain the fullest possible knowledge of the facts. We will equip them, whether in respect of secondary industry or primary industry, and we will help those who seek and deserve protection. We will not continue to work in the dark in that dismal twilight period between private enterprise and ill-informed government interference. The Government must exercise responsibility for tariff policy but it cannot do this yet because its advisory bodies are working in the dark. We must bring Australian economic activity into the light of day so that we know the facts. Only in this way can we reduce the effects of ignorance and sectional pressures which together have done so much to harm Australian economic growth.

That is the position that the Labor Party adopts. I have discussed this legislation in as much detail as I think the House would need or tolerate. I seriously ask the Government to pay attention to the man made fibres industry. I do not expect the Government to review it - 1 expect it to continue wilh this legislation - but the Minister has given an undertaking that the industry will be carefully watched and that if difficulties arise the matter will be referred to a special advisory authority. This is a very significant industry, lt is one of the most efficient in Australia, lt has considerable possibilities of development horizontally to the polymer raw materials that could be obtained under much better circumstances than they are being obtained now if a plan for the industry can be envisaged. This is greatly needed. It is a very serious matter. The Opposition is very disturbed at what is occurring and we will vote against the Thirteenth Schedule and against the third reading of this Bill.


– lt is a long time since I have taken part in a tariff debate of this nature. As the honourable member for Lalor (Dr J. F. Cairns) suggested. I come back to this subject with some excitement. I always enjoyed these tariff debates and I intend to enjoy this one. One of the reasons I will enjoy it is because of the change in the form of the debate. 1 pay a very great tribute to the Minister for Customs and Excise (Mr Chipp) and his departmental officers for amending the system and for making it much more understandable for those of us engaged in this exercise. I also pay tribute to the parliamentary officers. For many years tariff has been a very difficult subject. No-one knew quite what they were doing - at least I did not - but it is now much clearer and easier for us.

Dr J F Cairns:

– Hear, hear!


– I am going to handle this debate in a different manner to that adopted by the honourable member for Lalor. The fundamental difference is that 1 am going to deal with the general principles on which the proposals are based. In the Committee stage, particularly when the Thirteenth Schedule is before us, I shall bc happy to engaged in defence of the Government and the Minister and. prominently, a defence of the Tariff Board for the quality of the report on man made fibre. 1 think that report is one of the finest pieces of economic analysis 1 have ever read. However I will let that wait until the Committee stage is reached. 1 want to deal with some of the changes I have seen in respect of tariff in the last 9 or 10 years. I think, Mr Deputy Speaker, you would remember with some pain the way these debates were conducted in this House. There was almost no interest on the part of honourable members. I remember dealing with 16 or 17 separate proposals and I guarantee that I emptied the House as no-one else ever did. However, those proposals had to be debated. At that stage the principles behind what was happening had to be spelt out. lt was not a pleasant or easy process but it had to be done. However now there has been a very great change. I want to pay tribute to the honourable members for Corangamite (Mr Street) and Moore (Mr Maisey) for the careful way in which they have taken up the important duly of analysing Tariff Board reports during what might be called my sabbatical leave. In the Senate, Senator Bull and Senator Sim have done equally well. There has been a change of interest on the Government side. Honourable members now realise that something important to our economy has been going on for years. I do not know whether there has been a change in the thinking of honourable members of the Labor Party opposite. 1 have never been quite certain what the honourable member for Lalor, who leads for the Opposition on tariff matters, really thinks. He used always to support me but then I understand he got the message from Caucus stating that that was not the way to behave and that he must toe the high protectionist line. Then he changed. Almost everybody has changed in this field of protection. Almost everything has changed. The field has changed. But no-one has changed more frequently than the Labor spokesman on tariff. The former member for Lalor. Mr Reg Pollard, used to lead for the Opposition on tariff matters. I was never quite certain whether he knew the fundamental details of tariff but one thing we did know was that Reg Pollard said what he thought. The present honourable member for Lalor has the advantage over me in this regard. I am never quite certain whether he is saying what he thinks or what he has been told to think. I am certain there is going to be a very great change in the Labor policy. There must be. There is too much intelligence coming into the Opposition side as a result of the last intake to continue with the old outworn theories, if one could call them that, or practices. There must be a change as there has been a change in the thinking of honourable members on the Government side.

That change, however, is only a reflection of the change that has happened outside. The change outside really started or became vocal when the Report of the Committee on Economic Inquiry, the Vernon Committee, was released. I will never forget the sense of excitement of getting the Report, analysing chapters number 13 and 14 and discovering that at last we had clear advice that as we became more industrialised our tariff had to become firmer based; that we had to have a more exact or more sensible use of our resources; that someone has pointed out that we had a greater percentage of our work force engaged in secondary industry than in the United States of America. Because of these things, because of the development and because we were becoming more industrialised we had to have a more responsible attitude to tariff making.

The Vernon Committee urged the Tariff Board to use the bench mark technique not as an exact measurement but as a measurement of whether high tariff industries should be looked at with more care. The Vernon Committee Report, having broken the ice, having made the subject almost popular - the point of view I had been propounding for some time had been generally accepted by the Committee - then everybody else, the academics, Sir Leslie Melville, the

Chairman of the Reserve Bank of Australia, Sir John Crawford in particular, even the Secretary of the Department of Trade and Industry, Sir Alan Westerman, came out with a first class statement on how there had to be a more careful examination of tariffs, saying that industries had to expect to export and that if they expected to export they had to be conscious of rising costs.

Then came 2 annual reports from the Tariff Board that set out quite clearly for all of us who were interested in the subject that there had to be a different way of looking at tariffs and that we had to be more exact in our measurements and understanding of tariffs. Mr Rattigan, the Chairman of the Tariff Board, followed this with an exact analysis of the task of the Board and how it intended to tender its advice to the Minister. People say: These are theorists and academics. What about the real world?’ We found, as I knew we would find, that those who had to use highly protected raw materials in their industry were adversely affected by a high tariff policy. When I used to go to address meetings, it was this group, even more than the export industry groups, which would come to me and say: ‘Why did someone not tell us about this before? We did not know that a high tariff on our raw materials would make our position as manufacturers more difficult’. More importantly, the manufacturers who hope to export, or who have to export, began to understand, as we exporters had always known, how important excess costs were.

During the 1940s and the 1950s it was Mr Chislett of the United Graziers Association and Mr Jilek from the Australian Wheatgrowers Federation who shouldered the burden of giving advice on how high tariffs on their products were affecting the export industries. They did what they could. The financial position of the rural industries has never been handsome and perhaps they have never been able to buy the kind of advice that the big manufacturing groups could buy. But these people kept the flame alive. The mining industry gradually realised that it lived by exports and that it would have to carry excess costs if a high duty were imposed on conveyor belting. It realised that if the general cost structure within the whole economy got out of kilter with that in the countries to which it exported it would have to pay the price of excess costs caused by high tariffs. Consequently it became a vocal and powerful pressure group.

One of the most exciting stories in our development is the story of how manufacturing industry is gradually, and indeed now rapidly, increasing. The industries which hope to export and which can export became acutely aware that the price of protection could be too high because of the excess costs it would have to bear. So we have this remarkable change of emphasis. The old free trade dogma has gone. As I have explained to the House on many occasions, I am not a free trader and never have been but I am interested, as I have always been, in trying to keep the costs of protection at a reasonable level. An exercise that in the past years was a lonely one - new members in the House will never know quite how lonely it was - has now become almost respectable. In fact we find now only a few diehards, if 1 might call them that, speaking for the other side. Even the Associated Chambers of Manufactures of Australia, that high tariff lobby, now realises that manufacturers have to expand into the export market if they are to be a viable group and, indeed, if the Australian economy is to be viable.

Then, almost at the end of the line, the Australian Industries Development Association started to think. This was an experience that had been foreign to it for some time. I remember making a speech on 14th August 1963 about a statement prepared by AIDA, and representatives of that Association did not appear above the surface for some time after. Since then, as one would expect with a man like Bill Callaghan as the executive officer, it is beginning to face up to its problems and to realise that protection can be too high in some industries and that it must be based on principle. It is true that its thinking may be a little puzzled at the moment and that it may be sometimes asking the Government what AIDA ought to think. I think that the last bastion of responsible - I say this because it has always been recognised as responsible - high tariff lobbyists has almost fallen leaving only, I suppose, the textile council. I think that the textile council will also split in two because it is subject to very great pressures the other way. 1 have traced the gradual changes that have taken place and that had to take place as we became more developed and as we realised that we were a country with limited resources and that it was proper to try to guide these resources in the most economic way. I resent very much the criticism that the honourable member for Lalor made of the Tariff Board. 1 shall defend it during the discussion on the Tariff Board Report relating to man made fibres. I say that the chief credit for the change in thinking on tariffs goes, firstly, to the Vernon Committee, and secondly, to the Tariff Board for pointing out with courage and independence of mind the way we had to go and the way that all thinking people know we have to go. Not only academics, not only those who in Parliament represent rural industries, but also those thinking people in industry now know that high tariff protection, if not carefully measured out, is a handicap and not a help to the industrial development of. a country.

But still there are things that have not changed. I inject these things into the debate as a kind of warning to people that I am still about. One of the basic things that worries me is that people say: ‘What do exports matter? What does protection matter?’ Let me give a simple example We export from Australia a lot of goods. We export 50,000 tons of cartons wrapped around our exports. Those cartons carry a duty of between $50 and $60 a ton. This is costing the export industries, because they cannot obtain drawback on them, $ annually. I know that there are reasons for the inability for us to obtain drawback. Goods such as cartons are imported. If th»y are re-exported we should be able to obtain drawback. So the exporters would pay the penalty for high duties. In 1963 I spelt oat the arrangements that seemed to affect this situation. I am not quite certain whether they are still the same. I shall find that out. The fact remains that there is an excess cost which the exporters pay for the 50,000 tons of cartons. I want people to know that we must still take a lively interest in these excess costs.

One other fact that ought to be spelt out is that one of the fundamental problems of protection is that by over protecting an industry we get a proliferation of plants. That can be found to an acute degree in the Australian chemical industry to which

I wilt refer later. Honourable members and the General public should realise that in Australia with a population of about 121 million people we have 4 manufacturers of motor cars - we used to have 5 but Volkswagen fell by the wayside - and we have 4 or 5 assemblers. In Australia there is a 45% duty on cars. America which has a population of 200 mil’lion people has 5 manufacturers of cars and no assemblers. In that country the duty on cars is 4.5% and this will come down shortly to 3%. In this country we have one-sixteenth of America’s population and just about twice as many manufacturers or assemblers of motor cars. This is what unwise protection is all about. It creates a proliferation of plants and makes it difficult for industries to be competitive. The car industries demand protection by way of a 45% duty. Those of us connected with rural industry know how heavily this falls on us every time we have to buy a motor car or a utility.

Although changes have taken place, even more changes are necessary. One thing that worries me is the attitude of the Department of Customs and Excise. Whether my concern is justified, I do not yet know. I have a tremendous amount of respect for and trust in the Minister. I know that he thinks he is doing the right thing. In the Senate on 16th April 1969 Senator Murphy asked the previous Minister for Customs the following question:

Why has your Department without the recommendation of the Tariff Board adopted a new hard-line approach to by-law policy which will compel Australian manufacturers to inflate costs by adopting a local content similar to that which disrupted the vehicle industry?

Senator Scott, the then Minister for Customs and Excise, replied:

The Department of Customs, of which I am the Minister, is anxious to establish industries in Australia.

Mr Chipp:

– I thought that the honourable member received an answer from me last week.


– I am sorry. I know what the Minister thinks. Whether that applies in the Department. I just do not know. There is tremendous anxiety throughout the community about the way that the by-law system is operating. I am not going to say that it is operating badly. I do say, however, that there is considerable uncertainty and anxiety about the matter. As the Minister would know, a committee has been working on this and it hopes to make specific recommendations later. Knowing the Minister as J do, I know that those recommendations will be listened to. I understand that 70% of by-law uncertainty comes into the chapter 84 area. The Tariff Board has twice asked the Minister for Trade and Industry for a reference on this problem, lt has npt been examined for many years. The substantive duties are very high. If this area was examined, even if the duties were not lowered, although it is difficult to imagine that they will stay as high as they are, I am certain that the Tariff Board would give clear guidance as to what should be the bylaw policy. There is concern in the country that by-law policy and the Government’s protective policy might not necessarily go hand in hand. 1 repeat that I am not being critical of the Minister, nor yet of his Department. I am voicing the well known concern about what is called the new hard line policy. I am not yet being critical and I will not be critical until I get the facts and figures. The concern I have mentioned ought to be set at rest. One of the ways to do that would be to have some kind of appeal procedure so that appeals could be reported to Parliament, and honourable members and the public would know what principles were guiding the by-law administration. Even more importantly they would know how those principles were being put into practice. The real concern of the public lies in the fact that not enough information is made public. I do not say there is undercover work; I do not pretend that there is anything improper about it. I say to the Minister that there would be greater benefits if this uneasiness could be put at rest.

When we come to the Committee stages I shall deal with 5 particular matters. My main reason for rising tonight was to trace the difference in the way the subject has been looked at and the way it should be looked at. I congratulate the Government particularly on the man made fibres case. I congratulate the Tariff Board for the courage that it has shown. I congratulate, if I may, the Vernon Committee for the quality of its 2 tariff chapters. I express the hope and the expectation that we as a Parliament will realise that as the country becomes more industrialised so will our need for a careful measure of tariff protection be even more important than it is now.


– It is quite refreshing to see the old warrior, the honourable member for Wakefield (Mr Kelly) back on his tariff hobby horse again. 1 could not help but think as he spoke that he has given credit to a long list of people, starting with the Vernon Committee for its 2 great achievements. He says, firstly, that everyone has now come around to agree with him and secondly that they all want to reduce, costs and believe that they can do this by adopting a bench mark tariff. The point I make is that wc do not all know about it, and the Tariff Board does not, either. The Board, like the honourable member for Wakefield, is assuming that it knows without having a proper and full investigation. It is possible for anyone to assert that a tariff must be lower; that is a simple process. That is all the Tariff Board has done in this case of man-made fibres. All that the Tariff Board has said is what the honourable member for Wakefield has said - ‘We will reduce these tariffs and see what happens! As the honourable member for Lalor (Dr J. F. Cairns) quite affectively mentioned, the Board does not know the facts, and I submit that a more extensive inquiry should be made with a properly equipped staff, which Labor will give the Board when it comes to office.

I join those on this side of the Parliament in opposing that section mentioned by the member for Lalor in regard to the manmade fibres and yarn, tyre cord and tyre cord fabric. As the member for Lalor said, we shall vote against 13 items and against the third reading of the Bill. I see from the Tariff Board report - it is interesting that the member for Lalor mentioned this, too - that the Tariff Board somewhat complimented the industry in these terms:

The producing industries stressed their importance to the economy in terms of employment, funds employed and value of production with particular emphasis on the high value of production per employee in man-made fibre extrusion compared with Australian manufacturing industry generally.

The member for Lalor stressed the great productive capacity of that section. I quote further from this report:

In terms of persons employed (over 5,000) and funds used (over $70 million) the industries under review are large users of productive resources.

The value of their production is certainly large although that, in itself, is not a measure of an industry’s contribution to economic growth.

Evidently there was no doubt in the Board’s mind that it was contributing to the welfare of the nation by development and things of that nature. The Board, of course, does make some startling statements in respect of a submission. Further down, it says:

In the Board’s view economic size in itself is not a measure of economic worth.

To me that seems rather a strange argument. It continues:

Similarly a high value of production per employee, particularly in a capital intensive industry, is not necessarily indicative - from the national point of view - of the efficiency with which labour and other resources are being used. 1 find it difficult to subscribe to that point of view, because I would believe that, per man production plus those other factors, the industry certainly must have been on a very efficient basis.

I now go over to a section of this report on page 24 and refer to the paragraph limiting recommendations on raw nylon yarns until 30th June 1971. On page 24 this is done in connection with this section of the report, which says:

Because of the short period of this assistance, the floor price will not insulate the industry against the long term downward trend in world prices. The Board will recommend that the following f.o.b. floor price apply to raw c.f. nylon yarns until 30th June 1971 and that it be removed then without review.

Then are quoted the rates applying. I want to place my views before the House in respect of what I consider to be a new and dangerous proposal - that is, in limiting the time when this benefit will apply. I have already placed a question on the notice paper to the Minister for Trade in respect of this matter. The report by the Board suggests that by the expiration of a period of 18 months a most critical part of its proposed protection should cease to be operative. In accepting the Board’s report, does the Government also accept this suggestion or, if not, is this action to be permitted without a public hearing by the Board to determine whether the circumstances at such time warrant it being taken?

The issue is one not only of importance to a very wide range of industry but serves to demonstrate a marked departure by the

Board from the hitherto carefully guarded policy of not attempting to commit either its-elf or the Government to forward decisions which could well be influenced strongly by an unproductive economic climate such as that at present existing. The normal practice of the Board is to call in its report for a review of its decision at a date in the future if such a course is thought to be desirable. This review would be conducted in the form of a public hearing and a decision would be taken having regard to the circumstances at the lime. But this course has not been followed on this occasion. If the report is adopted in its present form the future of an extremely efficient Australian industry and its thousands of employees will depend entirely on whether an anticipated industrial and competitive climate will materialise 18 months hence.

I appreciate the need for a review of decisions from time to time, but only by way of a complete and public investigation. I. would be extremely disturbed if the Government were to agree to a procedure which may be described at the very best as a not highly responsible piece of crystal ball gazing by a group of people who have limited knowledge of the real manner in which industry and labour must conduct themselves if success is to be achieved and who seem to place more weight on the opinions expressed by our foreign competitors than on the opinions expressed by our own industrial leaders.

I wish to utter a word of warning in connection with this section of the report. The honourable member for Lalor who led for the Opposition on this Bill, quoted an advertisement which was inserted in practically all newspapers throughout Australia by the Textile Council of Australia in relation to the findings of the Tariff Board in regard to this industry. It is interesting to note that the textile and apparel industries, which employ 150,000 people, have asked that the satisfactory level of activity which is now present throughout their industries be maintained. These industries employ a lot of people. In other words, a lot of families are dependent on these industries. I do not intend to refer to the various sections of the Board’s report because this was done very effectively by the honourable member for Lalor. But I do stress that it has been pointed out that other countries are much more strongly and highly protected in regard to these items than Australia is. lt is quite clear, however, that if these amendments are implemented they will have an extremely detrimental effect on the textile industry. As well as affecting its employing capacity these amendments will place the industry at a great disadvantage in respect to overseas competitors. I think the Government should take note of this advertisement in the newspapers. The members of the Textile Council of Australia are listed as being the Cotton and Manmade Fibres Federation, the Cotton and Allied Textile Manufacturers Association of Australia, the Wool Textile Manufacturers of Australia, the Australian Knitting Industries Council, the Australian Wool Board, the Carpet Manufacturers Federation of Australia, Courtaulds (Australia) Ltd and Fibremakers Ltd. In other words, the Council consists of a wide ranging group of organisations which are interested in the textile industries throughout Australia. The submissions which have been made by the Council in its newspaper advertisement are in some detail and appear to me to be not only very factual but also well based and deserving of consideration. The Opposition will vote against the Thirteenth Schedule to the Bill as well as the third reading of the Bill because it believes that the section of the Tariff Board’s report which deals with the textile industry is detrimental to the industry.

I wish to make a few broad comments in respect to tariff policy generally. Proposals for a change in tariff policy were advocated recently by the Tariff Board and certain other sections of the community. It has been suggested that certain ceilings should be placed on protection and also that industry should be sectionalised in regard to the varying degrees of protection to which industry should be entitled. The Australian Labor Party, with its traditional background of having established and protected Australian industry has a very practical interest in a continuance of the policy and the development of Australian industries on an economic and efficient level, lt appears that the Australian manufacturing industries employ about 30% of the work force. Estimates indicate that the employment of 50% of the work force was due to manufacturing industries and that almost H million people are employed in those industries. It is my understanding that approximately 320,000 people are employed in the building and construction industry.

The Australian Labor Party believes in a high standard of living, full employment, an expanding economy and a continuation of the immigration programme, lt is the Labor Party’s belief also that workers are entitled to good conditions, long service leave, annual holidays and adequate wages. My Party believes that we should have strong manufacturing industries, protected against competition from cheap labour countries, and that our own people and capital should be employed in these industries. Provided these conditions are met it is my belief that Australian industries are entitled to a full measure of tariff protection. There is a tendency to blame protection exclusively in some cases for high prices. This may be true to an extent, but there are many contributing factors, such as excess profit in many cases, by those who control the distribution of the goods, and, in the case of primary producers, the carriage costs imposed by shipping companies.

My concern is to see that Australian workers are fully employed. I see little satisfaction in being able to buy cheap Japanese, British or American cars or products if our own workers are idle because of lack of tariff protection for our secondary industries. I have seen the day when there were plenty of cheap goods available but nobody was in employment and wages were not available to buy them. Our first obligation is to our own people, and tariff protection affords us the opportunity to protect their welfare. It is true that some review or changes are necessary, as was instanced a few moments ago by the honourable member for Lalor in respect of the functions of the Tariff Board. But any changes contemplated or suggested by the Board or by any other interests should not be allowed to destroy the basic principle underlying tariff policy in this country, and that is the establishment and the development of Australian industries manufacturing our raw materials and providing work and employment and security for Australian workers. I believe tariff pro tection provides a practical solution to our economic problem of employment, at the same time maintaining a high standard of living. The Labor Party’s policy on this matter is as follows:

Effective tariff protection of Australian industries and import embargoes in favour of Australian industries capable of supplying the home market - in each case subject to control of prices, to protection of Australian working conditions and to due efficiency in production.

That is undoubtedly a continuation of the sound policy of the Labor Party. At this stage I think I should say that the Labor Party has a long history and a proud record in providing the basis for the establishment md development of Australian industry from the t me of the Scullin Government The reason is that we believe in using out resources for manufacturing purposes instead of sending them abroad for manufacture. It is interesting to note that the basis underlying tariff policy was expressed in these words:

Protection and assistance for Australian industries, both primary and secondary, has been long established policy. It is one of the methods used by the Government to help to ensure the achievement of its national objectives, namely, economic growth and national security, increasing work force including migration, full employment, rising standards of living.

That has been the basis upon which tariff protection has been built. I say regretfully at this stage that I am becoming a little disappointed in the Minister for Trade and Industry (Mr McEwen). 1 must confess that I have admired the statements he has made from time to time in connection with protection and tariff policy. I look with some pleasure at changes in Country Party policy towards tariffs, which have been brought about by the Minister for Trade and Industry as time has gone on. Some of this contributions on this question to the Parliament and to other organisations have indeed been masterful. From the adoption of this report on man-made fibres I cannot help but think that not only the Minister for Trade and Industry but also the Prime Minister (Mr Gorton) have capitulated to the Tariff Board’s experimental changes in tariff policy, and that is indeed to be regretted. I am not unmindful that the Deputy Prime Minister in a splendid speech to this Parliament on 28th November 1968 laid down the fundamentals of a tariff policy. Complimentary copies of that speech ought to be given to the honourable member for Wakefield, because 1 think it was a statement that would have brought a great deal of pleasure to Austraiian . industrialists.

The Deputy Prime Minister followed that up not very much later with another speech to delegates of the Chambers of Manufactures at a luncheon at the Hotel Canberra on 28th April 1969. The speeches were basically the same, but each of them incorporated all the sound principles, I would say, of a good tariff policy. But where does the Minister for Trade and Industry now stand on the issue before us? Does he believe in this sectionalising of industries, the limit of 50% on tariffs, the taking away of protection and the new academic and intellectual look being given to the Tariff Board, not on comprehensive but on limited inquiries in respect of changes of policy? The Deputy Prime Minister said in his speech to the Parliament on 28th November 1.968: lt is important that it be recognised that Australia is, so far as I can discover, the only industrialised country which relies on the tariff almost exclusively to provide protection for its industries.

He mentioned that other countries have devious and many devices. He referred to the European Economic Community countries, Japan, even Great Britain, and the United States. But Australia, he said, relied exclusively on tariff protection and not quantitative protection for our goods. He went on to refer to the growth of industry and he dealt with the question of costs, in a way which the honourable member for Wakefield might well study. He said:

If seeking lower costs completely dominates our thinking, lower wages would be the most obvious area to turn to, with unemployment and a slower rate of development. There has been much talk lately about the effect of tariffs on costs. We ought to get this into perspective. There are many things that affect costs other than tariffs. The pressures of our development are reflected throughout our economy. Wages are forced up and this results in a great increase in over-award payments.

The Minister went on to refer to transport costs, both internally and for our overseas trade, interest rates, hire purchase, costs of land and buildings and other tertiary costs. He said that these are all important elements of the cost of production in primary and secondary industry. So that to blame tariffs exclusively as the basis for cost problems, as the honourable member for Wakefield does, is completely wrong. The

Minister for Trade and Industry went on to say something which 1 hope he will repeat in this Parliament. He said:

The Tarin” Board’s recent decision to break new ground by classifying industries according to existing levels of protection, with all the implications that are contained in this, might be regarded as a departure from the traditional method of judging each industry’s need for protection and whether the industry is economic and efficient. Indeed, let us remember that it can be regarded as the determination of a far reaching, total, economic policy embracing all industries both primary and secondary.

The right honourable gentleman was expressing his fear of breaking new ground. I would like to know whether this is still the policy of the Government. The Minister for Trade and Industry rarely, if ever, speaks in the Parliament on the matter of tariffs. It is handled, no doubt efficiently, by the Minister for Customs and Excise (Mr Chipp), who is at the table, but it is a rather weird situation when the Minister for Trade and Industry rarely appears in the Parliament to justify the Government’s policy on these matters or at least to give an explanation. The speech on tariffs from which I have quoted is one of the few on that subject that he has made. He put it right on the line when he said:

The Government’s established tariff policy can be simply stated. We will give adequate protection, where necessary, to Australian industries which are economic and efficient. We have an independent body, the Tariff Board, to advise the Government on the circumstances of individual industries. We expect the Tariff Board to tender its advice having full regard to the Government’s established policies.

I am in complete agreement with that view. At no stage can the Tariff Board properly take from the Government the right to implement its policy. The situation would be completely wrong if a body such as the Tariff Board could tell, for instance, a Labor government pledged to a policy of protection that there was not to be protection for Australian industries. The Tariff Board must certainly have a great degree of independence, but it must also be subject to review by the Parliament of the day. It would be indeed strange if a body outside Parliament forced the Government to implement policies opposed to those it had offered to the electors. The Minister went on:

Indeed, if this advice does not take into account the Government’s established policies, it is unlikely to be advice which we can expect to follow.

I have mentioned these matters because the winds of change are blowing through the Tariff Board, to my mind with a detrimental effect for Australian manufacturers. In the policy speech of the Prime Minister during the campaign for the last election he laid great stress on the point that this Government would protect Australian industries. He said it quite clearly and laid it on the line. On 9th October 1968 he spoke in this Parliament about winds of change blowing over the Tariff Board. He said: il will, of course, continue to be the Board’s role to advise, and it will continue to be the Government’s role, in determining levels of protection, to decide whether or not it will follow the advice given. These have been our policies and they have served us well. We have no intention of changing them.

It is time more extensive inquiries were made into industry. Today those people who wonder where Australian industry is going in respect of these matters should be reassured by the Government. As I said, I am somewhat concerned that such a good advocate for adequate protection for Australian industries in more recent times as the Minister for Trade and Industry, is silent on the man made fibres report, which implies a policy which I believe is detrimental to those industries and contrary to what the Deputy Prime Minister has said were his views in days gone by. The honourable member for Lalor mentioned the need for the Tariff Board to be fully equipped and to investigate completely all the facts associated with primary and secondary industry and inquiries. I believe the 4 points he laid down - the need to improve the Board’s composition by research and matters of that nature - are important ones which Labor will give effect to. The Board must extend its inquiry, as he said, through wholesaling, retailing and all aspects of industry.

The question of what is essential and economic is more or less guess work at this stage because of the Board’s limited inquiries into these matters. Labour will make the necessary changes in the Board for primary and secondary industry to be investigated on this basis. I rose tonight to express my opposition to the proposals which are contained in the man made fibres report and to endorse the comments made by the honourable member for Lalor in respect to the Opposition’s policy on this question. I hope that no government, what ever its political colour, will sacrifice Australian industries and Australian workmen for foreign interests so far as manufacturing is concerned. The Minister for Trade and Industry said in this Parliament on one occasion: ‘You can have cheap cars but you will have no motor industry; you can have cheap clothes but you will have no secondary textile industries; you can have cheap everything if you want it, but if you want to be able to afford it you have io make sure that Australians are working and the only way to do it is to see that industries are efficient, economic and adequately protected in coping with the demands we make on them to maintain the workforce in reasonable conditions and, at the same time, to add to the development of the defence potential of the nation’. I express those views tonight. I hope that on the next occasion there is debate in this Parliament on this subject the Minister for Trade and Industry will make a fleeting appearance and reassure the House that he has not changed his views which I commended him for in days gone by. I sincerely trust he still holds those views. I hope the Government also holds those views.


– Like all honourable members who are interested in this topic I appreciate one of the relatively few opportunities we have to debate the vitally important topic of tariffs. As my friend and colleague the honourable member for Wakefield (Mr Kelly) has said, a remarkable change in climate has taken place during the last few years - even since I first started speaking on this subject - but modesy and honesty prevent me taking any credit for that. As the honourable member said, a much greater awareness exists of the importance of tariffs in influencing the cost structure in the Australian economy by directly increasing the price of goods to consumers and, more importantly, because of the pervasive influence of excessive tariff protection throughout the economy. I have spoken on this aspect of tariff protection before. 1 do not intend to cover that subject again. It is quite apparent that the prime objective of all Australian industry must be to become competitive on the world market.

Recently our primary industries have been almost alone in facing the problems of buying on a protected market and selling on an open market. It is a remarkable compliment to our farming community that ii has succeeded in increasing production substantially when faced with such disabilities. lt must never be forgotten that it has been possible to establish secondary industry in Australia only under the protection of the foreign exchange earnings of primary industry. But now the position has been reached where our secondary industry is no longer able to depend entirely on the domestic market for its existence. If the Australian consumer is not to be denied the benefits of lower prices and better products as a result of new technologies and economies of scale, secondary industry must increasingly look towards the export market to absorb its growing productive capacity. lt took a long time for this fact to’ receive official acceptance, but fortunately it has now been accepted, and it is a measure of the change in climate to which I referred a moment ago that- is now almost taken for granted. The first indication came in Sir Alan Westerman’s speech to the Australian Chemical Industry Council last year when ho said:

The alternative to making the world our market for secondary industries is ossified, stultified secondary industry based on products with smaller domestic opportunities and hence relying upon higher and higher tariff barriers wilh a decreasing rate of development and meriting the description uneconomic and inefficient.

This was followed by several references by the Prime Minister (Mr Gorton) in the ensuing months in broadly similar terms. For example, in his address to the Western Australian Chamber of Manufactures on 10th April this year the Prime Minister said:

We think that in many fields of manufacture Australian enterprise must be much more massive than is the case in much of Australian industry, if there are to be economies of scale to enable that industry to compete on a world market and to compete in Australia wilh overseas industry with a minimum of tariff protection.

The Minister for Trade and Industry (Mr M c Ewen) in a recent debate in this House relating to the Australian Industry Development Corporation had this to say: lt must aim especially at expanding exports on a world-competitive basis, and enhancing our long-term balance of payments position, lt must seek to enable Australian industry to conserve our foreign exchange by competing with imports without recourse to high tariff barriers.

It is certain that Australian industry will be able to face the challenge of world competition only if it is soundly based and not relying on excessive - again I stress the word ‘excessive’ - tariff protection for its existence. Since the publication of the Tariff Board Report for 1967-68 a great deal of attention has been focused on the rates of protection received by various industries, and the principles enunciated by the Tariff Board on which it intends to base its future investigations and consequent recommendations to the Government. The fact that a great deal of attention has been given to the Tariff Board’s annual reports has not, unfortunately, invariably resulted in informed comment on them. 1 have been amazed at some of the quite mistaken conclusions drawn from those reports and at the way in which those conclusions have been constantly reiterated even after it has been demonstrated quite clearly that those conclusions are wrong.

I am referring now particularly to the question of industries receiving, or requiring, protection at an effective rate exceeding 50%. No other item in recent Tariff Board reports has been so misinterpreted or caused so much uninformed criticism. Typical of the sort of comment is the use of such terms as arbitrary limit, cut-off point and similar expressions. Anyone who was prepared to spend some time investigating and objectively assessing just what the Board said in its 1967 and 1968 reports must have realised that such a reaction was completely unjustified. In view of subsequent events, including the assurance of the Chairman of the Board to the Associated Chambers of Manufactures of Australia last year and the policy speech of the Prime Minister before the last general election, I find it extraordinary that some people and organisations are persisting in this attitude. First of all, let us see what Mr Rattigan said to ACMA in answer to the question: Do the Board’s points of reference provide a predetermined upper limit to protection?

Mr Kelly:

– fs Mr Rattigan the Chairman of the Tariff Board?


– Yes, Mr Rattigan is Chairman of the Tariff Board. He answered:

The points of reference do not provide a predetermined upper limit to protection.

He then went on to explain exactly why. In his policy speech the Prime Minister said:

The Government does not accept any predetermined upper limit to the level of protection that might be afforded.

Why then, even as recently as a couple of weeks ago, do we find statements such as that made by the President of the Australian Industries Development Association which in the annual report of that Association said: lt-

The Tariff Board - is doing this to its own policy of a 50% effective upper rate of limit.

I must admit that 1 was very disappointed to hear these comments when recent statements from the same source have given great cause for encouragement.

Debate interrupted.

page 3425



– lt being I I p.m., in accordance wilh the order of the House of 1 6th April I propose the question:

That the Mouse do now adjourn.

Mr Chipp:

– I require that the question be put forthwith.

Question resolved in the negative.

page 3425


Debate resumed.


– I ask: Why keep on ascribing to the Tariff Board the concept which its Chairman has quite distinctly denied and which the Prime Minister has said would not be acceptable to the Government in any case? 1 must admit that the answer to this seemingly insoluble puzzle took me some time to work out. But I believe I have now found the answer. Criticism of the Tariff Board on the basis that it has fixed a 50% upper limit to protection is a type of criticism which most people can understand. Incidentally, it might be worth pointing out that those involved with industries already receiving protection of over 50% in fact seem to grasp this argument rather more quickly than others.

Let us look exactly at what the Tariff Board said at paragraph 44 of its annual report for 1967-68. The Tariff Board stated:

In the case of areas of production which arc found to have little prospect of operating with an effective rate below 30%, the Board would not recommend protection sufficient to allow the industries concerned to compete for resources on the same terms as low cost industries.

In their excitement and agitation at the reference to 50%, very few people have taken the trouble to find out what in fact were the terms under which protection would be recommended for low cost industries. These terms were spelled out in detail in paragraphs 63, 72 and 74 of the 1967 report. 1 would like to give them as follows-

Mr Foster:

– Is that the ‘Bulletin’?


– These are the terms according to the Tariff Board’s 1 967 annual report on which protection would be given to low cost industries. The honourable member for Sturt might learn something from this. The terms are as follows:

  1. lt will recommend anticipatory protection for new products or for an extension of existing range of products which can bc produced economically in Australia:
  2. Protection would be readily recommended;
  3. Protection would be recommended on a basis offering prospects of greater profitability;
  4. The level of protection would not be subject to review in the normal course of events or al least not for a very long time. Thus a manufacturer would be able to benefit from any improvement in the profitability of his operations without the Tariff Board looking over his shoulder.

Those were the terms on which low cost industries are to get protection. So all the Board has said is that these conditions would not apply to industries receiving or requiring protection of over 50%. Immediately it can be appreciated why the criticism of the Board is largely based on the erroneous grounds that an upper limit has been fixed. It is much easier to try to get support for this argument with its considerable emotional content than to try to justify protection for industries requiring over 50% under the same terms as the low cost industries. In fact, such an argument cannot be justified because if it could there would be no reason for having a Tariff Board at all.

Carried to ils logical conclusion this argument would say that an industry requiring 100% protection and whose inputs are all duty free - that is whose effective rate of protection is 100% - is entitled to the same degree of consideration as an industry with an unprotected output but which has to pay a tariff of 100% for all its inputs. This, of course, is an extreme example. But the whole point of having a Tariff Board is so that the Government can get expert and impartial advice on the relative benefit and cost to the community of protecting industry. For the critics of the Board to say that it is exceeding its function when it indicates it is developing more precise methods on which to base its advice to the Government is in effect to deny the need for a board altogether.

It has always seemed axiomatic to me that an industry requiring a high rate of protection - a rate that is high by Australian standards - will impose correspondingly higher costs to the community than another with a lower protective requirement. This has been spelt out by the chairman of the Board when, in answer to a question from ACMA, he said:

The Board’s approach recognises that activities which by Australian standards, are highly protected will tend to be less economic to undertake in Australia than activities which require a relatively low level of protection because the cost of such activities to the community is likely to be high in relation to the benefits gained by die community from having such activities. It has therefore indicated that it will in future examine such activities more critically, because their uncritical support is incompatible with the Government’s tariff policy and with the settled objectives of national economical policy.

The Prime Minister himself, in his policy speech said:

The Government recognises that in cases involving relatively high protection the benefits have to be weighed very carefully against the possible effects on other industries and the community generally.

I feel that the great import of this sentence has not received the attention or publicity it deserves. It marks official acceptance at Government level of a concept that is fundamental to a rational tariff policy. What do we find on looking at the ALP tariff policy. In October last, just prior to the general election, the honourable member for Lalor (Dr Cairns) published a paper on protection. As he is the ALP’s chief spokesman on trade, presumably it was and still is the current ALP policy. As I studied the paper, I was strongly reminded of a radio commentator who used to describe wrestling contests many years ago. With his voice rising to a tremendous pitch of excitement he used to shout: *He can’t get out of it, he can’t get out of it.’ The honourable member for Lalor is trying to reconcile the irreconcilable, in trying to match a sound tariff policy with the historic ALP policy of uncritical high protection, has also found himself unable to get out of it. But whereas the wrestling commentator used to end up by saying with a great sigh of relief: ‘He’s out of it,’ alas, the honourable member for Lalor’s mental gymnastics were less successful than the wrestler’s physical ones and he ended up being more hopelessly entangled than when he started. This is really a remarkable document and I should like to make a couple of references to it. For instance at one point the honourable member for Lalor said:

Let me return to my main thesis at this point: neither a freer trade policy, nor the existing policy of protection; nor a policy of higher protection, will meet the needs of Australian industry.

In other words, we cannot go up, we cannot go down, and we cannot stay where we are. I suggest this conjures up all sorts of interesting possibilities. Further on, the honourable member for Lalor advocated the establishment of an industrial council made up of representatives of primary and secondary industries to plan future developments in their respective industries. But then it appears that this council will direct its influence to a tribunal which may be something like the Tariff Board. The honourable member went on to say: . . maybe something like the Tariff Board but it would be a fully informed body, expert and objective and capable of making recommendations for the development of industry far more extensive than now.

So from somewhere out of the blue we are going to find people able to do the job of the present Tariff Board, but they will be better informed, more experienced and more objective than the Board’s present members. This collection of Solomons will presumably have no trouble in making recommendations to solve all our problems. However, towards the end of his statement the honourable member for Lalor said:

We have travelled the correct road for industrial development in Australia by adoption of comprehensive high tariff policy.

And later he said:

It is upon this road we must continue to travel

So at last members of the Australian Labor Party are back where they started. So much for the tariff policy of the ALP. Until the honourable member for Lalor, as the chief spokesman for the Opposition, gives some indication that he is willing to reassume the responsible stand that he once took on this subject, 1 can see little prospect of a rational critical, protection policy from the other side of the House.

I should like to refer briefly to two specific reports before us in this legislation. The first is the Tariff Board Report on Man Made Fibres and Yarns. As has been said by several honourable members, this is indeed a most significant report not only because of the extent and importance of the industry to which it refers but also because of the principles which it embodies, the honourable member for Lalor has said that the Government has accepted this report. He said also that following the Government’s acceptance of this recommendation the Textile Council of Australia put in the Press several full page advertisements expressing concern for the future of the industry which it said directly employed 150,000 people. But what the advertisement did not point out was that the vast majority of this work force has a vital interest in keeping the man made fibre tariff as low as possible. The Australian textile industry is constantly referring to the effects of low priced imports on sales of their products. One of the disabilities of the Australian textile industry is having to pay higher than world prices for yarn used in the fabrics manufactured.

The reason the industry has to pay a higher price is because the principal supplier of yarn, Fibremakers Ltd has been forced to buy all of its raw material from its parent company, Imperial Chemical Industries at prices above those at which it could obtain raw material from other sources. Therefore in order to protect the 2.5% of the textile work force employed in one section of the industry denied access to raw materials at world prices the Textile Council argues that the Tariff Board had recommended inadequate protection for the whole industry. The only thing that surprises me is that the 97.5% of the textile industry work force which in order to remain competitive has a vital interest in obtaining its yarn as cheaply as possible, has not risen up in revolt at such an extraordinary attitude. I congratulate the Tariff Board on its recommendations aimed at safeguarding the employment and future stability of 97.5% of the work force in the industry and I congratulate the Government in accepting the Tariff Board’s advice.

The other report on which I should like to speak is the Special Advisory Authority’s report on vegetable oils. I regret that I have no congratulatory comments to make on this report. Vegetable oils were the subject of a detailed and exhausive inquiry by the Tariff Board, which made its report in September 1968. Following this report, protection for most oils was determined at 40c a gallon. In its report the Tariff Board made these comments:

The Board believes vegetable oilseed and oil production in Australia has the long term potential to become a highly efficient and economic industry capable of producing virtually all Australian requirements and of competing on export markets . . .

The key to continuing economic linseed production sufficient for local needs thus appears to the Board to lie primarily with the development of a sustained1 demand. Demand can be sustained when production costs allow surplus seed to be exported at some profit . . .

Consistent with these conclusions the Board suggests that these industries be again reviewed in 7 years when it would expect the protective requirements of linseed and safflower oils to be substantially less.

Despite this, only 15 months after the Tariff Board report, the Special Advisory Authority has recommended an approximate 60% increase in protection. This recommendation incorporates all the classic ingredients for future trouble. First, it is an example of the shuttlecock system whereby the protection recommended by a Tariff Board report is referred back to the Special Advisory Authority which in turn recommends a substantially higher rate. By the very nature of their respective constitutions and methods of operation, I maintain that the Tariff Board is more likely to be right. Second, the Special Advisory Authority’s report could result in making it possible to produce oil seeds in areas where otherwise it would not be profitable to do so. This would result in misallocation of resources and production which would be less capable of remaining competitive in world markets. The inevitable consequence of such production would operate against the best interests of those districts and those farmers who are the most efficient producers of vegetable oils and would endanger the export prospects of the industry.

I make these comments as an oil seed grower myself who might therefore be expected to support the SAA report. However, for the foregoing reasons I consider the degree of protection it recommends will eventually prove detrimental to the industry, and I therefore felt it necessary to give this warning.

Despite this last criticism, 1 feel that Australian tariff policy is gradually assuming the appearance of rationality and consistency. Australian industry’s present situation might be compared to that facing a man who inherits an old ramshackle house built on poor foundations. He has to live in it for a while, but he can ensure that no further jerry built additions are stuck on willy-nilly. At the same time he can call in a competent architect to design him a new modern house built on sound foundations in which he will be able to live in safety and security. The architects of the Tariff Board are gradually evolving the design and structure which will house Australian industries of the future - not in the unhealthy atmosphere of the fragile hot bouse but in a strong building from which industries should be able to go out and do a good day’s work for Australia.


– I have listened carefully to the honourable member for Corangamite (Mr Street) and the honourable member for Wakefield (Mr Kelly). Both of them were most critical of the honourable member for Lalor (Dr. J. F. Cairns) for his approach to tariff making policy. But there is one thing consistent about the honourable members for Corangamite and Wakefield: They are always consistent in that they invariably attack the tariff and they always attack subsidies. It is all very well to attack high tariffs and high subsidies, but what about putting up some alternatives? These 2 members of the Liberal Party are fast becoming known as something like the terrible twins in the free trade block - the free traders. This type of philosophy is commonly employed by economists who want to knock things. One can always adopt an ad hoc approach to something and come up with the questions: Why do you not have margarine instead of butter as it is cheaper? Why do you not import something as it is cheaper? But the important point is that free trade economics went out with the industrial revolution. Today other countries, even the undeveloped countries, are finding that they have to protect their secondary and primary industries. The honourable members for Corangamite and Wakefield were most happy, apparently, with the Government’s decision with respect to manmade fibres because it meant a reduction in the tariff. On the other hand, they were most unhappy with the Special Advisory Authority’s report on oil seeds because the tariff was increased. Now, as a test, I would be most interested to listen to the honourable members when we debate in this Parliament - if we debate it of course - the margarine issue, because that it where one really comes down to the facts of life about protection. But that is not the subject of the debate tonight. I have tried to find some reference by the honourable members for Wakefield and Corangamite to the margarine issue, but I have not been able to find it yet. That is a test of the sincerity of the line which the honourable members have been following.

Mr Kelly:

– I hope you do not go outside.


– No, I will not go outside. The honourable member for Wakefield made the point, which is quite valid - and I suppose it is a mild critisism of the Department of Trade and Industry and the Minister for Trade and Industry (Mr McEwan) - that there are not enough facts and figures from which intelligent decisions can be made on Tariff Board reports. The honourable member for Wakefield was very laudatory in bis remarks about the Tariff Board report on man-made fibres. I have read the document and it is a good report in terms of providing information. But I fail to see - and I will be interested to hear this at the Committee stage - how the honourable member for Wakefield can say that the report is an excellent economic analysis. They are the words he used. When a far reaching decision to reduce something in quantitative terms is reached, one would expect that the theme throughout this Tariff Board report would in fact be a quantitative economic analysis. I do not mean an analysis in the most minute detail, but certainly an economic analysis and not just opinions or judgements. This is the matter to which the honourable member for Lalor referred and I endorse what he said. 1 am one of the Opposition members who takes a critical view of tariffs. If I thought the decision in question was right 1 would not hesitate to say so here but I do not think it was right. On many occasions in this Parliament I have given my views about high tariffs. After reading the report, I am not convinced about this excellent economic analysis that the honourable member for Wakefield mentions, because I cannot find where it is. Perhaps he has data we do not have, because it is certainly not contained in this report. I understand an economic analysis to be something that arrives at or deduces a decision. To support my argument. I will give examples of the terminology on which the conclusions about man made fibres have been reached. The reports states:

The main opportunities for the local industry to supply a greater share of the total market for man-made fibres will be in noncelllulosics

The point is that this is a fact that is known; there is no argument. The report continues:

Throwsters have greatly increased their capacity to process nylon and polyester yarns and new processors have entered the industry.

That is a fact about which there is no argument, but we do not get anywhere by having just those 2 statements. I now come to the following profound and important statement in the report:

Generally, producing industries under review have been operating at a higher level of profitability than was apparent at the previous inquiry.

Where in this report is that contention proved? All we have is that generalisation. lt is most important that we know the answer to that question. 1 do not agree with the proposition that, because an industry happens to be operating at a point of time at a profit, it necessarily follows that its protection can be reduced. In fact, quite the reverse can apply. The industry could be increasing its profit while still having a sound case for increased protection. The classical infant industry approach is this: A small expanding industry may be getting more and more efficient but may still need time and more protection. The report continues:

As a result there appears to be a need for the local industry to keep abreast of overseas developments.

The point is that the report should st-ite there is’ instead of ‘there appears to be’ because, when one looks at the technological change and innovation in the fibre industry overseas, one sees that there is no doubt that we have to keep abreast. 1 now come to the type of argument in Tariff Board reports that worries me. and it is typical. The report slates:

There is no reason to doubt that the industries under review are in general technically efficient.

This is an important statement, lt is said that without a shadow of doubt they are efficient. Well, 1 suppose that one has to accept this as being true, for it is the considered opinion of the Tariff Board, which has gone into the question thoroughly. However. 1 again make the point that if the Board is to make and the Government is to endorse important decisions on the Tariff a more through analysis has to be made on the economics of the case.

When reading this report, unless one reads the conclusions first - I think the honourable member for Lalor (Dr J. F. Cairns) mentioned this - it is nol until one starts to see through a few of the generalisations such as I have read out that one can have a bit of a bet on which way the Tariff Board will decide. This is not good enough. In a properly quantitative analysis hypotheses have been developed based on the evidence available and, step by step by deduction or whatever it might be, the case is built up to support the conclusions. However, this is not available here. I am not criticising the members of the Tariff Board, because perhaps it is physically impossible for them to do this with the resources available to them, lt may be that because of some type of secrecy Act they cannot go ahead and produce in detail the quantitative arguments to support their analysis; but, if we in the Parliament have to make judgments or have to endorse far reaching decisions of the Government such as this one, we are entitled to know more detail.

One of the points made by the honourable member for Wakefield and certainly by the honourable member for Lalor is that it is about time we had a more thorough discussion in this Parliament and a debate with the responsible Minister for Trade and Industry taking part. After all, he is the Minister in charge of the Tariff and responsible for policy making in respect of the Tariff, which is one of the most important influences in the economy today; but the appearances of the Minister in the Parliament are becoming less and less frequent, particularly on the subject of the Tariff.

The other thing 1 am disappointed about tonight is the lack of interest in this debate by the Country Party. If there is one subject of which the County Party ought to take very close notice it is the Tariff. I would have hoped that its members would have taken some part in this debate, because a high tariff policy is diametrically opposed to Country Party policy where exports are involved.

Mr Buchanan:

– That is not really right.


– The honourable member knows that it is right, arguing broadly. I think that to get a good debate in this Parliament on tariff we should have the classical Country Party view. An export industry such as the wool industry, for example, is a magnificent example of what could be quoted by the Country Party to show how an industry is being penalised by the Tariff. We could have had a debate on this, but the members of that Party are quiet about it. Instead of getting the Liberal view and the Labor view, we could have got the Country Party view. One very enlightening point that I have noticed in this Parliament is the very fresh approach flowing through it with respect to the Tariff. This is not only because more people are taking notice of it but also because more industries in Australia are starting to be hurt by the Tariff.

I think that basically the whole structure of industry in Australia is changing. After the depression we had only a few manufacturing industries affected by the Tariff, which did not make much of an impact on the economy of Australia.

Sitting suspended from 11.30 p.m. to 12 midnight

Friday, 12 Jane 1970


– Before the sitting was suspended I was making the point that after the last depression when tariff protection became an important part of economic policy in Australia, the effect of the tariff was rather small because the manufacturing sector was responsible for a relatively small part of the national income and played a small part in the earning of export income. But the manufacturing sector became more and more important after World War II and it has been growing ever since. It was not until the report of the Committee of Economic Enquiry - the Vernon Committee - that there appeared the theme of analyses made by men like Dr Harris, skilled in the technique of measuring the effects of tariff. Other men, such as members of the Vernon Committee, with the assistance of the Tariff Board, made certain measurements which rather startled the Australian public. They revealed the high cost of tariff compared with that of subsidies to primary industries. Since that time, particularly after a former Prime Minister rubbished the Vernon Committee report, the Government and other people continued this trend of probing more and more into what lies behind the principle of protectionism. The Tariff Board itself has given this impetus.

However, it was not until the last 6 or 7 years, I suppose, that the principles of the tariff making machinery were subject to more and more questioning and scrutiny. One of the most important reasons for this is, as the honourable member for Wakefield said, that the primary industry sector, in relative terms, is stagnating. The rate of growth of the non primary industry sector in the last 5 years has been 40% - 8% per annum. In real terms the rate of growth in primary industry has been static. As costs go up and world prices go down it is only to be expected that important sectors of the economy are starting to look for scapegoats and to question what is happening. Today, with greater freedom and greater abandon, they are picking on the high protection high cost industries. This is a good thing in the sense that there will be more scrutiny of the tariff. The manufacturing industries are starting to question the economics of the tariff and this was unheard of before. Previously their objective was that the more they could get from the tariff the better it was for them. But many secondary industries are becoming surplus industries in the sense that they have to look for export markets. They now realise that they have to pay a high cost for in-puts when compared with the import parity price of some of these in-puts

It is obvious now that there is all round questioning of the tariff. This is good because in the long run we have to achieve proper allocation and utilisation of resources of land labour, capital and management. High tariffs in themselves, unless the industries are inefficient, certainly create employment. The honourable member for Grayndler (Mr Daly) made it very clear that one of the advantages of a high tariff or of tariff protected industries is employment. But looking at the cold facts of economics, it does not necessarily follow that this is the best method of creating employment. An example is the hot water bag industry in respect of which we held a debate here a couple of years ago. It is not necessarily the best policy to provide high tariff protection to that industry when the resources could be used to create a greater degree of employment somewhere else.

It is generally accepted that greater opportunities for a wider range of export commodities exist today. The acceptance of this point is fundamental to any discussion on tariff policy. Whereas previously the Australian economy was greatly dependent on exports of wheat and wool, and today is dependent on mining and meat in addition to wheat, wool and sugar, manufacturing is becoming increasingly important. Under previous conditions of a relatively inelastic supply of export goods in relation to overseas demand for our primary products, the effect of a policy of high tariffs on manufactured goods was not particularly significant because Australia had few production alternatives and exports of manufactured goods were either zero or extremely low.

Two points must be made clear. Firstly, under current and future conditions, as opposed to the past, the factors of production are being used in a significantly greater number of industries. They are diversified over a wider field of secondary industries. The tariff as such is affecting more people and more industries. Secondly, we must consider protectionism and its limitations, because this is important. There can be little real argument about a policy of protectionism being advantageous to a developing country like Australia where economic growth, full employment and a steady increase in population is accepted policy. I believe in protectionism. I am not certain what the honourable member for Wakefield or the honourable member for Corangamite believe in, but I believe in protectionism, provided that the resources are used efficiently. But it needs to be firmly grasped that there is a limit to the degree of protectionism. Any claim that more protection or higher protection - whichever phrase one chooses to use - will result in greater prosperity because there will be increased employment is not necessarily true. High rates of protection for some manufacturing industries can result in a lower level of employment in terms of the total economy.

As the honourable member for Grayndler has said, the Australian Labor Party has always endorsed a policy of protectionism because it is fundamental to growth and fundamental to full employment. It has always endorsed a policy of orderly marketing of primary products and protectionism for efficient primary industries, even if it involves the payment of a subsidy. It seems to me that the theory advanced by the honourable member for Wakefield was that all subsidies are bad. Perhaps I am a little unfair in saying that, but all subsidies are not bad. If an industry is producing efficiently and is producing a product which can be sold, often a subsidy will act as a stimulus for expansion and more efficient production. I mention the superphosphate subsidy as an example.

Mr Street:

– That is a subsidy on imports.


– Even a subsidy as a compensation can be a stimulus. What docs the honourable member say about wool? The honourable member suggests that there should be a Tariff Board equivalent for the wool industry. Suppose there is a 20% compensation factor. How would he apply that disability allowance to wool, for example? The wool grower is being penalised by not being able to import products. He has to buy his chemicals, fertiliser and spare parts on a highly protected domestic market. How can we apply a disability allowance if we do not do so by paying a subsidy? Of course it has to be a subsidy.

One point about protectionism should be qualified. The indiscriminate backing by the Government of every decision of the Tariff Board is completely wrong. We on this side of the House are opposing the Government’s decision this time. I am making it quite clear that I am opposing it because I am not convinced of the soundness of economic analysis. It does not satisfy me. The chemical industry as an example, is a classic example of a high cost industry and a high protection industry. There is a multiplicity of diversification in this industry. It is generally recognised that in an industry such as the chemical industry, unless it has adequate throughput shown by a downward sloping average cost curve, it is most difficult to reduce its average costs.

The more that technology or science advances, particularly in agriculture, the more diversification there seems to be in the manufacture of chemicals. Perhaps I can make an analogy with the railway system. The Government usually makes an ad hoc decision. It may be asked to make some decision on subsidising a section of a railway line, and it makes a decision on that portion. That section may be an economically weak section but yet is vital to the efficiency of the whole railway line. A section of the chemical industry may be weak in the sense that it has to have a high degree of protection in order not to break the chain of processing. The more weak links we get through diversification, fragmentation or whatever one likes to call it, the greater becomes the problem of tariff making in industries like the chemical industry.

One of the statements in support ot tariffs is that Australia needs a high protection policy because of the imbalance of the work force. This is a fallacy. It has been argued that most people work in the rural sector and therefore we need a high degree of protection to attract them into the manufacturing sector. In terms of the work force, we are among the most highly industrialised countries in the world. Something like 27% of our total labour force is employed in manufacturing industries. This is approximately the same as in the United States of America. So the argument that most of our work force, relatively speaking, is in the rural sector is not right.

The tertiary industries have not been touched upon tonight. They are the largest employers of labour in Australia. Sixty per cent of the nation’s wage bill is paid to workers in tertiary industry. Because of the major deficiencies in housing, education, transport and health there is no doubt that this percentage will increase at the expense of the rural sector and possibly at the expense of the manufacturing sector. Therefore it follows that the standard of living of the nation is directly correlated to the prosperity in tertiary industry. If the building trade has a slump, we can expect a slump to spread quickly through the whole economy. It is an indicator which must be looked at because tertiary industry employs such a high level of labour.

There is sometimes a tendency, when tariff policy is dominated by Government thinking, to fix abnormally high tariffs for particular commodities in order to be able to bargain with overseas countries such as Japan and the United Kingdom. These are very good tactics to bargain with overseas countries such as Japan and the United Kingdom. In recent years Australian bound tariffs have contained both the substantive rates and the primage duties. Primage duties have always been looked upon as a temporary revenue raising device rather than as an element to be included in tariff policy as such. By this type of device often one is able to bargain with overseas countries on a quid pro quo arrangement. There is nothing wrong with that, but often it is a little unfair.

I think 1 have covered most of the points that I wanted to make about tariffs. I will sum up by saying that in view of the marked changes in the structure of primary, secondary and tertiary industries, which has occurred in recent years, Parliament must take a positive role in tariff making. First and foremost, we must remember the tremendous employment created by effective tariffs. Each policy decision should be set out so that benefits and costs of the policy are fully appreciated. This means that instead of a blanket acceptance of all levels of tariffs for industries we become more moderate in our approach, more modest and selective. In effect, this means giving greater support to potentially viable low cost industries and perhaps less support for uneconomic high cost industries.

Thursday, 11 June 1970 (continuation)

page 3433



– I will not keep the House very long - for only about 5 minutes, lt has been said that no member of the Australian Country Party has spoken during the debate. 1 listened to the honourable member for Dawson (Dr Patterson) attack the Country Party. Since I have been a member of this House I have learned, if nothing else, that members of Parliament always attack a party which they fear. If the honourable member for Dawson fears any party, he fears the Country Party. There is not the slightest doubt about that. The honourable member spoke about this subject. He said that he wanted to hear from members of the Country Party. If he had been awake, intelligent and aware of what was happening he would realise that in speeches in the last 2 months members of the Country Party have mentioned tariffs on quite a number of occasions.

Dr Patterson:

– When?


– I will show them to the honourable member in Hansard. The Country Party does not need always to speak during a debate such as this. The honourable member for Dawson sets himself up as an expert. He said that he believed in this and that and he did not accept that. I do not accept a lot of things that he said but I do not speak against him in a personal vein. He attacked the Country Party because he fears it. The honourable member said that the Labor Party believes in secondary industry, in protection, in supporting primary industries and in a number of other matters. Why has the Australian Labor Party been in office for only 17i years during 70 years?

The Country Party knows that progress has robbed the primary industries of being big employers of labour. With big machines a farmer can work 2,000 acres of wheatland with not more than 2 employees to help. The Country Party wants to build up the population. Secondary industry is the big employer. The Country Party supports tariffs but does not support tariffs gone mad altogether. I believe tariffs are protecting our secondary industries against imports from countries with a low wage standard. If we allowed their goods to be imported, most of our secondary industries would be put out of business. This is practical talk, not some of that airy-fairy stuff that we have been hearing. The Country Party believes that primary industry should receive equivalent financial support so that it can enjoy the same progress and prosperity as is being enjoyed by secondary industry through tariff protection. The honourable member for Dawson cannot say much truthfully against the Country Party because it has always been to the fore as the specialist party for primary industry. But the Country Party realises that this country needs more population. An increased population means more consumers in the home market. The home market is the best market if only it can be built up enough. If primary industry could sell all its goods in that market where it buys the goods it needs for production, then the industry would not need any assistance. Therefore the Country Party says that primary industry should have price support for surpluses of goods that are sold overseas of a nature that will give the same financial advantage as secondary industry is getting through tariffs.

Minister for Customs and Excise · Hotham · LP

– In concluding the second reading of this debate I would like to thank honourable members for the splendid contributions that they have made to this debate. Because of the importance of tariffs to the Parliament I believe that had the debate not been held at such a late hour and such a late stage in the session we might have had more speakers. Perhaps this is my fault. It is customary to leave this debate deliberately until late in the session so that the Bill before the House can incorporate all those tariff proposals which come before the House from time to time. I will in future try to encourage the debate which this subject deserves.

As Minister for Customs, who administers the policy laid down by the Government, I am pleased to see the increasing interest that other honourable members have shown concerning tariff policy. I pay a passing tribute to the increasing interest displayed by certain weekly and daily journals on this subject. 1 mention specifically the excellent references to tariff policy - some of which I agree with and some 1 do not - in the ‘Financial Review’ and Tariff Week’ which spotlight and highlight the Government’s tariff policy. 1 refer briefly to one or two points that have been made. I shall reserve my comments on the remarks made by the honourable member for Lalor (Dr J. F. Cairns) until schedule 13 is discussed. The honourable member for Wakefield (Mr Kelly) made 3 points to which I would like to refer. He reasserted his kindly charge that my Department could be pursuing its new bard, line on its application of by-law policy. All I can do is repeat what 1 said in answer to him last week, that my Department does not concern itself with policy making, lt is concerned purely with the implementation of policy laid down by Cabinet. If the honourable member has any specific - I was going to use the word ‘accusations’ but that might he too strong - cases which he would like to refer to me specifically then 1 would be delighted to investigate them and report to him in public from the floor of this House.

The honourable member for Wakefield mentioned the by-law procedure and he used the unfortunate expression that it operated under cover. He said that he was not suggesting anything sinister but he did suggest that there may be too many secret decisions and secret discussions about by-law policy. The honourable member is raising a most significant and fundamental point. If he does want these matters raised in public evidence before a Tariff Board inquiry or before some other kind of tribunal, he must consider the possible delays that would be consequent upon such a decision; so it is not as easy as he may well have asserted. 1 was concerned at his statement that export industries that relied on containing their products in cartons were not eligible for the drawback provisions of the tariff. If the honourable gentleman reads the naked words of his speech, it may well be construed that my Department, which is charged with applying the drawback provisions, may not be giving drawback where perhaps it should be.

Mr Kelly:

– I did not mean that.


– I know the honourable member did not mean it but. for the record, I just say that, as he would concede in the particular industry that he had in mind, there may well be other considerations than the difficulties facing my Department that preclude the drawback being given to potential exporters who deservedly need it. I. conclude with a reference to the statements made by members of the Opposition that my colleague, the Minister for Trade and Industry, is not present at these debates. My colleague recommends to Cabinet, on the basis of Tariff Board reports, tariff policy. Once Cabinet or the Government makes the decision, that is reported to this Parliament, and then it is my responsibility to implement that policy.

Mr Wallis:

– But it is the decision that is important.


– The decision is important, indeed.

Mr Wallis:

– And that is why we would like him here.


– 1 should have thought that the reasons for Government policy were amply described at the time of declaring or reporting that decision to Parliament. However, for the record, I make the following statement on behalf of and in the name of my colleague. Tariff policy is the responsibility of the Government, both in general and in relation to every single decision. The Government gives the Tariff Board the task of inquiring into, and giving the Government the benefit of its advice on, questions referred to it by the Government. The Tariff Board is an independent body, lt has developed on this basts for almost half a century. The Government has never tried to lay down for the Board the procedures it should follow in carrying out its responsibilities. The Board’s task is simply to provide the Government with an adequate basis on which the Government can make its decision. The decision itself is the Government’s responsibility and there can be no question of delegating this responsibility. The appropriate level of protection in any particular case can only be determined on the basis of a careful consideration of all the facts relevant to that particular industry. There can be no question of any predetermined upper limit to the level of protection that may be justified.

Question resolved in the affirmative.

Bill read a second time.

In Committee

First Schedule.


Mr Chairman, I want to raise briefly one question dealing with the Tariff Board’s report on secateurs. It is a very small one but in the second reading stage of the Bill I said I was concerned that the Department of Customs and Excise and the Department of Trade and Industry might have policies that were not exactly the same. The Board’s report in this respect is very simple. It recommends that the duty on secateurs should be 25% if they are of the anvil type, but if they are of the scissors type it should be 7½%. The Department of Customs and Excise has to rule on whether, if one item or product is regarded as a suitable equivalent to another item or product and is reasonably available, by law protection will be given to the second item or product. In this case the Tariff Board has found that there are 2 types of secateurs - one type where the blades meet and the other where the blades cross over. Obviously both are used for pruning. By law should be refused to the second one - the type where the blades cross over - under the criterion used by the Department of Customs and Excise. A duty of 25% would then have to be paid. In this case the Tariff Board has fixed a duty of7½% by using a different method to arrive at its judgment. I bring this example forward to illustrate that different criteria are used by the Tariff Board and the Department of Customs and Excise.

Schedule agreed to.

Second to Seventh Schedules - by leave - taken together, and agreed to.

Eighth Schedule.


– I refer to the item on syringes and injection needles. I raise a very small point here, but the principle adopted should be spelt out again. I think that Everett Products Pty Ltd is the only manufacturer of hypodermic needles in Australia. Everett Products is based in Portland. It was burned down recently. It is interesting to note that in this case the Tariff Board has treated the industry as an infant industry and recommended a duty of 42½%. At the end of 1972, when the industry will have grown out of its infant stage, the duty will come back to 30%. This is an interesting and unique development which should be mentioned. I think it is a responsible attitude to adopt. I am glad to see this practice in operation.

Dr J F Cairns:

– I think I should make a few comments in order to reduce the area of disagreement which might exist between the honourable member for Wakefield (Mr Kelly) and myself. I have looked at the operations of Everett Products Pty Ltd of Portland very carefully. Like the honourable member, I approve of this method of fixing the duty at 42½%. The factory is being treated as a new one. It is better equipped and more modern than the old factory. One provision is that in 1972 the duty will be reduced to 30%. I think that this is a very good principle to adopt. I think it is very satisfactory. As far as I am aware, this is the first time such a principle has been adopted.

Schedule agreed to.

Ninth Schedule.


– I am not goingto oppose this provision. Indeed, I would never go as far as to oppose a Tariff Board recommendation at this stage. But I am rather critical of the Board’s report in relation to caustic soda or sodium hydroxide in chlorine. A rather unpleasant duty of 55% is being imposed. It is worth remembering that 3 of the biggest chemical industries in Australia - Imperial Chemical Industries of Australia and New Zealand, Dow Chemical (Aust.) Pty Ltd and Union Carbide Aust. Ltd - are the 3 manufacturers. The raw materials used in the industry are salt and electricity. It is interesting to realise that a previous Tariff Board report noted that salt could be carted to Japan, where our chief competitor is, and back again to Sydney cheaper than it could be carted from Spencer Gulf around to Sydney. This is the kind of penalty we are paying for our shipping services.

The important point is that chlorine in this case could not be increased in price because of the impact on the plastics industry. So caustic soda or sodium hydroxide had to carry the whole of the increase. The duty was increased, except in relation to aluminium manufacturers or those who are using caustic soda in the production of alumina, lt seems to be rather a queer way of making a division. The bigger export industries, such as the aluminium industry, receive the advantage of cheap raw material production, while other exporters have to carry the cost of this increased duty. The names of some of these exporters were supplied to mc by the Library. The products involved include detergent and soap, paper pulp, textile fabrics, preserved meats, rayon, rubber accelerators and weedicides. The Board recognised that the higher duty would be a burden on the economy and recommended a bounty in preference to a duty, but the Government did not accept that. I think the bounty would have cost about $l.lm. The Government turned away from that and used the Tariff as a protective instrument. This has handicapped other industries all along the line.

Tariffs are supposed to be used to protect the infant industries, and rightly so. This infant industry is becoming a bit overgrown for an infant, lt has been in existence in one form in South Australia since the early 1930s. This is the form in which sodium hydroxide-

Mr Chipp:

– ls that both processes?


– No, that is the process that is not referred to in this report, but the same product is produced. The point that is really worrying me - I would be glad if the Minister could help mc here - is that sodium hydroxide or caustic soda comes from 2 processes, one through the chlorine route and the other through the soda ash route or Solvay process. This Solvay process has been in operation in South Australia since the early 1930s in producing caustic soda. Yet this very, very big and very, very old infant will receive protection at the rate of 55%. lt will be a recognised burden on a great many exporting industries. J would be very glad if the Minister could tell me 2 things: Firstly, why the Government did not use bounty as a protective medium and, secondly, what proportion of Australia’s production of caustic soda conies from the old. old infant in South Australia.

Minister for Customs and Excise · Hotham · LP

– The honourable member for Wakefield (Mr Kelly) has raised a valid question. As I understand if, he suggests that the Tariff Board, in costing the production of the product, has put particular emphasis on the electrolytic process or the process of adding chlorine, whereas he knows and slates that there are 2 methods of producing caustic soda, the other being by the soda ash process. He has asked me to supply some statistics on the percentage of the product that is produced by the soda ash process. 1 cannot do that because, as the honourable gentleman knows, the evidence was given to the Tariff Board in camera. He would also be aware that the evidence taken at many Tariff Board hearings, if disclosed publicly, could place one particular company at a disadvantage. I have had checked the statistical records of my Department and of the Department of Trade and Industry. For the reason I have staled I cannot disclose the figures held by my Department and the Department of Trade and Industry, but I can say quite definitely to the honourable member that the amount of the product produced by the soda ash process is minima!. That does not entirely satisfy him, but it may slightly relieve his mind.

Schedule agreed to.

Tenth Schedule.


I wish lo discuss vegetable oils. This is a subject that the honourable member for Dawson (Dr Patterson) asked me to raise. 1 will also refer to margarine. The honourable member for Corangamite (Mr Street) referred to this subject in his speech in the debate on the second reading of the Bill. This is a very important report. In 1968 the Minister for Trade and Industry (Mr McEwen) released a Tariff Hoard report on vegetable oils. The main thesis of the report was that the industry had an export potential, that it could gear itself for exports. It was said that it ought to be able to produce for the export market. The Tariff Board pointed out that many of the problems of the industry stemmed from the location of the crushing plant and the solvent extraction process, which was not commonly used. The Board very sensibly recommended that as the industry was growing up it should look to exports to increase its growth. In 1969 there was a reference to the Special Advisory Authority. It is rather interesting that since 1960 there have been 6 reports on vegetable oils by the Tariff Board and 3 by the Special Advisory Authority, making a total of 9, at the rate of 1 a year. Anyone given to weak puns could say that there are as many reports as in an artillery barrage.

There are several classical weaknesses in the report that disturb me. All the arithmetic in it is calculated on the price of oil per ton, but the recommendation refers to a price per gallon. I wrote to the Department and with its characteristic courtesy and kindness it translated the figures in the report back into a price per gallon. I appreciate that kindness, but it should not be necessary. The report was printed just before Christmas and that may explain its weaknesses. This quite remarkable statement appears in a report by the Special Advisory Authority:

It was submitted on behalf of farmers that inadequate protection from imported oils could result in farmers’ returning to wheat production and therefore worsening the already difficult position of that industry.

I have been known to take civil servants for a bit of a ride, but it seems to be overdoing it to tell Sir Frank Meere that if the farmers did not get protection they would grow more wheat, when they knew quite well that they could not grow more wheat. Anybody could see at this time last year when quotas were imposed on wheat growing that there would be a superfluity of vegetable oils as soon as the wheat growers used their know-how and plant to produce safflower, linseed, and the crop grown by the honourable member for Corangamite, rape seed. It is desperately important that everybody, particularly those concerned with the dairy industry, realise that within a year, if not before, Australia will be over-producing vegetable oils and will be exporting it. I quote from ‘Primary Industry Newsletter’ of 1st April 1970:

Australia will this year produce marginally more than its present estimated usage of edible vegetable oils. Current estimates put production, at about 37,000 tons of substitutable oils- suitable for use, for example, in margarine - and consumption at 35,000 tons.

That is this coming year -

But with oilseed processing firms literally fighting off enthusiastic would-be growers, and with contract acreages for rapeseed and sunflower likely to set new records, production in the coming season is expected to reach 49,000 tons - providing a surplus of at least 14,000 tons over present consumption.

I am concerned about this and 1 beg the dairy industry to think about it. It is quite clear Australia will have a superfluity of vegetable oil in 1 or 2 years. The restriction on margarine has been justified because it was being made from imported oils which people said came from ‘cheap labour countries’. I put those words in inverted commas. If margarine is to be made from homegrown vegetable oils a different position will arise because 1 Australian primary industry will be competing with another. A lot of rethinking has to be done by the dairy industry. One of the things I want to bring out is that this is the time to support the claim. I am sorry that the Special Advisory Authority made this report but I do not think it will make much difference because obviously a remarkable change has taken place in the vegetable oil industry. Strangely enough, the industry has evolved and discovered that it can make a degradable biological detergent made out of some vegetable oils. The detergent flows out to the sea in the effluent and does not have any adverse effect as regards pollution. This has increased the world demand for vegetable oils in a remarkable way.

The wheat position has increased the production of vegetable oils in an outstanding way. Australia will be faced with a remarkable change in the vegetable oil position. Let me give honourable members some of the facts about the peanut oil industry. I am glad to see the right honourable member for Fisher (Mr Adermann) here. For many years he has been a stalwart defender of the peanut industry. I have always thought that a statue of him should be erected in the town square and over it every New Year’s Day the citizens could break a bottle of port wine or peanut oil because he has been a remarkable defender of the industry. It has protection in the system of by-law entry. According to my figures it amounts to about $600,000 for the industry annually. It will not be covered by the by-law much longer because most vegetable oils will not be imported. It is true that peanut o:l has a section of the market to itself. The fundamental fact is that the by-law advantage on peanut oil has been almost a hidden subsidy which varies from year to year. I worked out the annual hidden subsidy for the industry at $600,000. This advantage will be lost. There is need for this change in the Australian vegetable o’i industry and for a lot of people to do some vital rethinking. 1 think it proper to point that out at this stage.


– The honourable member for Wakefield (Mr Kelly) has raised a point with respect to peanut oil. 1 should have thought that the right honourable member for Fisher (Mr Adermann) would have had something to say very strongly on this. 1 cannot accept the logic of the statement by the honourable member for Wakefield that, just because there has been high protection before and because there are now going to be phased in over a number of years duty free imports of peanut oil, it therefore is good. What about the established peanut growers in north Queensland, in the tableland and Mareeba area? They may not have been protesting to the honourable member for Wakefield but they have been protesting to me. They are established growers. What is going to happen to them? That is not taken into account. 1 just cannot follow the logic of the honourable member’s argument, because on the one hand he is saying that local production must be supported and on the other he seems to be saying thai it is a very good thing to get free imports of peanut oil without any tariff protection at all. This will do harm to the industry in Queensland. As I see it, his argument is illogical. Me is arguing again for free trade.

Mr Kelly:

– No.


– Yes, it is a free trade argument. Oil seeds are grown in Australia and therefore the honourable member is saying that there will be a greater production of margarine. He is saying that we should produce less buller and eat more margarine.

Mr Kelly:

– I did not say that.


– Surely that is the end result. I do not agree with the Government’s decision to allow free entry of peanut oil.


– One of the protections of the peanut industry has not been in effect a head subsidy - it has not cost the country, the consumers or the Government anything, lt is a method of letting in sufficient imports to make up the country’s requirements at concessional rates so that the average price for which the peanuts will be bought by the manufacturers- that is, the price of imported peanuts - plus what they pay to the Peanut Board for those which it has available, is equivalent to the price of all other oils, which are now interchangeable. 1 am all in favour of concessional rales. However, the Board made an earlier recommendation to abolish concessional rates, which the Government did not accept. What is wrong with a policy that allows a country which manufactures to bring in sufficient peanut oil to make up the requirements of the market here? I think the honourable member for Dawson (Dr Patterson) said that peanut oil is a special oil and has. a special place, and that not all oils are interchangeable. The oils arc interchangeable, but the manufacturers desire to have peanut oil for a particular purpose in certain instances.

To allow, as has been the case, 3 tons of peanut oil to be imported for the product that is on the market means that its price will be equivalent to that of other oils. lt does not cost the Government or the consumer anything, because if the product is not made up of imported peanut oil it will be made up of other imported oils. Frankly, 1 am against the abolition of the concessional rate. However, the Tariff Board has recommended that it should be phased out over 2 years. The Government has reduced that period to 1 year and 8 months. I have asked the Minister to have a look at this position and he is doing so. I cannot see why we should not have the full 2 years principally because the season of the peanut industry is from 1st July to 30th June. To back dale the period to January or to April cuts right into the middle of the season. As a result the Board cannot make its arrangements with the manufacturers for a seasonal supply for the tonnage that is available and equate that with the necessary tonnage that comes from overseas. I hope that the Minister will have a look at this matter.

Schedule agreed to.

Eleventh and Twelfth Schedules- byl leave - taken together, and agreed to.

Thirteenth Schedule. (Amendments of the Principal Act as Amended in Accordance with sections 3 to 14 (inclusive) of this Act).

Dr J F Cairns:

I move:

Omit the Schedule. The Opposition does not object to everything in the Thirteenth Schedule. However, the Opposition objects to the substance of this Schedule and for convenience I do not intend to try to separate the items that we accept from the ones we do not accept. The Opposition objects to the substance of the Schedule and so I have moved to omit the lot of it.

Mr Chipp:

– This is a pretty serious act:on.

Dr J F Cairns:

– It simply returns the position to what it was before the tariff report was made. It returns us to the status quo- to the position as it was before. The amendment I have moved if carried will prevent the Thirteenth Schedule from operating. It will prevent the reduction of the duties that the Tariff Board has recommended.

Firstly, I would like to thank the Minister for Customs and Excise (Mr Chipp) for his co-operation since he has become Minister and for the way in which this co-operation has been given. This has made my work much easier and I should have expressed my thanks when I first spoke. I would like to mention in passing one or two points that have arisen out of the second reading debate. I think I challenged speakers on the Government side of the House to defend both the Board and the Minister. I would say at this stage that I did not think the honourable member for Wakefield (Mr Kelly) put up a very effective defence of the Board or that the Minister put up a very effective defence of the Minister for Trade and Industry (Mr McEwen). I think the honourable member for Wakefield supports the Tariff Board right or wrong. He said that he could never vote against a recommendation of the Tariff Board. I think this is a very blind spot on the part of the honourable member.

No-one in this House, nor in this country suppose, wants high costs. We all want low costs. We want the lowest possible costs. It is very superficial thinking for the honourable member for Wakefield and others to think that because they stress low costs they are the only ones who want low costs. That appears to be the way in which they put it. No-one wants high tariffs. We want the lowest possible tariffs. I would say the same thing about tariffs as I said about costs. However, I would say that without effective tariffs we would have little secondary industry in this country and without effective subsidies we would have many thousand less farmers in Australia. As a matter of fact, we would have very few people. It is possible that we might have a better society if this were the situation. We would be a slightly larger New Zealand and we might have a better quality of life in such a society. But that is not our situation. Our situation is that we have an industrial structure and I think that in that industrial structure there must be change.

The only question is: How can this change be brought about? I think there is an alternative view in this Parliament and also outside it. The honourable member for Wakefield (Mr Kelly) mentioned the Vernon Committee, the Tariff Board and others, and also himself. I think they represent one point of view. As I understand it, their point of view is that of simplifying tariff to a bench mark type and, I must stress, of lowering tariffs. I do not know what the definition of free trade is. Is it no tariffs at all? If one stands for the lowering of tariffs, as the honourable member for Wakefield and all the other people he talks about do, one does not need much knowledge about the industry, in the way of facts. One can have an amateur Board, as I have been calling it. One can have an experimental situation. One can say: ‘We will lower the tariffs in connection with this industry’ - as you are doing in connection with schedule 13 - ‘and see what happens.’ I do not think the Tariff Board is saying much more than that. I will concede that it might work out all right, but if it does, it will be a result more of chance than of informed judgment. The approach that the honourable gentleman and others take is relatively a free trade approach; it does not need factual knowledge. This experimental way of making tariffs is quite appropriate for it. I do not think it is unfair to say that we have been using an experimental way of making tariffs.

There is another way of going about it. That is what we stand for on this side of the House, and I think it is what the Minister for Trade and Industry (Mr McEwen) has’ stood for. But changes are taking place among the social and economic class of people who have previously stood behind the position of the Minister for Trade and Industry. The second , way of going about it is by recommendation based on the fullest possible knowledge of the facts. The Minister for Customs and Excise quoted the Minister for Trade and Industry as saying something like this: The Board provides the Government with adequate knowledge. My point of criticism is that the Board does not provide the Government With adequate knowledge. It is not possible for it to do so now. I think we need a larger advisory body. We need a manufacturing industries development commission. We need a body which understands that its job is to work out what is necessary for the development of the manufacturing industries.

Mr Chipp:

– Does the honourable gentleman mean that an increase is needed more in the number of personnel on the commission or in numbers of staff?

Dr J F Cairns:

– 1 mean particularly in numbers of staff. There is much more work to do - an enormous amount, lt has to be continuously at work, continuously searching for facts and continually watching facts here and overseas in co-operation with industry and working closely with it. I oppose schedule 13 mainly because that condition does not exist. I oppose it more for that reason than for the risk involved in schedule 13 - the experiemental method, with the Board saying: We think it is safe - we cannot put it any stronger than that - to reduce these tariffs. We will give it a go and see what happens.’ The Minister says that if something harmful happens, a special advisory authority will get to work to reduce the harmful effects, litis is an experimental method. It is one way of going about making tariffs, but it is not the way I want. It is not an informed way. Do not let us kid ourselves. This report is not worth having as a document. If could have been written without making any inquiries at all. This is not good enough for a country in 1970.

We all desire the lowest possible costs and the lowest possible tariffs, but we must have effective tariffs and these tariffs are going to be pretty general in Australia. They will cover practically all, if not all, of our secondary industry. In some cases they are going to be higher than they are now. In other cases there will be quantitative restrictions within the next few years. The nature of these tariffs and other forms of protection that will come from this kind of work is the type of system existing in West Germany and Japan. Already those 2 countries are more adequately and effectively and sensitively protected than Aus. tralia. To believe that Australia is in some way a more protected country than Japan or West Germany is to misunderstand completely the sophisticated nature of the protection existing in those countries, lt is time we woke up to this sort of thing and realise that those who blithely talk about Australia being over protected apparently talk about Australia being over protected in relation, to Japan or some other country. If this is so then they do not know what they are talking about. Japan knows more about protecting its industries than we in Australia have ever imagined and in Japan it is done much more effectively than we do it here.

The Opposition opposes the schedule because of the reduction of tariffs on the man made fibres industry. They are far below the bench mark before the reduction and they will be very much below it now - 10 to 20% or thereabouts. This is a very low tariff indeed. The Opposition opposes the schedule because we think there is a risk involved to an intricate, complicated, technically developed industry and we are not prepared to take that risk. Members on this side of the chamber oppose the schedule mainly because we do not have the necessary, equipped advisory board. I look forward to the appointment of a board or a commission capable of doing its job in the last quarter of the 20th century, lt is lime we came out of the first quarter of the 20th century, where we still are in our tariff making procedures. For those reasons the Opposition opposes the Thirteenth Schedule.

Minister for Customs and Excise · Hotham · LP

– The amendment proposed by the Labor Party is unacceptable to the Government. I appreciate and understand the reasons put forward by the honourable member for Lalor (Dr J. F. Cairns) but 1 cannot agree with them. Perhaps after I have given a brief explanation the honourable member will reconsider his decision to divide the House on this issue. The honourable member perhaps does not realise the effect that the omission of the Thirteenth Schedule would have on much of the man-made fibres concerned. The temporary duties that had previously applied lapsed 3 months after the Tariff Board report was received by my colleague the Minister for Trade and Industry (Mr McEwen). Those tariffs cannot be reimposed without further reference to the Special Advisory Authority. Of 35 or 36 tariff changes set out in the analysis circulated for the assistance of honourable members, only 12 references would revert to the higher rates of duty proposed under this Bill. To put it another way, two thirds of the changes would be reductions if the Labor Party’s amendment were carried. I do not think that would be the intention of the honourable gentleman. lt may be appropriate here to remind the Committee that the Minister for Trade and Industry has answered criticism of the Government’s adoption of this Tariff Board’s report earlier this week; so it has been answered on the floor of the House. If the textile industry finds itself in considerable economic peril, it could apply to my colleague for a reference to the Special Advisory Authority. Before I resume my seat and before the honourable member for Wakefield (Mr Kelly) takes up the cudgels, I know he would bc interested to hear from mc a report on action which my own Department has taken concerning this industry, after discussions with the Department of Trade and Industry. The Australian industry meets only about 40% of Australian demand for man-made fibre yarns. The balance, 60%, is imported. In the past it has been imported at non-protective rates usually under by-law. The Board’s report suggested discontinuance of the by-law entry. But on representation by the industry as a whole through the Textile Council, by-law entry will be accorded until the end of this year on yarns which were previously dutiable at non-protective rates in their own right or admitted under by-law. This measure, which is of particular interest to weavers, provides a breathing space for the industry to adjust to the circumstances created by the implementation of the Board’s report. Before resuming my seat I say to the honourable member for Lalor that he has made his point in his speech. I wonder whether he would consider, before he divides the Committee, the implications of his action in the light of the information which I have given.


I regard this report as one of the most significant reports and a report of the highest quality following an economic analysis and close examination of an industry that I have read. I claim to have read almost every report that has come out since 1960. I regard the report as a first class exercise. The Tariff Board has been spelling out its principles in the last 2 annual reports in an exemplary manner. We all stood around anxiously waiting to see whether its principles were going to be put into practice and hoping - indeed desperately hoping - that when the report was issued it would show that the Board was standing on its principles; that the report would be of sufficient quality to enable the Board’s decisions to be implemented. We were also desperately hoping that if the report was of that quality the Government would accept it. The Government did accept it. and I congratulate the Government for accepting it.

I will not go through the report in detail. I repeat that 1 consider it to be a report of the highest quality, lt sets out several things quite clearly. Firstly it states that the high tariff was said to bc necessary and that one of the reasons for this was that Imperial Chemical Industries of Australia and New Zealand Ltd was buying its polymer from which the fibre was made at higher than usual prices from its parent company in Britain. What kind of a system would we have in Australia if we increased tariff in Australia to protect industries in Britain. This is what would have happened? The Board’s report also set out clearly that it was dangerous to place high tariffs on raw material that is used by other industries. These things are known. They arc truisms. But they had to be spelled out. I will not go into them in detail. I will just take up where the honourable member for Lalor (Dr J. F. Cairns) left off. He referred to the advertisement by the Textile Council of Australia. It is interesting to note that space was taken in all major newspapers throughout Australia so that the Textile Council could make the point that it was not happy. I wonder whether these overhead costs will be included when the Council applies next to the Tariff Board, if it so applies. This advertisement, for which I trust the Council paid good hard money, states that, the employment of 150,000 people is at risk. It says that the rate of duty is far too low when compared with other duties. With characteristic quickness, the honourable member for Lalor picked it up and pointed out the difference between our low rate and the rates applying in Canada and the United States of America.

I have tremendous respect for ecomomists, particularly those who write, in the newspapers. In the ‘Australian’ of 1st May, under the heading ‘Bluff, Bluster and Emotion on Tariffs’, there appeared an article by Kenneth Davidson. That article in the ‘Australian’ buried the Textile Council advertisement, for which good hard money had been paid, in a way that I have never seen any other similar advertisement or pronouncement buried before. As the honourable member for Corangamite (Mr Street) so rightly said, of the 150,000 people said to be at risk, only 2.5% were engaged in making the goods under reference, while 97.5% were engaged in using the material and would have had their employment put at risk if this duty had been increased as requested. Therefore, with hard money, the Textile Council paid to make a statement that 150,000 people had their employment put at risk whereas, in fact, only 2.5% or about 5,000 would have had their employment put at risk - if it was put at risk. On the other hand, if the duty had been increased, 97.5% would have had their employment at risk..

This article points out, as the honourable member for Lalor mentioned, that the Council claimed that the Board’s report was out of date and based on old information. Interestingly enough, the report was published in November or December. About 2 months before the report was signed, final information was forwarded by Fibremakers Ltd, which had provided the chief witness. The part of the Textile Council’s advertisement that really copped the lot is dealt with so well in the article by Kenneth Davidson that I can do no better than quote from the article. It is of such quality that it should be quoted. I pay tribute to the author. Referring to the high rates of duty in the United States of America and Canada the article states:

The Council is just plain silly to try to compare the level of Australian duties on man-made fibres with overseas countries such as Canada and the United States. The rates quoted for Canada apply to a few countries such as Andora and Outer Mongolia, which are not listed by the Canadians as being subject to preferential of MFN duties. The rates quoted for the United States are the penal rates of duty which are applied to Communist countries only, and are at least double the rates the United States applies to its trading partners. In any case, these comparisons are meaningless.

Fancy paying good hard money to have an advertisement such as that which the Council put in the newspapers published, and then getting it tossed back in one’s face in that exemplary manner! The article continues:

Does the Council think that, because duties on a particular commodity are high overseas, or there is no duty on another commodity, that Australia should impose a high duty on the first and no duty on the second?

I would like honourable members to listen to the following with more than usual interest:

The advertisement is one of the best public examples of the mixture of bluff, bluster and emotion which has proved so successful in the past in influencing government.

In taking that report apart I could not do better than Kenneth Davidson has done in taking apart the kind of announcements that appear in this advertisement. I repeat that I regard this report as a fine milestone in our economic development. It shows that from now on the Government would do what I feel it has to do and have a much more responsible attitude to the tariff question. I congratulate most sincerely the Tariff Board on the quality of its work and on the courage of its recommendations, and chiefly I congratulate the Government on its courage in accepting them.

Dr J F Cairns:

I have just a couple of points to make in conclusion. The honourable member for Wakefield (Mr Kelly) has been most euloguistic about the Tariff Board report; it is the best he has ever seen. But nowhere has he given us any indication why he thinks this. He has simply given us his opinion: he has made no attempt to analyse the report or to deal with or refute any of the criticisms of it that I made. He simply gives it his imprimatur. This may be enough for some people, but it is not enough for most.

The Minister has suggested that we may reconsider our decision to vote against the 13th schedule. He pointed out that the temporary duties do not apply unless the 13th schedule is passed, in saying that we would oppose the schedule I mentioned that there were some parts of it thatI did not want to oppose but that rather than separate those parts from other parts, which would have involved a good deal of work and time.I proposed to vote against the whole schedule to show our opposition to the implementation of the proposals arising out of the report. However, for quite a number of reasons, one of which is the time, I do not intend to divide the House on the 13th schedule, and we will let it pass, having made it clear why we oppose it and what parts of it we do oppose.

Schedule agreed to.

Remainder of Bill - by leave - taken as a whole, and agreed to.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Mr Chipp) put

That the Bill be now read a third time.

The House divided. (Mr Deputy Speaker- Mr J. D. M. Dobie)

AYES: 51

NOES: 47

Majority 4



Question so resolved in the affirmative.

Bill read a third time.

page 3443


The following Bills were returned from the Senate without amendment:

Handicapped Children (Assistance) Bill 1970

States Grants (Teachers Colleges) Bill1970

page 3443


Bill returned from the Senate with a request.

Message from the Governor-General, recommending appropriation for purposes of an amendment to be moved upon request by the Senate, announced.

Motion (by Mr Chipp) agreed to.

That the request be considered in a Committee of the Whole forthwith.

In Committee

Clause 3.

There is payable to the States, during the year that commenced on the first day of July, One thousand nine hundred and sixty-nine, for the purpose of financial assistance, the sum of Thirteen million five hundred thousand dollars, . of which -

Senate’s request.

In paragraph (b), leave out ‘One million five hundred dollars”, insert ‘One million five hundred thousand dollars’:

Motion (by Mr Bury) agreed to:

That the requested amendment be made.

Resolution reported; report adopted.

page 3444


Second Reading

Debate resumed from 7 May (vide page 1788), on motion by Mr Sinclair:

That the Bill be now read a second time.


– In the strict sense there is no legislation before the House at the moment. The Chair, being extremely tolerant in its old age, allowed the honourable member for Melbourne Ports to speak.

Mr Snedden:

– I did not know whether 1 had to seek leave to speak. If I may speak with the indulgence of the Chair, I will proceed on that basis. The blue business sheet lists a number of Bills. It lists the Seamen’s Compensation Bill and the Commonwealth Employees’ Compensation Bill, which are now being called. I understand that the House is willing to have a cognate debate on these 2 Bills. Then there are the 2 Loan Bills, and I understand that there is a willingness for the House to have a cognate debate on those. I would not expect that either of those 2 cognate debates would occupy a great deal of time. We then have on the business sheet 5 States Receipts Bills. I believe the will of the House is that those Bills be taken together in a cognate debate.

The question I was asked was: How late are we going to sit tonight? I cannot give an answer as to how late we are going to sit. All I can say is what business I want to bring on tonight. One cannot fix . the time at which the House will rise. One can only fix what business one wants to transact. The business I want to transact is to complete the compensation Bills and the Loan Bills. If I can I would like to make a start on the States Receipts Bills. The honourable member asked what business there is for tomorrow. The business tomorrow would be to complete the States Receipts Bills, to complete the Stevedoring Industry (Temporary Provisions) Bill and to complete the Conciliation and Arbitration Bill. The honourable member asked whether the House will- be up by 4 o’clock tomorrow. I am unable to say whether we will be up by 4 o’clock. That is the programme for the House tomorrow, and at what time we will finish I do not know. The honourable member asked about the convenience of transport. I have had discussions with Mr Pike, who also asked that question. I have given him all the information I can give him which, essentially, is the information I have just provided.

Mr Bury:

– May I have the indulgence of the House to raise a point of order on this legislation? Before the debate is resumed on this Bill, I would like to suggest that it may suit the convenience of the

House to have a general debate covering this Bill and the Commonwealth Employees’ Compensation Bill as they are associated measures. Separate questions may of course be put on each of the Bills at the conclusion of the debate. I, suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the 2 Bills to be discussed in ur.s debate.


– ls it the wish of the House to follow the suggestion made by the Treasurer? There being no objection. I will allow that course to be followed.

Mr Clyde Cameron:

– This Bill is a stop gap measure designed to make a short term adjustment to existing rates of compensation pending fuller consideration of the whole field of compensation when the Government’s Bill for a completely new Act is debated during the coming Budget session. The Opposition has completed in draft form a full answer to the Government’ > Bill lor ,t new A i. and copies of the Opposition’s proposal in that form are already in the hands of interested organisations, including the Sec.relary of the Australian Council of Trade Unions. Replies have been received from the Council of Commonwealth Public Service Organisations. We await a reply from the Secretary of the ACIU. Because this has not yet come to hand we have had to hold over until the Budget session our reply to the Bill. For those reasons the Opposition will not delay the passage of this Bill by lengthy debate, by moving amendments or by calling for divisions.

The Bill now before us does not lend itself to amendment in the way necessary to make it accord with the standards of compensation which thi Opposition wants to implement. Our aim is to give Australian wage and salary earners the best compensation provisions in the world. We believe that they are entitled to it. We believe that we can afford it. For those reasons we state quite clearly and without any qualification that that is the aim of the Australian Labor Party. 1 hope to see the day when the level of compensation in this country will make it unnecessary for any person to be forced into common law action to secure just compensation for the loss of life or limb. The Commonwealth Government is the largest single employer in this country. It employs about 320,000 people. If we add lo that figure those who are employed by employers carrying out Commonwealth contracts, the number of people directly and indirectly affected by what we do in this Parliament in relation to Commonwealth compensation would be about 400.000. The ultimate aim of the Labor Party is to have one compensation Act to cover not only Commonwealth employees but also private employees in all the Territories of the Commonwealth and to cover employees who are engaged in interstate trade and commerce and who could constitutionally be brought within the ambit of an Act of the Commonwealth Parliament. We cannot put that in the proposed Bill for a new Act because the long title of the Bill is too restrictive but. that will be the ultimate aim of a Labor Government.

There was a time when the Commonwealth led the field in workmen’s compensation lt had the best workmen’s compensation legislation in Australia. State parliaments looked at the Commonwealth for a lead. They can no longer do this because in so many respects the Commonwealth Employees Compensation Act is lagging. We look at the States to see in what respects we ought to improve our Act. Un for.tunafely, this Government after 20 years of control of this Parliament is only now picking up those advances in the State legislation. Nearly all the States - and sometimes the Commonwealth will not move until all the States have moved - have increased their rales or liberalised the conditions under which compensation is paid. We ought to resume the position we held previously so that the standard we set can filter down into the various State Acts so that in the end all employees in the Commonwealth will benefit from what we do here.

The great tragedy is that the very reason why the. Government does nol act is that what we do will ultimately set the pattern for what will become the normal standards in the 6 State parliaments. The Government’s very excuse for not giving concessions such as 4 weeks annual leave and improved working conditions is that it thinks it ought not lo set standards which employers ultimately will be forced to follow. In the field of compensation the Government feels that it ought not to set standards which may require the wealthy insurance companies and other employers to have to pay more than they are paying now. The Bill provides for many things with which the Opposition is unable to agree. We appreciate the fact that some increases will be made in the weekly payments to widows, children and people who are totally and permanently or totally and temporarily incapacitated. The increases are not enough, but they are better than nothing. They will help to fill the gap between now and when the Bill for a new Act can be dealt with. For that reason and for that reason only the Opposition agrees to the . Bill without formally moving amendments to the various clauses.

The maximum lump, sum payable under the Bill will be $12,000. Depending on the percentage of the total which the scheduled injury carries under the Bill a person will receive a percentage of $12,000. The Opposition would prefer and it is proposing in its model Bill to be considered during the Budget session that the maximum amount should not be a stated, fixed amount which requires alteration by way of amendment to the Act whenever it is necessary to bring it up to date, but should be an amount stated in such terms that, without an amendment, those who are affected by the Act will automatically get the benefit of fluctuations in the cost of living as reflected from time to time in decisions of the Commonwealth Conciliation and Arbitration Commission. For that reason we propose that the maximum amount should be stated in terms something like1 this: that the amount shall be the minimum weekly wage fixed by the Arbitration Commission from time to time, multiplied by 520, in other words, the equivalent of 1 0 years. This would give, on the presently fixed minimum wage, an amount of money equal to about $22,058 compared with the $12,000 proposed by the Government. This is not as extravagant or generous as it might appear at first blush to those honourable members opposite who are not used to thinking in these terms.

Let me remind the Treasurer (Mr Bury) of something that he and his colleagues have long since forgotten. In the’ 1911 Seamen’s Compensation Act the compensation to a seaman’s widow was equal to 3 years’ earnings of her late husband. Today the average earnings of a seaman for 3 years would be Si 8,000 as compared with the proposed compensation of $12,000. The $18,000 which was the 1911’ standard is only $4,000 less than what the Opposition proposes should be the minimum standard, and yet what we propose is nearly double the amount proposed by the Government. We regret that right up to this moment the Commonwealth Act makes no provision by way of lump sum payments to a person who, through accident, loses the senses of taste or smell. There is no lump sum payment for facial disfigurement, loss of speech, loss of sexual capacity or loss of genital organs. True, these payments are proposed in the Bill for a new Act. It is a regrettable thing that we have had to wait all these years before anything was done in respect of these matters. Another point of objection which the Opposition has to the present legislation - unfortunately, this vice is carried into the proposed new Act - is that the Bill limits the amount that can be received by a person who has been paid weekly amounts of compensation for a given period, to be followed by a lump sum settlement in respect of some loss of limb or faculty. “Mr Cope- What is a faculty?

Mr Clyde Cameron:

– A faculty would include your sexual organs, if that is what you are mainly concerned with. You are covered. The Bill provides that all weekly payments made to a person who receives a lump settlement in respect of, say, the loss of 2 legs or an eye or 2 eyes or a leg and an arm shall be deducted from the lump sum payment - that is, if the lump sum payment and the weekly amounts combined exceed $12,000. We object to this. Many of the State Acts make no such deduction. We believe that the lump sum payments fixed under the Act for a specified injury ought to be payable in addition to the weekly compensation paid, pending the final settlement of the lump sum payment. Unfortunately, that is something that we cannot incorporate in this Bill.

We believe also in the principle of no loss of wages during the period of total incapacity, whether permanent or temporary. When I spoke on this matter in 1964, 1 mentioned that even in Bulgaria then the principle of no loss of wages was accepted as normal. In some of the Scandinavian countries the same applied and 1 said then - I have not checked it - that in West Germany the same old position applied. I looked up the 1969 edition of the ‘Encyclopaedia Britannica’ on this matter and I discovered that since then other countries have introduced the principle of no loss of pay during periods of incapacity following an accident at work or following disabilities due to an industrial disease. There are the United Soviet Socialist Republic, Yugoslavia, Argentina, Brazil and Mexico. Some of those countries that I have named are not rich countries. At least one of them is very poor; yet it can afford to recognise the principle of no loss of pay.

The no loss of pay principle for injured workers is Dot new to the compensation and industrial laws of New South Wales. It is nor new to the standards recognised in some of the other States. Indeed, ever since 1936 the New South Wales legislature has recognised this principle in the enactment of section 124 (1) of the Transport Act and section lOOB(l) of the Government Railways Act. These 2 Acts cover a very substantial segment of the work force in New South Wales. The 2 sections already mentioned provide in effect, that an employee who is incapacitated by an injury arising out of and in the course of his employment so as to be unable to perform the duties of his classification, shall be paid not less than the salary for the time being payable to employees with the same classification and with the same length of service.

The no loss of pay principle has also been introduced by consent of employers to cover employees of the Electricity Commission of New South Wales, the Sydney City Council and the Sydney County Council, which incidentally, is the largest local government employer in Australia, and also workers employed throughout the electricity supply authorities and local government councils of New South Wales. A typical example of the type of benefit introduced by the instrument of an industrial award may be found in clause 16 (b) of the Electricity Commission (Wages Staff) Award. It is known that many employers in private industry also make up an injured worker’s compensation payment to his full rate. I know of many employers in South Australia who insure separately and additionally to cover the difference between the maximum amount payable under the Workmen’s Compensation Act of South

Australia and the wages which a worker would otherwise be receiving.

The reasoning of the Government in its attitude to this question seems to be quite odd. The Government seems to assume that during his per od of incapacitation a worker eats less, his wife and children can live on less, the rent is less, the electricity supply costs less per unit, the gas company charges less and it does not take as much electricity to heat the bath water or to cook the food. The Government assumes that in some magical way the cost of living of a worker is less during a period of incapacitation than when he is working. If this is not the reasoning, the only other explanation for making a ‘person accept less than his normal wages during periods of incapacitation is that the reduction :s a punitive measure imposed upon the worker. Presumably the penalty is imposed because of the assumption that the worker deliberately injured himself, deliberately allowed hrs eyes to be struck out, deliberately allowed one of his limbs to be cut off or, perhaps, deliberately allowed himself io run the risk of death. This is sheer nonsense.

The fact is that when a worker is in hospital recovering from an industrial injury the cost to the household is greater than normal. The wife and children still have to be fed. In addition, in all cases in which normal family relationships existed, the wife and children would travel to the hospital and back again each day and would have to pay the cost of fares. Fruit and other little things would also have to bc taken to the sick man while he was in hospital. His financial position would not bc much belter when he returned home because friends would come to visit him and his wife would feel obliged to supply them with cups of tea and so on. All in all. the expense is greater and not less when the breadwinner is not working, but the Government has adopted the attitude that such a person should not receive the full amount to which he would normally bc entitled if he were working. The Australian Labor Party will be proposing a Bill which is in line wilh the policy of the Australian Council of Trade Unions and of the Labor Party to provide for no loss of wages during periods of incapacitation, so that once again there will be no incentive to become involved in common law actions for damages, which result in tremendous delays and costly litigation, because a person will be regarded as having the right to continue to receive his full normal wage.

The Government proposes to pay the widow of an employee who is killed in the course ot his employment a lump sum of only $12,000 and then to wipe its hands completely of the matter. The Government will not care one iota what becomes of the widow once it has salved its conscience with the payment of $12,000. The Government’s attitude typifies the attitude to compensation :n every State in the Commonwealth. It is a careless, slipshod and lazy way of administering justice. To fix an amount of only $12,000 is an unreal and miserly way of assessing the actual loss to a widow of her breadwinner. A lump sum of $12,000 is little enough for an elderly widow without children. It is, however, criminally inadequate for a young widow with small children to feed, clothe, educate and shelter.

Speaking personally, 1 would like to see a widow with dependent children paid a weekly compensation equivalent to the income of her deceased breadwinner for the whole period of her children’s dependency and, say, 75% of that amount thereafter until her death. Such weekly payments should be assessed, pf course, at. a figure-

Mr James:

– What if she remarries?

Mr Clyde Cameron:

– I will come to that in a moment. Such weekly payments should be assessed at a figure equal hot only to her late husband’s normal earnings but should also include overtime, etc. Even in cases where a widow remarries a sufficient portion of her- original weekly compensation should continue to be payable to her deceased husband’s children for the full period of their dependency. For those reasons we reject the concept that a flat lump sum payment of $12,000 is proper compensation to the widow of an employee who dies as a result of an industrial accident or disease. If $12,000 is an adequate sum to pay a wife who is widowed at 60 years of age and who has no dependent children to maintain, it is surely axiomatic that the same amount must be totally inadequate for the mother of 2 or 3 little children who is widowed at 30 years of age. Conversely if SI 2,000 is adequate for a 30 year old widow with dependent children it must be excessive for a 60 year old widow without children. Noone will advocate any proposal that a woman should make a profit from the death of her husband, but no-one I hope will want to see a woman lose from such an event.

We reject the proposition that an employer can properly discharge his responsibility to the widow by merely paying some lump sum and then wiping his hands of the whole matter. There is no formula by which one can determine a lump sum payment of compensation that will guarantee the security of the dependants and will also give due regard to a deceased employee’s age, earnings and commitments. We are therefore left with only one way by which we can guarantee that the dependants of such a worker will not be disadvantaged by his death, and that is to pay the dependants weekly compensation of whatever would have been the average weekly earnings of the breadwinner but for his death. As I have already said, the only modification I would make to such a rule is, in the case where there were no dependent children, that the weekly payment could be modified or reduced to, say, 75% of the weekly earnings which the breadwinner would have earned but for his death.

I have mentioned that it may be argued that the adoption of the principle of no loss of earnings is too generous or beyond the capacity of industry. I. can anticipate the pinch penny arguments that will be advanced by Government speakers against such a proposal. They will discover that after the breadwinner’s death there would be one fewer mouth to feed, that the widow can save a few grains of sugar or salt or a few specks of pepper when cooking for one fewer person, that there would be a small saving of shoe polish, that there would be a spoonful of jam saved on each meal or perhaps one spread of butter fewer. Then of course it may be possible with care to put fewer tea leaves into the teapot. These miserable little economies will loom large in the parsimonious little minds of those who support the Government. They will neglect the fact that the widow will probably have to employ somebody to cut the lawn, to dig the gardens, attend to household repairs and perhaps repairs to the motor vehicle and the host of other things which her one- time breadwinner used to do on weekends or outside working hours.

They will forget that the weekly payments of principal and interest on the home which her late husband contracted to purchase must still go on. They will see nothing wrong with interrupting a child’s schooling at the secondary level when the aim of the dead father was to give him the advantage of a tertiary education. They will see no justification for a widow and her children indulging in such extravagances as going to the pictures, to the theatre or for a holiday or in buying toys at Christmas time. They will reject car ownership for a widow as an indefensible example of extravagance or ostentation. If a car was only partly paid for at the time of the breadwinner’s death they would expect her to accept repossession as a normal consequence. They will overlook the fact that the widow will remain a taxpayer, just as her late husband was a taxpayer, and that the rate of taxation for the widow will be higher than it would have been for her husband prior to his death. Once we honour our obligations in this matter there will come to all of us, as Australians the satisfaction that we belong to a society which refuses to shirk the responsibility which a rich and highly developed community surely owes to the dependants of people whose lives are cut short in the course of their employment.

The cost would not be as great as we may be told later in this debate that it would be. The proposal I have outlined would almost double the benefits, because the average weekly wage in Australia today is nearly double the amount which is proposed in the Bill. The amount of $22,000 which we fix as the basis for deciding lump sum payments is nearly double the amount of $12,000 proposed by the Government. So let us assume that we doubled the proposed amount. The total cost annually to the Commonwealth then would be no more than an extra $3,316,000.

Mr James:

– It is peanuts.

Mr Clyde Cameron:

– I thank the honourable gentleman for that sage remark. It is not a great amount to be paid by a country which is spending the amount we spend on things like the Fill, and in view of other enormous expenditures we incur without so much as blinking an eye. With the concurrence of honourable members I incorporate in Hansard a table setting out the amounts paid by the Commonwealth as compensation in the last 10 years.

It is clear from the table that if the total cost were doubled it would amount to only a little more than an extra $3m. I wish now to deal with seamen’s compensation. I said earlier in my remarks that the amount provided in the Bill is about $6,000 less than if the 1911 Act were still in operation. Three years earnings for a seaman at today’s average rate would be, I am assured, $18,000, compared to the amount of $12,000 that is now proposed. The amount of $12,000 payable both under the Seamen’s Compensation Bill and the Commonwealth Employees’ Compensation Bill represents a 20% increase on the previous amount of $10,000; but the weekly rates for compensation which are proposed represent an increase of only 8.8% .

It seems to me to be rather odd that the Government should justify such a small weekly increase when it is recognising the need to increase by 20% the maximum amount and the lump sum for specified injury and for the death of a breadwinner. The Government seems to have recognised its own shortcomings by the fact that it agreed to take out for a seaman employed on the ‘Jeparit’ separate compensation for an amount of $15,400 over and above the existing sum of $10,000, making a total of $25,400. It is true that the principal reason for that action was that the ‘Jeparit’ was sailing to a war zone. That is a good enough reason to distinguish between the rates payable on the ‘Jeparit’ and on other ships. Nonetheless the Government has grudgingly, no doubt, recognised the need for a higher amount.

Once again the Labor Party complains about the delays which have occurred on the part of the Government in bringing down improved Commonwealth employees compensation provisions. The demand for a better Commonwealth Employees Compensation Act started many years ago. The Labor Party had a special committee which used to meet every week and sometimes twice a week to hammer out a model Bill1. This was away back in 1956 or 1957. We were never afforded the opportunity to present that Bill and that is why we welcome the opportunity which will be opened to us in the Budget session to bring down what we regard as a model Bill in answer to the Government’s Bill. 1 place on record some examples of the procrastination which has typified the Government’s handling of this matter. Mr Paul Munro the Secretary of the Council’ of Commonwealth Public Service Organisations has informed me that he wrote to the then Treasurer, now the Minister for External Affairs (Mr McMahon), on 12th August 1969 complaining that the Act was outdated. He pointed out that it contained real bias against industrial justice. Three years before that Mr Munro and, I understand, representatives of the Australian Council of Trade Unions but certainly representatives of the Council of Commonwealth Public Service Organisations met representatives of the Government and urged them to do something about compensation and to treat it as an urgent matter.

In that letter of 12th August 1969 Mr Munro reminded the Treasurer that the Government had given repeated assurances that the review of compensation legislation expected by the spokesman to be put into effect since the Budget session of 1965, would be introduced, in the near future. He reminded the Treasurer that he had already stated:

Further delays of this kind cannot be justified; having regard to the history of vacillation and postponement in relation to the legislation, failure to enact the badly needed changes in the life of this Parliament would amount to disgraceful neglect by this Government of the just claims of injured Commonwealth employees.

On 28th August 1969 Treasurer McMahon replied to Mr Paul Munro:

I had every intention of introducing the legislation in this Budget session….. but this is nol possible because of the general election.

Both the basic and transitional legislation will be lengthy and intricate. The delay has not been due to vacillation but to -the drafting problems experienced in the Parliamentary Draftman’s office.

On 1st September 1969 Mr Munro wrote to the Public Service Board requesting the Board to consult with the Treasurer on the long delay in submitting the Bill to the Parliament. On 3rd September 1969 Mr Munro again wrote to the then AttorneyGeneral, now the Minister for Education and Science (Mr N. H. Bowen) asking that he consider the order of priorities to enable the Draftsman’s attention to be given to the Compensation Bill. On 1 2th September 1969 the Attorney-General replied to Mr Munro and stated, amongst other things:

The preparation of new compensation legislation is a formidable task that requires considerable care and research on the part of the Draftsman and cannot be completed quickly.

On 20th November 1969 Mr Munro wrote to the present Attorney-General (Mr Hughes) advising him of the previous correspondence with his -predecessor. He stated that the Council of Commonwealth Public Service Organisations: . . was deeply distressed that the manifest inadequacies of the Commonweallth Employees Compensation Act have continued for such a long period despite our frequent efforts to secure change.

To the extern that disadvantages may flow from faulty drafting, these are far outweighed by disadvantages and gross injustice which result and have resulted for years from the continuation of the existing anachronistic legislation.

On the same day Mr Munro again wrote to the Treasurer and enclosed a copy of his letter to the Attorney-General. On 28th November the Treasurer wrote to Mr Munro advising him as follows:

This legislation is being pushed forward at quickly as practicable, but as you know it represents a truly mammoth task of drafting. But it will be introduced in the autumn session.

On 9th December 1969 Mr Munro again wrote to the Treasurer expressing the hope that his promise would prove more reliable than previous promises dating back to as early as 1967, as on 19th October 1967 the Senate was told that the Bill would be introduced early in the next session. Mr Munro concluded his letter by asking that the Bill be circulated in advance of the session so as to assure its passage during the autumn session or that consideration be given to giving retrospective effect to those provisions of the Bill which the Government in June 1968 promised to include in the new Bill.

This time Mr Munro sent to the Attorney-General a copy of his letter to the Treasurer. On 16th December 1969 the Attorney-General wrote to Mr Munro stating that he shared his concern at the length of time taken in the preparation of the Bill and repeating the Treasurer’s assurance that considerable progress had been made. The CCPSO has made a comprehensive list of amendments, and ACSPA and many individual unions and lawyers practising in the field of workmen’s compensation have done likewise. I expect that in due course the Australian Council of Trade Unions will make submissions, as I said earlier. The Opposition has been working on the question of workmen’s compensation for well over 12 years. In 1964 I was assured by the Government through Mr Holt, who was then Treasurer, that the Government would be prepared to give earnest consideration to the propositions we then put forward and, because this promise was made, we decided not to press to a division the various amendments we then moved in the Committee stage. On 11th November 1964 I said, as reported in Hansard, the following: 1 have had a talk with the Treasurer on this subject and I understand from him that he is not unfavourably disposed to the suggestion that earnest and serious consideration should be given to the Opposition’s proposals.

What 1 complain about is that the Government did not let the Opposition see a copy of this Bill for a new Act until a fortnight, I think it was, after the session commenced when, according to the Government’s print number at the bottom of the Bill, it had been completed last year. This was not the sort of Bill that should have been treated as a kind of political football. It should have been treated in much the same way as the present Chief Justice when AttorneyGeneral treated the Matrimonial Causes Bill, the Marriage Act, the restricted trade practices legislation and the copyright legislation. They were not regarded by Sir Garfield Barwick as matters that ought to become the butt of political argument, and it was for this reason that he very properly circulated the Bills so that both sides of this

House could have a proper opportunity to study them. Perhaps it is not fair to expect the Opposition or those who are advising it on this matter to be able to do in 9 weeks that which the Government has taken 9 years to do. After all, the Secretary and President of the ACTU are both extremely busy men. They have nowhere near the number of staff that they should have. Certainly they have nothing like the staff and facilities that a Minister of the Crown has at his disposal.

It is not fair to expect the ACTU in 9 weeks to consider and thoroughly understand a Bill that took the Government 9 years to draft. However, I hope and I feel confident and certain that the ACTU will be able to complete its consideration of this Bill now that it is in draft form and is before the officers of the ACTU. They will not have to start from scratch and build something up, consider it and then go through the process again. They have before them something that has already been prepared in draft form. They have only to check that draft, consider it and then let the Opposition know what they think about it. After that is done we will, of course, confer with the officers of the ACTU and consider their views. I hope, therefore, that no impediment will be forthcoming which would prevent this matter being finalised in the spring session of the Parliament. I am hoping that the Government, when it is considering its Bill for a new Act, will be willing to give reasonable consideration to the various amendments that we will be proposing. We know the Government will not agree to all of them but I hope it will agree to most of them. .


– The Minister for Customs and Excise (Mr Chipp) in the debate on the Customs Tariff Bill apologised for the late hour at which that debate was brought on and said that he would try to bring on tariff Bills earlier in the session in the future to allow for a fuller debate. The Treasurer (Mr Bury) who is in charge of Commonwealth employees compensation might follow his admirable example. It is noticeable that this debate is always brought on late in the session and usually in the early hours of the morning. This does not allow justice to be done on a matter that is so vital to the interests of over 300,000 Commonwealth employees and also national servicemen militia and men serving in certain sections of the forces.

Having said that, I would like to refer to the Bills now before us. The Commonwealth Employees’ Compensation Bill is, of course, to amend the Commonwealth Employees’ Compensation Act pending the establishment of the proposed new code of workers compensation for Commonwealth employees which has already been introduced but which has been further delayed. This delay is one of a long series of delays going back as far as 1964 when the then Prime Minister stated that the amendments to the compensation code submitted by the Opposition ‘would be further considered during the forthcoming recess’. In 1967, 3 years after the first promise was made, the Minister assisting the Treasurer at the time in his second reading speech said: ] am happy to be able to inform the House that the Government has now virtually completed its examinations of the many other proposals for amendment of the Act put forward by honourable members and other interested parties in recent years and it is hoped that it will be possible to introduce amending legislation giving effect to the Government’s decisions before the end of this session.

On 6th June 1968 the treasurer at that time announced: the Government expected to submit a Bill for a new and revised compensation Act during this cession.

Towards the end of the year a Bill was introduced to amend the rates only and the Minister assisting the Treasurer at the time had this to say:

Honourable members will recall that, in his statement to the House on 6th June 1968, the Treasurer announced that the Government expected to submit a Bill for a new and revised Commonwealth Employees’ Compensation Act during this session. The drafting of that Bill, which is, by any standards, a major one, is proceeding.

That was the autumn session following the session when the legislation was expected to be introduced. Later in the year the Treasurer said in this Parliament: 1 regret to inform the House that because of a number of unforeseen difficulties which arose during the review of the compensation legislation by a committee of Ministers and later during the drafting stage, it has nol been possible to complete the drafting of a Bill that could be introduced during the pre-en: session of Parliament.

Now, 6 years will have elapsed between the first promise and the performance - that is, if the new code comes down in the forthcoming autumn session. The procrastination that has taken place is to the eternal discredit of this Government. The Treasurer should remember also that the performance falls far short of the promise that was made that a new code would be introduced. This Bril amends some of the rates to bring them up to those contained in the new code that has been withdrawn for the time being. In some respects it provides for higher rates than those in some of the States, but in many respects it falls far short of the State provisions, lt is our view that all workers compensation Acts in Australia should be co-ordinated with the objective of ensuring that uniform benefits and payments are made available to all workers covered by the Acts. I would have thought that in the new code the words by accident’ would have been deleted from section 9 (1) of the existing Act, but we find that these words are to remain in the new code. Section 9 of the Act reads:

If personal injury by accident arising out of or in the course of the employment by the Commonwealth is caused to an employee, the employer shall subject to this Act be liable to pay compensation in accordance with the First Schedule of this Act.

The words ‘by accident” are outdated. The words ‘personal injury arising out of or in the course of employment’ appear in the Acts of New South Wales, Victoria, Queensland and South Australia. The words ‘personal injury by accident’ appear in the Commonwealth Employees Compensation Act and in other Acts such as the Seamen’s Compensation Act, the Northern Territory Compensation Act, the Australian Capital Territory Compensation Act and the Papua-New Guinea Compensation Act. ‘Personal injury in the course of employment’ are the words that appear in the Tasmanian Act. It is clear that the words ‘by accident’ have for all practical purposes been deleted from the majority of the other Acts. It is very important to remember that a worker could be injured by radiation or some other means without an actual accident having occurred. Claims could be lost because the facte were such as to make it impossible to prove that something in the nature of an accident occurred. In those circumstances, the burden of proof that there had been an accident could not be discharged. 1 emphasise that point, and I hope that some consideration will be given to it when the Minister is giving further consideration to the new code.

Under the First Schedule of this Bill the weekly rate of compensation for an employee without dependants will be increased to S3 1.80, for a dependent female to $7.70 and for a child to $2.80- making a total of $45.10 a week for a man, his wife and 2 children. 1 ask the Treasurer to consider the case of a worker with a wife and 1 child who may be off duty with a hernia which has been accepted as compensable. With his injury, the period off duty is usually 13 weeks; it is certainly 13 weeks if he is doing arduous work. Let us assume that his salary is the average adult wage of $72.80 a week, which was the average adult wage - for the September quarter of 1969. Since then it has increased but we will not take the highest average wage at this particular stage; we will treat it as though it was $72.80 a week. Under this legislation, this man, his wife and 1 child, would get S42.30 a week, so that over 13 weeks his loss in salary would be $396.50. This loss of earnings could be a tremendous loss for the family unit, particularly for the young married man who has commitments for furniture and maybe the purchase of a home. Hire purchase companies have to be paid, as does the mortgage on the home. A worker injured on duty should receive his average weekly earnings; he should not lose financially.

The Australian Council of Trade Unions has adopted the principle that a worker who is deemed to be totally or partially incapacitated for work should be entitled to receive during the period of his incapacity the amount of weekly earnings he would have received but for his injury. There is a justifiable reason for that amount being paid. Why should a worker and his dependants suffer a substantially reduced rate of earnings in the circumstances I have mentioned? The Government not only has the basic responsibility to protect workers against industrial hazards but it also has the responsibility to ensure that when a worker is injured he and his family are justly compensated. The weekly rates provided for in the amending legislation are inadequate to meet the average family needs.

As the honourable member for Hindmarsh (Mr Clyde Cameron) has pointed out, the principle of no reduced income does apply in some of the New South Wales Acts. After a period of incapacity most workers find themselves in considerable debt for some time. It is not uncommon to hear of injured workers having to obtain personal loans from banks and other borrowing sources in order to make ends meet while they are incapacitated for work. I mentioned the case of a worker who was off duty with a hernia and receiving Commonwealth employees compensation. After being off duty for 6 weeks on compensation he went on to his accumulated sick leave for the remainder of the 13 weeks of his incapacitation. He could not afford to stay on the reduced rate provided under the compensation Act. All Workers Compensation Acts already have built in safeguards to ensure that only legitimate claims are met and that compensation payments are made only while the worker is actually incapacitated for work. That is a principle which should be applied and it is supported by the Australian Council of Trade Unions and by the Australian Labor Party. The honourable member for Hindmarsh pointed out that this provision already appears in some legislation. I do not propose to quote details of that legislation.

I draw attention to the fact that in his second reading speech the Treasurer (Mr Bury) said that the new code would be reintroduced at a later time, suitably varied to take account of the situation that has emerged. He said:

I said that the Government’s mind was not closed so far as that Bill was concerned and that we stood prepared to consider on their merits suggestions for amendments during its passage.

I hope that the points already mentioned will be carefully noted and considered before the new code is introduced. I note that in clause 29 of the new code provision is being made for reimbursement of the cost of repairs or replacements of artificial members and aids damaged or destroyed as a result of accident. I draw to the attention of the Treasurer the fact that there is no provision, as there is in the New South Wales Act, to cover the cost of examinations and prescriptions in connection with the repair or replacement of such articles. Nor is there provision for damage to clothing, as there is in the New South Wales and South Australian Acts. 1 note too that in the case of the death of a worker the compensation payable to his children to age 16 or student children to age 21 is higher in New South Wales than is proposed in this new code. In New South Wales the amount for a child in such circumstances is $5 a week. In the proposed new code it is at least a lump sum of $280 or $2.80 a week.

It is true that the amount for a widow will be $12,000 under the new code. In New South Wales the amount is $10,000, but no doubt it will be adjusted before the end of the year when that legislation is being reviewed. But, even taking that into account, the New South Wales Act is better where there are children.

Let me took at a situation which could arise. I take the example of a wife and 3 dependent children aged 6, 10 and 12, and the total amount which is received until the children reach the age of 16 years. Under the New South Wales legislation the total amount payable would be $15,200. Under the new Commonwealth code it would be $14,912. The advantage under the New South Wales Act would be even greater in that example if the children remained at school after reaching 16 years and up to the age. of 21 years. Both the New South Wales Act and the new Commonwealth code arc better in this respect than any other State Acts under which lump sums are payable for a child, ranging from $200 in the case of Victoria to $300 in the case of Queensland. The weekly payments are $5 in the case of New South Wales and $2.80 in the case of the Commonwealth. lt is surprising to see that under clause 42 (1.) of the new code the amount allowed for funeral expenses for a deceased worker remains at $120. The amounts are $160 in New South Wales, $200 in South Australia and $163 in Western Australia. In Victoria reasonable expenses are allowed. In Queensland and Tasmania provision for funeral expenses is included in the amount allowed for medical expenses. The cheapest funeral now would cost at least $160 and cremations would cost very much more. I suggest that the Treasurer should review the maximum of $120 that is provided for funeral expenses in the new code. Surely it is not reasonable to leave the amount allowed for funeral expenses at that very low figure, lt is pleasing to see that compensation will be paid under the new code for loss of power of speech and for facial disfigurement However, we are not satisfied with the amounts that are provided. We would also like to know why no provision is made for toss of sense of smell or taste, as is made in the New South Wales Act under which $600 is allowed, which is little enough. The Treasurer might look at that point.

The Commonwealth Employees’ Compensation Act, which in many respects provides benefits which are below the. standards of benefits provided in some of the Slate legislation, applies also to our national servicemen and to members of our militia and our Regular Army. If these lads are injured or meet their death by accident arising out of their service, they or their dependants, as the case may be, come within the ambit of this Act. That is before (he servicemen go overseas or after they return. They should be covered by the Repatriation Act from the time they enter the Services. It is ridiculous that men training for wars, who are subject to greater dangers than they would meet in their ordinary working life, should come under the provisions of the Commonwealth Employees’ Compensation Act. These men could be training with live ammunition or operating tanks. We ask that this matter be given consideration in future legislation.

Whilst we claim that our national servicemen and members of our militia and our Regular Army should come within the ambit of the Repatriation Act from the time they enter the Services, the fact is that they now come under the provisions of the Commonwealth Employees’ Compensation Act. Consequently it should be the model Act in Australia, if for no other reason than that. It should contain the best possible provisions for our servicemen. It should not be worse in any respect than any of the State Acts. The fact that the Commonwealth Employees’ Compensation Act covers our servicemen is an added reason why the Government should be condemned for delaying the long promised amendments to this Act. Whilst we reluctantly accept the improved benefits to be provided under this Bill - even though they are long delayed - we want to make it clear that we are not satisfied with them and that when the new code is being debated in the next session we will take the opportunity, as the honourable member for Hindmarsh mentioned, to introduce amendments which, if carried, as we hope they will be, will make the Commonwealth Employees’ Compensation Act the best Act in Australia and a model Act for other countries to follow.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3455


Second Reading

Consideration resumed from 4 June (vide page 2959), on motion by Mr Bury:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3455


Second Reading

Debate resumed from 4 June (vide page 2961), on motion by Mr Bury:

That the Bill be now read a second time.

Treasurer · Wentworth · LP

Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate is resumed on this Bill, I should like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Loan Bill, as they are associated measures. Separate questions may, of course, be put on each of the Bills at the conclusion of the debate. I suggest, therefore, Mr Deputy Speaker, that you permit the subject matter of the 2 Bills to be discussed in this debate. ‘


– Is it the wish of the House to have a general debate covering the 2 measures? There being no objection, I will allow that course to be followed.

Melbourne Ports

– Of course, I regret that these measures are to be dealt with at this time of night and in these circumstances.

Mr Turnbull:

– It is absolute stupidity.


– It is; I can agree with my new friend that it is absurd, but we have agreed to what is described as a cognate debate, although in a sense the measures are entirely different. I indicate that the Opposition intends to oppose the Loan (Defence) Bill, under which it is proposed to borrow $10Om from the United States of America, although I will only formally oppose it tonight as I do not want to divide the House. Nevertheless, we will oppose that Bill while, with regard to the Loan Bill, which the Treasurer (Mr Bury) has described as a technical measure, we offer no objection. Regarding the Opposition’s reasons for opposing the loan from the United States of America of $100m for defence purposes, basically we think that defence should be paid for as we go. It is an expendable item for which we should not incur debt or borrow, overseas. Australia has a deficiency of reserves at present, if we have to procure defence equipment overseas. After all, we have had the fiasco in recent times of the Fill. In the course of his speech, the Treasurer was careful to point out that none of the $100m would go on the ill-fated Fill venture. In fact, he has implied that he still has $75m unspent on that account for which authority has already been given. The other rather peculiar aspect of this measure is that although it is a Loan Bill the loan has not yet been arranged. The Treasurer used the following rather curious words:

It is expected that the Export-Import Bank of the United States will provide the loan funds to be raised under this legislation. We are at present negotiating with the Bank for this purpose, and the Bill has been drafted to provide authority for the Commonwealth to accept the usual provisions of Export-Import Bank loan agreements.

I am not sure what he means by ‘the usual provisions’. No rate of interest is quoted, and it seems to me to be a peculiar kind of exercise to ask for a blank cheque, as it were, with interest rates being as high as they are at present and with borrowings being raised overseas at a rate as high as 9%. No term has been quoted. 1 would have thought that at least the term should have been arranged before the sanction of the House was sought. Briefly those are the reasons for objection to this measure. I maintain that for defence we should pay as we go. We certainly should not borrow in the United States on terms that are not even set down. So much for that measure.

I now want to say one or two things about the second of these measures which I think the Treasurer described as virtually a machinery measure to enable the Government to carry out policies approved under the various Acts authorising expenditure, the raising of revenue and financing transactions. He claims that the measure is necessary to authorise,- if need be, what is known as the Government deficit in this particular year. Broadly, the Commonwealth Government aims to raise and to spend sums in the region of $7,000m. That is roughly the expected revenue from all sources. The expenditure is almost a like amount, but there is a difference of $30m, a deficit. Tn other words, spending is to exceed potential revenue by the sum of $30m. The rather curious thing about the Budget documents these, days is that we seem to have more documentation but in many respects the whole thing is becoming harder to comprehend. We now have attached to the Budget Speech when it is brought down a document known as Statement 6 which presents the Budget in what is described as national accounts form. When the Budget is laid down, whilst technically every dollar that we spend has to be accounted for, nevertheless in the course of a year there are a. number of transactions which the Government is not able to predict in advance. Reading such information as is available to us, it seems that certainly the outcome at this stage of the year is far from being clear, and the picture is certainly very much different from what it was at this time 12 months ago.

I should like to quote from the latest monthly summary issuing from the Treasury of Commonwealth financial transactions for 1969-70. It deals with the situation to 31st May 1970. They are the latest figures available to me. The Treasurer may have some later figures. In the course of his second reading speech on this Loan Bill he indicated that there had been a different result in the overall loan market this year from that which had been expected. The main reason seems to have been that this year there was a greater degree of redemption of loans than on previous occasions. In other years, as Joans came due for conversion the tendency was for people to put the- money back into new loans. However on recent occasions they have chosen to redeem the loans - in other words, they have asked for their cash and have put it into something other than government securities.

It seems to me that this makes a considerable difference to the potential situation. The sums involved amount to about $500m, or 2% of the gross national product. Whether people convert their loans and put their money into private rather than government activity can make some overall difference, certainly to the Budget situation and perhaps to the total economy.

Interesting differences have arisen in the I I months to 31st May 1970 compared with what happened in the 1 1 months to 31st May 1969. In 1969 the then Treasurer had from the United States more than $62m in defence credits. This year the sum availed of has been only $18.5m. In 1969 the Government obtained borrowings abroad amounting to $105m whereas this year there has been repayment of moneys overseas to the extent of nearly $114m. There is a fairly significant difference in aggregate. Whereas last year the Government had nearly $168ra available from overseas sources, this year there has been a net retirement on the overseas account of approximately $95m. There has been a marginal difference of about $250m on that account.

The next item which is significantly different from that of last year relates to loans in Australia. At 31st May 1969 the net proceeds of loans in Australia was $367m. This year it was only S242m. So there is an adverse difference of $125m. The next item also reveals a considerable difference this year against that of last year. I refer to the change in treasury notes on issue. In the 1969 period there was a reduction of S19m whereas this year there was an increase of $116m. That has been used mainly to finance the wheat pool arrangements. As honourable members know, we have a lot of wheat that we cannot sell but under the arrangements an advance is made to the growers. The Treasury has financed that by recourse to treasury notes. Net advances to the Australian Wheat Board this year show a debit of $2 18m. Until 31st May 1969 there had been actually a retirement of borrowings from the Reserve Bank of $133m. This year actual borrowing from the Reserve Bank to the end of May has been J 100m. Again that shows a net difference of $233m. 1 was interested to see the other day that the Treasurer hopes to be the first Treasurer to present what are known as ‘forward estimates of expenditure’. I would have preferred the Treasurer to do what was done in the United Kingdom in respect of this matter, that is, to issue what is known as a Green Paper - not a White Paper. This Paper was prepared and presented in April 1969. The explanatory note at the beginning of the Green Paper deals with- certain aspects of the relationship between the Executive and Parliament in the held of public expenditure, lt continues to explain that it sets out a number of proposals for changes in present arrangements which the Government is submitting to the Select Committee on Procedure for its consideration. The explanatory note concludes by saying ‘ that in view of the importance of the subject the Government is issuing the Green Paper so that its proposals may form the basis of wider public discussion.

I submit with all respect to the Treasurer that there is need for a certain amount of public discussion in Australia also on these matters. I commend lo him the suggestion that he issue in advance noi so much the actual figures but an indication of what he proposes for this 5-year estimate, lt would be in no sense binding for the 5 years but would be an estimate for as far as could be seen at that stage. In Great Britain this system arose from the recommendations of an earlier committee, known as the Plowden Committee, which said that regular surveys should bc made of public expenditure as a whole over a period of years ahead and in relation to prospective resources. So as well as anticipating what the expenditure will be some attempt could be made to assess what the revenue might be. Of course it would be necessary to presume the continuance of tax rates at the same rate; it would not be possible to indicate that in 3 years time the rate of income tax would be increased.

There are certain limits to forward planning. Nevertheless, there is an indication that public expenditure is not something that we think about only at the time of a Budget but that it has a relationship to what has been done before and what is expected to flow from that into the years ahead. I am glad that we are to have something of that kind, but 1 think the Treasurer might have educated us a bit better if he had adopted the same practice as has been introduced in Great Britain. Had the hour not been so tate 1 would have liked to go further this evening into what seem to be some limits of the Budget in the context of the Australian situation as we find it. I think I mentioned the other evening in the course of another financial debate that we have virtually thrown away fiscal policy in Australia as a weapon. Because of that we have to rely more than we should on monetary policy. Monetary policy for the most part, when it is applied in Australia, is applied in the form of the bludgeon of rising interest rates. 1 would commend to the Treasurer observations that were made in the most recent issue of the ‘Australian Economic Review’ published by the Department of Applied Economics at the University of Melbourne. This document, which contains a survey of the Australian economy up to the end of the March quarter, points to some of the difficulties that arise from the pay-as-you-earn method of taxation, under which, broadly, the same amount of deductions is collected each month. But in the first 2 months of the financial year and even in September very heavy refunds are made to taxpayers out of the Commonwealth account, and subsequently these amounts find their way into the banking system and there is an increase in liquidity in those months. The opposite situation prevails in the period from March to June when what are called the larger taxpayers begin to get their provisional assessments and when companies have to pay their taxation. During those months we get what is called a run down in liquidity. This of course makes for some difficulty in the Australian context. Certainly the difficulty is compounded if we are not being very successful in our debt management or loan market transactions. This, it seems, is the situation the Treasurer believes we hit in the Australian economy a month or two ago.

I must say that I concur with the general observations in the ‘Australian Economic Review’. 1 made the same sort of criticism in this House some month or two ago when these matters were discussed. I said that in essence, . pricewise if you like or in terms of inflation, the situation in Australia is not any worse than it has been for the past 5 or 6 years. It is pretty true that the drastic measures that have been applied with respect to interest rates have perhaps had one or two rather interesting side effects. One of them of course is that there has been a severe cut down on home building. The victims of that are certainly not the people .who are. responsible for the inflationary tendencies in the community. The other odd effect is that the Treasurer seems to have attracted to this country in the months of April or May a certain amount of foreign money. Whether it has come here just on a hot basis because the interest rate is higher now than it was and will flow out again after a short period, I do not know. But at least it may tide the Treasurer over what he thought would be a balance of payments difficulty.

Nevertheless I think all .of this points to some need at least to refine the situation in Australia in order to control these waves of economic activity which gives us too much liquidity at some times and too little liquidity at other times. A publication called ‘Trans City Discount Limited Money Market Review News Letter’ for May 1970 stated:

The Commonwealth’s borrowings from the Reserve . Bank had reached an awe inspiring $8 18m at the end of December but had fallen to $537ra by the end of March. Cash in the system was then already tightening and the excess of revenues over expenditure by the Commonwealth for the final quarter still to come was estimated at some $900m. Such a contraction coming after 2 years of easy money when a high flying stock market had been accompanied by a proliferation and expansion of non-bank financial intermediaries, could only have a very severe impact on an over extended credit base.

That points to the very wide fluctuations that have taken place in the recourse to Reserve Bank credit During the time when the money has not flowed in and the bills have continued to come in, the Commonwealth has to have some means of meeting its obligations. Nevertheless, the system is of such a kind that the economy does get these very big troughs and reverses of troughs in the course of a financial year. This year some of the difficulty was compounded by reason of the difficulty with respect to the loan market. The principal difficulty there was that the people who had the option of converting did not convert but chose to take their cash instead. It will be rather interesting at the end of June, when the final wash up comes, to see what the final picture actually is. It certainly is very much different from what it was 12 months ago, although on that occasion the Treasurer was budgeting for a much smaller deficit than for the previous year. This is what he said:

This year we expect the Budget to produce a domestic surplus of about $500m. This would withdraw a similar amount from the money supply.

I am not sure that that kind of situation has not been confounded by results. Because of transactions that the Government has had to indulge in this domestic surplus of about $500m has not been produced but rather what has happened is that the Government has an excess of action in what might be called the private sector of the economy as against what the Government anticipated would be the situation in the public sector. I am not too sure that the Budget forecast has not come unstuck. I would be interested later on, perhaps on some other occasion, if the Treasurer might expand a little upon that theme. It is not very fair to have to talk about this matter and to listen at this time of night. It is a very unsatisfactory kind of situation. The House has before it two measures that involve in aggregate about $130m. They came on at about 2.45 a.m. There will be no further opportunity until the next Budget to discuss them more fully. I certainly register my protest at the way in which important business of this House is being transacted.

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 Bury) read a third time.

page 3459


Second Reading

Consideration resumed from 5 June (vide page 3083), on motion by Mr Bury:

That the Bill be now read a second time.

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 Bury) read a third time.

page 3459


Second Reading

Debate resumed from 4 June (vide page 2964), on motion by Mr Bury:

That the Bill be now reada second time.

Mr DEPUTY SPEAKER (Mr Lucock)Is it the wish of the House to have a debate covering the 5 measures?


– Let us deal first with the suggestion of the Treasurer for a debate on all the Bills together, they being cognate measures. Is it the wish of the House to cover the 5 Bills in the one debate? There being no objection, I will allow that course to be followed.

Debate (on motion by Mr Crean) adjourned.

House adjourned at 3.19 a.m. (Friday)

Cite as: Australia, House of Representatives, Debates, 11 June 1970, viewed 22 October 2017, <>.