House of Representatives
13 October 1970

27th Parliament · 2nd Session



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

page 1997

DISTINGUISHED VISITOR

Mr SPEAKER:

– I have to inform the

House that Jose B. Laurel Jnr, Speaker of the House of Representatives of the Congress of the Philippines, is within the precincts. With the concurrence of honourable membersI propose to provide him with a seat on the floor of the House.

Honourable members - Hear, hear! (Mr Laurel thereupon entered the chamber, and was seated accordingly.)

page 1997

PETITIONS

Air Transport

Mr PEACOCK:
Minister Assisting the Prime Minister · KOOYONG, VICTORIA · LP

– I present the following petition:

To the honourable the Speaker and members of the House of Representatives in Parliament assembled.

This humble petition of electors of the Division of Higgins in Melbourne,, Victoria, respectfully sheweth that the price of air travel at present is such that it cannot be afforded with any degree of frequency by the ordinary citizen.

Your petitioners therefore humbly pray that the Government give full, prompt and unbiased consideration to the airbus proposal of Mr Peter Wood, which is directed at reducing air fares by the establishment of a cheap system of air transport to be based on a suitable, locally made, two engined aircraft.

Your petitioners particularly urge the setting up of a trial airbus system and as in duty bound will ever pray.

Petition received and read.

Social Services

Mr McIVOR:
GELLIBRAND, VICTORIA · ALP

-I present the following petition:

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Victoria respectfully showeth:

That due to the higher living cost, persons on social service pensions are finding it extremely difficult to live in even the most frugal way.

We therefore call upon the Commonwealth Government toincrease the base pension rate to 30 per cent of the average weekly male earnings for all States, as ascertained by the Commonwealth Statistician, plus supplementary assistance and allowances in accordance with A.C.T.U. policy and adopted as the policy of the Australian Commonwealth Pensioners’ Federation, and by doing so give a reasonably moderate pension.

Your petitioners most humbly pray that the Senate and the House of Representatives in Parliament assembled with take immediate steps to bring about the wishes expressed in our petition: so that our citizens receiving the social service pensions may lire their lives in dignity. And your petitioners, as in duty bound, will ever pray.

Petition received and read.

Kangaroos

Mr FOX:
HENTY, VICTORIA

– I present the following petition:

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled: The humble petition of the residents of the State of New South Wales respectfully sheweth:

  1. The red kangaroo and many other marsupials, through shooting for commercial purposes have been reduced to a numerical level where their survival is in jeopardy.
  2. None of the Australian States have sufficient wardens to detect and apprehend people breaking the laws in existence in each State, and in such a vast country only uniform laws and a complete cessation of commercialisation can ensure the survival of our National Emblem. It is an indisputable fact that no natural resource can withstand hunting on such a concentrated scale, unless some provision is made for its future.

We, your petitioners, therefore humbly pray that:

The export of all kangaroo products be banned immediately, and the Commonwealth Government make a serious appraisal of its responsibility in the matter to ensure the survival of the kangaroo.

And your petitioners, as in duty bound, will ever pray.

Petition received and read.

page 1997

DISTINGUISHED VISITORS

Mr SPEAKER:

– I desire to inform the House that Mr Jose B. Laurel Jnr, who is the joint leader of a delegation from the Congress of the Philippines, and members of the delegation are at present in the Speaker’s gallery. On behalf of all honourable members I extend to them a very warm welcome.

Honourable members - Hear, hear!

page 1997

NOTICES OF MOTION

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I give notice that at the next sitting I shall move that the Commonwealth should provide now $100m for assistance to the wool industry.

Mr SNEDDEN:
Minister for Labour and National Service · BRUCE, VICTORIA · LP

– I give notice that at the next sitting I shall move that Government business shall take precedence over general business tomorrow.

page 1998

SENATE ELECTION

Mr GORTON:
Prime Minister · Higgins · LP

– by leave - When I informed the House on 1st October that the Government proposed that the next Senate election should be held on Saturday, 21st November 1970, I undertook to give full details of the timetable when replies had been received from the States. 1 am now able to say that all States are in agreement with the timetable, which is as follows: Issue of writs, 16th October 1970; close of nominations, 29th October 1970; polling day, 21st November 1970; date for return of writs, on or before 7th January 1971.

page 1998

MINISTERIAL ARRANGEMENTS

Mr GORTON:
Prime Minister · Higgins · LP

– I wish to inform the House that the Minister for Primary Industry (Mr Anthony) left Australia on 7th October to represent Australia in Fiji at the independence celebrations. Mr Anthony is expected to return to Australia on 15th October, and during his absence the Minister for the Interior (Mr Nixon) is Acting Minister for Primary Industry.

page 1998

QUESTION

ADDRESS BY PRESIDENT NIXON

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Minister for External Affairs a question. When did the Australian Government receive its advance copy of the address delivered by President Nixon at 11 o’clock last Thursday morning eastern standard time? When did the Minister receive or see a copy, and when did he consult with the Prime Minister or officers of the Prime Minister’s Department on the Australian reaction to President Nixon’s statement?

Mr MCMAHON:
Minister for External Affairs · LOWE, NEW SOUTH WALES · LP

– Elements of the President’s statement were forwarded to the Prime Minister on Wednesday morning. He immediately contacted me and asked me to come up here. He made a VIP aircraft available for me to get here as soon as J could. I came up and discussed it with him on Wednesday afternoon. In the meantime, with the assistance of my officials, 1 drafted certain comments which I offered to hand to the Prime Minister at 11.30 on Wednesday night. He suggested that it would be better for me to leave it until first thing in the morning. As to the full text of the President’s speech I received it at approximately the same time and possibly a little earlier. One or two minor amendments were made to the text at a subsequent time. That was early on the morning of Thursday, probably about 10 minutes to or 10 minutes past 9. Any statement to the contrary appearing in any publication or newspaper is totally wrong and the Leader of the Opposition has a totally false impression.

page 1998

QUESTION

MIDDLE EAST

Mr GRAHAM:
NORTH SYDNEY, NEW SOUTH WALES

– My question is addressed to the Minister for External Affairs. I refer to the crisis in the Middle East. Has the Minister heard of the comments made by the United States Secretary of State, Mr Rogers, about the movement of USSR surface to air missile sites into the Suez Canal zone? Has he any precise and confirmed information about these missile installations, installed in defiance of the ceasefire arrangements? Does this information confirm the flexibility of Communist integrity?

Mr McMAHON:
LP

– This question must be judged against the recent background of the activities of the Union of Soviet Socialist Republics, particularly its naval operations in the seas and oceans of the world, including the Mediterranean Sea; the difficulty that has been experienced with the negotiations amongst the 4 powers over West Berlin; the problems of the conclusion of the strategic arms limitation talks; and now a development which I believe is as bad as any of those, the movement of SAM1, 2 and 3 sites into the Canal zone. There is no doubt at all that despite the agreement that was reached between the USSR and the United States of America a large number of SAM2 and 3 sites have been moved. The SAM3 sites are manned and operated by USSR personnel and there can be no doubt whatsoever that USSR personnel as well as armaments are in this zone. The agreement was that there would be a ceasefire and no movement of any kind of arms or equipment into this zone.

Consequently, against the background that I have mentioned, recent developments have thrown a great question mark upon the integrity of the USSR. It is highly regrettable that these arms and equipment should have been moved at this time, when it did appear as though it was possible for Mr Jarring, the United Nations mediator, to get negotiations under way. These movements have, I think, invited retaliation from other countries. They are particularly regrettable in view of the fact that there had been a ceasefire between the Jordanian and Palestinian and Syrian forces and consequently it appeared that there was some prospect of a settlement. I can make no other comment than this: It is a matter of great regret that these movements have occurred. Verification has been possible by U2 flights and other methods of identification and there is no doubt whatsoever that these SAM 2 and 3 sites have been moved. It is also most regrettable that this has caused some pause not only in the negotiations for a ceasefire but also in negotiations for peace in the Middle East which it was hoped to arrange.

page 1999

QUESTION

LIBERAL PARTY OF AUSTRALIA

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I direct a question to the Minister for Labour and National Service. I ask him: Has his attention been drawn to a report that a member of (he Communist Party will be a guest speaker at a meeting of the Northern Suburbs Branch of the Liberal Party on 20th October next to speak on the subject ‘Modern Aspects of Trade Unionism’? If so, is this an indication that the Liberal Party’s new approach to peace in industry will be based on Communist philosophy, and if so, whether it will follow the Moscow or the Peking line? ls it also a fact that all members of this Branch will be photographed and screened and that their portraits will be filed in the archives of the Australian Security Intelligence Organisation to be turned up when the revolution comes?

Mr SNEDDEN:
LP

– The logical inconsistency of the honourable member is well known to us and it has been manifested in its highest form today. The Liberal Party of Australia, unlike the Australian Labor Party, can observe what Communists are doing without being taken over by the Communists. It is the association of the Labor Party with the Communist Party which is fraught with so much danger to this country. The truth is, of course, that Communists do get themselves into important union positions in Australia. They gel themselves into these positions by assiduously applying themselves to union work, and having attained office they then use their influence, power and position to serve their political purposes, and too often they drag by the nose unsuspecting Australian Labor Party members. I recommend that the honourable gentleman look at the Australian Labor Party for the effects of Communism rather than at the Liberal Party.

page 1999

QUESTION

HANDICAPPED CHILDREN

Sir JOHN CRAMER:
BENNELONG, NEW SOUTH WALES

– My question is directed to the Minister for Social Services. The Minister may recollect representations I made to him in connection with a subsidy under the Handicapped Children (Assistance) Act to assist the financing of a major extension to the Karonga House special school for handicapped children at Epping. Difficulties, he will remember, arose-

Mr SPEAKER:

-Order! the honourable member’s preface is far too long. The honourable member will ask his question.

Sir JOHN CRAMER:

– The Minister will remember these difficulties. The land is owned by the Department of Education-

Mr SPEAKER:

-Order! I suggest that the honourable gentleman ask his question.

Sir JOHN CRAMER:

– Can the Minister tell me whether these difficulties have been overcome so that the construction work may proceed without further delay?

Mr WENTWORTH:
Minister for Social Services · MACKELLAR, NEW SOUTH WALES · LP

– Indeed I can. I am well aware of the honourable gentleman’s interest in this institution. I recall with pleasure a visit I made in company with him a short time ago. Under the Act which this Parliament recently passed, capital subsidies on the basis of $2 for $1 can be made to handicapped children’s organisations. In making these subsidies naturally we require some assurance that the buildings which are financed will be used for a reasonable time for the purpose for which we give the subsidy. The Karonga school for handicapped children is built upon land belonging to the New South Wales Department of Education. I understand that under the New South Wales Act leases of longer than 10 years cannot be given. In the case of subsidies we normally require a lease of 21 years. But in view of these special circumstances and the fact that there is no reasonable possibility that the New South Wales Department of Education will take the land from the institution at the end of 10 years, it has been decided that the 10 yean lease will be acceptable. Therefore, as soon as we receive official intimation - we have already had unofficial intimationthat the New South Wales Government will grant the 10 years lease, we will make the subsidy immediately available so that work on building an extension to this very excellent school may continue without delay.

page 2000

QUESTION

VIETNAM

Mr BARNARD:
BASS, TASMANIA

– 1 ask the Minister for Defence a question. Is Brigadier Henderson correct in his assessment that life will be much tougher for the Australian task force in Vietnam once the 8th Battalion is withdrawn? Will the withdrawal mean changes in military operations and tactical dispositions in Phuoc Tuy province, as Brigadier Henderson has indicated? What additional South Vietnamese units will be available to assist the task force once the 8th Battalion leaves? What is the state of training of these units? In view of the publicly expressed doubts of the task force commander about its future role and effectiveness, is there any purpose in persisting with this commitment? Will the task force now be less effective, as hinted by the Brigadier?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– As the

Prime Minister announced when details of the first reduction of our commitment to Vietnam were made known several months ago, there would be qualitative changes in the nature of our commitment. The role of the task force is plainly reduced because it will be a 2 battalion task force as opposed to a 3 battalion task force. The role is reduced but the basis of what the task force is doing will be very largely the same. Obviously there will be less patrolling. [ have not seen the details of the Brigadier’s remarks beyond what was in the Press. I should not have thought that anyone would be asking those soldiers remaining in Vietnam to work or to fight harder than had been the case with the 3-battalion Task Force.

This matter needs to be judged not only in relation to our own Task Force and to the numbers in it but also in relation to the whole process of Vietnamisation, which is the increasing assumption of additional res.ponsibilties by the South Vietnamese armed forces - whether it be the Regular Army or the regional forces or the popular forces. One of the things that we have quite deliber ately sought to do - and it has already been put in train - was to announce that there would be a number of military assistance teams sent to Vietnam. A number is already inside Vietnam working with the regional forces and popular forces companies to assist in the training or further training of regional forces and popular forces in Phuoc Tuy Province. Ultimately - and I think ultimately’ will be shortly after Christmas - there will be about 15 Australian teams in the Province. This additional training effort is assisting and will assist greatly the South Vietnamese in the Province in assuming some of the responsibilities that might earlier have been assumed by the task force, in addition to this, early in the new year the jungle training centre, when it is fully operational, will be training 400 to 500 junior military leaders in South Vietnam at any one time. It will also be of assistance to the South Vietnamese military effort.

Other things have changed quite dramatically - in general, the disposition of the forces and the capacity as we have seen it over recent weeks, although this could change if a decision were made to conduct increased infiltration. The United States and ARVN operations in Cambodia quite clearly have made it much harder for the Vietcong and North Vietnamese to operate in South Vietnam, and the greatest assistance given by those operations has occurred in the third and fourth military regions. These were the sanctuaries which for years in Cambodia had been used to attack in the greatest strength. So again the operations in Cambodia have had a general effect on the military situation in South Vietnam, particularly in the southern pari of the continent. So when we are looking at what the Australian Task Force of 3 battalions, or in the future of 2 battalions, might be asked to do, it is necessary to make a considered judgment of all these factors and take them all into account.

The Deputy Leader of the Opposition also asked in his question whether there is any purpose in persisting in this commitment. Of course, from the philosophy and attitude of the Opposition there is no purpose in persisting with it. because the result of every proposal put by it to this Government about South Vietnam and the conduct of the war in South Vietnam would have made it quite impossible for South Vietnam to maintain its freedom. Labor’s proposals would have given victory to the Communist North and to the Vietcong. One thing that this Parlament should demand of the Opposition is whether the Opposition truly wants the North Vietnamese and Vietcong to win - whether that is its objective - because that is the logical conclusion of every proposal that it has put for months and for years in relation to this conflict in Vietnam.

page 2001

QUESTION

EXPO 70

Mr HALLETT:
CANNING, WESTERN AUSTRALIA

– I ask the Minister for Trade and Industry a question. Is it a fact that the United States pavilion at Expo 70 was equipped with a synthetic carpet? Is it also a fact that this carpet had to be replaced during the Exposition? Is it a fact that the replaced synthetic carpet also was worn out at the conclusion of the Exposition? Is it correct that the Australian pavilion was fitted with an Australian wool carpet which was in good condition at the conclusion of the Exposition and is to be used again? Does this not prove the superior quality and value of wool as against man-made fibres?

Mr McEWEN:
Deputy Prime Minister · MURRAY, VICTORIA · CP

– There could not have been a better occasion on which to compare the durability of carpet made from Australian wool with that of carpet made from synthetics. It has been recorded that 11.2 million people went through the Australian pavilion at Expo 70 and that15 million people went through the American pavilion, which was just slightly more. In June, the American synthetic carpet was worn out completely, was taken out and was replaced. Now, at the termination of Expo, the American synthetic carpet replacement is worn out completely and, I am advised, is of no further use. On the other hand, the Australian wool carpet which sustained the traffic of more than 11 million people is in such good order that it is regarded as completely satisfactory, when the pavilion is moved - it having been given by the Australian Government to a city in Japan - to retain the carpet therein for future use. This is a clear example of the superiority of pure wool over the synthetics for use in carpet making.

page 2001

QUESTION

BUDGET 1970-71

Mr HURFORD:
ADELAIDE, SOUTH AUSTRALIA

– -Does the Treasurer recall saying in his Budget Speech on 18th August, less than 2 months ago, that his proposals aimed to produce ‘a balanced

Budget, a Budget shaped to the requirements of … an economy still threatened by disruptive inflation’? Did not indeed the Budget estimates arrive at a small surplus of$4m? How does he reconcile this policy and also the Government’s inability to find an extra deserving amount for the pensioners of this nation with the newly announced policy of finding overnight an extra $50m for the States, as announced after last Thursday’s Premiers Conference?

Mr BURY:
Treasurer · WENTWORTH, NEW SOUTH WALES · LP

– Of course, the honourable member just picks out one item, namely, pensioners, which he thinks has a highly coloured political application. The basic overall Budget policy was for a balanced Budget. The Budget and all subsequent policy will aim at containing inflation. This in fact has been contained in reasonably good degree over the last few months.

The position following a conference with the States regarding receipts duty is not by any means as yet wholly clear. The State budgets were for the most part formulated on the basis that they would continue to receive receipts duty at the full rate for the whole of this financial year, 1970-71. It now seems probable that these receipts may well cut out by about the end of September and that the States in this case would enjoy only the receipts of one quarter instead ofthe receipts for a whole year. The precise position is by no means clear nor is the effect that it will have on the States’ finances if this comes to pass.

During the next few weeks, officials of our Treasury will have discussions in detail with each of the State Treasurers when the position will be worked out in detail. Until that has been done, the precise position is not clear. But it-

Mr Armitage:

– Where is the $50m coming from!

Mr BURY:

– The honourable member yells out: ‘$50m’ Where does he get his $50m from? Is this a calculated figure or a bit of rubbish that he has picked up from the newspapers? I suspect the latter. In due course, the figure will emerge and action will be taken accordingly. The purpose of the Budget was to restrain the excessively-rising tide of demand and this the Government in the Budget and by other measures has succeeded in doing. This will continue to be the policy.

page 2002

QUESTION

VIETNAM: STATEMENT BY ARMY OFFICER

Mr BONNETT:
HERBERT, QUEENSLAND

– Has the Minister for the Army seen reports in the Press referring to a statement supposedly made by a senior officer of the Australian Army in Vietnam, in which he took strong exception to remarks attributed to Senator Wheeldon concerning the efficiency of the artillery unit there? If so. will the Minister tell me whether he intends to take any action against the officer for making the alleged statement or will he place the blame where it really belongs and take Senator Wheeldon to task for making such derogatory remarks concerning one of the most efficient and well disciplined units in the Australian Army?

Mr PEACOCK:
LP

– J have seen the reported remarks of Senator Wheeldon and the letter written by Lieutenant-Colonel Forward, commander of the fourth Field Regiment, Royal Australian Artillery, which is currently serving in Vietnam. Whilst accepting that serving officers and soldiers should not become actively involved in politics, I would have to say that the senator’s statement must have been provocative to any soldier, and particularly a commanding officer. Members of the Opposition may always direct their criticism to the Government - to the Ministry - but. it is an entirely different matter to criticise soldiers, whether Australian or allied, who are serving together and are loyally carrying out their governments’ policies. I believe that LieutenantColonel Forward’s letter was correcting an inaccurate and misleading statement. In the circumstances I am not prepared to direct that action be taken against LieutenantColonel Forward for any alleged breaches of military regulations. So far as Senator Wheeldon is concerned. I think his own actions condemn him.

page 2002

QUESTION

COMPANY CONTROL

Mr KEATING:
BLAXLAND, NEW SOUTH WALES

– I address a question to the Prime Minister. I preface the question by referring to his stated intention to introduce legislation preventing a takeover of Queensland Mines Limited, the uranium prospector. As his initiative in this case was made possible only because the company concerned was incorporated in the Australian Capital Territory, I ask: Will he adopt a policy to give this Parliament more power over Australia’s natural resources by informing companies searching and mining for minerals, with a view to export, that the Government will not grant them an export licence for their produce unless each company concerned is incorporated in the Australian Capital Territory?

Mr GORTON:
LP

– This clearly is a question going very deeply into matters of policy and Commonwealth-State relations and I think, as such, is not a question that lends itself to answering at question time.

page 2002

QUESTION

GREAT BARRIER REEF

Dr MACKAY:
EVANS, NEW SOUTH WALES

– My question is addressed to the Minister for Trade and Industry in relation to his responsibility for tourism. Will the Minister accept a petition signed by over 600 girls of Canterbury Girls High School with respect to the preservation and conservation of the Great Barrier Reef? Will the Minister personally acknowledge the petition which, although not in the regular form required by the Standing Orders, is in respectful terms and shows an admirable concern for Australia’s natural assets on the part of the pupils of this school and which was delivered to me personally in front of the whole school?

Mr McEWEN:
CP

– Yes, Mr Speaker, I would have great pleasure in receiving the petition from the honourable member. As honourable members will know. I am assisted in the administration of the tourist activities of the Department of Trade and Industry by Senator Wright. I will consult with Senator Wright on what might best be done.

page 2002

QUESTION

COAL

Mr CONNOR:
CUNNINGHAM, NEW SOUTH WALES

– I ask the Minister for National Development: Are the New South Wales proven reserves of coking coal 1,300 million tons? Are they being depleted by over 20 million tons a year by local industry and export? Are substantial quantities of these reserves not economically extractable? Has any projection been made by his advisers of the life of these reserves in the light of (a) the annual growth of Australian steel production and (b) the soaring world demand of major steel producing nations whose reserves have been seriously depleted or are non-existent? What export guidelines has he in contemplation? Has he duly considered the repeated serious warnings on these matters by the

Joint Coal Board, the Australian steel producers and the honourable member for Cunningham?

Mr SWARTZ:
Minister for National Development · DARLING DOWNS, QUEENSLAND · LP

– The honourable member will be pleased to know that this is a matter that has received very careful attention over recent months. Indeed, we have been in close consultation with the principal States concerned in relation to the matter. As the honourable member also knows, the Joint Coal Board is an instrument of both the Commonwealth and the Government of New South Wales and has a certain responsibility in relation to the operation of the coal industry in that State. He may not have noticed, although it was stated publicly by the Minister for Mines for New South Wales, that certain action has already been taken by that State after having had discussions with the Commonwealth and also with the Joint Coal Board in relation to their reserve situation, particularly as far as coking coal is concerned but also in relation to steaming coal. What they have done there is place a type of embargo on certain areas, which have been reserved for steel and energy production purposes. This has been stated as policy by th: Minister on behalf of the New South Wales Government and, of course, has the complete support of the Commonwealth.

At. the present time, through the Bureau of Mineral Resources, we are obtaining, as far as we possibly can, full details of our reserves of all types of coal in Australia. This is being done with a view to further discussions with the States along these lines. I assure the House that this matter is being very carefully watched. We know that throughout the world today there is a tremendously increasing demand for coking coal, particularly for steel making purposes, and that the supply of this type of coal in Europe and other countries is now declining. Countries such as Australia that have big reserves are feeling the effects of this increasing demand. At the same time, while watching the situation very carefully, we appreciate the tremendous marketing opportunities afforded to us for the future - opportunities of which full advantage is being taken by the principal States concerned. I assure the honourable member that that situation is being closely watched by the Commonwealth and State governments.

page 2003

QUESTION

REVEREND IAN PAISLEY

Mr REID:
HOLT, VICTORIA

– 1 ask the Prime Minister a question. In view of the extensive public interest and concern about the possibility of the Reverend Ian Paisley visiting Australia at the same time as the Pope, will he state whether the Government intends to prevent such a visit?

Mr GORTON:
LP

– I think I should say firstly that contrary to Press reports, the Government never either made or announced any decision to prevent the entry into Australia of Mr Paisley. We did, however, when we heard that he had allegedly been invited to this country, let Australia House know that should an application be made by him to come here he should be told that the Government of Australia would regard his visit at the time of the visit of the Pope as being unwelcome to the Government of Australia. When 1 say that I believe, bearing that timing in mind, we spoke not just for the Government but for the vast majority of the people of Australia and, I should think, most of the people in this House.

Mr Cope:

– Bring Bernadette Devlin out.

Mr GORTON:

– I have no objection to Bernadette Devlin coming out either, but 1 would think that that too might be considered unwelcome if she was invited at the time of the visit of the Archbishop of Canterbury. It is the same kind of approach. We took this step not because we have any objection to Mr Paisley coming to Australia and advancing his religious views, however reprehensive they may be - I think they are; stirring up religious strife in this country is something we do not want - but because his visit was clearly timed to coincide with a visit of a Head of State and leader of a significant church. That being so, it was I think designed and probably is designed to endeavour to stir up religious bigotry and hatred in this country, which we can surely do without. That is all I have to say on that matter. The question of whether after that indication of the Government’s view Mr Paisley still intends to come here must be regarded in the light that he is a member of 2 parliaments, one the British Parliament and the other the Stormont - the Parliament of Northern Ireland - and also I think in the full confidence that even if he does arrive the vast majority of Australians would have nothing to do with the kind of demonstration he may seek to put on. That is the view and the approach of the Government on this matter.

page 2004

QUESTION

MALLARD PROJECT

Mr WHITLAM:

– I ask the Minister for Defence a question. He will remember his distinguished predecessor in June last year announcing phase 2 of the Mallard Project which he described in typical rhapsodic terms as an unprecedented international co-operative venture with the United States of America, Great Britain and Canada. I ask: What legal or financial safeguards had Australia secured against the unilateral cancellation of this project of which no inkling was given in the Minister’s Defence Report circulated lust month?

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– This project has come to an end not because of any wish of the United States Department of Defence, but because of a decision of the US Congress which was unwilling , to vote further funds despite the best arguments put forward by the US Department of Defence. There will be discussions between the Governments concerning the winding up of the project and I cannot say what might come out of them. But I think I should tell the House that of Australia’s commitment about Sim was spent on various contracts which went to firms operating in Australia. I cannot say that there will be any permanent value in terms of the work performed but I am advised that there will be permanent value from the advanced technology gained as a result of carrying out various tasks in the factories concerned. As to the final outcome or future developments in this important area of Service communications, these matters will have to wait until after the discussions between the governments concerned.

page 2004

QUESTION

CITIZEN MILITARY FORCES

Mr JESS:
LA TROBE, VICTORIA

– 1 ask a question of the Minister for Defence, ls it a fact that an inquiry has been in progress for some time into the consolidated rates of pay of senior officers of the Citizen Military Forces? Is it a fact that the last consolidation of the rates of pay was made in 1962? What is the reason for the delay? When does the Minister expect a decision to be announced in respect of this matter?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

-The last advice I had from my Department was that a recommendation would be made to the Treasurer and myself on this matter today. I have not got that recommendation but I will find out where it is.

page 2004

QUESTION

POSTAL CHARGES

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– It was only in the last week of the sittings of this Parliament that agreement was reached in the 2 Houses that there should be new rates of postage. If representations are made to me about matters which might appear to be anomalous I will consider them but 1 do not hold out any hope of any substantial adjustments in view of the approval which has already been given by the Parliament.

page 2004

QUESTION

AUSTRALIAN CAPITAL TERRITORY: EDUCATION

Mr ENDERBY:

– My question, which is directed to the Minister for Education and Science, arises out of the Minister’s 2 recent announcements that the Government has decided against holding an inquiry into education in the Australian Capital Territory at this time. I ask: Did the Minister’s own Department in its submissions recommend or approve of an inquiry being held and did he himself advise that such an inquiry was justified at this time? Did the decision take into account the enormous benefits that would result to Australian education generally from such an inquiry? Does his announcement yesterday, as reported, mean that an inquiry should not be held into how the present system should be changed until after the Government has changed it?

Mr N H Bowen:
PARRAMATTA, NEW SOUTH WALES · LP

-I appreciate that the honourable member for the Australian Capital Territory has not been long in this place but he still should know that I cannot answer questions about submissions to Cabinet and the detail in them. I think probably he does understand this. However, in the announcement I made last Friday about an inquiry into an education authority for the Australian Capital Territory I did point out that this was the decision at the present. I will keep the matter under review. 1 would point out to the honourable member that it has been generally agreed, certainly by my predecessors, and I have taken the view, that at some time the present arrangements with New South Wales, under which that State supplies teachers for the Australian Capital Territory, will have to be replaced. What really is at issue is the timing of this and the form of administration. It would not be reasonable for the Government to set up an inquiry without first considering certain conditions which, if they were left unchanged, would severely limit the scope of any recommendations at this time.

It is necessary for the Government to take into account the matter of teacher supply. A teaching service confined to Australian Capital Territory schools now or for some time to come would be too small to provide any attractive carreer structure. The Government’s decision announced on Friday, to which the honourable member also referred, to establish a Commonwealth teaching service is related to this particular question. The Commonwealth teaching service will, if it operates successfully, provide some security and mobility for teachers in Commonwealthoperated school systems wherever they are. While its first application will be in the Northern Territory, both in the community schools and in the Aboriginal schools, its existence will eventually facilitate the operation of a separate school system in the Australian Capital Territory if one is to be established. This would be the case whatever form of authority was constructed to take care of the school system in the Australian Capital Territory.

Another matter which needs to be considered is the question of teacher training. The Australian Capital Territory cannot expect to rely on other States to supply its teachers through their teacher training facilities. We are now supporting at the Canberra College of Advanced Education teacher training courses which will be operating from 1971. This is another matter which will have to be considered. It is central to the question of an authority in the Australian Capital Territory that there be a sufficient supply of teachers available. These and other matters have to be considered and, as I said in the announcement, the Government gave very careful consideration to all the proposals that were put forward.

page 2005

QUESTION

POSTAL CHARGES

Mr CHARLES JONES:
NEWCASTLE, VICTORIA

– I address a question to the Postmaster-General. Has the Postmaster-General’s Department approached the domestic airlines for a 29 per cent reduction in airmail carriage rates? If this were agreed to would it result in a reduction from 73.2c per ton mile to 52c per ton mile? How would these rates compare with those on international routes? In view of the recent exorbitant increase in postal charges, what grounds are there for demanding this substantial reduction in mail carrying rates? Can the Minister assure me that the present conflict between his Department and the airlines will not extend the time for mail deliveries to country centres and for interstate mail?

Mr HULME:
LP

– There should not be any delay because of any disagreement between the Post Office, the Department of Civil Aviation and Ansett Airlines of Australia in relation to charges for the carriage of mail. I think I should make some explanation about this situation which was reported in one of the newspapers this morning. It is to be appreciated that if the Post Office is to be regarded as a business undertaking it must look not only at the revenue side of its accounts but also at the costs side. The Post Office spends annually many millions of dollars on the conveyance of mail to various parts of Australia and also overseas.

In an examination of the rates of charge for the carriage of mail internally it was noticed that there was a substantial difference - approximately 50 per cent - between the cost of carriage of passengers and freight and the cost of carriage of mail. It has always been my understanding that usually the large user tends to have a lower rate than the small user. As a result of this investigation it was believed that payments larger than necessary were being made to the internal airlines, and the Government decided that there should be a reduction. This was put to the 2 internal airlines. It was accepted by Trans-Australia Airlines but not accepted by Ansett Airlines of Australia. A different situation in principle applies in regard to overseas carriage of mail by air. The Universal Postal Union determines the rate of charge by overseas airlines. There is a very substantial difference in charge between the carriage of letter mail overseas and the carriage of other mail overseas. The difference is 4 gold francs as against 1 gold franc. I am speaking approximately. At the last UPU meeting in Japan last year it was decided that there would be a reduction in the letter rate of 25 per cent. This will apply from 1st July 1972.

page 2006

AUSTRALIAN BROADCASTING CONTROL BOARD

Mr HULME:
LP

– Pursuant to section 28 of the Broadcasting and Television Act 1942-1969, I present the 22nd annual report of the Australian Broadcasting Control Board for the year ended 30th June 1970, together with financial accounts and the report of the Auditor-General on those accounts.

page 2006

AIR NAVIGATION ACT

Mr SWARTZ:
LP

– Pursuant to section 29 of the Air Navigation Act 1920-1966, I present the 10th annual report of the administration and working of the Act and Regulations and on other matters concerning civil air navigation.

page 2006

QANTAS AIRWAYS LTD

Mr SWARTZ:
LP

– For the information of honourable members I present the annual report of Qantas Airways Ltd for the year ended 31st March 1970 together with financial statements and the report of the Auditor-General on those statements.

page 2006

HOMES SAVINGS GRANT ACT

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

– Pursuant to section 32 of the Homes Savings Grant Act 1964-1970, I present the 6th annual report of the administration and operation of that Act for the year ended 30th June 1970. An interim statement on the operations of the Act was tabled in the House of Representatives on 17th September 1970.

page 2006

ASSENT TO BILLS

Assent to the following Bills reported:

Post and Telegraph Rates Bill 1970.

Post and Telegraph Bill 1970.

page 2006

SELECT COMMITTEE ON PHARMACEUTICAL BENEFITS

Mr SPEAKER:

– I wish to inform the House of the following appointments of members to be members of the Select Committee on Pharmaceutical Benefits: Mr Brown, Mr Garland, Mr Lucock, Dr Mackay have been appointed by the Prime Minister, and Mr Berinson, Dr Gun and Mr Hayden have been appointed by the Leader of the Opposition. The Prime Minister has appointed Dr Mackay to be Chairman of the Committee.

page 2006

QUESTION

NATIONAL SERVICE

Discussion of Matter of Public Importance

Mr SPEAKER:

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

The Government’s failure to extend exemption from national service to persons whose conscientious beliefs do not allow them to engage in a particular war or particular warlike operations.

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

Mr BARNARD:
Bass

– The Opposition has moved this motion to draw attention to aspects of the National Service Act which urgently need modification and clarification. I refer to the conscientious objection provisions of the Act contained in sections 29a, 29b, 29c and 29d. Some of the Regulations under the Act are also relevant to this discussion. These provisions in toto contain some notable anomalies.

According to section 29a a person whose conscientious beliefs do not allow him to engage in any form of military service is exempt from service as long as he holds these beliefs. A sub-section provides for exemption from combatant duties for those whose military objections do not allow them to engage in military service of a combatant nature. That is, they are excused from duties whose intrinsic nature is inseparable from the conduct of war. I intend to have a closer look at how these duties are defined later in my remarks.

This section also provides that a conscientious belief is a conscientious belief whether it has a religious basis or not. Section 29b and 29c outline the legal procedures for determining the objection and the process of appeal. Finally, section 29d provides that the burden of proof in a conscientious objection claim rests on the person making the claim. This is the basis of the law on conscientious objection; it has remained substantially unchanged since 1953.

The original Act of 1951 in substance took over the National Security (Conscientious Objection) Regulations of 1942 which covered objection during World War II. These wartime regulations provided for a conscientious belief that did not allow the person to perform combatant naval, military or Air Force service. The provision that conscientious objection was to any form of military service was incorporated into the Act in 1953. These provisions did not become an issue in the National Service scheme of the 1950’s. Most objectors to that universal scheme of national service came from traditional, pacifist groups such as the Society of Friends, ft was also possible to accommodate non-combatants Within the framework of that scheme; there are many jobs around a peacetime military camp not related to the bearing of arms.

The real test of these provisions came with the Government’s commitment of national servicemen to the Vietnam war in 1966. In the subsequent 4 years the conscientious objection provisions have been shown to be completely inadequate. This has resulted from the extremely stringent interpretation placed on the provisions by the higher courts. I do not believe that higher judicial authority is to blame for this. Because of the way the legislation is framed the judges probably have no option but to interpret it in a stringent way. But the result has been to close the exemption granted under the act to scores of genuine conscientious objectors.

One side of the coin is the Act’s provision that a conscientious objector is exempt from service as long as he holds his conscientious beliefs. The other is that he cannot get this exemption if his belief is confined to the Vietnam war. The Act gives an exemption with one hand and takes it away with the other. The crucial point at issue is the legal interpretation of the words ‘any form of service”. Because this has been held to exclude an objection based only on a particular war, it is worth having a quick look at the attitudes of the courts to these provisions.

The first interpretation of any weight was given by Mr Justice Windeyer in the case of William White which honourable gentlemen, will recall as a controversial issue in the 1966 election campaign. Mr Justice Windeyer defined any form of military service in the following way:

Service in any capacity, at any time, anywhere, in any arm, corps or unit.

He said, further, that it seemed to him that the requirement for total exemption was a conscientious and complete pacificism. The judge also pointed to the severity of the Australian law, saying that elsewhere and under other Acts claims for exemption had been upheld because of a conscientious objection to participation only in a war then in progress. Under such provisions it is obvious that an objection based on Vietnam could be sustained’. As Mr Justice Windeyer pointed out, such an objection was permissible in the United Kingdom during World War II. Although the Windeyer definition of conscientious objection under the Act did not have the force of precedent, it had immense influence on the interpretation of the Act. Quite obviously magistrates in the lower courts hearing conscientious objection cases would be swayed by legal interpretation from this source, even though it were obiter dicta. However, there were isolated instances of magistrates applying their own discretion to the Act and interpreting it to allow objection to Vietnam.

The most notable case was Monaghan’s case in June 1967 when a young man was exempted because the magistrate found he had a conscientious belief with respect to serving in the military forces at the present time. Unfortunately, the logic of this interpretation did not have a great deal of influence on his fellow magistrates hearing these cases; the great majority preferred to abide by the dicta of Mr Justice Windeyer.

Loopholes of this nature were finally closed in Thompson’s case before the High Court in 1968. Here the Chief Justice, Sir Garfield Barwick, interpreted the language of the provisions to mean that the conscientious belief must be all embracing in relation to soldiering, including soldiering in any capacity in the defence, or in aid of the defence, of this country in any circumstances. Sir Garfield said further:

It must be, in my opinion, an objection based on the intrinsic quality of military service and not upon particular targets, purposes or causes, to which it is or is likely to be directed.

According to the Chief Justice, the section required the conviction, viewed as of the present, to be unlimited in relation to time. In other words, to qualify for exemption, a conscientious objection had to be to all military service at any time and in any circumstances, even in the country’s defence in the direst circumstances. This was the majority opinion accepted by the High Court and which is, of course, binding on all magistrates hearing conscientious objection cases.

It should be noted, however, there was a minority opinion from Mr Justice Menzies that tended to the view that an objection could be sustained even if it were only to a war being waged at the moment. The judge made the valid point that it was to the obligation to serve here and now that the Act subjected those to whom it applied. Consequently, it was from that service that section 29a of the Act exempted those who came within its terms. In Mr Justice Menzies’ view a conscientious belief against serving in any war now being waged would suffice for exemption. Such an interpretation did not give exemption because of objection to a particular war. Because Vietnam is the only war in which Australia is engaged at this moment, it would have the same effect. This interpretation goes much of the way towards removing the worst features of .the administration of this part of the legislation. Unfortunately, the majority interpretation which has binding force of law is couched in the most comprehensive terms. Only an objection to all wars at all times and in all circumstances can win the day in the courts.

Such an interpretation has remarkable implications. Under it, a magistrate could sincerely believe that a young man objects to all wars at all times and in all circumstances. To test this, he could put to the man a hypothetical question on the folowing lines: ‘Would your beliefs prevent you from bearing arms if at some future time Australia is invaded and your family is directly threatened?’ To sustain his objection the young man would have to answer: Yes’. If he had a genuine doubt that at some time, possibly SO years in the future, a situation could arise where he might engage in military duties, his objection would fail. This is a perfectly feasible projection of what can arise with the allencompassing definition of ‘any form of military service’ laid down by the High Court. Under the Act there is a specific commitment to undertake national service at a particular time, a time when this country may or may not be at war. Under the Court’s interpretation there is an obligation on a young man to predict the beliefs and convictions of a lifetime if he is to be exempted as a conscientious objector. Quite obviously, a young man of 20 cannot say with certainty what his beliefs will be at 30 or 40 or 50. Yet under the present law he must do so and avow that these beliefs will not change.

Something of the absurdity of the present status of the law is implicit in the finding by Mr Justice Smithers in the Brian Ross case. This young man was recently released from prison after the judge found he was a conscientious objector under changes in the National Service Regulations which are still before the Parliament. The judge found that while Ross’s beliefs related to the Vietnam war, they went further and forbade participation in all wars or any form of military service. According to the judge, Ross’s beliefs were indefinite in point of time and circumstance. He said that Ross was unable to assert positively that it was impossible that in some indefinable and unpredictable circumstance his beliefs might permit him to render military service. Mr Justice Smithers, goes on to say at page 4 of his report:

I find it difficult to understand that a rational person having such an aversion resting upon personal inner convictions as distinguished from religious convictions could honestly deny that his beliefs might change should circumstances change in some unpredictable but important respects.

The Judge is making the obvious point that beliefs may change radically over time; that no-one can say today what he will believe in 10 years time. Yet this is what conscientious objectors have to do under the present wording of the Act and its interpretation by the courts. The Australian Labor Party has said repeatedly and consistently that the definition of conscientious objection is too vague and should be given greater breadth and precision. As interpreted by the Courts and with the onus of proof on the claimant, the present administration of the conscientious objection is excessively severe. There can be no doubt that in almost all cases those who apply for conscientious objector status are men of principle. A genuine draft dodger would not go through the legal process of convincing the court of a non-existent conscientious objection. Such a person would make a simple assessment of his chances under the Act and take to his heels. Some hundreds have cleared the country in this way during the last 4 years; there are also some 100 evaders of the Act within Australia. Quite shameful attempts have been made by supporters of the Government, particularly the Treasurer, (Mr Bury) to link evaders with genuine conscientious objectors. Obviously a young man will not go through the most difficult and agonising legal test of all - the public exposure and test of conscience - unless he is motivated by his most deeply held beliefs.

This Government and the American Government have been most obdurate in clinging to stringent interpretations of conscientious objection. In the United States of America there are signs of a much more flexible policy; a sub-committee of the United States Senate Judiciary Committee headed by Senator Edward Kennedy has proposed a definition of conscientious objection to include selective objection to a particular war. In the opinion of this committee national and clearer standards should be adopted. Where the American definition of conscientious objection has been much too narrowly based, with the main emphasis on religious objection, the Australian definition has been much too vaguely worded. This has thrown responsibility on to the courts, which have interpreted it in the way outlined by Sir Garfield Barwick. This is a perfectly proper way for the courts to act; f make no criticism of that. But with the Vietnam war moving towards the fina) stages the

Government should remove this burden from the courts and amend the Act. It should make the concession it has refused stubbornly to make - to extend conscientious objection to cover a particular war.

I believe that for the Government to adopt this attitude is completely- wrong and unjustified. For example a man might object to the use of napalm or the practice of classing civilian occupied territory as freefire zones. A deeply held antipathy to such a course of military operation could be the only basis for conscientious objection. Obviously, under the present law an application for exemption would not have any chance of succeeding no matter how deep and fervently held the objection. An objection of this sort can form and colour the whole nature of a conscientious objection to a particular war.

Mr SPEAKER:

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

Mr SNEDDEN:
Minister for Labour and National Service · Bruce · LP

– The Deputy Leader of the Opposition (Mr Barnard) has made some comments which need to be answered initially before the main thrust of the argument is presented. Firstly, he says that the conscientious objection provisions are inadequate. From that one would assume that the great majority of those people making application for exemption as conscientious objectors have failed in their applications. The opposite is the truth. In a report that I made on the operations of the National Service Act to 30th June, for the year preceding, I pointed out that of 1 83 applications for total exemption, 150, or 82 per cent, were granted; 14. or 8 per cent, were recognised as noncombatants; and 19, or only 10 per cent, were refused. Of the 34 applications for non-combatant status, 30, or 88 per cent, were granted. Ft is simply not justifiable to describe the conscientious objection provisions as inadequate.

The next point which the Deputy Leader of the Opposition made was that there was selective objection in the United Kingdom during the Second World War. The honourable gentleman relies for the authority for that statement on a judgment by Mr Justice Windeyer. He has not produced any authority to indicate that the United Kingdom situation was achieved by statute, by regulation or by any other way. He relies solely upon the following excerpt from a judgment by Mr Justice Windeyer:

This was so in the United Kingdom during the war of 1939-194S, as Mr Fenner Brockway, a veteran of the cause of conscientious objectors, has acknowledged in his foreword to Hayes’ Challenge of Conscience which deals with that period.

He went on. I come to the next point which I think should be answered specifically. The Deputy Leader of the Opposition posed a question in a rhetorical form. He said that a young man applying for exemption on the grounds of conscientious objection would have the question put to him: ‘Would your belief prevent you bearing arms if there was an invasion and your family was threatened?’ To that the Deputy Leader of the Opposition says the young man must answer ‘Yes’ in order to be granted exemption on the grounds of conscientious objection. I think he is wrong in anticipating that such a question would be put, and he is certainly wrong in anticipating that unless the answer were ‘Yes’, no conscientious objection status would be granted by the court. That is a matter for the court to determine. One thing that is abundantly clear is that you cannot give conscientious objector status to any man simply on the claiming of it. No country in the world will give conscientious objector status to a man simply because he claims it, especially when acceptance of his claim to conscientious objection removes him from any liability to service, as distinct from the position of his colleagues who have to render service.

It is worth noting that the major thrust of the argument of the Deputy Leader of the Opposition did not go to the question that is posed in the terms of the matter of public importance, namely, selective objection. The major part of his argument went to the adequacy of a person claiming conscientious objection on the well known ground, which I can best put by referring to the words of the Chief Justice of the High Court of Australia, Sir Garfield Barwick: ‘A present conscientious belief which does not allow of participation in military service of any kind at any time’. That is what the honourable gentleman was arguing against. The terms of the matter of public importance before the House relate to selective service. The words of the matter of public importance are:

The Government’s failure to extend exemption from national service to persons whose conscientious beliefs do not allow them to engage in a particular war or particular warlike operations.

He asserted selective service when speaking but he did not justify it.

I think it is worth making a few points on the issue which has been raised in the House - selective objection claims. There is a range of persons proposing selective objection. In the first category that I identify are the well intentioned people who see in it a panacea for all objections to national service. I am afraid that these people - well intentioned as they are and whose integrity I respect - are very sorely misled. If they think they will have in this a panacea with which to get rid of objections to national service - many of them who argue in favour of national service think it would be less difficult if there was selective objection - they are very sorely misled.

The people in the second category which I now identify, who argue for selective exemption, are the great majority of objectors. The great majority of objectors object to compulsory military service in any form, so much so that they refuse to register or to make application for conscientious objection or to undergo a medical examination. They say that their conviction is so deep that the Act is wrong that they will not participate in any way. I am afraid to say that it is nonsense to suggest to these people that selective objection would be the means of getting rid of all these objections.

Then there is a third group which is in favour of selective objection, and that is the members of the Australian Labor Party, and particularly the parliamentary section of the Australian Labor Party. I fear that they pursue this policy for no other than political purposes. What they seek to do by the pursuit of it is to capture the voles of the first category, that is, the wellintentioned people who think it is the panacea. They also attempt to catch the voles of the whole range of objectors, whether they be objectors in reasonable form or unreasonable form or whether they be syndicalist members of the Labor Party seek to attract the votes of these people by taking this course. Another reason why they pursue this policy is that they want to destroy national service completely. There is no doubt that in all of the statements that have been made by the Opposition at various times by various spokesmen, while it is very difficult to find a consistent line running through them, there is the single umbilical cord - to destroy national service.

Also, of course, as was said quite rightly in this House today, in all of its attacks the Opposition recklessly disregards and indeed abandons any thought for the probity of our commitment in Vietnam. It recklessly disregards that matter, uncaring as to the outcome of it both for our own commitment or for the welfare of the South Vietnamese people and their capacity to choose their own solutions. But a third and more cogent reason for this debate today is the attempt by the Leader of the Opposition (Mr Whitlam) to align the whole of the parliamentary Labor Party with his statements of the week before last, which were quite irresponsible for a man who is Her Majesty’s loyal Leader of the Opposition and who so constantly reminds us that he is the alternative Prime Minister. Feeling so lonely, as he must, because of the irresponsibility of the statements, he is making an attempt, today to hide the statements behind a selective objection proposal so that the whole of his Party can say: “Yes, we are for selective objection.’ He will then, by some illogical process, argue that the whole of his Party supported those statements. Quite clearly, the Parliamentary Party, possessing as it does very many responsible and serious men, does not embrace those statements, lt is worth remembering what they were. I quote from the transcript of this Press conference. The Leader of the Opposition said:

I told the Caucus that if I were asked by a man who objected to the Vietnam war as to the course he should take, I would give this advice: He should register and at the time of doing so give written advice that if he was inducted and ordered to go to Vietnam he would not obey that order. If he was ballotted in then he should present himself for his medical examination and if found fit and should be inducted, then he should give -written advice that if he was ordered to go to Vietnam he would not obey the order.

Why is this matter of public importance before the House today? The public importance of it is to try to relieve the Leader of the Opposition from the responsibility of that quite unwarranted and indeed reckless and irresponsible statement. He feels that getting his Party to support him will enable him to say: ‘Well, we are all in favour of selective conscientious objection; therefore, what I said was not really so bad. That is the device chosen today. How then does this matter suddenly become a matter of public importance? It has been argued in this chamber many times before. Why is it suddenly now, on the first sitting after the debacle of the week before last week, which was a non-sitting week, that this matter has come up? lt is raised merely as a device by the Leader of the Opposition to try to inveigle everybody else unwittingly into supporting his point of view.

It is worth remembering that, in that same Press conference transcript, this statement by the Leader of the Opposition appears:

Never have 1 said that a man should not obey orders in Vietnam.

The necessary consequence of this proposal is that a young man would disobey orders in Vietnam because he would say: ‘1 have a conscientious conviction against this fire pattern’; ‘I have a conscientious objection against taking this ridge’; ‘I have a conscientious objection against scouting, lo prevent surprise attack on some other elements in the force’. That would be to disobey orders. I wonder whether the Leader of the Opposition knew when he said: Never have I said that a man should not obey orders in Vietnam’ that within 48 hours he was going to do exactly what he said he had never done. Within 24 hours, he said: . . that a young man on service in Vietnam who decided it was a bad war should notify his commanding officer thai he could not conscientiously continue.

That is to disobey those orders.

To accord the status of conscientious objector to a person who objects lo a particular war - selective conscientious objection or selective pacifism, as it has been called - was considered by a United States National Advisory Commission appointed by President Johnson which reported in 1967. The majority of the Commission believed that the status of conscientious objector can properly be applied only to those who are opposed to military service in all circumstances. It is one thing to deal in law with a person who believes he is acting according to an inner conviction when he opposed all military services. It is another to accord a special status to a man who believes that there is an inner conviction which tells him he can undertake military service under some circumstances and not under others. The Commission members considered that ‘selective pacifism’ is essentially a political question of support or non-support of a war and cannot be judged in terms of inner convictions, (as distinct from views and opinions a man may hold). Political opposition to a particular war should be expressed through recognised democratic processes and should claim no special right of exemption from democratic decisions. Legal recognition of ‘selective pacifism’ could open the door to a general theory of selective disobedience to law which could quickly tear down government and its operation; the distinction is dim between a person conscientiously opposed to payment of a particular tax and conscientious objection to a particular war or to a particular battle. Let us assume that a naval crew member on a ship told to train guns said: ‘Wait a minute. At whom are we firing?’ That is selective objection.

Do honourable members opposite say that a person can have selective objection only in Australia? Do they say that a person can have selective objection only before he is called up? Of course they do not. They argue for selective objection throughout the entire process, that is, before call-up, during service in Australia and, if necessary, during service in Vietnam. The recklessness of that proposal - the destruction of the confidence and morale of an Army, of a Navy or of an Air Force charged with the defence of this country - would be recklessness to a degree that one would not expect it to be brought up for any other reason than an attempt by the Leader of the Opposition to harm and to divert attention from the recklessness of his statement of 2 weeks ago.

Mr BEAZLEY:
Fremantle

– There are many reasons why a man who is fully prepared to be a soldier of Australia should object to the war in Vietnam, without being what is normally understood by the designation ‘conscientious objector”, and there may be future contingencies in which this will again be true. All Australian soldiers take the oath of allegiance to the Monarch. There is a tiny minority of aliens in the Army whose constitutional position is different, but what I am about to say applies to the overwhelming majority, namely, that they are subjects of the Crown of the United Kingdom of Great Britain and Ireland, according to the covering clauses of the Constitution and other clauses within it. The Crown is not at war in Vietnam. Her Majesty’s Government in the United Kingdom permits a trade which supplies North Vietnam with weapons. British ships carry Chinese and Russian weapons from Hong Kong and elsewhere to Haiphong. Although the United States commands the Pacific with overwhelming naval superiority, the port of Haiphong is not blockaded. The position of Her Majesty’s Government in the United Kingdom has simply been that certain of Her Majesty’s subjects will have money as a result of this trade and other of Her Majesty’s subjects will have death as a result of this trade. The late Sir Wilfrid Kent Hughes and the present Minister for the Navy (Mr Killen) have protested about this situation, but we have no evidence that the Australian Government has attempted anything in the way of inducing the United Kingdom to cease from the trade. Under the circumstances its sense of responsibility to its own troops is gravely open to question.

The war aim in this non-war in Vietnam now appears to be to disengage, but the unlimited nature of a commitment on the mainland of Asia and the carelessly undefined obligations assumed towards the South Vietnamese Government appear to make this impossible to »he Government. That is the most complimentary construction that it is possible to put on the attitude of the Government. We are confronted with a civil war in which the revolutionary forces are determined to take over the state and to reshape it. The conditions for which we fight are to guarantee existing society and existing regimes.

Our right to determine the nature of Vietnamese society will no more be accepted than has foreign intervention in any other revolution. Intervention in a revolution, whether American, French or Russian, is a classic formula for failure. If

Vietnam were a peninsula, like Korea or Malaya, the military line could be terminated at each end by the sea. The enemy could be deprived of supplies and reinforcements. The military commitment could be defined. Swamp, jungle and river on the Asian mainland make the military commitment limitless and intervention interminable. The North Vietnamese already have fought the French for a decade and the United States for 7 years They do not negotiate at Paris because they have no desire to negotiate. In the main, they have the sympathy of Asia because all Asia, even the most proWestern parts like Malaysia, has reached the position that Asians will no longer accept that their fate will be determined for them in Moscow, London, Paris, Washington or even Peking. India and Communist Korea have fought Peking in India’s case and snubbed it in North Korea’s case.

The Vietnam war is a formula for failure abroad but for electoral success at home. In this, it resembles the Suez adventure. It coincides perfectly with common illusions in Australia. It wins Australian Democratic Labor Party preferences for the Government and I supect that that is now the Government’s real war aim. Sir Robert Menzies was the architect of this adventure as far as Australia was concerned and he began the Indo-China policy as a supporter of French rule.

The nation’s most consistently successful, and therefore probably its most representative, Prime Minister, Sir Robert, asserted that not to stand for the continuance of white rule was the very ecstasy of suicide. In pursuit of such a theory and with the undoubted support of the bulk of the nation Australia threw the weight of diplomatic support behind the French effort to continue rule in Indo China. We are led by the Government to support the destruction of Asian people with napalm and the destruction of their agriculture with picloram under circumstances when the disaster falls indiscriminately on enemies, friends and uncommitted people in Vietnam in a way we would never countenance were the targets Europeans. If Danes, Norwegians or Swedes were being napalmed the revulsion in this country would be tremendous. It is the measure of our unconscious racism that there is no revulsion when the people are yellow.

I saw the earthy reaction and heard the gut cries of support for a policy of bombing the despised ‘Gyppos’ in 1956. Australia’s initiatives produced the Suez affair in 1956, an automatic Australian reflex action in defence of imaginary jugular veins, lifelines and vital routes without which our economy would be gravely damaged, demonstrating how deep in the thinking of the older Australian generation are imperialist and racist assumptions. Successive explanations of events in Vietnam offered by Australian Governments are now known not to be true, and any person who follows these statements through is entitled to object to involvement in a non-declared war which has been justified by falsehoods. The initial explanation was that we were really fighting China. China was coming south. Department of External Affairs publications, blatantly concocted for party-political use, were put out showing Chinese weapons and inferring Chinese intervention.

Actually, as far as weapons are concerned, China has supplied the ginger beer and Russia the champagne. If weapons are the proof, a far stronger case can be made that Russia is actively intervening than that China is. Confronted wilh the obvious criticism that if China is the enemy why supply her with wheat, wool and even some etremely vital materials with a direct military bearing, like rutile, the late Harold Holt admitted that China was not involved. This varied Sir Robert Menzies’ remarkable theory that China was thrusting south to separate the Indian and Pacific Oceans, and that that was what the Vietnam war was about. Then Sir Robert, following the Pentagon, asserted that the mosquito fleet of Haiphong had attacked the United States Navy on the high seas iti the Gulf of Tonkin. This stampeded the United States Congress into endorsing the bombing and President Johnson into widening the war to attack Hanoi.

It is now admitted by the naval officers concerned that the attack did not lake place in the Gulf of Tonkin. What is a man who may not be a conscientious objector to make of that? We are unable to be consistent about our allies. After Ambassador Lodge had connived at the overthrow of Diem, Sir Garfield Barwick faintly informed the House that as far aa

Australia was concerned Diem was a patriot. What does a man who may not be a conscientious objector to war in general make of that? As far as the United States was concerned, Diem was an obstacle, and the Central Intelligence Agency, in overthrowing him, blundered. Whatever he was, his hold on the allegiance of his people was strong enough for him not to need massive outside support.

It is obvious that our American allies have had to pay for their ignorant meddling with an expansion of an American presence from a few hundred advisers to 600,000 troops. The action in overthrowing Diem also produced the Australian commitment. With Diem’s assassination Pandora’s box was opened. In the thinking of many Vietnamese the mandate from heaven, the accolade of legitimate government, passed from Diem after his assassination to Ho Chi Minh. People near Saigon, not hitherto enemies, became enemies. For years we accepted the fact that Sihanouk was a friend. After Diem was overthrown Sihanouk broke diplomatic relations with the United States and sent hundreds of United States advisers out of the country. He argued that if Americans dealt as they had done with a man who had been as faithful to them as Diem had been, he, Sihanouk, could not afford to have them around.

Sihanouk was supported by the Australian Government. The Pentagon, gulling Nixon as it had gulled Johnson over the Gulf of Tonkin, launched an attack on Cambodia on the specious ground that this would facilitate an American withdrawal from Vietnam. It has not done so. Once more Pandora’s box was opened. The King of Laos lives in dread of being rescued from the Pathet Lao by white troops. If that happens he knows the nation will turn against him. Asians are tired of the white man’s government, tired of the white man’s economic exploitation and, above all, tired of the white man’s contempt. Corruption can flourish. In Vietnam and in other South East Asian countries presidents and senators can become super-rich and multi-millionaires overnight. If this produces Communism they know that the United States will rush to their rescue. It is the way of Batista and of Papa Doc Duvalier all over again. The course of history will not stay on the side of corruption, and the Government’s policy is folly. Menzies’ contempt for the ‘Gyppos’ turned the Arab world from being a British sphere of influence into a Russian sphere of influence.

Mr DEPUTY SPEAKER (Mr Luchetti:
MACQUARIE, NEW SOUTH WALES

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

Mr BARNES:
Minister for External Territories · McPherson · CP

– I think honourable members could be forgiven for losing track of the actual matter of urgency after listening to 2 Opposition speakers. To bring this debate back to the point I will read again, for honourable members on this side of the House, the terms of the proposal for discussion. They state:

The Government’s failure to extend exemption from National Service to persons whose conscientious beliefs do not allow them to engage in a particular war or particular warlike operations.

Obviously, as my colleague the Minister for Labour and National Service (Mr Snedden) has pointed out, this is a device to get the Leader of the Opposition (Mr Whitlam) off the hook for an irresponsible and outrageous statement he made some time ago, a statement of advice to young men that they join the Army, as I recall it, but that later they refuse to serve. What would be the ultimate result of this operation? They would be dishonourably discharged, and this would hang around their necks forever in anything they wanted to do. What an extraordinary situation. I believe that every Australian values our security. If ever we valued it we should value it now. We have been a fortunate country, I suppose. For the whole of our existence we have been able to look to one of the greatest powers in the world in those days - Great Britain - to look after us. We have accepted this. We have grown up to be a nation in which we enjoy the greatest freedoms, liberties and opportunities of any country in the world. This has been brought about because we have been free to pursue our policies and our democratic government without fear of threats.

We have had threats from overseas. I have lived through 2 world wars. They were 2 threats. Everyone in this country joined in the support of those wars to protect our way of life. Here again we have the vast majority of the Australian people behind us in the present operation in Vietnam. I remind the Opposition that the 1966 election was fought purely on the operation in Vietnam, and look at the overwhelming majority we had on that occasion. Now we have the whole of the Australian people behind us, and this is their concern, under the system of representative government we have inherited from Great Britain. In essence, if the Opposition’s policy came into force what would our reputation in the world be? What would our reputation with the allies be if our men could choose to opt out of a particular war? Conscientious objection to war is one matter. Conscientious objection to a particular war is an entirely different matter.

We have provision, as the Minister for Labour and National Service pointed out, for a judge to make a decision on conscientious objection to war. The Deputy Leader of the Opposition (Mr Barnard) opened this debate and I gather from what he said that a person might object to this particular war but would fight in another war. He might change his mind in 20 years time and fight in another war. We would end up having a lot of perhapsers in our community. We would not know where they stood. How would our reputation stand with our allies - allies we need to preserve our situation in this part of the southern hemisphere? If ever a country needed allies to support it Australia does. Every country needs allies. Even Russia has to rely on the massive support of its Warsaw Pact allies. America has in Europe the NATO alliance. We must maintain the reputation that we will support our allies. A serious situation is developing for Australia. I support our involvement in Vietnam, as do the majority of Australians. Our policy is to support democratic countries to our north; to give them an opportunity to preserve their way of life.

We came out of a very difficult situation a few years ago. It was only an accident that the whole of Indonesia did not go Communist. What would have happened if the Communists had taken over in Indonesia? Right at our back door we would have had a foreign country embarking on authoritarian practices, backed by Russia or China - I do not know which, but it would not make much difference as far as f am concerned. The Soviet Union, with massive support from the Warsaw Pact, is endeavouring to secure its position in

Europe, lt has negotiated, a treaty with West Germany because it has ambitions of becoming a super military power. It has designs on expansion into the Indian Ocean. This, after all, is the policy that Czarist Russia had. Russia has pursued the policies of a super national power and a super military power in extending into the Indian Ocean. There was no outcry about the prospect of Russia making a naval base at Aden. There was no outcry over the former British territory of Socotra at the end of the Red Sea being used for training operations for Russian naval personnel. There seems to be a great effort by these propagandists to assist our enemies to prevent the British operating from the naval base at Simonstown. But they treat with complete equanimity a possible furtherance of Russia’s expansion into the Indian Ocean and its development of a naval base at Aden. In the past Britain, a small nation compared to continental Europe, could usually rely on alliances to preserve a balance of power in Europe. We need alliances in our part of the world. Britain has always honoured her treaty obligations. I believe we are following our British traditions in doing these sorts of things.

What an extraordinary policy is being advocated by the Labor Party - that a section of our community should be prepared not to accept the authority of Parliament. The government of the day makes a decision as to where danger lies and what wars we embark upon. As I said earlier, the 1966 election was fought on the issue of our involvement in Vietnam. We won an enormous majority. We had the support of the Australian people. The Leader of the Opposition has advocated that people should not obey the law unless they want to do so. Another leading member of his Party advocated the overthrowing of authority. I think he said: ‘There is power in the streets, power in the universities and schools’. This policy, if put into effect, would subtract from the authority of Parliament. Where on earth would we be if individuals made decisions as to whether they would fight a war, irrespective of what the Parliament - the authority of this country - decided. This is quite an extraordinary position. It is an outrage that a party which seeks to be the next government should sponsor such a proposal and it is certainly an outrage that the Leader of the Labor Party should personally advance this incredible policy.

Mr WHITLAM:
Leader of the Opposition · Werriwa

– Three Ministers have spoken in support of the Vietnam commitment and conscription for it. None of them was very happy about it. We have just had the present Prime Minister for 1000 days. There are as many Australian soldiers in Vietnam now as there were when he came to office. By contrast, President Nixon is making sure that when he has his congressional elections next month he will be able to point out that more than 200,000 fewer soldiers will be in Vietnam than there were when he was sworn in. Today his Secretary of . Defense was able to announce that by mid-1973 the whole of the draft apparatus in the United States will have been dismantled. The crowning irony was that the Minister for Defence (Mr Malcolm Fraser) worked himself into his usual synthetic indignation and patriotism on this matter - patriotism being the last refuge of a scoundrel - by performing in front of a delegation of senators and congressmen from the Philippines which, of course, withdrew its contingent from Vietnam in 1968. The Minister for Labour and National Service (Mr Snedden) was not his happiest today because at least to his credit he has seen the unfairness of having no alternative for those who have a conscientious objection to the war in Vietnam and the methods pursued in that war. He did persuade his colleagues in the Cabinet to bring in a civilian alternative but he was overruled by the hawks in the Government parties. I need say no more about the Minister for External Territories (Mr Barnes) than that he was the one who for the first time secured authority for the Administrator of Papua and New Guinea to use the Australian Army to maintain law and order in the Territory.

At least today we have been spared the arguments put on television by the Minister for Defence and the Prime Minister (Mr Gorton) and in the Parliament by the Prime Minister and the Deputy Prime Minister (Mr McEwen) that the Citizen Military Forces is an alternative to service in Vietnam for those who conscientiously object to it. The Minister for Labour and National Service as a lawyer knows that it is not an alternative. I will quote the Prime Minister on this matter. A fortnight ago he told us:

If a young nian does not have that conscientious objection to war but objects to some particular theatre of war then there is provision in the law for that young man to join the Citizen Military Forces, in which case he cannot be called up and will not be called up to serve in a theatre to which he objects.

The Deputy Prime Minister stated:

As a lawyer and a parliamentarian the Leader of the Opposition knows that there is an alternative for the young man who is not a conscientious objector to all wars but has an objection to fighting in Vietnam. The option is to join the Citizen Military Forces. This is provided for. Many have taken advantage of it . . . the Leader of the Opposition, wilh a knowledge of the law, would be bound to say: ‘You have no problem. You join the CMF. The law provides for it’.

The form of registration under the National Service Act consists of 4 pages. Only the middle pages, pages 2 and 3, have statutory force. The particulars set out on those pages are prescribed in the regulations of December 1966. The particulars set out on the outside pages, the first and last pages, have no statutory basis. All references to service in the CMF as an alternative to national service have an administrative basis alone. These 2 outside pages are no more than a departmental form. They comprise the only warrant for saying that service in the Citizen Forces is an alternative to national service. There appears to be no legislative provision, either in an Act of Parliament or in subordinate legislation, authorising the ballot or the laying down of requirements for the conduct of the ballot. The great vaunted alternative to service in the Citizen Forces, which is described by the Prime Minister as being in the law of the land, is not in the law of the land at all. It is in a departmental form which could be changed overnight by the Department of Labour and National Service.

Young men entering the CMF as an alternative to national service have no legal guarantee that their names will not go into a ballot. They have no legal guarantee that they will not be sent overseas as members of the CMF. It is simply untrue to say that the CMF is a genuine alternative for the potential conscript with a particular objection to a particular war. I have a letter from the Minister for Defence himself which exposes the falsity of the claim. The Minister says:

  1. . as the situation is al present, the CMF wit] not be required to render full-time service or service overseas.

He goes on to make the important and vital qualification:

  1. . the citizen forces will not be required until the necessary proclamation is made by the Governor-General.

When called out in this way members of the citizen forces may be required to serve either within or beyond the territorial limits’ of Australia.

The Gates Commission in the US has very fairly and calmly looked at this whole question. The Commission consisted of 2 retired American generals of great distinction - Lauris Norstad and Alfred Gruenther; the chairman of Morgan Guaranty; the chairman of the Finance Committee of Du Pont de Nemours and the president of Notre Dame. The Commission delivered its report earlier this year after years of passionate and bitter division over the American commitment to Vietnam. But when it came to commenting on the problem of conscientious objection it did not flaunt words like ‘treachery’ and ‘treason’. Its judgment was balanced, measured and charitable. It said:

There is a problem of determining who is entitled to exemption as a conscientious objector. These decisions are inherently difficult to make and arc harmful both to the group deciding and the person requesting conscientious objector status. The process weakens the political fabric of our society and threatens the delicate web of shared values that alone enables a free society to exist.

Even more significantly the Commission had something to say on the problems of conscientious objection within the Army. As I have stated if a soldier makes it plain that he will stand his ground and refuse to go to Vietnam the Army makes no attempt to send him. The Gates Commission said:

Dissent within the military presents a particularly ticklish problem for the armed services of a free nation.

There are many things to criticise in the political life of the United States but I wish that we could bring some of the sanity and rationality of the Gates Commission, and of so many United States Government bodies into our discussions in Australia on conscientious objectors. On this issue - and on this issue alone - the Prime Minister likes to say that what Par liament thinks is decisive. His answer to demonstrators against conscription for the war in Vietnam and to conscientious objectors against that particular war is that the whole question has been decided by the ballot box. It is the only issue on which he expresses respect for the parliamentary processes. One wishes he would put it to the test because the fact is that the majority of the members of this Parliament favour changes in the National Service Act; a majority of them favour the majority of the changes put forward by my Deputy to this Parliament early last year and which are again awaiting today a debate and vote. The fact that the majority of members support it is proven by the move made in the Cabinet itself for a change.

How absurd all this denunciation and recrimination against my Party is when one considers that even in the Cabinet itself and even in the Government parties there is concern about the Act and in particular the situation of young men who conscientiously object to this war and who reject any participation in its prosecution. In September 1969 the Cabinet rejected the proposals of Mr Bury, the then Minister for Labour and National Service, for a civilian project alternative although all the stories in the newspapers made it plain that Mr Bury himself was believed to favour a system providing for civilian service for conscientious objectors. The present Minister for Labour and National Service took the matter much further and on 28th May it was reported:

Federal Cabinet has approved a plan for a civilian employment alternative to national service in the Army. Mr Snedden, who submitted the plan to Cabinet yesterday, will announce details in Parliament next week. Mr Snedden said in a statement issued in Canberra last night that he had put before the Cabinet a paper reviewing the operation of the National Service Act and the possibility of a civilian alternative.

In the event he had to climb down; he was overruled by the hawks in the Party room. The fact is if there were a free vote on this matter in this Parliament conscientious objection to the war in Vietnam would become the law of the land.

I conclude my remarks with a quotation from Mr Justice Windeyer in the Zarb case. He said:

The appellant’s real unwillingness is nol to all forms of military service. It is to being required to take any part in or in aid of active military operations now in progress abroad. I understand this attitude. i recognise it as one which can be conscientiously based.

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

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

Mr SNEDDEN (Bruce - Minister for Labour and National Service) - 1 wish to make a personal explanation. I was misrepresented by the Leader of the Opposition (Mr Whitlam) when he said that when 1 spoke about the CMF alternative I did not recognise it as an alternative to national service. The fact is that I did not mention it because of limitation of time and I had so many other matters to put in rebuttal of what the Deputy Leader of the Opposition (Mr Barnard) said. I do assert affirmatively that the CMF is an alternative.

Mr Whitlam:

– The Minister is going beyond the terms of a personal explanation. The Minister has for months and years been challenged to give the statutory basis for it. There is none.

Mr GORTON:
Prime Minister · Higgins · LP

– What we have been listening to is not a speech at all based on the motion which is before the House. The motion before the House gives clear indication that it is the view of the Opposition that in the case of any war men who have no conscientious objection to war as such or to bearing arms should be allowed to say: Although I have no conscientious objection to war I have some conscientious objection to going to some particular theatre of war or to fighting in some particular place.’ That is the view of the Opposition. That is a view of which I hope the Australian people will take note because if it was carried into practice it would mean that in no theatre of war, in no war-like operations, could our Army, Navy or Air Force be assured of being able to undertake successful operations because those engaged in it would all have the right to say, ‘I, Smith, do not want to go to Vietnam’ or ‘I, Brown, do not want to go to Malaysia. I have a conscientious objection to that.’

Mr Uren:

– That is not so.

Mr GORTON:

– Yes, it is. If it is accepted that it is right that a man should have a conscientious objection to one theatre then it must be accepted that he is allowed to have it about all theatres, and this is what-

Mr Foster:

– Why?

Mr GORTON:

– Because this is what the motion says. That is what it says. It is not at all related to Vietnam. What we have been listening to is not a speech on that, because 1 do not believe the Leader of the Opposition feels he could justify it, although his Party puts it forward as his view. What we have been listening to is an attempt to excuse the inexcusable and to justify the unjustifiable - that being a statement by the Leader of the Labor Party to the young men of this country that he would advise them to join the Army and to disobey the law. What has been sought to do here is to advance some excuses for that and what tenuous and invalid excuses they are. First of all, there is an attempt to pretend that there is no other way in which a young man who may be called up and who has objections to going to Vietnam or to any other theatre could avoid that possibility, and an attempt to pretend that if that young man joins the CMF then he is not thereby excused from that kind of service - an old legal attempt to pretend that there is something in this. Everybody in this House, including the Leader of the Opposition who made these tenuous excuses, knows that there has not been a single instance since the Vienam war has been in operation when someone who has joined the CMF for service there has been called up as a conscript or has been sent out of this country. That has been made known to the Australian people. That has been accepted by the Australian people and that, in all common sense, is an alternative, and a proper alternative, to get the young man for whom the Leader of the Opposition says he is so concerned out of the obligation to carry out his service.

In advancing these unbuttressed excuses the Leader of the Opposition started by misrepresenting other Ministers who had spoken. He said that these people had spoken on behalf of the Vietnam commitment. These speakers were speaking on behalf of the proposition that it was completely destructive to admit into the operation of the military forces in this country the concept that any individual in them could, at a particular time, say: ‘1 do not want to go to this place, that place or the other place. 1 have conscientious objections to doing so’. This cannot be confined to one theatre. It must be regarded as something that the Opposition would wish to see brought in for the first time in our history into our forces. So far as I know it has never been brought into the operations of the forces of any other country.

Even when the Labor Party was in government, in the war against Fascism it introduced conscription. It introduced an area into which it would send conscripted forces - a confined area, but an area. There was no suggestion then that there be provision for somebody to say: ‘I do not think I should go to Bougainville; I have conscientious objections about that’ or ‘I do not think T should go to Borneo; I have conscientious objections about that’. Why, I wonder, has this newfound desire to allow the individual to choose the theatre of war to which he would go suddenly been imported?

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I point out to the House that the Leader of the Opposition was heard in silence and I would suggest that the House extend the same courtesy to the right honourable the Prime Minister.

Mr GORTON:

– Thank you, Mr Deputy Speaker. I wonder why this has suddenly been imported into the concept of military service by a Party which did not ever have it before. Following on these cobwebby arguments that were put, what next was put to us? Mr Nixon has been able to withdraw 200,000 troops. Well, so he has. But why? Because he retained troops in that country, at a time when the Leader of the Opposition and all members of the Opposition were screaming that we and they should get out, until a situation was reached where that country was strong enough to be able to defend its self-determination and to allow the withdrawal of those troops at the same time. What sort of a position would it have been if that which was urged by the Labor Party at the time had been carried out and all foreign troops had been withdrawn then? We would not have now been in a situation where South Vietnam would be able to come within reach of being able to have self-determination and where the amount of support given to it would be able to be reduced. Rather would we have that country already overrun by the North Vietnamese and a blood bath similar to that which occurred in North Vietnam On the consciences of those who urged this step had that step been taken at that time.

There is no alteration whatsoever in the approach of the Australian Government to this matter. If the Opposition and the Leader of the Opposition wish to go before the Australian people now and say: ‘This is our view and if we ever become the Government we will put that view into operation, that anybody called up into any branch of the armed Services can choose the area in which he will fight’, let them say so, because we will not accept that, and if it were to be accepted it would be greatly to the detriment and harm of the people of Australia. This whole matter, this new initiative, this new desire is part of a pattern which stretches back well into the past, though not so far back into the past as the Leader of the Opposition might wish us to think, because the operation of Australian troops in Vietnam was not always a matter of conscience with the Leader of the Opposition. Indeed, in the cause of the 1966 elections when he disagreed publicly with his then Leader, he made a statement to Australia that the Labor Party would leave our regular troops in Vietnam if, after consultation with the Vietnamese and the Americans, it felt they should stay there. No matter of conscience there, at that stage. It seems to have developed later during the time when the military situation of North Vietnam and the Vietcong got less and less effective.

Let us consider the whole sequence of events: The demand for withdrawal, without conditions, back in 1967; then the claim that the United States as well as ourselves were immoral in being in Vietnam; then the advice to young men to join the armed forces if they had to but to refuse to obey an order when they were in that situation; and now a demand, because a great new peace initiative has been made by President Nixon, but not accepted, that because that initiative has been made we should at once withdraw all our troops before there has been any acceptance of negotiations and certainly before those negotiations have been brought to a conclusion which can give to the people of South Vietnam that self-determination for which we have been fighting since the beginning of the war and which, in statement after statement since 1967. has been made clear on behalf of various Prime Ministers of this Government. What sort of situation is it that the Opposition is suggesting now? Another help to the North Vietnamese.

Mr DEPUTY SPEAKER:

– Order! The honourable the Prime Minister’s time has expired.

Mr HURFORD:
Adelaide

– I want to tell this House about Charles Martin who is. as I believe it, the only person at the moment serving a 2-year sentence in Yatala Prison-

Mr SNEDDEN:
BRUCE, VICTORIA · LP

Mr Deputy Speaker, have you called the honourable member in pursuance of this debate?

Mr DEPUTY SPEAKER:

– Yes.

Mr Snedden:

– I move:

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

AYES: 56

NOES: 52

Majority . . . . 4

AYES

NOES

Question so resolved in the affirmative.

SALES TAX BILLS (Nos1 to 9) 1970

Second Readings

Debate resumed from 18 August (vide page 104), on motion by Mr Lynch:

That the Bills be now read a second time.

Mr SNEDDEN:
Minister for Labour and National Service · Bruce · LP

– May I have the indulgence of the House to raise a point of procedure regarding this legislation. Before the debate on these Bills is resumed I would like to suggest that it may suit the convenience of the House to have a general debate covering the Bills and the Sales Tax (Exemptions and Classifications) Bill, as they are related measures. Separate questions may, of course, be put on each measure at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of these Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Mr Lucock:

– Is it the wish of the House to have a general debate covering these measures? There being no objection, I will allow that course to be followed.

Mr CREAN:
Melbourne Ports

– The Opposition intends to oppose these Bills because they are part of the

Budget system that imposes taxation increases with one hand and grants certain reductions with the other. The increases in sales tax are regressive in their incidence and inflationary in their effects. For that reason it is the intention of the Opposition to oppose the measures. For reasons that were explained by the Minister for Immigration and Minister assisting the Treasurer (Mr Lynch) and explained in technical detail also in the 48th report of the Commissioner of Taxation, 9 Bills have to be presented on a sales tax measure because of the way in which the tax is imposed. I do not want to go into the technical details, but those who are perhaps new to the House and sometimes wonder why 9 Bills have to be introduced will find the explanation on page 63 of the 48th report of the Commissioner of Taxation.

This year §645m will be collected in sales tax. Next to excise duty, income tax on individuals and company tax, sales tax is the fourth most prolific item in the Commonwealth Budget, lt is interesting to note the history of sales tax from its beginning on 1st August 1930. We have now had more than 40 years of sales tax in Australia. Table No. 34 on page 65 of the 48th report of the Commissioner of Taxation gives the history of the rates of sales tax as they have applied from 1st August 1930 to just prior to those increases. Originally the tax was a simple one of 2i per cent. Since that there was a general rate, a Second Schedule, a Third Schedule, a Fourth Schedule, a Fifth Schedule and a Sixth Schedule. Two of those do not operate any more, so there are 4 operative rates at the moment.

These Bills propose to increase the present maximum 25 per cent rate of sales tax to 27i per cent. The principal item to which it will apply, of course, is the motor car. When the Minister made his second reading speech he circulated a document indicating the items to which this 2i per cent increase would apply. Later on I want to say something about some of the items. The increase will be responsible for a further $29m revenue in this financial year; that is, from the time it became operative up to 30th June next year, $29m more will be collected than if the increase had not taken place. That, of course, will be part of the total of $645m. The Opposition opposes these measures because our view is - and I hope that some figures 1 will give in a moment will support this - that the Government has been mistaken in its Budget strategy. It has presumed the continuance of an inflationary situation and it has thought that increasing the amount of indirect taxation will lead to a decline in the rate of inflation. I am not quite sure how this philosophy is supposed to be worked out. 1 understand that the increased sales tax, let us say, on a motor car has already meant an average increase of $60 for a new motor vehicle - an increase of 10 per cent. The number of new motor vehicles purchased each year in Australia is over 400,000, rising towards a figure of 500,000 per annum. If we collect §600 on something like 450,000 units this means a total of something like $270m, a major part of the total sales tax collected. It seems to me that there is not a great deal of logic in the construction of the sales tax as to what is taxed and what is not taxed. There is a fairly large body of sales which are exempt altogether and it is probably a good thing that there are not taxes on foodstuffs, clothing and so on. Again, if one looks at the statistics of the Commissioner of Taxation one finds from a table that this tax is collected on only about one quarter, 1 think, of the total retail sales in Australia during a year. The tax is imposed at what is described as the level of the last wholesaler. But if we take the financial year 1962-63 as a guide, in that year what the Commissioner of Taxation describes as the net effective rate of sales tax was 14.1 per cent on those goods on which it was applied. That figure has risen progressively each year.

From 1961-62 until the last year for which full statistic1! were available, which was 1968-69, it had increased to 15.1 per cent on the items on which it was applicable. So there has been a systematic increase in the impact of this tax in total and that is, of course, borne out by the figures of total collection which have risen again from $290m in 1961-62 to an anticipated figure this year of $645m. If one looks at the gross national product over the same period, sales tax is now a higher proportion of gross national product or gross national expenditure, whichever way one likes to look at it, than it was many years ago. In a moment I. would like to say a little more about the philosophy of taxation in this context. Tomorrow we will be talking about the alterations in the income tax structure. In the course of his Budget Speech the Treasurer (Mr Bury) indicated that he hoped that what had been done with the income tax structure would only be the beginning of a complete new look at the total tax structure in Australia. I hope that this will be the case, and one of the methods of taxation that ought to be looked at, in addition to the direct form of taxation, is the multiplicity of items that are called indirect taxation. They are not all levied at the Commonwealth level; the majority of taxes that are available to the States and local authorities fall into this category of indirect taxation, and when one takes the total impact of taxation throughout Australia at all 3 levels of government - and it amounts now to something like 30 per cent of the gross national product - there has again been an increasingly greater reliance than there should be on these indirect taxes as a source of revenue.

Recently in Canada - and I hope some day that the same kind of thing will happen in this country - there was a royal commission on taxation. It presented its report in 1966. On page 146 of the series Penguin Modern Economics Readings’ in the publication titled ‘Public Finance’ there is an extract from the report of the royal commission on taxation in Canada and it had this to say about sales tax:

Rigid adherence to our equity principles- they were the principles that the Commission felt should apply in a total structure - would call for the complete abolition of all sales taxes. Any adverse effects which the abolition of sales taxes and the increased reliance on personal income taxes would have on the rate of saving and on Canada’s international competitive position could be offset by changes in monetary and trade policies and the fairness of the system would be improved. We do not advocate such a course, in part because we think that virtually the same result could be achieved in a way that would be less disruptive. For reasons to be explained later, we recommend that the federal government abandon its manufacturers sales tax and replace it with an indirect retail sales tax collected, if possible, by the provinces. Having taken this step the federal government should then seek to provide the provinces with sales tax room in exchange for provincial withdrawal- there is a different scheme of arrangement in Canada, of course - from the imposition of corporation income taxes.

It goes on further in that vein, but the suggestion there is that there may be, even if we decide eventually to retain some sort of sales tax, better ways of collecting it than the existing methods. A couple of years ago I made reference in this House to a device that has been adopted in some of the European countries, that is, a tax called the value added tax. It is a rather complicated mechanism and I do not intend and could not explain in simple language its application. But nevertheless when one is talking of forms of taxation one has to be concerned with the complexity of the problem. The other day I was interested in reading in one of those statements that emanate from the Prime Minister’s Department - one of the various utterances that he and others make - that in the course of a discussion the other day he said that he thought it was not a bad idea to toss ideas around in public without indicating what one’s view on a proposition was because in matters that are controversial by so doing one may perhaps enlighten the public as to the complexity of the problem. I think the same sort of thing applies when one comes to talk about reforming the total tax structure.

Honourable members ought to realise that it is a most complicated system that we are dealing with. It is one that has grown up over a great number of years and which it is not possible to radically change quickly. 1 have often thought that it would not be a bad idea if we could have a tax holiday and say that on 30th June 1971 all taxes throughout Australia will cease, but then add the unfortunate rider that on 1st July 1971 a new set will come into operation. Because it is virtually impossible to do that one has to make changes rather more slowly and this is why I think that when reductions or increases are made they should sometimes be made a little more carefully than they are. Certainly in regard to the income tax adjustments we will be discussing tomorrow, in my view they were made in the worst possible manner.

The reason given by the Government for these increases in sales tax is that it hopes they will lessen somehow the impact of inflation raging in the community. To me it is a rather dubious proposition. Let us say, for example, that you increase the sales tax on a motor car so that the price is now S60 greater than it was. I think it is a matter of fine judgment as to whether you really restrict the sale of motor cars or whether you are restricting the sale of something else. 1 used the argument in this place once before that you put a tax on cauliflowers in order to reduce the consumption of cabbages. I think overall that this is the intention of the Government in this instance. 1 do not really think that the Government believed that the sale of motor cars would be affected very much because it has budgeted for a further $29m during twothirds of the financial year even after this impost.

I was rather interested this morning to read an article in today’s ‘Financial Review’ written by Mr P. J. Sheehan of the Australian National University, lt is headed Monetary reasons why an Australian business slowdown could continue’. Table 1 in the article is headed ‘Selected production series 1970. (Seasonally adjusted, average of monthly figures.)’ and he gave the total motor vehicles per thousand units. In the first quarter of this year there was a total sale throughout Australia of 40.6 thousand motor vehicles. In the second quarter the figure had declined to 39.1 thousand. In the period from July to August it was proportionately 37.8 thousand or, as he says, a percentage change of this quarter over the first quarter of 7 per cent. In the text of the article he said:

Total registrations of new motor vehicles rose somewhat in July-August over the monthly average of the second quarter, but remained below the level of the first quarter.

Retail sales were virtually flat in May, June and July, although they pulled up a little in August. The rate of growth of spending on capital investment other than construction pulled back sharply in the June quarter.

The portent of his article is that it is his belief that the Government has misjudged the total tempo of the economy and whilst there may be inflationary trends, nevertheless there are signs of declining economic activity relative to the total population and the total activity. I submit that if what he says continues to be borne out it is likely that there will not be as many motor cars sold as was projected. The motor car industry in Australia is fairly significant. As some of my colleagues already know, there has been a dreadful impact as a result of the farming situation upon the sale of tractors in our economy, leading to a decline in the industrial area of Sunshine in Victoria where some hundreds of men have been laid off since the beginning of this year. Even now the number of men employed is continuing to reduce further. One would hope that that kind of impact will not continue further. Nevertheless this shows bow careful one has to be when judging the effects of budgetary measures.

To me it has seemed always to be a curious philosophy that somehow you restrict inflation by increasing the price of certain articles by imposing additional tax on them. This same point is made in this rather interesting annual compilation called Impacts on the Australian Economy 1969-70’ by 2 young economists, Messrs Coysh and Treyvaud. I commend them for the speed with which they issue this information. The matters they write about in this book are based on the current Budget. They say:

Earlier we referred to the fallacy of indirect taxing as an anti-inflationary device. Indirect taxes directly raise the price of products and since they are levied mainly on goods with a fairly inelastic demand, it is possible that a greater amount of money will now be spent on those goods.

If there is a greater amount of money spent on those goods there will be a lesser amount of money spent elsewhere and that seems to be where the deflationary aspect lies. The authors continue:

It may follow that less money is saved, which means a greater volume o£ money in circulation and hence a growing pressure on demand.

So the effects are not always easy to follow; nor can one be dogmatic as to what they can be. They continue:

This factor coupled with a direct inflation of the consumer price index by virtue of the artificially higher prices of the affected goods will obviously worsen the inflationary process that the policy was designed to remedy.

An alternative view is taken by the Treasurer, namely that in terms of influencing the trend in demand, changes in indirect taxes of these sorts have a more immediate effect than changes in other forms of taxation.

In his Budget the Treasurer (Mr Bury) actually reduced direct taxes and increased indirect taxes. The authors continue:

He also expects that company taxes will reduce the funds available for investment by companies and. the dividends to shareholders.

Again this simply shows how difficult it is to make precise judgments in these matters. It is the view of the Australian Labor

Party that the increases announced in this Budget - this Bill accounts for $29m of the increases - will be regressive in their impact as between individuals; that rather than abate inflation they will tend to feed it. lt ought to be realised sometimes that you can actually inflate the economy into a deflationary situation if real incomes are not adjusted fast enough to mop up the goods and services available in a community.

I think that is the point we are reaching in Australia at the moment. One rather astonishing phenomenon today Ls that everybody is alarmed by what is called the tendency for wages to rise. I point out again, as I have done in this place on more than one occasion, that the wage earner is the preponderant form of economic unit or spending unit in the community. More than 80 per cent of the people with incomes derive them as wage earners. If they are to maintain their standards and gel some share of the increased productivity, and if prices continue to rise as they have, the only way by which the wage earner can maintain and improve bis position is by increasing wages. But then the problem arises: What about the other sections in the community? lt is rather astonishing now to hear the number of people beginning to talk about the necessity of price control. It is also rather astonishing when we realise the areas those people represent. The wage earner always has insisted that if there were some measure of control of the prices of the goods which his wage is supposed to buy there would not necessarily be the same need to go for annual wage adjustments. But in default of controlling prices just as effectively as you try to regulate wages, the only course open to the wage earner is to seek higher wages. I hope that the Government will grapple with this very serious problem in the community. It is one of considerable complexity and affects the whole economy in aggregate. Something should be done to provide justice to all sections of the community - not only wage earners but those on fixed incomes and those people whose incomes are uncertain, such as the farming section and so on - and to curb the capacity of those who are able to adjust their prices to suit themselves.

In the few minutes that remain I would like to draw the attention of the House to the complaints of 2 groups in the community and no doubt there are more with complaints. However, the 2 groups I want to mention are the soft drink manufacturers on the one hand and the cosmetic and toiletry manufacturers on the other. Fortunately the burden of the soft drink people is not increased in this Budget. Although there is no increase as far as their product is concerned they still complain that their product should not be taxed at all. The cosmetic and toiletry group argues likewise. This group has had an additional burden placed upon it - the amount of sales tax on articles in this category is to be increased from 25 per cent to 27i per cent. In a letter written in June 1970 the Cosmetic and Toiletry Manufacturers Association of Australia said:

Dear Sir:

We are writing to enlist your aid in achieving a tax reduction, long overdue, for Australian women and their families.

What the Association did not anticipate was the guile of this Government. Instead of reducing tax the Government is increasing it. The letter continues:

In the past 14 years we have made repeated representations to the Federal Treasurer for a reduction of 25 per cent ‘luxury’ sales tax on cosmetics and toiletries to the general rate of 15 per cent.

Again, our request is supported by a wide range of women’s organisations, individual women and industry associations.

Mounting support by women’s organisations is disclosed by the list in the enclosed document setting out the case for taxation justice for Australian women.

Would you kindly add weight to our campaign by making direct representations to the Federal Treasurer for a reduction of the tax in the 1970-71 Budget.

Yours faithfully,

J. AUSTIN

President

No doubt Mr Austin is well now aware that this plea has not been listened to and instead of a reduction, cosmetic and toiletry manufacturers face an increase. The Association used a rather powerful method of comparison to show how ridiculous in essence is some of the structure of sales tax. In a document attached to its letter the Association states:

What modern woman, or man for that matter, would consider lipstick, nail polish, powder or deodorants a luxury? Surely we all recognise these and many other similar products as essential to appearance and acceptance in today’s society.

Consider these ridiculous anomalies in the tax schedule. . . .

The Association sets out a list which shows that dog powder is free of tax while baby powder is subject to a tax of 25 per cent; hair nets are free of tax but hair spray bears a tax of 25 per cent; women’s gloves are free of tax but hand lotion bears a tax of 25 per cent; baby toys bear tax of 15 per cent and baby cream 25 per cent; compacts are taxed at 15 per cent but face powder at 25 per cent; and dog clippers are subject to a tax of 15 per cent while razor blades are taxed at 25 per cent. The Association points out:

There is no logical argument in favour of continuing this deplorable injustice and if the Federal Government has any regard for fair play it must reduce this tax in the 1970-HI Budget.

Despite this powerful plea the tax has not been reduced; instead, it has been increased. Whilst this is not the only reason, it is certainly one of the reasons why the Opposition is of the opinion that the set of Bills which is now before us should be opposed, that the increases are unnecessary and unduly regressive and that they arise out of a total misinterpretation by the Government of the health of the economy. We believe that the only effect that the increases can have is to worsen what is already a deteriorating situation.

Mr COLLARD:
Kalgoorlie

– I rise, like the honourable member for Melbourne Ports (Mr Crean), to oppose these Bills. Sales tax, like every other form of indirect taxation, is a most inequitable and obnoxious method of gathering revenue. It is a flat rate tax which cannot be avoided and it imposes the heaviest burden upon that section of the community which is least able to bear it. It is a tax which can be justified only during times or conditions of emergency. Because this form of taxation is inequitable, unfair and unjust and as there is not now and has not been for a number of years any state of emergency or any condition such as we had during or just subsequent to the last war, to warrant its continuance, it should be abolished as quickly as possible. Therefore, the Government should have submitted to the Parliament for approval not Bills such as we now have before us to increase sales tax, but a Bill to remove the tax altogether on items that are necessary or are in more common use. We also need a Bill to reduce sales tax on many, if not all of those other items upon which it is presently imposed. But obviously, and unfortunately for so many people, particularly those in poor circumstances, the Government takes the opposite view. It apparently sees sales tax as the easy way of gathering revenue, irrespective of the effect on the people. Not only has the Government retained the schedules but it has indeed made the situation even worse by increasing the tax rate on quite a large number of items which are generally necessary to all people.

If the Bills which we are now debating are approved by this Parliament - and I sincerely hope that they are ‘not - it will simply mean that there will be an increase to 27i per cent on all of those items which are at present carrying a tax of 25 per cent. To worsen the situation even more, the articles upon which the Government proposes to impose additional tax on this occasion are those which to a very large extent are in everyday use in practically every household. This in turn will mean that persons with small incomes or with large families will be hit much harder than those with large incomes or with no family at all. The pensioner will be hit much harder, for instance, than the Treasurer; the labourer will be hit much harder than the millionaire. If a pensioner and the Prime Minister enter the same shop and purchase an identical article such as a tube of shaving cream or a packet of razor blades they will both pay exactly the same amount of lax. They will both make the same contribution to revenue. If we compare the salary of the Prime Minister wilh the meagre amount the Government allows to the pensioner it is quite obvious that the burden upon the pensioner will be much heavier than the burden on the Prime Minister. With any kind of flat rate indirect taxation the pensioner and the Prime Minister make an equal, contribution in regard lo the amount they pay for an article. But they make a most unequal contribution with regard to their ability to pay. Surely this should never be an acceptable method of revenue contribution except in times of emergency. The only way to overcome this inequitable and undesirable situation is to remove the tax from the articles of purchase altogether. When addiitional revenue is required the tax should be levied where it should be levied and it should be done in a direct manner.

As I said earlier, this Government takes a completely opposite attitude. Indeed, it is aggravating the matter. What the Government is doing - this can be shown still further when we are discussing the Income Tax Bills - is reducing revenue from incomes by giving, for instance, tax relief of §428 a year to taxpayers who have a taxable, not actual, income of $378 a week. Further, the Government is giving relief of $418 a year to taxpayers whose taxable incomes are $20,000 a year. The Government is re-gathering to a large extent these amounts by imposing an additional sales tax upon items or articles which pensioners and others on small incomes cannot avoid buying. In other words, the poor will be forced to pay more so that the rich will be able to pay less, and in some cases substantially less. Having seen Bills introduced to give income tax relief to persons with quite substantial incomes - in some cases incomes up to $30,000 - surely we are entitled to a clear explanation as to why the Government should consider it necessary to increase sales tax which is a tax everybody has to pay irrespective of income. But we have not been given that explanation or information. We have been told nothing at all in that respect.

When introducing the Bill, the Minister said very little. He said absolutely nothing to justify the Government’s action. He gave us no figures or information to show us the need for the increases; neither did he give us an explanation as to why any additional revenue, if it were required, could not be gather by more equitable methods. The Minister was completely silent in that regard. But he did point out for some reason, for which he gave no explanation either, that the increase of 2i per cent would not apply to motor vehicles of a commercial nature and further that the present rate of 15 per cent tax which is applied to a large number of unspecified goods would remain unaltered. The Minister’s reference to those items, without giving the full story, may have conveyed the impression that the Government was resisting increased sales tax wherever possible, but the fact of the matter is that only 2 years ago an additional 2J per cent was imposed on these articles. Since that time people have been paying that extra tax on such things as commercial vehicles, tyres, tubes, motor spare parts, children’s toys, sporting equipment and a large number of other items that are listed in the schedules.

I take the Minister’s remarks to mean that while the Government actually favoured an increase in all sales tax it was hesitant to take that action at this moment. For the past 2 years the sales tax on practically every article of common use that comes within the tax schedules has been increased by 2i per cent. There never has been a suggestion that the Government would discontinue this method of imposing tax or would discontinue the increases. Perhaps I am not quite correct when I say that, because I see, by reading the 1948 Hansards, that Mr Arthur Fadden and Mr McEwen.- although they did not promise, certainly suggested that under a LiberalCountry Party Government sales tax would be abolished. That was at the same time as they promised to abolish the means test and to put value back into the pound. So I do not suppose we can take much notice of that. In complete contradiction of what was suggested or promised in 1948 the Government is continuing with this obnoxious method of gathering revenue. By increasing the amount of tax the Government is rapidly becoming a main offender and a main cause of the increasing cost of production and of the increasing cost of living, which in turn means that it is a main offender in lowering the living standards of those in poor circumstances and is causing an extension of and a deepening in what are termed pockets of poverty.

Two years ago, when the sales tax on those articles to which I have just referred - tyres, tubes, etc. - was increased, the Treasurer told us that the estimated increase in revenue would be $44m. On this occasion he told us that the proposed increase will be $29m. This being so, next year the people will pay $73m more in sales tax than they paid 2 years ago. Certainly there is no suggestion of any reduction in sales tax or of any removal of the sales tax by the Government. The section of the community from which the

Government will continue to gather a substantial amount of this tax is that in which the breadwinner is trying to provide for and raise a family on a fairly low income. This is the very group which the Prime Minister before the last election said required consideration in relation to income tax and the very section which he agreed was being treated inequitably and which he promised to assist but which, in actual fact, has received very little consideration in relation to income tax reductions. People in that section are now being called upon to carry a much heavier burden of sales tax. For instance, a person with a taxable income of $1,000 will receive the magnificent and what the Government calls a generous reduction of S5.53 in his income tax. Undoubtedly he will have it all regathered from him in sales tax. The person with a taxable income of $16,000 will receive an income tax reduction of $500 and could pay little if any more - in fact, he could pay less - sales tax than the person whose taxable income is only $1,000. Apparently this is the Government’s way of correcting what it calls an unfair burden.

If honourable members care to examine the taxation statistics for 1968-69, which are the latest available, to me anyway, they will find that out of a total of just over 5 million residents and non-resident taxpayers 4,930,000 have incomes of less than $10,000 while more than 3 million have incomes of less than $3,000. Because sales tax is a flat rate tax. and everybody has to pay the same, if everybody bought the same amount of goods - and there is no reason why they could not do so to a very large extent when we look at the majority of items upon which the increases have been imposed - people with an income of less than $10,000 a year can be expected to pay approximately $71. 5m of the total $73m to which I referred earlier. Taxpayers with incomes of $10,000 and more, up to $.100,000 and more, will pay only about $1.5m. The position is even worse than that because taxpayers whose incomes are no more than $3,000 will pay much more than half of the additional sales tax. On the 1968-69 figures half the increase will come from that section of the community where the breadwinner has an income of $2,800 or less. That group includes pensioners whether they be aged or invalid pensioners or widows. They will pay the same amount of sales tax as anybody else.

The Treasurer has informed us that he estimates that the increases in sales tax proposed on this occasion will bring into the Treasury an additional $29m. This being so, it is rather interesting to find that the income tax relief measures which have been proposed to give substantial tax reductions to those taxpayers whose taxable incomes range from and include $10,000 up to and including $20,000 will amount to approximately $27m. This means that $2 7m of the $29m which is to be gathered from additional sales tax will offset the income tax relief which is to be given to the group to which I have just referred. The remaining $2m will be sufficient to offset the income tax relief which is to be given to the groups whose taxable incomes are between $20,000 and $3.1,000. So it would appear that the reason for imposing this additional sales tax was to permit giving income tax relief of amounts such as $500 on a taxable income of $16,000, $479 on a taxable income of $17,000 and so on - so that this relief could be given to these groups of taxpayers. If this is so, it is no wonder that the Minister was very careful to avoid telling the House why the sales tax increases are to be imposed.

If my figures are correct - and .1 think they are - it would seem fairly obvious that if the Government had given income tax relief only to those whose taxable incomes were $10,000 or less there would have been no need to increase sales tax. By doing it this way, the people on the lower incomes would have received the full benefit of any income tax reductions; not as it is at present, with these people receiving very little if any relief at all. It seems to me that it would be a perfectly ridiculous situation if a person with a taxable income of only $500 were obliged to pay $8.81 income tax and then some immeasurable amount of sales tax when at the same time a person with a taxable income of $30,000 were given a tax relief of S70. The person with a taxable income of $500 cannot avoid paying sales tax because it is imposed on such articles as shaving necessities, hair oil, face powders, body powders, which include baby powders, many toilet preparations, wireless sets, television sets, motor cars and all articles which any man, wife and family would normally use - even toys. The Government is attacking not only in the kitchen, laundry, garage, playroom and on the playing field - no-one can escape it - but even in the nursery and in the bedroom it is attacking. The Treasurer is holding out his hungry hand.

One of the lists of articles upon which the Government has increased sales tax to 27 i per cent includes artificial flowers, artificial fruits, artificial leaves, artificial berries and so on but ignores wreaths. The exclusion of wreaths suggests that perhaps some thought was given to the use of flowers at funerals. But apparently the fact that many people are obliged to place artificial flowers and greenery on graves has been overlooked or considered to be of no consequence. Perhaps artificial flowers and greenery are placed on graves because fresh flowers are not available or because the cemetery is such a distance away that fresh flowers would wilt and the grave would show signs of neglect before the next visit could be paid. So what the Government is doing is placing a tax on mourners, on the people who are endeavouring to bring a touch of brightness to the last resting place of a loved one. One wonders how heartless and how grasping this Government can be. Also, of course, many people cannot obtain or afford to buy fresh flowers or greenery to place in their living rooms or dining rooms in order to brighten up their houses. These people also are obliged to buy artificial flowers. Yet, in circumstances like that, this Government is prepared to gather its revenue from those people.

The Bills which are now before the House and those which were introduced and passed a couple of years ago are and were in direct contradiction to the recommendations of the Loder Committee which was appointed by the Government in 1964 to carry out investigations of transport costs in Northern Australia. The Committee brought down its report in September 1965. It drew very obvious, valid and important conclusions. One of the matters to which it referred was the effect of sales tax on the cost of living in the north. While the Committee mainly referred to transport - the terms of reference obliged it to do so - its comments and conclusions also related to the effects of sales tax generally, lt has become quite obvious that the work of the Committee was a great waste of public money simply because the Government has failed or refused to take heed of the Committee’s recommendations.

After all, amongst the terms of reference of the Committee was the question of the need for ‘achieving significant and stable increases in the population of the area and to suggest possible means whereby the costs may be reduced’. What the Committee said in effect was that in order to achieve that end it was necessary for the Government to ease the burden of sales tax. But, of course, this Government has adopted the opposite attitude, lt has increased sales tax, thereby increasing the cost of articles in the north. This in turn would not encourage people to go there - in fact, it would discourage them.

One of the very bad features of the existing sales tax laws and indeed of all indirect taxation laws is that people living in the higher cost areas, such as in the north - although there are many high cost areas which are not in the north - are obliged to pay much more sales tax (ban do people who live in the lower cost areas. If one cares to make a list of all the articles which an ordinary person would purchase in a year, one finds a very considerable difference in the total amount of sales tax which is paid by people living in the high cost areas and by those living in the low cost areas. 1 think 1 have shown that for several reasons sales tax in its present form is inequitable and obnoxious. It is a flat rate tax than can be avoided only by death from starvation or privation. It places a greater burden on the very poor than it does on the very rich. It places a greater burden on the large family than it does where there is no family at all. It causes the living standards of the lesser privileged to be substantially damaged. It imposes a burden on people, such as pensioners, when if justice were applied that burden should be carried by the wealthy. It causes people in some areas, that is, in the high cost areas, to make a greater contribution to revenue than do people in the lower cost areas. For those very good reasons I oppose the Bills.

Mr MARTIN:
Banks

– For the first time since I have been in this Parliament we have the situation in which 3 Opposition members have spoken to oppose a Bill and not one Government supporter has spoken to support it. I do not know whether or not this is usual. I think that Government supporters are either ashamed of the Bill or they have not got the courage to stand up and support it. 1 would not like to think that there was not a Government supporter who was capable of standing up to support the Bill. I give honourable members opposite the benefit of the doubt. I think that they have not got the courage to stand up and support it, and I think that they have very good reasons for not supporting it.

Sales tax is an inequitable tax. It is implicit in any taxation system that the tax burden should be based on ability to pay. The tax burden should be distributed fairly amongst the community; sales tax is not. 1 should like to quote from the White Paper which was brought down by the Canadian Minister for Finance in 1969 which related to proposals for tax reform in that country. The principles about which the Canadian Minister for Finance speaks apply with equal force in Australia. Hesaid:

Fairness in taxation implies 2 principles. First, it means that people in similar circumstances should carry similar shares of the tax load. But, for a variety of reasons - historical, accident, outdated decisions or short-term expediency - taxpayers’ circumstances are defined in ways that ignore certain forms of income and expenditures. Many of the wealthy in our society have benefited unduly. A taxpayer is understandably angry when he sees that he carries an extra tax burden to pay the cost of unfairly low taxes on others. This concept of fairness must shape the standards we apply . . .

As I said, I suggest that the principles as enunciated there apply with equal force in Australia. Further on he said:

Fairness also requires that people with higher incomes, people who are better off, should be expected to pay in taxes a larger share of their incomes than persons with lower incomes.

I think that quotation contains the argument against the imposition of sales tax as such. There is only one equitable form of taxation, and that is a progressive income tax based cm ability to pay. But sales tax is not imposed in that way.

Let us have a look at the principles of sales tax. The tax was imposed in 1930 as a temporary measure. It was imposed during the depression years. When it was first imposed the rate was 2½ per cent on all goods which were not specifically exempted. In the period between 1930 and 1939 the rate was increased gradually until it reached 6 per cent. Then came the war years from 1939 onwards. In those years the necessity arose to increase sales tax. This was done by governments of all political persuasions which were in power during those years. Eventually, in 1942, during the darkest days of the war, a sales tax rate of 25 per cent was introduced for articles in the Third Schedule. The rate was even increased to 50 per cent in 1951. If my memory serves me correctly, Labor was not in power in 1951.

During the war years there grew a concept of a sales tax rate on luxury items. That concept has been carried forward from those days to the present time. Let us have a look at some of the items which previously attracted a rate of 25 per cent but which will attract a rate of 27½ per cent and see whether they fall within the category of luxuries. In the list we find such items as paper weights. Is a paperweight a luxury? Possibly it may be a luxury if it is necessary to defend oneself with it. Other items include paper knives and fobs. I suppose a fob would be classed as a luxury today, although I can see honourable members in this chamber who wear fobs. I would not say they were wearing a luxury item. Nutcrackers will now be taxed at the rate of 27½ per cent. Could anybody in his wildest dreams tell me that a nutcracker is a luxury and should be put in the luxury class? Incense burners fall into this category. I do not know who the Government is getting at here, whether or not it is getting at High Church of England or Catholic Church people who burn incense. Is it getting at the hippies or the flower people?

Mr Turnbull:

– The Presbyterians are safe.

Mr MARTIN:

– They may well be from this Government. Other items of luxury include cigarette lighters. Sales tax on these items has increased from 25 per cent to the higher rate of 27½ per cent. Other luxury items include fountain pens and ball point pens. They will also be taxed on this basis. Even refills for the ball point pens are classed as a luxury and the full rate of 27± per cent is applicable. A watch is a luxury; it is not a necessity any more. The list goes on to mention toiletries and beauty preparations. Would anybody tell my wife or the wife of any honourable member of this House that the toiletries that they use are a luxury? I guarantee that many honourable members in this chamber would not be game to go home and tell their wives to cease buying these luxuries - toilet preparations, lipsticks and face powders. I doubt that there would be one member in this Chamber who would have the courage to do it. Powder compacts, powder puffs, powder sprays, powder bowls and lipstick containers are also classed as luxury items. I do not know whether this Government is knocking the ladies of this country. After all, more than 50 per cent of the voters are women.

The poor old man does not escape this inequitable sales tax either. Safety razors and safety razor blades are subject to sales tax of 27± per cent, whereas previously the rate was 25 per cent. They are now classed as luxuries. Included in this list are electric razors, shaving brushes, shaving sticks and shaving creams. I do not know what the Government expects the men in this country to do. Does it expect them all to become like the hippies and to grow beards? I know at least one member in this Parliament who is apparently suffering from the effects of this Government’s policy and is growing a beard. Does the Treasurer (Mr Bury) expect us all to grow beards? 1 do not know. Toilet and dressing cases are also included in this list. I could run through this list and ridicule the items on which this rate of 27i per cent is imposed. 1 think this Bill is deserving of ridicule.

Some items on which sales tax has increased from 25 per cent to 27i per cent have felt the very heavy hand of the Treasurer even in recent times. Let us take tape recorders. Up to 1967 the rate of sales tax on tape recorders was I2i per cent, and when the Sales Tax (Exemptions and Classifications) Act (No. 80 of 1967) came into operation on 16th August 1970 the rate was increased to 25 per cent. Now it goes up to 27i per cent. I do not know whether a tape recorder can be classed as a luxury. I think it plays a very important part in a person’s schooling nowadays. I grant that a certain amount of pleasure can be obtained from a tape recorder, but does that place it within the category of a luxury? Even still photographs and cinamagraph film which were previously taxed at the rate of 124- per cent up to 1967 and increased to 25 per cent in that year, wil now be taxed at the rate of 27£ per cent.

I think the instances I have given show the complete fallacy of this type of taxing, lt is inequitable. The burden is not shared equally. As the honourable member for Kalgoorlie (Mr Collard) said earlier, the burden falls equally on the widow and on the pensioner, just as it does on the very rich person, lt is an inequitable tax and should not be in existence, lt. should be replaced by a progressively based income tax. When the Labor Party gets into power - and it will - its policy will be gradually to abolish sales tax, except for luxury items, and replace it with a more graduated scale of income tax which is an equitable tax.

Mr Graham:

– You had better be careful on that.

Mr MARTIN:

– There is no need to be careful on that. This has been Labor policy for a long time. 1 would like to look at one of the biggest imposts as a result of this tax. It has been on the motor car industry. South Australia is a State which is very much dependent on the motor car industry. In New South Wales, the State from which I come, we are not as dependent on this industry, although it does comprise a big slice of our secondary industry. But the Slate of South Australia will be heavily hit by this impost. It has already been heavily hit. I would like to give a few figures which demonstrate the effect that this tax is likely to have on the motor car industry of that State. South Australia has 2 major motor vehicle manufacturing companies. They are General Motors-Holden’s Pty Ltd and Chrysler Aust. Ltd. These 2 companies between them employ 18,000 people on motor assembly work. Approximately a further 9,000 are employed in the making of component parts for motor vehicles in that State. The total work force employed in manufacturing industries in South Australia approximates 130,000. So one-fifth of South Australia’s employment force is engaged in the motor industry.

Let us have a look at the effect that this tax is likely to have and the intention of this imposition of increased sales tax as it applies to motor vehicles. The obvious intention is to dampen down sales of motor vehicles. Prior to the imposition of this additional sales tax interest rates went up. As a result of that increase sales of motor vehicles dropped by 10 per cent. As yet statistics are not available to show the drop in sales of motor vehicles as a result of the imposition of this sales tax. The full effect of it will be felt in the months ahead. The greatest effect will be felt in the State of South Australia because it is vitally dependent upon this industry. This Government has a lot on its conscience. If the situation in South Australia reaches the stage at which a work force is willing to work in this industry but due to the curtailment of sales in the industry cannot find employment this Government will have to answer for it.

The Labor Party opposes this Bill on several issues. The first is that it is inflationary. The increased sales tax on every item will be passed on to the public. Industry will not carry one iota of the additional sales tax imposed. As a matter of fact, it will pass on more than the amount of increase, as we have seen in connection with other measures, particularly that related to the excise on wine. An additional margin will be charged by manufacturers, wholesalers and retailers on top of the increased sales tax. It is inflationary in that regard also. We oppose this Bill because it is inequitable. I have pointed out earlier in my speech why it is inequitable. The only thing which can be said in its favour is that it is an easy way to collect revenue. This Government has taken the easy way out.

Mr Turnbull:

Mr Deputy Speaker-

Mr Lynch:

Mr Deputy Speaker-

Mr DEPUTY SPEAKER (Mr Jarman:
DEAKIN, VICTORIA

– I call the Minister for Immigration.

Mr Foster:

– What about the honourable member for Mallee?

Mr LYNCH:
Minister for Immigration and Minister assisting the Treasurer · Flinders · LP

Mr Deputy Speaker, in the first place, the honourable member for Mallee (Mr Turnbull) was not seeking the call for the purpose of making a contribution to this debate but rather had it in mind to move the adjournment of the debate. It occurred to me that if I could have the time of the House for a brief period, a vote on these Bills could be taken at approximately 5.55 and, therefore, the debate would be completed and off the agenda paper by the time the House resumed at 8 o’clock.

The Bills before the House in relation to increases in sales tax are expected to raise an additional revenue amounting to $29 m in a full year-

Mr Foster:

– lt was not my intention to rise, but I take a point of order. Out of courtesy, I did not rise when an honourable member on the Government benches who had not spoken yet in this debate appeared to be about to rise. I refer to the honourable member for Mallee (Mr Turnbull). He has seen fit, following glances at him, not to accept the call. Would it be in order for another member of the Opposition to be given the right to speak before the Minister closes the debate?

Mr DEPUTY SPEAKER:

– No point of order arises. I have called the Minister.

Mr LYNCH:

– Apparently the Opposition is becoming somewhat testy on these Bills. It has had the opportunity, with 3 speakers, to cover fully the ground of the Bills, but apparently that is not sufficient for the honourable gentleman who has just resumed his seat, fi he will just contain himself for a moment, I shall tell the House that the approach by the Opposition in this debate has been predictable and if I may say it to the Opposition members who have spoken, has been predictably irresponsible. The Opposition during the course of the Budget debate and in the course of the present debate now in fact has-

Mr Foster:

– A point of order! Can he call us irresponsible without himself being responsible?

Mr DEPUTY SPEAKER:

-The point of order is without substance.

Mr LYNCH:

– I again hope that the honourable gentleman will contain himself. I know that he is having considerable difficulty in subjecting himself to the constraints of this House. If I may commence again in relation to the Bills which are before the House, I point out that, unfortunately, because of the ramblings of the honourable gentleman who has just resumed his seat, there will not be time for me to adequately deal with the matters which have been raised at length and in depth except to say in general terms that on this occasion, as on other occasions, the Opposition has tried to have it both ways. It argued during the course of the Budget debate for massive increases in expenditure and at the same time as the Government brings forward proposals for increases in revenue the Opposition opposes them. . 1 put it to the House that this is not an exercise in responsibility. The Opposition has tried to have it both ways. But, of course, its approach is unreal, impracticable and lacking in responsibility.

As an adjunct to the implementation of the promise to reduce the level of income tax on the middle and lower ranges, the Government decided that the loss of revenue should be made up to some extent by increasing the rate of sales tax from 25 per cent to 27) per cent. This, together with other increases in indirect taxation - I think here of excise duty on cigarettes and motor spirit - will restore to some degree the ratios between direct and indirect taxes which had become out of balance. On this question of the ratio which was referred to by the honourable member for Melbourne Ports (Mr Crean) we see, if we look back to 1960-61, that indirect tax collected accounted for approxmately 42 per cent of the total Commonwealth tax collection. Last financial year, the proportion was 34.2 per cent whilst it is estimated that, for 1970-71, the indirect tax collection will represent 35 per cent of our total tax collections. This is scarcely a major change and clearly goes only a relatively small way along the path of restoring the 1960-61 situation.It is fair to bear in mind also that the indirect tax increases do apply not to basic necessities such as food, clothing and rent but to a limited class of other goods.

If attention was paid to what the honourable member for Kalgoorlie (Mr Collard) and the honourable member for Banks (Mr Martin) had to say in this debate, we would simply dispense with all sales tax, which has been an integral part of the tax structure of this country since 1930. 1 say, frankly, that what they have put forward is not based on any economic realities and that if Labor were in power at this time - and God forbid - it would have no possible hope of reducing the incidence of sales tax. Although 1 have not had the opportunity to deal adequately with what has been put forward - because of what the Opposition has tried to do in disrupting the debate and the lime of the House - I suggest that this might be an appropriate time at which to take a vote on the Bills before the House.

Question put:

That the Bills be now read a second time.

The House divided. (Mr Deputy Speaker - Mr A. W. Jarman)

AYES: 56

NOES: 49

Majority . . . . 7

AYES

NOES

Question so resolved in the affirmative.

Bills read a second time.

Third Readings

Leave granted for third readings to be moved forthwith.

Bills (on motion by Mr Lynch) read a third time.

page 2033

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1970

Second Reading

Consideration resumed from 19 August (vide page 162), on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (cm motion by Mr Lynch) read a third time.

Sitting suspended from 6.8 to 8 p.m.

page 2033

APPOINTMENT OF DESIGNS LAW REVIEW COMMITTEE

Ministerial Statement

Mr HUGHES:
AttorneyGeneral · Berowra · LP

– by leave - I am pleased to be able to announce the appointment of a Committee to review the law relating to industrial designs. The Committee will be under the chairmanship of Mr Justice Franki, a Deputy President of the Commonwealth Conciliation and Arbitration Commission. The terms of reference of the Committee will be:

To examine the Australian law relating to designs and to recommend any alterations of the law that may be thought desirable.

To consider and to recommend whether separate legislative provisions should be made in Australia with respect to utility models and, if it so recommends, the provisions that it is thought should be included in that legislation.

The Chairman is eminently qualified to conduct an inquiry such as this. Before his appointment as a Deputy President he had practised extensively in the field of industrial property law and appeared as counsel in leading cases in this field. The other members of the Committee are Mr P. J. Marsh, Vice President of the Institute of Patent Attorneys of Australia Inc.; Mr R. A. Rosenfeldt, a Foundation Councillor of the Industrial Design Council of Australia; Mr D. A. Freckleton, President of the Australian Manufacturers, Patents, Industrial Designs, Copyright and Trade Mark Protection Association; Mr K. B. Petersson, the Commissioner of Patents; and Mr J. P. Harkins, Senior Assistant Secretary of the Attorney-General’s Department. The Secretary of the Committee will be Mr J. McKenzie, an officer of the Attorney-General’s Department.

The law relating to industrial designs is in need of review. This review was foreshadowed by my immediate predecessor, the Minister for Education and Science (Mr N. H. Bowen), in his second reading speech on the Copyright Bill in 1968. He said then that it was proposed to set up a Committee to review the Designs Act when the Copyright Act had been brought into operation. Apart from 2 minor amendments there has been no substantia] change in the Designs Act since 1904. In 1961 the Johnston Committee in the United Kingdom recommended substantial changes in the United Kingdom designs law. Legislation to effect the changes recommended by that Committee has not yet been introduced the United Kingdom. One of the matters that needs to be looked at is the overlapping that occurs in Australian legislation relating to designs and copyright. There may be uncertainty among members of the public as to the scope of protection and as to which body of law applies in a particular case. These problems and other problems need to be examined with a view to devising a designs law that is most appropriate to the present stage of industrial development in Australia.

I mentioned earlier that one of the terms of reference would be to consider whether separate legislation should be introduced dealing with utility models or ‘petty patents’ as they are often called. The utility model possesses some of the qualities of an industrial design and some of the qualities of a patent but does not clearly fall into one or other of the 2 categories. Several countries, including Germany and Japan, have passed legislation protecting utility models in their own right. The Institute of Patent Attorneys of Australia Inc. has sought separate legislation in this field. The Government thinks that as this subject is closely allied with the law of industrial designs, it would be appropriate for the Committee to report on both matters. The task that the Committee faces is a difficult one but 1 believe that with the expertise and experience that the members of the Committee will bring to its deliberations it will be able to furnish a comprehensive report that will provide a foundation for a modern designs law for Australia.

Mr WHITLAM:
Leader of: the Opposition · Werriwa

– by leave - 1 must congratulate the Attorney-General (Mr Hughes) on the announcement he has made. The subject matter that the Committee will consider is an important one; the chairmanship of the Committee is an excellent one. In fact I must concede that the Attorney-General has been able to achieve something that none of his distinguished predecessors in my time has been able to achieve. Attorneys-General Spicer, O’sullivan, Barwick, Snedden and Bowen never got round to appointing a Designs Law Review Committee. I pay this tribute with all the greater warmth because when a Liberal Government does something on behalf of the people which it has undertaken to do, I think I should acknowledge it. In these days the Government does so many things which it has not warned the people that it would do.

When the Attorney-General was good enough before the dinner adjournment to let me know that he would seek leave to make this statement I thought: This strikes a bell. So I went through Hansard, and then it clicked. The very first GovernorGeneral’s Speech I can remember in this place promised to carry out this very proposal. I looked up the GovernorGeneral’s Speech of 4th August 1954. There was an amazing number of contemporary issues being promised to the Parliament. We were going to develop sound policies for encouraging private investment and an inflow of capital. We were going to achieve close financial collaboration with the States who were responsible for most public works. There was to be legislation to deal with the River Murray Commission. There were to be expanded services in Papua and New Guinea to improve the health, education and social status of the natives. There was a pending Commonwealth and State Housing Agreement. The means test was to be liberalised with a view to its imminent abolition. There was a proposal for voluntary insurance to provide for medical and hospital treatment. There was to be an inquiry into television. There was to be a Petrov commission. There was to be a Constitutional Review Committee which was to be charged particularly with devising a method of ensuring in the future some coincidence between the dates of elections for the House of Representatives and of elections for the Senate..

There was an amazing modernity and contemporaneity in the Governor-General’s Speech from the Throne in 1954 and this is the relevant passage from which the Attorney-General’s statement comes:

My Government will continue its programme of reviewing and bringing up to date the law of tile Commonwealth on industrial property and other matters affecting industry and commerce. In particular, it is reviewing the laws relating to trade marks, designs, copyright and bankruptcy.

At last, 16 years and 2 months later, we have the proposal to review the laws relating to designs.

Mr Cope:

– You cannot be impatient.

Mr WHITLAM:

– Exactly. How long have you been here? You should learn to control yourself. I often say with Galileo about the Liberal Party: Eppur si muove. Nevertheless, it does move. Now 6i years later we have an Attorney-General bringing in a proposal which was promised in August 1954. I do not see why honourable members should cavil at my generosity in acknowledging this action. Attorney-General Hughes has succeeded where AttorneysGeneral Spicer, O’sullivan, Barwick, Snedden and Bowen were unable to get their colleagues to move. Honourable members will know that my patience is not always limitless in these matters, so I sometimes ask questions about matters pending before the Parliament or in policy speeches; so I started, 10 years after this proposal was promised, to ask about it. I have not gone back further than that in the records. In

November 1964 I asked Attorney-General Snedden this question:

  1. Has a committee been appointed to review the laws relating to designs, as promised in the Governor-General’s Speech of 4th August 1954?
  2. If so, when was the committee appointed and when does he expect to receive its report?

Attorney-General Snedden gave this succinct answer:

  1. and (b) No Committee has been appointed.

After a decent interval, in August 1966, in answer to the question ‘What progress has been made towards introducing a new Designs Act?’, Attorney-General Snedden gave me a somewhat lengthier reply. He said:

The necessity for an urgent review of some existing procedures under the Patents Act and the preparation of draft copyright legislation has precluded an examination of other industrial property laws.

We had a new Attorney-General in the following year, when I asked this question:

What progress has been made:

since his predecessor’s answer to me on . . the new Designs Act promised by the Governor-General on 4th August 1954. . . .

On 19th May 1967 Attorney-General Bowen gave this reply: . . further consideration will be given to a review of the Designs Act when the new Copyright Bill has been passed by this Parliament;

It is true that there was a Copyright Bill before the Parliament in 1967, but in fact that Bill miscarried. A new Copyright Bill was introduced the following year. On 16th May 1968, in presenting that Bill, AttorneyGeneral Bowen said, in referring to the amendments to be made by the Bill:

They should be read in conjunction with amendments to be made to the Designs Act by a Designs Bill which I shall be presenting to the House.

In fact Attorney-General Bowen had quite some difficulty in getting the Copyright Bill through the Parliament. The former honourable member for Warringah earned the gratitude of the Parliament - if not of Attorney-General Bowen - in having the Copyright Bill then before us further improved. Accordingly Attorney-General Bowen was frustrated in his intention to introduce a Designs Bill.

Finally, Attorney-General Bowen had to admit to me in March last year that:

No committee has been appointed within the last 20 years to advise on legislation with respect to designs.

All honourable members will be grateful for the present sign of action. I compliment the Attorney-General. He has appointed a good committee, and however deliberate that committee may be in its investigations and its report it will unquestionably fulfil its task in less than one-tenth of the time that Liberal governments have taken to carry out this promise made in August 1954.

page 2035

EXCISE TARIFF BILL 1970

Second Reading

Debate resumed from 17 September (vide page 1275), on motion by Mr Chipp:

That the Bill be now read a second time.

Mr CHIPP:
Minister for Customs and Excise · Hotham · LP

– May 1 have the indulgence of the House to raise a point of procedure on this legislation? Before the debate is resumed on this Bill I would like to suggest that it might suit the convenience of the House to have a general debate covering this Bill, the Diesel Fuel Tax Bill (No. 1) 1970, the Diesel Fuel Tax Bill (No. 2) 1970 and the Customs Tariff Bill (No. 2) 1970, as they are related measures. Separate questions may of course be put on each of the Bills at the conclusion of the debate. I suggest that you, Mr Deputy Speaker, permit the subject matter of the 4 Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Mr Lucock:

– Is it the wish of the House to have a general debate covering the 4 measures? There being no objection I will allow that course to be followed.

Mr CHARLES JONES:
Newcastle

– The 4 Bills that the House is now debating are the Excise Tariff Bill 1970, the Diesel Fuel Tax Bill (No. 1) 1970, the Diesel Fuel Tax Bill (No. 2) 1970 and the Customs Tariff Bill (No. 2) 1970. One would assume that this debate would be quite a mixed grill when one realises that the 4 Bills propose increases in the excise on many items including, to mention a few, wine, tobacco, cigarettes, cigars, diesel fuel, kerosene, aviation fuel, refined spirit, gasoline and turpentine. One could go into minute detail concerning the numerous items that are affected. Various members of the Opposition will deal with the items individually.

The proposed increase in excise on these commodities is an indication of the Government’s policy of imposing taxation on people irrespective of their ability to pay. This Government refuses to use the fairest and most equitable form of taxation, namely, income tax, and resorts to this method of hidden taxation whereby people are taxed irrespective of their ability to pay. The person on a fixed income, the pensioner and the person on a low income still have to pay the increases that are now being charged on tobacco, cigarettes and items of this nature. I do not smoke, but there are still poor unfortunates in the community who do. I notice that the Minister for Customs and Excise (Mr Chipp) is smiling, but 1 am not bigoted in any way. These unfortunate people, irrespective of their income, will be required to pay the increases. As 1 have said, this is a clear indication of the Government’s policy of imposing this form of taxation.

I intend dealing with the 3c a gallon increase on diesel fuel in its various forms - petrol, gasoline, call it what we will - and aviation fuel. The Opposition regards these measures as inflationary. The Government has not suggested any specific proposal for the additional revenue. The Treasurer (Mr Bury) in introducing his Budget said that during 1970-71 it was estimated that $63 m would be received from the increased excise, and for a full year $79.6tn. This will be no more than a source of revenue for the Treasury for Consolidated Revenue. The Government does not propose increasing its allocation to the States for road construction purposes. Some 12 months ago we debated the Commonwealth Aid Roads Agreement which provided for an allocation of $ 1,252m to the States over a 5-year period. There was no mention in the Minister’s second reading speech or in the Treasurer’s Budget Speech that any of this additional revenue would be allocated to the States. During the next 4 years this additional revenue will amount to about S340m. If this money were to be allocated for road works the Opposition would have more sympathy with what is being done and with the levying of this taxation.

The airline industry will now be required to pay an increase of 3c a gallon on its fuel. If this were to be taken into consideration in assessing air navigation charges and assisting the running of civil aviation we would be prepared to look at it in a practical and constructive way. These measures, in our opinion, do nothing for the industry except add fuel to the present inflationary fire. Prices arc increasing at an alarming rate. According to the figures of the Commonwealth Statistician they have increased by about 3£ per cent in the last 12 months. I do not think that any members of the Government could convince the housewife that the cost of living has increased by only 3i per cent. 1 am certain that no-one on our side of the House could convince her.

It has been claimed that transport costs form up to 23 per cent of our gross national product. I have some figures on this taken from a very reliable magazine. The cost of road transport represents about 9 per cent of our gross national product. So by adding 3c a gallon to the price of fuel we are adding, as I said a moment ago, to the inflationary fire which is raging at an alarming rate. With the concurrence of honourable members I incorporate in Hansard a table which was prepared by the Parliamentary Library Legislative Research Service:

These figures disclose that in 1969-70 revenue received from customs and excise duty collected on motor spirit and automotive diesel fuel was $291,300,000 and that the estimated amount for 1970-71 is 5372,800,000. From this table I took out some figures of my own. I have taken the 5-year period of the Commonwealth Aid Roads Agreement, to which I made reference a moment ago. Working on the average of the increasein customs and excise revenue collected in the previous 10 years, which worked out at 8 per cent, I estimated that for the 5 years, 1969-74, the amount of revenue received will be $1,71 lm. Under the Agreement $ 1,252m will be allocated to the States over that 5-year period, which will leave a surplus of about $459m for the Treasury.

The Government has not been satisfied with this figure. It has imposed an additional 3c a gallon on the price of fuel. I have worked on the Government’s estimate of $79.6m per annum and applied an 8 per cent increase per annum because this has been the average increase over the past 10 to 1 1 years. Incidentally, the last increase represented approximately an 8.2 per cent over the previous year. So my figures were at least right for the first year and the Government’s forecast of 5 per cent was wrong. Working on that basis I estimated that in the next 4 years the Government will receive about $341 m from this increased revenue, which will leave the Treasury with a surplus of $800m at the end of the 5-year period of the present Commonwealth Aid Roads Agreement, assuming that we get no further increase in the petrol tax, as it is commonly called. I think it is worthy of emphasis that the Government will at the end of another 4 years have a surplus of $800m after it has allocated$1, 252m to the States during the term of the current Commonwealth Aid Roads Agreement. One would believe that the Australian road system today was in first class condition; that we had no worries; that we had a very low accident rate; and that very few people were being killed on the roads today. But the reverse is the position and when one looks at the figures one finds that we have one of the worst traffic accident rates of any country.

New Zealand has a traffic accident rate of 5.2 persons per 10.000 registered vehicles, the United States of America 5.5, the United Kingdom 6.1, Canada 7.2 and we have the proud record of 8.1 per 10.000 registered vehicles. On those figures it must he obvious that the Government should be doing something about the situation.

Mr Chipp:

– Are those fatal accident rales?

Mr CHARLES JONES:

– Yes. 1 placed question No. 871 on notice and on 4th June 1970 I received a reply from the Minister for Shipping and Transport (Mr Sinclair) which discloses the alarming fact that road accidents in Australia are on the increase. The total number of road traffic accidents involving casualties in 1959 was 43,051. In 1966 it had risen to 55,538, in 1967 to 57,253, in 1968 to 58,759 and for the first 9 months to September 1969 it was 45,930. Then we come to the number of road traffic accidents involving casualties resulting from collisions between vehicles and this table shows that the number rose from 21,589 in 1959 to 31,232 in 1968, which was the last full year for which statistics were available. That is quite an alarming figure when one realises that in that short period there has been an increase of more than 10.000 accidents a year. In the same period the number of people killed in road traffic accidents involving casualties rose from 2,321 in 1959 to 3,382 in 1968. Yet the Government sees fit to take this money - to levy an additional excise of 3c a gallon on fuel - and then do nothing with it except pay it into the Treasury and in this way build up its revenue. As I said earlier there is any amount of evidence of the need to do something about the accident rate. There is a great need to plan not only our urban transport system but also our national highway system. I have a statement here which 1 think is worth quoting. It comes from a publication of the Department of Main Roads of June 1 968 and it stated:

It is of interest to know that on rural highways 2 or more vehicles are involved in 59 per cent of all accidents whereas on the tollway-

That is a reference to the NewcastleSydney tollway- only 12 per cent of the accidents involved 2 or more vehicles.

So it is easy to see what would happen to the accident rate if we had a decent road system. Anybody who has travelled over the Newcastle-Sydney tollway would know that this is an excellent piece of engineering and is an excellent road to travel on. This road should be the basis of the planning of a national main highway system which would eliminate this unnecessary carnage on our roads which last year involved the death of some 3.000 people. The need is there when we see the example of 59 per cent of accidents involving 2 or more vehicles on rural roads and only 12 per cent on this tollway. The Government should be trying to reduce the accident rate in this way and using this money to build a national road system. Not only is there a need to plan a national road system but also there is a need to develop our city and suburban roads and our trunk roads.

I mentioned earlier the cost or! transport to our country and the inflationary effect this cost has on the economy as a whole. One can see the serious effect this cost has on our gross national product when one reads statements such as that made by the Managing Director of Mayne Nickless Ltd who said that every minute a truck was delayed by traffic between the points of loading and unloading the cost was between 5c and 10c. This statement was made almost 2 years ago. These delays are having a serious effect. In our ports and al our railheads goods are being loaded into containers. In a matter of a few minutes huge containers are lifted off ships and are put onto trucks or vice versa. This is the easiest part of the transaction. The trucks carrying these containers can be held up for hours between the seaboard and the place of delivery in a city. This is where transport problems are adding a huge cost to the Australian economy. This is where the money collected should be used and put to good advantage. This is where we could do something about assisting the economy by keeping costs down.

The Government talks about keeping costs down. However, in reality it does very little about this problem. At present grandiose plans are being prepared by various State planning authorities to build huge highways within the cities of Sydney and Melbourne. A great urban transport system was prepared for Adelaide but 1 think this project will be put into the archives somewhere. The facts are that State planners are planning internal road systems within capital cities while at the same time they are doing very little about urban transport. They are doing very little about the need for urban public transport by encouraging people. to travel from their homes to their places of employment by such a system. Honourable members on this side of the House would welcome some of the money that has been collected being made available to public transport authorities to assist them in keep ing their costs down. Perhaps the Government could eliminate the need for these authorities to pay taxation; if need be, the Government could make a grant to them. After all, the road systems can easily be improved by reducing the number of vehicles travelling on them. The problem of urban transport could be assisted quite considerably if the number of vehicles travelling on our roads was reduced by encouraging people to use public transport.

I have some figures which indicate some interesting facts. For instance, a train in an urban area depending on its length and type, can carry between 40,000 and 60,000 passengers an hour. The Melbourne Swanston Street transport system has transported passengers at the rate of 12,000 an hour. Motor cars travelling in single lane traffic can transport only 2,400 people an hour. Therefore, if we can encourage people to use our rail systems or whichever other form of public transport - be it buses or trams - meets the requirements of a city, this will help considerably to overcome the problem of having to construct huge freeways or tollways within the major cities, and particularly the capital cities, of each State where traffic bogs down. I have informed the House of the statement made by the manager of Mayne Nickless. Similar statements are made by numerous people who are involved in transport today. These people would welcome any move whatever to remove from public roads the large number of motor cars which in the main carry a driver or at best carry only one other passenger. These motor cars are cluttering up traffic and are adding seriously to costs.

I would like to make one suggestion to the Minister for Customs and Excise who is at the table. 1 suggest that the Government should make a contribution to the public transport system by making it easier and cheaper for people to travel. The Government might have to make some form of tax rebate. The trade union movement and members on this side of the House for years have asked that the cost of travel from home to work should be acceptable as an income tax deduction. An income tax deduction could be granted to people who use public transport. I know that there would be a complaint from people using their private cars.

Mr Chipp:

– 1 would.

Mr CHARLES JONES:

– The Minister said that he would complain. But this would be one way of getting people to use public transport. These people could be subsidised in many ways. A direct contribution could even be made to them. After all, the Australian Country Party can find any amount of ways to subsidise rural producers. If people could be encouraged to use public transport that would be one way in which we could help the economy as a whole. By using some of this money to improve the public transport system, the need to build the concrete jungles which are springing up in the various cities would be eliminated. While we have our present road transport system it will be necessary to have these concrete jungles.

Recently when I was overseas I took the opportunity of visiting Los Angeles, a city of about 7 million people, lt has no public transport system. Everyone has to travel from home to their place of employment or other destination by private car, taxi or some similar means of conveyance. 1 believe the city spent $3. 75m trying to develop a public transport system to take people out of private cars and put them into public transport. The city found that it was necessary to do this. If anyone wants to see expressways, tollways or highways of all types - in other words, concrete jungles - that is the place to go. In the middle of the city cars rocket along at 60 and 70 miles an hour. The city has a major transport problem and a major atmospheric pollution problem brought about in the main by the emission of pollutants from motor car exhausts. 1 make a strong plea to the Government to use some of the $340m that it will get over and above what was expected previously, or some of the $800m which I anticipate it will accumulate during the period of the present Commonwealth Aid Roads Agreement. Throughout Australia today local government is in serious financial difficulties. A few councils are not in financial difficulties but. in the main, local government throughout the Commonwealth is in serious financial difficulties. So the Government should give some thought to providing additional finance to assist local government to improve the roads which at present do not come within the provisions of the Commonwealth Aid Roads Agreement. The people who are using these roads are contributing towards their upkeep by indirect taxation. For each gallon of petrol that they purchase they pay 15.3c in indirect taxation. Many of them use only the ordinary suburban street for which the ratepayer pays 100 per cent of the cost of maintenance. This is one matter to which the Government could give some thought. It could assist local government by making a direct contribution or a direct grant.

As 1 proved earlier, Australia has one of the worst safety records among the more developed countries. There is a need for the Government to do more detailed planning and to have more detail of the types of roads which can be constructed to prevent accidents. Recently I spoke during the debate on the motion for the adjournment of the House about a bus capsize on the Newcastle-Bulahdelah Road. Five men were killed in that accident - 4 national servicemen and the driver. The bus went off the road in the early hours of the morning. I am not giving any reason why it went off the road, because the inquiry has not yet been completed. While that road is a good one as roads go today, it was in such a condition that the accident occurred. Similar accidents could be prevented if adequate safety measures were employed by the Government and by road constructing authorities as a whole.

In the few minutes left to me I shall deal with pollution caused by motor cars. The Government should do as the President of the United States of America has given notice that he will do, and that is to indicate to motor car manufacturers and to petrol companies that taxes will not be imposed on any pollutant-free petrol which is produced. The companies can produce such a petrol. It will cost a lot to install the various types of gadgets that the mechanics and engineers are talking about which can be attached to motor cars to prevent the emission of the various pollutants that are harmful to the human race. I will not say how much it will cost because even the engineers themselves cannot make up their minds as to what it will cost. But if a motorist installs one of these gadgets in his car he will be able to buy a type of petrol which will cost less than petrol which contains the various additives that are added to it by the manufacturers for various reasons, such as to make one brand of petrol a bit better than another brand of petrol. This is one matter at which the Government should be looking. There is no doubt that there is a need for it.

I refer to a statement made by a local government engineer who said that the rate of discharge of air pollutants in the County of Cumberland, which includes Sydney, is as follows: Carbon monoxide, 318,000 tons per annum; total hydrocarbons, 31,800 tons; nitrogen oxides, 10,580 tons; aldehydes, 552 tons; sulphur compounds, 803 tons; organic acids, 218 tons; ammonia, 218 tons and solids, 32 tons per annum. These figures show the amount of air pollutants that are discharged by motor cars. What I have just suggested certainly would be a cheap way to avoid the atmospheric pollution which is being caused at the present time. As I mentioned earlier, the President of the United States of America has indicated that he will impose a tax on petrol which contains all these additives. This tax will return SI, 440m to the American Government. This money will be used to eliminate, wherever possible, atmospheric pollution which is caused by motor vehicles. This is something which the Government should consider.

When it comes to a question of ascertaining just what is emitted by a car, one should take into consideration a few of the facts and figures which were prepared by the Senate Select Committee, on Air Pollution. Under the heading ‘Urban Transportation’ it said:

This area requires the most urgent action, but it should not be considered independently of city wide planning. There must be immediate cessation of highway building and parking station developments designed to bring yet more cars into central city areas. Even with the introduction of emission standard the problem will continue to grow if more cars are allowed to arrive in the central city. The congestion of cars also results in stopgo traffic which makes the situation even worse.

An idling car will raise carbon monoxide from its cruising concentration of 4 per cent to 7 per cent.

An accelerating car will raise nitrogen oxides from a cruising concentration of 650 ppm to 1050 ppm.

A decelerating car will raise hydrocarbon levels from 550 ppm (cruising) to 4,400 ppm.

As I say, these facts and figures were prepared by the Senate Select Committee, not by some outside body. So there is a clear indication of the need for the Government to do something about eliminating, wherever possible, the atmospheric pollution that is being caused in our cities today. The larger the cities grow the greater the pollution to which the people will be subjected.

I know that a lot of research is being carried out by various people. For example, in America recently a new form of external combustion engine using instead of water, a liquid called Freon, which was used in refrigerators, has been developed by a Mr Minto in Florida. He tried to sell the patent to the American automobile industry, but it was not interested in it. The Japanese motor car firm of Datsun purchased the patent, and it is expected that this car will be on the roads in Japan within the next 18 months. Honourable members may say: What have we got to worry about if this car will be on the roads in Japan within 18 months and on the roads in Australia within 2 years?’ But it must be remembered that a car has a life of about 10 years. That will mean that for the next 10 years at least we will be loaded with the cars we have now, plus whatever cars come on the market and on the roads when this particular car is made available to the general public. Of course, that is assuming it is within the range of people to buy. For the reasons that I have already outlined, the Opposition proposes to vote against the 4 Bills before the House at the moment. We consider that the various forms of tax that have been imposed on these commodities are unfair and unreasonable.

Mr SPEAKER:

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

Mr CALDER:
Northern Territory

– I rise to speak to these Bills which propose an increase of 3c per gallon in excise and customs duty on motor spirit and diesel fuel for road vehicles. Before doing so I would like to mention a few of the remarks made by the honourable member for Newcastle (Mr Charles Jones) who has just resumed his seat. He made a statement that this tax will bring in an extra $340m over the estimate. Out of this amount he is calling on the Government to reorganise the national roads system, the trunk roads system, the ports and urban transport and to look into the huge highway system in South Australia, and even to look at pollution and so on. It is a typical approach of the Opposition to ask for everything. The Government has imposed this tax and proposes to raise a certain amount of money from it. The Opposition cannot go on and on saying: The Government should do this and this and this.’

The honourable member for Newcastle has enumerated so many things that they could not possibly be paid for out of the money raised from this tax. Of course, I might point out that the money goes into Consolidated Revenue thus providing the benefits that may come through the Commonwealth Aid Roads Agreement. I urge that the Government look at the trunk roads system between the capital cities, and between Port Augusta and Alice Springs. The Opposition holds that the cost of everything that it has enumerated should be paid for out of this tax. Because the Government does not agree with that attitude, the Opposition is opposing the Bills. In my own area of the Northern Territory we rely on road transport, and a rise of 3c per gallon in the price of distillate fuel used for motor transport is proposed. No alternative transport to road transport is available in this area. I have heard the honourable member for Newcastle talking about ports and so on. No doubt he has a railway into his area. The distance from Alice Springs to Larrimah is 600 miles. The distance from Alice Springs to Mount Isa is about 740 miles, which is roughly the length of the road from Mount Isa to Larrimah which connects the rail heads.

I urge the Government to review the situation where there is no alternative transport. The development of the north which will have a great effect on the future of Australia depends largely on the use of road transport between rail terminals. 1 referred blithely to a distance of 600 miles but that is 3 times the distance between Melbourne and Albury which, in itself, is hardly a mere Sunday afternoon’s drive. This is 3 times that distance. These are the things which will lead lo a rise in the developmental costs of Australia. The reason why I am on my feet this evening is to bring briefly these matters to the attention of the Government in respect of this rise of 3c per gallon in the cost of automotive fuel, both petrol and diesel. I am not so concerned about the rise in the excise on petrol because most main transport companies in the outback are using dieseline today. To impose this tax by way of this excise increase on these transport companies will increase the cost of devloping Australia.

So, 1 ask the Government and the Minister for Customs and Excise (Mr Chipp), who is at the table, to take note of the distances which I have mentioned because probably these facts are not realised by many people living in southern States. I ask them to recognise also the fact that no other form of transport operates in the area which 1 represent. There is an air service but it does not cover the transport of heavy goods. We arc trying to develop this country. This impost could operate against the development of the country. I am on my feet to urge the Government to review the situation with reagrd to this tax as it will affect areas where no other transport facilities are available. That is all that I wish to say on the subject.

Mr GRASSBY:
Riverina

– I rise in this debate in the first instance to echo the sentiments of the honourable member for the Northern Territory (Mr Calder). What (he honourable member for the Northern Territory has said in relation to fuel is only too right. The new impost on fuel, as he just said, will be a lax on the development of the nation, lt will certainly be a hurtful tax in relation to a countryside in crisis. I hope that the words of the honourable member will be translated into real activity and real opposition. When the bells ring and the vote is taken on these measures, I would be very happy if he would sit with me in opposing thom. After all, that is the moment when a member has lo make up his mind. He either supports the proposals or he does not. lt is not very much use, I am afraid, saying that it is not a very good idea to do this and to say then: ‘Of course, the Government is going to do it and we must accept it”. 1 do not think that this is the attitude that we should carry through in this debate and in the debates on the Estimates. Surely to goodness when we see something that is not acceptable - completely unacceptable - from the point of view of the people whom we represent and completely unacceptable sometimes in common sense - and I will deal with that in a moment or two in relation to wine - we should say very bluntly that we reject it and that the Government must go away and think again. So, I invite the honourable member to sit with me as he once did on another matter of conscience. Even if we do get beaten, never mind; we will act together.

Tonight we are dealing also with the proposal to tax a primary industry which has asked the Government for no support, no subsidies and no special consideration. It is a primary industry which, however, may shortly need to frame an application for Government subsidy, if the Government persists in its announced policy of a tax. I refer to the wine grape industry. The Government in defiance of the expert evidence of economists, of advisers and of the industry itself decided to ignore all the advice and to impose, for the first time in our history, a wine tax. I predicted accurately and warned in advance that this Government impost would add 15c to each bottle of wine. This is the position. So it has come to pass.

By its decision, the Government is threatening not only wine grape growers in nearly every State but also the very stability of an industry which already is contributing magnificently to the Commonwealth Treasury. If the Government persists in its intentions, it will not only reduce a flourishing industry to subsidy status but also rob itself of desired revenue. The tax will hit an industry which is making a contribution to our export income of between $2m and $3m a year. The Australian wine industry has come a long way in a short time. Australian wine has been sold in a score of countries. It is sold even to an agent for re-export to France. One can sit in some French cafes and order a glass of red and find that one is sipping a product of Australia. This is a measure of the acceptance and status of our wine these days across the world. But the wine industry has great prospects of serving Australia further with more exports, side by side with a progressive expansion of the home market. If the Government persists with this Bill and if it survives the division which we will force on this measure it will sabotage carefully made plans in the industry because the wine tax was sprung on the industry, lt came as a shock. As a matter of fact, when the tax was predicted there was disbelief that such action could be taken because it is not an action based on commonsense.

I stress that there are long term plans for the expansion of the wine industry at home and abroad. I shall illustrate this by citing some examples. Some years ago we sold a million gallons of wine per annum to the United Kingdom. Today exports to that country are down by half and they are expected to fall to 250,000 gallons. Consequently, we must examine the export position and plan for a change. We have exports prospects in areas such as Canada and Japan, but time is needed to enable us to develop alternatives to the British market. In addition we are facing a build-up of stocks in Australia this year to 56.2 million gallons, an increase of 5 million gallons over the previous year. Australians have been drinking about 2 million gallons more wine per annum in the past 3 years and the industry was looking forward to us drinking a further 2 million gallons in 1970-71. The Government’s action in imposing a tax on wine means that sales of wine in the lower price group could drop by 20 per cent, which is more than 2.5 million gallons. If we lose these sales and the predicted increase in consumption of 2 million gallons the industry faces a situation in which it will be left with 4.5 million gallons per annum.

In my own area of Riverina we produce 90 per cent of all wine produced in New South Wales and 25 per cent of all light table wines produced in Australia. I might say also that we do our best to drink this nation into prosperity. The average Australian manages to consume only a couple of gallons of wine each year, but by the banks of the Murrumbidgee River we each manage to consume 20 gallons of wine per annum. I am glad to say that our example in this activity has been followed in the national capital which is now drinking about 10 gallons of wine per capita per annum. I am glad to see this development. But the Government proposes to encourage home wine-making only, which is quite incredible.

Mr Keating:

– Bootlegging.

Mr GRASSBY:

– It is not bootlegging; it is perfectly legitimate to produce wine. My honourable friend is referring to the fact that it is not permissible to distill spirit even to brew beer. If we adopt the principle which is enshrined in this legislation I see no reason why the home brewer or home distiller should not be given an opportunity to produce beverages for his own consumption if he chooses to do so. Let us consider what is proposed in this legislation. The Government proposes to encourage us in our home drinking by allowing a family to consume 400 gallons of its home-produced wine. Already in Australia we have more than doubled our intake of wine on a daily basis, but if we were to consume the amount permitted bv this legislation we would become the greatest wine drinkers in the world. The Government has adopted a peculiar approach. It has said: ‘Wc are going to bring in an impost. We are going to cut back the industry to the extent of 20 per cent of the increase that it had in mind. We are going to cut that back in the commercial sphere but we are going to encourage each and every family to drink 400 gallons of wine a year.’ This is a most peculiar set of thoughts put together in this piece of legislation. Perhaps the answer to the Government’s intention is for all adult Australians to link together in a great co-operative so that they can each fill their allocation of 400 gallons and ignore the Government, its taxes and its imposts. It is quite a romantic thought.

In seriousness 1 want to enter a plea to the Government, tonight, even at this late stage, on the basis that it. has proceeded in this matter against the advice of economists, against the advice of specialists and against the advice of the industry. It would appear that the Treasurer (Mr Bury) and the Minister for Primary Industry (Mr Anthony) got together one evening and said: ‘Let’s have a beer. Let’s have a whiskey - imported, of course - and the wine growers can drown in their own vats.’ If the Government is hungry for revenue I would recommend that it direct its attention to the flood of foreign brandy which is being imported. They are not the best brandies of the world; they are dumped brandies, Mr Speaker, that you would not grace your cabinet with at all, and neither would I mine. But they are coming in. Our people tend to be misled occasionally. In fact they are misled very regularly. They see a label and they say: ‘We will have that.’ They buy it. They are buying it in increasing quantities, lt is a dumped product; that is all. 1 am suggesting that if the Government is hungry for revenue it should apply itself to the dumped products that are being brought here and not hit our own industry, not cripple an industry which has been standing on its own feet and doing a job for the nation in its exports abroad. We see a veritable flood of material coming in. It is not so long ago that I went to a fuction where they wanted to do me honour and, after the address, they brought me to a place where they had a very large quantity of wine. They unveiled this quanity of wine with a great deal of pride. When 1 looked at it I saw that it was the wine of one of the 21 republics of the southern Americas. I might say that it was the worst wine that I had tasted for a long time, but they had bought it because it had an exotic label and because they were encouraged by subtle advertising. So the stuff floods in. lt is being sold. So if the Government is hungry for revenue 1 commend an examination of these imports. By all means let the Government get a little extra from them. Certainly the situation in regard to our own industry is that this particular tax should not be imposed at this time because of the effect on the industry, the effect on the growers and the effect on the community. It will utlimately affect the Treasury itself, which will not benefit.

The only voice of realism that I have heard from the Government side on this matter has been that of the Minister for Customs and Excise (Mr Chipp) who was given this rather unwelcome foster child of the Treasurer. He readily understood that what the Treasurer and the Minister for Primary Industry had apparently decided was just not workable. He indicated - I am very grateful for this - that he does not want to see wineries closed down and the industry stricken. He said he would do what he could to avoid it. This helpful attitude was appreciated, because apparently the people who framed this tax gave no thought at all to its operation or to what it would do to individual wineries.

Mr Giles:

– Nonsense.

Mr GRASSBY:

– -I did not quite catch the interjection of the honourable member for Angas. I would hope that he is standing with me on this.

Mr Giles:

– I said ‘Nonsense’. Did you hear that?

Mr GRASSBY:

– I hope that he is standing with me on this.

Mr SPEAKER:

-Order! J understand that the honourable member for Angas is to speak in this debate. He can say what he has to say then.

Mr GRASSBY:

– I want to refer the Treasurer and the Minister for Primary Industry to the fact that they have overlooked the published economic evidence. Dr J. Taplin and Mr W. Ryan have published the forward prospects for wine in Australia. Dr Taplin has examined the proposed tax. They have indicated that price is a fairly effective regulator of consumption. Dr Taplin also predicted a 20 per cent drop in consumption if the wine tax is applied. He said that the price rise would bring about a crisis in the industry in a couple of years. The Opposition met representatives of the wine grape industry, growers’ representatives and the makers’ representatives. They were pretty blunt. As a matter of fact they could not have been more blunt. In the ‘Australian Grapegrower’ of August there is a magnificent cartoon which is entitled ‘The final crush’. lt shows a barrel labelled ‘Australian Wine Industry’. In it are the Prime Minister (Mr Gorton) and the Treasurer tramping the grapes. There was one rather sad thing there. One of them seems to have his boots on. The comment attributed to the Prime Minister is: ‘Good work, Leslie! This makes the last of the rural industries we’ve managed to crush.’ That was a statement by an industry which has been hurt. It is resentful, and it has expressed its resentment in these terms.

I go back to the point that the only published economic data indicates that the tax is a tragic error. 1 ask the Government whether it undertook through the Bureau of Agricultural Economics a study of the effects of a duty imposition. I ask further whether such a study was commissioned. If it was commissioned I would like to be told this. I would also like to see the report tabled so that the Parliament can apply its collective talents for study to the recommendations, and make comments on it. That is a reasonable request. The honourable member for Angas who interjected just now spoke in this House on the tax and he indicated that he would vote against it. I was happy to hear this. 1 was particularly pleased. But on a very careful examination of Hansard I see that he said he would only vote against it if the industry were brought to its knees. I suggest to the honourable member for Angas that he should not wait until that. He can do it tonight. He can vote with us now. He had some discourteous remarks to make about my appeals on behalf of the industry. I regret this, but I feel that the honourable member for Angas was under some pressure because the people whom he represents have demanded some action from him. I do not blame them at all.

I know that the Minister for Health (Dr Forbes) was another sturdy freedom fighter for the primary producers, but he is the most silent man in the House on the subject. He also has been asked what he is doing about this impost. There has again been a deathly silence. We have had a great deal of silence on this subject from the representatives who should be saying to the Government today: ‘All right; we understand that you acted in haste. We will forgive you, but take it back for the moment. Table the one set of economic evidence that we have. Let us all have a look at it together’. I do not ask anyone in the House to do anything more than examine the data which has been amassed by the only people who have carried out an examination. They have carried out examinations on the effect of this tax. They have come up with a very definite conclusion that it will mean an absurd situation, that the Government will on the one hand impose a tax and. on the other, have to receive an application for subsidy and assistance. This is a matter that has surely reached an absurd level.

In this debate at this particular time in the consideration of the Estimates surely the Government even now, with the support of the members representing wine grape producing constituencies, will say: All right; we will take it back. We will have another look at it. We will have another look at the economic data which apparently was completely ignored in relation to this matter.’ It is not just a matter of another tax; it is a matter of the viability of an industry, lt is a matter even of the good management of the nation and the Treasury because how silly it will be for the Treasurer to announce one day that the tax will be imposed and the next day for the Minister for Primary Industry to say to the Treasurer, on behalf of growers: ‘I must have a subsidy to offset the tax you imposed yesterday*. Surely this Ls the most ridiculous proposition we have had before us yet. I still say that honourable members who represent the industry should say to the Government in a united way: Take it back, have another look at it, table the documents, table the economic evidence and let us do the sensible thing by a growing Australian industry and by the Treasury itself.

Mr GILES:
Angas

– I have not found myself so much in agreement with the honourable member for Riverina (Mr Grassby) before. I do not alter the remarks that J made on this subject during the Budget debate. The effect of this excise on the industry is out of all proportion to the amount of revenue that can be raised from it. The maximum that can be raised, if my memory serves me rightly, is $ 15.2m in 1 year. I go a long way with the honourable member for Riverina when he says that it is quite a ridiculous situation to risk a viable industry by putting it in jeopardy or in need of tariff protection against imports. I am always unhappy if I have to be rude to the honourable member for Riverina and 1 do not intend to be rude tonight. But I do think there are other aspects of his remarks which, despite my general agreement, I must try to correct. First of all, this tax has been levied by way of excise. This has been spelt out previously by me and other honourable members. The effect of this excise is a tax on quantity so that the higher priced wines - a champagne, an old burgundy or a claret - are taxed precisely the same per volume as are the cheap, big selling wines such as sweet and medium sherries, muscats, ports and other types of lesser quality wines.

So the question we must ask ourselves is: If this excise on the wine industry is to detract from sales, allowing for a protection to growers, which wines will it affect? The answer is that a tax at the rate of 5 per cent on champagnes and expensive clarets and burgundies will not affect the sales of those types of wines. But 38 per cent tax on sweet sherries in flagons, medium sherries, muscats and ports, could very well affect their sales. If it does what type of grapes will be hard to sell? The answer is - I have not personally been involved in growing grapes for a good many years - that it will affect the palominos, pedro zimines, gordos, sultanas, grenache and those types of grapes that on the whole make the cheaper wines sold in flagons in Australia today. If it does affect these sorts of grapes what areas will it affect? It certainly will not affect McLaren Vale in my State; it certainly will not affect the Barossa Valley; it certainly will not affect Tea Tree Gully; and it certainly will not affect the Hunter River. The irrigation areas that grow the grapes at high bearing capacity to which I have referred are the areas of the honourable member for Riverina and myself in the Upper Murray because these are the areas that supply the bulk wines to the industry in Australia. Demand will always exist in dry areas but not necessarily in irrigation areas.

There are many wines in the dining room that carry as an ingredient wine from my Upper Murray electorate. Any worthwhile Sydney brand one can lay one’s hands on, apart from special bins produced in special areas of New South Wales, is in one degree or another made from the irrigated juice that comes from my area and, 1 suppose, to a marginally important degree, from the area of my friend, the honourable member for Riverina - to an infinitesimal degree. But these are the areas that are supplying not only bulk wines of this nature but also the spirit for the entire brandy production. For instance, I believe it is true to say there is one name area in Australia that produces quality wines for sale to the brandy trade, but the fact is that there is not one bottle or vat of brandy made in this area. In that case all of the brandy is taken from my electorate and sold under another label. So far what have we said? We have said that if there is a decrease in sales what area will it affect? If there is a decrease in sales what grapes will it affect? If there is a decrease in sales what are we to do about it? The honourable member for Riverina in his erudite fashion tonight pointed out all sorts of unusual things. For instance, he pointed out that some important wines with exotic labels catch peoples eyes and get their support.

Mr Grassby:

– And their pockets.

Mr GILES:

– I was thinking of politicians, ls this your forte? ls this how you operate? 1 can see the distinct resemblance between the exotic label and the colour of the honourable member’s shirt, as though it were dyed in wine. He also said that it came as a great shock to the wine industry when this excise was applied. My foot it did! My memory is a little bit longer than that of the honourable member for Riverina. It goes back 3 years to a time when a member of this House debated whether there should be an excise on table wines. I very well remember that about H pages of Hansard consisted solely of a running tirade between me and the honourable member for Lalor (Dr J. F. Cairns) or, as he then was, the honourable member for Yarra. For some reason or other it seemed that he did not want my remarks to get into Hansard. All I was trying to do was protect the wine industry and point out the facts of life - the fact that beer is made of water, which even in South. Australia is not that expensive yet; barley, which has not exactly gone up in price or for which there has not been a much higher demand; and sugar, which we know the shadow Minister for Primary Industry, the honourable member for Dawson (Dr Patterson), is trying to sell to Australian industry. The beer industry is paying $1.2m per day to Federal coffers whereas prior to this excise the drinkers of champagne, clarets and other wines were paying nothing. How very well they played their cards. It was this sort of exercise I was trying to do - to point out that the people growing the grapes have to find a market for them. Until 3 years ago in my State the growers could not do so. Around the corner we have a two-fifths greater yield of grapes coming into bearing. What will happen? 7here is no doubt that when small growers from your area and my area cannot place their grapes they will blame the Federal Government’s excise on wine. It is axiomatic, but it is unjustifiable. I think I made the point some time ago when I was on my feet that I would not hold myself responsible if a surplus existed that had nothing to do with the application of an excise on wines. I stick to that. If, allowing for a growth factor, wine grapes cannot be easily placed and if, according to statistics, the excise has not altered the sales volume of wine, then the Government’s action on excise has not been responsible for that state of affairs. I think L made this very plain a little while ago. But the point 1 am leading up to is this: Running right through my speech up to this point and through the whole of the speech of the honourable member for Riverina are phrases like ‘if this’, ‘if that’, ‘if it hits this area’, ‘if there is a decrease in sales’. Let us be quite plain about this. All of us up to this point of time are procrastinating, making up theories, crying hysterical woes and being prophets of doom. We do not know whether the Government’s action will decrease sales or not.

I thought it was a little unfair of the honourable member for Riverina to suggest to me that I should take rapid action before the industry falls into disarray. Nobody can tell at this time what effect the legislation now before us will have. I will continue with the ‘if theme, but let us be quite certain that we should recognise it for what it is. 1. am theorising and I will say this: If there is a reduction in sales, allowing for the growth of the industry, one thing I would ask the Government to do immediately is to look into the alternative of sales tax. 1 have already described to the House how there can be an increase of the order of 38 per cent in some instances in the case of low priced wines and how in the case of champagnes the figure may be 5 per cent. I am quite certain that many people in the wine industry realise this very well and realise that high priced wines are well and truly in their top income earning bracket.

But I pointed out also in my following of the ‘if theme, in my theorising, that the first areas to be hit will be the area of the honourable member for Riverina and that of the honourable member for Angas in the Murray Valley. If this is to be so - and again we get the ubiquitous ‘if - then there is a good deal of justice in applying a sales tax in an ad valorem fashion. In other words, it is applied to the value of the wine. It then does not hit the big bulk suppliers to 7 times the extent that it hits the champagne suppliers. It is applied across the board to the value of the wine. It may be more expensive to collect it. It may be necessary to collect it from many retail outlets. But it would also have in its favour the fact that it would be applied to the Australian product at the same level or at the same stage as it would be applied to the imported wine, and that is not the case at present.

I am not at this time saying that the Government must do this or it must do that. Only time can tell whether this excise will make even one ounce of difference to sales. We will not be able to tell this until the second half of the next financial year and only an idiot would get up at this time and say that the Government has taken an action that will disadvantage a viable industry. Nobody knows. We can have forebodings but until we get a look at accurate statistics we cannot know the actual effect, In this connection T suggest also that the Australian Labor Party should have had a look at the statistics regarding Chowilla and Dartmouth, but it did not go into the matter in sufficient depth and merely played cheap political politics on that issue. If we want to make a case we should wait until we have the full facts accurately set out and then go to the Minister and say: ‘Here are the facts, what will we do about it?’ There is not a great deal of use just getting up and making noise for the sake of noise.

These are my most sincere and most deeply held feelings on this topic. I have fears just as any other honourable member has, but only time can tell whether the demand for wines in this country has become so cemented as a trend that it will continue to grow. Cigarette smoking has continued to increase even in the face of medical opinion that it is injurious to health. Is there a decrease in the sales of cigarettes when the excise on them is increased? Is there a decrease in the use of petrol when excise on that commodity is increased? Do any more people travel into the capital cities by public transport? I can think of innumerable cases of children of my friends who will not go to work in the capital cities unless they have a car or have a parent to drive them to work. How cheap are these luxuries and what attitude should one take on them?

I will finish up, Mr Speaker, by making one point that is not generally recognised. It is not the industry that bears the cost of excise. Very rarely is it borne by an industry and certainly not in the examples I have just given. It is the consumer who bears the cost. Take the case of a man with a 25-acre vineyard from which he takes 100 tons of grapes for wine and 60 tons for spirits. On a rough calculation he will get a return of $9,600 from that crop and the Government will take $2,400. Let nobody run away with the idea that the wine industry or indeed the grower will carry that load unless sales are depreciated through the Government’s action. It is the consumer who carries the load. The consumer is paying for the increase in cost if sales remain at the same level as before. This is the case whether the excise is on petrol, tobacco or on anything else. If the commodity concerned is not one of the essentials of life but is a pleasant luxury then the consumer will pay if he wants that commodity. I hope that my protestations bear fruit and that the prophets of doom will be found to have been wrong. If they are not they will number me among their friends.

Dr GUN:
Kingston

– We have just heard a remarkable speech by the honourable member for Angas (Mr Giles). It was remarkable in terms of a contrast to the great words we heard him utter a couple of months ago when he was speaking on the same subject, lt was a very remarkable contrast to the opposition which he expressed in his Budget speech. It was also a remarkable contrast to the words of his Liberal-Country League colleagues in the South Australian Parliament when they discussed the same matter on 19th and 20th August this year. Having listened to the honourable member for Angas the only comment I have is that if that is his attitude and his Government’s attitude to the wine industry, most of which is in his electorate, then I am afraid that the wine industry is in for a very severe economic hangover.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– He will not bo there much longer.

Dr GUN:

– No. I dare say that his electors will bear it in mind when he shows his attitude by voting on this issue when it comes up later tonight. The Opposition is opposed to these taxation measures. The general tenor of our opposition has been expressed by the honourable member for Newcastle (Mr Charles Jones) when he pointed out that these forms of taxation are regressive and because they impose an undue burden on those in receipt of low incomes they are unacceptable to the Opposition which in principle supports progressive taxation which takes into account the principle of the capacity to pay and apportions the taxation burden according to that principle. 1 wish to speak mainly on the question of the effect the increased excise will have on South Australia, but before doing so I crave your indulgence, Mr Speaker, to mention a matter in relation to sales tax and indirect taxes that was referred to by the Minister Assisting the Treasurer (Mr Lynch) before the suspension of the sitting when he was speaking to the Sales Tax Bill. He claimed that the Labor Opposition was being irresponsible because, he said, it was saying that the Government should spend a lot more money and yet lower taxation at the same time. If this were what the Labor Party was proposing this would be irresponsible, but the Labor Party is not suggesting this at all. Members of the Labor Party believe that there are many fields in which expenditure should be increased, but this does not mean that we would try to reduce taxation at the same time. What we do maintain is that there are many fields in which there has been misdirection of resources and misallocation of moneys by the Government. Even apart from that, the Labor Party is not necessarily suggesting that the overall revenue of the Government should be decreased. We have suggested that there should be drastic alterations to the present means of imposing taxation. We believe that the Government has done wrong in increasing regressive taxation. With respect to income tax we believe that as prices and wages have risen with the fall in the value of the Australian dollar the scale of taxation on the lower and middle income earners has been increased out of proportion. There should be great alterations to the taxation scales related to income. However the Government has not done this. All it has done is to provide an across the board reduction in income tax. lt has reduced by some 10 per cent the incidence of income tax on all incomes up to the $10,000 a year bracket. This has done nothing to alter the relative imposition on those in the lower income bracket. 1 wish, however, to refer to the effect on South Australia of the measures we are now discussing and the sales tax measures debated earlier. These are, in fact, sectional taxes upon South Australia, lt should scarcely be necessary for me to point out the great dependence of South Australia on those industries that are affected by sales tax - industries associated with motor vehicle production and with the manufacture of consumer durables. The honourable member for Port Adelaide (Mr Birrell), when he was debating the estimates of the Treasury, referred to the great number of people who are employed in South Australia not only in the manufacture of motor vehicles but in the manufacture of component parts. The South Australian Labor Government is doing its best to diversify industry in South Australia but it does not seem to receive much encouragement from its Liberal Country League opponents in that State. One of the most significant things done bv the first Dunstan Government in South Australia was to create a department to promote industrial development and appoint a full time director for it. lt is history now that when the Hall Liberal Government was elected in 1968 one of the first things it did was to ease Mr Currie, that wellqualified director, out of that job and replace him with someone else who had about 3 other important jobs as well Apparently the Hall Government believed that the job of diversifying and developing South Australian industry could be left to somebody who had a lot of other jobs - perhaps he could do that work on a Wednesday afternoon instead of playing golf.

The wine industry is of tremendous importance to South Australia, as was pointed out by the previous speaker. In the motor vehicle industry there have been some instances of adverse effects on South Australia’s economy. Already we have experienced such effects because of the high interest rate policy which is pursued by the Commonwealth Government. It was hoped that there would be some easing of this policy but the Treasurer (Mr Bury), when he returned from Copenhagen last week, gave us little reason to hope for any relief from the existing rates, because he has said much about the principal problem facing all nations of the western world being inflation. It seems as though we will get more of the same high interest policy and the higher the interest the worse the effect on the consumer durable industries in South Australia. Added to this, of course, is the proposed increase in sales tax from 25 per cent to 274 per cent on consumer durables.

Regarding the wine industry, most of the facts were mentioned by the honourable member for Riverina (Mr Grassby) in his excellent account of the industry, but it is worth remembering that in South Australia there are more than 5,000 grape growers who could be severely affected by the imposition of the proposed excise. A few facts are worth recapitulation. The Commonwealth Government will get the same revenue from a ton of wine grapes as will the grape grower himself. One ton of grapes produces between 120 to 140 gallons of wine and the taxation, in the form of excise, from this production will be about $60 to $70 which is almost equal to the average value of non-irrigated grapes and greater than the value of irrigated grapes. The honourable member for Angas said how ‘iffy’ the whole question was and that we could not say what the effect would be on the industry.

Mr Giles:

– Quite right.

Dr GUN:

– That is conceded, but surely we have to take the evidence that has been presented. I do not know why the honourable member for Angas chose to ignore the report of the Bureau of Agricultural Economics, which is the only thing we have really on which to hang our hat. I think he referred to this review when he spoke so forthrightly on the subject during the Budget debate, but now that he has shown his hand and is going to vote against the measure he will not mention it at all.

Mr Kennedy:

– He wants 2 bob each way.

Dr GUN:

– That is right. The facts are that at present there is something of a boom in the wine industry, particularly in relation to table wines. The reason for this, as has been well shown by the report of the Bureau of Agricultural Economics, is that there has been a fall in the real price of table wines. In other words the actual price of the wines has gone up by a lesser amount than the retail price index has risen. The Bureau’s report showed also that there is great flexibility in sales in relation to prices, so much so that however much the real price decreases there is a more than proportionate rise in sales, and the converse can be expected to apply. This is the only thing we have to go by, but could we examine what has happened in the short time since the price of wines has increased? It is perhaps early to draw any real conclusion about this, but my information is that with certain types and categories of wine sales have actually dropped and, as was predicted by the honourable member for Angas, the sales of flagons of fortified wines have dropped. It is possible, of course, that this is due to the fact that many consumers stockpile when they received notice that prices were to rise. If we are to draw any conclusion at all it is that there has been some effect already as a result of the increase in the price of wines. The honourable member for Riverina gave an excellent account of how this action by the Government is another example of the misallocation of resources by the Government. As I pointed out in my speech on the Budget, it is quite irrational for the Government to be subsidising certain primary industries that are very uneconomic at the same time as it is puting these penalties on very efficient industries. The wine industry is one such efficient industry that has not received any assistance. It has been in a buoyant state, but the Government is now trying, apparently, to crush this industry as well. The honourable member for Angas and some of the other South Australian members of this Parliament might like to be reminded of the following resolution that was passed by the South Australian House of Assembly on 20th August this year:

That this House calls on members of the Federal Parliament representing South Australia to take action in the Federal Parliament to protect employment and development in South Australia from the impost on the sale of wines of 50c per gallon and from the increase of 2 per cent in sales tax on motor vehicles and electrical goods which are proposed in the Federal Budget and which will adversely affect South Australia far more than any other State.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Did all the Labor members vote for that?

Dr GUN:

– All the Labor members voted for it. I might point out the attitude of the Liberal-Country League Opposition in the Parliament at the time. I think the view of the Opposition was to support this in principle. This can be seen by the Amendment that was put forward by the LCL Opposition in the South Australian Parliament, which is not much different from the original resolution. This amendment was moved by Mr Rodda in the South Australian Parliament:

To strike out all words after ‘That’ and insert this House inform the Prime Minister that the interests of the wine industry and the manufacturing industries in South Australia will be beneficially served if the increased taxes on the sale of wines and consumer goods be removed as soon as possible’

This seemed to be pretty well the unanimous feeling of the South Australian Parliament, but I should mention that there seems to be one notable exception in all these deliberations, and that was the present South Australian Leader of the Opposition, Mr Hall, who seems to oppose persistently making any moves to the Commonwealth Government to try to get relief for South Australian industry. He has said that if we try to oppose the imposition of sales tax and excise, which is a sectional tax on South Australia, we are just running for help and asking for special treatment. But we are not doing anything of the sort. We are not asking for special treatment, but South Australians ask that they are not discriminated against. I. fell that the attitude of Mr Hall in this was quite remarkable, to say the least. South Australian members in this place now have the opportunity - and I hope that those on the Government side will take heed of the directions given by the South Australian Parliament in almost the same words by both sides - to. vote against these Bills.

Mr BENNETT:
Swan

– I rise to raise strong objection to the imposition on the road transport industry of the diesel fuel tax. The Diesel Fuel Tax Bill (No. 2) varies the rate of tax to be collected on diesel fuel used in propelling a road vehicle on a public road. This will mean a savage increase in the cost of fuel to people who are the lifeline of our outback. They have been encouraged to purchase diesel units in preference to petrol units on a running cost basis. They now are caught again by the Government’s increases after they have been involved in fleet standardisation on diesel, or after the single unit operator has made one major investment in what is in fact his total business based on a unit which is economical to operate compared with petrol driven units. In the situation that is developing, he is to be a tax gathering machine for governments.

The operators would not complain so strongly but for the fact that they firmly believe - and I agree - that insufficient of these lax revenues are finding their way back to the State governments, whether they be Liberal or Labor. The proof of this lies in Western Australia with its Liberal Government, which has had to resort to the imposition of the road maintenance tax which everyone abhors. Its imposition and the non-payment of it have led to several gaolings of truck owners, not only Western Australians but also of people from other States, simply because these States are not getting back sufficient tax moneys. Because they are not getting sufficient money they find other devious means to raise money for road maintenance. How this road maintenance tax spent on Western Australian roads can help the interstate driver after he has incurred the costs of repairs and unit depreciation, after his unit has broken down on that national disgrace, the unsealed section of the Eyre Highway, the one and only road link between east and west which he must traverse, and for which the Government has refused to give a special grant for sealing, is beyond comprehension.

So with tongue in cheek this Government foists yet another imposition on an industry which must be one of the most heavily taxed in Australia, and that is really saying something. The owners pay the Government’s heavy sales tax when they purchase their unit. This is followed up with sales tax on subsequent spare parts, tyres, etc. Now they must pay heavier tax on fuel, plus road maintenance tax; then they must pay for permits to move a load. If they are not bankrupt because of higher interest rates on their unit repayments, again Government inspired, they will go on to pay income tax or provisional tax on their expected earnings.

How about coming down to earth with these taxes and prevent the high costs to our community that must be passed on, causing inflation to spiral, because this is a service industry and no doubt it passes on each and every cost if it can. This Government is one of the greatest creators of inflation, with its never ending increases to the tax spiral costs which must be paid by someone. Perhaps the Minister for Customs and Excise (Mr Chipp) will assure the House that this increased revenue will go back in full to the States for road maintenance and will not add to the S800m Treasury surplus alleged earlier in the debate so that State Ministers, in particular the responsible Western Australian Minister, will stop gaoling businessmen in the form of truck owners who happen to have a bad run and cannot pay the fines imposed by the special courts appointed to deal out this so-called justice. Some 2,600 charges have been issued in Western Australia alone this year. It is no wonder that out of the 200 bankrupt people listed in Western Australia this year, 41 are truck owners. Other men are waiting to go to gaol because they just cannot pay the $1 for % fines and costs accruing from the imposition of a Government tax which should not exist and which exists only because enough money is not granted to the States to maintain their road systems.

I ask that in granting this money to the States the Minister discuss with the appropriate State Minister a reformation of the overall tax systems which are killing the transport industry. If the Commonwealth Government will not grant sufficient money to the States to do away with the road maintenance tax, I ask the Minister to consider seriously making sufficient moneys available to allow a total reformation of the road maintenance tax system. The State Opposition has pledged to abolish the tax in Western Australia so no doubt the Federal Government will have to face up to this matter after the next election. Interstate operators should be able to go to Western Australia without the fear of being gaoled, losing their trucks, their incomes, their good name for the future. This danger does exist primarily because the State imposes the other tax I have mentioned and because it does not receive back sufficient from the Federal Government.

If the Government is to put yet another charge on transport operators in the form of increased taxes, it must endeavour to allow them to survive in business, to continue to purchase fuel and serve the country. The honourable member for the Northern Territory (Mr Calder) has asked the Government to waive the tax increase where there is no alternative transport. I would support him and ask the Minister to review the charges in developing areas such as the north west. I hope that the honourable member for the Northern Territory will obtain some support from his fellow party members to assist us of the Labor Party to defeat the Bill and thus enforce a review. I will be most interested in the Minister’s reply.

Mr CHIPP:
Minister for Customs and Excise · Hotham · LP

– in reply - 1 compliment all speakers in the debate for the constructive comments that have been made about the 4 Bills before the House, particularly because most of them involve provocative and challenging subjects. I will comment briefly on some of the issues raised. The theme of the member of the Australian Labor Party who led for the Opposition seemed to be that the taxes in question were hidden taxes, indirect taxes, to which the Labor Party was categorically opposed as a matter of political and fiscal philosophy. This might sound fine as a speech theme. As a piece of philosophy it does sound good to the body politic, but promises have to be examined in the light of performance. I do not have at my disposal the current break-up of the percentage of indirect taxes raised in proportion to direct taxes under a Liberal-Country Party Government but I would be astonished if it rivalled the performance of the last Labor Government which, in its last year of office, raised 52 per cent of its total tax income from indirect taxes. This was the highest incidence of indirect tax raising by any government since Federation.

Mr Crean:

– Any Commonwealth Government, but what about the States?

Mr CHIPP:

– We happen to be in a Commonwealth Parliament, and if the Opposition is going to challenge the Government on questions of policy I would have imagined it could be speaking from a position of strength if its own performance measured up to what it promises to do. The honourable member for Kingston (Dr Gun) did not challenge the right of the Commonwealth to collect additional revenue. I appreciated that attitude expressed in his speech. It was a responsible attitude. But the honourable member did oppose a tax on wine as did other members of the Labor Party. It seemed to me to be rather odd that members of the Labor Party, the confessed champions of the working class, the self-confessed champions of people in lower income groups, most of whom drink beer, should throughout the whole of the debate make no mention at all of the excise on beer. On the one hand we had the view put that they did not challenge the right of the Government to raise additional revenue but on the other hand there was not one word of criticism about the excise on beer.

Mr Hurford:

– Are two wrongs supposed to make a right?

Mr CHIPP:

– No. not at all, but one presumes from what has been said by speakers from the Labor Party that wine drinkers should not be taxed although it is perfectly all right to tax beer drinkers. I thought this was a rather odd consensus coming from members of the Australian Labor Party who are supposed to champion the rights of the working class. We on this side of the House believe that there is no equity, if excise is to be charged on alcoholic liquor, to charge the beer drinker and not charge the wine drinker. We cannot see the logic in that at all. But when we look at the figures - and I would not like to be held to a cent or two because these charges vary from State to State - the beer drinker pays 19c excise on a bottle of beer which costs him about 45c and the wine drinker pays only 8c excise on a bottle of wine. One would have thought that from the self-confessed champions of the working class, the beer drinkers, that at least some mention would have been made of the rights of the beer drinker. But there was not one word of it. All the criticism was simply related to the principle of taxing wine drinkers.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Is the excise 8c or 7c a bottle?

Mr CHIPP:

– It is approximately 8c. Then we had the spurious argument, if I could say that with respect, that all of the money that is raised from the excise on petrol should be spent on roads. I suppose before a Senate election, or for any other devious political purpose, it is always opportune for an Opposition to raise this kind of argument. But does the honourable member for Swan (Mr Bennett), who knows that I hold him in great respect, seriously suggest that this principle should be followed to its logical conclusion? Does he suggest, for example, that all the excise we rise on tobacco should be spent for the benefit of cigarette and cigar smokers? Does he seriously suggest that all the excise we raise on whisky should be spent on whisky drinkers? The proposition has only to be stated to be exposed in the absurdity in which it lies. May I refer briefly to the speech of the honourable member for Angas (Mr Giles)? I thought, because of the position in which he stands and because of the State from which he comes, it was a speech of real courage. The honourable member for Angas knows as well as anybody in this House the problems of the wineries but, more particularly - and I concede this point that has been raised - the problem of the grape growers, and he has been quite vigorous in his representation of those interests. But he put the matter in its proper perspective. He said: ‘Let us look at the effects on the wine industry and on the grape grower.’ I have given an assurance on behalf of the Government thai it will look at the effects of this new tax as a responsible government should look at all new taxes.

If I was disappointed with any speech made in this debate I was disappointed with that of the honourable member for Riverina (Mr Grassby). One would have thought that he has some basic knowledge of the wine industry - but his speech was delivered for political purposes only and did not attempt to get at the basic problems facing the industry. He criticised the Government for the concession it gave to home wine makers. He said that 400 gallons a year was excessive and not consistent with the Government’s decision to cut the industry back, whatever that means. Does the honourable member for Riverina want this concession to be abolished? He has written vigorous letters to me and disclosed to the Press personal correspondence from me to him on his advocacy of concessions to home brewers of beer. Does he suggest that we should not give a concession to home wine makers? Does he not know that this concession in itself assists in taking up the grape crop each year? Does he not know that traditionally - and in his electorate of all electorates there are so many migrant families - groups of families band together in co-operative schemes, and 400 gallons a year split among 5, 6 or 7 families is certainly not an excessive concession?

It seems rather odd that the honourable member for Riverina should be criticising a concession the Government has given to hundreds of his own constituents. I would hope that this aspect of the speech of the honourable member for Riverina is brought home to his constituents. Does he not know - we have been at pains to explain it - that this concession has had severe conditions placed upon it? If anybody who has that concession breaks the conditions once - in other words, sells one bottle commercially of the wine that he makes - then that concession is cancelled not only for that year but forever. So we do propose to police this concession-

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Can he sell what he made the previous year?

Mr CHIPP:

– No, he cannot. He cannot enter into any commercial transaction. The honourable member for Riverina also tried to appeal to the emotive sentiments - rather cheaply I thought - of his constituents, as opposed to the approach of the honourable member for Angas. The honourable member for Riverina stated categorically that this excise would lead to a fall in demand of 20 per cent. But again he did not produce one shred of evidence to indicate how that 20 per cent fall in demand might come about. I would like to place before the House some interesting figures concerning wine. In the 4 years since February 1966 the retail price of sherry and port, for example, has increased - these figures are based on South Australian bottle prices - from 58c a bottle to 75c a bottle as at July 1970. Claret might be an easier example to quote. In February 1966 the price of a bottle of claret in Adelaide was 50c. Today one cannot buy that bottle of claret for less than 95c or SI. The point I am making is that in 4 years the price of claret has increased 100 per cent. During those 4 years sales of wine have increased by at least 33 per cent.

Mr Giles:

– Is this price sensitivity?

Mr CHIPP:

– The honourable member for Angas has asked whether this is price sensitivity. I hasten to state that 1 am not blaming the grape grower or the wineries for this rapid increase in the price of wine. This increase has occurred because of other elements. But this does not invalidate my argument that the wine industry is a very viable industry. After this kind of price increase and the kind of increase in demand it is rather strange to hear the honourable member for Riverina say that because we are putting a 50c per gallon or 8c a bottle excise on wine, this will suddenly mean a diminution of 20 per cent in demand. I think the spurious nature of his argument is rapidly exposed. 1 ask the wine industry with great respect - not all of the industry fed the honourable member for Riverina with figures which for some reason he swallowed - why did it, immediately after a 50c a gallon excise was announced by the Government, increase the price of wine by 62.5c a gallon. When it was complaining, legitimately as it might, about the 50c excise why did it suddenly add another 12.5c to that excise? lt is the industry’s right to take this action, but if it increases the price has it then the right to say that because of the added excise demand will diminish by 20 per cent? Certainly, no comparison can be made between the wine industry and the petrol industry. I would suggest that the petrol industry is not notorious for being kind hearted to the consuming public. The excise proposed in the Budget and which is contained in the Bills before the House will increase the excise on petrol by 3c a gallon and the price of petrol has been increased by exactly that amount whereas the excise on wine has been increased from nothing to 50c and the increase in price made by the industry has increased by 62.5c. Again, I thank those honourable members who made a constructive contribution to this debate.

Question put -

That the Bill be now read a second time.

The House divided. (Mr Speaker - Hon. Sir William Aston)

AYES: 53

NOES: 47

Majority . . . , 6

AYES

NOES

Question so 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 Chipp) read a third time.

page 2054

DIESEL FUEL TAX BILL (No. 1) 1970

Second Reading

Debate resumed from 18 August (vide page 105), on motion by Mr Chipp:

That the Bill be now read a second time.

Mr CHARLES JONES:
Newcastle

– The Opposition does not intend to divide the House on this measure. We have already indicated our position by dividing on the previous Bill. But the Opposition is opposed to this measure.

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 Chipp) read a third time.

page 2054

DIESEL FUEL TAX BILL (No. 2) 1970

Second Reading

Debate resumed from 18 August (vide page 105), on motion by Mr Chipp:

That the Bill be now read a second time.

Mr CHARLES JONES:
Newcastle

– The Opposition is opposed to this Bill, but once again we do not propose to divide the House on it, having already done so on a previous measure.

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 Chipp) read a third time.

page 2054

CUSTOMS TARIFF BILL (No. 2) 1970

Second Reading

Debate resumed from 17 September (vide page 1275), on motion by Mr Chipp:

That the Bill be now read a second time.

Mr CHARLES JONES:
Newcastle

– The Opposition opposes the Bill, but we do not propose to divide the House on it, for the reasons I gave previously.

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 Chipp) read a third time.

page 2055

INCOME TAX ASSESSMENT BILL 1970

Second Reading

Debate resumed from 27 August (vide page 597), on motion by Mr Bury:

That the Bill be now read a second time.

Mr CREAN:
Melbourne Ports

– The Bill now before the House seeks to amend the law relating to income tax in respect of convertible notes.

Mr SPEAKER:

– Order! There is far too much audible conversation in the chamber and it is not fair to any honourable member who has to speak to a subject in these circumstances.

Mr CREAN:

– To begin with, it is a highly technical measure, and I want to indicate immediately that it is the Opposition’s intention to oppose it. We do this for very good reasons. In many respects the Bill is a bit of a gimmick. I should like to recall the words of the previous Treasurer now the Minister for External Affairs (Mr McMahon), who made a statement in this House I think at least 12 months ago. Mr Speaker, could I ask again for your indulgence to request a little silence in the chamber?

Mr SPEAKER:

– Order! I ask the honourable member for Banks and some other honourable members on the same side of the House as the Opposition speaker who is endeavouring to address the House, to remain silent. The honourable member for Oxley will behave himself.

Mr Hayden:

– Well, there are some members over there.

Mr SPEAKER:

– Order! The honourable member will behave himself. 1 think it is only reasonable that the honourable member for Melbourne Ports should be heard in silence on this important matter, from the point of view of his colleagues and also honourable members on the Government side. I have asked previously for the co-operation of honourable members in this regard, and I will insist upon it.

Mr CREAN:

– 1 am not quite sure of the date of this statement but it was made at least a year ago. The former Treasurer said:

It will not be practicable for the amending legislation - which, because of the intricate nature of the subject, will require some time in the drafting - to be introduced before the House rises.

The legislation has been before us now for a month or more. AgainI should like to make an appeal to the Government which is still in charge of the drafting of tax legislation. Many of these matters are exceedingly complex in their nature, and sufficient opportunity is not given for representations to be made by people who are either for or against the particular legislation. I think it is a very serious breach in the system. After all, income collection - and this relates to income tax which is imposed on both individuals and companies - will amount to a little less than$5,000m in aggregate this year. Approximately $3,000m will be collected in income tax on individuals and approximately $ 1,500m will be collected in company income tax.

The question of what is taxed, what is not taxed and the rate at which the tax is imposed is of some significance. In essence, a convertible note is a sort of half-way house between a share, on the one hand, and a debenture on the other hand. If it were a pure bred instead of a hybrid, if it were a debenture, let us say, at one extreme, there would not be any argument but that interest paid on it would be allowed as a deduction before computing the tax of the company. But it is not pure bred; it is something in between. If it were a share the profit of the company would be computed and if a dividend were paid it would not rank as a tax deduction. Tax would be paid out on whatever profits are computed.

The convertible note which existed in this country prior to 1960,I think it was, went out of existence. It was in that sort of speculative area at the time when it was convenient for certain organisations to float or to get new capital. If people were honest there was not much doubt but that it was a share. But because it was called a convertible note it was treated as a debenture. It was treated as a debenture rather than a share and whatever was paid on it was regarded as a deduction before computing the profit.

The thing had reached such a stage that it had become - and I do not use the word offensively - a racket. Therefore, to protect the revenue, the Government acted so as to treat a convertible note in essence not as a debenture any more but as a share. The situation has rested there in between.

But there has been a great deal of agitation. Again this is one of the areas where it is difficult to know who is right and who is wrong and what the facts of the situations are. Apparently sufficient pressure has been put upon the Government to reverse the decision made nearly 10 years ago and to regard the convertible note now as a legitimate form of commercial transaction. But so many fences have been put around it that it seems to me - candidly I must say that I am glad that the fences have been put around it - they are so high that it is a little difficult to know whether those who wanted the convertible note restored to its old form are very happy about the restoration.

Here is one of the areas where the income tax law is being asked to do something that, in a sense, has nothing to do directly with the revenue. It relates to something else altogether. It relates to the totality of investment in the community. Mr Deputy Speaker, might I ask again for a little silence?

Mr DEPUTY SPEAKER (Mr Drury)Order! I ask that the level of conversation in the chamber be reduced. It is not fair to the honourable member who is on his feet.

Mr CREAN:

– I can understand the difficulties involved in following this sort of legislation and I regret the lateness of the hour at which the Bill is being debated. That is not my fault. Surely I am entitled to make all the observations that I have to make in at least reasonable tranquility.

We have dealt with this area in regard to mining legislation, particularly petroleum and we have had it in relation to life insurance legislation, where the Income Tax Act is asked to bear something which is outside the field of income tax directly as such. A lot of it has to do with the rates of tax which are applicable. This is certainly the case as far as convertible notes are concerned. 1 must confess that, originally, when I looked at this proposal, I thought that the fences that had been put up were sufficient in themselves. But after having discussions with other people within my own Party, with certain people outside the Party and with certain members of the stock exchange concerned with these investigations I have come to the conclusion that on balance the proposed legislation is bad rather than good. It is for this reason that we decided to oppose it.

As I understand it, one of the reasons given - I think that this is implicit enough in the second reading speech of the Treasurer (Mr Bury) - ‘and one of the arguments advanced for this sort of legislation were that it would favour the expansion of Australian equity in ventures in Australia, particularly mining ventures, and that the foreigner would be placed at a disadvantage. After making considerable inquiries, it seems to us that the foreigner is placed in a better position. This is a highly technical matter. If it is debated, I would be pleased to hear the issue cleared up. It seems to me that the foreign investor, if I may so describe him, is in a better position than the Australian investor because the sorts of barriers do not apply to him that apply to the internal investor. These matters are quite technical and are within the scope of the legislation itself. Again, those outside the Party to whom I have talked suggest that the people who really will take advantage of the convertible notes will be the capital hungry in Australia but on a relatively small scale and inclined to be in the more dubious type of venture. I suggest that, if this is the case - and I would like to hear an answer given about it - this is something that ought to be resisted.

I asked a question here the other day. It had nothing to do with this measure. It had to do with certain insurance ventures in Australia. There is not much doubt that in Australia at the moment - and I hope that the Commonwealth acts pretty quickly on this situation - any sort of enterprise can set itself up as an insurance company. It cannot in the life insurance field because at least this has been covered. But this is not asked of a company that indulges in, say, motor vehicle insurance. This is where the issue is the most serious. No barrier is erected against an enterprise engaging in this field of insurance. After all, if a company collects a premium for motor vehicle insurance from a man, he could have an accident the following day. If a company is writing business reasonably quickly, it might be able to cover the risk. But, in my view, anyone who has written premiums to the extent, let us say, of Sim should have something like Sim in reserve to cover all his contingencies. This is not the case.

Let me illustrate what I am suggesting with regard to the fences around this convertible note type of venture. I appreciate the interest of the Taxation Branch in this matter. I think it is doing what it ought to do. I think that the Government is too. It is protecting the revenue. Nevertheless, it has opened the gate that has been closed for a long time, but it has introduced certain severe restrictions. I doubt whether big companies like Broken Hill Co. Pty Ltd, Alcoa of Australia Ltd or any of the other large firms will be very interested in the prospect of the convertible note. I do not think that they are. What has not been told to this House by the Treasurer or by the Minister for Immigration (Mr Lynch) who is Minister assisting the Treasurer is, which are the sorts of companies that are likely to be advantaged by this new device or by the opening of the gate to the convertible note once more.

What is the position if the big are out and the little may be dubious? I am not one of those who think that the field should be mads pleasant enough for those who arc big enough, but I think in terms of people who are likely to invest. I have quoted in this House before the famous line of T. S. Eliot: ‘All men are ready to invest but most men expect dividends’. Surely this is a prudent ground on which one should look at this matter. 1 ask this categorically of the Government: First, which does it think will be the sort of interest which will avail itself of the convertible note? Secondly, is it true as my advice suggests that, despite what the Treasurer has said - that is. that this will make it easier for local equities as against foreign equity - this legislation is more advantageous in its application to the foreign investor than lo the local investor? lt seems to me that these things are fundamental in the proposition. I have tried to read the literature that is available in this field. I must confess it is pretty limited. I quote one article which is 2 years old. There has been a blank in the field from I960 to the present time because I think most people, once the door had been closed, turned to other devices. The article which 1 shall quote appears in the ‘Australian Security Analysts Journal’. I do not quite know what that journal represents, but it must serve a fairly limited field of people who are called security ana lysts. The issue of June 1968 contains an article by one K. J. Hedley, B.Com., F.F.A., F.A.I. I., Principal of K. J. Hedley & Co., Sydney. He wrote:

There is some artificiality in the clearcut division between interest paid on funds provided by way of loans and dividends paid on funds provided in the form of ordinary and preference capital. Interest is treated as an expense in the earning of the company income to be taxed whilst dividends are treated as a disbursement of the net profits left after payment of company tax.

He is simply posing there the essential difference between a debenture and a share. Then he goes on to argue:.

A manufacturing enterprise may need a certain volume of resources to carry out its activities, and logically these resources (apart from seasonal fluctuations) should be wholly provided by shareholders. The present company tax system almost forces the enterprise to borrow as much as possible of the needed resources, and this can introduce a degree of instability into its operations and financial results.

The smaller sort of activity would be encouraged into that sort of resort to capital by this particular kind of easing of the law. He goes on to say:

There arc many possible variations, but basically there are two types of convertible notes:

Those that are automatically and compulsorily converted into ordinary shares at the end of a period. At worst these are merely a vehicle for lax avoidance-

I think this was the reason for the closing of the doors in about 1 960 - the company really needs additional share capital but makes a temporary saving in annual taxation through this subterfuge. lt is that subterfuge that was closed up by the Act of I960. The article continues:

The company as a whole makes a gain, but lo an extent this is indirectly at the expense of those of ils shareholders who are -

  1. Australian companies receiving taxable interest instead of rebatable dividend income or forced because of this taxation situation to decline to invest in notes and so to reduce their ultimate equity percentage, as against,
  2. individuals and foreign companies no’, rela tively disadvantaged by the tax position.

My advice is that it is the foreign company that is still put at an advantage. The article goes on to mention the next group:

  1. Those that are really a borrowing for a term of years but which have an associated option or conversion right that could be exercised by the holder at the end of the period. lt is somewhere in between those two grounds that the legislation seems to have been struck. There are so many reservations or gates put against it that, 1 am told, what you are likely to close the door against if you are not careful is the type of transaction where one can apply for a share and, as one of the conditions of receiving the share, agree not to take a dividend for a period of years. Honourable members opposite believe in private enterprise in which risk is supposed to be an element of the game. Whilst it is nice to remove the element of risk by means of precautions such as tax assistance I still believe that an important matter needing careful consideration is that Australia has a limited amount of overall resources. Therefore such capital as is invested should be sifted into those ventures that are likely to yield, not merely the best return, but the return that will be most advantageous to our national development.

In the past there have been two sorts of areas. The big enterprises have been able to look after themselves. As often as not they pre-empted certain resources that could have been better used in the middle area. On the other hand were the small and perhaps rather dubious ventures. I have in mind what happened to the Reid Murray organisation and its effect on the Australian economy. Capital was funnelled into ventures that simply did not have the entrepreneurial capacity to handle it. One of the great difficulties of the Reid Murray group was that it started off as a merchandising sort of activity and then branched out into areas such as land development in which it did not have the necessary expertise and got into trouble. That is the kind of thing we have to be careful about in studying this legislation.

The Labor Party has looked rather carefully at this type of legislation. I think it can be summed up in this way: Probably the Taxation Branch was not very happy to open this door at all. Certain pressures on the Government persuaded it that the door should be opened. I must say that it is to the credit of the Taxation Branch that it made passage through the door rather tough, in fact so tough that those people who were enthusiastic about convertible notes in the first instance are now not nearly so enthusiastic. In reply I am not looking for a generalised statement. I would like to have from the Minister assisting the Treasurer, who is now at the table, an indication of the kinds of ven tures he thinks will be encouraged by this legislative device. Unless they are to be substantial sorts of ventures I cannot see much purpose in the legislation. Surely nobody can fairly say that in the period of nearly 10 years in which this barrier has operated a lot of venture capital has not been forthcoming in Australia. I would like to know what new doors will be unlocked by this legislation. What sorts of new fields will be entered?

I must confess that in the first instance I was persuaded by an assurance of the Treasurer, who introduced this legislation. One of his assertions was that this measure would be in line with the ideas of the Prime Minister (Mr Gorton) about the guidelines we should use in doing our best to encourage local equity rather than foreign equity, particularly in mining ventures. Such resources as are avail* able to me - and they are very limited when compared with the resources that are open to the Government - suggest that this legislation as it is drawn favours the foreign investor rather than the local investor of capital. Perhaps that point could be answered in the course of the debate. My colleagues - the honourable member for Banks (Mr Martin), the honourable member for Adelaide (Mr Hurford), and the honourable member for Cunningham (Mr Connor) - and I, and others in our Party, have had quite substantial discussions about this matter. On balance we have come to the conclusion that we should oppose this legislation and leave the situation as it has been for something like the last 10 years, because we are not convinced that a serious case has been put up on the advantages of this legislation. I leave it at that.

I am sorry that the matter should have come on at this late hour. I have had a busy day on other things and I think it is a little hard when one is asked to make 2 serious speeches in one day, even though I cannot complain that I have not had sufficient notice. When matters have been on the notice paper for a couple of months and one is given 3 or 4 of them and told, You will do these in the next couple of days’, I do not think it is very conducive to their serious presentation. This is one of those matters that in the long run have not a great deal to do with the amount of revenue collected: rather is it protecting the evasion of revenue. I think there is a very good case for this sort of legislation to be referred to a committee - 1 would prefer a select committee of the House - where the details can be scrutinised and where representatives from both inside and outside the department can argue the pros and cons of it. Otherwise most of us who are laymen in this field find it a little difficult to comprehend and we are voting blindly on what really are pretty significant matters.

Mr GARLAND:
Curtin

– I propose to take up in the course of my remarks the points the honourable member for Melbourne Ports (Mr Crean) has just made, but before 1 do that I will give an outline of the main features of this Bill dealing with convertible notes. As has been mentioned, the distinction we are drawing here affects the deductibility of interest payable on convertible notes by companies which can convert them in due course to equity shares and which thereupon will pay dividends. Of course, those dividends are not deductible for income tax purposes.

Dr Gun:

– We are talking about company taxation.

Mr GARLAND:

– Yes. I am talking about the deductibility of interest on convertible notes which is a deduction in the accounts of a company and therefore results in less company income tax - primary tax - being paid to Commonwealth revenue. As has been said, in 1960 all this interest was deductible without hindrance. There were no hedges at all. The result was that many companies availed themselves of this opportunity, particularly in 1959 and 1960, and perhaps 99 per cent of those issues were devised purely for the purpose of obtaining the income tax deduction. They were convertible note issues which amounted to deferred equity share issues. The Government announced at that time, when incidentally other measures were taken in what is now known as the credit squeeze, that it would make a change, but it made the distinction that this would be a change to the permanent law and not simply a temporary measure. These measures were introduced into this House on 15th November 1960. What was then happening was legal avoidance of company income tax which was costing the revenue substantial amounts.

The opinion of the Government was that little or nothing was being received in the national interest in exchange.

So a review has been held, as set out in the second reading speech, in order to devise means whereby advantages which did accrue from such an allowance could be obtained without, on the other hand, allowing easy exploitation. Criteria have been set in this Bill to cover issues of convertible notes, which normally would be issues of debentures and which in a given time would be convertible to ordinary shares, when substantial reasons can be given for such issues in the public interest.

The reasons are twofold. Firstly, there are many genuine cases when a company can start a business, or some new aspect of its operations, with good prospects but without a prospect of being able to service, in the early period and perhaps early years, dividends on the new capital as equity shares. If a company issues convertible notes in the early years, cheaper money is often available because it is more attractive to investors to be able to place it. The company can give better conditions for such an issue knowing that it will receive a deduction for the interest payable on those notes during their currency. When they become shares, as I said previously, the dividends payable to shareholders will not be deductible. There are a number of such companies which develop the resources of this country. Much of the development of this kind is slow and the profits are some years in coming. Yet those companies normally would rely on loan funds rather than equity in the form of debentures in order to finance their operations.

The second reason for requiring such legislation - I mention this now because the earlier speaker in this debate, the honourable member for Melbourne Ports mentioned, somewhat darkly, that there were pressures on the Government - is that if you make it more attractive for investors in Australia to make such investments you will minimise - this is the point I have to meet - the amount of foreign capital that will come into Australia in the form of certain investments. This will allow not significantly more but a little more Australian participation because it would be a more favourable investment. I take it that it is common ground that Australia needs investment from overseas in such large quantities because we do not have the capital here to put into projects which open up our resources. The Government and honourable members on the Government side of the chamber would take the view that the cost being paid at present for this overseas capital is justifiable in the overall interest. At the same time that investment must be paid for by way of royalties, dividends and interest and the cost must be minimised at every opportunity.

Thus this legislation will be a complementary part of the legislation passed by this House in connection with the setting up of the Australian Industry Development Corporation. It also complements the overseas borrowing guide lines announced recently in this House. It is part of the Government’s policy aimed at trying to minimise the cost of the overseas investment which we regard as fundamental to the development of Australia’s resources.

Those are the two principal reasons. The convertible notes which will be issued as a result of this legislation would be, in most cases, fixed interest investment that would exist anyway. Therefore, what the Government is doing will enable a structure whereby companies can convert ultimately to equity capital the loan funds which otherwise would have remained as debentures and been repaid on maturity or renewed, if that were possible in the finance market of that day.

We are dealing, as has been said, with questions of judgment and policy. No black and white decisions are to be made in this area. This matter is not entirely clear; these complicated matters never are. The more I sit in this chamber the more it seems to me that fewer and fewer political questions can be determined clearly in one direction or another. At least this amendment to the Income Tax Assessment Act will give a clear indication to the Commissioner of Taxation of how he should apply the law. In itself that is a commendable thing. It does not leave to him or to anyone else a discretion as to what ought to be done, or what is a good thing or what ought to be a charge on the revenue, as he is allowed in other areas. It makes quite clear how he should apply the law, what interest will be deductible and what will be nondeductible. As has been said, certain fences have been erected here. In other words, attempts have been made to minimise the types of issue on which such convertible notes can be made.

I mention them briefly because they are contained in the documentation. Firstly, these options which are to be held by the convertible note holders are to be real options. They are to be at the opinion of the note holder. He can, if he wishes, not exercise the option and take the cash, which would place him in the position of the genuine debenture holder, a note holder. If he wishes he may take that cash back, which would be the position in the case of a debenture which did not have a convertible option. So he has a real choice. 1 refer not to the company but to the note holder.

Secondly, the option itself must not be for longer than the term of the loan. The first 2 years of the term of the loan is the maximum time which will be allowed as the period in which the note holder cannot exercise the option. That is a period which might be called the ‘maximum no option period’. That period will be set by the conditions of the issue. After that 2-year period he has a right to exercise it at any time up to within 12 months - and that again is the maximum period so it could be a lesser period - before the maturity of the loan. The option period itself must not be for longer than 10 years. The 10-year period again has been regarded, as a matter of judgment, as the period within which any undertaking ought to have reached profitability, and so it will be necessary under the terms that the company offers for the option and the period to have then come to an end, the loans to be repayable or to be converted into equity shares, whichever the note holder wishes.

In the case of Australian note holders the term must be less than 7 years because that is regarded as a fair period in the case of a note holder who may be an investor without particular knowledge and probably without particular technical, managerial and entrepreneurial knowledge in the activities of the company concerned. That would be a period which would allow him time to make an assessment as to whether or not he should exercise this option. The Government is not concerned with the judgment formed by overseas investors and it therefore has not put that restriction on an overseas investor. This is an assistance to Australian investors and note holders and not a barrier - and I will deal with this matter later - which would help overseas investors. Also for Australian investors the issue must provide fixed terms and conditions at the beginning of the issue. These terms and conditions are not allowed to be changed. Of course if they were changed during the period of the loan the right to make a tax deduction would not exist. Therefore the advantage of the issue would go. For Australians the terms must remain fixed, though not for overseas investors. They may wish to enter into such an investment with the knowledge that the terms can be varied. They often are in international money markets. Frequently a loan is raised with a condition contingent upon international money market, some fixed market agreed upon and stated, varying up or down - and these days it always seems to be upwards. If such a variation occurred it would not affect the deductibility in Australia to overseas investors but it would certainly take away the deductibility if such a variation were made as against the Australian note holders. Those conditions which are made have been made in the interests of Australian investors. So one cannot turn around and say that this is a help to overseas investors. It is not really a tax matter for them. It is a matter of providing a safeguard to Australian investors which is not given to foreign investors.

These options can be for new shares or for issued shares and can be in a variety of ways. The last main criterion is that the price at which the convertible notes are converted to shares must not be less than 90 per cent of market price or par or, alternatively, at valuation. A structure is set out for valuing in different circumstances. The procedure is there. These valuations are a minimum only. That criterion is to prevent any inducement or advantage being given on the option being taken up so that it is known from the beginning, in fairly precise terms, exactly what the value will be at the time the option is taken up. That full disclosure is very much in the interest of investors. The scheme is to come into operation by application after assent to this Bill. The matter is a relatively complex one, although perhaps not as complex when the Bill is read and the documents are considered for a while.

I think it is comforting to note that although opposing the Bill members of the Opposition are not moving an amendment for the setting up of a committee to inquire into these matters. The moving of such amendments has become a joke. Time and time again the Opposition’s lack of precise criticism has been converted to a plea for the setting up of a committee to inquire into matters, but which would only delay the passage of the Bill. It has been said that the matters contained in the Bill have been overdone. I submit that that has not been determined yet. In 1960 the Government and, I think, all people believed that too much advantage was being taken of the existing law, which meant a loss to the revenue of a substantial amount of tax. Steps were taken to make the interest non-deductible. Until very recently that situation continued. Until this legislation has been in operation for a while, it will not be possible to see how many companies avail themselves of the structure. In future it may be necessary to restrict it a little further. It may be possible to open it a little further. I suggest that that will need testing.

The honourable member for Melbourne Ports made some criticisms of the Bill. His first point that there was not time for representations to be made is perhaps a little thin because, as we see from the Notice Paper, under item 7, this Bill has been in the House since 27th August. It is now 13th October. Prior to 27th August a statement was made: it was well known roughly what the criteria being presented tonight would be. The honourable member mentioned that in former times what went on was regarded as a bit of a racket. I have alluded to the revenue loss. He said that it was difficult to know what was right or wrong. I suggest that the principle in this Bill is that the Government is prepared to allow deductibility within certain criteria, provided that the economy and public interest receive some advantage. I have advanced reasons for this. Allowing companies, within certain conditions, to receive cheaper money and providing a small advantage for Australian participation where there otherwise might have been foreign participation are most substantial advantages which have been given and which compensate and justify the proposition as it is in the Bill. I do not think one can reasonably say, as the honourable member did. that overall the Bill can be regarded as bad rather than as good. That was bis phrase. I noted it. I have tried to point out that it will mean, particularly in the area of Australian participation, a small advantage to us. It is not a question of its giving foreign investors any advantage. Surely they will be in a rather similar position.

Debate interrupted.

page 2062

ADJOURNMENT

Mr SPEAKER:

– Order! It being 1 1 p.m., in accordance with the order of the House of 26th August, I propose the question:

That the House do now adjourn.

Mr Lynch:

– I require that the question be put forthwith.

Question resolved in the affirmative.

Bouse adjourned at 11 p.m.

page 2063

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Mineral Industries (Question No. 501)

Mr Swartz:
LP

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

  1. Income payable on direct overseas investment by companies in Australian mining and quarrying, and oil exploration and production industries in 1968-69 amounted to $90m, of which $37m was distributed.

Income payable overseas on portfolio invest ment in companies in Australia is not available on an industry basis. Total dividends payable overseas on portfolio investment amounted to $48m for all industry groups in 1968-69.

  1. Details of capital gains are not available.
  2. The only mining industries receiving sub sidies from the Commonwealth are gold mining and oil exploration. The rate of gold subsidy payable to larger producers is an amount equal to three quarters of the average cost of production over $27 per line ounce with a maximum subsidy of $8 per fine ounce. The amount of subsidy is reduced by an amount equal to three quarters of any premiums received from sales of gold by producers on the free market. Subsidy payments in the calendar year 1969 to companies with significant overseas participation are as follows:

Lake View and Star Ltd. $280,000

North Kalgurli Ltd. $170,000.

Payments under the petroleum search subsidy scheme are designed to defray approved costs of exploration. A split-up of payments of petroleum search subsidy as between local and overseas shareholders is not available. The complexity of ownership of many companies, particularly where farm-out arrangements are involved, is such that it is not possible to provide separate figures. Total subsidy payments in 1965 were $14,911,351.

National Development Planning (Question No. 1586)

Mr Swartz:
LP

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

  1. No. The report is currently the subject of interdepartmental consideration.
  2. The tabling of the report will be considered by the Government when it has had an opportunity to examine it.
  3. It is not possible, at this stage, to state when the report will be completed.

Public Authority Receipts and Expenditure (Question No. 306)

Dr Everingham:

asked the Treasurer, upon notice:

What sum specifically for capital expenditure has the Commonwealth (including its banks) in the last financial year (a) spent, (b) transferred as grants or loans direct to (i) State, local or semigovernment authorities, (ii) autonomous health, education and welfare organisations and overseas recipients and (iii) private industry, including all compensation and capital subsidies and price support to private industry except by way of relief of temporary natural disasters, and (c) received, as grants or loans, from other countries.

Mr Gorton:
LP

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

The available information pertinent to the honourable member’s question is set out below. To avoid double counting and inconsistency the figures are based, as far as possible, on information published in, or used in the preparation of, the Supplement to the Treasury Information Bulletin, “National Accounting Estimates of Public Authority Receipts and Expenditure, August 1970’. Where the answer has been supplemented from an additional source, the source is noted. Some of the information requested by the honourable member - such as the lending and investment activities of the Commonwealth Banks - is either not collected or is not available in the detail necessary to permit a satisfactory answer to certain parts of the question.

Gross fixed capital expenditure on new assets by the Commonwealth and its authorities, including the Commonwealth banks, amounted to $653m in 1969-70.

(i) Grants to State, local or semigovernment authorities for capital purposes by the Commonwealth Government in 1969-70 amounted to $3 11m. Net advances by the Commonwealth to these authorities in 1969-70 totalled $667m.

Commonwealth Government grants to autonomous health, education and welfare organisations in Australia for capital purposes totalled $14m in 1969-70. Total overseas grants and contributions by the Commonwealth Government are estimated at $180m in 1969-70 but no breakdown of this figure into grants and contributions for current and capital purposes is available from the Supplement to the Treasury Information Bulletin. Details of external economic aid for 1969-70, which is a slightly different concept, are given in Statement No. 8 attached to the Budget Speech.

Commonwealth Government grants and advances to private industry in 1969-70 for capital purposes amounted to $45m. Of this total, $40m was in respect of grants and advances for housing - which, for national accounting purposes, are treated as advances to private industry.

Commonwealth subsidy payments, as defined for national accounting purposes, amounted to $184m in 1969-70. Details of these payments are given in Table No. 5 of ‘Commonwealth Finance, 1969-70, Bulletin No. 8’. Further details of Commonwealth payments to industry are given in Statement No. 9 attached to the Budget Speech.

Australia receives negligible amounts in the form of grants from other countries for capital expenditure. Apart from drawings on credit arrangements for defence purchases in the United States of America, loan proceeds from other countries through the issue of Commonwealth securities are available for capital purposes or for loan redemptions and repayments. In 1969-70, excluding amounts available from credit arrangements for defence purposes, redemptions and repayments of official borrowings overseas exceeded overseas loan proceeds by S128m, compared with net proceeds of P8m in 1968-69:

Work Force: Productivity (Question No. 1225)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Treasurer, upon notice:

Will be arrange to include in ail future issues of the Labour Report an intelligible table showing the productivity per unit of work force in the various manufacturing industries in each year since these statistics were first compiled.

Mr Gorton:
LP

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

As stated in the answer given on 16 April 1970 to question No. 325 asked, by the honourable member, there are no official statistics showing productivity (i.e. ‘production at constant prices) per unit of work force in manufacturing industries. As indicated in that answer it is possible to derive some estimates of this type using the Commonwealth Statistician’s annual indexes of factory production and work force particulars from the annual factory censuses on which the indexes are based.

I am advised by the Statistician that he intends to examine the desirability of compiling and publishing such measures along conventional lines despite their significant conceptual limitations. It will be necessary to give attention to technical problems including some that arise from the changes and developments associated with the introduction (as from 1968-69) of the integrated censuses. The Statistician does not expect lo complete the study of these technical problems until after the forthcoming re-basing of his factory production indexes as at 1968-69. This work is expected to be completed during the second half of 1971.

Banking: Loans (Question No. 1365)

Mr Hallett:

asked the Treasurer, upon notice:

  1. At the end of the last financial year what was the percentage of loans outstanding from the Commonwealth Development Bank, the Term Loan Funds, the Australian Banks’ Export Refinance Corporation, the Australian Resources Development Bank, and the trading banks (other than term loans) for period, (a) up to 180 days, (b) 180 to 1 year (c) 1 year to 2 years, (d) 2 to 3 years, (e) 3 to 4 years, (f) 4 to 5 years, (g) 5 to fi years, (h) 6 to 7 years, (i) 7 to 8 years, 0) 8 to 10 years, (k) 10 to 12 years, (1) 12 to 15 years, (m) IS to 20 years and (n) over 20 years.
  2. At the end of the last financial year what was the percentage of loans outstanding from the Reserve Bank for the same periods.
Mr Gorton:
LP

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

  1. Generally, the statistics sought are not available. The Commonwealth Development Bank does not maintain statistical records that would enable it to provide information in the form requested. However, the Bank classifies loan approvals according to repayment term, and has provided the following information in respect of approvals from the commencement of ils operations on 14th January, 1960 until 30th June, 1969:

In the case of the trading banks, most lending is by way of overdraft which is normally repayable on demand but in fact may extend over a number of years; balances of overdrafts normally fluctuate considerably between the dates of initial approval and final repayment. Trading banks also provide Term Loans (currently 11 per cent of total loans outstanding) with maturities of 3-8 years, or a little longer, and Farm Development Loans (2 per cent) with maturities of up to IS years, or longer in special cases. The Australian Resources Development Bank’s loans are generally for a term of 5-10 years from final drawdown of loans. Refinancings of the Australian Banks’ Export ReFinance Corporation can be for terms of up to 10 years.

  1. It is not the practice of the Reserve Bank to provide detailed information of this kind. The Bank has advised, however, that the great bulk of loans made by it are repayable within one year.

Insurance: Motor Vehicle and Third Parry (Question No. 1389)

Mr Whitlam:

asked the Treasurer, upon notice:

  1. What were the ‘ amounts of premiums received and claims paid by insurance companies for comprehensive motor vehicle and compulsory third party insurance in the ‘latest year for which statistics are available.
  2. Have steps been taken since his predecessor’s answer to me on 26th September 1968 (Hansard, page 1629) to ascertain the separate details of (a) compensation and damages, (b) legal expenses and (c) medical “and hospital expenses.
Mr Gorton:
LP

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

  1. The Commonwealth Statistician has advised that the latest period for which statistics of premiums received and claims paid by insurance companies for comprehensive motor vehicle and compulsory third party insurance is 1968-69. The details, as published in the bulletin, Australian Fire, Marine and General Insurance Statistics 1968-69, are set out in the following table:
  1. No steps have been taken to include questions on compensation and damages, and legal, medical and hospital expenses on the statistical forms submitted annually by insurance companies.

Public Service Board (Question No. 1532)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Prime Minister, upon notice:

  1. Is it a fact that members of the Commonwealth Public Service Board are not permanently appointed and may be replaced at the end of their appointed term.
  2. Are members of the Board expected to act independently of Government policy.
  3. If so, what guarantee is given to members of the Board that re-appointment is not prejudiced by decisions that are independent of, and in any given case opposed to, Government policy.
  4. In view of the fact that presidential members of the Commonwealth Conciliation and Arbitration Commission are appointed for life and Conciliation Commissioners are appointed until they attain the age of 65 years, will he give consideration to amending the Public Service Act in such a way as to give to all members of the Public Service Board the same tenure of office and opportunity for independence as is already enjoyed by Conciliation Commissioners.
Mr Gorton:
LP

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

  1. Yes.
  2. and (3) The duties, powers and conditions of appointment of members of the Public Service Board are set out in the Public Service Act 1922-1968.
  3. A presidential member of the Commonwealth Conciliation and Arbitration Commission may hold office until death only if he is a Judge of the Commonwealth Court of Conciliation and Arbitration.

It is customary for Parliament to provide that Commonwealth statutory officers be appointed for fixed terms, for example, the Public Service Arbitrator, the Commissioner and Second Commissioners of Taxation and the Chairman of the Tariff Board. This has been the practice for many years.

Wool Prices (Question No. 1552)

Dr Everingham:

asked the Minister for Primary Industry, upon notice:

  1. Is the Government negotiating with Japan ese wool buyers regarding low wool prices without similarly approaching other buyers who buy some two-thirds of Australia’s wool.
  2. Is he able to say whether any discussions have occurred between Australian merino wool exporting interests and those in South Africa or South America to set floor prices; if so, what were the results.
  3. What estimates are available on the probable savings to growers by the adoption of a single marketing and storage authority as was done during two world wars to the satisfaction of governments, growers and consumers.
Mr Anthony:
Minister for Primary Industry · RICHMOND, NEW SOUTH WALES · CP

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

  1. No.
  2. I understand that a meeting was held early in August of this year in Sydney between representatives of the Australian Wool Marketing Corporation Pty Ltd and the New Zealand and South African Wool Commissions. The purpose of the meeting was to discuss technical matters of mutual interest associated with the wool marketing schemes operating in the 3 countries, including the operation of flexible reserve prices at wool auctions.
  3. The Government has before it a proposal for the establishment of a statutory authority to administer the marketing ‘of the Australian wool clip. The proposal has been agreed upon in principle by the 2 federal woolgrower organisations and endorsed by the Australian Wool Industry Conference on the same basis. I should mention, however, that the proposal is not for a scheme of the type which operated during the 2 World Wars.

The proposal as put to the Government was prepared by the Advisory Committee of the Australian Wool Board and contained only a broad outline of the proposed plan. Subsequently I arranged for Sir John Crawford, Vice Chancellor of the Australian National University, to comment and elaborate on the proposal submitted and to suggest details for its operation. In carrying out this task Sir John consulted various interests and organisations.

I have recently received Sir John’s report and it is now receiving the urgent consideration of the Government.

Town Planning: Gosford (Question No. 1589)

Mr Cohen:
ROBERTSON, NEW SOUTH WALES

asked the Minister for the

Interior, upon notice:

  1. Has his attention been drawn to the projected increase in population in the GosfordWyong district to half a million people as outlined in the New South Wales States Planning Authority’s outline plan for the Sydney region for 1970-2000 A.D.
  2. Has he received a request from the Gosford Shire Council for assistance from the

National Capital Development Commission in the planning of the Centre of Gosford.

  1. Is he able to say whether, in common with most local councils, Gosford lacks the large trained skilled staff required to cope with urban development proposals of the magnitude projected.
  2. If so, will he give favourable consideration to assisting the Gosford Council as requested.
Mr Nixon:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

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

  1. No.
  2. Yes.
  3. I am not in a position to comment on this statement.
  4. The National Capital Development Commission receives many requests of this type but it is not in a position to engage in this type of work. However I would be happy to make arrangements for Gosford Shire Council if they wish, to have discussions in Canberra with the N.C.D.C. which could adivse them on the method of approach it adopts to some of its own planning work.

Finance: Cash Benefits to Persons (Question No. 1599)

Mr Crean:

asked the Treasurer, upon notice:

  1. What are the constituent items of the sum of $820m in 1960-61 and $1598m in 1969-70 as shown in Statement No. 7 of the Budget Speech 1970-71 under the description ‘Cash benefits to persons’. ‘
  2. What percentage to gross national expenditure does each constitutent item bear.
  3. What percentage of the total population were the receipients of (a) child endowment and (b) age pensions in 1960-61 and 1969-70, respectively.
Mr Gorton:
LP

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

  1. (a) The average number of endowed children in 1960-61 was 3,296,357 or 31.72 per cent of the mean population. In 1969-70 the average number of endowed children, .including endowed full-time students aged 16 to 21 years, was 4,037,710, or 32.45 per cent . of the mean population.

    1. The average number of age pensioners in 1960-61 was 539,826 or 5.20 per cent of the mean population. Figures for 1969-70 are 739,795 and 5.94 per cent respectively.

Local Government Revenues (Question No. 1723)

Mr Whitlam:

asked the Prime Minister, upon notice:

  1. Did the Local Government and Shires Associations of New South Wales write to him on 8th July 1970 asking that the sources of local government revenue should be included in the survey which he has commissioned Treasury officials to make into the sources of finance for the Commonwealth and State Governments.
  2. Did the Associations offer their fullest cooperation in providing information which might be required by the Treasury.
  3. Has he answered the Associations’ letter.
  4. If so, did he agree to the Associations’ request.
  5. If not, when does he expect to answer the letter.
Mr Gorton:
LP

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

  1. The Local Government and Shires Associa tion of New South Wales did write to me on 8th July as indicated by the honourable member. However, the Association’s request was based on an understanding that I had said that Treasury officials would be requested to conduct an exhaustive examination into sources of finance for the Commonwealth and State Governments.

This is an incorrect understanding of the position. In fact, having recently completed a comprehensive review of Commonwealth-State financial relations, it is not the intention of the Government to undertake a further examination in the near future. While I stated at the June 1.970 Premiers’ Conference that the Commonwealth would be prepared to have Commonwealth Treasury officials examine with State Treasury officials alternative possibilities for new growth taxes for the States, any exercise along these lines would be restricted to the question of possible new State taxes.

  1. Yes.
  2. Yes.
  3. No. The Associations have been informed in terms of part (1) above.
  4. See answer to part (3).

Erosion: Ord River Catchment Area (Question No. 1725)

Dr Gun:

asked the Minister for the

Interior, upon notice:

  1. Is it a fact that at present there is severe erosion of the Northern Territory part of the Ord River catchment area covering Vesteys’ Mistake Creek Station.
  2. Has his attention been directed to Bulletin No. 3599 of the Department of Agriculture of Western Australia, which reports the progress of the Ord River catchment regeneration project covering 2,100,000 acres including the whole of Ord River and Turner River stations and part of Flora Valley station, formerly held by Vesteys and resumed in 1967 for erosion reclamation.
  3. If so, what action has been taken by his Department or the Northern Territory Administration for erosion reclamation on Mistake Creek Station.
  4. Has Mistake Creek Station or any part of it been resumed for erosion reclamation.
  5. If not, does the Government contemplate resumption of the whole or part of this station for erosion reclamation.
Mr Nixon:
CP

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

  1. There is considerable soil erosion on parts of Mistake Creek Station.
  2. Yes.
  3. and (5). The Government is concerned about the need for soil conservation in the Territory and the Soil Conservation and Control Ordinance, which was passed by the Northern Territory Legislative Council during November 1969, received the Governor-General’s assent on 25th. March 1970. Erosion reclamation work on Mistake Creek Station is being carried out under the provisions of the Ordinance by the Northern Territory Administration with the cooperation of the lessee. Reclamation works include erection of fencing, including subdivision of some of the affected paddocks; contour furrowing and seeding; de-stocking of paddocks according to Government requirements. The lessee is bearing half share of fencing costs and is responsible for the maintenance of the fences erected.
  4. No.

Laws in Commonwealth Properties (Question No. 1730)

Mr Whitlam:

asked the Attorney-Gen eral, upon notice:

  1. On what dates have there been meetings of the two committees set up by the Standing Committee of Commonwealth and Stale AttorneysGeneral in July to consider laws with respect to places acquired by the Commonwealth for public purposes.
  2. When are the committees expected to report.
Mr Hughes:
LP

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

  1. Except as mentioned below, meetings of each Committee were held on the following dates: 21st July 1970 30th July 1970 31st July 1970 13th August 1970 14th August 1970 18 August 1970 19th August 1970 20th August 1970 31st August 1970 1st September 1970 2nd September 1970 18th September 1970

The Drafting Committee did not meet on 21st July 1970.

  1. A report was furnished to the Slate AttorneysGeneral and to myself on 18th September 1970.

Papua and New Guinea: Appeals Against Administrative Decisions- Legal Aid (Question No. 576)

Mr Whitlam:

asked the Minister for External Territories, upon notice:

  1. Under what acts, ordinances and regulations have (a) boards, tribunals and committees been established and (b) courts beela empowered to hear appeals from the decisions of departments and instrumentalities in the Territory of Papua and New Guinea.
  2. What 1) the title of each board, tribunal, committee and court.
  3. What legal or other representation is (a) permitted and (b) provided on appeals to each board, tribunal, committee and court.
Mr Barnes:
CP

– The answer to the honourable member’s question as it relates to the Administration of the Territory of Papua and New Guinea is as follows:

  1. and (2)-
  1. The following Ordinances expressly confer a right to legal representation, namely:

Royal Papua and New Guinea Constabulary Ordinance 1965-1969- Section 104

Public Service (Papua and New Guinea) Ordinance 1963-1969- Section 73

Medical Services Ordinance 1965-1969 - Section 60 .

Veterinary Surgeons Ordinance 1966-1968 - Section 24 .

In the absence of specific provision, the question whether or not the appellant has a right tobe legally represented or a right to an oral hearing, is a matter of law to be determined in the case of each appellate body.

Legal aid in the Territory of Papua’ and New Guinea is provided by the Public Solicitor and private practitioners.

Applications to the Public Solicitor for legal aid in civil cases are subject both to the means test and to the requirement thatthere appears to be a good cause of action. In addition, due to the volume of applications for such aid and the limited number of lawyers available, the Public Solicitor gives priority among such applications according to the nature of the action and the circumstances of individual cases. Broadly, all applications by impecunious “ persons in matters relating to the restoration of land titles, workers’ compensation, or to claims by relatives arising from death are granted. Other applications requiring action in the Supreme Court are granted if there appears to be a good cause of action and counsel are available. Legal aid by the Public Solicitor in summary cases is limited to the preparation of. complaints or defences unless special circumstances make the provision of counsel desirable.

In addition to his assistance in actual court proceedings, the Public Solicitor advises indigenous persons generally as to their legal rights and obligations and as to ways and means of enforcing their legal rights.

When the Public Solicitor is unable to act for a person otherwise entitled to legal aid from the

Public Solicitor due to possible conflicts of interests, legal aid is made available on the same principles as apply to legal aid from the Public Solicitor either through the Department of Law or through the briefing of private practitioners through that Department.

Under the Poor Persons’ Legal Assistance Ordinance 1951 a person committed for trial on an indictable offence may apply to a Supreme Court Judge for legal assistance for his defence, and if the Judge consider it desirable that assistance should be provided the Administrator may arrange legal aid. Due to the availability of the services of the Public Solicitor in trials for indictable offences this Ordinance is rarely invoked.

The honourable member will appreciate that the question involves considerable detail and perhaps some problems of interpretation. An endeavour has been made to deal with the question’ as broadly and completely as possible.

Defence Equipment Procurement (Question No. 1156)

Mr Keating:

asked the Minister for

Defence, upon notice:

What are the names of the personnel in his Department and the other Service Departments who (a) set down the criteria for aircraft performance requirements and who evaluate the various aircraft types offered to Australia’s Armed Forces, (b) head the respective departmental evaluation teams dealing with aircraft procurement and (c) comprised the evaluation team that advised the Menzies Government in 1963 concerning the procurement of the General Dynamics F-111 fighter-bomber.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

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

The evaluation and recommendation of defence equipment procurement is not confined to any one Department in the Defence Group, but ls carried out by combined teams made up of officers from the Departments of Defence, Supply and the Services. These teams, expert in specialised areas, are delegated the task of assessing the equipment - most suited to meet the requirements of the Armed Forces. In respect of the F-11 project, a number of teams examined the various aspects of the strike aircraft proposal.

The question of specifically naming all the individuals responsible for setting the performance criteria and making recommendations would be difficult at this late stage. In any case, generally the Government does not disclose the names of all public servants involved in making recommendations to it as to do so would place them in a position where they could be subject to public criticism or query. You will appreciate that, in our system of Government, public servants cannot engage in public debate on Government decisions.

The final evaluation team that advised the Menzies Government in 1963 on the procurement of the General Dynamics F-111 fighter-bomber, however, wag headed by the then Chief of the Air Staff, Air Marshal Sir Valston Hancock. The composition of this team was given in the House by the former Minister for Air, Mr Gordon Freeth, on 17th September 1968. (See Hansard of 17th September 1968, page 1071.)

Bank Investments (Question No. 1261)

Mr Whitlam:

asked the Treasurer, upon notice:

  1. What dividend did each private trading bank receive in its last financial year from merchant banks.
  1. What capital (a) has each bank subscribed to date and (b) did each bank subscribe in the last financial year to merchant banks. .
  2. Can he bring up to date the information on other bank investments which « former Treasurer gave me in an answer on 24th September 1963 (Hansard, page 1327).
Mr Bury:
LP

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

The Reserve Bank has provided the following information:

and (2) The term ‘merchant bank’ is currently used in Australia by such a wide range of financial institutions that it is difficult to identify the particular institutions in respect of which information is sought Moreover, many institutions which might be classed as merchant banks have not been operating in Australia for a sufficiently long period for annual accounts covering a full year’s operations to be available. Table No. 1 shows the published information available on private trading banks’ investments in some financial institutions of these types as at June 1970. However, published information makes incomplete references to the amount of capital subscribed by banks to these institutions; banks are not obliged to publish details of such investments or dividends received.

Table No. 2 brings up to- date, as far a* practicable, the information on other bank investments given in the earlier answer referred to. No information is available regarding dividends received by banks from unit trust, development corporation or factoring organisations, while published information makes incomplete reference* to capital subscribed by the banks to unit trusts and factoring organisations.

Uranium (Question No. 1285)

Mr Stewart:
LANG, NEW SOUTH WALES

asked the Minister for National Development, upon notice:

  1. Is he able to say whether the enrichment of uranium in the United States of America is performed by a government instrumentality.
  2. If so, has he- any information as to what the effect on the price and availability of enriched uranium would be if this responsibility were handed over to private enterprise in the United States of America.
Mr Swartz:
LP

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

  1. Yes. Enrichment of uranium in the United States of America is performed in facilities owned by the United States Atomic Energy Commission and operated under contract to the Commission. The President has announced his desire that these (three) plants should be sold to private enterprise and has directed certain preparatory action to this end. The hew owners would work in competition, and would finance expansion and general operation on a normal commercial basis.
  2. Studies are being undertaken by the USAEC to review uranium enrichment costs. No information is available on how these costs or availability might be affected if private enterprise assumed the responsibility.

Uranium (Question No. 1288)

Mr Stewart:

asked the Minister for National Development, upon notice:

What are the respective (a) advantages and (b) disadvantages to Ausatralia if (i) natural uranium or GO enriched uranium is adopted as the fuel for our nuclear power stations.

Mr Swartz:
LP

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

Under Australian conditions, the costs of nuclear power derived from natural uranium and enriched uranium may not be very different. Actual figures must depend upon the evaluation of specific sites and of specific tenders called for such sites.

Cost of power is, however, not the only consideration. Natural uranium power ‘ stations generally have higher capital costs than enriched fuel stations. This is offset by the fact that natural uranium fuel is cheaper than enriched uranium fuel, and this effect persists throughout the life of the station. Part of the extra cost of natural uranium stations is the cost of heavy water, in the cases where it is used. Supply of the initial heavy water charge would be the responsibility of the successful contractor. The heavy water is not consumed like fuel although some reactor types require some makeup of irrecoverable heavy water. We would not be in a position to manufacture heavy water in Australia for some years.

Australia has adequate resources of natural uranium to sustain a nuclear power programme. The manufacture of natural uranium fuel could be carried out in Australia and this could constitute significant savings of foreign exhange. Manufacture of zircaloy fuel cladding could also be accomplished in Australia within a few years.

Although Australia may one day be able to enrich its own uranium, that day is some way off and it is not yet certain what the cost of that operation would be. Purchase of enrichment services overseas would cost a considerable amount of foreign exchange, and would make the nuclear power industry dependent upon the ability and willingness of foreign powers, at present only one, but in the future perhaps two or three, not only to continue to supply, but to do so at an acceptable cost.

Semi-Government Loans (Question No. 1343)

Mr Whitlam:

asked the Treasurer, upon notice:

Has the Loan Council approved any special allocations for semi-government or local government authorities other than the Brisbane City Council (Hansard 3rd June 1970. page 2882) in the last 10 years; if so, in what State or States.

Mr Gorton:
LP

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

The Loan Council has approved the following special allocations for individual semi-government and local government authorities, other than the Brisbane City Council, in the last 10 years:

New South Wales-

Cobar Water Board- $2,850,000

Grain Elevators Board- $6,000,000

Queensland -

Cairns and Mackay Harbour Boards $7,773,000

South Australia -

Natural Gas Pipeline Authority- $20,000,000

Tasmania -

Hydro-Elec tric Commission- $8,000,000

As I have explained in previous answers to questions by the honourable member (numbers 726, 909 and 1835), the proceedings of the Australian Loan Council are confidential and I cannot divulge information available only in those proceedings. The information given above has been obtained from statements published by the States concerned.

Equal Pay by Commonwealth (Question No. 1377)

Mr Whitlam:

asked the Prime Minister, upon notice:

Is it yet possible to state the annual cost to the Commonwealth (a) Public Service and (b) instrumentalities of the equal pay judgement on 19th June 1969 (Hansard, 9th September 1969, page 1013).

Mr Gorton:
LP

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

  1. am advised by the Public Service Board that as at . 1st January 1970 there were of the order of 26,000 females employed within the Commonwealth Service in categories eligible to be covered by the equal pay phasing provisions. The equal pay decision results in the adult female salaries of these staff being increased by $428 per annum between the period 1st October 1969 and 1st January 1972. Assuming that from 1st January 1972 the figure of 26,000 females employed in equal pay categories is a representative figure, and that all of these females are in receipt of adult rates of pay, the maximum annual cost of the equal pay decision in a full year would be in the vicinity of $11m. The actual annual cost in any year would depend upon the number of females employed in equal pay categories, and the proportion of these who are in receipt of junior rates (the differential between male and female junior rates is less than $428 per annum).

The only Commonwealth instrumentality which falls within my ministerial responsibility and whose staff is not covered by the Public Service Board’s advice is the Institute of Aboriginal Studies. If the same assumptions as above are followed, the maximum annual cost of the equal pay decision in a full year in respect of the Institute would be $856.

Vietnam: Prisoners of War (Question No. 1412)

Mr Whitlam:

asked the Minister for Defence, upon notice:

How many prisoners have been captured by the Australian forces in Vietnam since his predecessor’s answer to me on 12th August 1969 (Hansard, page 167).

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

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

Between 1st May 1969 and 31st July 1970, 65 prisoners of war were captured by Australian fortes in Vietnam. A total of 169 prisoners have been captured since June, 1965 when the first Australian battalion arrived in Vietnam.

Education: Northern Territory (Question No. 1423)

Mr Whitlam:

asked the Minister for Education and Science, upon notice:

Will he bring up to date the answer which his predecessor gave me on 14th August 1969 (Hansard, page 344) on tertiary and technical education in the Northern Territory.

Mr N H Bowen:
PARRAMATTA, NEW SOUTH WALES · LP

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

The following information updates that given by my predecessor on 14th August 1969:

Existing Tertiary Facilities

  1. (a) External tuition continues to be provided by the University of Queensland under the subsidy arrangements outlined in my predecessor’s reply of 14th August 1969. Northern Territory students also undertake courses with the Royal Melbourne Institute of Technology, the Western Australian Institute of Technology and the University of London. Certain students have arranged to complete courses with the University of Western Australia and teachers are undertaking subjects with Teachers’ Colleges in South Australia.TheDarwin Adult Education Centre provides tutorial guidance in these courses.

In 1970, 101 Northern Territory students enrolled as external students of the University of Queensland in 143 . subjects. Fifty-eight of the students live in Darwin and use the tutorial service provided at the Adult Education Centre. The University of Queensland vacation school held in’ Darwin during May 1970 was provided by eleven lecturers for a daily average’ of fifty students.

Existing Technical Education Facilities

  1. (b) In the field of technical education the Technical Division of the South Australian Education Department provides full-time trade teachers at the Adult Education Centre, Darwin and at Alice Springs. Instruction is provided on day release conditions to apprentices employed in the basic trades in Darwin. Supervised study is provided for apprentices undertaking other trades in the Northern Territory arid for students who undertake correspondence courses from South Australia and Western Australia. Full-time teachers are provided to instruct young Aboriginals in trade skills and office work and approximately 40 of these young people are receiving instruction at the present time.

Proposed Facilities

  1. The Planning Committee for the Darwin Community College held its first meeting on 30th September 1969 and has met regularly since that date. The Government has accepted the recommendations in the Committee’s first report which was concerned with the capital facilities required and - in July this year I announced that the Community College, to cost in the vicinity of $4.5m, would be constructed on a 50 acre site. Preliminary design work has already commenced and it is hoped to submit a proposal to the Parliamentary Committee on Public Works in the near future. The aim is for the College to begin operating in its own buildings in 1974.

The Planning Committee is continuing its work and hopes to give me its second report in the near future. This report will be concerned with the government, organisation and staffing of the College.

Water Supply: Polda-Kimba Main (Question No. 1525)

Mr Wallis:
GREY, SOUTH AUSTRALIA

asked the Minister for National Development, upon notice:

  1. Have the submissions of the South Australian Government for financial assistance to complete the construction of the Polda-Kimba water main on Eyre Peninsula been considered under the National Water Resources Development Programme.
  2. If so, what decision has been made.
Mr Swartz:
LP

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

  1. The submission by the South Australian Government on the Lock-Kimba water supply reticulation scheme is at present under consideration by the’ Commonwealth Government. The honourable’ member will appreciate that a large number of projects has been submitted by the States and a considerable amount of work is involved in property assessing their benefits to the nation. For this reason it is not possible at this stage to give any firm indication of when a decision might be made with’’ this particular project.
  2. See . (1) above.

Roads (Question No. 1571)

Mr Webb:
STIRLING, WESTERN AUSTRALIA

asked the Minister for Shipping and Transport, upon notice:

  1. What -appropriations has the Parliament made for the Commonwealth Bureau of Roads in each financial year since 1965-66, including the appropriation for 1970-71.
  2. What expenditure was incurred by the Bureau during each of the financial years 1965-66 to 1969-70.
  3. What cash balances have been carried over by the Bureau at 30 June for each of the financial years 1965-66 to 1969-70.
  4. Do these figures reveal a stationary or reducing financial provision for the activities of the Bureau.
  5. Is it a fact that cost rises have averaged about 3 per cent per annum over recent years.
  6. Does this mean that the Bureau is capable of undertaking less activity now than was the case before he was appointed to his present portfolio.
  7. If so, why has the Government decided that the activities of the Bureau are to be reduced by financial control of this nature.
Mr Sinclair:
Minister Assisting the Minister for Trade and Industry · NEW ENGLAND, NEW SOUTH WALES · CP

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

the proposed appropriation for 1970-71, i.e. the amount included in the Appropriation Bill (No. 1) 1970. on behalf of the Commonwealth Bureau of Roads, is$636,000.

  1. The figures reveal neither a stationary nor reducing provision for the activities of the Bureau over the financial years 1965-66 to 1969-70.

When the cost of establishing the Bureau during its formative years is taken into account and to this is added the cost of the first road needs survey, it is apparent that over the years in question there has been an effective increase in the financial provision for the Bureau.

  1. It is true that of recent years the consumer price index published by the Commonwealth Statistician has increased in the order of 3 per cent per annum. The percentage increase in costs experienced by the Bureau of Roads is not known.
  2. and (7) The figures do not support this conclusion.

Commonwealth Bureau of Roads (Question No. 1572)

Mr Webb:

asked the Minister for Ship ping and Transport, upon notice:

  1. On what occasions has he. or his predecessors, determined under Section 18 of the Commonwealth Bureau of Roads Act 1964 the maximum number of staff who may be employed by the Bureau.
  2. What has been the maximum number of staff determined on each of these occasions.
  3. How many staff has the Bureau recruited in each financial year since its establishment.
  4. How many staff have actually been employed by the Bureau as at 30th June in each year since its establishment.
  5. Can the Bureau adequately perform its statutory functions within the present maximum staff determination.
  6. Is the maximum number of staff who can be employed by the Bureau, as at present determined by the Minister, due to the stationary or reduced financial provision made for the Bureau’s activities in recent years.

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

  1. The maximum number of staff has been determined under section. 18 on two occasions: 24th March, 1966 1st August, 1968.
  2. The maximum number of staff determined on these occasions was as follows: 24th March, 1966 - 50 1st August. 1968 - Maximum of 56 officers and/or employees reducingto 52 officers and/or employees on and from 1st May, 1969

(5)I am advised that the functions are adequately performed within the present staff determinations.

  1. See answer to part (4) of question 1571.

Trade Practices Legislation: Victoria (Question No. 1596)

Mr Whitlam:

asked the Attorney-General, upon notice:

  1. Did his predecessor tell me on 5th April 1967 (Hansard, page 906) that Victoria was still disposed to discuss certain aspects of the trade practices legislation with the Commonwealth.
  2. Have such discussions occurred.
Mr Hughes:
LP

– The answer to the honour able member’s question is as follows: .

  1. Yes.
  2. I refer the Honourable Member to my predecessor’s answer to Question 566 on 10th October 1968 (Hansard, page 1905). No further approach has been made to Victoria as it has appeared that no good purpose would be served by continuing to press the matter.

Drought Assistance (Question No. 1600)

Mr Kirwan:
FORREST, WESTERN AUSTRALIA

asked the Prime Minister, upon notice:

  1. How many approaches have been made by the State Government of Western Australia to the Commonwealth for drought assistance, since 1st January 1969.
  2. For what specific purposes were the funds sought.
  3. What amounts have been allocated to Western Australia for drought relief in the past 5 years.
  4. What other State Governments have sought -Commonwealth drought assistance in the last 5 years.
  5. For what specific purposes were these funds sought in each case.
  6. What amounts were allocated in each instance.
Mr Gorton:
LP

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

  1. Two. (2)The drought relief measures for which Commonwealth assistance was sought included carry-on and restocking loans, freight rebates on the transport of stock and drought fodder and the provision of emergency water supplies. These are measures which are normally eligible for reimbursement when the Commonwealth agrees to assist a State. Assistance was also requested for the cost of drilling for water on farm properties.
  2. None.
  3. Every State has sought Commonwealth assistance for drought relief purposes at some time in the past 5 years.
  4. The main purposes for which assistance has been sought fall under thefollowing headings:

    1. loans for carry-on and restocking purposes where credit is not available through normal commercial channels;
    2. rebates of freight onthe transport of fodder and water to drought affected areas, the transport of starving stock out of drought areas, and the transport of slock to areas recovered from drought;
    3. grants to local councils and other authorities to provide relief work for those unemployed in rural areas as a result of drought; and
    4. other miscellaneous items associated with drought, including cloud seeding and expenditure on emergency water supplies.

In addition, the Queensland Government requested Commonwealth assistance in financing grants to help drought affected farmers meet crown rentals and local authority rates. In the light of the extended period of drought experienced in many areas of the State the Commonwealth agreed to reimburse the State for grants to meet half the rates payable in 1970 by primary producers in drought areas who are demonstrably in need of such assistance.

Requests have also been made for Commonwealth assistance in subsidising the price of fodder for drought affected stock. While these requests have been refused, the Commonwealth has arranged from time to time, through the Wheat Board, for feed wheat to be sold to drought affected farmers on 12 months credit at a concessional rate of interest.

  1. Payments to each State for the various categories of drought relief measures in the past5 years are given in Table 24 of the White Paper Commonwealth Payments to or for the States 1970-71’.

Australian Atomic Energy Commission (Question No. 1605)

Mr Whitlam:

asked the Minister for

National Development, upon notice:

On what dates and for what purposes has the Chairman of the Australian Atomic Energy Commission made visits to other countries.

Mr Swartz:
LP

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

Since taking up the position of full-time Chairman of the Atomic Energy Commission, Sir Philip Baxter has made the following overseas visits: 15th September- 29th October 1969

Austria, United Kingdom, United States of America and Canada: The visit to Austria was to attend 2 meetings of the Board of Governors and the Annual General Conference of the International Atomic Energy Agency (IAEA) at which Sir Philip was elected Chairman of the Board for the forthcoming year. Visits to the other countries were for discussions with atomic energy authorities on matters of interest to the Australian Atomic Energy Commission. lst-16th December 1969

Austria: To attend, as Chairman ofthe Board, 2 Meetings of the Board of Governors of the IAEA in Vienna. 11th February- 10th March 1970

Austria and South Africa: To attend, as Chairman of the Board. 2 Meetings of the Board of Governors of the IAEA in Vienna. During return to Australia, brief technical discussions were held with the South African Atomic Energy Board. 27th March- 7th April 1970

Austria: To attend, as Chairman of the Board, a Meeting of the Board of Governors of the IAEA. 4th-18th June 1970

Austria: To attend, as Chairman of the Board, 2 Meetings of the Board of Governors of the IAEA. 4th September- 4th October 1970

Japan: As a guest of the Japan Atomic Energy Commission for discussions on matters of mutual interest to that Commission and to the Australian Atomic Energy Commission.

Austria: To attend 2 Meetings of the Board of Governors of the IAEA and the IAEA General Conference.

At the present time there are no plans for Sir Philip to go overseas again during the remainder of this year or in the early part of next year.

Vietnam and Singapore Reduction of Forces (Question No. 1639)

Mr Whitlam:

asked the Minister for

Defence, upon notice:

  1. When is each unit in (a) Vietnam and (b) Singapore due to complete its tour of duty.
  2. What reduction has the United States (a) made in the numbers of her forces in Vietnam in the last 12 months and (b) announced that she will make in the next 12 months.
  3. What reduction has Britain (a) made in the numbers of her forces in Malaysia-Singapore in the last 12 months and (b) announced that she will make in the next 12 months.
Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– The answer to the honourable member’s question is as follows: (l)-

  1. VIETNAM
  2. Navy -

HMAS ‘Hobart’- September 1970

RAN Helicopter Flight - September-Oc tober 1970

RAN Clearance Diving Team - October 1970

  1. Army - 8th Battalion RAR- November 1970 7th Battalion RAR- February 1971

Special Air Service Squadron - February 1971 106th Field Battery- February 1971

Regimental Headquarters and Headquar ters Battery 4th Field Regiment - March 1971 2nd Battalion RAR- May 1971 107th Field Battery- May 1971

Other units of the Australian Armed

Forces Vietnam are not relieved on a unit for unit basis. In these units individual personnel are usually relieved’ after 12 months’ service in Vietnam.

  1. Air Force -

RAAF units Nos 2, 9 and 35 squadron’s and the base support unit do not complete fixed length tours. The units remain in Vietnam and individual personnel are rotated after a 12-month tour.

  1. SINGAPORE
  2. Navy-

HMA Ships ‘Parramatta’ and Vendetta’- September 1970

  1. Army - 1st Battalion RAR- June-July 1971 108th Field Battery- Approximately

December 1971-January 1972

Personnel from units which are not replaced on a unit basis arc relieved after 2 to 2½ years’ service in the area.

  1. Air Force -

There are no RAAF units in Singapore. Individual RAAF personnel serving in the area complete tours of 2 to 2) years.

  1. United States Withdrawals from South Vietnam -

President Nixon announced on20th April 1970, that by that date, a total of 115,000 men had been returned from Vietnam. The President also announced the withdrawal of a further 150,000 to be completed by May 1971 of which 50,000 are expected to be withdrawn from Vietnam by mid-October.

  1. British Force Reductions in Malaysia and Singapore -

The British Government’s Statement on the 1970 Defence Estimates shows that during the period April 1969 to April 1970 troop withdrawals from the Malaysia-Singapore area totalled 6,500 United Kingdom Servicemen and 1,900 members of the Brigade of Gurkhas. As the honourable member will be aware the British Government has announced that it will retain a modest but balanced military force in the area post 1971, and that this force will consist of elements of the Navy, Army, and Air forces. Neither the likely force levels that will be maintained nor the details of further reductions in the existing British forces by the end of 1971, have been announced.

Dry Cleaning Machines (Question No. 1685)

Mr Berinson:
PERTH, WESTERN AUSTRALIA

asked the Minister for Trade and Industry, upon notice:

  1. Can he say how many perchlorethylene dry cleaning machines have been manufactured in Australia in each of the past5 years.
  2. If so, what was the capacity of these machines.
Mr McEwen:
CP

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

  1. No. The Commonwealth Statistician does dot publish statistics ‘ of production specifically for. dry cleaning machines.
  2. See answer to (1).

Television (Question No. 1691)

Mr Berinson:

asked the PostmasterGeneral, upon notice:

  1. What is the cost per hour to (a) commercial and (b) Australian Broadcasting Commission television of hiring the television link between (i) Adelaide and Perth, (ii) Melbourne and Perth, (iii) Melbourne and Adelaide and (iv) Melbourne and Sydney.
  2. Are there any technical restrictions applying to the use of these links.
  3. What has been the average weekly use of these television links since the respective facilities became available.
Mr Hulme:
LP

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

  1. Commercial television companies and the Australian Broadcasting Commission are charged the same standard rates for the hiring of television links. For a one-hour relay, the charge is $4.50 per radial mile during the full-rate period 6 p.m to 12 midnight and $2.25 per radial mile during the reduced-rate period 12 midnight to 6 p.m.

A maximum chargeable distance of 600 miles is applied in determining the charge for relaying a television programme between two centres. The cost for a 1 hour television relay between the capital cities named would be:

  1. Yes. There are no permanent links between Melbourne-Adelaide and Adelaide-Perth provided exclusively for television relays. Television programmes may be relayed between these cities however, over what is known as the MelbourneAdelaide and Adelaide-Perth standby bearers. Should a fault occur on the bearer providing the telephone channels on the route the standby bearer automatically switches over to carry the telephone traffic. Television authorities are aware of this limitation and know that a television programme in progress between MelbourneAdelaidePerth will be subjected to immediate disconnection on the complete failure of the telephone system bearer. For technical reasons the use of standby bearers for television relay purposes is generally restricted to 15 hours per week.

Between Melbourne and Sydney there are two both-way links available exclusively for television relays as well as a standby bearer which provides an additional both-way link. One exclusive bothway link is leased by General Television Corporation Pty Ltd, Melbourne, and the other by HeraldSun TV Pty Ltd. General Television Corporation Pty Ltd share their link with the Australian Broadcasting Commission under a private arrangement between these two bodies. The standby bearer between Melbourne and Sydney is made available for occasional television relays under the same conditions as the Melbourne-Adelaide and AdelaidePerth standby bearer.

  1. Adelaide-Perth and Melbourne-Perth- These finks did not commence operation until the opening of the Adelaide-Perth microwave link on 9th July 1970. Six programmes, totalling 18) hours usage, have been sent from Melbourne to Perth. No programmes have been sent between Adelaide and Perth to date.

Melbourne-Adelaide - 7i hours weekly over the last 12 months.

Melbourne-Sydney - 60 hours weekly over one exclusive television link and 30 hours weekly over the other:

On the standby beater 14 hours’ weekly over the last 12 months.

Shipping: Western Australian Services (Question No. 1705)

Mr Webb:

asked the Prime Minister, upon notice:

  1. Has a request been received from the Government of Western Australia for financial assistance to build barge-carrying ships for the State Shipping Service.
  2. If so, as this type of ship is urgently required for the development of the North-West, will be ensure that the assistance is granted.
Mr Gorton:
LP

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

  1. Yes. . (2) I have informed the Premier of Western Australia that the Commonwealth agrees in principle that there is a case for re-quipment of the State Shipping Service. On the question of Commonwealth finance for the re-equipment programme I have advised the Premier that, if satisfactory financial arrangements for the purchase overseas of the replacement vessels are not available or, if the tender prices are such that the vessels could not be imported under the Government’s ship building policy, the Commonwealth would then be prepared to consider providing financial assistance in the light of circumstances at that time. The Premier has informed me that he agrees that his Government should explore the possibility of obtaining satisfactory financial terms abroad, and that he has agreed to the Western Australian Coastal Shipping Commission proceeding to the design and tender stage on this basis.

Citizen Military Forces (Question No. 1746)

Mr Hayden:

asked the Minister for Defence, upon notice:

What were the manpower strengths of each of the Citizen Forces during each of the last 5 years?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

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

The manpower strengths of each of the Citizen Forces as al June for the years 1966 lo 1970 inclusive are as follows: (Commonwealth Property: Rates (Question No. 1766)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Treasurer, upon notice:

What payment does the Government’ intend lo make in lieu of local government rates on Commonwealth owned property.

Mr Bury:
LP

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

Under Section 114 of the Constitution property of the Crown in right of Hie Commonwealth is not subject to local government rating. However, the Commonwealth pays, ag an act of grace, the equivalent of rates on certain classes of properly.

Circumstances in which payments are made to local authorities by the Commonwealth on this basis include:

Housing for employees-AO amount equivalent to the rates assessed is paid to the local governing body in respect of houses erected or purchased by the Commonwealth which are used solely for domestic purposes; no payment is made when the residence forms part of a building used for official purposes.

Leased Commonwealth properly - if the lessee or tenant pays to the Commonwealth, either as a separate amount or within his rental, the equivalent of rates, the Commonwealth pays that equivalent to the rating authority. - (iii) War Service Homes - rates are payable on all War Service Home*. However, the War Service Homes Division does not pay rates on vacant land of which it is the registered proprietor.

Properties acquired by the Commonwealth - a payment is made to the local authority where the Commonweatlh acquires land on which residential or business premises are erected and where the premises are occupied by persons other than the Commonwealth.

Commonwealth instrumentalities - a Commonwealth instrumentality that is engaged m commercial enterprise in competition with private firms or organisations, and either owns property or leases property from the Commonwealth, pays to the local authority an amount equivalent to the rates assessed on the property.

Construction of roads, footpaths, kerbing or guttering on land abutting Commonwealth property - an amount is paid equal to the sum which would have been payable to the local authority under the appropriate Slate legislation had the land been privately owned, subject to the reasonableness of the charge made by the local authority. No contribution is made for repairs or maintenance.

Payments are also made for any services rendered by a rating authority, such as the supply of water, sewerage, electricity or the collection of garbage. - Army Land: Liverpool-Holsworthy Area (Question No. 1778)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister for the Army, upon notice:

  1. What area of land is utilised by the Army in the Liverpool-Holsworthy manoeuvre area.
  2. Does the Army have any intention of recommending the relinquishment of the area and its replacement by a suitable area in some other locality.
  3. Has the attention been drawn to the recommendationscontained in the Sydney Region Outline Plan produced by the State Planning Authority to the effect that an early decision should be made about the future release of this 85 square mile defence area so as to permit development of 2,000 acres of industrial land and accommodation for 250,000 persons.
  4. If so, has his Department given consideration to these recommendations.
Mr Peacock:
LP

– The answer to the hon-. ourable member’s question is as follows:

  1. Approximately 72,000 acres.
  2. No.
  3. Yes. This matter is the subject of correspondence between the Prime Minister and the Premier of New South Wales.
  4. Yes. My Department has been consulted.

Disabled Persons: Telephone Services (Question No. 1824)

Mr Jacobi:
HAWKER, SOUTH AUSTRALIA

asked the Minister for Social Services, upon notice:

Will he give Urgent consideration to the granting of a telephone service free of charge to disabled persons in view of the special need these persons have for such a service.

Mr Wentworth:
LP

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

The question is one involving Government policy and will be considered when social, service benefits generally are next under review.

Funeral Benefit (Question No. 1827)

Mr Collard:

asked the Minister for Social Services, upon notice:

  1. May a funeral benefit of $20 be paid to a person other than a pensioner, who is responsible for the funeral costs of an age or invalid pensioner.
  2. Is this benefit payable for the funeral costs of a widow pensioner.
  3. If not, will he take immediate action to extend this benefit to include widows; ifnot, why not.
Mr Wentworth:
LP

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

  1. Yes.
  2. A funeral benefit of up to $40 may be paid in’ respect of the funeral of a deceased widow pensioner, if the claimant had paid or was liable to pay for the funeral and was a pensioner or became a pensioner within 6 months of the death of the widow.
  3. Any question of extending the conditions for payment of funeral benefit is one involving Government policy and will be considered when social service benefits generally are next under review.

Funeral Benefit (Question No. 1828)

Mr Collard:

asked the Minister for Social

Services, upon notice:

  1. Is the amount of funeral benefit payable to persons, other than pensioners, responsible for the funeral costs of an age or invalid pensioner the same today as it was in 1945.
  2. If so, what percentage of the’ average funeral cost did this benefit represent in 1945 and what percentage does it represent today.
  3. Does the Government intend to increase the amount of this benefit, on a percentage basis, to bring it into line with present day funeral costs.
Mr Wentworth:
LP

– The answer to the hon ourable member’s question is as follows: (1)Yes.

  1. There is no information available as to the average cost of a funeral in 1945.
  2. Any question of variation in the amount of funeral benefit is one involving Government policy and will be considered when social service benefits generally are next under review.

Shipbuilding: Tankers (Question No. 1891)

Mr Charles Jones:

asked the Minister for

Shipping and Transport, upon notice:

  1. Has the firm of R. W. Miller and Company Pty Ltd in recent years placed an order with the Australian Shipbuilding Board for the construction of tankers for the carriage of petroleum products on the Australian coast.
  2. If so, when was the order placed with the Australian Shipbuilding Board for each tanker.
  3. When were la) tenders called and (b) orders placed with shipyards.
  4. Which shipyard was used in each case.
Mr Sinclair:
CP

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

  1. R. W. Miller and Co. Pty Ltd has placed a firm order for one 62.000 T.D.W. oil tanker (‘Amanda Miller’) with the Australian Shipbuilding Board.
  2. The order for ‘Amanda Miller’ was placed with the Board on 7 March1 969. On 30 April 1970 the Company indicated in writing its intention of ordering a second similar tanker. On 22 July 1970 a further letter conveyed the Company’s intention of building a third tanker.
  3. Tenders were called for the first tanker on 19 August 1968 and the order was placed with the shipyard on 11 April 1969. In the case of the proposed second tanker, tenders were called on 14 July . 1970 and have not yet closed. 1 have not authorised the calling of tenders for the proposed third tanker.
  4. In the case of ‘Amanda Miller’ the shipbuilding order was placed with the lowest tenderer, Whyalla Shipbuilding and Engineering Works, Whyalla.

Papua and New Guinea: Public Service (Question No. 1911)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Minister for External Territories, upon notice:

  1. Is it a fact that earlier this year the Public Service Association of Papua and New Guinea wrote to the Administrator seeking clarification on a circular issued by his Department about public discussion by public servants and that the Administrator failed to furnish a reply.
  2. Is it also a fact that public servants in the Territory are now obliged to determine their rights and obligations from a circular from (a) the Public Service Board (1970), (b) the Public Service Commissioner (1963) and (c) the Administrator (1970).
  3. What is meant by the Public Service Board when it uses the phrase ‘the public affairs of the Territory’.
Mr Barnes:
CP

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

  1. Yes, because further circulars and action as in (2) were proposed. I am informed that the views put forward by the Association were given thorough consideration, when the further circular instructions and revised authorisations mentioned in (2) below were being prepared.
  2. The rules governing public statements by members of the Papua and New Guinea Public Service are set down in Public Service Regulations 17 and 18, made under the Papua and New Guinea Public Service Ordinance, authorisations by the Administrator pursuant to Public Service Regulation 17 (i) (b) and a direction issued by the

Public Service Board of Papua and New Guinea pursuant to Section 128 of. the Papua and New Guinea Public Service Ordinance.

The circulars issued by the Papua and New Guinea Public Service Commissioner in 1965, the Papua and New Guinea Public Service Board (which has since replaced the office of Public Service Commissioner) dated 1st September i 970 and the circular issued by the Department of the Administrator on 18th February 1970 promulgate, explain and remind Public Servants of these rules.

Public Service Regulation 17 provides:

  1. An officer shall not -

    1. use for any purpose, other than the discharge of his official duties, information gained by or conveyed to him through his connexion with the Public Service; or
    2. except with the consent of the Administrator or an officer thereunto authorised by the Administrator, publicly comment upon administrative action or upon the administration of a Department.
  2. Nothing in paragraph (b) of the last preceding sub-regulation contained prevents an officer from publicly commenting upon civic affairs relating to the Territory.’

Public Service Regulation 18 provides:

Except in the course of official duty, an officer shall not divulge, directly or indirectly, any information concerning public business or any matters of which he has knowledge officially.’

Pursuant to the power given to it by Section 128 of the Papua and New Guinea Public Service Ordinance the Papua and New Guinea Public Service Board in its circular of 1st September 1970 issued the following directions to all officers and employees of the Papua and New Guinea Public Service in amplification of the Regulations.

  1. An officer or employee shall not, unless he it specifically authorised or unless it is his official duty to do so:

    1. give to a news reporter information which he has through his work in the Public Service, or
    2. discuss matters concerning the administration of any Department or the public affairs of the Territory, other than civic affairs relating to the Territory, with a news reporter in circumstances such that the views of the officer or employee will be or will be likely to bethe subject of a press or radio report
  2. An officer or employee other than a Departmental Head, intending to make a public address or submit for publication an article on any matter concerning the administration of any Department or the public affairs of the Territory, except a matter which falls within the description ‘civic affairs relating to the Territory’ shall at least three weeks in advance, submit to his Departmental Head a copy of his proposed speech or article for approval by the Administrator or officer thereunto authorised by the Administrator. A Departmental Head intending to make such an address or submit such an article for publication shall similarly submit a copy of his speech or article to the Administrator for approval.’

In 1968 a list of officers specifically authorised by the Administrator as in Regulation 19 (i) (b) to give information to Press representatives was drawn up and circulated to the Press. This list contained the names of 66 officers in Port Moresby. A revised list is now being drawn up by the Administrator. It rs expected to include approximately 130 names of officers throughout the Territory including officers in all of the Territory’s 18 districts.

When the authorisations by the Administrator were issued in 1968 the Administrator stated that he considered that authorised officers will be able to handle the bulk of Press enquiries but matters of major importance including policy issues or controversial issues should be referred to the Administrator or one of the Assistant Administrators or the official spokesman at Administration Headquarters. officers will have to use their own discretion in deciding if a matter falls into this category.

Matters of policy, include questions concerning the budget, major moves on political developments, major organisational changes in the Administration or issues where major decisions are pending. Where a policy has been announced authorised officers are permitted to supply information at their own discretion. It is emphasised that the Administrator wants the public to be as well informed as possible about the objectives, policy achievements and view points of the Government. Within the bounds of common sense as much help as possible should be given to Press representatives by those authorised to deal with them’. ‘

An instruction issued by the Administrator last month emphasised the increased responsibility of Ministerial and Assistant Ministerial Members in the making of public statements. This was in line with the increase in responsibility of Ministerial office holders since the previous circular was issued. The Administrator stated that this did not alter the obligation of authorised officers of the Administration to provide factual information in response to Press enquiries.

  1. The term ‘public affairs of the Territory’ is used in this context to identify those matters for which Papua and New Guinea public servants are responsible ultimately to the elected members of the Papua and New Guinea House of Assembly or of the Australian Parliament.

Australian Economy (Question No. 1922)

Mr Uren:

asked the Treasurer, upon notice:

  1. Is it the intention of the Government to continue to use the home building sector as an instrument to dampen down the economy.
  2. If not, does it intend to follow the guidelines set out in his speech on the Budget in September 1965.
  3. If so, what is the estimated number of dwellings which can be constructed in each year for the next 3 years without undue strain on the rest of the economy.
Mr BURY:
WENTWORTH, NEW SOUTH WALES · LP

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

  1. The Government has not selected the home building sector for use as an instrument to dampen down the economy in the past, nor is lt likely to do so in the future.

In fact, activity in the dwelling industry (as shown by the figures of investment expenditure) has tended to grow fairly steadily from year to year, despite quarter to quarter variability shown by the figures for dwelling approvals and commencements. This is because there is, at any one time, a considerable stock of dwellings under construction, which provides a ‘cushion’ to smooth out activity in times of rapid variation in approvals and commencements.

The fact is that the dwellings sector of the building industry has enjoyed reasonably stable growth over the years. Investment expenditure on dwellings has increased in each year since 1961-62, and in 1969-70 was one of the fastest-growing forms of expenditure.

In the private sector, investment in dwellings has grown over the past fifteen years, at an average rate similar to that of investment in other building and construction, but its growth has been significantly more stable. Even in the June quarter, 1970 (when financial constraints had a quick dampening effect on private new dwelling approvals and commencements) activity remained high, investment in dwellings being up 9 per cent on the corresponding quarter of 1969.

  1. In the speech alluded to, the concluding note was that ‘the basic problem in housing is to obtain a sufficient share of the national income for the purpose. Housing is, and is likely to remain, in strong competition with other pressing demands on our resources’. The following figures indicate how housing has fared relative to other demands on resources in the year since that speech was made (1956-66):

The figures speak for themselves as regards the Government’s record in the housing field.

  1. In the normal course of events, it can be expected that the construction of dwellings will increase year-by-year approximately in line with trends in population and incomes. It would not be realistic to be more precise. than this in answer to the question in view of the many factors which have an influence on the feasible rate of dwelling construction - among them the standard, size and location of the dwellings called for to be constructed in the years concerned.

General Motors Holden’s: Assembly Plant in Indonesia (Question No. 1967) Mr Grassby asked the Minister for Trade and Industry, upon notice:

  1. Is be able to say whether the General Motors Company of the United States of America has successfully negotiated with the Government of Indonesia for the establishment of an assembly plant at Tjilatjap.
  2. If so, has there been any similar Australian Initiative in the interest of regional co-operation and trade. (3)Will he confer as a matter of urgency with General Motors subsidiary in Australia, General

Motors-Holden’s Pty Ltd, to ensure that these initiatives are not stifled by the parent company in the United States.

  1. Will he also consider taking steps to initiate general inquiry into the operations of overseas subsidiaries in Australia to establish the degree to which their export initiatives are stifled by their parent companies overseas.
Mr McEwen:
CP

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

  1. I have been advised by General MotorsHolden’s Pty Ltd that it is not correct that General Motors of the United States of America has successfully negotiated with the Government of Indonesia for the establishment of an assembly plant at Tjilatjap. The initiative concerning vehicle assembly in Indonesia has in fact been taken by General Motors-Holden’s. Holden vehicles are Assembled in Indonesia by ‘P. T. Udatimex at Sourabaya, and units have been sent to Indonesia in a knocked down condition for assembly since 1938.
  2. See answer to (1).
  3. In view of the facts given above I do not see any necessity to confer with General MotorsHolden’s on this matter.
  4. The Government has made clear that it wishes to see overseas-owned subsidiaries based in Australia able to operate without any restriction on their export activities.

Child Welfare (Question No. 1459)

Mr Whitlam:

asked the Minister for

Social Services, upon notice:

What requests or suggestions were made by the Ministers concerned with child welfare at their meeting in March 1970 for legislative or administrative action by (a) the Commonwealth, (b) the Territories and (c) the States.

Mr Wentworth:
LP

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

It is understood that at this meeting of State Ministers there was agreement as to action to be taken by the States for the purpose of formulating a joint approach to the Commonwealth on certain matters discussed at the meeting. So far as I am aware, no formal communication has yet been received from the States as a result.

Mutual Hospital Association Limited (Question No. 1763)

Dr Gun:

asked the Minister for Health, upon notice:

  1. What was the level of reserve funds of the Mutual Hospital Association Limited of South Australia at the end of the last financial year.
  2. What were the total (a) receipts from contributions, (b) payments in benefits and (c) expenses and running costs of the Associationin the last financial year.
  3. Where have the reserve funds of this Association been invested.
  4. Who are the directors of the Association.
  5. Is he able to say whether any of the directors hold equityin any of the enterprises or institutions in which the reserves of the Association have been invested..
Dr Forbes:
LP

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

  1. As at 30 June 1970, the Mutual Hospital Association held the following reserves:

Apportioned on the basis of the previous year’s ratio between the two registered funds.

  1. The investments held by the Association as at 30th June 1970 are listed hereunder:
  1. As at 30th June 1970, the Directors of the Mutual Hospital Association Limited were:

Chairman - Mr Ian McLachlan

Members -

Sir Clarence Rieger, C.B.E., F.R.C.S (E.D.), F.R.A.C.S.

Mr P. B. Angas Parsons

Mr Anthony Brookman

Mr B. S. Hanson, C.M.G., D.S.O., O.B.E., E.D., M.B.B.S., F.C.R.A.

Sir Roland E. Jacobs

Mr A. B. Thompson, M.B.E.

Mr A. G. McGregor, M.A., L.L.B.

  1. No.

Hospitals: Charges (Question No. 1641)

Mr Whitlam:

asked the Minister for

Health, upon notice’:

Has any of the States or either of the Territories made or announced increased daily charges in hospital wards since his answer on 7th April 1970.

Dr Forbes:
LP

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

As at 30th September 1970, the only States to either increase daily charges in hospital wards or to announce such increases since 7th April 1970 are Western Australia and Queensland.

In Western Australia, the public and intermediate ward charges of $10.00 and $13.50 per day, respectively, were replaced by a single ‘standard ward’ charge of $13.50 per day, with effect from 1st May 1970. On the same date the private ward charge was increased from $18.00 to $20.00 per day. The new charges cover in addition to accommodation, medical and paramedical services provided by the hospital and ancillary items such as theatre fees, wheel chairs, appliances, etc. They do not, however, cover radiology and pathology services for which a separate fee equal to the amount of Commonwealth medical benefit for the. service is charged.

As recently’ announced in the Queensland State Budget, hospital charges in that State are to be increased from 1st November 1970, as follows:

Private Ward- from $10 per day to $13.50 per day

Intermediate Ward- from $8 per day to $11 per day.

The Queensland Government’s policy of no charge for public ward treatment remains unaltered.

Hospitals: Honorary System (Question No. 1673)

Dr Klugman:
PROSPECT, NEW SOUTH WALES

asked the Minister for

Health, upon notice:

  1. Has his attention been drawn to an article in the Financial Review of 1st September - 1970 in which if is stated that the abolition of the honorary system’ in Australian hospitals is estimated to cost $20-$30m.
  2. If so, will he obtain from’ each of the States estimates of what would be the costs of paying medical officers on (a) a sessional basis and (b) a fee for service basis.
Dr Forbes:
LP

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

  1. Yes.
  2. The Nimmo Committee’s recommendation that there be adopted a policy for the gradual elimination of the honorary and concessional services rendered by the medical profession is one of the matters that is a subject of discussion between the Commonwealth and the States at the present time but at this stage reliable cost estimates in the form sought are not available.

Health Insurance (Question No. 1782)

Mr Webb:

asked the Minister for Health, upon notice:

  1. Did the Report of the Commonwealth Committee of Inquiry into Health Insurance recommend that special arrangements be made under which persons who object to being members of health insurance funds on grounds of religious conviction be’ paid amounts equal to Commonwealth hospital benefits (at present $2 a day) and Commonwealth medical benefits.
  2. If so, will he take action to implement this recommendation.
  3. If not, why not.
Dr Forbes:
LP

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

  1. (2) and (3) Yes. The Government gave close and careful consideration to this particular recommendation of the Committee (Rec. 10).

However, as announced in my statement to this House on 4th March 1970, this proposal will not be adopted as it is considered contrary to the basic concepts of voluntary health insurance to make available Commonwealth insurance benefits to persons who for various reasons are unwilling to undertake voluntary insurance.

The Government’s purpose in the Health Benefits Plan is to encourage persons to make appropriate provision to cover their medical and hospital costs. As an incentive, the Government provides, to those who so insure,. Commonwealth benefits to supplement the benefits provided by the insurance funds.

Papua and New Guinea: Rural Workers (Question No. 1964)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Minister for External Territories, upon notice:

What progress has been made by the board of inquiry appointed to deal with the terms and conditions of rural agreement workers in the Territory of Papua and New Guinea, which is referred to in his answer to Question No. 1258 (Hansard, 18th August 1970, page 123) and when is it expected to give its report.

Mr Barnes:
CP

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

The Board of Inquiry investigating rural minimum wages under the Native Employment Ordinance, minimum wage fixing machinery and related matters presented its report to the Administrator on 22nd September 1970. The report is being examined.

Cite as: Australia, House of Representatives, Debates, 13 October 1970, viewed 22 October 2017, <http://historichansard.net/hofreps/1970/19701013_reps_27_hor70/>.