House of Representatives
14 October 1970

27th Parliament · 2nd Session



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

page 2085

PETITIONS

Interest Rates

Mr BENNETT:
SWAN, WESTERN AUSTRALIA

– 1 present the following petition:

The Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Western Australia respectfully showeth:

That the recent increase in the interest rate on Government Bonds has caused hardship to the thousands of home buyers throughout this state due to the subsequent increase in interest rates on mortgage contracts by home tending institutions.

Your, petitioners most humbly pray that the House of Representatives in Parliament assembled will give earnest consideration to this most vital matter and your petitioners, as in duty bound, will ever pray.

Petition received and read.

Law and Order

Mr BROWN:
DIAMOND VALLEY, VICTORIA

– f present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

That they are gravely concerned at the apparent appalling increase in crime in Australia, particularly in densely populated areas;

That they fear the police forces of the various States and Territories are undermanned and underequipped to handle the increase in crime;

That their concern is aggravated by the apparent number of unsolved crimes particularly those involving violence to the individual including murder.

Your petitioners therefore humbly pray that the Honourable Members of the House of Representatives will seek to ensure that the Commonwealth Government will seek the co-operation of the States and supply extra finance to the Slates to enable;

  1. proper town planning and development to halt the increase in densely populated areas which leads to increased crime,
  2. (he proper staffing and equipping of police forces to enable adequate crime, prevention and detection measures to reduce the frightening increase of both solved and unsolved crime,
  3. the proper detention of and rehabilitation of criminals, and
  4. compensation to victims of crimes of violence, and your petitioners, as in duty bound, will ever pray.

Petition received and read.

Education

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– 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 undersigned citizens of Australia respectfully sheweth:

  1. That the Australian Education Council’s report on the needs of State education services has established serious deficiencies in education.
  2. That these can be summarised as lack of classroom accommodation, desperate teacher shortage, oversized classes and inadequate teaching aids.
  3. That the additional sum of one thousand million dollars is required over the next five years by the States for these needs.
  4. That without massive additional Federal finance the Stale school system will disintegrate.
  5. That the provisions of the Handicapped Children’s Assistance Act 1970 should be amended to include all the country’s physically and mentally handicapped children.

Your petitioners most humbly pray that the Senate and the House of Representatives in Parliament assembled will take immediate steps to

Ensure that emergency finance from the Commonwealth will he given to the States for their public education services which provide schooling for seventy-eight per cent of Australia’s children. And your petitioners, as in duty bound, will ever pray.

Petition received and read.

Education

Or GUN - I present the following petition:

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully sheweth: ‘

Whereas

  1. the Commonwealth Parliament has acted to remove some inadequacies in the Australian education system.
  2. a major inadequacy at present in Australian education is the lack of equal education opportunity for all.
  3. 200,000 students from universities, colleges of advanced education and other tertiary institutions, and their parents suffer severe penalty from inadequacies in the Income Tax Assessment Act 1936-1968.
  4. Australia cannot afford to hinder the education of these 200,000 Australians.

Your petitioners request that your honourable House make legal provision for -

  1. The allowance of personal education expenses as a deduction from income foi tax purposes.
  2. Removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students.
  3. Increase in the amount of deduction allowable for tertiary education expenses.
  4. Increase In the maintenance allowance for students.
  5. Exemption of non-bonded scholarships, for part-time students from income tax.

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

Petition received and read.

Social. Services

Mr WALLIS:
GREY, SOUTH AUSTRALIA

– I present the following petition:

To the Honourable the Speaker and Members of of the House of Representatives in Parliament, assembled. The humble petition of electors pf Grey 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 to increase 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 the Australian Council of Trade Unions 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 House of Representatives in Parliament assembled will take immediate steps to bring about the wishes expressed in our Petition: so that our citizens receiving the social service pension may live their lives in dignity.

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

Petition received and read.

Social Services

Mr JACOBI:
HAWKER, SOUTH AUSTRALIA

– 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 South Australia 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 to increase 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 the Australian Council of Trade Unions 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 House of Representatives in Parliament assembled will take immediate steps to., bring about the wishes expressed In our petition: so that our citizens receiving the social service pensions may live their lives in dignity.

And your petitioners as in duty bound will ever pray.

Petition received.

Social Services

Dr GUN:
KINGSTON, SOUTH AUSTRALIA

– 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 South Australia 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 fingal way.

We therefore call upon the Commonwealth Government to increase 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 Australian Council of Trade Unions ‘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 House of Representatives in Parliament assembled will take immediate steps to bring about the wishes expressed in our petition: so that our citizens receiving the social service pensions may live their lives in dignity.

And your petitioners as in duty bound will ever pray.

Petition received.

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:

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.

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 provision is made for its future.

We, your petitioners, therefore humbly pray that: The export of all. kangaroo products be banned immediately, and that the Commonwealth Government make a serious appraisal of its responsibility in the matter to ensure the survival of the “kangaroo.

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

Petition received.

Kangaroos

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

– I ask the House for leave to present a petition from certain residents of the United States of America.

Mr SPEAKER:

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

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES · LP; IND LIB from Oct 1977

-I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled in Canberra, Australia.

The humble petition of the residents of the United States of. America 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 (that is, Australia’s National Emblem).
  3. 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 from

Australia be banned immediately and the Commonwealth Government of Australia 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 2087

QUESTION

CHINA

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I direct a question to the Minister for External Affairs. In view of the fact that Canada and China have agreed to establish diplomatic relations, and in view of the fact that Malaysia will now join our other neighbours, Singapore and Indonesia, in voting against the proposition that the admission of China to the United Nations is a matter requiring a two-thirds majority of the General Assembly,I ask the right honourable gentleman whether the Australian Government has reconsidered its own attitude on diplomatic relations with China and oh China’s admission to the United Nations?

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

– Implicit in the question asked by the Leader of the Opposition is the suggestion that we should always follow the lead of every other country, particularly when problems are raised before the United Nations. This country decides its own future and will decide in accordance with its own interests what action it will take on this resolution or on any other. Ever since I have been the Minister I have been interested in this question of Canada recognising Red China and simultaneously Red China recognising Canada. Recently, while in. New York,I had a long discussion with Mr Mitchell Sharp, the Canadian Foreign Minister, about this . problem. It is true, as the honourable gentleman says, that the Red Chinese Government and the Canadian Government have decided to recognise one another. ButI would like to point out some parts of the communique which was issued and ask whether the honourable gentleman agrees with it in total. It states:

The Chinese Government re-affirms that Taiwan is an inalienable part of the Territory of the People’s Republic of China. The Canadian Government takes note of this position of the Chinese Government. The Canadian Government recognises the Government of the People’s Republic of China as the sole legal government of China.

There is no definition of what ‘China’ in fact means. Our position is clear. We do not necessarily follow what other governments do. We have stated - the Prime Minister has recently confirmed this and I now confirm it again-that of course we would like Red China to be in the United Nations provided only that it accepted the Declaration of Human Rights and abided by it and provided it was willing to abide by the principles of the Charter itself. The condition would be that Red China renounced the use of violence and force in an attempt to ensure its political objectives. Secondly, we have stated that if Red China does live up to its obligations we would be prepared to reconsider our position. Finally, we do not accept the Albanian resolution that the Republic of China should be expelled from the United Nations. This is a country that has lived up to its obligations; it is a country which we believe should be a member of the United Nations:

The last part of the honourable member’s question referred to what Malaysia intends to do. Malaysia will vote against the important question but it will abstain from a vote on the actual recognition of Communist China.

page 2088

QUESTION

PACIFIC ISLANDS REGIMENT

Mr STREET:
CORANGAMITE, VICTORIA

– I direct a question to the Minister for the Army. In view of the general point made by a small number of commentators on Papua and New Guinea that the Pacific Islands Regiment in a postindependence situation might be inclined to take power because of its cohesiveness and discipline, can the Minister give an indication of what steps are being taken to inculcate a sense of political neutralism into the Pacific Islands Regiment?

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

– I have seen articles of the nature referred to by the honourable member. The current basic roles of the Army in Papua and New Guinea are broadly twofold. Firstly there is the need to build an efficient army capable of playing a vital role in the defence of the Territory and secondly we have to provide for the future a well disciplined, stable and reliable indigenous force completely loyal to the Administration or government of Papua and New Guinea. The Army is well aware of the experience of other newly emergent countries which has shown that concentration on purely military training is not sufficient to ensure that the Army’s potential for power is not used for undesirable ends. As a consequence, extensive training and education programmes are required. In other words, the Pacific Islands Regiment is not trained in isolation. There is close contact and cooperation with villages, civic aid programmes, the constabulary, the Administration and, more importantly, with members of the House of Assembly who regularly visit units and discuss matters of mutual interest. In short, the Army is cognisant of its duty to ensure as far as possible the potential neutralism referred to by the honourable member.

page 2088

QUESTION

TELEPHONE CHARGES

Mr BERINSON:
PERTH, WESTERN AUSTRALIA

– I direct a question to the Postmaster-General. Is it a fact that all telephone accounts normally distributed in September were held back until October in anticipation of an increase in rental charges? If so, will the Postmaster-General say why this was done? Is it the Government’s view that the procedure adopted was in accord with proper commercial practice?

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

– I am not sure whether the honourable member, in the earlier part of his question, referred to accounts or rentals. I would not believe that there was any holding up of Post Office accounts because these accounts are rendered at the end of each 6-month period. The only time an adjustment is made is related to a change in the accounts area of the Post Office. This would happen very infrequently. If the honourable member’s question applied to rental charges, I can assure him that the problems, if any, which the Post Office has relate to the installation of new equipment. I have had some complaints that there has been delay in meeting the new demand because of the increased rental applying from 1st October. I can assure the honourable member that increased charges were not the reason for the delay. Rather, it was because the engineers recently refused to work overtime. I can assure the House that nothing was done within the Post Office in an attempt to take any advantage whatever of the new charges. Work went on as usual, other than for some industrial difficulty which did cause a postponement in certain cases.

page 2088

QUESTION

VIETNAM

Mr BROWN:

– Has the Minister for External Affairs any information regarding the planning behind the United States troop withdrawals from Vietnam? Are decisions in this matter determined by an informed appraisal of the military situation in South Vietnam, or by pressures for noninvolvement at home, or a measure of both? If there is solid achievement in Vietnam making these withdrawals possible, why is it that so many people and many of the media purvey the impression that we are getting out of Vietnam after a bad mauling and a species of military defeat?

Mr McMAHON:
LP

– When the announcement of the withdrawal of a further 150,000 troops from Vietnam was made in April of this year there were certain conditions under which the withdrawals would take place. They were, first, that Vietnamisation should be successful; in other words, that the South Vietnamese themselves should be able progressively to take over the combat role from the American and other free allied troops in South Vietnam and be in a position to defend themselves. Secondly, there was the fundamental principle that in withdrawing the troops there should be complete protection and security for the allied forces, including the Americans there.

The truth is that Vietnam isation has succeeded beyond expectations. In recent discussions with people, such as Robert Thompson, and in my 2 visits there, I confirmed the view that Vietnamisation is being successful and, consequently, that the target set in April by President Nixon can be more than achieved or achieved in quicker time. The President announced yesterday that there would be an accelerated withdrawal within the 150,000 troops agreed to in April. He pointed out - and I want to emphasise this - that while statements have been made in recent weeks as to a somewhat accelerated withdrawal, it will be within the 150.000 troops that have been mentioned.

Simultaneously with the statement by the President, our own Prime Minister announced that we would be withdrawing one battalion and supporting troops. The date of that withdrawal has already been announced in this House. So I cannot understand why anyone could argue that this is a compulsory or forced withdrawal. We are withdrawing in accordance with a timetable. Now I can add that so far as the recent statement of President Nixon is concerned as to a ceasefire standstill, since April investigations have been made in South Vietnam to indicate those areas which are regarded as safe for the South Vietnamese and which they can defend themselves. During the whole of that time investigations have been made to ensure that when the withdrawal takes place it is on the basis of successful Vietnamisation and without danger to the allied forces there.

page 2089

QUESTION

TOURISM

Mr COHEN:
ROBERTSON, NEW SOUTH WALES

– Is the Minister for Trade and Industry aware of the continuing growth and the enormous potential for growth in the tourist industry in Australia? Will this assist in. earning valuable foreign currency and offsetting the decline in earnings in the rural sector of the economy? If so, will the Government upgrade the tourist industry by appointing a separate Minister for Tourism, by low interest loans through the Australian Industry Development Corporation for the building of accommodation and by grants or loans to bodies such as the National Trust and private organisations which will develop tourist attractions of a distinctly Australian character?

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

– J assure the honourable member that I am conscious of the potential of the Australian tourist industry. Of course, the Government has displayed its consciousness of this by providing increasing amounts for expenditure in promoting tourism overseas, in establishing the Australian Tourist Commission and in having, as there is in fact, a separate Minister for Tourism, lt is true that, departmentally, the activities of tourism are within the jurisdiction of the Department of Trade and Industry, but Senator Wright, as the Minister assisting the Minister for Trade and Industry in respect of tourism, acts completely separately from myself except on matters of high policy when we do consult. He has an adequate support from the staff of the Department of Trade and Industry.

We look forward to an increasing growth of foreign exchange. One needs to remember that tourism within Australia is not merely tourism from overseas. But it is only tourism from overseas which earns additional foreign exchange. It would not be reasonable to suggest that, for the purpose of catering for tourists from overseas, the Commonwealth should involve itself in substantial expenditure for accommodation and so on, as the honourable member mentions, when in fact it would so happen that most of the accommodation was being occupied by Australian tourists moving within the country. This is a matter on which the States and the Commonwealth keep in close contact. I am sure that the honourable member will find that both the Commonwealth and the States will move with the times in this respect. I cannot feel that there is a very broad base of relationship between the prospects of tourism and the present deteriorated circumstances of rural industry.

page 2090

QUESTION

IMMIGRATION

Mr BENNETT:

– Has the attention of the Minister for Immigration been drawn to an article in the ‘Australian’ on Tuesday, 13 th October, written by Mr Peter Ryan, in which he claims that Mr J. R. Wilson, who has been appointed by the Minister to head the inquiry into the costs and benefits of immigration, has prejudged the inquiry already by stating that he is in favour of immigration? Is the Minister aware of the growing feeling in many quarters, based on this report, that a person who has expressed such a view is not the best person to head such an inquiry?

Mr LYNCH:
Minister Assisting the Treasurer · FLINDERS, VICTORIA · LP

– I have seen the. article to which the honourable gentleman refers. Essentially, it is a challenge to the professional integrity of Mr J. R. Wilson, a senior lecturer at the Sydney University, who has been appointed to undertake the cost benefit analysis which was announced some months ago and, by inference also, it is a challenge to the integrity and the judgment of the distinguished academics, bankers, industrialists and trade union officials who constitute the membership of the Commonwealth Immigration Planning Council which recommended the study and agreed to Mr Wilson’s appointment.

T do not believe for one moment that any responsible person would treat seriously the views which the writer of the article has put forward. Indeed, I do not find it strange or unacceptable that the economist to whom reference has been made has a view on immigration - a matter of professional interest to any economist; nor do I believe that whatever views he does hold - and I must say that I am unaware of them in any detail - in fact will prejudice the objectivity of his research.

I might add that the work of the economist will toe supervised by Professor Williams who is a world expert in the field of cost benefit analysis. I might observe finally that, contrary to the impressions created by the writer of the article, to whom the honourable gentleman has made reference, intellectual eunuchs are not commonly found in Australia.

page 2090

QUESTION

NATIONAL SERVICE

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Will the Minister for Labour and National Service tell the House which act or regulation gives a person liable to register for national service the right to join the Citizen Military Forces as a lawful alternative to national service? Which Act or regulation. gives a member of the CMF immunity from service in Vietnam? If there is no Act or regulation which (a) gives a person liable to register for national service the right to join the CMF as a lawful alternative to national service or (b) gives a member of the CMF immunity from service in Vietnam, is there any Act or regulation which would prevent the Minister from taking administrative action to require a member of the CMF to serve in Vietnam?

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

– I cannot give answers to these questions in the order in which the honourable member put them to me, because I did not note down the questions as they were asked, but I think my answer will comprehend the whole nature of the questions. There is provision under the Act for the Minister to declare classes of people as having indefinite deferment, and those classes include those persons serving in the Citizen Military Forces.

Mr Hayden:

– Are the classes enumerated?

Mr SNEDDEN:

– That is the way in which it occurs. As far as the alternative is concerned - that is, of performing CMF service as distinct from full time service - I am glad that the honourable gentleman recognises that it does constitute a valid alternative to service in Vietnam, quite contrary to what his Leader and Deputy Leader said in the debate yesterday.

Mr Whitlam:

– There is no Act or regulation, and you know it.

Mr SNEDDEN:

– The Leader of the Opposition said ‘ yesterday that the CMF was not an alternative to service in Vietnam. The question today acknowledges that it is an alternative.

Mr Whitlam:

– There is no statutory provision made.

Mr SPEAKER:
Mr SNEDDEN:

– There is a difference in your points of view. The other point raised by the honourable gentleman in his question is whether there is power to require a member of the CMF to serve in Vietnam. This does not come within my responsibilities but comes within the responsibilities of my colleague the Minister for Defence. But my understanding is that there can be no requirement for service of the CMF on a full time basis until a proclamation is made. It would only be after the proclamation was made that the disposition of those part time Citizen Military Forces, elevated to full time serving forces would be at the policy decision of the Government, as I think it properly ought to be.

So far as the Citizen Military Forces are concerned, they are attracting volunteers. Also, the national service scheme quite properly gives the alternative to people to serve in the CMF so that the CMF can be maintained at an adequate level of force.

page 2091

PERSONAL EXPLANATION

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– J wish to make a personal explanation. I have been misrepresented.

Mr SPEAKER:

-Order! lt has been the practice of this House for some considerable time now that if a member claims to have been misrepresented during question time he makes his personal explanation immediately question time is over.

page 2091

QUESTION

VIETNAM

Mr McLEAY:
BOOTHBY, SOUTH AUSTRALIA

– My question is addressed to the Minister for External Affairs and is supplementary to the question asked by the honourable member for Diamond Valley. How many United States troops will be left in Vietnam and what will be their role? How will this number compare with the numbers of front line - that is, combat - troops of the South Vietnamese army?

Mr MCMAHON:
LP

– On completion of the withdrawal of 130,000 United States troops by the end of May 1971 there will be 284,000 United States troops in South Vietnam. Mr Rogers, . the Secretary of State, and Mr Laird, the Secretary of Defence, have both indicated that between 40 per cent and 60 per cent of that 284.000 will be combat troops. They wilt be there to cover ‘ the second phase of the Vietnamisation programme. After the withdrawal of the ground combat troops there will still be a support role for support troops - Air Force, helicopter operators and artillery. The role of the 40 per cent to 60 per cent of the 284,000 will be to ensure the security of the base areas and also they will be used in a positive role to prevent a build-up against the security ot the United States and other free forces there. As to the second part of the honourable gentleman’s question, I have not got the answer but I will obtain it for him and let him have it.

page 2091

QUESTION

RAILWAY CONSTRUCTION: BELL BAY

Mr BARNARD:
BASS, TASMANIA

– I ask the Prime Minister whether he has seen, a statement that the Department of Shipping and Transport has reported favourably on a $l5m scheme to build a Bell Bay rail link in Tasmania. If he is aware of the statement and the report, can he say whether the matter has been considered by Cabinet and, if. it has, what decision was reached?

Mr GORTON:
Prime Minister · HIGGINS, VICTORIA · LP

– I have not seen the report referred to by the Deputy Leader of the Opposition but this matter of a rail link to Bell Bay is obviously one of some significance for Tasmania and tire development of Tasmanian shipping. I would hope that some rationalisation of Tasmanian shipping could lead- to a reduction in the sea freight rates which are such a difficulty for Tasmania at the present time. 1 understood there was a general inquiry being made by Pak-Poy and Associates into this whole matter and I am not able to tell the honourable gentleman whether the Government would need to have the Pak-P.oy report as well as any other reports before some decision on this matter could- be made. T hope from what I have said that it will be clear to all that the matter is not escaping the attention of the Government.

page 2091

QUESTION

CONSCIENTIOUS OBJECTION

Dr SOLOMON:
DENISON, TASMANIA

– My question which is directed to the Minister for Labour :ind National Service is supplementary to a question asked by the honourable member for Ballaarat a week or so ago concerning pressures on workers to join trade unions even though they might have conscientious objection. Since such pressures originate from essentially the same political area as that which protests vociferously, publicly and often against compulsory national service-

Mr SPEAKER:

-Order! The honourable member is giving information and the preface to his question is. far tpo long.

Dr SOLOMON:

– . . . will the Minister consider giving equal publicity to the frequency and nature of the unions’ coercive activities in relation to conscientious objectors?

Mr SNEDDEN:
LP

– I am afraid I do not command the influence which is necessary to give the publicity to the unions’ attitudes to conscientious objectors that the public media give in the other area. I do not possess that influence. However, I think it is worth reiterating that the unions do not accept a person’s claim to be a conscientious objector merely because he makes the claim. Secondly, the unions do not recognise selective conscientious objection. I think I should add that I have heard union spokesmen say that their attitude to conscientious objectors is that if they want to be conscientious objectors they should forgo the benefits which have been achieved by trade unionism. It occurs to me that the same sort of process applies to military service and that those persons who recognise that the future of Australia depends on the survival and the maintenance of a defence policy should acknowledge that national service is predicated on that basis so that we can enjoy the benefits of a future strong Australia.

page 2092

QUESTION

ABORIGINALS

Mr HAYDEN:

– I ask the MinisterinCharge of Aboriginal Affairs whether he has yet had an opportunity to attend to and digest the findings of a sample survey of the Aboriginal population in Brisbane, recently conducted by the University of Queensland Social Work Department, which established that 68 per cent of that population had no skills, that unemployment was 4 times greater than for the rest of the population, that housing was significantly inferior, and that there was an alarming retardation rate at school for Aboriginal children which worsened as they got older. What urgent financial and physical policies does the Minister intend to apply to overcome these fairly serious defects especially as they are capable of interpretation as evidence of racial disadvantage and even racial discrimination against a minority in our society?

Mr WENTWORTH:
LP

– I have not had an opportunity to study in depth” the report in question with which the honourable member is no doubt more familiar than I am. In regard to the last part of his question may I say that I deplore racial discrimination in Australia. I deplore any attempts to exploit the feeling that there might be racial discrimination.

page 2092

QUESTION

DARTMOUTH DAM

Mr TURNBULL:
MALLEE, VICTORIA

– My question is addressed to the Minister for National Development. Has the Minister convened a meeting of representatives of the States of Victoria, New South Wales and South Australia and the Commonwealth at which he will be chairman, to discuss the urgent need to build the proposed Dartmouth Dam? If so, will he indicate whether there is now a chance of an early start in building this important water storage despite the demand of the Australian Labor Party that Dartmouth be not built without a Government commitment to build other storages?

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

– A meeting has been arranged to be held in Sydney on Friday week. It is to be attended by the responsible Ministers of the Commonwealth and the States concerned. I am afraid I will have to wait until after that meeting before I can give the answer to the second part of the question.

page 2092

QUESTION

OVERSEAS SHIPPING FREIGHTS

Mr WHITLAM:

– I ask the Minister for Shipping and Transport a question. The Minister will recall assuring the House in April last year that by participating in the joint management of the container ships of the Associated Container Transportation Ltd valuable insight will be gained into the operation of those ships and of the conferences involved. I ask: Was it in the light of insights so gained that he encouraged Australian exporters at Griffith on 25 th June and in Darwin on 30th July to believe that increases in north-bound freights were unwarranted and would be resisted by the Government? Is it in the light of subsequent insights that he has since reversed his position? Do his current insights enable him to assure the House that the recently announced freight increases of 4 per cent for wool and 10 per cent for general and refrigerated cargo other than apples and pears are in fact justified?

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

– When I spoke at the Australian Country Party conference at Griffith and similarly when speaking in reply to some queries prior to my departure for Darwin about the suggested increase in container freights on the United KingdomEurope Conference line I expressed concern, which I frequently express in this House, at the burden of cost to primary producers. 1 think that there is no doubt that any impost on those engaged in primary production at the present critical stage of financial returns must be seen as reflecting adversely on their capacity to maintain a reasonable standard of living. It is, of course, towards the alleviation of such burdens that so many policies of this Government have been directed. At the same time, having expressed very strongly my beliefs politically, in terms of the introduction of a new form of shipping, that there was no justification for an increase in the freights, I acknowledged then and later that this was, of course, without concern to the economics. - The economics, certainly in the operation of the container shipping service and indeed of farming, have shown an escalation in costs. This meant that ship owners were able to produce in the discussions between the shipper body, the Australia to Europe Shippers Association, and the Oversea Shipping Representatives Association, figures which demonstrated considerable increases in the cost of moving their ships and containers over the period of 1 2 months for which the new contracts were being negotiated. It is true that economically costs have moved adversely. It was in the light of those costs that the ship owners sought the freight increases. I believe that the difference between the position as I expressed it and the position as the ship owners expressed it is that I believe it is very much against the interests of Australian producers of export commodities that there should be any increase in freight. I believe that it is equally true, in terms of the negotiations that have taken place, that are arranged within the Trade Practices Act to take place, that if there is economic justification for the increases then the ship owners would be justified in increasing freights. But I would doubt whether the economic justification will enhance acceptance of the new form of shipping or demonstrate the economies which it was said would result from the introduction of containers. I do not believe that the views expressed in my statements made then and later have changed. I do not believe there is political justification for the increase although there might be economic justification.

page 2093

QUESTION

EXPORTS TO CHINA

Mr KEOGH:
BOWMAN, QUEENSLAND

– 1 address a question to the Minister for External Affairs. What is the present position regarding the export of what could be considered to be strategic materials to China - materials which could be used in the interests of the Government of North Vietnam?

Mr McMAHON:
LP

– 1 notice that one of the latest questions added to the notice paper is along lines similar to the question asked by the honourable member, but in any event I can give this answer. I can add nothing to the answer that has already been given by the Minister for Trade and Industry and the Acting Minister for External Affairs during my absence. We adhere to the COCOM list, that is, the list that was established by the co-ordinating committee of the North Atlantic TreatyOrganisation countries. Nonetheless, although this list is strictly adhered to and there are no deviations made from it, I have instructed my Department to look at the list again and I will shortly be referring the matter to the Prime Minister and, if necessary, to Cabinet.

page 2093

QUESTION

PREFERENCE TO UNIONISTS

Mr GILES:
ANGAS, SOUTH AUSTRALIA

– My question to the Minister for Labour and National Service is supplementary to the question asked by the honourable member for Denison. Is the Minister aware that a motion of no confidence is to be moved against the Minister of Labour and Industry in South Australia because of his action in attempting to deny job opportunities to nonunionists? Can the Minister perceive any consistency whatsoever between this action of a Labor Party Minister in South Australia and the Australian Labor Party’s thinking on other matters of conscience «s expressed in this House?

Mr SPEAKER:

-Order! This matter is not within the ambit of the Ministers responsibility.

page 2094

QUESTION

GOLD MINING

Mr COLLARD:
KALGOORLIE, WESTERN AUSTRALIA

– I address a question to the Prime Minister and refer him to Order of the Day No. 9 on the blue information sheet which refers to the resumption and completion of the second reading and third reading debates on the Gold-Mining Industry Assistance Bill. Is it correct that the Prime Minister is to meet the Minister for Mines from Western Australia, the Leader of the Opposition from Western Australia and the President of the Chamber of Mines of Western Australia on the 21st of this month in Canberra to hear their views and listen to their case for an increase in the gold subsidy? If so, why is the second reading debate on the Bill being continued today rather than left until after that meeting? Does it mean that the gentlemen referred to are wasting their time and money coming here to see the Prime Minister? Does it mean that nothing they can say or prove will change the Government’s attitude to the gold mining industry?

Mr GORTON:
LP

– lt is true that I am seeing the deputation comprising the persons mentioned by the honourable member on the question of gold mining. These gentlemen know the decision which the Government has taken and which the Government is now proposing to pass into law. However, they wish to put facts before the Government which they think may cause some later amendments no doubt of what we do. I think it would be unusual for me to say that 1 refuse to see them at all to allow them to do that. That, I suggest, is the answer to the question.

page 2094

QUESTION

NATIONAL SERVICE

Dr MACKAY:
EVANS, NEW SOUTH WALES

– My question to the Minister for Labour and National Service relates to the laws governing national service. Has there been a change in the legal position, expounded by experts from the days of Dicey to the most recent book by Professor Geoffrey Sawer. that we have 2 kinds of laws - enacted laws and nonenacted laws? Is the Leader of the Opposition justified in limiting bis description of legal measures relative to national service to enacted or statutory law?

Mr SNEDDEN:
LP

– I am afraid that the honourable gentleman is asking me for a legal opinion. I will have to communicate with him, and I wilt send him both my opinion and my fee.

page 2094

QUESTION

COMMONWEALTH LAND

Mr UREN:
REID, NEW SOUTH WALES

– I direct my question to the Prime Minister. He is aware that the Commonwealth, particularly the Department of Defence, retains large quantities of land on the foreshores of Sydney Harbour. He would be aware that the New South Wales Government and a broad section of our community are seeking the restoration of the natural environment of the areas of North, South and Middle Heads and Georges Heights. Will he consider transferring progressively to the State these Commonwealth areas so that they can be restored to parklands and so that all Australians may enjoy the beauty of one of nature’s wonderlands?

Mr GORTON:
LP

– The honourable member is quite right when he states that I know that the Commonwealth Government through its Defence Department, or its Service departments, has title to a great deal of land around Sydney Harbour. I also know that the Commonwealth has stretched every nerve to endeavour to return to the State Government those areas which it can return without affecting the defence efforts which it needs to make. I also know that 1 have been and am in communication with the New South Wales Premier in correspondence which has not yet been completed on this whole matter.

page 2094

QUESTION

PRIMARY PRODUCERS RALLY

Mr TURNBULL:

– My question is addressed to the Minister for Trade and Industry. Press reports state that organisers of the primary producers rally at Canberra yesterday claim that the poor attendance was due to Country Party influence. As the organisers, including one Labor member of this House, have said previously that the Country Party has ceased to be a power in the community, and as these opinions are contradictory, can the Minister clarify the position?

Mr McEWEN:
CP

– The planned demonstration outside Parliament yesterday which was, 1 think, organised centrally by the honourable member for Riverina and others associated with him, was to those who observed it, as I did, and to those who read the reports in the newspaper, a complete frost. It was a frost, of course, because of the Country Party - not because the Country Party took any steps to persuade people not to come but because the policies on which the Country Party, in conjunction with our colleagues of the Liberal Party, has operated in respect of wool, wheat, dairying, the search for markets overseas and concessions and assistance to primary producers obviously produced such a consciousness in the minds of primary producers that their wellbeing was safe in the hands of the Country Party and our Liberal colleagues that they stayed away in their thousands.

page 2095

QUESTION

TARIFFS

Dr J F Cairns:
LALOR, VICTORIA · ALP

– Does the Minister for Trade and Industry recall that he recently said: ‘I would regard it as utterly ridiculous to decide that an industry was not economic and efficient because some competition had come in from a deplorably low wage country like South Korea or Taiwan’? I remind him also of a statement by the Chairman of the Tariff Board recently to manufacturers that he did not agree that the Board’s policy ought to be to allow higher tariffs for industries which need them to survive against low wage Asian competition. If this is an accurate recollection of what was said by both himself

Mr SPEAKER:

-Order! 1 suggest that the honourable member ask his question.

Dr J F Cairns:
LALOR, VICTORIA · ALP

– If this is an accurate recollection of what was said both by himself and the Chairman of the Board, cun the Minister reconcile these 2 statements, and can he say whether industries that need tariffs or other protection of over 50 per cent to survive against low wage competition will be granted them?

Mr McEWEN:
CP

– The record of the Government shows that there has been a very adequate protection of Australian industry during its period of office, for 14 years of which I have been the responsible Minister. There can be no evidence more incapable of contradiction than the sheer growth of Australian industry over that period and the base of investment and of employment that has been provided over that period. That reflects the policy of the

Government and it is a policy which the Government having pursued in the past will pursue in the future.

It is not for me to try to reconcile a statement of mine with whatever the Chairman of the Tariff Board might have been reported as having said, but I have no trouble in again stating that, if an Australian industry has been assessed as economic and efficient by the Tariff Board and by the Government and has been accorded an appropriate protective duty, it would seem to me to be completely ridiculous that one could discover it to be inefficient the next day, not because there had been any alteration whatever to the industry itself but because imports were offered to us from some low cost country. Such imports could be from a country where wages are tow or a centrally controlled economy country - a Communist country - where there is no basis of assessing costs of production but where it is not uncommon for goods to be offered for sale for no other reason than to earn foreign exchange. Australian industry is entitled to be protected if it is efficient in our own environment. If it is efficient in our own environment it is entitled to be protected in the future as it has been in the past and I have no doubt it will enjoy that protection.

page 2095

PERSONAL EXPLANATIONS

Mr CLYDE CAMERON (Hindmarsh)Mr Speaker, I wish to make a personal explanation.

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Yes, 1 have been misrepresented by the Minister for Labour and National Service. In answering my question concerning the lawful right of a person to join the Citizen Military Forces as an alternative to national service training and whether there was any Act of Parliament which gave a member of the CMF immunity from service in Vietnam the Minister chose to ignore both parts of the question and instead misrepresented the question by stating that he was pleased to note-

Mr SPEAKER:

-Order! The honourable member will confine himself to the Minister’s remarks in which he claims he has been personally misrepresented. He cannot debate the matter or refer to what the Minister said in relation to the various Acts.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The Minister said he was pleased to note that 1 had in my question admitted that there was a lawful alternative to national service training and that was by joining the CMF. My question did not give that impression, nor did it make that admission. My question was this: . . . which Act or Regulation gives a person liable to register for national service the right to join the Citizen Military Forces as a lawful alternative to national service? ] asked which Act gave a person the right to join the CMF as a lawful alternative. I did not say, as the Minister attributed to mc, that it was a lawful alternative to doing national service training. The Minister has still nol answered the question.

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

Mr Speaker, I wish to make a personal explanation.

Mr SPEAKER:

– Does the Minister claim to have been misrepresented?

Mr SNEDDEN:

– Yes, I was misrepresented by the honourable member for Hindmarsh. I did answer the question. The honourable member will remember, I am sure, that in the second reading speech when the Bill was introduced the Government stated that as a matter of policy it would indefinitely defer those persons who opted for Citizen Military Forces training.

Mr GRASSBY:
Riverina

– I wish to make a personal explanation.

Mr SPEAKER:

-Order! Does the honourable member claim to have been misrepresented?

Mr GRASSBY:

– Yes. I was misrepresented by the Deputy Prime Minister (Mr McEwen) in his reply to a question asked by the honourable member for Mallee (Mr Turnbull) when he said that the farmers’ rally held in Canberra yesterday was organised by me. This is totally incorrect.

The organiser and convenor of the rally was Mr Bob Hudson of ‘Cowary’, Wilcannia, in conjunction with the Edenhope Agricultural Bureau, and with the support of other groups in New South Wales and South Australia which subsequently withdrew their-

Mr SPEAKER:

-Order! The honourable member has explained how he was misrepresented. He has pointed out that he was not responsible for the rally. I will not allow a member to debate a matter or give further information unless it is relevant to the personal explanation.

Mr GRASSBY:

– Thank you. 1 was about to add. . . .

Mr SPEAKER:

-Order! The honourable member will resume his seat and the balance of his statement will be struck from Hansard.

page 2096

REPATRIATION

Mr HOLTEN:
Minister for Repatriation · Indi · CP

– Pursuant to section 82 of the Repatriation Act 1920-1970, 1 present the reports of War Pensions Entitlement Appeal Tribunals Nos 1, 2, 3, 4 and 5 for the year ended 30th June 1970.

page 2096

BILLS RETURNED FROM THE SENATE

The following Bills were returned from the Senate without amendment:

Urea Bounty Bill 1970.

Sulphate of Ammonia Bounty Bill 1970.

Sulphuric Acid Bounty Bill 1970.

Pyrites Bounty Bill 1970.

Cellulose Acetate Flake Bounty Bill 1970.

page 2096

QUESTION

GOVERNMENT BUSINESS

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

– I move:

It is the custom of the House while the Budget debate continues for Government Business to take precedence over General Business on the Thursday when under Standing Orders General Business would otherwise come on.

Question resolved in the affirmative.

page 2097

PROVISION OF ENGINEERING SERVICES, DISTRICT OF DRIPSTONE, DARWIN

Approval of Work - Public Works Committee Act

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

– I move:

The proposal involves construction of sealed roads, kerbs and gutters, footpaths, water supply, sewerage and. stormwater drainage, and electricity supply to residential and special sites in the neighbourhood units of Nakara, Wanguri, Brinkin and Tiwi. The estimated cost is $ 10.76m. One component of the proposal is the construction of a bridge across Rapid Creek to serve as a link in the projected arterial road system. The Committee received evidence that damming of the creek at the bridge site had been studied in connection with a proposal to clean out the swamp along Rapid Creek and create a lake/ water feature. If the lake scheme is to proceed, construction of a combined weir and road bridge would be a practical and economic proposition. The Government intends to consider this proposal in depth before proceeding with a firm bridge design but with due regard to the importance of providing a road link at this location in accordance with arterial road and traffic requirements. Upon the concurrence of the House in this resolution, detailed planning can proceed in accordance with the recommendations of the Committee.

Mr CALDER:
Northern Territory

– Once again I express pleasure in the Government’s confidence in the Northern Territory and its awareness of the expanding city of Darwin. There has been and there will continue to be a shortage of land for housing in Darwin while that city expands at the rate that it has in’ recent years. But the Government is showing a very alive awareness of this problem and has approved the expenditure of $10.76m in the Dripstone district of Darwin. I gather that a further 800 blocks will be available for government houses or for private sale as the result of the introduction of these services. Therefore, these services will help to overcome the housing shortage in Darwin. I welcome the attention that the Public Works Committee has given to the Rapid Creek swamp area. If a beautification scheme is carried out this area will become a most attractive setting. However, I trust that the investigation in depth will not delay the overall work.

Question resolved in the affirmative.

page 2097

CONSTRUCTION OF ELECTRICITY SUPPLY STATION, ALICE SPRINGS

Reference to Public Works Committee

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

– I move:

The proposal involves construction of a new power station to replace the existing station and to meet, increasing demands for power supplies in Alice Springs. The new station will contain 2 new diesel generating sets, the 2 largest sets from the existing station and 2 spare bays for future sets. Associated works will include engine cooling towers, switchgear and transformers, roadworks, oil supply line and storage, and a crane. The building will be evaporatively cooled and the control room will be fully air-conditioned. The remaining generating equipment in the existing station will continue in operation to supplement output from the new station and will be progressively phased out of operation. The estimated cost of the proposed work is $2. 5m. I table plans showing the location and tentative layout of the proposed work.

Mr CALDER:
Northern Territory

– Once again I commend the Government on the work that it is carrying out in the Northern Territory. On this occasion the Government is considering the construction of an electricity supply power station at Alice Springs, which is a rapidly developing area and which is my home town. I note that the proposed new station will contain 2 new diesel generators and tha! the building will be air cooled while the control room will be fully air-conditioned. I think that this is wise planning because temperatures in Alice Springs have already risen above the century mark although we are still in October. I am certain that when the Department of Works is granted approval to commence this work at Alice Springs it will do a good -job and hasten the electricity supply which is so needed in this developing town.

Question resolved in the affirmative.

page 2098

ASIAN DEVELOPMENT BANK (SPECIAL FUNDS CONTRIBUTIONS) BILL 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Mr BURY:
Treasurer · Wentworth · LP

– 1 move:

That the Bill be now read a second time.

The purpose of this Bill is to obtain parliamentary approval for a contribution by Australia of the equivalent of $US10m to the special funds of the Asian Development Bank. As honourable members will be aware, Australia is a foundation member of the Asian Development Bank which opened for business in Manila in December 1966. Membership of the Bank now totals 35 countries, 21 of which (including Australia) are in the Asian region and 14 outside it. Total capital subscriptions to the Bank at the present time amount to $US1 ,004m, only half of which is, however, payable. The balance will remain at call as security for any borrowings by the Bank on international capital markets to supplement its subscribed capital. As indicated in the following table which, with the concurrence of honourable members, I incorporate in Hansard. Australia’s subscription of $US85m to the capital stock of the Bank is exceeded only by those of the United States, Japan and India.

I might perhaps add that the final instalment of Australia’s subscription was paid in August of this year.

The Asian Development Bank is empowered under its Articles of Agreement to conduct both ‘ordinary operations’ and special operations’. In the case of ‘ordinary operations’ the Bank lends on commercial terms - the standard lending rate by the Bank at the present time is 7i per cent per annum, with repayments spread over 10 to 25 years including grace periods ranging from 2 to 5 years, depending on the nature of the project involved. The Bank has to finance such loans either by drawing on paid-in capital subscriptions or by using funds raised for this purpose by selling bonds on the capital markets of the world.

To date, the Bank has successfully floated 2 such bond issues. In 1969 it raised a loan equivalent to $US16m in the Federal Republic of Germany and in April 1970 it borrowed the equivalent of $US5m in Austria. Efforts are being made to float bond issues in other capital markets in order to establish the Bank’s standing in the international financial community and enable it to borrow funds to finance its normal lending activities in much the same way as the World Bank now does.

In the case of ‘special operations’ the Bank lends on concessional terms and can finance such loans in part from its paid-in capital (10 per cent of which can be set aside specifically for this purpose) but more importantly by drawing on resources contributed to special funds by its member countries. The terms of the loans financed from special funds to date have involved rates of interest ranging from lb per cent to 3 per cent per annum with periods of repayment extending from 16 to 40 years including grace periods of from 4 to 10 years. I would emphasise that special funds are employed only to finance high priority development projects which meet the same technical standards and satisfy the same economic criteria as projects financed from the Bank’s other resources.

In a sense, special funds are to the Asian Development Bank what the International Development Association is to the World Bank group of institutions, namely, a means by which assistance can be provided on more liberal terms than apply to normal loans by the respective banks. By a skilful blending of ‘ordinary operations’ and ‘special operations’ the Asian Development Bank is able to reduce the average costs of its overall lending to developing member countries to more manageable levels. To date the Bank has approved loans to a total value of $US184m, of which $US35m will be financed from special funds on concessional terms.

To assist the Bank in meeting the growing demands on its own limited special funds resources, Canada, Denmark, Japan, the Netherlands, the United Kingdom and the United States have all made or offered to make voluntary contributions to the Agricultural Special Fund and/or the Multi-Purpose Special Fund. In addition, each of these countries, along with Finland. Germany, India and New Zealand has contributed to the Technical Assistance Special Fund. Details are set out in the following table, which with the concurrence of honourable members I also incorporate in Hansard.

In recognition of the important role which the Asian Development Bank has to play in promoting economic development in the Economic Commission for Asia and the Far East - ECAFE - region, and the great need of many of its developing member countries for external assistance on concessional terms so as not to exacerbate their growing external debt servicing problems, the Government decided earlier this year that subject to the approval of Parliament, Australia should contribute the equivalent of $US10m (about $A8.9m) to special funds over this and the next 2 financial years. I made an announcement to this effect at the third annual meeting of the Board of Governors of the Bank in Seoul last April. Of this amount, it is intended that $US9,750,000 will be allocated to the Multi-Purpose Special Fund and be paid in 3 equal annual instalments commencing in 1970-71, while the balance of SUS250,000 will be allocated to the Technical Assistance Special Fund. No restrictions will be placed on the rate at which the latter sum may be used by the Bank.

Except as otherwise agreed by the Government of Australia, the proposed contribution to the Multi-Purpose Special Fund will be tied to the procurement of goods produced in, or services supplied from. Australia. Likewise, the contribution to the

Technical Assistance Special Fund may be used only to pay for the services of Australian consultants and experts hired by the Bank in connection with its technical assistance activities. No restrictions will be placed on the developing member countries of the Bank in which these contributions may be used, although the Bank will be asked to pay special regard to the needs of less developed countries in South East Asia and the Pacific region which are of special interest to Australia.

This Bill provides us with a tangible opportunity to confirm Australia’s continued strong support for the activities of the Asian Development Bank. The additional funds to be authorised by this Bill will not only add to the Bank’s resources and permit a desirable expansion of its lending activities, they will increase the Bank’s versatility and enable it to tailor the terms of its overall lending to the requirements and borrowing capacities of its developing member countries. There is no need for me to enlarge here on the great importance to Australia of the Bank succeeding in its efforts to help developing countries in Asia to achieve faster rates of economic growth, and so help to raise living standards throughout the ECAFE region. I commend the Bill to honourable members.

Mr Crean:

– Before I move the adjournment of the debate, may I ask the Treasurer whether he will make available the latest annual report of the Asian Development Bank?

Mr BURY:

– I will endeavour to do so.

Debate (on motion by Mr Crean) adjourned.

page 2100

STATES RECEIPTS DUTIES (ADMINISTRATION) BILL 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Mr BURY:
Treasurer · Wentworth · LP

– I move:

The purpose of this Bill, and of the 5 Bills j shall subsequently introduce, is to enable the States to receive, in respect of business receipts during the period 18th November 1969 to 30th September 1970, the amounts of duty they would have received had their own receipts duty laws been wholly valid. Business receipts during that period will be liable to duty under the Commonwealth legislation at the rate of 1 per cent, but this liability will not arise if the provisions of State laws - whether valid or invalid - are complied with. This means that receipts exempted or not dutiable under the provisions of state legislation will remain free of all receipts duties, lt also means that receipts in Queensland will remain liable to duty at the rate of .02 per cent provided for under Queensland legislation - provided Queensland duty is in fact paid on the receipts or has already been paid.

Honourable members will observe that some changes have been made to the legislation since it was introduced during the last sittings and subsequently not passed by the Senate. Under clause 24(1.) of the States Receipts Duties (Administration) Bill, provision is made to limit the duty to moneys received before a date to be fixed by proclamation. The Government undertakes that this proclaimed date will be 1st October 1970. The decision so to limit the scope of the legislation is based on legal considerations of a constitutional nature. The same Bill also now specifies 30th September 1970 as the terminating date for the period - described in the bill as ‘the transitional period’ - during which receipts are to be exempt from liability under Commonweealth law if the provisions of State laws, whether valid or invalid, are complied with, lt will also be noted that

I here is now a separate Bill - the States Receipts Duties (Exemption) Bill - lo provide for exemption from duty under Commonwealth law for receipts during the transitional period where State duty was paid or was not payable. This provision was included as clause 88 in the previous States Receipts Duties (Administration) Bill. Honourable members who wish to have more detailed explanations of the changes being made by the revised legislation can refer to the explanatory memorandum which is being circulated.

Honourable members will be aware of the reasons why it is proposed that the legislation is to cease to have application to transactions after 30th September. They will also be aware that, after a special meeting with Premiers in Canberra on 8th October, the Prime Minister (Mr Gorton) announced that, at the request of the Premiers, the Commonwealth Government agreed to the State governments dropping the receipts duty completely, even in areas where it would be legal for them to impose it. This means that liability for receipts duty under either Commonwealth or State legislation will not apply to any transactions after 30th September 1970.

The Government has agreed that the whole of the resultant loss of revenue to State Budgets in 1970-71 should be made good through the provision of additional Commonwealth grants to the States. The Government has also agreed that, in respect of 1971-72 and the 3 subsequent years, the amount of receipts duty which it is estimated would have been collected by the States in the ordinary course in 1970-71 should be added to (he base to be used in determining the financial assistance grants payable under the grants formula in those years. These arrangements, which the Government regards as constituting eminently fair and, indeed, generous treatment for the States, were made subject to the proviso on the part of the Commonwealth that they depended on the conditions governing the offers of the Commonwealth made at the June Premiers’ Conference. Legislation to give effect to the arrangements will be introduced in due course. I commend the legislation to honourable members.

Mr Crean:

– Hasthe Treasurer any idea of the amount which it is estimated would be collected in 1970-71?

Mr BURY:

– I do not have the figure precisely.

Debate (on motion by Mr Crean) adjourned.

page 2101

STATES RECEIPTS DUTY BILL (No. 1) 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Motion (by Mr Bury) proposed:

That the Bill be now read a second lime.

Debate (on motion by Mr Crean) adjourned.

page 2101

STATES RECEIPTS DUTY BILL (No. 2) 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Motion (by Mr Bury) proposed:

That the Bill be now read a second time.

Debate (on motion by Mr Crean) adjourned.

page 2101

STATES RECEIPTS DUTY BILL (No. 3) 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Motion (by Mr Bury) proposed:

That the Bill be now read a second time.

Debate (on motion by Mr Crean) adjourned.

page 2101

STATES RECEIPTS DUTIES (EXEMPTION) BILL1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Motion (by Mr Bury) proposed:

That the Bill be now read a second time.

Debate (on motion by Mr Crean) adjourned.

page 2101

STATES GRANTS (RECEIPTS DUTY) BILL 1970

Bill presented by Mr Bury, and read a first time.

Second Reading

Motion (by Mr Bury) proposed:

That the Bill be now read a second lime.

Debate (on motion by Mr Cretin) adjourned.

page 2101

INCOME TAX ASSESSMENT BILL 1970

Second Reading

Debate resumed from . 13 October (vide page 2062), on motion by Mr Bury:

That the Bill be now read a second time.

Mr GARLAND:
Curtin

– Concluding my remarks on the amendments to the Income Tax Assessment Act in relation to convertible notes 1 wish to take up the points put forward by the spokesman for the Australian Labor Party, the honourable member for Melbourne Ports (Mr Crean). Yesterday I had reached the stage of stating that I believe the opposition to the Bill is based on false premises. The basis of the opposition stated by the honourable member can be, in his own words, stated thus, that he believes that the provisions of the Bill will be bad rather than good. I would respectfully suggest that that is an unsupported assertion. It was not backed up by any detail or evidence in his speech. At one stage he sounded satisfied when he said that he was glad that certain officers of the Public Service had obtained tough criteria or tough provisions for this Bill.

I draw the honourable member’s attention again to the objectives as set out in the second reading speech in which it was clearly pointed out that the Bill will allow some genuine cases of loans to be raised which will enable cheaper money to be obtained and will make the issues sufficiently attractive to enable more Australian participation than otherwise would have been the case in those undertakings where a period of 7 to 10 years of development is required. At the same time it will give a real choice to note holders with options to equity in those undertakings in due course. On the basis of what we have heard so far, the opposition to the Bill is for opposition’s sake. I see that there are more Labor members who are to speak and I will be interested to hear whether they can be more specific.

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

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

Mr HURFORD:
Adelaide

– We are debating a Bill for an Act to amend the law relating to income tax in respect of convertible notes. The honourable member for Curtin (Mr Garland) merely had to fill in the 2 or 3 minutes which were still due to him. I listened to his speech last night with a great deal of interest to see whether he could take up what had gone by default in the second reading speech of the Treasurer (Mr Bury), namely, arguments in favour of supporting the Bill. I hope I am being reasonably charitable to the honourable member when I say that he did a very workmanlike job in repeating the Treas urer’s second reading speech and outlining the Bill without telling us why the Bill is before the House. In his concluding remarks he has attempted to throw the onus back onto this side of the House to prove why we are opposing the Bill. My argument is that the onus is on the Government to tell us what are the pressures that are forcing it to bring this Bill before the House.

I will first of all attempt to explain what are convertible notes, to make sure we are talking on the same subject. As far as I am concerned, they are a hybrid - a combination - of unsecured notes on the one hand and equity capital on the other hand. What is achieved by this capital instrument can be achieved by unsecured notes and equity capital issued separately in the market. This capital market instrument, 1 concede, is available elsewhere in the world in developed money markets, but certainly not, as 1 understand it, in the form that the Government is proposing in this amendment to the Income Tax Assessment Act. The other point that I would like to make about convertible notes is that there is nothing to stop them being issued in this country at the present time. All that we are debating at the moment is whether the interest which is payable by the companies to the holders of these convertible notes should be a taxation deduction before primary tax is applied to the taxable income of companies. So there is nothing prohibiting convertible notes being issued.

The question is whether the Government should encourage the issue of convertible notes by allowing taxation deductions for the interest paid to the holders of them. I want to elaborate on the points made by the honourable member for Melbourne Ports (Mr Crean), the shadow Treasurer, last night and explain that there are 3 main reasons why the Opposition is opposing the Bill at the present time. The first is because we think there ought to be better arguments proposed by the Government in support of this Bill than we have been able to hear from the Government or find out from Government supporters and other people knowledgeable in this sphere. We think there ought to be better arguments put forward before we allow the erosion of the tax base, which erosion will take place if the interest payable on convertible notes is an allowable deduction.

I repeat that the case has gone so far by default. I have pointed to the speech of the Treasurer. 1 have pointed to the speech of the honourable member for Curtin. I invite anybody to look at those speeches and tell us who is going to use these convertible notes. It is my knowledge of the capital market that certainly the large companies in this country will not want to use them. When I turn to appropriate literature - J refer to such magazines as ‘Taxation in Australia’, the monthly magazine of the Taxation Institute of Australia, and the financial Press - I find that there is some speculation. Perhaps the medium sized or smaller companies in our community will want to use these convertible notes, but nowhere that I have been able to see has anybody written that convertible notes in the form being put forward by the Government at the present time will be used by them

Let me refer to the article in ‘Taxation in Australia’ by Mr Sam Denton, a chartered accountant of my own State, or to an article which I think appeared in the Australian Financial Review, a year ago when the possibility of this Bill was first intimated. The article arose from a speech made to the Institute of Directors by another person known to rae, Mr Michael Gleeson White of the firm of Ord, Minnett, which is a firm of stockbrokers and which is also in a reasonably large way in the underwriting field. In every case where we have been able to find the written word on this subject of convertible notes nobody has justified the limitations imposed on them by the Government. This is not to criticise those limitations in any way because I believe they are necessary in order to avoid the sort of excesses that took place prior to November 1960 when the then Treasurer, the late Mr Harold Holt, brought in a Bill altering once again the Income Tax Assessment Act, this time prohibiting interest on convertible notes as a deduction. I believe that in trying to find the reasons for this Bill the answer perhaps lies in it being the thin edge of the wedge, although it would not be used by many people now. But at least it has brought these sections back into the Income Tax Asssessment Act where they can easily be amended later so that they will be more acceptable to members of the community who want to use convertible notes. But the onus is on the Government to prove that in the form in which they appear in this Bill they are of great use to our community in encouraging investment and for the other purposes which have been mentioned in a very vague sort of way.

The second reason why the Opposition opposes this Bill is the effect it has on interest rates. 1 hardly need outline the hardships being caused in the community at the present time by the high rate of interest which we are suffering. We have only to look at the interest rate on mortgage loans to understand this. We have only to see how savings banks are forced to reduce the amount of home mortgage loans to applicants because of the present monetary policies, and how building societies are experiencing difficulties, to know that the monetary policies of this Government are creating great hardships in the community. 1 submit that in encouraging a new form of investment and a greater demand for savings in the community which are in short supply the Bill will merely increase interest rates and the demand for money and thus the cost of money. I think this is another worthwhile reason to put forward for the reticence of the Opposition to support this Bill at the present time. I would like to draw to the attention of the House the words of the late Mr Harold Holt in his second reading speech on the Income Tax and Social Services Contribution Assessment Bill (No. 3) 1960 when interest was removed from the list of allowable deductions for taxation purposes. He said:

In my statement I outlined why the Government had decided upon these measures.

That is, removing interest rates on convertible notes from the list of allowable deductions. He continued:

I pointed out how the bidding of higher and higher rates of interest for borrowed morley had been working to the disadvantage of governments and other public authorities and, through them, to the disadvantage of the general taxpayer. This was because the less governments could borrow on reasonable terms the more they had to obtain in taxation to finance basic developmental works and the provision of community services.

I also went on to say that the bidding-up of interest rates imposed a burden on productive enterprises and added to costs generally. Industry, in general, seeks to raise finance as Cheaply as it can, especially when it wants the money for longterm investment and when it has to engage in strenuous competition to sett its products either on local markets or overseas.

I will not quote any more of the words of the late Mr Harold Holt other than when he said, after developing this argument:

This unrestrained competition for capital is not good for the economy . . .

I suggest that a measure such as this - unsupported, I will admit, by evidence of where it is required - can have no result other than to encourage investment and add to the demand for investment capital and so increase its cost. I list this as another reason why the measure should be treated with a great deal of reticence.

The third reason for opposing this Bill lies in the very wording of the Bill. There are 13 pages of extremely complicated provisions in order to arrive at the result that we have today. The explanatory memorandum goes to over 24 pages. I use this opportunity to object to the making of what is already a stupidly complicated Act into a ridiculous Act. which engages the activities of too many intelligent people for too great a length of time. This Bill merely makes this position worse by these provisions. This is not to criticise those who had to draft this Bill. I know how difficult it is to include these measures in the Act without leaving any loopholes. But I list it as another reason why T am opposing the Bill at this time. I will use this and any other occasion given to me to say that it is high time that we looked at this Act as a whole. It has about SOO sections. It covers about 425 reasonably sized pages. It has become an absurd Act to master - an Act which is doing nothing but retard productivity in the community in as much as so many intelligent people are involved in finding all sorts of ways through and around it. I do not want to do anything to add to this occupation. But I want to be constructive at the same time.

It is high time we in Australia had a royal commission into this field of taxation. Canada has recently had a royal commission - the Carter Commission. It is not a panacaea, I agree, but it at least brings together many people who are knowledgeable and interested in this complicated sphere to examine the whole field of taxation rather than the ad hoc way the Act is being examined at this present time. I believe the report of such a commission should at least set the sights on where we should be heading in the field of taxation over 5 or even 10 years. At the same time

I advocate that we should have an Australian taxation foundation such as already exists in Canada, a body of people outside our Taxation Branch who are knowledgeable in this field - lawyers, accountants and people in business - and who are interested in this field which is vital to the welfare of our nation and vital to our level of economic activity. At the moment the only research being undertaken is either within the Taxation Branch or on an ad hoc basis at an odd faculty of economics or commerce in various universities throughout Australia. The taxation foundation would be a continuing body. The Government should help to finance it just as the Canadian Government helps to finance the Canadian taxation foundation. We have the nucleus at the moment for such a body in the form of the Taxation Institute of Australia, of which I am a member on the South Australian Council. This is a body of lawyers and accountants who are interested in this field and who are using their spare time to do what they can to improve their knowledge of this Act and its application. We also have, of course, the Law Society of Australia, the Institute of Chartered Accountants and the Australian Society of Accountants. If these organisations were correctly stimulated by the Government I believe that they would take part in an Australian taxation foundation. However, this would not be a substitute for the work of a Royal Commission which would set the sights and show us where we were going in this field. Such a foundation would provide the knowledge which would stimulate what is taking place in this field within the Taxation Department and it would guard from day to day, month to month and year to year the interests of the taxpayers.

There are plenty of precedents for a proposal such as the one I have suggested. I draw the attention of the House to the Institute of Economic and Social Welfare which has been set up in the United Kingdom and subsidised by that Government. That Institute is financed in part by commerce and industry. It houses a number of economists, social scientists and political scientists who are working on a lot of the subjects that are being dealt with within the British Treasury, the British Department of Health and the Department of Social Services. In effect that Institute is an alternative body of knowledge and thought to that which obtains within the Government.

In the short time that is left to me in this debate 1 want to repeat the 3 reasons why the Opposition opposes this Bill at this time. Firstly, the onus is on the Government to prove who wants these convertible notes. We have not heard anything about this so far. We on this side believe that this is the thin end of the wedge. Secondly, there is the effect of interest rates on the community. Thirdly, difficulties are being created in what is already an absurd Act. Finally, I would like to take up a point made by the honourable member for Curtin when he facetiously said that at least the Opposition is not on this occasion referring the matter to a committee. My reply to him is: What a pity that it is not. I believe that there is not one member of this House with any deep knowledge of the underwriting field. What a pity it is that those few people who are interested in (his subject are not able to sit around a committee table to inquire into this Bill. The Bill could be referred to a select committee which could confer with people like Mr Denton and Mr Gleeson White whom I mentioned, perhaps with the Managing Director of Australian United Corporation and with others who know underwriting or who take an academic interest in it. We may be able to learn more and to justify what is before us at present. We do not have such a system at present but I believe that we should have it. I hope that even honourable members on the Government side would believe that if we could debate a Bill such as this one with more expert knowledge on the subject it would add to the status of this House.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I was very interested in the 3 reasons put forward by the honourable member for Adelaide (Mr Hurford) as the bases for opposing this Bill. 1 suggest that there is an additional reason which ought to be included and that is the one which was enunciated quite clearly last night by the shadow Treasurer, the honourable member for Melbourne Ports (Mr Crean). He referred to the doubt concerning the flexibility relating to overseas lenders with respect to convertible notes. I also have misgivings about this Bill, especially concerning the prospective overseas lenders, but for very different reasons from those put forward by the honourable member for Melbourne Ports.

Before I deal with that I would like to refer to one or two of the reasons enunciated by the honourable member for Adelaide. The honourable member was concerned that this measure is a complex financial one and this being so it adds significantly to the list of legislation which involves areas of this type - taxation legislation of various kinds. I suggest that complexity alone is never a sufficient reason for opposing a measure and that it can on occasions be a reason for trying to understand what is involved in the measure and then to produce whatever reasons are appropriate for supporting or opposing the measure.

The second reason he gave for opposing this Bill was that adequate reasons have not been given for the introduction once again of convertible notes in this country. Convertible notes with the taxation advantages appropriate to them operated, as we know, quite significantly during the late 1950s. They went out during the early 1960s. The reason that they went out. as was clearly enunciated by a former Treasurer, was that they were not providing a useful accretion to the productive capital of the country but that they were being used for taxation measures, for deferred share issues and for the advantages that went with such arrangements. This measure represents an attempt to find the extent to which the reasons for the misuse during the 1950s apply today and if there are any cases in which investment in productive enterprise would occur with this type of measure which would not otherwise occur then this measure can be of some use. The attempt to eliminate the abuses which occurred more than 10 years ago is made clear in the conditions which are being utilised to fence around the convertible note issue involved in this Bill.

The third point offered in opposition to this Bill concerns interest rates. My understanding may not be correct but I do not understand that convertible note issues, either in Australia or overseas, will of themselves cause interest rates to be higher than they would otherwise be. For example, if there is any advantage in issuing convertible notes overseas it may be that the interest rates offered to lenders can be at a rather lower level than they would be with fixed interest loans because there are certain other advantages to be had. Consequently I find it difficult to accept that internationalisation of interest rates on that basis will cause the rates to be higher in Australia than they otherwise would be if the notes were not to be issued.

I find the 3 reasons enunciated by the honourable member for Adelaide unattractive. I will later refer to that part of the legislation which deals with foreign investors. It is 10 years since this type of legislation was before the House. The reasons for discontinuing the practice were made perfectly clear by a former Treasurer when he said in his second reading speech on 6th December 1960:

There has recently been a strong trend for companies to issue convertible notes in lieu of shares, and by this means they have been obtaining a deduction for interest paid on the notes . . . The notes have in substance more in common with the permanent capital of the company than they have with either short term or long term borrowings.

He went on to say:

But from the evidence there was a strong presumption that there was a misuse of the intentions for which convertible notes were deemed to operate.

When one examines the raisings of new money for companies during that period and the rate of increase in the utilisation of convertible notes from 1954 to 1961 the misuse of them is clear. During that period there was a very marked increase in the volume of fund raising by listed and unlisted companies, both in the absolute and relative terms. The peak period for fund raising for notes, debentures and so on occurred in 1960. In that year nearly 60 per cent of new funds were raised in this form. This compares with a little over 20 per cent 5 years previously. It is interesting to note, from an examination of the figures, that after the November measures of that year this form of fund raising was almost completely eliminated. If one goes through the financial bulletins of that period from which these details can be elucidated, it is clear that from 1954-55 there was an escalation in this type of borrowing. In 1954-55 SI. 8m of the new capital raised through the issuing of debentures, registered notes or from accepting deposits was from this source. In the next year it was $4m and in the following year $5m. In 1958-59 and in 1959-60 the amount of convertible notes utilised to raise capital in this way rose to $19m and $48m respectively, and at that period they were discontinued. Immediately there was a sharp and precipitate decline in the use of this form of raising and by 1961-62 it was down to $7m. So there was a strong presumption that once the advantages were taken away from this type of activity it was found to be significantly less attractive for those people who wanted to invest.

This Bill represents the attempt to discover what proportion of those moneys was not being used merely for deferred share issues or in order to escape the revenue of the Commonwealth with the advantage of convertible notes, and if $5m or $10m is available through this means which would not otherwise be available this measure can be useful and should be passed. If one looks at the results of this measure in 3, 4 or 5 years time one can then make an assessment, but to oppose the Bill and to reject it out of hand as it has been rejected by the Opposition is, I suspect, a little irresponsible. After all, in this measure, as the Prime Minister (Mr Gorton) has indicated, there are conditions, which have not previously applied, which fence around these issues. The Prime Minister made it perfectly clear last year - and at that time there was no opposition - that convertible notes would operate in this country. He indicated that the conditions for their operation were to be 5 and, as he stated in this House on 16th September 1969 the conditions were these: First, the lender or noteholder, and not the issuing company, has the option to convert. That is the most important new provision. Previously all the initiative tended to remain with the company. Secondly, the noteholder’s right to exercise the option is not deferred longer than 24 months after the date of issue of the security. In other words there is a no option for a period of 24 months. Thirdly, the convertible note is to have a currency of not less than 7 nor more than 10 years but the company may make the terminal date for the exercise of the option as much as, but not more than, 12 months earlier than the maturity date of the note. That will be up to 9 years after the issue of the note. Fourthly, the terms and conditions of the issue are fixed and not subject to any variation throughout the period of their currency. Fifthly, there are certain provisions concerning the conversion price of the notes.

With respect to foreign investors, and I touch now upon the reason for which the honourable member for Melbourne Ports finds opposition, foreign investors vary in a couple of ways. There is a flexibility as to interest rates which does not apply with respect to notes issued on the domestic market. The time limits of between 7 and 10 years do not operate in as stringent a manner. They are the 2 principal aspects of difference concerning foreign investors. On those bases alone it is not sufficient to say that they ought to be refused with respect to foreign lenders. But I suggest there is another reason for which f doubt their applicability to foreign lenders, and it involves the specific mention in the second reading speech of the Australian Industries Development Corporation. I would. suggest that through the issues of these convertible notes overseas to foreign investors, and especially through the part of the indus- tries Development Corporation in its issuer - and that can occur - there is going to be allowed to be a greater overseas equity in Australian industry than would otherwise occur. This is the principal reason for which I have some doubts.

It is perfectly clear when one looks at the measure that the AIDC can hold notes, it can hold shares and it can issue convertible notes on an overseas market. It might be argued that it can do this because it may be able to obtain loans at lower interest rates than without convertible notes. I have no argument with that but these notes issued on an overseas market can, at a certain date, become convertible. We have to remember at the same time that the AIDC is not prevented in any way from holding up to 15 per cent or a greater equity holding in Australian industry - an equity holding which can give it effective control. That provision was specifically not accepted by this House when the AIDC legislation was submitted to it. So we see that the Australian Industries Development Corporation through its operation in the convertible note market overseas and through its holding of equity in Australian industries lays itself open to the suggestion that there can be a greater overseas equity holding in Australian industry than would occur otherwise. This applies especially in another way. It has to be remembered, for example, that the Industries Development Corporation is not a lender of last resort. Companies that want to operate through the AIDC do not have to demonstrate that there are not fixed interest loans available overseas at equal or even lower interest rates, so it has an incredible amount of initiative in this field and, through its operation in the convertible note market, I do not particularly like the legislation that is before the House. I intend to vote for it because we will have to see how it operates, but as long as it is not prevented from holding the amount of equity that it can hold we lay ourselves open in a way in which I do not think we should.

Other speakers have gone through the provisions of the Bill and have dealt in detail with it. I do not want to go through the details as have been enunciated by other speakers, but one can ask oneself a further question. If, as it suggested, this can enable overseas investors to have a greater share in Australian industry than they would otherwise have, what is the experience overseas? What about overseas companies that have issued convertible notes? Have they, in fact, enabled there to be greater, say, American investment in those companies than otherwise would apply? For a couple of reasons, they have not. The period of operation of these notes in overseas markets has been far greater - 10 to 25 years. The interest rates have varied rather more than has been the case in Australia, and most lenders would not have exercised their option because the market price in the host country of many of the shares has not risen sufficiently or has not fluctuated in a way which would enable that market price to be taken advantage of or to be appreciated.

However one will have to see how this operates in the future to examine whether the danger involved in the legislation will be realised. If it is ralised it will not be to the advantage of this country. If it is not realised then we will have gained more out of the convertible notes than we would have gained otherwise. It epitomises the basic balance that has to be examined in measures of this type. On the one hand we have an opportunity to preserve Australian equity. On the other hand we do not want (he revenue to be robbed in respect of the convertible note issues. This is a balance that has to be examined and preserved. It is a balance on which judgment can come down on one side or the other, but I suggest that this aspect of the legislation should be looked at. The operations of the AIDC, which operates not at market rates but at beneficial rates compared With other operators in the field, will have to be examined very closely. But I suggest that the Bill ought to be passed because it can be beneficial to this country. If we are able to discover those genuine operators in convertible notes in the late 1950s and early 1960s and can entice them into the field of capital investment now - they would not be enticed if it were not for this Bill - then 1 suggest it will be worthwhile to pass this Bill. 1 suggest that it should be examined in this way.

Mr CONNOR:
Cunningham

– 1 thought from the initial and interim remarks of the honourable member tor Lilley (Mr Kevin Cairns) that he might have even been joining us. Of course, there is an old scriptural saying that there will be more joy in heaven over one sinner who does penance than over 99 just persons who need no repentance. Fortunately he gave himself the necessary escape hatch out of his dilemma. I might say that there are many escape hatches in this legislation. In fact, that might have been its middle name because it is intended both to get money out and, in certain cases, to get money in. The Government at this stage can feel somewhat benevolent in the light of the proposals in the Budget when it will have a little surplus, which has remained undisclosed, of a matter of $5 50m that will go into the Loan Consolidation and Investment Reserve for the purpose of the redemption of some of its bonds. Therefore there is room for a little largesse to be spread amongst its supporters, open and covert. Perhaps the best test we can apply to this legislation are the words of the Treasurer (Mr Bury) in introducing the measure. He characterised the situation prior to 1°60 when the celebrated amendments were made to the Income Tax Assessment Act. The Treasurer thought that as the matter then stood the then legislation permitted the giving to a deferred issue the semblance and the guise of fixed interest borrowing. The legislation in its present form is somewhat in the nature of a Trojan horse. It is a good way of getting in and, on the converse, it is a good way of capturing. A person who chooses to invest in convertible notes under the Government’s proposal is due to get the best of both worlds.

Let us briefly examine the content of the legislation and what it stands for. Firstly, it reverses and repeals the 1961 legislation, which refused, for the assessment of income tax, deduction of interest paid on convertible notes. Now that same interest is to be payable under certain conditions. After the royal assent is given to this measure, where a loan is to mature in a minimum of 7 years - of course there is a very subtle, or perhaps I should even say crude, reservation in the case of foreign investors - the conversion is to be at the option of the note holders. That is to be welcomed. The option is to be exercisable after a period of 24 months from when the loan was made and before the final 12 months of the loan. In addition it is not to be exercisable in respect of a period beyond 10 years.

Finally - and this is a most important aspect - let us look at the price that is to be paid for the shares by the lucky people, the friends of those inside, who choose to convert. The price will be either the par value of the share or 90 per cent of the equivalent share value at the time when the notes were offered for subscription, whichever is the greater. They are very lucky people indeed. Thay have the be.->t of both worlds. The shrewd people can lend money on .security, and in turn they know that if the venture is a good one - and they have every reason to believe it will be - they can come in, not as the ordinary investor who buys his shares on the stock exchange at the current market price, but, in the good Australian phrase, on the grouter. The price they are to pay is the price which operated at the time when the notes were first offered for subscription. It is somewhat like the spider who, as is well known, chooses to sting and paralyse its prey, to leave it alive and to consume it later at its convenience. The rates of interest and other terms of the loan and the option are not to vary from time to time, again with the little proviso that in respect of foreign loans there may be variations of interest in accordance with international interest markets, and the longer the period of the loan the less favourable the terms.

The honourable member for Melbourne Ports (Mr Crean) last night made reference to the peculiar nature of convertible notes. They are legal and financial hybrids. They are neither fish, flesh nor good red herring. They are neither in the nature of a fixed proprietary interest, as in the case of a share, nor can it be said that they are true interests covered by a debenture, which is another name for a mortgage on the assets of a company. But, of course, with the arts of the tax minimiser they are a very subtle invention and one which can be used, as T said earlier, for other purposes.

One of the most sinister things I can see in this legislation is that a person who has lent money on a convertible note has not merely the right to acquire ultimately shares at par or at 90 per cent of the prevailing price at the time when the loan was arranged first but also the right to acquire them in another company other than the issuing company. It can be either an associated company or one of a group that can be interlocked with it. This is a nice way of muscling in. Let us take the classical case of Poseidon NL, which apparently is sitting on a nickel bonanza that has been valued at 180 times the subscribed capital of the company, or more. I believe the subscribed capital is of the order of $500,000. The company is virtually powerless unless it can get someone to lend it money. This is where the big boys can muscle in. They may decide to form another company and call it Poseidon Development and buy into it at par. They will have the major part of the operation and they will muscle in well and truly on the existing company. The loophole is there for them to do so.

Mr Lynch:

– Is the honourable member objecting to big companies being involved?

Mr CONNOR:

– Not in the least. In the main they will not take advantage of this loophole. It is only the lurk man who will want to do if. As a matter of fact, about 45 per cent of the shares in Australia today are held by life assurance companies, mutual funds and superannuation funds. The trend is not and never has been in this direction, lt is very plausible now for the Government to come along weeping crocodile tears and suggesting that this legislation will attract extra money. It will not. It will have the opposite effect. It is designed rather to get dividends out for the friends of a particular group of people who have, found that a company is really on a bonanza. Let us take a simple illustration. If the borrowings are to be at the rate of 7i per cent, with proposed company tax of 42i per cent the borrowings cost that company only 4 per cent. That is convenient for the company and nice for the investor, who has the certainty that if he wishes at a later stage he can either buy into that company’s shares or form the other development company to which [ referred and then take control of the whole operation.

A share in a company is a fixed interest in that company’s assets. The traditional pattern of borrowing is either by bank accommodation, which is the normal way, or by debentures, and they can be either first, second or third preferences. Then, of course, there are unsecured notes. There is another means of borrowing too that can be very effectively used by a company where there is a risk involved and the company wants others to participate with it, and that is the deferred dividend share which has been very effectively used by Ampol and certain other Australian companies.

One of the most fundamental objections that we have to this legislation is that people who are putting in the risk capital, and in many companies doing it genuinely, can find that other people have muscled in. It is a matter of acute debate amongst company lawyers, accountants and financial experts as to what extent the capital of a company ought properly to be diluted, particularly that of a successful company. This is a matter of acute controversy, and anyone who might have read the works of Berle will find that today more than ever the board of the average big company can be very remote from its shareholders. In point of fact, as long as they are drawing their dividends they do not know much about what is happening in the company, and even in the case of the very biggest they are not capable of exercising effective control over it. In other words, we get a hierarchy or a group of financial elite who virtually dictate the policy and almost pass over their particular inheritance to one another in terms of control.

Quite apart from these aspects there are many other features to which I want to refer. In the case of the overseas investor, by what right does the Government suggest that overseas companies which are already coming in on the Australian capital market and raising money there should then qualify to invest in convertible notes of this type? As I see it this is another means for further control - a control that is to be seriously deprecated - of major Australian assets by overseas investors. I do not want to delay the House further because I know that the Minister is anxious to get the measure through by a given time.

Mr Foster:

– Somewhat too anxious perhaps.

Mr CONNOR:

– Yes. But to summarise, these are our objections: Firstly,, that the aim of the Government in this is to minimise taxation; secondly, that there may be a dichotomy of interests between the equity shareholder, the person who has borne the brunt of the battle, has run the risk and is entitled to the legitimate rewards; thirdly, that the fixed interest holder ought properly to get priority only for his interest and his capital - he should have no proprietary rights; fourthly, there is the absorption, as I suggested, of the original company and the transferability of option rights to another associate company; fifthly, there is the danger of the high gearing of borrowings to capital, and high gearing is a besetting evil today in company operation and in company manipulation; sixthly, there is the inflow of overseas capital which can only provoke further ultimate control of Australian assets; seventhly, the favourable terms and the flexible rates of interest which are to be made available to overseas lenders; eighthly, the competition of rich overseas companies with Australian firms on the local capital market; and ninthly, better use can be made of deferred dividend shares. Another and major objection is this: Even assuming that convertible notes are acceptable, why should not the conversion be made on something nearer to the then current market price? Lastly, we say that - we have said lt for many years in this House and in State legislatures too - it is high time that the scandal of company share manipulations in Australia in respect of certain companies was properly controlled by the establishment of a securities exchange commission.

Mr MARTIN:
Banks

– The Bill before the House is a very complex piece of legislation. I do not think there would be any argument on that from either side of this House. The object of the legislation is to allow a deduction of interest on convertible notes subject to prescribed conditions. Let us have a look at the history of this question of the deductibility of interest on convertible notes. The honourable member for Lilley (Mr Kevin Cairns) had a look at this question in his speech.

I would like to repeat some of the figures that he gave. We had a situation which reached a peak in the income year 1959-60 when $48.8m was subscribed by way of convertible notes. The total borrowings or amounts invested in share capital in that year were $95m. In the succeeding year it was $l97m. In 1959-60 we had a borrowing on convertible notes of $48. 8m out of a total share capital of $95. 8m. In other words, the peak was reached during that year. Prior to that we had a gradual increase in this type of security. In 1958-59 it was $ 19.6m, in 1957-58 it was $13.8m, in 1956- 57 it was $5. 8m and in the preceding years it was almost infinitesimal. That was the reason for the introduction of legislation in 1960.

Honourable members might ask why there was a sudden upsurge in this type of security. The reason, naturally enough, was that there was a tax advantage in it. There was a tax advantage in ‘the issuing of convertible notes by companies and that was the purpose of the issue. The honourable member for Wentworth (Mr Bury), who is the present Treasurer, at the time when this legislation was introduced in 1960 had this to say about the question of interest deductibility on convertible notes:

As to the permanent measure indicated by the Treasurer - the taxation on convertible notes - 1 do not think on the whole that any reasonable person anywhere would challenge a measure of this character, because this operation of convertible notes has clearly been closely tied up with measures to dodge taxation.

I wonder why there has been this sudden change of heart. The Minister for External Affairs (Mr McMahon) when he was Treasurer indicated to the House after his 1969 Budget Speech that the Government would re-introduce deductibility of interest on convertible notes. At that time he said:

Convertible notes have worthwhile advantages apart from considerations such as those I have mentioned. They have been widely used as a means of raising capital on international markets and could therefore place Australian companies in a better position to raise funds overseas. 1 notice that there is no mention in the present Treasurer’s second reading speech of this facet of the Government’s intention. In fact, the impression was given that the desirable features ‘ of this Bill were to achieve exactly the opposite purpose, that this legislation would facilitate the raising of capital in Australia. Yet we had a situation which was set out by the Treasurer’s predecessor who indicated thai the Government intended to place Australian companies in a better position to raise funds overseas. This is one of the basic purposes of the Bill about which we as an Opposition disagree with the Government.

I would like the Minister for Immigration who is also the Minister assisting the Treasurer to say whether this Bill is the first step in the opening of the flood gates. The Government is taking a big step. 1 believe that the Opposition and the people of Australia are entitled to know whether this is the first step in the opening of the flood gates. 1 listened to the honourable member for Curtin (Mr Garland) who was the first speaker from the Government side of the House to speak on this Bill. 1 believe that he more or less envisaged that this could be the case. The honourable member said:

In future it may be necessary to restrict it a little further. It may be possible to open it a little further.

J am wondering whether it is the Government’s intention - the Minister assisting the Treasurer can give me an answer in his reply - to open the flood gates again? Does the Government intend to open the flood gates a little further? Is this Bill the first step in this operation? My main quarrel with the Government is that better means should be used to encourage the investment of capita] in Australia. The Minister in his second reading speech indicated that one of the main reasons for the measure which is before the House is that it will assist to encourage the investment of capital in developing companies with good but to some extent uncertain prospects. I wonder, from an economic viewpoint, whether we should be doing this. Should we be offering encouragement to investors to hazard their capital? Have we reached a stage of economic development in Australia where we have a surplus of Australian capital available for uncertain prospects? I think not. Should the Government encourage this type of speculative venture by the judicious use of taxation legislation? I certainly do not agree that the Government should be adopting this type of legislation to achieve its stated objectives.

There is no shortage of Australian equity capital for ventures that have a fair chance of success. We should not be seeking to over-stretch our resources into fields of investment with uncertain prospects. There is ample evidence to establish that companies in the extractive minerals industry with reasonable chances of success have no problem in raising equity capital without the necessity to resort to the use of convertible notes. As an example of this, one has only to look at the situation which applied to such companies in the extractive minerals industry as Robe River Limited and Utah Development. When they recently floated on the Australian market Utah Development’s shares were issued at 85 per cent premium which meant that a $1 issue was issued at $1.85. Brokers were flooded with applications for these shares. The same flood of share applications applied to Robe River Limited. The Robe River Limited share issue was at par or $1. Utah’s shares were issued at a premium - at $1.85. There was a flood of capital in the cases I have mentioned.

What is the reason for the measure now before us? I suggest that the reason for this measure is to enable capital to be hazarded in speculative industries. I consider that speculative industries of this kind should not be encouraged in the current, state of Australian growth and development. It is bad economics to initiate legislation which will have the effect of overstretching our capacity for Australian investment. On the one hand this Government is having extreme difficulty in filling its Commonwealth loans for capital works. On the other hand, on the word of the Treasurer, the Government is seeking to encourage the utilisation of Australian capital in developing companies with uncertain prospects. I do not agree that we should attempt to over-stretch our economy to this extent.

I now turn to the general basis of the Bill. It is true, of course, that convertible borrowings, which replace what would otherwise be straight fixed interest borrowings, do not in any way prejudice income tax revenue. It is also true that overseas investors are more interested in using their funds to obtain equity capital and are not particularly interested in fixed interest lending. Overseas investors are interested in sharing the control of Australian companies which they do when they have shares or equity capital but which they do not do when they lend at fixed rates of interest. It is in this regard that the Opposition quarrels with this Bill. When we get down to the conditions and specifications in this Bill we find that the Government has a different series of conditions applicable to borrowings on the foreign market compared with borrowings on the Australian market. I would like the Minister to explain why we have this differential treatment? Is it because the Government wants to encourage the investment of foreign capital in Australia to the detriment of the Australian economy?

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

– A number of comments have been made by honourable members seeking explanations in relation to the Bill before the House. In the time available to me 1 intend to set in context the Bill presented by the Government and to answer a number of queries which have been raised. First of all I would like to say that the Government’s decision to restore the income tax deductions for convertible note issues was first announced in the 1969-70 Budget Speech, was spelt out in some detail in a ministerial statement made by the Prime Minister (Mr Gorton) on 16th September 1969 and was further amplified in a ministerial statement made by the previous Treasurer, who is now Minister for External

Affairs (Mr McMahon), on 25th September 1969. In those statements the basic criteria proposed for the allowance of income tax deductions for convertible note interest, and which are in substance incorporated in the legislation now before the House, were clearly established. For example, it was clearly indicated that as a condition of eligibility and as a condition for deductibility the lender or note holder and not the issuing company would need to be given the conversion option. That we proposed restrictions as to the time during which the conversion option was to be exercisable was also made clear at that time. lt cannot be said that insufficient notice has been given to the Opposition or business interests of the conversion price test provided in the Bill. As we indicated in unambiguous terms over 12 months ago, as a condition for deductibility the conversion price for shares is to be not less than 90 per cent of their market value when the convertible securities are issued, or par, whichever is the greater. As my colleague on this side of the House, the honourable member for Curtin (Mr Garland), has already pointed out, the Bill was introduced in this Parliament on 27th August - some 6 weeks ago - and this I believe to be a reasonable time for interested parties to make their representations. In fact, the Government has received and considered submissions made to it by representatives of the business and finance community since the Bill was introduced. The amendment to a machinery provision of the Bill, which has been circulated in this House, results from a difficulty which was raised in one of these representations.

The honourable member for Melbourne Ports (Mr Crean) indicated that in his view the Bill had been brought down because of what he referred to as ‘pressure’, and T use that word in inverted commas. He said that pressure had 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. This is simply not the position. As the Treasurer (Mr Bury) indicated when introducing the Bill, the decision to revive the use in this country of the convertible note financing technique emanated from the Government’s recent review of the income tax law relating to convertible notes. As a step towards attaining our objective of increasing Australian equity participation in Australian development, we sought means of diverting fixedinterest borrowings into borrowings with an opportunity of equity participation. It was in fact for this reason and not because of any pressure, to which reference has been made, that the Government gave notice in the 1969-70 Budget of its intention to amend the income tax law to restore deductibility of interest for income tax purposes on convertible securities.

One of the basic matters raised by the honourable member for Melbourne Ports and 1 believe also by the honourable member for Adelaide (Mr Hurford) was the question of who will be advantaged by the new convertible notes legislation. During developmental phases many major projects have either no earnings or no surplus earnings available for distribution as dividends to shareholders, These are projects which could have difficulty in attracting funds from investors seeking an immediate return on their capital outlay - a factor which could inhibit the raising of equity finance. The alternative of convertible fixed-interest borrowings with a guarantee of income can have special attractions for both lenders and borrowers. Companies, by being able to offer an immediate income return on the funds invested plus the opportunity to convert into share capital, will increase the probability of borrowing successfully, and, of course, the interest payable on debt raising is tax deductible, thus substantially reducing the effective cost to the borrower of servicing capital raised.

Convertible notes are, of course, widely recognised - both here and overseas - as a particularly appropriate means of financing new and developing companies or of financing development projects that will not come on stream for some time. In these cases lenders would generally be more willing to make what could be regarded as high risk loans at reasonable rates .of interest if they had the added inducement of being able to acquire equity holdings and so participate in the profits of the enterprise, should it ultimately prove successful. To indicate that this is the case, I refer to the comments of a prominent sharebroker, Mr A. C Goode, who would be known to the Opposition, particularly to the honourable member for Melbourne Ports, and who has recently gone on record as saying that with the bringing down of the new convertible notes legislation a most interesting and flexible method of raising finance will be available, and that the special situations to which convertible notes might be applied in the future are bound to be numerous.

Mr Goode specifically instanced the use of the convertible borrowing technique in cases where an overseas company was planning to convert to public status; in cases where an Australian subsidiary was not immediately profit-earning; as a stimulus to a particularly large issue, or to an issue for a company temporarily encountering difficulties, or to a small and not well-known company. Whether or not large companies like the Broken Hill Pty Co. Ltd, Alcoa of Australia Pty Ltd or any other large firms will take advantage of the new legislation is of course something that quite frankly only experience will show.

Mr Connor:

– They will not.

Mr LYNCH:

– The honourable gentleman must have available to him more expertise than is available to the whole of the Commonwealth Treasury. I myself would have some doubts as to the dubious legitimacy of the sources which cause him to make that comment. But it is interesting to record that during 1968 and the early part of 1969, convertible issues on the international capital market totalled $US2,300m, or more than twice as much as total fixed-interest issues of $US1,100m. These issues were on terms that would generally comply with the basic conditions in the Bill. ( do not suggest here for one moment that convertible issues on these conditions will be equally popular in the special circumstances of the Australian market, but it does suggest that Australian companies generally ought to be able to devise terms and conditions within the proposed legislation which would make their convertible notes quite attractive to Australian investors. If we were to be guided by overseas practice where many of the current convertible issues have been made by leading companies, I believe we would have little hesitation in saying that this financing technique will not be overlooked or ignored by the larger Australian companies.

Several honourable gentlemen who have spoken in this debate have raised the specific question of the position of the foreign investor vis-a-vis his Australian counterpart. The different tests that apply to convertible notes issued overseas do not place the overseas investor in a better position than his Australian counterpart. One difference of course is that there is a minimum borrowing period of 7 years for local issues and no limit for overseas issues. This minimum period is designed to ensure that a local investor cannot be deprived of the opportunity of converting into shares by early repayment of the loan before the investor has had a reasonable opportunity to judge whether the borrowing company’s development prospects justify such a course. As I have earlier indicated, the objective that convertible notes could provide increased opportunities for Australian equity ownership in foreign-initiated ventures was a principal consideration in relaxing the 1960 embargo on convertible note interest.

Another difference is that provision may be made for variations in the rate of interest in specified circumstances on overseas issues but not on local issues. This is designed to permit variations in the rate of interest where the overseas lender is himself borrowing on a ‘roll-over’ basis. No other variation of interest rates is permitted for overseas issues and, but for this modification, the constant interest rate condition is to apply on the same basis to both local and overseas issues. The constant interest rate condition is intended, of course, to act as an additional obstacle in the way of arrangements designed to induce note holders to defer conversion without in the end losing the main advantages they would have gained from subscribing to an equity issue. For example, it will prevent a company from inducing note holders to convert at one time rather than another by interest rate manipulation.

There are other differences, but I do not want to take up too much time of the House. There is not enough time to answer all of the questions that have been raised, but I want to direct comment briefly to the final point raised by the honourable member for Melbourne Ports. He said that the fences or the criteria established in the Bill may be so high that business interests may find that little use can be made of the new technique. This seems to be somewhat at variance with the point made by the honourable member for Banks (Mr Martin) who said that in his view - which is unjustified in the opinion of the Government - we were seeking to open what he dramatically termed the ‘flood gates’. It would seem to me that the Opposition has tended to speak with 2 voices on this subject.

Quite honestly, from past experience we believe that the Bill has been correctly drawn, that the right criteria have been established and that there is no indication that we will find the same disabilities which were apparent in the pre-1960 period. From past experience, simply drawn legislation could leave the way open, as may have been suggested by the honourable member for Banks, for circumventing the basic conditions that have been set for determining deductibility. I wish to stress to the House that every effort has been made to steer a course between the needs of protecting the revenue and the needs of producing a detailed scheme that will serve the Government’s objectives in restoring the deduction and will be found useful by the business community. From comments that have been made in the Press since the basic conditions for deductibility were announced, there is every indication that the new convertible notes legislation will be of practical assistance to the business community. I could quote from a number of the comments that have been made. But, in fairness to the hour of the day, at this stage I simply commend the Bill to the House.

Question put:

That the Bill be now read a second time.

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

AYES: 54

NOES: 49

Majority . . . . 5

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

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

-I refer the Committee to clause 6 of the Bill which reads in part:

After Division 3 of Part III. of the Principal Act the following Division is inserted: - “ Division 3a. - Convertible Notes. “ 82i.. - (1.) In this Division, unless the con trary intention appears - the valuation date ‘, in relation to a share, means the date that is earlier by two weeks than the date that is theda te of offer in relation to the loan in respect of which the value of the share is to be ascertained.

I move:

The broad purpose of the amendment is to give companies that are planning to make a convertible note issue more time between the date at which shares must be valued for purposes of the conversion option and the date the notes are offered for subscription. Under proposed sections 82S (1.) (D) (xiii) and 82T the price to be paid for a share by a noteholder who exercises his option to convert must be set at no lower than 90 per cent of the market value of the same kind of share at a valuation date shortly before the notes are offered for subscription. The time interval in the Bill between the valuation date and the date of offer is 2 weeks. Representations have been made to the Government that this period is insufficient for companies to give notices, make calculations, obtain approvals and print necessary documents. The representations suggest that a period of 6 weeks would be adequate for the purpose. The Government has accepted these points and this amendment will give a period of 6 weeks between the valuation date and the date of offer. I commend the amendment to honourable members.

Amendment agreed to.

Bill, as amended, agreed to.

Bill reported with an amendment; report - by leave - adopted.

Third Reading

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

page 2115

INCOME TAX BILL 1970

Second Reading

Debate resumed from 18 September (vide page 1381), on motion by Mr Lynch:

That the Bill be now read a second time.

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

– May I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate on this Bill is resumed I would like to suggest that it may suit the convenience of the House have a general debate covering this Bill and the Income Tax (Partnerships and Trusts) Bill, 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 therefore, Mr Deputy Speaker, that you permit the subject matter of the 2 Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Mr Lucock)Is it the wish of the House that the suggestion put forward by the Minister be agreed to? There being no objection, I will allow that course to be followed.

Mr CREAN:
Melbourne Ports

– On behalf of the Opposition I move the following amendment :

That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: the Bill be withdrawn and re-drafted because whilst it reduces rates of taxation it does so in a regressive manner’.

The measures that are before the House impose the rates of income tax as they will operate on individuals and companies for this financial year. I would point out that, as is disclosed in the Budget details, the income tax on individuals is expected to yield $3.036m this year and the company tax as applied this financial year is expected to yield $l,401.m. In essence, a total of about$4,437m will be collected as a result of the application of these rates of tax. I would like to raise a point that was touched on last evening by the Minister for Customs and Excise (Mr Chipp) who, when dealing with the present levels of taxation in Australia, pointed with some pride to the fact that direct taxation, as it operates in Australia at the moment at the Commonwealth level - he stressed this - is a higher proportion of total taxation now than it was previously. This sort of comparison distorts the very real circumstance that, in Australia, taxation is not levied at only one level of government; it is levied at the Commonwealth level, the State level and the local authority level.

Because the Commonwealth is the sole collector of income tax. the major direct tax in the economy, and of company tax the picture appears to be brighter as far as the Commonwealth is concerned. But it is a picture that is significantly different when the total of taxation levied in Australia is taken into account. It will be seen from the total figures - I quote from a compila tion that I have here - that the Australian national accounts for the last financial year 1968-69 show that that year the Commonwealth collected an aggregate of $5,486m, some $3,41 3m of which was from direct taxes and the residue, about $2, 000m, from indirect taxes. The States and local authorities collected an aggregate of $1 , 208m, only $133m of which could be classified as direct taxes. When one takes the total pattern into account and also the excess that public authorities charge for the services they provide, which has been increasing in recent years and which last year aggregated $800m - this is a charge upon the users of public utility undertakings such as electricity and gas - one finds that the position is distorted even more into the regressive pattern of indirect tax as against direct tax.

Taking the whole level of taxation in Australia, at the 3 levels, it is still true that approximately 50 per cent of it is direct tax, nearly all collected by the Commonwealth, and the residue collected at the other 2 levels. The Commonwealth also collects sales tax. excise and so on.It is a 50-50 pattern still and it has not altered very significantly over the last several years.I am sorry that I cannot put my hand on the figures for the last 4 years which are contained in the White Paper on national income. We now turn to the very significant question of the equity of taxation. The Treasurer in his Budget speech spoke about the revision of taxing. He said:

In deciding on this kind of revision, we have had regard to the way in which the incidence of the effective burden of tax has been altered by past rises in incomes. Effective tax rates have increased more on lower and middle incomes than on higher incomes, and in giving some relief from the effects of the past trends, there is a clear case for ensuring that most of the relief will go to lower and middle income earners.

I submit that the present form of relief docs no such thing. If one had chosen to redistribute about $250m of tax, as these income tax concessions do, one could not think of any worse way to do it. Contrary to what has been said, the maximum advantage goes to those with the highest incomes and the fewest dependants, and the least of the relief goes to those with the lowest incomes and the most dependants. I will illustrate that in a moment by reference to a couple of tables.I emphasise again that the tax to be collected this year will be something more than$3,000m, even with the reductions aggregating about$250m proposed in this measure. People say rather glibly that direct tax is preferable to indirect tax. That ought to be true, but it is not necessarily true if inequities are allowed to creep into the income tax structure. I submit that this is what has happened in Australia. The mathematical curve of the rate of progression has remained unaltered since 1954. There have not been very great alterations made to the concessions that can be claimed for dependants such as wives and children.

Hansard of 15th September 1970.I have adapted that table, which shows a range of incomes from $417 to $100,000 and over, by dividing it into 3 ranges of income, $417 to$4,000 - $417 being the minimum income subject to taxation - $4,000 to $10,000 and $10,000 plus. I have consulted the Minister in charge of the debate and with the concurrence of honourable membersI incorporate that table in Hansard.

It is an adaptation of the question asked by the Leader of the Opposition and the details contained in the document entitled Commonwealth Income Tax Statistics’ which was brought down with the Budget. In Australia for the year ended June 1968. which is the last year for which statistics are available, there were nearly 5 million taxpayers. There has been a lot of talk about what is a middle income and not much attention given in my view to what is a low income.I have heard the range quoted as being as high as$3, 000 at the bottom and $16,000 at the top. These statistics are based on grade of actual income, that is, the income before the concessions are taken off. In Australia for the year ended June 1968 only 71.000 people out of 5 million - less than 2 per cent - had incomes in excess of $10,000. As I will point out in another table, the 2 per cent group which had incomes in excess of $1 0,000 was responsible for 20 per cent of the income tax collected. But when we talk about giving relief to people receiving in excess of$1 0,000I simply submit that we are talking about a fairly select section of the total taxpaying public.

The lowest income rangeI have taken, $417 to$4,000- $4,000 is about $77 per week- accounted for 4,027,000 or 80 per cent of taxpayers. It is a bit difficult in Australia to make a proper appraisal of the weight of taxation because whilst there is considerable detail in the statistics there is in fact no distinction between married and single taxpayers. In the lower levels of income the statistics tend to be distorted by 2 factors. They comprise single people who have just commenced work and, to an extent, some of the effects of what is called income splitting. That is to say, what should be effectively one income, by reason of resort to partnerships, trusts and private companies and so on is divided into more than one income. If one runs a farm, for instance, it is not very difficult to have it regarded as a partnership. If there is an income on the one farm of $10,000 it can be divided into 2 incomes of $5,000. It makes a considerable difference to the amount of tax paid on the farm. The other matter that cannot be separated very clearly except by a kind of deductive process is the degree of claims that are made for dependants. Nevertheless, it is possible by a deductive process to do this and, according to the statistics, if one takes the character ‘spouses’ - I do not think there are many wives who claim for their husbands and I think it is still preponderantly the husband who claims for the wife; therefore in my view one can use the category ‘spouses and housekeepers’ for a comparison of those male taxpayers who still claim support for their wives - there are 1,360,000 spouses claimed for and 874,000 of them, which is near enough to 2 out of 3, are in this lowest range of income, that is, less than $4,000 per annum or $77 per week. There is almost the same proportion of children claimed for in the same group.

The interesting thing about the table sought by the Leader of the Opposition is that if one starts with aggregate actual income for taxation purposes of something like $15,000 that is reduced to a taxable income of $12,000 after allowance for these various concessions which aggregate on their face value nearly $3,000-$2,850 in fact. The information obtained by the question asked bv the Leader of the Opposition is that those concessions when claimed meant that the revenue lost or forgone was nearly S900m. Just to take one item, life assurance, as an example, under the pro visions of the income tax law if a person is able to save $1,200 per annum for life assurance or superannuation he can claim it as a taxation deduction. This is nearly $23 a week. How many people in the community can afford to save $23 a week in the first place and are they entitled to be assisted by the revenue for so doing? I commend the details on page 1155 of Hansard to honourable members. The allowance of those concessions meant that the revenue lost $19 lm which, by way of comparison, was more than that allowed for all the wives of taxpayers in Australia. It was more than was allowed for all the children that were claimed as dependants. It exceeded the child endowment bill for the vear.

I received an answer yesterday to a question which I had asked. The answer shows - the figures are in the Budget - that in 1969-70 a lesser proportion of gross national expenditure was devoted to social welfare payments than was the case in 1960-61. This answer, which is in yesterday’s Hansard for those who are interested, shows that in 1969-70 child endowment was 0.73 per cent of the gross national expenditure whereas in 1960-61, 9 years earlier, it was 0.98 per cent of the gross national expenditure. Another interesting point is that relative to the total number there was an increase in the proportion of children receiving child endowment in 1 969-70 compared to 1960-61. This shows the deterioration that has taken place in the real value of child endowment payments.

For those honourable members who have some sympathy for what are called repatriation benefits I provide these details: In 1960-61 repatriation benefits were 0.98 per cent, or nearly 1 per cent, of the gross national expenditure. In 1969-70 they had fallen to 0.74 per cent of the gross national expenditure. Th s was a deterioration in proportion to the wealth of the nation of one-quarter. Something which is rather contradictory and which has been built into the income tax structure is that the allowance made for family and other concessions runs counter to the logic of social welfare payments. As an example let us take 2 families each with 3 children under the age of 16 years. Each family receives $3 per week in child endowment irrespective of the income of the family. But if the father of one family has an actual income of $3,000 and the other father has an actual income of 810,000 the tax concession to the first family, the lower income family, is worth $2.56 a week but to the second family, the higher income family, it is $5.17 a week which is almost double the first amount. It is quite a feasible proposition that most of the taxpayers of Australia and most families would be better off if the Government did away with the taxation concessions for children and doubled the amount of child endowment which was payable. I submit that these are the sorts of things that ought to be looked at when we are examining the taxation structure.

Under the new arrangement I have not very much time left in which to speak in this debate. Also built into the existing rales structure is the effect of inflation. I will take as a comparison what is called the average weekly earnings. In Australia the average weekly earnings at present are about $77 per week or about $4,000 per year. The existing tax rate scale was last altered in 1953-54. Taking the average weekly earnings in 1953-54 as an index of 100, that index in June 1970 has risen to 237.2. Using the same basis that I have on these figures it was 201.2 in June 1968 or almost exactly double in 1967-68 what it had been in 1953. In 1953-54 the average weekly earnings were in the region of $34 to $35 or $1,700 a year. In 1968 the average had doubled to $3,400 a year. If one looks at the marginal rate of tax, which is the amount paid on an additional Si of income earned, in 1954 it was 17.6c in the $1 but in 1968 the marginal rate had risen to 29ic in the $1.

Average weekly earnings go up for 2 reasons: More than half because of inflation and something like the other half because the worker is getting his share of the increase of productivity that has taken place in a period of over 15 years. But when we take into account that more than half of every $1 the wage earner gets as a wage increase is due to price increases and less than half is due to productivity increase we see that something like 30 per cent is taken away in the additional tax that he pays. So virtually he has been robbed of some of the fruits of his progress. This is one of the reasons why the Government should periodically alter the progressive scale.

I do not know whether people are aware of the distribution of incomes in Australia so. 1 prepared a table from the statistics which are available in the booklet ‘Commonwealth Income Tax Statistics’. With the concurrence of honourable members I incorporate the table in Hansard.

In compiling that table 1 divided the actual income as revealed in the taxation statistics into what are called dectiles. The total amount of income is divided into one-tenth slices. For the year ended June 1968 24 per cent of taxpayers were in the first dectile - that is, in the first one-tenth of the total income received. That is to say, one-quarter received one-tenth. They were people with incomes of less than $35 a week. Even within that level there were some who had dependants to support. They were responsible for only 4 per cent of the tax collected. At least there was some sort of case to begin to reform the tax system from the bottom. There ought to be a base deduction from everybody or what might be called subsistence or some minimum amount. It would be set as high as $1,500 or $1,600 and then the scale of progression would alter.

The next dectile involved people with incomes ranging from $1,800 to $2,400 which was 14 per cent of the taxpayers or one-seventh. They paid 7 per cent of the tax collected. They had 9 per cent of the dependants. The next one-tenth - this is a narrower band - involved people in the $45 to $54 a week range or $2,400 to $2,800. That is another 14 per cent and they also paid 7 per cent of the total tax collected. The first 5 dectiles, or half of the total income of Australia, threequarters of the population received half of the income and paid one-third of the tax. At least there is some degree of income maldistribution in Australia. In my view it is part of the duty of the progressive income tax to redress that maldistribution.

The remaining quarter of the population is found in the income levels above $70 a week. Therefore below this figure of $70 a week are three-quarters of the taxpayers and above it only one-quarter. The sort of adjustment that is made in this legislation will give two-thirds of the advantage of these taxation reductions to one-quarter of the population. If anybody suggests to me that that makes the tax structure more equitable then I would say that I have no understanding of the meaning of the word equitable’. I submit that the Government missed an opportunity here to begin to reform fundamentally the taxation structure of Australia. The way to begin is to remove the inequities that are inherent within the tax structure itself.

Sometimes people say to me: ‘What is your tax schedule?’ lt is impossible to write a tax schedule in the abstract. The only thing that one can sensibly do is to point out the inadequacies and injustices in the system which obtains at present. To my mind the structure that we now have is riddled with inadequacies and injustices. The progressive mathematical scale in 1954 when the average weekly earnings which would have covered probably, as it does now. about three-quarters of the tax payers was thought to be a logical scale. If it was thought to have logic in 1954 when the average wage was $1,700 and the marginal rate was 17.6c, how can it have logic with the same scale of progression in 1968 or 1970 when the average wage has doubled and when the marginal rate has risen from 17.6c in the $1 to 30c? I submit that this is only the worst of patchwork alteration and I would hope that the Government will do as it says it will do and. having made this move, will now look at the total structure of taxation in Australia. Its first look has been a pretty fleeting, pretty furtive and pretty unjust one.

Sitting suspended from 6.1 to 8 p.m.

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

– Is the amendment moved by the honourable member for Melbourne Ports seconded?

Mr Stewart:

– I second the amendment and reserve my right to speak.

Mr GARLAND:
Curtin

– 1 was interested to listen to the honourable member for Melbourne Ports (Mr Crean), who led for the Australian Labor Party in this debate, comment on this most important Bill as part of the Budget proposals. In the course of his remarks he touched on a great number of matters affecting income tax law. They were, in the context of the rating Bills now before the House, of relevance although in many respects they were not connected. The Government received many demands from many organisations for a reduction in income tax rates. Among the most firm in their demands for such reductions were the trade unions. So we must remember that the Budget was framed in conditions of wide-scale public demand for a reduction in income tax rates applying to the various levels of incomes.

One of the main features of this Bill is that it reduces by 10 per cent the rate of income tax on taxable income from the minimum level up to the level of $10,000. The rate then tapers down to 4.4 per cent at the level of $20,000 taxable income, and from that point the tapering continues until the taxation relief is nil at the point of $32,000. That level of $32,000 taxable income is of significance because it is at that point, and has been for many years, that the progressive scale ends its acceleration and becomes a flat rate of two-thirds tax plus 2b per cent. That is basic and perhaps the major point of this Bill, although there are 3 classes of items mentioned in it.

It has been said that income tax is a major form of raising revenue for the carrying on of the conduct of affairs in this country. It is fundamental that when those rates are set one can anticipate fairly closely the revenue that will be received and, in the total Budget concept, fairly accurately estimate what the expenditure will be. I suppose that every day we sit in this House we hear demands by the Opposition that more money ought to be spent. They are not inconsiderable demands. We have demands for very large sums. Yesterday one honourable member opposite stood up and asked that a mere $100m be appropriated for a purpose. That is not uncommon. We hear that a great deal here. Whilst it is the right of the Opposition and the right of any citizen to make such a request, the Government has the responsibility of deciding where the priorities will go and how much will be spent on the major heads of education, social services, defence and health. It has to decide how the economic cake will be cut up.

So it is not unreasonable in a debate of this kind, when suggestions are made for reducing the rate of tax or increasing expenditure - never do we hear a suggestion for reducing it - to ask: Where is the money to come from? It is not only a question of receiving money; it is also a question of providing balance to. the economy. I want to make a few remarks about the economy because it is very easy to criticise how little is spent on a certain item and take it out of the context of the total flow in the economy and the total levels of supply and demand. Very briefly, in economic terms, the Govern ment has the responsibility to make sure that the supply of goods and services in the community - the amount of physical labour that is available in the community - are balanced by a reasonable demand, because if demand outstrips supply we get shortages of goods and inflation. Inflation beyond acceptable levels of perhaps 3 per cent, 4 per cent or 5 per cent per annum creates further difficulties. They are not theoretical difficulties but difficulties which touch the lives of every individual in this country.

In taxing the private sector the Government, through its powers, subtracts a capacity for private spending so that the Government can spend the revenue so raised in the various avenues set out in the Budget, the major heads of which 1 have just referred to, to try to keep in balance supply and demand, a steady and high rate of employment and a fairly constant level of prices. In current economic conditions, were it to be otherwise, it would result in rising costs and shortages. T referred to acceptable levels of inflation because there is an incipient inflation which exists in any developed economy as a result of tremendous demand, and rightly so. Beyond acceptable levels it can create much hardship for various classes of income earners and, importantly, also upset the balance of payments. The honourable member for Melbourne Ports mentioned, as 1 said, a wide variety of matters. To the motion that the Bill be read a second time, he has moved the following amendment: the Bill bc withdrawn and redrafted-

He speaks here of the fundamental Bill of the whole Budget proposals -

  1. . because whilst it reduces rates of taxation it does so in a regressive manner.

I believe that my colleague who will speak after me may refer to those words in more detail, but 1 want to put to the House one or two fundamental facts about income tax as it is levied on individuals, because we have a progressive rate of income tax. I am sure that the concept of a progressive rate is accepted by every member of the House. We have a method of levying taxation by which those with the higher incomes are taxed at a higher rale than those on the lower incomes. Surely, if we are to reduce income tax, we cannot alter that principle without giving greater benefit to those on higher incomes than to those on lesser incomes. Were it otherwise we would not have a progressive rate of income tax but a regressive rate, and that would be an impossible situation.

The rate scale which has been in existence since 1954 has to be changed from time to time because the average income increases not only with inflation but with increased wealth and productivity. One has to have this basic rate and it has to be changed from time to time. So it has come about that this year it has been re-drawn making the allowances to which I have referred. 1 would like to emphasise, incidentally, because i believe there is a misconception around the country about it to some extent, that although the rates of taxation on some incomes are higher than they have been previously no-one at any level pays more taxation than he did before. That ought to be clearly understood, although I know that there are some areas where it is not understood.

But what has emerged out of this Budget, and it perhaps is the most important point for the people of Australia to understand, is that there has been an adjustment in the Budget which provides for less personal income tax to be paid by individuals and there has been an increase in certain indirect taxes. To me, speaking perhaps from the point of view of someone who believes deeply in the value of individual initiative and private enterprise, that is a great benefit to receive. It means that a man has more of his earnings at his disposal to spend as he wishes and if he does not care to buy those items on which the excise or sales tax has been increased that is for him to decide. I am ali in favour of the individual having that right to decide and having more net disposable income to spend as he likes. In other words, I am supporting the principle which I believe is implicit in the Budget and I think that there ought to be more emphasis in our economy on indirect taxes rather than direct taxes. Here, of course, we are in an area of judgment because I do not think the honourable member for Melbourne Ports would, from what he was saying, agree with that contention. But I would say that a comparison of the 3 levels of taxation to which he referred - Commonwealth, State and local government - with other Western countries would show that Australians are paying more in direct taxation. I think the tendency today is that there should be a transfer to more indirect taxation so that the individual can make up his mind as to how he will spend his earnings, his take-home pay.

The honourable member ‘for Melbourne Ports discussed at some length the concept of equity in taxation. This is a very difficult and important field. He made a number of suggestions and I would like to point out that because of the complex nature of income tax law and all tax law it is easy to take an example from here and an example from there, put them together and show an inequality or an inequitable position. I do not by any means disagree with some of the suggestions that he made. I think he made a number of valid points. I think that certainly it is the duty of this House and the Government to give continuing consideration, as they are, to endeavouring to improve the equity of taxation, but I point out there there is no such thing as perfection in equity of taxation. One can go to a lot of trouble to try to be more equitable to certain classes of income earners and find that changes that are made upset another class. This is a matter not easy of solution. But certainly with a progressive income tax scale it is impossible to give more relief in taxation to the lower than the higher income group, although the rate of taxation may be altered.

May 1 point out that in consideration of this subject it is important that when one looks at the statistics - 1 saw the honourable member for Melbourne Ports holding the booklet of very comprehensive statistics which is published each year - one must always remind oneself that the incomes stated in that booklet are net incomes - in other words, earnings less concessional and other deductions which are by no means insignificant. When one talks about a level of income being taxed one has to remember always that that is the net figure, and in the case of higher income groups the concessional deductions may be very significant, perhaps $2,000 or $3,000. When one talks about average earnings that point must be taken into account. The honourable member for Melbourne Ports at one point discussed the losses to revenue resulting from different classes of concessional deductions and inquired as to whether it was fair that one class should be at one level as against another. 1 think that is a valid and most proper avenue for inquiry and comparison, and the statistics to which I have referred illuminate that avenue. 1 believe that it is something that should be given even closer attention. But 1 do not think that one ought to go straight on from there and say that we should not make a reduction in this progressive scale when we had a general demand by the people of Australia, as we did in the months gone by, for a general reduction in direct income tax.

The honourable member also made what I could perhaps describe as a traditional attack on the progressive scale and said that it had not been varied for some years. He related it to average income. That is something which might at first sight appear to be valid but 1 really do question it. In spite of the tax rate rises that we have seen consumer spending in the economy has increased at a significant rate, somewhere in the region of 7 or 8 per cent in the last year. There has been an increase in expenditure by individuals on dwellings of the order of 20 per cent. Spending on building and construction and on plant and equipment has increased substantially and these substantial increases speak highly of the expansion which has taken place in the economy of this country. There has been a very strong increase in the net disposable income after tax - what can loosely be called take-home pay. Indeed, while the current taxation scale has been in existence, 1 think, since 1953-54 there has been an increase in the disposable income of the average wage earner with 3 children of well over 30 per cent. There is no need to be gloomy on the subject. Indeed, the overall position is a favourable one.

In addition, of course, the Government’s spending, which is only possible because of taxation, has resulted in a number of benefits to individuals in the community. I think those comments put the matter into context in economic terms. The individual is far better off today than he was in 1954 in spite of the fact that the progressive scale of taxation has stayed the same. Because of the complexity of the taxation law I say that advocating a change may lead to what appears to be a more equit able position for one class but often puts another class in a more inequitable position. This Bill changes an individual’s tax rates in the fasihon that I have mentioned. lt increases company tax by 2] per cent on all levels, lt increases substantially the age allowance made to women over 60 years of agc and men over 65 years of age to a point where a person entitled to an age allowance can earn a net income - that is, income less deductions - of $1,326 a year before any taxation is payable. A shaded amount of taxation is payable on amounts higher than $1,326. It is a very substantial reduction. I think that the community ought to understand that because one tends, in the total Budget context, to pick out a criticism here and there and not see the thing as a whole. But the Government has the responsibility for the economy of this country. The people and the Opposition would be the first to criticise it if it did something which was irresponsible and allowed conditions to arise which affected the people in an unacceptable way.

In the short time that is left to me I want to make one or two points which I hope the Government or the Treasurer may take into consideration. The Budget speech referred to the continuing consideration of the taxation law and rates. 1 do not refer to these necessarily as firm proposals but as questions to consider. I take it as axiomatic that the tax scale must be varied from time to time. It would seem to me that the publishing of a scale which shows a separate levy of 21 per cent is now without use and outmoded. It would also seem to me that the minimum net income taxed could well be raised from its present level of $417 to a figure of Si. 000. Such an increase would be consistent with the steady increase of the age allowance. Of course, there would be a need to have some shading in rates. I question whether there is any need to continue with the top limit at $32,000. It would seem to me that a level of $25,000 would be more apt. We should always remember thai the people in the higher income group whom I would define as those receiving in excess of $10,000 a year often use companies in order to minimise their tax burdens.

Mr DEPUTY SPEAKER (Mr Lucock:

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

Mr COLLARD:
Kalgoorlie

– The Income Tax Bill which is now before us for discussion is the result of a rather hurried promise made by the Government just prior to the House of Representatives election last year. The promise was that if returned, the Government would bring down legislation to reduce income tax for the lower and middle income groups. More particularly and more importantly the Government promised that it would equalise the burden of taxation generally. It is now quite evident, when we examine the tax scale which the Treasurer (Mr Bury) proposed to the House, that at the time of making the promise to reduce income tax the Government had no idea how it would implement its promise or what effect such a measure would have. Otherwise - and I think this is more likely - the concern that the Government expressed for the low income groups was merely a smokescreen for a vote catching gimmick.

I rise tonight to support the amendment which was moved by my colleague, the honourable member for Melbourne Ports (Mr Crean). I do so because we now find that where the most relief is required - that is for people on the low incomes where the tax burden has been the hardest or has had the heaviest effect - is where the least relief of a real nature has been given. The area in which the least relief is needed is in the income range from $10,000 to $30,000. lt is in this area where the greatest real relief has been granted. While Government supporters prior to the election preached relief for those on low incomes - and this is where relief should have been given - it is very disappointing to find now that although the Government can see its way clear to give relief amounting to only 82c per year to a person whose taxable income is only $500, it is prepared to accept and indeed has accepted as being in the middle income group taxpayers with taxable incomes of $30,000. Such persons would have actual incomes nearer to $33,000. The Government has given these persons income tax relief of just on $70.

There may be an even more inequitable situation in the Government’s proposal. This is where a person with a taxable income of $16,000 will receive a reduction in tax of $500.20 which is 20c more than the total taxable income of the person who is to receive a reduction of only 82c and who will still be required to pay income tax of $8.81 together with some immeasurable amount of indirect tax. It is interesting but rather disturbing to note that the amount of $500 reduction a year which will be received by taxpayers who have a taxable income of $16,000 is twenty-nine times the amount which the Government gave to pensioners this year as an increase. Looking at the proposed scale we And that the group which is made up of taxable incomes which range from $12,000 to $25,000 will receive an average reduction in tax of $450. In the group where taxable incomes range from $500 to $3,000 the average reduction will amount to only $19 each. This is the system the Treasurer has told us would bring about a more equitable distribution of the burden of income tax. This is what the Treasurer told us in his Budget Speech would be the method which the Government would adopt to give relief on an equitable basis. However, the Government will give $9 a week relief for those on high incomes, 37c a week for those on low incomes, down to 2c a week for those on extremely low incomes. So if the Government had decided before the election how it intended to implement its promise, it is little wonder that it was very careful not to spelt it out to the electors. It is no wonder that the Government avoided teling the people about its idea of equitable distribution. The fact is that the system will be even more inequitable as a result of the proposed scale than it is at present.

In his second reading speech on this Bill the Minister for Immigration and Minister Assisting the Treasurer (Mr Lynch) said:

Of greatest importance, so far as individual taxpayers are concerned, are the tax reductions - substantially in the lower and middle income ranges - proposed by the Bill.

I have referred to some of these so called substantial reductions - that of 82c for instance. But let me examine in more detail the reductions in the lower income groups as against those with high incomes. I would also like to give the House some information on the number of taxpayers in those groups. The Government took an easy way of giving some tax relief which does nothing to correct the inequality. The Government has made a flat percentage rate reduction up to where taxable income reaches $10,000. There is a scaling down from this figure to where the income reaches $32,000. Therefore, if the tax rates between, for example, a taxpayer with a taxable income of $1,000 and a taxpayer with a taxable income of $10,000 are inequitable under the existing scale - and nobody will deny that this is so - surely by simply adopting a flat percentage rate reduction from $1,000 to $10,000 will not correct or even improve the situation. Indeed, it will aggravate it. This is what the Government is doing; it will place the man on the low income in a worse position comparatively than he is at present.

If the Government had genuinely wished to make a more equitable distribution of the tax burden over the whole field of taxpayers it should not have stopped at the taxable income of $32,000 where the reductions phased out. The Government should have continued on from there by gradually increasing the tax up to a taxable income level of $100,000. It is not only between $1,000 and $30,000 where the tax is inequitable; this extends right to the top. Surely this has not been corrected by simply leaving a man on an income of $50,000, for example, at the same rate of tax and then reducing the man on only $1,000 by $5.33. However, I would like to return to the so called substantial reductions to which the Treasurer has referred. Let us take, for instance, a man with a wife and 2 children who is completely unskilled and therefore can accept work only of a labouring nature. That man will attract only the minimum wage. Therefore, if he is fortunate, he can expect at best to be paid only $40 a week or $2,080 a year. According to the statistics there are some If million taxpayers whose actual incomes do not exceed $2,000. Therefore the person I refer to would not be a rarity. His allowable deductions from his total income for a wife and 2 children plus perhaps medical and hospital contributions and such things could amount to $780. This man would finish up with a taxable income of $1,300. It is people in circumstances such as this who require relief. Yet this Government, although the Treasurer claimed that he would grant substantial reductions, will allow those people a tax relief of only $9.22 and will still require them to pay $85.79 in tax.

To pursue the scale further, we find that if the taxable income were $1,400 the relief would be $10.66, leaving an amount of $98.91 still to pay. If the taxable income were $1,500, the reduction in tax would be only $12.30, leaving $113.57 to pay. If we go to the scales below $1,300 we find that on a taxable income of $1,200 the reduction would be only $7.79. At $1,000 the relief would be $5.33 with $54.83 still to pay. So it comes down to the position where, as I said earlier, a person with a taxable income of $500 will be granted only 82c relief.

Certainly I could not accept amounts like 82c or $7.79 or $5.33 or even $10.66 as being substantial reductions. Of course, we must not forget that the Government has increased by 2.5 per cent the sales tax on a considerable number of items and household articles and, as a result, any small saving in income tax will be seriously depleted by the necessity to pay extra sales tax. As a matter of fact, many of those people on the bottom of the income scale will be in a much worse position than they are at the present time.

For instance, the taxpayer who will save 82c in income tax would be better off if he continued to pay that 82c in income tax and was not obliged to pay any additional sales tax. At the other end of the scale we find that the person with a taxable income of $16,000 - and I repeat a taxable income, not an actual income; the actual income would be nearer $18,000 - will receive the maximum relief being granted, namely, $500.20. Where the taxable income is $14,000 the reduction in income tax will be $469.45, where it is $12,000 the reduction will be $438.70; and where it is $20,000 the reduction will be $418.20. So we could certainly agree that the relief to be granted in those areas of high taxable income is substantial. But at the other end of the scale, in the low income area, I would suggest that the relief could be better described as being very meagre, and it is in those areas that we really see the unequal severity of income tax.

The Prime Minister (Mr Gorton) a short time ago, when speaking about the effect which the increases in sales tax could have on people, is reported as having said that a person after paying income tax has” a certain amount left which he can spend as he sees fit and that if he spends it on articles which carry sales tax, then that is his own decision. I was interested to bear the honourable member for Curtin (Mr Garland) echo those words, but he went even further. He suggested that the field of sales tax - the field of indirect tax - should be extended still further. Apparently this is something that the people of this country can look forward to if this Government is allowed to remain in office. That is a very generous attitude for the Prime Minister and the honourable member for Curtin to adopt. They say that a person can spend how he likes what is his own. But let us sec what some of these people will have left for themselves after paying income tax on the present scale and on the proposed scale. Let us see also what these’ so called substantial income tax reductions will mean to their spending power.

The man to whom I referred who earns $40 per week and finishes up with a taxable income of $1,300 has an amount of $38.17 a week left, after paying tax under the present scale. Do not let us forget that he has a wife and 2 children to keep. After these so called substantial reductions come into operation be will have $38.35 to spend as he sees fit, which is an extra 18c a week. If he splits that up amongst his family, including himself, each member of the family will have an extra 4£c a week, which is not enough to buy anything - not even an icecream. If the taxable income were $1,500 the reductions to be granted would give each member of the family an extra 6c a week. If the taxable income were $2,000, each member of the family would receive an extra 10£c a week. If the taxable income were $2,500, which would mean that the man was earning more than $60 a week, the proposed tax reductions would give each member of his family the colossal increased spending power of 16c a week or. to put it another way, the taxpayer could lash out and spend an extra 16c a week on each of his dependants. So if we take those in the very lowest income bracket and those who receive up to $60-odd a week, which takes in approximately 3i million taxpayers out of a total of 5 million taxpayers, the relief which they are to receive from the Government’s proposals will not mean much with regard to their purchases, whether they carry sales tax or not. The fact is that the Government’s decision to increase sales tax will gather in the amount to be granted in the proposed reductions in income tax in many cases, and as a matter of fact in some cases the amount granted by way of relief in income rax will not be sufficient to meet the increases in sales tax.

One of the most inequitable features, as i see it, in the present method of arriving at the amounts of income tax to be paid by the individual is that a taxpayer with a very large income enjoys a much greater tax reduction for permissible deductions, such as dependants, than does a taxpayer with a middle or a small income. I could never understand why the wife and child, say, of one taxpayer should attract a much higher, or, if you look at it another way. a much lower tax reduction than does the wife and child of another taxpayer. But of course they do, and will continue to do so while the permissible deduction is from income and not from the lax itself. The same thing applies, of course, to other permissible deductions, such as deductions for medical and hospital contributions or expenses. For one taxpayer a $100 hospital account can bring an income tax reduction of $50, while for another taxpayer - one on a very low income who really requires tax relief - an account of exactly the same amount may attract a reduction in income tax of only $5. The same thing applies with regard to education allowances and to every type of permissible deduction. The taxpayers on very high incomes derive a greater benefit than do those on low incomes. The Government’s proposal regarding this new tax scale will make the difference even more pronounced, as 1 will explain now.

I take, for instance, a taxpayer who has a wife and 3 children. He is allowed a reduction in his taxable income amounting to $988 - for quick reckoning and convenience I will call it $1,000. Therefore, if that taxpayer’s actual income were $3,000, his taxable income, after deducting dependents’ allowances, would be $2,080. Under the present tax rates those dependants, so far as income tax is concerned, have a value to the taxpayer of $244.97: that is, his income ta* would be reduced by that amount. Under the proposed rating the value of those dependants so far as income tax is concerned will be reduced to Si 96.08, which is a difference or a reduction of $24.39. If that same taxpayer had an actual income of $6,000, under the existing rating his dependants would have a tax value of $404.47. but under the new system their tax value will be S363.88. which is a reduction of $40.59. If his taxable income were $10,000, under the proposed rating the tax value of his dependants will be reduced by $53.50. It may be suggested that this is a correction in relation to the difference in the tax value of dependants of high and low income earners. But if we take a man who has a taxable income of $13,000 up to and including a taxable income of $16,000. the reduction in value of his dependants is $15.37 or $15.38, which is a smaller reduction than that which applies to the taxpayer whose taxable income is only $2,000.

Up to that stage there will be a reduction in tax value of dependents, but if the taxpayer had an actual income of $17,000. then his dependants, on a $1,000 allowable deduction, would have a value, so far as income tax was. concerned, of $619.10 under the existing scale but a value of $639.60 under the proposed scale, which is an increase in value of $20.50. That same increase continues up to a taxable income of $20,000. which is as far as I went. So under the present rating a $1,000 reduction in taxable income would give a taxpayer with an actual income of $2,000 a reduction in tax amounting to $162.98. while for a person with an actual income of $20,000 the reduction would be $619.10. But under the proposed rates the man who has an actual income of $2,000 will receive a tax reduction of $146.58, if his taxable deductions are $1,000, while, as I said earlier, the taxpayer whose actual income is $20,000 will receive a reduction of $639.60. This simply means that so far as permissible deductions are concerned, the taxpayer who has an actual income of $20,000 has improved his position over those people on low incomes. Each $1 of allowable deduction has increased in tax value for the taxpayer who has actual income of $20,000, while for those on lower incomes it has reduced in value. The whole method of allowing permissible amounts to be deducted from actual income rather than fixing an amount to be deducted from the tax itself favours those on large incomes and acts against those in the low income group. This is clearly demonstrable with regard to the $1,200 which can be claimed on a life “assurance policy. Now, the effect of that deduction is that if a man with an actual income of $3,000 took out the permissible maximum assurance of $1,200 - it is not likely that he would because he could not afford to do so; but if he did - it would mean that, in effect, he actually pays $944 for the insurance. But if a man with an actual income of $20,000 took out that insurance, his taxation reduction would mean that, in effect, his insurance cost him only $353 or thereabouts. In other words? the man on - the high income obtains the same amount of insurance cover but at a cost which is approximately $590 less per year than what the man on the low income has to pay. I cannot see anything equitable about that state of affairs - that’s for sure! I say in conclusion that if this Bill or this proposal is any indication of the attitude of the Government, it shows very little if any concern for those people on low incomes and it is quite obvious that a great deal more work is required if the Government really wishes to bring about an equitable situation.

Mr DEPUTY SPEAKER (Mr Lucock:

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

Mr KEVIN CAIRNS (Lilley) (8.42- The Opposition has moved an amendment to this Bill. The words in the amendment are extremely significant. The Opposition proposes that: the Bill be withdrawn and redrafted because whilst it reduces rates of taxation it does so in a regressive manner.

A Budget has been passed by the House. It is a Budget which has a great deal of significance for the country in a broad way and which has a great deal of significance for a lot of individuals in the country. There are some individuals who are advantaged financially as a result of this Budget. There are some who are not. But let it be perfectly clear that the principal duty of a budget is to assure a high rate of economic growth in a country. If it does not do that within the constraints that a budget has, it is a failure. That is the first duty of a budget. Bearing all of that in mind and bearing in mind what the economic growth is, the Opposition suggests that this cornerstone of the Budget should be withdrawn and re-drafted.

Having considered the significance of that strategy of the Opposition, we look now at the other words in the amendment. The Opposition proposes that the Bill should be withdrawn and re-drafted:

  1. . because whilst it reduces rates of taxation it does so in a regressive manner.

Now, the Opposition has not understood what ‘regressive’ means. What does ‘regressive’ mean? A regressive tax is a tax which falls unequally on those with high or with low resources at their command. Some taxes are regressive because in fact they fall more heavily on those with lower income or less resources than on those with higher income or more resources. Some indirect taxes of their nature are in this way. But this is an income tax measure. This measure does not fall more heavily on those with less income than on those wilh more income.

So, what does ‘regressive’ mean in the words that the Opposition has chosen? Does it mean, perhaps, that this income tax measure is regressive with respect to economic growth? The Opposition has never made that case, ft has not mentioned the word-

Mr Foster:

– What is the economic growth of the bloke on the’ minimum wage, mate? Where does that get him?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– The honourable member for Sturt has illustrated over many years the principles of a minimum rate of growth, and he illustrates them tonight in his own stature. What does ‘regressive’ mean? With respect to welfare, is there less welfare distributed as a result of this Budget or as a result of this income tax measure than there was hitherto? That case has not been touched. Perhaps the Opposition meant rather to move an amendment to the effect that the income taxation measures are not as progressive as it would like them to be. The difference between the 2 is a world. But it is a difference which, I would suggest, the honourable member for Melbourne Ports (Mr Crean) did not touch upon in his contribution this afternoon. It is a difference which the honourable member for Kalgoorlie (Mr Collard) has not touched upon. It is a difference which, I would hope, the honourable member for Cunningham (Mr Connor) may touch upon when he follows me in this debate.

We must look at the requirements of an income tax system. After all, this is what we are dealing with. What are the requirements of an income tax system? We can go to the Canadian Royal Commission on taxation of 4 years ago. The Canadian Royal Commission on taxation made it perfectly clear that the first objective of the tax system was to maximise the growth of output. Unless the growth of output is maximised, a government has neither income taxation concessions to confer nor welfare to confer. But the Opposition has ignored this principle. Countries with low rates of growth have no welfare to confer. Do not members of the Opposition know that the problem with the British taxation system after the war was that insufficient incentive to the people subject to that taxation system was allowed and while the British Government devoted itself to welfare in the years immediately after the Second World War, British growth was retarded right throughout the 1950s because that principle was forgotten. That can be well substantiated, but the Opposition has ignored this principle.

It simply means that, in a sense, one has to be concerned with the vertical redistribution of taxation as between income groups. It means that different income groups are to make their appropriate contribution to a country’s progress and to a country’s economic growth. The vertical principles of taxation, as they apply to the income tax measures now before the House, are fair. They are adequate. More measure is made in order to draw distinctions between people at different income levels in relation to their contributions to Australian welfare than occurs in almost any other country in the world. It is no use talking about welfare on its own. We talk about nothing if we talk about welfare on its own. For example, we have the Australian Labor Party platform on taxation. It has one. It is an extremely minute document as well I would expect it to be. In the Australian Labor Party platform on tax, the Australian Labor Party never mentions these most basic principles that must animate any taxation system.- I refer to the Platform, Constitution and

Rules of the Australian Labor Party. I turn to page 11, section V headed ‘Economic Planning’. Reference is made in paragraph 3 to ‘The pattern of taxation and deductions to be reviewed”. The Labor Party then mentions 6 items. Nowhere does it mention the most important and most central item of any taxation system.

Welfare cannot be administered in a vacuum. But the Opposition would seek to do so. Need I remind Opposition members, after all, that other Labor governments - the British Labor Government and the Australian Opposition when it was in power - administered taxation but they did not administer it so as to assume maximum growth. They administered it on the principle that all that can be obtained from the people is taken, incentive is reduced and something is re-distributed on the claw back principle. But there are those who are subject to these matters. It does not do a country any good for itself to be subject to them. While I am dealing with the different rates of taxation let me refer for a moment to the contribution made by the honourable member for Melbourne Ports. I was intrigued that, having regard to incentive, he paid such attention to the fact that only 71,000 taxpayers in this country had an actual income of $10,000 or more. One could hear the regret creep into his voice, the thought that maybe no concessions ought to have been given to these people or that the concessions ought to have been far less than they were. There we see once again the disincentive that so animates the Opposition when it is concerned with matters of taxation.

Honourable members opposite ought to know that unless there are some inequalities in income or in resources a nation just does not go ahead. No country in the world which has sought to equalise resources and income completely as between people, has progressed. It is due to a basic misunderstanding of social justice that the Opposition would seek to do this. There is a great difference between social justice, as it is administered to people, and forced equalisation. It just does not operate’ in the facts of life and in the real world. Let us go a little further. What are the great disincentive effects that apply to taxation? Let us look again at the Canadian Royal Commission on Taxation.

The Commission makes it perfectly clear that to have too high a rate of taxation imposed on those on incomes above the average applies a disincentive effect that disadvantages all. It refers to this time and time again throughout its reports. The Commission said: we are convinced that high marginal personal rates of tax do have a negative effect on labour, managerial and professional effort.

This applies to the country which has so often been held up by the Opposition as the exemplar for Australia to follow. A strange silence creeps over the Opposition. Let us go a little further. What are the disincentive effects that apply to taxation? The honourable member for Melbourne Ports attempted to give example to them when he quoted the case of a worker in 1954-55 on an income of $1,700 who would be paying a rate of marginal taxation of 17.6 per cent. In 1968-69, presuming his money income had doubled to $3,400, he would be paying a marginal rate of income tax of 29.5 per cent. Somehow that was taken to illustrate the principle that taxation has got out of hand.

The honourable member knows as well as I do that it is not quite as simple as that. Over those years the increase in personal income taxation that has accrued to the Commonwealth Government has come from two or three sources. This was well set out by Professor Percy Harris, formerly of the University of Queensland and now of the University of Townsville. The first source is the increased number of taxpayers. The second is the rise in money income. The third is the increased real severity of taxation. They are the 3 ingredients of the increased taxation that comes to the Commonwealth Government. Therefore it simply means that if taxation is to be altered or reduced, if some regard is to be had for the severity of taxation, the measures can only be applied at the third level where there is a measure of the real severity of taxation.

It is interesting to note that Professor Harris, carrying the figures up to 1965-66 - I have carried them on a couple of years later - demonstrates that only 29 per cent to 30 per cent of the increase in taxation accruing to the Government comes from an increase in the real severity of taxation. His calculations are extremely complicated, but they do have some merit.

It simply means that if welfare is to be administered with respect to taxation, if taxation is to be reduced - and this has been the welfare programme of the Government - one can apply oneself only to the 29 or 30 per cent of the increase to which I have referred. This is what the Government has done.

Mr Crean:

– You ought to look where it falls, and. that is what you have not done.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– By making 3 different grades of taxation an attempt has been made to alter the areas where the taxation falls. Honourable members opposite might argue that more steps, should have been introduced in the taxation scale. That could well be. We are on a never ending scale here. It is like unemployment. You can never introduce sufficient steps to apply in vertical redistribution. You can never have unemployment sufficiently low to satisfy. Let it also be perfectly clear that there are more steps with respect to different income levels in the Australian taxation system than apply in almost any other country.

Mr Crean:

– There are far too many.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– The more steps there are the more differences you create between people of different income groups; the more vertical equity is observed. The Opposition has been making a case tonight that sufficient account has not been taken of the differences between income groups. It says there have been overall reductions in taxation applying over too wide a range. Now the honourable member for Melbourne Ports seems to contradict the basis on which so many of his confreres have been arguing tonight. Let me go a little further with respect to the taxation system in Australia. Is it unfair? We ask ourselves the question: What proportion of the total taxation and at what average rates of taxation do the majority of taxpayers operate, compared with the income taxation system, say, in the United States, the United Kingdom or any other country? Insofar as one can glean some data from the United Nations bulletins - they go up to only the year 1967, which I think corresponds to our financial year 1967-68 - it is perfectly clear that Australia has a fairer system than, for example, the United States.

Let us apply our thoughts to nearly 60 per cent of those who pay taxation. They contribute the major bulk of the taxation. The average rate of taxation applying to those people a couple of years ago has changed in a rather progressive manner since then, but this comparison would be appropriate. In Australia the tax for that group was at a marginal rate ranging from 12 per cent to 27 per cent and the average rate was from 5 per cent to 15 per cent. In the United States the marginal rates for the bulk of taxpayers contributing the bulk of United States taxation were not 12 per cent to 27 per cent, as in Australia, but were rather 25 per cent to 37 per cent. Their average rates were not 5 per cent to 15 per cent as in this country. Rather they were 18 per cent to 24 per cent. That gives an idea of the sources that are contributing the major bulk of the taxation which accrues to the Commonwealth Government. That is the way in which one has to judge whether a taxation system is fair or whether it is appropriate.

I have tried to indicate tonight what are some of the basic principles which have to animate any taxation system. The major one is still that it must ensure adequate economic growth. The second major principle that has to apply once that has been satisfied is that there should be appropriate redistribution. There could always be more redistribution, but the redistribution within this country is not bad. Even if one examines the state of poverty in this country, which is a measure of the redistribution of resources, one finds that poverty here is still one of the lowest levels in the world. For example, in the United Kingdom under the Labor Government it was found that between I I per cent and 14 per cent of households were at poverty level and it increased during the period that the Labor Government - the Democratic Socialists - had power. In the United States, where admittedly there is a great negro problem with respect to those in proverty, between 18 per cent and 19 per cent of households are living at poverty level. In Australia, even on the worst estimates, it is between 7 per cent and 8 per cent, lt is still too high but it is .not a bad effort. People should not knock this country all the time. Seven per cent to 8 per cent is too high but it is still one of the best levels of poverty in any part of the world. 1 suggest honourable members watch the level of poverty among different groups increase

In South Australia while our friends have power in that State. The last time they were in power they were responsible for increasing the unemployment rate in South Australia by more than it had been increased in 2 decades.

Mr DEPUTY SPEAKER (Mr Cope)Order! I ask the honourable gentleman to address the Chair.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I was under some provocation which on this occasion was understandable. We look .at the taxation system for what it is supposed to do, not what it cannot do. The Opposition has only one principle - it socks .everybody at high and low. income levels, it tries to claw back from those people, distribute it elsewhere and in fact commit the errors of the British Labour Government when it was in power for many years. What makes me so disturbed when I hear the Opposition speak of these things is that it does not seem to have learned anything from the British Chancellors of the Exchequer in the years 1946 to 1949 and in latter years. I would suggest with respect to the Opposition’s platform that the Opposition should write some basic principles into the taxation system which it says it would restructure. If it did write some basic principles into the system and followed them it would find they would lead to very different results and very different judgments from those that have been proposed in this House tonight by the shadow Treasurer and the honourable member for Kalgoorlie. We have to wait to hear what is proposed by the honourable member for Cunningham.

Mr DEPUTY SPEAKER:

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

Mr CONNOR:
Cunningham

– The honourable member for Lilley (Mr Kevin Cairns) begs the question when he asks what is a regressive tax. A regressive tax in the usual glossary of economic terms is simply one whose incidence does not bear any relationship to ability to pay. If he wants an example of it I think I can convince him on that point at least, incorrigible though he may be. The Government has brought about the growing burden of income tax by not increasing tax rates but by the simple expedient of maintaining a tax schedule constant in the face of con tinually higher money incomes and by generally refusing to adjust allowable deductions in line with those increased incomes. This Government specialises in indirect taxation. The classic illustration would be the fact that it collects some $ 1,600m a year by way of sales tax and excise duty on beer, petrol, cigarettes and tobacco and at the same time in terms of company taxation it collects only $l,100m per year. In other words the individual consumer - the man in the street - pays 50 per cent more than all the major companies of Australia put together. That is another form of regressive taxation.

The effects of the Government’s inaction have been quite astonishing.’ The current tax schedule has remained unchanged since 1954-55 except for the addition of a further 2.5 per cent levy and some increase of the amount that can be earned before incurring income tax. Since that time, however, money incomes have been substantially increased as is shown by the fact that the 1968-69 average weekly earnings have risen by 100 per cent and the average wage rate by 70 per cent. Inevitably, therefore, wage and salary earners have moved continually into higher tax brackets with the result that their income tax burden has been increasingly severe; that is, the percentage of their income which has been taken in tax has been continually getting higher which means that more and more of their working time has been spent labouring for the Commonwealth. At the present level of average weekly earnings the tax burden has increased to the extent that whereas in 1954-55 income tax amounted to 5 weeks pay for the average worker it has now increased to 9.2 weeks. As a result of the current Budget, as I propose to show, it will be a week in addition to that now taking it over the 10 weeks mark per year. However, the increase in the tax burden has been uniform for all taxpayers. Deplorably the increase in the tax burden has not been inversely correlated to income so. that the lowest income earners have their tax obligations increased at the greatest rate and the highest income earners have had the lowest such increase. For example, in the period 1954-55 to 1968-69, during which average weekly earnings doubled, a man on $1,500 net taxable income in 1954-55 and whose income kept pace with average weekly earnings would have had his tax increased by 277 per cent; That is his income went up 100 per cent and his tax up 277 per cent - 2i times the rate of Increase in his salary. On a net taxable income of $6,000 per year which increased to $12,000 over the same period the tax increase would be 206 per cent while the man on $16,000 whose income increased to $32,000 would have seen his tax increase by a comparatively low 153 per cent. In other words, for the lowest tax group there was an increase in taxation over the 14 year period of 277 per cent; for the tall poppy only 153 per cent.

This Government, of course, has a vested fiscal interest in inflation. There was quite a neat little footnote in statement 4 attached to the Budget Speech which stated that in 1969-70 the Government’s domestic transactions appeared - a masterpiece of understatement - to have subtracted about $500m from liquidity. In his Budget Speech the Treasurer (Mr Bury) said:

Willim this overall result there would on present figuring be surplus of domestic receipts over domestic expenditure of the order of $550m which would be about $50m greater than the actual domestic surplus in 1969-70.

Quite an achievement. We hear the argument raised from time to time: Where is the money coming from to make concessions? This is where the money can come from and this is where some real relief can be given to the average wage and salary earner especially those in the net taxable income group below $5,000 per year. How much, I might reasonably ask, is left of the 10 per cent reduction that the Government proposes to give in view of anticipatory price rises’ which have been current since the Budget was introduced and prior to any relief that will operate, I assume from 1st October. At the same time the Government can very conveniently make its sales tax retrospective in its incidence to 18th August last. lt is truly said that a married man gives hostages to fortune. Today the average budget in the form that is presented is nothing more than an annual swindle sheet. The Treasurer maintains a straight face when he says there is actually a surplus of $4m. In point of fact there has been a surplus, as has already been admitted, of $550m, plus the $4m that has been stated as the official figure. Let us have a look at the real impact of this celebrated 10 per cent reduction. Let us take the year 1968-69 when the total pay-as-you-earn tax and other tax on men with annual incomes - businessmen, farmers and the like - was $2,379m. In that year the total income tax received was $2,379m. For the financial year 1969-70 there was an increase of $478m. The Government is giving back $280m of that amount. It still has up its sleeve nearly $200m of the increase for the last year. To compound the offence we find that for the current year the Government intends to take $3,035m by way of taxation from those people receiving an annual income or those who pay as they earn. This is an increase of a further $178m. With one hand the Government gives but with the other hand it takes back even more.

But even worse than that we have the position of indirect taxation, the increase in sales tax and all the other increases which were adequately dealt with by honourable members who have already spoken in this debate. In point of fact, as is set out in the speech made by the Leader of the Opposition (Mr Whitlam) on the Budget, no less than 92 per cent of all taxpayers are losers. The document which the Leader of the Opposition had incorporated in Hansard shows that as a result of indirect taxation no person in receipt of a net taxable income of less than $5,000 per year will in any way benefit from this Budget. Further, 80 per cent of the 3i million children in Australia who are supported by the wage and salary earners are losers because they are maintained by the group with net taxable incomes of less than $5,000 per year. And what is even worse is that this Government in its paltriness has not increased child endowment for the first child since 1949. It is still 50c a week. It is also still $1 per week for the second child, as it was in 1949.

In other matters, such as allowances for fares or the cost involved in the running of a motor car from a man’s place of residence to his place of employment, this Government has persistently over the years refused to give the slightest taxation concession. There are 2 ways of looking at these matters. It is not merely a matter of what the man gets in the pay packet. It is a matter of what it will, in effect, buy. We have today as we have never had before rampant inflation soaring to an astronomical level. But this Government is not prepared to do anything about this. As to the fairness of the incidence of taxation let us look at the position of a man with a wife and 2 children and let us take an average net taxable income of $2,000 per year. The nominal concessional deduction for that man and his family is $676. Actually with an income tax rate of 21c in the $1 he has an annual reduction of $146 in the income tax which he must pay. In the case of a man with a wife and 2 children who is in receipt of $3,000 per year the concession is worth $329 per annum. In other words, the more a person earns and the less he needs the more benefit he will get from this Government.

What we really need is a reverse tapered concessional deduction for a man with a wife and family. This Government is not prepared to do this. This is one of the disincentives in a country which must increasingly turn to its export income from secondary industry as primary industry declines. No honourable member will gainsay me on that tonight. We need to get the maximum production. But today the average worker is convinced that to get further wage increases without some protection by way of stabilising prices, is an exercise in futility. We have the spectacle where even a major retail chain store such as Woolworths Ltd is not prepared to accept goods because of the rorts - a good Australian term - being worked in respect to price fixation. I can go back to the remarks of the Minister for Labour and National Service (Mr Snedden) when he was recently addressing a gathering of people. Even be, of all people, had to rebuke manufacturers for the exorbitant price increases they were imposing and which bad no relationship to increased costs. In Tasmania last week there was a rebuke delivered by the Attorney-General (Mr Hughes) in respect of the Trade Practices Act. What is this Government prepared to do? Precisely nothing. Even before the pensioners received their 50c increase which was operative from 1st October they, had already lost it. It has again been taken from them in price rises.

Whenever there is a further concession suggested by way of income tax deduction, whenever there is a suggestion of some increase in social services for those who need them so desperately, the Government asks: ‘Where is the money to come from?’ Let us have a look at the operations of this Government and what it is doing. Let us look at the Loan Consolidation and Investment Reserve which was set up in 1955 by an Act of Parliament with a view to repurchasing or redeeming for cancellation securities which represent portion of public debt to the Commonwealth. Moneys to the credit of the reserve may be invested in securities of, or guaranteed by, the Commonwealth or on deposit at any bank. Last year the Commonwealth actually tucked away $61 8m in that reserve. 1 draw the attention of honourable members to an article by no less a person than a former New South Wales Auditor-General, Mr W. J. Campbell, published in the ‘Bulletin’ in 1967. He said that today there is a pointed contrast in revenue and capital financing practice between the Commonwealth and the States.

While I do not want to digress into the financial relationship between the 2 tiers of government I want to make this point: There has been socked away in cash payments for the Snowy Mountains Authority a little nest egg of over $800m. There is an amount, of $400tn in the National Welfare Fund. Cash was paid out of the Consolidated Revenue Fund. There is an amount still due to the Commonwealth of $904m from war service homes loans advances. In fact the position has been reached where Mr Campbell ventures to say that the Commonwealth, in all probability, is holding most of its own bonds. What a miraculous result. What fantastic financing. Where is the money to come from? lt is being deliberately extracted from the taxpayers, loaned out at interest rates to the States and in the process the Government keeps a straight face. I. wonder what an auditor would say. i wonder what the Security Exchange Commission in the United States of America would say to practices of that nature in respect to US corporations. Some of the people involved would be behind bars.

Sir, is this to continue? Are the people ; the ordinary working people ; to be denied their rights because there is no form of price control for the benefit of the consumer today although there is rampant negative price control in Australia? It consists of price control by monopolies. This country is hag-ridden by monopolies. It is hag-ridden by 200 companies. Four of the major companies virtually control the economy of this country and they decide the prices. These companies can put up the price of steel or can fix the price on anything they wish. There is nothing that this Government can do about it. The Government introduced the Trade Practices Act which also is an exercise in futility and which has been adopted by only one State. Unless we can get price control associated with wage fixation this country will continue to go along, the steep and narrow path to destruction by utter and unrestrained inflation.

Mr FOSTER:
Sturt

– It was not my intention to speak in this debate but I must make the observation for those who perhaps have not realised it that there is not one single Liberal Party member; outside of the Minister at the table, in the House tonight. I am sorry, the Minister for Repatriation (Mr Holten) who is at the table is a member of the Country Party but the Minister for Immigration (Mr Lynch) was previously at the table and I thought he was in the House. I would not want to be accused of misrepresenting the Minister who is now at the table. The honourable member for Angas (Mr Giles), who is now trying to interject, can sit down. I have listened to some stupid comments from honourable members who should be better qualified than I am.

Mr Giles:

– They are.

Mr FOSTER:

– You can put your money where your mouth is frequently in respect of your electorate which is suffering from increased taxation. The fact is that members from the Government side continually attempt to criticise Opposition members for their contributions to this debate which, I might mention, the Opposition, in the main, has had to carry throughout this day and yesterday when we were discussing other financial measures. There have been occasions when not one member from the Government side has risen to speak in support of the Bills - mark you, not one member. And the honourable member for Angas fell into that category until we came to consider the wine excise.

Mr Giles:

Mr Deputy Speaker, I rise on a point of order. My point is that this is a deliberate misrepresentation of the truth. The honourable members for Lilley and Curtin have both been on their feet.

Mr DEPUTY SPEAKER (Mr Cope)Order! There is no point of order. If the honourable member claims that there has been misrepresentation he may say so after the honourable member for Sturt has concluded his speech.

Mr FOSTER:

– I repeat, the honourable member for Angas never rose to his feet until the wine tax measure was being discussed. He has seen fit to wander through his electorate during the last few weeks attempting to hoodwink his constituents by saying that he would take some decisive action on their behalf regarding the implementation of the wine tax. It was only the contribution of my good friend and colleague, the honourable member for Kingston (Dr Gun) which dragged him to his feet in the debate yesterday.

Mr Giles:

– A point of order, Mr Deputy Speaker. My point of order is that I was on my feet in that debate before the honourable member for Kingston. I would ask that the honourable member for Sturt be accurate for a change in his remarks.

Mr DEPUTY SPEAKER:

-Order! There is no point of order.

Mr FOSTER:

– The honourable member is pointing. Tonight we have heard a deal of mention about economic growth. Where is the Government’s policy on economic growth which is going to benefit those vast numbers of people in the community in the various States and Territories who enjoy no more than the base rate? Where is the Government’s taxation relief to those people with families? Did it increase child endowment? Did it, in looking at the overall situation, decide, no doubt after rejecting the pleas of the Minister for Social Services (Mr Wentworth) that the Government should do more than increase pensions by 50c, to embark on a programme that will do nothing to relieve the burden of the lower income earner? Did it decide this in the light of what is happening today with applications for wage increases? The Government has a system of taxation which derives taxation from age pensioners. This evening we heard the hypocrisy of the honourable member for

Lilley (Mr Kevin Cairns) when, in speaking to a taxation measure, he had the hide and temerity to say that to have 7 per cent or 8 per cent of Australians below the poverty line should be accepted, even though it involves 1 million people. It is an utter and absolute disgrace that any member of this House should condone our economic structure and talk of economic growth while there are 1 million people living in poverty. In speaking to a taxation measure and trying to condone poverty in Australia he tried to draw a comparison between the United States of America and Australia. He said that in America it is the less fortunates who have to put up. with such a policy. He went so low, in my opinion, as to mention the Negro population in the United States.

Mr Lynch:

– He was not justifying any degree of poverty.

Mr FOSTER:

– The Minister interjects, but I would say definitely that the remarks of the honourable member for Lilley - and the Minister can read them in Hansard tomorrow - were clear. His very words, if I may quote them, were: ‘That is not a baa average’. It is an indictment of this Government that 1 million people in Australia live in poverty. For a member of the Government to say that that is not a bad average is an indictment of that honourable member and, because of the esteem in which he is held by the Government, it is an indictment of the Government. For the honourable member for Lilley wages is a dirty word and profits, of course, is the golden, magic word. This fetches me to the question of what the Government has done about tax evasion in Australia, lt has paid lip service to it over the years, but what has it done about tax evasion? Where are the possibilities for wage and salary earners evading taxation? The wage earner has to rely on his memory in filling out his income tax form in the hope of getting some concessional allowance for his children of educational age, but there is a battery of clerks, computers and God knows what in the Taxation Branch trying to whittle him down for every lc he may have claimed in excess of what he is allowed to claim. However, this is not so with big business. Big business can evade taxation by taking other companies’ losses. This Government does nothing about that whatever.

I notice that the honourable member for Lilley has returned to the chamber and is in earnest conversation with me of his colleagues. This evening, when referring to some rise in unemployment figures in South Australia, because there is a different government in power there to what he thinks should be in power, he had the bide and temerity - in fact, I should say. and be must accept this fact unparliamentary though it may be, that perhaps he did not lie but he most certainly stretched the meaning of the word ambiguity’ - to defend his Government’s actions earlier in increasing taxation on motor vehicle sales tax from 25 per cent to 33 per cent when it put the motor industry in South Australia on the breadline. The Government has not been game enough to impose such a Steep increase on taxation which affects the motor vehicle industry and the general manufacturing area since then. However, it is bail enough that it has increased it by 2i per cent in the present Budget. Did not the honourable member for Lilley, his Government, his colleagues, his cohorts, call them what we will, realise that an increase such as that which they imposed on the earlier occasion on the manufacturing industry in South Australia was going to have the repercussions that it did have? Of course the imposition had repercussions and because today in South Australia there is a government of a different political climate to the Commonwealth Government, the Government is up to its old tricks. However, it was not game enough to attack that industry to such aa extent as it did before.

Let us consider what can happen to the wage and salary earners and to those who are more privileged because of this Government’s actions. Has the Government ever given any consideration to Iiic shift worker who works in the automobile industry and who perhaps resides in an area where there is no public transport available and who has to use his own vehicle? This situation applies to a lot of newcomers to Australia who have been brought here to work in the automobile industry. Has the Government considered allowing such people a taxation concession for travelling similar to that which i.s allowed to the upper strata - to the boards of directors and the tall poppies who sit in big buildings in Melbourne? Of course they are allowed a taxation deduction for the car that is supplied by the company and which is sometimes chauffeur driven. But for the worker at the lower end of the line the Government does nothing, and does noi intend to do anything.

The honourable member for Lilley has the hide to stand up here and talk about economic growth. I suggest that if he keeps talking like that, the halo that he thinks he has above his head may surround his neck. His values are completely astray and false. He says that the Government, by making certain grants to the States, is playing a magnificent role. Who does he think he is kidding? He is not kidding me, and I am not an economist. In some public departments in South Australia - and no doubt this is the same in every other State in the Commonwealth - for every $5m loaned by the Commonwealth Government it gets back almost an equivalent amount in interest charges. Is that right? So whom does the honourable member think he is fooling? I would like to quote from a publication that I have here. It states:

In recent years there has been considerable trafficking in company losses. This has had the effect of enabling taxpayers to reduce their tax liability by transferring profitable businesses to companies which they have taken over with accumulated losses. Even the shareholding restriction on private companies is not effective, because the original shareholders in such companies can be allowed to retain shares with 25 per cent of the voting power after the takeover, or they can be required to give an option to the acquiring shareholders to enable the latter to purchase the shares with the 25 per cent of voting power within 7 years.

No doubt honourable members on the Government side have seen this document before. I knew of its existence. Within if are quoted ways and means for the upper strata to evade thousands of millions of dollars in taxation each year. But someone in the lower income bracket who mis-states his income or small business people who dcr not pay provisional taxation because of unforeseen circumstances that may arise in business from time to time are really given the axe. What right of appeal do they have? They have some rights of appeal within the structure of the Taxation Branch. I have written to the Taxation Branch in Adelaide on behalf of some people merely seeking an extension of time to pay the moneys that they owed to it. I made a plea in the case of one small businessman who as a result pf an accident was completely and totally blinded. Was any humanitarian treatment accorded to this individual? Of course not.

Mr Robinson:

– Speak up. We cannot hear you.

Mr FOSTER:

– A member of the Country Party says that I ought to speak up because members of the Country Party cannot hear me. They did not have the courage yesterday to go out and let some of their constituents hear them in front of Parliament House. Members of the Country Party have been standing up in this chamber from time to time since I have been here bellowing, bleating, bawling, moaning, groaning and adopting all sorts of attitudes in an endeavour to have the farmer let off the hook in all fields of taxation, to have his telephone connected to a more modern type of exchange and all sorts of other things.

I agree with the honourable member who preceded me in this debate tonight. This Government is not even prepared to glance at the matter of price control any more than it is prepared to look at profit control. During the Government’s term of office the number of companies that control the welfare and the destiny of millions of people has fallen remarkably. The Minister for Immigration, who is sitting at the table, may be making, a rough note that the small businesses make up the number. But I am speaking in terms of big employers. What are they paying towards the development of this country by way of taxation compared with what the smaller people pay? This Government, by means of taxation and by manipulating certain funds, is denying benefits to aged people who have paid a tax all their working lives. They will not receive one penny from the Government unless they are almost destitute. Honourable members opposite can talk about the Government’s means test as much as they like. They can moan and groan. In comparison with what the company director has at his fingertips on his retirement and the perks and the lurks he has, the battler has become almost destitute. Honourable members opposite should turn their minds to that matter instead of making stupid comparisons, as the honourable member for

Lilley did tonight, between 1949 and 1970 and complaining about a previous Labor Government. Let me say, almost in conclusion, that during the term of office of the last Labor Government, when we were fighting a war, we did not have to go into the area of overseas finance to the extent that this Government has in peace time. Honourable members opposite will not deny that, nor can they do so. They ought not to be making comparisons between 1949 and 1970, because there can be no comparison, as I have endeavoured to point out.

Motion (by Mr Giles) put:

That the question be now put.

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

AYES: 50

NOES: 43

Majority . . 7

AYES

NOES

Question so resolved in the affirmative.

Question put:

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

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

AYES: 50

NOES: 44

Majority . . . . 6

In division.

AYES

NOES

Mr DEPUTY SPEAKER (Mr Lucock)No.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Lynch) proposed:

That the Bill be now read a third time.

Mr FOSTER:
Sturt

- Mr Deputy Speaker, what stage have we reached? I want to speak onthe third reading of this Bill. Could you inform me where we stand at the moment?

Mr DEPUTY SPEAKER:

– Order! The question before the House is that the Bill be read a third time.

Mr FOSTER:

– In that case I would like to take the opportunity of regaining the 3 minutes that I was so undemocratically deprived of by the honourable member for Angas (Mr Giles). What I wanted to say whenI was interrupted by the honourable member was this: While the Government will continue to say that it has done the right thing by the community in the field of taxation, let the Government confer the same benefit–

Mr DEPUTY SPEAKER:

– Order! The honourable member cannot make a second reading speech on the third reading of a Bill.

Mr FOSTER:

– I am not doing so. I would not even attempt to do so, Sir.

Mr DEPUTY SPEAKER:

– The honourable member for Sturt said that he was using 3 minutes of the time he was deprived of during the second reading debate on this Bill. This means that the honourable member is continuing the remarks he was making during the second reading debate.

Mr FOSTER:

- Mr Deputy Speaker, am I to take it that I am now being denied my right for the second time in 20 minutes?

Mr DEPUTY SPEAKER:

– The honourable member for Sturt is not being denied any rights at all. When speaking to the third reading of this Bill the honourable member cannot make a second reading speech.

Mr FOSTER:

– I am not doing so.

Mr DEPUTY SPEAKER:

– Order! If the honourable member for Sturt wants to speak to the third reading of this Bill he must speak only on subject matters not covered during the second reading debate.

Mr FOSTER:

– In those circumstances I ask that the Bill be deferred.

Question resolved in the affirmative.

Bill read a third time.

page 2138

INCOME TAX (PARTNERSHIPS AND TRUSTS) BILL 1970

Second Reading

Consideration resumed from 18 September (vide page 1381), on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time. .

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2138

LIGHTHOUSES BILL 1970

Bill received from the Senate, and read a first time.

page 2138

WIRELESS TELEGRAPHY REGULATIONS BILL 1970

Second Reading

Debate resumed from 25 September (vide page 1740), on motion by Mr Hulme:

That the Bill be now read a second time.

Mr STEWART:
Lang

– This Bill provides for an increase in licence fees for radio communications stations. The Bill is entitled ‘A Bill for an Act to amend certain regulations under the Wireless Telegraphy Act 1905-1967’. The licence fees for these telecommunications stations have not been increased since 1924 when they were fixed at $2. Radio communications stations are graded into 5 categories - land, mobile, fixed, amateur and receiving. The licence fees for land and fixed stations are to be increased from $2 to $10; licence fees for mobile, amateur and receiving stations are to be increased from $2 to $6; but the $2 fee will continue to apply to stations operating as outpost services. The category of outpost services includes services associated With ‘Schools of the Air’, the Flying Doctor, aerial ambulance and those services in which a radio is the only means of public communication. The $2 fee will also continue to apply to mission stations in the Territory of Papua and New Guinea as well as to ambulance services and rural fire brigades.

It appears to me that careful consideration has been given to the breakdown of stations into the varying grades of fees. The Opposition acknowledges the strong arguments for the increases in the licence fees for these radio communications stations. As I have said, the fee of $2 has been in operation since 1924. Until 1950 only 5,115 stations were in operation and the costs of technical supervision and administration Were not a burden to the Government. But since 1950 the number of stations has increased to 136,000 and a substantial number of extra stations is being added each year. The present annual deficit from this section to the PostmasterGeneral’s Department is $800,000. This is too much for the Department to carry. The new range of fees will return approximately $620,000 in 1970-71. This will still leave a fairly large deficit of $180,000.

The Opposition offers no objection to the increases. I have received no criticism from any member of the public or any member of an organisation which conducts one of these radio communication stations. No member of the Opposition has mentioned to me that he has received any criticism from any member of the public. The Opposition believes that the increases are fair and just. I conclude by saying that it is the first time that the Government has shown such commendable patience before increasing a tax or charge. The Opposition does not oppose the Bill.

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 Hulme) read a third time.

page 2139

AGRICULTURAL TRACTORS BOUNTY BILL 1970

Second Reading

Debate resumed from 25 September (vide page 1741), on motion fey Mr Chipp:

That the Bill be now read a second time.

Dr PATTERSON:
Dawson

– The Bill before the House is designed to provide additional assistance to the tractor industry in Australia, particularly to the two main manufacturers of tractors, Chamberlain Industries Pty Ltd and International Harvester Co. The objective of the bounty is to provide financial assistance on sales made of bountiable tractors on and from 1st July 1970. The additional assistance will be given only in respect of tractors manufactured at premises registered under the Australian Tractors Bounty Act of 1966. This legislation has been introduced as an emergency measure to meet what must be regarded as a crisis in Chamberlain Industries, in particular, and in International Harvester Co. of Victoria.

This system of bounty payments has been in operation, 1 think from memory, since 1922. It is in tine with the classical tariff or bounty arguments which are advanced, that assistance should be given to Australian industries to help them to become established and viable, particularly in the face of dumping or cut-throat competition from other countries. In 1966 the Tariff Board published a report on agricultural tractors in Australia. In that tariff investigation various arguments were advanced for and against the giving of assistance by way of tariff or by way of bounty to assist the Australian industry. The same arguments apply today as applied in 1966.

At existing prices and without assistance the local tractor industry would be unable to compete effectively against exports made by the large volume producers, particularly in the United Kingdom and the United States of America. It is also argued that there is in Australia - and this must be recognised - a potential for the saving of overseas exchange if the local tractor industry is expanded. It also must be accepted - and this of course is behind the Government’s reasoning in providing this additional bounty - that Australian manufacturers are at a cost disadvantage in respect of labour, materials, and other production costs because of the comparatively small number of tractor plants in Australia. It must be quite clear that the same principles regarding cost of production criteria apply to the agricultural machinery industry as apply to, say, the motor car industry. Countries producing under mass production techniques have a decided cost advantage over smaller countries like Australia, particularly where there is fragmentation of factories.

A further point is that decentralisation of the Australian tractor industry justifies special consideration, and in this respect, Chamberlain Industries, which is located in Western Australia, is faced with serious transport costs in marketing its products in the eastern States of Australia; Australia being a relatively large country. Another argument is that imported tractors are at present supplying most of the Australian requirements and that increased tariffs would therefore impose a considerable cost burden on using industries, and particularly on primary producers.

One of the arguments used here is: Why not put a tariff on imported tractors? Why provide a bounty? Of course, this can be explained by referring to the economic principles involved in a tariff as opposed to a bounty. It should be quite clear that a tariff on imported tractors would only cause an increase in the price of tractors in Australia, whereas a bounty, which is more appropriate in this case, would not have the same effect. I believe that that is the fundamental reason why the Government has in fact taken action to pay a bounty rather than impose a tariff. Of course, the Opposition agrees 100 per cent with this reasoning.

One must examine very closely the reasons why the tractor industry in Australia is in trouble. I think this is the fundamental issue which we should be discussing tonight. We should be discussing not so much the machinery provisions which are used to provide the bounty, but really why the bounty is necessary. One must come to the conclusion that the critical condition of primary industries throughout Australia is now starting to affect seriously secondary industries located in the cities. I have been hammering in this House for many years the fact that city people have to realise that their economic prosperity is directly depen-dent on export income earned from the sale of rural products.

It is quite apparent now that the lag in sales of rural products which has occurred over the last 3 years due to drought, low wool prices, problems in the wheat industry and other economic conditions, is now catching up in terms of the multiplier theory as it affects secondary industry or the supplying industries. I believe this is the first serious warning to the Australian economy. Because primary industries are in a critical condition there has been a slackening in demand, and one has only to look at the White Paper which was presented with the Budget to realise this. Over the last 5 years there has been an actual decline in net farm income compared with a 40 per cent increase in income in secondary industry over the same period.

When we consider that approximately 60 per cent of our export income is derived from products of primary industry, it is quite obvious that something has to go before very long. Of course, the first secondary industries which must go are those which are directly supplying primary producers, which is the area in which demand has fallen. For example, I refer to the agricultural machinery industry - the tractor industry, the equipment industry - and to the chemical industry.

The tractor and agricultural implement industries are in such a desperate position now that wholesale sackings are taking place in Australia. It is obvious that the Government has to go further than this bounty. Emergency Federal assistance in addition to this bounty will need to be granted or may need to be granted in the future if these Australian companies are to be kept viable. In addition to the agricultural tractor manufacturers I refer to those suppliers of component parts - the sub-contractors, we might say. Many of them are being bankrupted. We do not hear much of them. They are not major firms. They may only be supplying ballbearings, some part of a front end or whatever it may be. But these firms are in serious financial trouble also. Honourable members may like to refer to them as backyard firms.

Perhaps the only sector of agriculture in Australia today where stability exists in a major industry as far as maintaining demand for tractors and agricultural implements is concerned is the sugar industry. Our major export industries include the wheat industry, the wool industry and the dairy industry. The sugar industry is the only major industry today where stability of demand exists. In fact, a degree of prosperity is to be found in agricultural industries in the rural sugar towns.

Mr Chipp:

– Because of sound Government policies?

Dr PATTERSON:

– Because the sugar industry is the best organised agricultural export industry in Australia today. The decision by Massey-Ferguson (Aust) Ltd to dismiss a large proportion of its work force in Victoria reveals the seriousness of the problem. I am not attempting to make any emotive speech. These are facts.

Mr O’Keefe:

– What percentage did it put off in Victoria?

Dr PATTERSON:

– It has put off 500 men out of 2,500 employees. That is 20 per cent. Those are official figures. Out of a work force of 2,500, 500 men have been dismissed. Those are the figures for one firm only. There is more to come. These men are not necessarily all skilled workers; but, nevertheless, most of them are men with families. This firm also has announced in the last 9 months a loss of $2m which is accumulating. The International Harvester Co. of Australia Pty Ltd in Geelong has been forced to sack 300 men. The proportion there is much higher.

In addition to the serious decline in demand, Australian agricultural manufacturers have shown the Government that they are being hit by rising costs also. On the one hand, they have a slackening of demand caused by drought and other conditions in primary industry. They have increased costs of production. Against those factors, they have increasing pressures from overseas competitors through the importation of tractors and agricultural equipment. Because of rising costs, local firms are being placed at a serious disadvantage regarding competition with imported tractors.

As I said before, the tariff in this instance is not the most satisfactory method of protecting local manufacturers because such a measure must lead to a higher price being asked for Australian tractors. This is what we must guard against. If this means a higher price, a further slackening of demand for agricultural machinery and tractors in Australia will result. In such circumstances, bounties to a local manufacturer on production and on the sale of tractors are more appropriate than assistance by tariff duties. I congratulate the Government on making this bounty applicable to sales of tractors. Up to now the bounty has been applied to the production of tractors. This Bill provides for the bounty to be paid on the sale of tractors. It is being applied of course in relation to the specific brake horsepower of individual tractors.

The point that I wish to make and to stress very strongly is that the serious financial position of agricultural machinery industries is the first major warning that secondary industries in the cities will be affected if the prolonged depressed state of primary industry continues. Indirectly, this must affect other firms. For example, the sacking of 300 men in Geelong will affect their families and in turn will create a slackening in demand with grocers, butchers, bakers or whoever the supplier may be. The effect spreads through the economy.

Imports are still running at record levels. But these imports must be financed. Certainly today-

Mr Chipp:

– Imports of what?

Dr PATTERSON:

– Imports from overseas.

Mr Chipp:

– But not of tractors?

Dr PATTERSON:

– No. I am talking about imports-

Mr Chipp:

– With respect, what has this to do with the Agricultural Tractors Bounty Bill?

Dr PATTERSON:

– 1 will show this. I am speaking about what has caused the slackening of demand. It is the critical condition of primary industry. Now, imports are running at record levels. These imports can be financed only by export income which is earned basically from primary industry,, minerals and secondary industry. Of these, primary industry is the major net contributor to export income. Any major failure in primary industry must lead to some counter device on imports with inevitable consequences of unemployment. We saw this happen in 196J. So, this is fundamental to the whole argument. This bounty is to assist an Australian agricultural industry and certainly an Australian agricultural manufacturing industry. But it is fundamental to the whole argument that the Government must take measures to make certain that primary industry, whether it be on the agricultural manufacturing side or on the production side, does not fail. If primary industry does fail as far as export income is concerned it must have adverse effects on secondary industry in general. Secondary industry is the main user of imports.

The widespread economic stagnation in the rural sector which has shown no positive increase in the last 5 years is, as I said before, in sharp contrast to the gross national product of the non-farm income which has shown an average increase of 8 per cent per annum over the last 5 years. In other words, a serious imbalance is starting to show itself now in the cities or, particularly, the provincial cities.

That is all that I wish to say. The Opposition supports this measure. It is an emergency measure. Through no fault of their own, the International Harvester Co. and Chamberlain Industries Pty Ltd are in serious financial difficulties due on the one hand to a definite decrease in demand caused by the financial situation in primary industry and on the other hand by rising costs.

However I ask the Government to have a closer look at this whole problem because it is what we might call the warning. It is not only agricultural manufacturing industries which will be in trouble. Indirectly this condition will spread. As anyone in the country or in country towns knows, once the nucleus fails, the first people to be hurt are the farmers, then the workforce, then the industry supplying die farmers and so it spreads indirectly through the community concerned. The same thing will happen with magnified effect in the cities if the chaotic conditions existing in primary industry and spreading through primary industry are not halted.

Mr GRASSBY:
Riverina

– I rise particularly to echo the sentiments put forward by the honourable member for Dawson (Dr Patterson) in relation to this measure. It has been said by the Government that this is a temporary additional bounty to local manufacturers currently producing bountiable tractors. The Minister for Trade and Industry (Mr McEwen) in his second reading speech described this bounty as an urgent short term measure. He also indicated that the Government bad received from the 2 Australian manufacturers of tractors eligible for bounty evidence which indicated that the industry was facing serious damage from import competition. Of course, he aso added that investigations carried out by the Government indicated that there had been a substantial downturn in total sales of agricultural tractors in Australia. Of course this was a recognition of the crisis which exists in the countryside at the present time, lt was an acknowledgment of the difficulties which are being experienced internally. While I support the measure, a question that has to be posed to the Government tonight is whether it is satisfied that this measure will restore some stability to the Australian agricultural machinery industry.

In view of the fact that it is a component of rural industry and that the crisis in the countryside has now spread to the cities, we should place it on record in this debate that the Australian agricultural machinery industry faces the retrenchment of 14,000 men this year as a result not only of imports but of the continuing rural crisis. In 1967-68 28,000 people were directly and indirectly employed in the agricultural machinery industry, together with 12,000 country dealers and representatives or distributors. It is estimated by the industry that in the current financial year only 9,000 will be left of the labour directly and indirectly employed, and that 7,000 dealers and their individual representatives may well be out of business. This is an incredible situation. We are looking at the possible demise of the Australian agricultural machinery industry against a background of history in which this industry led the world in so many directions. It led the world in its evolvement of new machine parts, new machines and new approaches. Yet if the present crisis is allowed to continue it could mean the complete extinction of the Australian controlled agricultural machinery industry.

I say that with due weight and seriousness, because the components of the industry have said that they are feeling the Weight of the crisis in the countryside and they are feeling the weight of interests that would be quite happy to take them over Australia exports nearly $8m worth of agricultural machinery. Australian production overall last year amounted to $131,808,000, but this year it will be cut by half. The contribution that agricultural machinery has made to agriculture generally may be gauged by the fact that the value of the machinery on our farms amounts to more than $400m. This gives an indication of the size and importance of an industry which today comprises 7 local manufacturing companies of major size - I stress that - and 8 overseas companies. They are the national figures. When one examines the machinery firms across the nation one finds, as I have found in one centre in the south west, a situation where there has been a firm which regularly has been the major factor in employment in that town. Its turnover has always been adequate to maintain a work force on which the town has relied to a major extent. Today its turnover is down by half and its work force is rationed as far as employment is concerned because of the situation and the crisis which exists in the countryside.

The challenge to end the crisis in the countryside is clear and urgent, as my colleague the honourable member for Dawson has pointed out, not only in the interests of the countryside itself but in the interests of city workers and city industries such as we are talking about at the present time. This opportunity must be taken by the Government. The Minister carries the burden tonight of showing whether he believes that this measure is adequate to prevent the extinction of an independent Australian agricultural machinery industry. That is the issue before us at the present time, not just tractors and not just imports.

I would enter a plea, on behalf of all those who are concerned, that the Government might now examine urgently the plight of Australia’s agricultural machinery industry with a view to extending a further helping hand to prevent it being bought out by overseas interests.

As I pointed out, the rural crisis is hitting not only the farmers but country businessmen and employees. It is now also hitting city based workers in industry. I submit tonight that the battle for survival in the countryside, however it may be bedevilled by party politics and pettiness in some respects, is vital not only for country people but for all Australians. If the countryside empties then the vacuum will inevitably be filled by overseas interests. So I submit that this is not just a rural crisis. It is a national crisis. The question to be posed to the Government tonight in relation to this measure and in relation to the agricultural machinery industry generally in our country is: Is the Government telling us tonight in relation to this measure that this is enough? Is it suggesting that this will meet the crisis in the agricultural machinery industry and the nation? If it says yes, I suggest that the Government has been misinformed. 1 would suggest that it confer with the industry to learn the facts of the situation and to take firm and strong steps from this point, and this measure, to ensure that this nation does not lose its agricultural machinery industry, because that is the challenge in the position that we face at this time.

Mr TURNBULL:
Mallee

– I was very interested to hear the 2 Labor men speak on this subject tonight. Of course I agree with the honourable member for Dawson (Dr Patterson) that if a tariff is imposed on tractors coming into this country the price will go up. But the bounty does not have that effect. It has the effect of the tractor being kept at the same price or perhaps being reduced in price. The debate then went on from the subject of tractors to the effect of the rural crisis on the cities. Someone said a long time ago that if the cities were burnt down they would be rebuilt as if by magic. But metaphorically speaking, if the farms are burnt down the grass would grow on the streets of every city in this Commonwealth. This seems to be in a way what is being said by the 2 honourable members and also seems to be the truth. But they have said nothing about what the Government has done to try to overcome the problem.

J was very surprised that the honourable member for Dawson changed his mind so suddenly on certain things that have been happening. He knows quite well that in the House some time ago he criticised the Government for making advance payments on wheat that had not been sold. The fact is that if the Government had not made advance payments amounting, as he said in his speech, to between $650m and $700m, for wheat, much of which was unsold, the crisis would have been much more severe. The honourable member for Riverina (Mr Grassby) was going around the Riverina just prior to our big debate at Barham and saying that the Government should pay $1.10 a bushel for the over quota wheat. The honourable member for Dawson was saying that the Government had been warned - and he had warned the Government - about what could happen as a result of its being a guarantor for large proportions of wheat that cannot be sold at present. I think that perhaps the honourable member for Dawson, seeing that this is wrong and that it was very necessary for the Government to make these advances on wheat to keep the wheat industry in operation - the Government has put many millions of dollars into doing this - should not have criticised the government for it.

Mr Grassby:

– It has been paid back.

Mr TURNBULL:

– lt has not been paid back.

Mr Grassby:

– The Government has been paid back with interest.

Mr TURNBULL:

– The Government has not been paid back. The point about this is that the amount of money has been paid to wheat growers. The Government has advanced it to the Wheat Board which has paid it in advances. Much of the wheat has not been sold. The advance has been made on wheat that has not been sold but the growers have the advance payment. This advance has been made to growers on wheat that has not been sold and that, as the honourable member for Dawson said truthfully, cannot be sold - he used this hackneyed phrase - at this point of time. The point about the whole thing is that had these advances not been made, what would the position have been in the wheat industry? The wheat growers would have been 50 per cent worse off than they are today. The Government has been criticised by the Labor Party for making these advances that have been a Godsend to wheat growers. I do not find the honourable member for Dawson and the honourable member for Riverina saying that the Government has been doing a splendid job by letting wheat growers know 6 months earlier-

Mr DEPUTY SPEAKER (Mr Drury)Order! I remind the honourable member that this Bill has the limited purpose of providing temporary assistance to local manufacturers currently producing bountiable tractors additional to the normal assistance provided under the Agricultural Tractors Bounty Act.

Mr TURNBULL:

– I have always been most careful not to go against the rulings of the Chair but could I remind you respectfully, Mr Deputy Speaker, that I am only answering what 2 members of the Labor Party said, and they were right off the subject. Let me put it this way if 1 have to say ‘tractor’ now and again, that as far as tractors are concerned I suppose the wheat industry is responsible for the sale of more tractors in Australia than any other industry. So when the Government said that the advance would be $1.10 a bushel on all quota wheat grown in the coming harvest, would that not have helped the tractor people? Knowing that they would get a first advance of $1.10 a bushel wheat growers would be more inclined to buy tractors. This is the logical conclusion for anyone who has looked into the problem to reach. This advance of $1. JO a bushel was announced last February or March. This has never happened before; it has always been announced about November. I am very happy to find 2 Labor men speaking so favourably of the primary industries. I am delighted about it. I deplore the attitude of the city versus the country. It is one of the reasons why I have been an advocate for so many years of greater political representation for country areas. I could get away from the subject we are discussing and I do not want to do that, but what has been said by the 2 members of the Opposition tonight has to be examined in order to find what they really mean. Are they trying to get primary producers on side now, and at the same time objecting to the advances?

Dr Patterson:

– I did not say that at all. Read out what I said.

Mr TURNBULL:

– The honourable member for Dawson said on 10th March 1970:

It was obvious to everybody, to the industry and to the Government, that last year there would be large sums of money unrepaid in respect of the 1968-69 harvest. The Government then made another advance of $440m. Looking at it in perspective now, in March 1970, we see a total of $440m as the first, advance for last year’s crop and approximately $250m in unsold wheat or the equivalent still on hand. This amounts to a loan of from $650m to S700m having been made.

Mr DEPUTY SPEAKER:

-Order! I am sorry to have to interrupt the honourable member again but I must remind him that the purpose of this Bill is a limited one. I have allowed the honourable member a certain latitude so that he could express his remarks in relation to previous speeches but this is a bounty Bill in relation to tractors.

Mr TURNBULL:

– If I cannot go on, let me say that the real point is that the honourable member for Dawson warned the Government of the consequences that would flow from being a guarantor for large quantities of wheat that cannot be sold. That is what he said and it is in Hansard. I would not have entered into a debate on wheat unless Opposition members had raised matters concerning primary industry and referred to the need to do something for the primary producer, with which I am in accord in every way. Surely the Government must be given credit where credit is due. Opposition members talk about these things and pass over matters that have nothing to do with the subject. I believe they were also, in an inexcusable way, getting away from the subject matter of the Bill.

Mr BENNETT:
Swan

– I rise to support the Bill, particularly where it applies to Chamberlain Industries Pty Ltd at Welshpool in Western Australia. This company which, in the main, is an efficient one with modern thinking in personnel and administration training in management methods and production techniques is indeed severely affected by the current market prices in the agricultural tractor field caused mainly by the recession in the agricultural industry, and, of course, the lower priced imports now available to the farmer from overseas, including tractors manufactured in mainland China or, as it is better known, Communist China, Czechoslovakia and other European and Asiatic countries such as Japan. The overall result has been to make the tractor industry a disaster area. For example, let us look at the effect on the work force of Chamberlains, which had on its staff at the commencement of last year some 1,650 persons. Reluctantly it has had to reduce this number to 800 employees or below half and it is still in trouble, having incurred a loss of some $ 10m in sales to the farming community in the last year. In effect $10m worth of farming equipment did not enter the agricultural industry last year in Western Australia and Australia generally.

Chamberlain has not been idle in trying to avoid the disaster. It has attempted to diversify into the industrial equipment field for both the local and export market but these industrial sales were only able to reach some $2m for last year. In reality, even though this sales field is slowly growing it is only minute and cannot keep up with the falling sales in the farming sector as the farming community falls under economic pressure. Unless improvement can be effected in the buoyancy of the market in the agricultural field the manufacture of agricultural implements and machinery in Western Australia will collapse, for what company can continue in the face of a loss in the vicinity of $700,000 in one year? This is the loss which was suffered last year by Chamberlains, a company which has done all that is possible to be modern in production and management techniques and to diversify its products to meet demands and to participate in overseas exports. The loss of this company to Western Australia would be a disaster, not to mention the skilled workers who have been thrown out of employment and the trained personnel in the tractor industry who have been forced to find employment elsewhere. This is a personal disaster to the persons affected and to the company itself. This industry is fighting for its very survival

Whilst commending the Bill one wonders if this is a sufficient answer to the problems, taking into consideration the situation facing its primary market, the farming community. The industry itself appreciates the problems and believes that this bounty is as much as it can expect in the circumstances.

However, the real answer to its problems is an improvement in its market prospects which will only be- brought about by a recovery in the farming community. Whilst admitting that there is a serious price disparity between the imported tractor and the Australian product, they are both fighting for a diminishing market to the serious disadvantage of the Australian industry.’ It is only logical that with the diminution of their volume of production they lose the economies associated with volume production. Thus with all this facing it it is not hard to understand why Chamberlains has had to surrender its wholly Australian identity and allow a 49 per cent takeover of shares of this pioneer Australian company by yet another American firm which to do this has surrendered its own individual assembly in Australia. One wonders whether we will continue to see the production of a purely Australian product or -some form df hybrid imported product which will have all the associated problems of profits going overseas - with the overseas exchange bill being yet further burdened with this situation of paying for what was in the main a purely Australian product. So in effect a major section of this industry has been lost to Australia.

One cannot blame the management of the firm for it has done a tremendous job in an effort to bring about the survival of the industry. Whilst the Bill brings help it brings help too late to avoid the laying off of half the staff of Chamberlains, too late to avoid a $10m sales loss, too late to avoid a $700,000 loss to Chamberlains, too late to avoid the loss of Australian identity with a proud pioneer Australian tractor firm. We note the Government will review the situation before the 1971-72 Budget to determine the effect of this assistance and, if necessary, adjust the rate of payment. We must ask that this matter does not take the course of some Budget promises and be forgotten or procrastinated so that a complete overseas takeover of this firm takes place.

It can be seen that by operating at premises registered for the purposes of this Bill to attract the bouncy from 1st July 1970, which is based on sales only and not now on .production, it could be an attraction to the American company to take steps to utilise this venue as a sales outlet of an assembled-only unit. No doubt the Minister will take steps to ensure that in future reviews of bounty and tariff every encouragement will be given to ensure Australian content of the units so that the subsidiary contracting supply companies in the secondary industry field will have their markets protected,, because in the main these are wholly Australian firms which have grown with this industry and their survival is as important as the survival of the total agricultural implement industry.

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

– in reply - I will answer the honourable member for Swan (Mr Bennett) first. I can give an assurance that the Government will examine the effect of the additional bounty early next year and will then consider the further action that is desirable in the light of such an examination. As to the points raised in the latter part of his speech I can also give him a part assurance. To save proliferation of manufacturers or assemblers of tractors in Australia this additional bounty will be paid only to those companies which were registered as manufacturers on 1st July 1970. I expect a company which is located in the electorate of the honourable member is International Harvester Cb. of Australia Pty Ltd.

The only other comment I have at this stage is to thank the honourable member for Dawson (Dr Patterson) for paying 2 compliments this evening to the Government. This has been interesting to those honourable members on this side of the House who have heard speculation on the competition between the honourable member for Riverina (Mr Grassby) and the honourable member for Dawson for the role of spokesman on primary industry for the Australian Labor Party. If I may pay an accolade tonight, the honourable member for Dawson won hands down. The honourable member for Dawson did nothing tonight except to pay respect where it was due. He complimented the Government and drew the wise distinction between imposing a tariff on tractors and paying a bounty. A bounty, of course, seeks to keep down the price of tractors to the farmer at the grass roots level, and this is the reason why the Government has applied a bounty as distinct from a tariff. The honourable member saw this point in a’ “flash and he paid a compliment to the Government for introducing a bounty instead of a tariff. The other compliment which was paid by the honourable member for Dawson in passing was that the sugar , industry is one qf the most efficient and stabilised in Australia. I accept his compliment that this is a result of the sound Government policies of the LiberalCountry Parties in this Parliament..

T will conclude my remarks by referring to some of the comments made by the honourable member for Riverina. I am disturbed to hear him speak because every time he rises to his feet he becomes a man who trades iri gloom and doom. Every speech he makes in this House is characterised by prophecies of doom to our primary industries and those people whom he purports to represent in this House. But tonight he went even further. No longer is he restricted by the boundaries of his own electorate. He prophesied devastating unemployment in the agricultural industries in the cities. I remind the honourable member for Riverina that all industry is sensitive to gestures of confidence or gestures of lack of confidence. Should be persist time and again in this Parliament whenever he is on his feet in saying that there is a crisis in this industry or in that industry - he mentioned the word ‘crisis’ 7 times tonight - or that there is a down turn, the survival of the countryside is not possible or that the battle of the countryside is lost, he will instil-

Mr Grassby:

– I did not say it was not possible. You are misrepesenting me.

Mr DEPUTY SPEAKER (Mr Drury:
RYAN, QUEENSLAND

Order! The honourable member for Riverina has already spoken in this debate.

Mr CHIPP:

– He will instil into the minds and hearts of all his constituents and everybody on the land; who God knows are having a hard battles to survive, a lack of confidence. Instead of representing these people as a responsible member of this Parliament should I suggest to him with respect that he is being counter productive and doing to his constituents and everyone in rural industries a great disservice. It was interesting to see the distinction between these 2 so-called Labor Party spokesmen on primary industry. I thank the honourable member for Dawson for the compliments he paid to the Government for its policy. I suggest, with respect, to the honourable member for Riverina that he might revise the philosophy he adopts in this House if he really wants to help the people in the rural industries.

Mr GRASSBY (Riverina)- Mr Deputy Speaker, I wish to make a personal explanation.

Mr DEPUTY SPEAKER (Mr Drury:

Does the honourable member claim to have been misrepresented?

Mr GRASSBY:

– Yes. I have been misrepresented by the Minister for Customs and Excise (Mr Chipp) who, when speaking in reply, said that I indicated in the course of my remarks that there was no hope for the countryside. This was not true. I did not say this. I have never said this. I have merely sought to do one thing and that is to tell the truth, to bring out the facts and ask that they be acted upon.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Dr Patterson) read a third time.

page 2147

SHELTERED EMPLOYMENT (ASSISTANCE) BILL 1970

Second Reading

Debate resumed from 15 September (vide page 1098), on motion by Mr Wentworth:

That the Bill be now read a second time.

Mr WENTWORTH:
Minister for Social Service · Mackellar · LP

– by leave The Australian Sheltered Workshops Association has produced an manual on sheltered workshops. This was not produced by my Department but in point of fact my Department did give some financial assistance to the Association. I lay on the table a copy of the manual. I will have a copy available for any honourable member who would like to apply to me for it.

Mr HAYDEN:
Oxley

– The Bill amends the Sheltered Employment (Assistance) Act 1967 in 3 respects. It proposes to extend the $2 for $1 capital subsidy towards the cost of accommodation for disabled persons working in normal industry. It provides for the payment of a $500 grant in respect of persons who are placed in normal employment by a sheltered workshop organisation after a minimum period of 6 months training in a workshop, provided that the person fulfils a continuous period of 12 months in normal employment. Thirdly, the Bill proposes a subsidy of $1 for $1 for the salary of certain sheltered workshop staff.

The , Opposition does not oppose this Bill. However, on behalf of the Opposition 1 want to make some observations about it. The first and most apparent one is that this Bill is another instance of welfare service being provided by instalments. The proposal came up immediately before the last general election which was about 12 months ago and it is being fulfilled just prior to the current Senate election. I feci that this is not the way in which welfare services should be provided in the community. There should be some, rationale about the way in which they are provided. There should be a full explanation of the overall objectives of welfare service policy by the Government, not only in terms of what it has implemented and how that is evaluated in terms of service to the community but. how this meshes into a broad long-term plan proposing adequate welfare services for the benefit of the whole community and of the whole man. This has not been done so far, nor have we had a philosophical explanation of the basis upon which the Government promotes its welfare services. This, too, could be done with benefit to the community. 1 should like to raise some questions during the course of the few comments I want to make. It is desirable, although I have reservations about the way in which this is being done, that the hostels the Minister for Social Services (Mr Wentworth) has in mind should be provided in the community. I dare say that other honourable members have had experiences similar to mine where people, because of handicaps and a lack of family relations or close friends in a convenient situation, have found themselves facing a difficult problem about accommodation. Many of these unfortunate people require special attention. They require accommodation which has special architectural features to allow them, because of their disabilities, to move freely. In any case, it is not a bad idea, from what I can gather, for these people to have the company from time to time of people similarly afflicted. It is good because it reinforces their attitudes, their self-confidence and their self-esteem. On the other band, of course, there may be detrimental effects if they are exclusively in this sort of company, but the degree to which they will be in this sort of company in hostels I do not believe will be harmful, so one sees a benefit there.

I mentioned earlier that I intended to raise some questions with the Minister. First, in respect of the $2 for $1 capital subsidy - and perhaps the Minister might care to take a note of these questions because it will save delay at the Committee stages - will the hostels be obliged to cater for different handicaps? For example, if a particular voluntary agency establishes one of these hostels in an area and caters for mentally retarded persons but in that area there are some people with a spastic condition, or some other condition which is not related to mental retardation, can those people anticipate that they will have a right to obtain accommodation at that centre or will they be prevented from doing so? What I am asking the Minister is will he negotiate with agencies to try to develop these hostels so that they will, in fact, serve multi handicaps.

Mr Wentworth:

– I can answer that question now. The answer is yes.

Mr HAYDEN:

– I thank the Minister. Again, what of the cost of equipment and replacement of items covered in sections 15 and 16 of the Act? Will, in fact, the coverage there be extended to the hostels? From my reading of the Act, those sections relate only to sheltered workshop employment. Perhaps I can leave that question with the Minister and he can answer it a little later. What will happen if the hostels are not profitable? This is something that intrigues me as does the possibility that a sheltered workshop may not be profitable. What would be the procedures that the Government would adopt? I scarcely expect that the Government would allow them to collapse. If it is not prepared to allow them to collapse 1 wonder - and this is a question I will raise a little later - why the Government does not move more positively into the area of providing capital for the establishment of these workshops in the first place.

I regret - and I say this in the form of a question as much as in the form of a statement - that there is no provision for maintenance costs of these hostels to be covered in the Bill. They will be involved in a cost structure which will be much higher than a normal establishment would have to carry. In some cases special beds will have to be provided. I expect that a greater number of sick beds will be needed and some residents will require more attention. Cleaning costs undoubtedly will be greater than would be the case in a normal situation. I know that some State governments do provide various forms of assistance in these hostels. I. believe that in Queensland assistance is provided for movable furniture and fittings but it is provided on a restricted basis. Again, the way in which this sort of assistance is allocated varies between the States. This, in turn, throws up the inconsistent manner in which we develop our welfare services, not only at the Federal level but at the State level too. There is clearly need for dovetailing between the various levels of government and voluntary agencies.

The $500 incentive, if one could call it that without trying to be offensive in any way, which sheltered workshops will attract when their employees graduate to outside employment, sounds a pretty fair proposal on the face of it,- but it could be a little bit rough in practice. For instance, why limit it at 6 months? I can appreciate that there may be some reservations in the mind of government officials that if they do not have this sort of limitation, some unscrupulous people might try to stuff their sheltered workshops with people who do not really require their sort of service and push them through quickly to get the $500. I do not know whether this nasty suspicion entered the Government’s mind. It seems to me to be a fairly remote probability and, at the most, it would have a minimum effect on the overall workings of the scheme. What if a person admitted to one of these sheltered workshops recovers quickly and graduates after 2, 3, 4 or even 5i months? As. things stand now there is an incentive to encourage the people who conduct these workshops to keep these people there longer than is necessary.

The next point I raise in relation to this particular aspect concerns a suggestion which has been made to me by people who are interested professionally in providing assistance for disadvantaged and disabled people. They suggest that in their opinion this proposal looks suspiciously like the Commonwealth attempting to opt out of a full commitment to rehabilitation services. At present the Commonwealth operates a rehabilitation service for certain disabled people as part of the Commonwealth’s social service organisation. What has been suggested to me is that the Commonwealth Government might be looking to using sheltered workshops as a way of minimising its expenditure on this sort of rehabilitation service; that is, having rehabilitation achieved on the cheap. I am sure that the Minister will give us an assurance that this is not true. My own feeling - and I will mention at some length a little later what I believe in this respect - is that we could possibly phase out the Commonwealth rehabilitation service in any event, but not do it on the cheap.

In relation to the $1 for $1 subsidy, will this subsidy cover, for instance, people employed in the hostels, such as the manager, supervisor or nurses? As I read the Act it will not. The $1 for $1 subsidy will relate only to the sheltered workshops themselves. However I am .not too clear on that and I would appreciate an explanation from the Minister on this aspect. There is a further point which I raise with him in the hope that he might be able to give some attention to it. There is evidence to suggest that some sheltered workshops become involved in what one could term unreasonable and somewhat irrational competitiveness with other sheltered workshops with the result that the quotations they make to outside organisations for work offered are quite unrealistic and could lead to a serious financial problem for some of these organisations. A case in point relates to the tendering for the production of Christmas cards in Victoria. I believe that at one stage at least this got completely out of hand, with organisations involving themselves in cut-throat competition by reducing the prices quoted to unrealistic levels in relation to the amount of labour and capital input involved in their production.

Debate interrupted.

page 2150

ADJOURNMENT

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! It being 11 p.m., in accordance with the order of the House of 26th August, I propose the question:

That the House do now adjourn.

Mr Snedden:

– I require that the question be put forthwith.

Question resolved in the negative.

page 2150

SHELTERED EMPLOYMENT (ASSISTANCE) BILL 1970

Second Reading

Debate resumed.

Mr HAYDEN:

– There seems to be a good case for adopting some sort of training programme for the management of these establishments. I have it on good authority that there have been instances of very well meaning people - of this there is no doubt - managing some of these establishments who, because of a lack of business experience, have been responsible for bad judgment in quoting prices for the services the establishments’ have offered to outside industry. I have listed some of these queries. I look forward to the Minister - and I know he will - giving me an explanation and perhaps an opinion, especially on that latter point, when he replies to me later. But I make the criticism quite strongly that this is another example of a disjointed approach to the provision of social welfare service in Australia. There is a need for overall and long term planning of these services. There is an obligation for public involvement in the development of these plans and in discussion of them and, as a result of such discussion, for any necessary amendment being built into the plans. Leonard W. Mayo, of the Association for Aid of Crippled Children in the United States, made a statement a few years ago on this point. He stated:

The time has passed when new rehabilitation services can be established or present ones expanded without a thorough look in advance at the rehabilitation needs of the community to be served. The need for planning and co-ordination (orderly arrangement of services) … is a continuing necessity. Institutions in society, like individuals, are dynamic - never static. . . .

Accordingly, I endorse the view that he has expressed and state with emphasis that we have a positive and urgent need in Australia to have this sort of planning not only because we want to use our economic resources efficiently but also because, on the basis of human values, we want to make sure that what we are providing meets the need according to an established priority and is going into areas of greatest need and not to areas of lesser need.

There is clear evidence, on the face of what one can ascertain, that there is a need for planning in the area of aid or rehabilitation services for the handicapped and the disadvantaged because from what one can see in this area alone in which we are interested, that of sheltered workshops, there are grave imbalances. For example, New South Wales, which has 36 per cent of the population of the Commonwealth, employs 68 per cent of disabled people in sheltered workshop employment. 1 am well aware that New South Wales had a good start in this field ahead of the other States and has been more generous in this respect in the past. But this is not the point. The point is that there is a general need for this type of service in the community.

Of the total number of the disabled work force in sheltered workshop employment, 68 per cent are in that form of employment in New South Wales. In contrast, Queensland, with 14 per cent of the Commonwealth’s population, has less than 6 per cent of the disabled people in sheltered workshop employment. If one looks at the 5 States other than New South Wales, which between them have slightly more than 62 per cent of the Commonwealth’s population, one finds that they have slightly less than 40 per cent of these disabled people employed in sheltered workshops. Again, if one looks at the allocation of finance under this Act, one discovers that a tremendously disproportionate amount of money, much greater than the amount that goes to the other States, goes to New South Wales. Nearly 50 per cent of the total amount allocated between June 1970 and September 1970 went to New South Wales. According to a telegram I received from the Department of Social Services in reply to a query I raised, New South Wales received $2. 29m of Commonwealth assistance, Victoria received SI. 08m, Queensland received only $419,000, Western Australia with a considerably smaller population received $654,000. and Tasmania received $236,000. South Australia is not mentioned. I presume that it did not receive any allocation in that period. But in any event, on the basis of this sort of evidence that I am quoting, New South Wales is doing very well under this legislation, and the people responsible for promoting these, services are to be commended.

But it does show also that there are serious imbalances in the provision, of these services. For instance, the rule of thumb that the Department of Social Services works . on, according to officers to whom 1 have spoken, is that 0.5 per cent of the population is estimated to be in the area of . handicapped people. But by looking at the figures in a survey carried out by the Department of Social Services in 1968 into handicapped workshops, one discovers that less than 0.003 per cent of the nation’s population then participated in sheltered workshop employment, so we are a- long way behind the estimated level of people who have this sort of need. The estimate is one on which the Department works. I would not expect us to reach the full extent of this estimated level, but to get half way there would at least indicate to me that we are progressing well towards the optimum level we can expect to achieve. But 0.003 per cent of the population clearly falls well short of this sort of achievement. Again I would appreciate a fuller analysis of the facts of the Commonwealth’s extension of its commitment to social welfare services where there is already a State commitment. But as far as 1 can see the situation, when the Commonwealth increases its commitment to social welfare services for which the States have already accepted a commitment the tendency is for the States to withdraw commensurately. This to me indicates that progress in total is not as great as it would seem on the face of the sort of evidence that the Government puts before us.

As I said a short time ago, the Commonwealth Rehabilitation Service is related to this overall concept, because 1 daresay that many people who go there eventually seek the advantages of working in a sheltered workshop. The Commonwealth sheltered workshop service is a service in the community about which I have some qualifications. First of all, for the year just completed, the number of people who graduated from training in the Commonwealth Rehabilitation Service was only 2.4 per cent of the new invalid pensioners. It seems to me that this is somewhat short of what we would hope to achieve with a fairly effective service. 1 said that 1 have qualifications about this service. My qualifications in no way can be interpreted as a criticism of the quality and dedication of the people the Department employs in this service, but rather are they to the effect that the service tends to be somewhat remote from many sections of the community. It tends to be somewhat distant from an important point where, for many people, rehabilitation service ought to commence. That is in the hospital.

Recently, f bad the good fortune to visit Sweden, among other countries of the world. I saw al the Danderid hospital the approach of the Swedish people to this sort of service. In that hospital they provided the sort of rehabilitation service which the Commonwealth provides at the Commonwealth Rehabilitation Service. Not only is this provided at the Danderid hospital but it is provided at ali the hospitals which serve the Swedish community. Their hospitals are established on a regionalised basis with health centres focussing in on them from various sections of the community. Within the public hospital service itself there is a comprehensive range of services; pediatric, geriatric and psychiatric services as well as the general services of surgery and physical support which a hospital normally provides. These hospitals go further. A range of vocational and occupational rehabilitation services is provided in the hospitals. As .quickly as possible after they are admitted to hospital these people commence their training because the Swedes believe - this view is supported by a number of medical authorities in this country involved in rehabilitation and training for the handicapped - that it is necesary to make contact with people, especially accident victims,’ as quickly as possible after the accident, to move them into these rehabilitation centres as promptly as possible and to get their confidence restored before the traumatic shock of their experience has settled into them and created some sort of inertia or resistance to the sort of training which rehabilitation services hope to achieve. lt would seem to me then that many of these rehabilitation services ought to be developed within hospital services. Not all of them can be, of course, but many of them could and should be. This would mean a diminished role for the Commonwealth Rehabilitation Service as it presently operates. Indeed, 1 propose in a few minutes to suggest that the Commonwealth Rehabilitation Service as it operates anyway ought to be phased out in favour of an expansion of community welfare services. But before moving on to that aspect I finally mention the case of business loans available under the aegis of the Department of Social Services. Since 1955 only 5 such loans have been provided. The provision is for a loan of $200 which the Federal Government wil provide at an interest rate of 4i per cent per annum. This level of $200 was struck in 1955 and has not been increased since. If it had been adjusted according to the movement in the cost of living it ought to be $583 at the present time. But even this is not sufficient to help these people.

In Ontario, Canada, I had the opportunity of discussing with people involved in social welfare services their approach to this sort of assistance for people who have received injuries and have to go back into the work force. They had just provided authorisation for a grant of several thousands of dollars to a former lumber man who had been injured in a work accident and had had a leg amputated. This was to set him up with capital and plant in a new industry after rehabilitation training. There is no requirement at all on this man to repay this money. This seems to me a far more reasonable, more rational and more advanced approach to rehabilitation services and compensation in a modern industrial society than the present system which we have, especially in relation to workers compensation which seems to be as much conceived on the basis of the gambler’s roulette wheel as on any other sort of principle. The Labor Party’s proposal is to set up, as I have mentioned many times before, regional departments of social welfare harnessing the co-operative support of the State governments, local authorities and voluntary agencies. For this purpose we propose to provide special grants. These regionalised departments would co-ordinate services and give a rational pattern to the supply of services according to identified needs and according to priorities. Of course, we would seek to avoid duplication, to eliminate gaps and to provide a continuing and comprehensive range of services conveniently accessible and bearing direct personal relationship with the community being served.

We aim at achieving this by community involvement in the general decision making and operation of these programmes through the regional department. An assential part of the department’s services will be an office of occupational and vocational rehabilitation developing, refining and constantly upgrading the quality of a comprehensive rehabilitation programme for the area served. The programme would support the work of voluntary and public agencies in encouraging the expansion of their services to plug the gaps. The programme would seek to develop the following minimum services: Prevention, case finding and outreach; comprehensive vocational evaluation; physical and mental restoration; personal adjustment training - prevocational; vocational training; vocationaltechnical education; undergraduate and professional education; transitional and extended sheltered employment; vocational placement and follow-up; day care for adults; personal counselling; social and recreational programmes; special housing; transportation; homebound employment; homemaking, attendant, and other services in the home; and consultation to agencies.

We do not propose to restrict this merely to disabled people. This ought to be available also to those people who can be defined as disadvantaged within the community. They too have a need. There is a responsibility on us to provide these sorts of services. Within the overall concept which I am proposing the programme would be administered by a director for disabled and disadvantaged services and this programme would, of course, involve the provision of sheltered workshops in the community. It seems to me that there is an obligation on us here in the Federal Parliament as well as those in the State governments, local authorities and voluntary agencies to see that according to the established needs of the community there are sheltered workshops available. It is completely unacceptable to me that we have to depend on someone running around rattling a tin can to obtain donations from generous members of the public who, frankly, are a minority and who are, all too often, the people who are continuously carrying the burden of these services, that is, they voluntarily carry an unfair proportion of taxes for public services in the community. So according to a plan the capital establishments ought to be set up. Then we could use the services of a voluntary committee to operate these workshops within the community.

We have to ensure - and it is a public responsibility for the regionalised departments of social welfare - that the staff serving these sheltered workshops are adequately trained and that where they should be professional people they are in fact professional people. Well meaning people can do a good job in social welfare, but in those areas where they have some particular ability to serve the people. But well meaning people who do not have this ability, who are motivated perhaps by maudling sentimentality where a practical and rational approach is required, can do more harm than good. What the Labor Party does is to spurn the piecemeal blight which affects Government thinking in welfare services. Where there is a clear public need, as there patently is in rehabilitation services, we accept an inalienable public responsibility to provide those needed services. To accept anything less than this is to deny the basic right of all individuals to human dignity and to civilised respect as human beings. To ignore this ukase is to flaunt fundamental Christian principles and the essential values of humanism.

Mr HUNT:
Gwydir

– I do not intend to detain the House for any length of time in dealing with this Bill but 1 would just like to make one or two observations in regard to the speech made by the honourable member for Oxley (Mr Hayden) who lamented the fact that the Bill did not . take into account the need to provide for the maintenance costs of sheltered workshops. Qf course he knows, and 1 think all of us know, that we cannot do everything at once but the fact remains that the Government has in the last 3 years made great strides in assisting the sheltered workshops throughout Australia. I want to pay a tribute to the Minister for Social Services (Mr Wentworth) and the

Government for the help given to those charity organisations and the State governments in providing assistance in the education and care of our handicapped people.

The sheltered workshop concept, which was conceived by devoted charity organisation and other organisations, has given a new hope, a new sense of confidence and security and a new lease of life to many of our handicapped people. These handicapped people, or those who are fortunate enough to be in the sheltered workshops, have been given a feeling of being useful and of being able to make a contribution to their community. Under the Sheltered Employment (Assistance) Act from 30th June 1967 to the end of February 1970 the following grants have been made: Sheltered workshops, 100 in all, over $3m; workshop rentals, over $78,000; workshop equipment, over $607,000: and for hostels for employees, over §839,000. This adds up to about $5m. In my electorate at Dubbo we have one of the most outstanding sheltered workshops and certainly one of the most outstanding handicapped complexes in the State. We have received capital grants for equipment and other purposes amounting to $13,000. This money has been used to purchase vehicles, rotary hoes, tractors and other farm machinery for the sheltered farm.

The record in the Westhaven workshop has been impressive. With a $2 for $1 subsidy for capital equipment purchased, a considerable quantity of equipment and machinery have been installed at the workshop. I refer specifically to the machine which was purchased not so long ago for the manufacture of seedling tubes. The Westhaven Association has won a contract to supply the New South Wales Forestry Commission wilh these tubes. Last week the Minister for the Interior (Mr Nixon) announced that the Westhaven Association had won a contract for the supply of 150,000 tubes for the Australian Capital Territory Forestry Commission. So we can see that in the Westhaven Association’s sheltered workshop we have a long range production programme for those engaged in the workshop. I would like to thank the Minister for the Interior and the Government on behalf of . the Westhaven Association for the assistance that it has received in this direction.

The sheltered workshop undoubtedly is a very vital part of any rehabilitation programme. The Prime Minister (Mr Gorton) announced last year that this Government has given rehabilitation a high priority in the welfare field. This Bill is evidence of the Government’s determination to aid those less fortunate people to the full. The Minister for Social Services announced in his second reading speech that a survey was being conducted to ascertain the dimensions of the disabilities that exist, especially among the young members of our community. Of course, the younger handicapped people should be trained in their youth because I know that training in their younger years is far more effective than in later years. The whole concept of sheltered workshop training is to endeavour to train those people for normal employment opportunities and also to provide employment for those less fortunate people who have no hope of seeking such employment and cannot take their place in the community in that way.

The Bill provides a new stimulus to the Government’s programme. It is a constructive effort which puts forward 3 specific proposals which were outlined in the Minister’s second reading speech. Firstly, the Bill will give a subsidy towards the capital cost of accommodation for disabled persons working in normal industry. Secondly, the Bill will provide training fees for persons placed in normal employment. Thirdly, a subsidy will be given towards salaries of certain sheltered workshop staff. These areas were quite rightly chosen by the Minister because at this stage of the development of sheltered workshops these are the areas of greatest need. It is all very well to suggest that the Government should have done more, but al] governments have limited resources. We have to divert those resources to the areas of greatest need. This is what the Bill is designed to do. It will help to tackle the social, vocational and economic problems of the handicapped. Today there are 100 such workshops in Australia employing about 5,000 handicapped people and producing goods worth $5m. Of course, when we add to this the $2m that has been contributed by private organisations and local people, we can see the degree to which not only the Government but the community is trying to assist the less fortunate people.

I want to deal briefly with the third provision of the Bill, which provides for a $1 for $1 subsidy towards the salary costs incurred by sheltered workshop organisations employing people with special qualifications. These are supervisory people, medical people, counselling people and people who are engaged to assist in sheltered workshops and other special services. This has been one of the heaviest areas of cost to the private organisations that have been running sheltered workshops. Earlier iri the year the Minister will remember that 1 appealed to him and to -the Government to give very serious consideration to providing some assistance in this field. 1 thank you, Mr Minister, very much for responding to the requests of the workshops throughout Australia and to my own appeal in this regard. I mentioned earlier this year that the total expenditure of Westhaven in 1969 came to $164,835. Of this amount the total cost of salaries paid to the employed staff was $41,207. This gives some indication of the heavy salary costs. The provisions of this Bill will be of great benefit to sheltered workshops. It will enable them to divert some additional resources to other areas of need in their general administration. I can assure the Minister that all of those persons concerned with the Westhaven Association and I am sure other sheltered workshops and other complexes are grateful for his interest and for the efforts that the Government has made to help those who are carrying out a magnificent job in caring for our handicapped people.

Mr REYNOLDS:
Barton

– I rise to support the Bill. This Bill provides 3 main provisions. Firstly it provides a subsidy towards the capital costs of accommodation for disabled persons entering normal industry; secondly it provides payment of a training fee to the organisation where a person graduates from that institution to normal employment; and thirdly it provides a subsidy towards the salaries of certain sheltered workshop staff who are involved in providing specialised services over and above those required in normal employment. Whilst I support the Bill, I would like to make a few comments which I think would have made this a better Bill.

First of all, 1 would have liked to see a systematic survey of the requirements of this kind of facility. The lack of statistical information regarding numbers of disabled persons in Australia is possibly the greatest prevention against a concentrated attack at the present time. We need some statistical proof of what our commitments ought to be. 1 understand that experts in the field have suggested that Australia probably is ho different from most other Western countries in Chat between 7 per cent and 10 per cent of the total population would come within the category of being disabled. With increased longevity, medical advances and permanent traumatic injuries resulting from road, industrial and domestic accidents, a figure of 7 per cent cannot be expected to decrease. Whilst I applaud the Bill, I think we have to take note that it is only a start along the road. How many people were employed in sheltered workshops up until June this year? According to the latest report of the Department of Social Services the number was 4,206. This represents an increase of 870 over the figure of 3.336 as at June 1969. On the other hand, the number of invalid pensioners has reached 133,766 which represents an increase of 12,022 on the previous year’s figure. So whilst the number of invalid pensioners has gone up by just over 12,000 the number in sheltered workshops has gone up by only 870. In other words, 7.3 per cent of the increase in the number of invalid pensioners were taken in sheltered workshops in the year in question. We might well ask: What of the other 92.7 per cent of the increase in the number of invalid pensioners during the year? Where are they? How many of them could benefit from sheltered workshop accommodation?

If we take 133,766 as the total number of invalid pensioners as at June of this year, . the number in sheltered workshops represents only 3.1 per cent of that total. Having thought that this represents a rather low proportion, by picking up another article 1 was then reminded that these figures did not include, for instance, all of the ex-servicemen who receive war pensions or all of the service pensioners who receive a service pension by virtue of their invalidity - the equivalent of the invalid pension under the social service provisions. -So whilst we can congratulate the Government on the steps that it has taken, there is still a long way to go. 1 turn to one other aspect ot the sheltered workshops legislation, and that is the provision, until now, of residential units to accommodate persons who were employed in sheltered workshops. But under this Bill these residential units also will accommodate persons who are disabled but who are capable of performing normal employment. During the past year, 1969-70, only one residential unit was provided in New South Wales, which attracted a Commonwealth subsidy of §36,186. Victoria did not provide one residential unit during the last 12 months. There was a subsidy of $16,741, but this was an adjustment on a previous grant. Queensland provided only one residential unit during that 12 months period. South Australia provided none. Western Australia provided 2 residential units which attracted a total Commonwealth subsidy of $82,001. Tasmania built no residential units under the Commonwealth legislation. So in all, during the past 12 months only 4 residential units to accommodate people who are employed in sheltered workshops were built in the whole of the Commonwealth. These residential units attracted a total Commonwealth subsidy of $162,088.

So far there has not been a great demand lor this kind of accommodation. The new provisions which the Minister far Social Services (Mr Wentworth) has introduced to cover people who are not necessarily employed in sheltered workshops might extend the demand for this kind of accommodation. Admittedly, in the two previous years the demand for this kind of accommodation was somewhat greater. In I96S-69 only 3 residential units were built in the whole of the Commonwealth, but in 1967-68 5 residential units were built. So whilst we applaud the payment of the subsidy, we have to recognise that this legislation does not necessarily provide for :i great many people. As a matter of fact, the only figures which I have been able to obtain relate to the number of units built and their cost. There is no intimation of how many people were or could be accommodated in these units. I think that this kind of statistical information could be helpful to the Parliament.

Tonight I spoke to one of the officials of a sheltered workshop organisation in my electorate. He raised with me the question as to what sheltered workshops are approved. I must confess that I was not clearly aware before as to how many sheltered workshops are not approved under Commonwealth and, for that matter, State legislation. I have not seen this in writing anywhere, but I was told tonight - and the Minister can confirm it or otherwise - that until a sheltered workshop is able to pay at least 51 per cent of its trainees, as they are sometimes described, in the workshop at least $4 a week it cannot receive recognition or approval as a sheltered workshop. I do not know whether this is the way in which the scheme is administered. As I say, I have not seen this in any provision.

Mr Wentworth:

– It is not quite correct.

Mr REYNOLDS:

– But apparently it is nearly correct. It confirms what I have been told, that a good many sheltered workshops - I think the figure of 65 was mentioned - do not receive any of these benefits. I cannot help but feel that this is a tremendous pity. There is a real dearth here. I am conscious of the Southaven sheltered workshop at Kogarah and of the Sunnyhurst sheltered workshop at Hurstville in my electorate. I am almost sure that neither of those sheltered workshops would qualify for Commonwealth assistance because the people in them are mainly mentally handicapped and physically handicapped. Their level of productivity is extremely low. Therefore, I believe that the workshops would be hard pressed to pay these people even $1 a week, let alone $4 a week. My informant also told me that a number of the sheltered workshops run by the organisation known as Aid Retarded Persons - commonly called ARP- do not qualify for assistance, for the same reason.

I understand that when the legislation providing for capital subsidy was introduced, the organisations had said that they would pay at least $4 a week to the persons who were going to be employed in the sheltered workshops. In this way they would receive the capital subsidy of $2 for SI. These organisations received the subsidy, but in many cases they were not able to continue to meet the commitment of paying $4 a week to the persons em ployed in the workshops. On the other hand, some existing sheltered workshops which wanted to extend were not able to pay the persons working in them $4 a week, so they did not receive the subsidy. They feel rather left out. as one could well imagine.

I am well aware that people who assist in these non-profit - if I can use that term - workshops are helping to keep them running by doing the sorts of things which my colleague the honourable member for Oxley (Mr Hayden) mentioned. They conduct raffles. We also have what is in my view the unfortunate sight of disabled people sitting in wheel chairs at shopping centres with a begging box in their hands asking for donations. I hope that we can overcome this situation very soon. Most of this charity fund raising activity has to be carried on by the parents and near relatives of the disabled persons. I hope they will not mind my putting it this way, but I think that they have a big enough social burden to bear without having the further imposition placed upon them of having to go out to help to raise money to pay the wages of the supervisors who help to provide not so much employment - employment is the means to a social end - but a social outlet for their disabled children.

Whilst I applaud what has been done in the Bill. I indicate that I hope the Minister can reach out into the field a little more and cover all these organisations. I think that this would be a worthwhile contribution, even if it only relieves the parents. The Government could provide these people with a recreation centre if we do not want to call it a sheltered workshop. But it is a sheltered workshop because it is run on some kind of commercial basis within the limitations of the people involved. In speaking to some of the other people who are involved in running sheltered workshops I was informed that they are grateful that there has been what they regard as a breakthrough in providing assistance towards meeting running costs. I think some would have been happier if, instead of being given the kind of subsidy that is provided in the Bill, they had received what I think a number of them have asked for, and that is assistance based on a per head per week subsidy. I believe that South Australia provides a per capita subsidy. Victoria provides a per capita subsidy towards the running costs of institutions for mentally retarded persons. Running costs, as the Minister will recognise, are easily the biggest burden. They are a continuing burden. Capital costs are subsidised at a particular point of time. Running costs include the wages of supervisors, social workers where the institutions can afford to employ them, employment officers and transport workers to take these disabled people to and from their homes. Alt these things are costly items.

I am told that at least for the immediate future there is not likely to be much use made of the $500 subsidy which is paid to organisations in respect of persons who graduate to the work force. I believe that the demand for employment from industry and commerce has been so great that the cream of the employees in sheltered workshops has already been taken off and it will be a while before it is replaced. So not many sheltered workshops can look forward to receiving the $500 subsidy in the immediate future. It was mentioned to me that it would be a good idea if there was a co-ordinated system of referral of persons to sheltered workshops. I think that the Minister recognises this fact. Too many persons are left to rot at home for a year, 2 years or even longer before they even come under the notice of or are referred to a sheltered workshop. The desirability of these people soon after an accident, a heart attack or whatever it may be being referred to a sheltered workshop again was something referred to by the honourable member for Oxley. The sooner this is done the better for them and for their own morale.

It has been represented to me also that there ought to be an increase in incentives to draw people into sheltered workshops. I know that concessions have been granted over the years concerning the means test. But I believe that people in a sheltered workshop get nothing extra in that regard than do other invalid persons working in some other employment or even working at home employment. They are allowed their $10 per week provided that they have assets of no more than $400. I am talking about the position of the single person. I believe that the average earnings in workshops arc approximately $5.25 per week. That is the average for a 5-day week. This is hardly a strong incentive, it has been represented to me, to draw people into sheltered workshops for income earning purposes.

Let me point out what has been recommended. I saw this reported by Mr Allan Hayes in the ‘Australian Financial Review* of 10th July this year. Mr Hayes is one of the persons for whom I have great respect. I think the Minister for Social Services has too. Mr Hayes suggested that the means test might be extended to $20 for those persons who are able to extend themselves in employment. We must realise that quite a variety of people enter sheltered workshops. Many of them are persons who have been in full time employment and who have suffered a heart attack or some other kind of disability which has reduced their work capacity. They still retain their skills other than the amount of output they can produce. Therefore, they are capable of reaching $20 per week. It would certainly be an incentive to them to go to places like sheltered workshops. I believe that 90 per cent of those who go into workshops stay in workshops. They are not the ones who graduate into normal employment.

I can see some administrative problems arising within the Bill particularly the provision whereby the subsidy is to go to those services over and above those required in normal employment. Some of the representatives of workshops have said to me that this might be a job of evaluating how much of a person’s services is over and above what that person might contribute in a normal employment position. I refer especially to the position of supervisor. It might be desirable that a supervisor in a sheltered workshop care for half the number of persons that he would have in a normal factory or commercial establishment. Some system has to be worked out. 1 think the sheltered workshops would like to see some overall subsidy for all the staff involved on a sort of flat rate basis rather than this subjective and rather painstaking labourious task of evaluating in the way that I have suggested.

I have mentioned before the need for a co-ordinated plan while ever we need to rely on voluntary services. I do not decry them. I applaud them. But we cannot rely on them totally. There will be overlaps.

The sheltered workshop representatives - these different organisations - acknowledge this fact. Facilities do overlap in some areas but in many other areas no services at all are provided. It is a matter of being able to induce people to undertake such a burden. A co-ordinated plan needs to be introduced for the development of workshops in the community. Then there is the matter to which I have made some reference of steering people into sheltered workshops. Here again, the supply of social workers, probably attached to local government bodies or to regional social services offices, could do a great deal in this respect. I believe that in Great Britain there is a non-compulsory disabled persons register. Other countries have some kind of survey by which they keep a tab on the number of persons of this kind in the community.

I do wish to make reference before 1 conclude to the business of providing employment for sheltered workshops. At the moment the supply of jobs or tasks is quite all right. But even the best administered sheltered workshops do have their slumps and it is a problem for them to carry on. It has been recommended strongly that the Commonwealth Public Service or the Public Services of the various States could take more responsibility in this regard than they do. The Commonwealth Public Service is pretty demanding as far as physical fitness is concerned. It is pretty quick to retire a man or to reduce his status if he does not measure up to its standards. Yet we make pleas to private employers to take on physically handicapped people. I think that our own Public Service and our own statutory bodies might give the lead in this respect. It is notable that in Great Britain again all employers with 20 employees or more are obliged under the relevant Act to take at least 3 per cent of their staff from disabled persons where such persons are available. There are opportunities to seek exemption from the operation of this law in special kinds of employment. But this provision is there.

I do not think that I need say any more. 1 have indicated some of the areas at which I think the Minister might have another look. What I have presented is not all my own ideas. Some of them are my own. As I indicated some have been repre sented to me by a number of hard working people in the field. I am grateful for what is included in the Bill. I wish the Minister well in developing these provisions.

Mr JACOBI:
Hawker

– I rise to support the Bill. I wish to apply myself to some constructive criticisms of certain aspects of the Bill. In doing so, I wish to give formal notice to the Minister for Social Services (Mr Wentworth) that during the Committee stage of the Bill I will deal with the following aspects, which 1 will enumerate, of the legislation. 1 wish to achieve this by quoting from certain parts of the second reading speech made by the Minister. The Minister stated in his second reading speech:

At the present moment, we have a survey in progress as to the dimensions of disability especially among the younger members of the community, ft is of course crucial to give help to the younger group at the lime when training will be most beneficial to them. It was for this reason that earlier this year, and as part of the plan, we brought in -the handicapped children’s legislation, which, I am glad to say, is already proving ils practical worth. Al the other end, we must help them to undertake employment - to train for normal employment those who are able to sustain it, and to provide continuing sheltered employment for those who are unable to make the grade.

He said further:

This Bill gives effect to three specific proposals contained in the Budget Speech - namely, a subsidy towards the capital cost of accommodation for disabled persons working in normal industry; payment of a training fee in respect of persons placed in normal employment by a sheltered workshop organisation: and a subsidy Cowards the salaries of certain sheltered workshop staff.

He went on to say:

The impetus given by the Government’s assistance can be gauged by the fact that more than 100 sheltered workshops - employing an estimated 5,000 handicapped people - have been approved for assistance and are now producing goods worth S5m a year. This figure is rising al the rate of approximately Sim each year. The wages paid to their handicapped employees, most of whom are invalid pensioners, are also increasing steadily.

Further, he stated:

By amendment of Section 9 of the Principal Act, the capital subsidy of $2 for $1 which is at present available for the accommodation of persons working in sheltered workshops, most of whom have been assessed as 85 per cent incapacitated for work, will be extended to include subsidy for hostels for disabled people who are working in normal industry.

He continued:

The second feature of the Bill is that it provides for a training fee of $500 to be paid to a sheltered workshop organisation where a former employee who is disabled to the extent required for invalid pension purposes, graduates to normal employment and is able to retain such employment for a period of 12 months.

He stated further:

The final provision contained in the Bill is for payment of a $1 for $1 subsidy towards the salary costs incurred by sheltered workshop organisations in the employment of persons to provide special supervision, or medical guidance, counselling, social work or other services for their disabled workers.

My purpose is that I wish to refer to these extracts specifically during the Committee stage of the Bill. I consider that certain aspects of them ought to be clarified and in fact looked at in greater depth because there are quite a number of anomalies within the provisions of the Bill.

Briefly I wish to turn to an aspect which has been mentioned tonight, and that is the question of the means test and social service payments as they apply to the disabled. I am the first to concede that the tapered means test has been of some help to handicapped people. However, further concessions in, or abolishment of, the means test for those on sheltered employment allowance is overdue. The handicapped need encouragement, not discouragement, in their efforts to help themselves. The existing means test for many of the handicapped is still the biggest single burden in their attempts to lift themselves from poverty. A single invalid pensioner receiving SI 5.50 a week is still allowed to earn a maximum of only $10 weekly before the means test operates. This means that with a gross income from sheltered employment allowance and earnings of $25.50 the handicapped person is living well below the breadline. Yet for all his efforts at earning more than $10, sheltered employment allowance is reduced at the rate of 50c for every $1.

It must be appreciated that from a handicapped worker who is assessed at at least 85 per cent incapacitated the effort required to earn is considerably more than the effort required from his able bodied counterpart. Yet the means test still denies him a minimum of 50 per cent reduction in his earnings when those earnings are more than $10 weekly, because in addition, as his earnings increase, income tax becomes payable. Many handicapped workers are so discouraged by this artificially created barrier that when they earn the $10 they do not continue their work. No-one can blame them for this approach. Exercising the means test at this level - when gross emoluments are $25.50 - is outrageous. It would be more proper to apply the means test to the salary and allowances of members of this Parliament.

The situation for the handicapped worker in a multi-diagnostic workshop frequently becomes ludicrous. Here a physically or metally handicapped worker working at the side of a blind worker is grossly disadvantaged, because there is no means test applied to the holder of a blind pension. Under these circumstances it is beyond expectation to hope that a quadriplegic worker would not be affected by the fact that a blind worker working at his side in the workshop retains his blind pension without deduction, irrespective of his earning capacity. Yet the blind pensioner can use public transport to and from the workshop while the quadriplegic worker has to use a taxi or private car. Thus the quadriplegic worker has greater expense in getting to and from work and at the same time is subjected to a deduction on sheltered employment allowance at 50c in the $1 after earnings of $10 weekly, while the blind worker is not so disadvantaged. It is vital that all handicapped workers be brought up to the same level as the blind pensioner. It is untenable to consider otherwise.

I commend to the Minister the ‘Australian Financial Review’ issues of 9th and 10th July this year which clearly set out some examples. There is no doubt that some handicapped workers attending sheltered workshops are the heaviest taxed workers in the community, even though their gross emoluments are the lowest in the community. It is impossible to expect handicapped people to develop their residual abilities with this enormous economic barrier imposed by the Government. A single handicapped worker on a sheltered employment allowance earning $10 a week receives a gross total from earnings and sheltered employment allowance of $25.50 and at that point the means test applies.

The handicapped worker earning $30.06 a week has his sheltered employment allowance means tested to the degree that the allowance is reduced from $15.50 to $5.45 a week, leaving a gross total of $35.51. This is a ludicrous situation, especially when one understands the enormous effort that the handicapped worker would have to make in order to receive a gross increase of $10.01. The blind pensioner earning the same amount, namely $30.06, would receive a gross income of $45.56. The Government, while it continues this policy of operating this heavy means test on sheltered employment allowance, is actively creating barriers against the successful rehabilitation of the handicapped and also against the full career development within the sheltered workshop of those whose disability would preclude their placement in open industry.

If it is not possible for the Government to undertake the complete abolition of the means test in relation to the sheltered employment allowance - and I commend this to the Minister - at least there should be a further easing of the means test in this area in order that disincentives for rehabilitation may be minimised. There can be no excuse that the cost factor rules it out: Quite the reverse. Greater productivity and production and less clerical expense in administering a means test will result. Undoubtedly there should be abolition of the means test in connection with all pensions, but while it may be economically difficult for this to be done in one sweep, there should be a peripheral attack on the means test. The majority of those attending sheltered workshops have been either disabled for life or for a long period of time, or have had disability come at an early stage in life and so have not had the opportunity of acquiring assets in the same way as most age pensioners have. So the handicapped have an additional reason for having the means test either abolished or modified. If the Government plans only a peripheral approach then this is the area in which to start.

When gross earnings in the workshop reach $40.96 weekly the sheltered employ ment allowance cuts out and when it cuts out all the ancillary benefits, including medical benefits, cease. When earnings in the workshop reach $40.86 weekly the sheltered employment allowance is reduced to 5c weekly but when this occurs ancillary benefits remain. Here again there can be no incentive to continue beyond the $40.95 when the sheltered employment allowance cuts out, because ancillary benefits attached to the sheltered employment allowance are an insurance for the handicapped worker. For the handicapped worker to go on beyond this point and lose his medical benefits is an enormous deterrent because the handicapped are always conscious of the reality of medical expense. It is strongly urged that the ancillary benefits attached to the sheltered employment allowance and invalid pension remain for all disabled workers working in a sheltered workshop. I think the points I have raised tonight warrant early investigation. They should be acted on immediately and I commend to the Minister my belief that this aspect must receive the prompt attention of the Government to alleviate what are in fact obvious anomalies and gross injustices.

Mr WENTWORTH:
Minister for Social Services · Mackellar · LP

– in reply - A number of points have been raised, some of quite major consequence. I would like to thank honourable members on both sides of the House for a constructive approach. I would not be able to agree with everything that has been said but on the other hand I would certainly not be able to disagree with everything that has been said. I will consider some of the points raised. Firstly, let me say that the Government is proceeding in accordance with a plan in this matter but it is not possible to say that everything must be set out in advance. There are 2 reasons for this. The first is that at the present moment we do not have all the information we would like to have. The second reason is more important: Until you advance you cannot quite see where the next step is. The old Latin tag ‘solvitur ambulando’ - ‘you can see your way clearest if you go forward* - is. I think, of relevance to this situation. We want to try things. We cannot always be certain of what is the best way to go but unless we make a forward step we will never find out. 1 would regret it if a State reduced its benefits when the Commonwealth increased its benefits, but that is something over which no Commonwealth government would have any control. 1 agree with the contention that we are not rehabilitating enough people. I am worried at the intake into invalid pensions, which is not always as well controlled as it might be. In particular I am worried that many people entering upon invalid pensions for the first time are not brought face to face with the opportunities for rehabilitation and do not get all the benefits which could come from it. I think this is one of the great inherent weaknesses in a scheme of invalid pensions which goes back now for many decades. This is one of the matters to which I am giving special attention. It seems to me that people who come into invalid pensions for the first time, and particularly those in the younger age groups, should be much more carefully scrutinised so that they can have new opportunities to overcome their disabilities. I do not think we are doing as much for them as we should. There are too many people dead-ended on invalid pensions.

This matter relates very largely to the means test which was raised by the honourable member for Hawker (Mr Jacobi)). If we do not have a means test, the qualifications for entry into the invalid pension must be scrutinised much more carefully than they are. If one looks at the ratio of invalid pensioners to population in the various States one finds that there are anomalies which can be explained only on the assumption that the medical criteria are applied differently in different States. If one looks at those figures one sees that the anomalies are massive. Perhaps the giving of a means test free pension to the. blind has created anomalies. I would not want to withdraw in any way from the blind their means test free pension. I am much more concerned with an aspect which the honourable member perhaps has overlooked - it is a real aspect - and that is the effect of the moderate earnings on supplementary assistance. I think averages of $5.25 earnings were quoted by the honourable member earlier tonight. This indicates that the people who would be affected by the normal means test on pensions would be comparatively few, but the people affected by the means test on supplementary assistance in this area are considerable. I think it is to this aspect rather than to the one put by the honourable member that I would be first turning my mind because this has a real impact on the situation and it causes me a considerable amount of disquiet.

The point was raised that our rehabilitation service should be more hospital oriented. I cannot agree with that. It is perfectly true that for some cases hospital orientation is desirable and essential. For every large hospital complex there should be a rehabilitation annex. This is something which I feel does not reach to the greater part of our problem. It is essential for part of the problem but it seems to me that the questions of motivation and employment, of fitting people into the kind of activity which they themselves can profitably conduct, are far more important in terms of what can be achieved. ] believe that the sheltered workshop could not only be one of the great instruments that we have for getting people employed temporarily or perhaps even permanently but also an instrument to pass them into the stream of normal employment.

I myself would look for far greater liaison between the Rehabilitation Service and the Commonwealth Employment Service within the Department of Labour and National Service than I would between the Rehabilitation Service and the hospital services. 1 agree that both should be there, but when we come to look at their proportionate importance I am inclined to think that the weight goes the way I suggest. I say this particularly because I remind the honourable member that when we looked at the intake of our invalid pensions at the bottom of the age scale we found that 61 per cent were mentally retarded. The more dramatic case is the quadraplegic or the paraplegic or the person who has lost a limb in a motor accident. I know that these are the most dramatic cases. They are important cases but they are not in number the bulk of the cases. Whereas we want to help both types we have to look at this proportionately and see where the needs are. This is part of the way in which I think we are working towards a co-ordinated programme. Although we are taking it a step at a time it does not follow that we do not have a fairly clear idea of where we are going. Of course, this is subject to the inevitable qualification that I have made that until the first step is taken we cannot be quite certain as to what the next step should be. But do not let us dither and do nothing because we do not have a complete plan. Let us see the general direction in which we are going and take steps towards it.

I agree with the contention of the honourable member for Oxley (Mr Hayden) that there are imbalances between the various States. The sheltered workshop has been developed much more in New South Wales than in other States. On the other hand, aged persons homes are developed much more in South Australia than they are in New South Wales. I would remind the House that our programme here is in a sense open-ended. We have never rejected a worthwhile application on the grounds that we do not have funds. If an application for sheltered workshop assistance is made we will find the funds for that assistance to be given, irrespective of where the application comes from. Let us have more facilities in South Australia or Victoria or Queensland, but do not let us say that we want less in New South Wales.

Mr Hayden:

– I did not say that.

Mr WENTWORTH:

– No, but it might be implied from what the honourable member said. There is an imbalance because there is not the same aptitude to take this up in other States. Let us commend New South Wales here and try to get the other States to come in. Let us correct the balance upwards and not downwards. As I said, the Government’s programme is open-ended. Let me come to one or two of the things that were said about detail. I will deal firstly with sheltered hostel equipment. This is subsidisable if it is a fixture but the hostel is not entitled to a subsidy if the equipment is not a fixture. In regard to the subsidy for salaries clause 16d. states that the subsidy is payable as follows:

Where-

a person is employed by an eligible organisation wholly or partly to provide services of a supervisory, medical, counselling or other kind in connection with the employment of disabled persons iti sheltered employment provided by the organisation;

The hostel is subsidised because it is necessary for living purposes and if the living is connected with the person’s employment then the specialised services in the hostel would be subsidisable for those in sheltered workshops.

Mr Hayden:

– But not for those outside.

Mr WENTWORTH:

– But not for those outside. I would think that most of them will be in sheltered workshops but we will have a look at this as and when it comes up. The normal running staff of a hostel would not be subsidisable

Mr Hayden:

– If you have 80 per cent of sheltered workshop people accommodated at the hostel it would apply to the 80 per cent.

Mr WENTWORTH:

– Some such administrative arrangement will be made. The details have not been worked out but 1 think that 1 have spelt out the general principle which will be applied. We are not - 1 think that the honourable member for Oxley asked me to deny this unci I do deny it - trying to use sheltered workshops on the cheap. We regard them as very efficient instruments and we are looking at them in a way that will ensure that we can get the maximum amount of benefit for handicapped people. In that sense they are being used as he suggested but we are not trying to do things in a pinch-penny way which would cut down the benefits. In point, of fact I believe that the voluntary organisation gives a benefit in a way which the Government organisation as such cannot do as efficiently. There would be very few people - probably no more than 1 case in a year in the Commonwealth - who would be kept in sheltered workshops unnecessarily to meet the 6 months qualification. I do not think that this is a matter of very great consequence.

There is some substance in the point made about competitive quotations and things of that character. The Government has already taken steps to do something about this. I do not know whether I have mentioned this before in the House so I will mention it now. The Government is proposing to subsidise a couple of industrial consultants who will be looking for contracts for sheltered workshops and who will be trying to find appropriate jobs, appropriate prices and helping in the management of them. I do not think that these people will be Government employees. I am hoping that they will be subsidised by the Government and attached perhaps to the Australian Council for the Rehabilitation of the Disabled or perhaps the Australian Sheltered Workshops Association. I think that the honourable member is quite right when he says that there is proper scope for doing this kind of thing.

Perhaps I have taken up too much time on this matter but I believe it is one of immense interest to honourable members. I thank honourable members on both sides for their constructive approaches and I assure the House that the Government is looking for ways and means of developing even more satisfactorily the system that we now have. Our present system is only 3 years old as far as the Government is concerned but it is older than that as far as voluntary organisations are concerned. We want to extend it fairly rapidly. I hope that with the assistance of honourable members we will do so. Earlier tonight I referred to the availability of a manual on sheltered workshops. I think that if they will look at this, perhaps in their own electorates they will find an organisation which could be helped and which would benefit by their assistance. By so doing they would be helping handicapped people in thenown electorates and, indeed, throughout Australia.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Progress reported.

Thursday, 15 October 1970

page 2163

ADJOURNMENT

Laevo-dopa - Primary Producers Demonstration - Exercise of Conscience - Charter Flights for Migrants - Wheat

Motion (by Mr Wentworth) proposed:

That the House do now adjourn.

Dr KLUGMAN:
Prospect

– I should like to speak for just 5 minutes and to raise a problem arising out of the testing of a relatively new drug. I will have to give some technical details to make the point, but basically this is a human problem, as will appear later. Very briefly, the substance concerned is Laevo-dopa, which is the metabolic precursor of dopamine, a transmitter substance present in the basal ganglia of the brain. In a disease called Parkinsonism the concentration of dopamine in these areas of the brain is diminished. This forms the basis for the effectiveness of L-dopa as replacement medication in the treatment of symptoms of Parkinson’s syndrome, particuarly rigidity and immobility, not so much of tremor. If honourable members have seen people with Parkinsonism they are probably aware of the symptoms. Treatment with L-dopa, being replacement therapy, is essentially long term. In other words a person must keep on with the substance. Once he goes off the substance the original symptoms reappear.

There are many potential side effects. In overseas trials improvement occurred in approximately two-thirds of the patients. This has varied from slight to spectacular but a leading article in the ‘British Medical Journal’ of February of this year states:

Initial improvements may be entirely subjective - increased vigour and well-being, greater clarity of thought and memory, and a general feeling of increased mobility. Soon unequivocal and sustained evidence of benefit may become apparent

I emphasise the word ‘may’ so as not to give anybody the idea that this works in every case. The article continues:

A long immobile fades may become animated, a sparkle returns to the eye, and the gait, posture, dexterity of the hands, speech, and balance may all improve. Particularly convincing is a renewed ability to perform movements which have been lost for several years such as rising from a chair or a lavatory seat and turning over in bed. This renaissance may extend to tasks such as shaving, typing, knitting, playing the piano, and even completing the football pools. Art early physical sign of response is that silent dentures, hitherto fitted snugly in an immobile face, rattled freely. In exceptional cases patients confined to bed and wheel chair have walked independently.

This drug has not yet been released for general marketing in Australia and its supply is limited to clinical trials. Three companies are importing the drug into Australia. I come now to the reason for raising this question tonight. I understand that applications have been made to place this drug on the list of pharmaceutical benefits. In the first instance, at least, its use would probably be restricted to specialists and hospitals. These seem reasonable restrictions and reasonable delays, looking at it from the point of view of the Government and especially the Department of Health but - and I emphasise the but - what happens? A patient who has been treated ineffectively with the usual drugs for years is admitted to clinical trials where the drug is supplied free and he improves. Twothirds of the cases improve dramatically. They are then told: ‘We have finished our trial. If you want to continue the treatment you must buy the drug yourself.’ But to do so would cost between $7 and $10 a week, depending on the source of the supply and the amount of the drug which is used in each case. Having to pay $7 to $10 a week would place a tremendous burden on many elderly people, many of whom are pensioners. Even if they are not pensioners it is a large amount of money for them to have to pay out.

I appeal to the companies concerned, the clinics taking part in the trials, that is, the large public hospitals, and the Department of Health to co-operate in order te enable patients who have been helped te obtain the drug free until it is formally added to the list of drugs available under the pharmaceutical benefits scheme. To my mind it is bad enough to have a degenerative disease such as Parkinsonism, but when the condition of a patient who has been helped worsens because finance is lacking, it is much worse. I am sure that only a small amount of money would bt involved at this stage, although in the long run it is hoped that the 10,000 .sufferers of this disease in Australia may be helped. I ask the Minister for Health (Dr Forbes) to take the appropriate steps to make it possible for the companies and clinical units which are taking part in this work to continue treating with the drug, until such time as the Government makes a final decision on whether it will admit it to the free list, those people who, for financial reasons would be unable to continue to finance their own treatment.

Dr FORBES:
Minister for Health · Barker · LP

– Unfortunately I was not present when the honourable member for Prospect (Dr Klugman) commenced his speech, but 1 assume that he was referring to the drug L-dopa.

Dr Klugman:

– That is right.

Dr FORBES:

– Perhaps I should inform the honourable member of the situation as I know it. The honourable member referred to the fact that limited quantities of the drug have been imported up until now lor the purpose of clinical trials, which is the normal method of introducing a new drug of this nature. Quite a number of patients have benefited from taking part in the clinical trials which have been conducted under the control of specialist neurologists. Whenever my attention or the attention of the Department of Health has been drawn to the position of patients who could benefit from treatment by this drug we have put them in contact with the doc tors or institutions undertaking these clincial trials.

I think it was last month, although it could have been earlier, that the general marketing of the drug in Australia came up in the normal way for consideration by the Drug Evaluation Committee. Two drug manufacturers had made application to market L-dopa. One product was approved for general marketing. Consideration of the other company’s application was deferred until the company provided additional information about its drug. The position now is that, through the normal processes, the drug has been approved for general marketing. I understand that the company which has obtained approval of its product for general marketing will not be in a position to place the drug on the market before November of this year. The Pharmaceutical Benefits Advisory Committee will be considering the question of listing L-dopa as a pharmaceutical benefit at its next meeting in November. So. if the Committee makes a favourable recommendation in respect of Listing, this will coincide more or less with the availability of the drug for general marketing. That is all the information I have in my head, but it may be of interest to the honourable member and the House.

Dr Klugman:

– The only point I wanted to raise is whether anything can be done in the meantime to cover people who have finished the trials and who do not have the money to pay for the drug until November.

Dr FORBES:

– Unless they continue in a trial they cannot, as 1 understand it, get the drug because it is not available. But I will look at that question and see whether there is some way of ensuring continuity between now and November for the people who have benefited from the trial.

Mr GRASSBY:
Riverina

– 1 rise tonight to rectify an injustice which has been perpetrated by the Government against people in the Australian countryside who have had the temerity to believe that we have a crisis in the rural sector and that the Parliament should know about it and perhaps apply itself to rectifying it. I refer to the deliberate campaign of sabotage that was waged against the farmers rally in Canberra yesterday. Once it was announced that this rally was to take place, members of the Government in the countryside went into action very well and very efficiently. Let me pay a tribute to those members of the Government and their machine. It is still strong, enduring and capable of convincing people in the countryside who are going bankrupt that all is really well.

I want to tell the House of the efforts of a lonely and dedicated primary producer who has been libelled in a quite shocking way by some members of the Government. 1 refer to Mr Bob Hudson of ‘Cowary’, Wilcannia, who was the convenor of the rally in Canberra. He acted out of motives of pure loyalty lo his family, his neighbours and his colleagues. He gave a lead, and he talked and pleaded with members on all sides of the Parliament for a better deal for country people. He was not a member of any political party and he never at any time mentioned any party politics. All he wanted was for the Commonwealth Parliament to know and to understand what the problems were and to take some action. He sought the support of the Edenhope Agricultural Bureau for the rally, and it gave support willingly. He sought the support of fellow farmers in other States, and they agreed. He invited no fewer than 20 ministers and members of the Government to address the rally. He invited only 3 members of the Opposition. Every Government member had some excuse for not being present, some valid and some not. The 3 members invited from the Opposition benches willingly accepted. The Minister for Primary Industry (Mr Anthony) was in Fiji; the Acting Minister for Primary Industry (Mr Nixon) was at lunch; the Prime Minister (Mr Gorton) was at lunch. In fact, with some honourable exceptions, they all seemed to be eating.

This was the public attitude of the Government towards a rally by people who had problems. There was no doubt in my mind or in the minds of the people who did the job that in the background there was a campaign of sabotage led by those freedom fighters for the countryside, the honourable member for Wimmera (Mr King) and the honourable member for Hume (Mr Pettitt). By implication they labelled the Edenhope Agricultural Bureau, the one body without fear or favour or politics, a body that had stood firm. The organisers of the rally were stooges, according to one Press release. The Government, of course - let us be quite blunt - largely succeeded in its sabotage and its aim. It attempted to discredit a man who had put his time and money into a protest against the present crisis in the countryside. One Government member is reported as having stated to Mr Tom Connors of the ‘Australian Financial Review’ that he was very pleased to report that he had stopped one busload of farmers on their way to Canberra. He just told them that it was not necessary.

Mr King:

– Who was that?

Mr GRASSBY:

– Well, Mr Tom Connors has not said, but it is published, and if there is any refutation to be made I hope it will be made. That was the confidence that was given to him by a Government member.

Mr Cope:

– It sounds like Winton Turnbull to me.

Mr GRASSBY:

– I would not know. The South Australian delegation apparently was betrayed by a man who sold his farmer neighbours out for political endorsement. He was able to spirit them away from the rally and to receive a personal and private blessing from the Prime Minister. Then the Government came forward today with perhaps the ludicrous statement of all - that the rally was organised by the honourable member for Riverina. Tonight 1 say lo the Government that if 1 want to organise a rally I will do so and I will let Government supporters know about it. J am quite capable of managing it.

Mr Holten:

– The honourable member does not look like it.

Mr GRASSBY:

– I am sorry, I did not hear the Minister for Repatriation. If he has something to say 1 will wait for his interjection.

Mr Holten:

– The honourable member did not get many there.

Mr GRASSBY:

– As the Minister for Repatriation said, it was not a case of 1 did not get too many there, but that the Government’s campaign of sabotage succeeded. I hope the honourable members are proud of themselves. I have not heard the honourable member speak in this House on any of the problems of the countryside. But he will have an opportunity tomorrow night when I will take him up on his challenge. Holten challenges Grassby on wheat policy. I say to the Minister: Come into the chamber tomorrow night and we will have a discussion at your convenience. I did not rise tonight to defend myself.

Mr Holten:

– Let the honourable member defend Labor’s policy on wheat.

Mr GRASSBY:

– I invite the honourable member to come in to the Parliament tomorrow night for a change and discuss the policies of the countryside. Accept the challenge. We will be delighted to meet the honourable member on the adjournment. I want to say in relation to the people and Mr Bob Hudson in particular and the Edenhope Agricultural Bureau that it is true they were let down by people. It is true that there was some betrayal, some sabotage, but that does not detract from the good will and good intention of those people. 1 was proud to have assisted them. I have assisted farmer rallies before, even rallies presided over by a Country Party senator, Senator Tom Bull in Narrandera. I have supported and encouraged rallies which were presided over by the honourable member for Gwydir (Mr Hunt) because they seemed to me to have some merit and good intent on behalf of people and not petty party politics.

On this occasion I gave my support. Tonight I repeat in the House of Representatives that I was delighted to do so. I think it was a miserable action to try to label and to denegrate a man who gave his time and his dedication only for his family and his neighbours in the countryside. I refer to Mr Bob Hudson particularly. I cannot understand how men who come in from the countryside in crisis can turn their backs on people of good will who are doing their best. This was not an attack on th.. u.-n-> -nVe member for Riverina. It was an attack on people who had a desire in something better done. The people who were responsible for the labelling and sabotage should be ashamed of themselves. I stand in this House proud of my effort to stand alongside people who were good in their intent and in their intention on behalf of their people.

Mr JARMAN:
Deakin

Yesterday in this House we heard Opposition speakers talk about the rights of conscientious objectors. They were not satisfied with the provisions of the National Service Act which gives exemption to genuine pacifists and to those who have a conscientious objection to fighting in all wars. They wanted and they asked for provision for exemption for those who refuse on ground of conscience to fighting against the Vietcong and North Vietnamese Communists in South Vietnam. I do not intend to argue the rights or the wrongs of the case put by the Opposition. I think its arguments were adequately disposed of yesterday. But I instance them here because I wish to point out the inconsistency of the Labor Party and the organisations on its side of politics.

Tonight in the South Australian Parliament a censure motion will, I believe, have been moved against the South Australian Labor Government’s Minister for Roads and Transport over departmental letters apparently signed by him threatening dismissal of government employees who refuse to join a union. 1 understand that in the past 3 weeks the Leader of the Opposition in South Australia, Mr Steele Hall, has twice produced letters to departmental heads to this effect. From Press reports I understand that the Acting Premier of South Australia, Mr Corcoran has said that Mr Hall was correct in his quotation from them. According to the Press Mt Hall said that a departmental letter threatened some Government employees with dismissal if they refused to join an appropriate union. But here lies the inconsistency and the insincerity of the Labor Party. What about those who, as a matter of conscience, are unable to join a union? Surely to be consistent the Labor Party must make an exception in the case of conscientious objectors to unionism. But as we see from the letters reportedly sent out by the Minister in the South Australian Labor Government, such is not the case Surely if exemption is to be granted to people who have a conscientious objection to fighting in a particular war, to be consistent we must agree to the proposition that anyone who has a conscientious objection to joining a union should also be exempt. On Monday a young lad from my electorate-

Mr Cope:

– What about-

Mr JARMAN:

– Of course, honourable members opposite do not like hearing these sorts of things. On Monday a young lad from my electorate. Peter Stratford Hocking of 35 Laburnum Street. Blackburn, Victoria, who had gone to Wodonga to take a job with Lamson Paragon Printers, was sacked from that job because, due to pressure from the unions on that firm, the firm has adopted a closed shop policy against anyone who is not a union member. Peter Hocking had conscientious objection based on religious grounds against joining a union and believed that according to his interpretation the teaching of the scriptures would not allow him to do so. He signed a statutory declaration to this effect. As his father said in his letter to me:

When approached by shop stewards, he explained that as a believer in the Lord Jesus and governed by the Word of God he had a conscience about joining the union and being party to its activities and outlook.

Now, no matter what one thinks about this lad’s religious beliefs-

Mr Cope:

– What do you want us (o do about it?

Mr JARMAN:

– No matter what the honourable member for Sydney thinks about this lad’s religious beliefs it is a fact that he had a genuine conscientious objection to joining a union, based on religious grounds. The boy’s father spoke to the Assistant Secretary of the Printing and Kindred Industries Union and got nowhere. He then spoke to a Mr Garrett, the Manager of Lamson Paragon Printers and Mr Garrett said, and J quote from Mr Hosking’s letter: . . while Peter was performing his duties satisfactorily and they would be sorry to see him go, they felt they had to stand by their policy of closed shop’ and would not alter their decision.

The letter continues:

Representation was then made to Mr L. Hills, solicitor, of Sydney who contacted Mr Fogarty, the Assistant Secretary of Labour and Industry, Victoria. Following moves between the Company and the Printing and Allied Trades Employers’ Federation, a stay of one week was given Peter as it was found that the Country Printers Award covered the position and while embracing a preference to unionists clause carried the provision for application to the Industrial Registrar for a certificate of examption. This was lodged on 5th October 1970.

But on Monday Peter Hocking lost his job for no other reason than his conscientious objection on religious grounds to joining a union. How hypocritical does it make the cries of the Opposition for the rights of conscientious objectors against particular laws when they raise no cry of protest for the rights of conscientious objectors to joining a union. Peter Hocking’s father has asked me to ask the Minister for Labour and National Service (Mr Snedden) to see whether a provision can be incorporated in the Graphic Arts Award to this effect:

That a person who is prevented from being a member of a union on the ground of conscientious beliefs be able to be engaged under the Award, and if already employed not to be dismissed, injured in his employment, or deterred in his position by reason of his circumstances relating to his conscience.

I shall place this matter before the Minister as I have been requested to do. But this is not the only instance of this kind of thing. Several weeks ago in Tasmania there was a case of certain men in, I think, Burnie, who for certain reasons, wished not to join a union. The editorial in the Launceston ‘Examiner’ of 2nd October took this matter up and I will quote it because it is very typical of what people feel about the Labor Party in this matter. It states:

The individual has rights, and in a world increasingly indifferent to liberty and individualism, a man’s remaining rights must be respected. How this is to be achieved must remain one of the greatest challenges to democratic parliaments. But while it poses as the standard-bearer of conscience, the Labor Party must be consistent in ils attitude to compulsory unionism.

I would like it to be known to this House that I believe a grave injustice has been done to this lad. I believe that Lamson Paragon Printers and the Printing and Kindred Industries Union - I know that members of the Opposition who are interjecting do not like this, Mr Deputy Speaker - stand indicted for their actions. If Mr Virgo, the South Australian Labor Government’s Minister of Roads and Transport, has his way it looks as though we will have many more cases similar to that of Peter Hocking.

Mr CHARLES JONES:
Newcastle

– The speech we just heard from the honourable member for Deakin (Mr Jarman) shows what a hypocritical humbug he is.

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I suggest to the honourable member for Newcastle that he withdraw that phrase.

Mr CHARLES JONES:

– I withdraw it, Sir. The speech we have just heard from the honourable member is a clear indication of what hypocrites and humbugs Government members are-

Mr DEPUTY SPEAKER:

-Order! I suggest to the honourable member for Newcastle that in the circumstances he also withdraw that remark. The honourable member for Bendigo will remain silent. Mr Kennedy - A point of order-

Mr DEPUTY SPEAKER:

-Order! The honourable member for Bendigo will resume his seat.

Mr Kennedy:

– Why?

Mr DEPUTY SPEAKER:

-Order! The honourable member for Bendigo will resume his seat. The honourable member for Sydney will resume his seat.

Mr Cope:

– I am taking a point of order.

Mr DEPUTY SPEAKER:

-The honourable member for Sydney will resume his seat. The honourable member for Newcastle used a phrase when referring to an honourable member in this House. 1 then asked the honourable member for Newcastle to withdraw that phrase, which he did. The honourable member for Newcastle then used the phrase in general terms referring to all members of the Government.

Mr CHARLES JONES:

– That is correct.

Mr DEPUTY SPEAKER:

– As the honourable member for Newcastle is aware, in the ordinary circumstances of general comment the Chair does not ask for that phrase to be withdrawn. However, I suggest to the honorable member for Newcastle that it was used immediately after I asked him to withdraw it in relation to an individual member, the inference being exactly the same. I suggest to the honourable member for Newcastle that, although this may not be within the normal province, in the circumstances he withdraw the remark he made.

Mr Barnard:

– On the point of order-

Mr CHARLES JONES:

– I am not speaking to any point of order, Mr Deputy Speaker.

Mr Cope:

– I rise to a point of order, Mr Deputy Speaker.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Newcastle is on his feet.

Mr Cope:

– I am taking a point of order.

Mr DEPUTY SPEAKER:

-The honourable member for Sydney.

Mr Cope:

– My point of order is that your ruling does not coincide with that of Mr Speaker. Mr Speaker consistently has told us that we cannot refer to any single member of the Government as a Fascist but we can refer to the Government as Fascist. Vice versa, honourable members on the Government side cannot refer to us individually as Communists but they can call the Opposition Communist.

Mr DEPUTY SPEAKER:

-Order! I accept the point of order raised by the honourable member for Sydney. I explained why I asked the honourable member for Newcastle to withdraw. His remark followed immediately after my original request to him to withdraw. I suggested to the honourable member for Newcastle that his second remark was partially a continuation of the remark that he made in relation to an individual member. I have not given a ruling but I have made a suggestion to the honourable member for Newcastle.

Mr CHARLES JONES:

– You asked me to withdraw a certain remark I made about an individual member. I have withdrawn that. I knew that I had to withdraw it or go out - and he is not worth going out over. The Speaker in this place has consistently ruled that generalised statements such as I made are not required to be withdrawn. I remember an occasion on which a Minister sitting at the table called members of the Australian Labor Party Communists. We debated the whole subject for several hours one Friday or Thursday, and finally the ruling of the Chair was upheld. I say to you that on the basis of previous rulings of the Chair 1 am not obliged to withdraw my statement. If you are going to be consistent, please be consistent.

Mr DEPUTY SPEAKER:

-I do not want to take up the honourable member’s time. I have already said that I suggested he withdraw the statement. I did not ask him to withdraw it but because of the circumstances I suggested that he do so. The matter is in his hands.

Mr CHARLES JONES:

– Begging your pardon, Sir, you are wasting my time and already 5 minutes of it have gone. I wish to bring forward a matter concerning the snide operations of certain migrant organisations made up of certain people who are setting up clubs and are chartering aircraft to take people overseas. In the very limited time available to me now I would like to put on record a letter which I have received from a Greek naturalised Australian in which he said:

Since August this year certain Greek travel agents with their organisations have been chartering Qantas aircraft one way to Alliens, Greece the fare of which is $312.50. The poor Greek migrants have been taken for a ride and have been robbed of hundreds of dollars above the right fare. Apart from the 2 charters that have already left, one left on 4th August 1970 and the other on 23rd August 1970, and there is another departing from Tullamarine this Sunday, 20th September 1970. The poor migrants have been openly robbed and/ or at this moment also with this charter on 20lh September 1970. These travel agents are charging from $390, $400, $425, $450 and even as much as $500 and $567. They are doing exactly as they did with the previous charters and if they are not stopped they will continue to do the same. As a Greek naturalised Australian 1 am disgusted and ashamed that these things should be allowed to take place in Melbourne. I have already written lo the honourable Ministers for Civil Aviation and Immigration and as well to the General Manager of Qantas but as yet I have nol received any reply.

In the time that is available to me I cannot put on record the whole of this man’s letter. But the facts are these, and honourable members can check them out with the airline operators. I have found out that the normal full economy fare is $567. Because of charter arrangements the airline operators charge 55 per cent of the full economy fare which means that the correct fare for a charter flight is $312.50. But as this man has said, some of the agents are charging fares as high as $500 and $567. Qantas Airways Ltd is aware of these facts but there is not a great deal that this organisation can do. The point is that Qantas should be taking more positive action than what is being taken at the moment against people who are forming what, in my opinion, are bogus clubs. These people are forming clubs to get people to travel overseas by aircraft. The clubs are charging all sorts of prices and are making exorbitant profits. I believe that the Department of Immigration or the Department of Civil Aviation, if need be, should be investigating these agents. Under no circumstances should the departments be doing any business whatever with them.

They should be forcing them out of business. If need be, they should be letting it be known throughout the trade just what should be done to stop these people.

For example, on most authorative advice, I believe that the Hermes Travel Agency in Lonsdale Street, Melbourne, is a bunch of crooks who have been responsible for taking down people in this category. These facts are known to people in the airline industry. I hope that people who are interested in chartering aircraft will have nothing whatever to do with the Hermes Travel Agency in Lonsdale Street, Melbourne. There is much more that I would like to say; but in the few seconds that are left to me let me say that it. is time the Department of Civil Aviation made a full inquiry into these fly by night agencies that are being set up to trap people and to create situations such as the one reported in the Melbourne ‘Age’ of 7th September under the heading Tour Tickets are No Good’. That is a case in which 100-odd Australian citizens are overseas and cannot get back here. They have had to send home for more money so that they can pay their fares from Greece or London back to Australia. It is time the Department of Civil Aviation and the Department of Immigration did something to protect and to assist people in this category.

Mr GILES:
Angas

– In the brief time at my disposal 1 wish, first of all, for about 2 minutes, to try to answer the contentions - I think that is as high as I can put them - of the honourable member for Riverina (Mr Grassby). The best way I can do this is lo say, firstly, that I was not invited to the rally - I presume, possibly, because he organised it; secondly, that if he did organise it he is not a very good organiser; and, thirdly, that I spoke to Mr Hudson, who is the norminal organiser, the night before. Of course, he lives a long way out and quite plainly he was relying on people who live closer in to do a lot of the organising. The point I want to make is that the large South Australian delegation of 3 - not 2, as is commonly supposed - came over the night before. I read their remarks from the Adelaide Advertiser. They said that they came to Canberra the night before to ‘sniff the political breeze’. The honourable member for Sturt (Mr Foster) is interjecting. I do not think they sniffed him, so he should not get excited. They continued:

We came here with an open mind, but after careful consideration we came to the conclusion at 9 o’clock this morning that the rally was not for us.

That was a Press statement. It was put in moderate language.

Mr Grassby:

– It was put in your language.

Mr GILES:

– It was put in moderate language. I know very well the language that they use when talking to me. Perhaps it would not have done the Adelaide ‘Advertiser’ much credit if it had publicised that. This is what happened to a rally that was organised as a political stunt. It is of no use for the honourable member for Riverina to stand up and say, with his hand over his heart: ‘I went out and stood with these sincere farmers’. They probably are sincere. But if the honourable member for Riverina had anything to do with the organisation of the rally, one can depend on its having had a certain amount of hokey-pokey about it. That was the attitude of the South Australian members.

Mr Foster:

Mr Deputy Speaker, I rise to order. Why does not the honourable member for Angas resume his seat? My point of order is that this man, when on his feet in a debate this afternoon, referred to me as a scab on my mates.

Mr Giles:

– It was not a debate.

Mr Foster:

– It does not matter. You made the statement in this House.

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! The honourable member will resume his seat.

Mr Foster:

– When can I take a point of order?

Mr DEPUTY SPEAKER:

-Order! The honourable member for Sturt will resume his seat. The honourable member for Angas also will resume his seat. The reference by the honourable member for Sturt to a matter in an earlier debate in this House has no relevance at the present stage. So there is no substance in the point of order.

Mr Foster:

Mr Deputy Speaker, I raise another point of order. Would you be good enough to inform me of what rights I have to raise the matter of the scurrilous attack that was made on me this afternoon or this evening in this House? Surely I have some rights here as a member.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Sturt will resume his seat. If he has been misrepresented there is a time and place in the proceedings of the House for him to raise the matter. The honourable member for Sturt has no right at this moment to interrupt another honourable member who is speaking and to refer to something that happened earlier this evening.

Mr Foster:

– The point of order I raise -

Mr DEPUTY SPEAKER:

-The honourable member for Sturt will resume his seat.

Mr Foster:

– This is the matter on which you have just spoken. 1 respect your ruling, but why did it not apply to the honourable member for Angas earlier this evening?

Mr DEPUTY SPEAKER:

-Order!. The honourable member for Sturt cannot refer to what happened earlier this evening.

Mr GILES:

– I hope that the Opposition will not get too fearful and continue to take points of order because if it does I will take the view that it is frightened of hearing what I am about to say. The point I got up to make tonight arises from a question that was disallowed, with respect, by the Chair at question time. The question was aimed at dealing with the complete inconsistency on the part of the Labor Party which, on the ohe hand, takes a great interest in the matter of conscientious objection in relation to national service and, on the other hand, in one State anyway, shows a complete disregard for the private liberties of an individual. May I just prove the point?

Today in the South Australian Parliament a censure motion was moved against the Minister of Roads and Transport for taking action to force compulsory unionism in South Australia. An amendment was moved by, I think, the Premier, or by someone in the Government, saying that ;n the opinion of the House support should be given to the Government’s policy of employment preference to unionists. We have had preference to unionists in South Australia and everywhere else for a long time, and I for one am open minded enough on this question to say that T think there is some merit in that stand. But this is not what has occurred in the last week in South Australia. The Minister of Roads and Transport. Mr G. T. Virgo, has given 2 directions which are today public knowledge. It is no use people saying that they are incorrect. They are in public view in South Australia at this point of time for people to look at.

The first was a letter to his own Department, the Highways Department, saying that in order to avoid the difficulties of employing non-unionists and in order to avoid the difficulty of direct contact in each instance with people who may or may not be unionists, he would like to arrange to appoint a liaison officer - and I notice that the Leader of the Opposition in South Australia referred to this officer as a political commissar, with some merit, 1 thought - whom unionists can contact should difficulties arise. He was dealing in this letter with workers on the job and also with those applying for a job. However, that is not so important as the next sentence. The next sentence is literally, I think, correct, lt is: lt is my intention that such an officer would contact the employee concerned and offer him’ the necessary motivation lo join the union by way of ultimatum.

Taking into account that it is ungrammatical - and there is the double use of a word with the second one slightly more onerous in its emphasis than the first - this is a matter to which one can justly object. The letter is signed by ‘GTV, Minister of Roads and Transport’.

I will not worry the House tonight with the second letter, which is also public property. But this was the key to the problem involved. The principle of obligatory unionism contrasts strongly with the principle enunciated by the Federal Opposition Leader (Mr Whitlam) when recently he counselled national servicemen to refuse to serve in Vietnam. He said that a young man should obey the Jaw only as far and as long as his conscience allowed. The analogy between compulsory unionism and compulsory military service is close. The principle involved is the same in each. In the unions membership is not only to be mandatory, but once a man is enrolled he is to be tied to union decisions. He will not be able to elect not to join a strike to which he objects. He will not be be able to opt out of a strike, for instance, as a national serviceman may opt out of service in Vietnam. It is a sheer lack of consistency, lt is the hypocrisy of members ot a part)’ who have their policy dictated to them by people not elected by the Australian people that makes a farce of this situation. It is farcical for honourable members opposite to act as minions obeying the dictates of people who are not elected. They are slaves to their own system. They have no sincerity and no possibility of saying in this House the things they really believe. What happens to individual liberties under a system like that, which has no provision at all for individual liberties?

Mr Hurford:

– Where do you stand?

Mr GILES:

– I stand for individual liberties in one degree or another.

Mr Hurford:

– What about Charles Martin?

Mr GILES:

– The honourable member can say what he likes. I believe that national interests have to be taken into account. The sheer inconsistency of the policy of honourable members opposite should be made plain to the people of Australia. In the name of morality they do not have the right to go around Australia saying that they are the upholders of the rights of individuals in this country. Their own actions prove that to be incorrect and insincere.

Mr FOSTER:
Sturt

– I was hopeful that the Minister for Labour and National Service (Mr Snedden) would be in the chamber to hear me speak tonight in the adjournment debate, because I wish to deal with a question that has been raised tonight, in a rather fictitious fashion, by 2 Government supporters.

Mr McLeay:

– Why do you-

Mr FOSTER:

– I will deal with the honourable member for Boothby in a minute. I will deal with him first.

Mr DEPUTY SPEAKER (Mr Lucock:

– I suggest that the House come to order, or the Chair will deal with somebody in a moment.

Mr FOSTER:

– The honourable member for Boothby-

Mr DEPUTY SPEAKER:

-The honourable member for Sturt will control himself. I suggest that both sides of the chamber come to order.

Mr FOSTER:

– 1 inquired of the Minister for Labour and National Service whether the National Service Act contains any provision for exemption on compassionate grounds of members of the community called up for national service. He told me that there was no such provision. On my return to South Australia I sent the Minister a telegram in regard to this matter. He replied by telegram, which 1 now have much pleasure in reading. It states:

There is no provision whereby exemption from callup may be granted in the circumstances you have outlined.

I will now explain the circumstances 1 outlined. They relate to a widow with 8 children whose husband died suddenly about 12 months ago. Her 19-year-old lad was about to matriculate, but abandoned his education to serve as a counter jumper in a departmental store in Adelaide in order to supplement the family income. A second member of the family similarly cut short her education. Five children of the family are attending school and another child is due to commence in the coming school year. This Government has been so neglectful of the problems of the community that, it has made no provision whatsoever for a lad to be exempted on compassionate grounds.

I turn now to another case, lt concerns a woman with 3 sons, 2 of whom have already served a 2-year stint in Vietnam. A minister of religion and a doctor have said that if her third son has also to serve it will most certainly be extremely detrimental to her health and could mean the loss of her life. Once again there was no ground on which this lad could opt out of service. The Minister will say that this lad must go to the courts with an overbearing attitude. I will have more to say about this matter in the House unless the Minister, on behalf of the Government, is prepared to look squarely in the face some of these human problems which confront the electorate.

I invite any honourable member in this chamber tonight to put himself in the position I was in, in my 10 feet by 12 feet office with this widow who was asking me for advice on this matter. Was I to stand there, look out the window and say: ‘Look, you will comply with what the Government says’. I suppose that I should have turned to the lad, from the point of view of this Government, and said: Look here, son; the penalties of the Crimes Act will be inflicted upon you unless you leave this office with the full knowledge that you will serve your time in Vietnam or anywhere else because a neglectful Government says this to you and this is what you must do’. That is as much as I will say on the matter at this time.

Let me deal now with the honourable member for Deakin (Mr Jarman) and the honourable member for Angas (Mr Giles). An honourable member who is interjecting was sitting in the chamber a while ago eating a chocolate which was made by trade unionists, carted by trade unionists, sold by a trade unionist and apparently consumed by a renegade. 1 wish to say this to the honourable member for Angas: What does the Chamber of Manufactures do in South Australia if in fact a small manufacturer wishes to commence business there and he does not join that chamber? Supplies of raw materials such as steel and carpentry requirements are chopped ofl’ completely from him. ls this not so? The profit of the chamber each year is $2m and for that they produce nothing and do nothing. They are a burden on the community. You support them. You whispered to your mate, the honourable member for Deakin, on this matter thi1 morning when you were sat down, and properly so, by Mr Speaker. Let me inform you that you have your values completely mixed up in regard to this question. You have the hide to stand here and try to-

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I call the honourable member for Stuart to order. I remind him that he must address the Chair and not direct remarks to a member of the House.

Mr FOSTER:

– 1 thank you for directing my attention to that fact, Mr Deputy Speaker. The fact is that they have their values hopelessly mixed up and muddled. Here we have 2 men who purport to be responsible people and whom I would describe by saying that truculence is a characteristic of small people. They stand in this chamber and say that a kid who is told by an employer that he must join a union or else, must be considered to have a conscientious belief. These honourable members opposite say that we on this side of the House ought to support that young person. They say that we have not SUP:ported him. They try to draw a comparison and to say that if we are fair dinkum we on this side of the House ought to be taking a different attitude from the one that we take concerning conscientious objection on the part of those whom this Government wishes to send to be slaughtered with resultant sorrow to widows and mothers. Our troops ought not to be in Vietnam. Nor in my belief was there ever any defence strategy with respect to Vietnam. Anyone on the Government side who still continues to believe that there i* a need for us to be in Vietnam is somewhat foolish. He is not looking at the realities and he is not reading the signs around him in this country today and in the Asiatic region generally. I also wish to talk about-

Mr Grassby:

– The honourable member for Boothby.

Mr FOSTER:

– Yes, the honourable member for Boothby. Where is he? He has left the chamber. Here is a man in business in South Australia whose firm has had no compunction in going to the waterfront and causing stevedoring operations to cease whilst it uses a ship, that ship’s gear and its cargo, that does not belong to it and is not imported for it, for the purpose of making television advertisements. Yet the honourable member stands in this chamber and speaks against trade unions. He is always talking about Communists and labels the particular trade union that he used as a Communist dominated organisation. But when it suits his business purposes, the honourable member for Boothby permits the trade union to be used. That advertisement is still played on television in Adelaide under his firm’s name. So much for their hypocrisy. It is sickening, is it not?

Mr Giles:

– Tell us about compulsory trade unionism.

Mr FOSTER:

– As far as compulsory trade unionism is concerned, there is Government legislation on the books in this House which in fact says that in some industries if a person is not a member of an appropriate trade union that person does not work. It followed the Hursey judgment. Do Government supporters remember, or have they short memories? There is Government legislation. The honourable member may ask his colleague, the Minister tor Labour and National Service (Mr Snedden), who is not in the House at the moment. If the Minister knows enough about his Department, I am sure that he will confirm what I have said.

General Motors-Holden’s Pty Ltd has a closed shop agreement. Myers in Melbourne, I believe, has a closed shop agreement. Many such firms have. Is there anything wrong with that? A closed shop agreement operates in the medical fraternity. The honourable member for Deakin, I understand, is in a professional organisation. If he was not in it, he probably could not practice his profession. He has no compunction about that. Let him get up and test the principles of conscientious objection with his own organisation and within the realms in which he may move from time to time. The Government talks about loyalties and the question of conscience. What did the Government do to a former member of this House who dared stand in this House and seek an inquiry on a matter in which he thought justice had to be done. On his own conscience, mark you, he demanded that the Government make another inquiry into the ‘Voyager’ incident. What did the Government do to Mr St John. Where were the Liberal Party’s fine, upstanding principles on individual rights on that occasion? They floated completely out of their convenient minds or their minds of convenience - put it which way you like.

I inform members of the Liberal Party that it is no good their coming into this House after crawling around the corridors all day thinking how they can get these matters before the House on the motion for its adjournment, believing that their alley is good and that their halos above their heads are such that they have nothing to fear, when their own house is not in order. So far as the matter in South Australia is concerned, Mr Corcoran, the Deputy Premier of South Australia, who was mentioned by the honourable member for Deakin did not, I am quite certain, put the matter in the terms in which it was put in this place tonight. He did not do this at all. Nor did the Minister referred to by the honourable member for Deakin put the matter in the exact terms in which the honourable member for Angus put it in this Chamber tonight.

I draw the attention of the House to the fact that the people who sit on the Government side have done nothing but use subterfuges for about 20 years to hoodwink the electors. They do not hoodwink the Opposition. That is most certain. If they want to continue in this vein and if they want to accept a challenge in this respect, as far as I personally am concerned in this matter or any matter, I will be only too happy to accommodate them.

Mr DEPUTY SPEAKER (Mr Lucock:

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

Dr PATTERSON:
Dawson

– I want to correct a misconception of the honourable member for Mallee (Mr Turnbull), who in this House this evening made certain allegations against me regarding wheat. It has come to my notice over a period of time that the honourable member for Mallee has been running around the countryside telling producers that I have been opposed to paying $1.10 a bushel as a first advance to wheatgrowers within the quota. This has come to my notice on several occasions.

Mr Kennedy:

– Would you say he was a liar?

Dr PATTERSON:

– If I say that, it will be unparliamentary. He has attempted to justify this tonight by quoting from a speech I made. I have had the privilege now of reading that speech. Not one sentence in that speech justifies his contention. What he is trying to say or maliciously imply is that I am opposed to paying wheat farmers $1.10 a bushel for the first advance, despite the fact that in this Parliament on behalf of the Opposition I supported the Minister for Primary Industry (Mr Anthony). I have supported that statement many times in public and yet the honourable member has the temerity to say this outside many times. I assume that he will deny it. I have heard from other sources that he said it. In this House again tonight he attempted to say it.

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I would suggest to the honourable member for Dawson that he cannot revive a debate that has been held in this House previously.

Dr PATTERSON:

– I am just referring to it. What I said is quite clear. I assume it would have the backing of every sensible member of this Parliament. With regard to the moneys being made available by the Commonwealth or through the Reserve Bank to the Wheat Board for advance to farmers, this is the accepted principle of making a first advance payment. What I said was that where you have a position of surpluses, where you have a position of uncertainty, you have to be extremely careful in the upper limit of what is advanced. That is entirely what the Minister for Primary Industry also said, in more blunt language than I used. This is what I said:

It is obvious to everybody, to the industry and to the Government, that last year there would be large sums of money unrepaid in respect of the 1968-69 harvest. The Government then made another advance of $440m. Looking at it in perspective now-

That is in 1970- we see a total of $440m as the first advance for last year’s crop and approximately $2S0m in unsold wheat or the equivalent still on hand. This amounts to a loan of from $650m to $700m having been made. The disturbing thing of which Parliament must take note-

This was also stated by the Minister for Primary Industry (Mr Anthony)- is the very serious economic problem of the consequence of making large advances to anyone when that money has been spent and the product for which it has been advanced has not been sold.

In other words, how long can we continue to do this? This is the basis of the quota system - an upper ceiling on the amount of Commonwealth liability. All I was doing was warning the Government, which the Minister for Primary Industry did and I will later quote what he said. I said:

The Government has now been warned about what can happen by being a guarantor for large proportions of wheat that cannot be sold at this point of time.

The Minister for Primary Industry said even more than that. He in fact warned the industry that if it went above that ceiling he would reduce the $1.10. I do not think the honourable member for Mallee has even done his homework. I. will now quote what the Minister for Primary Industry, his office boy as the honourable member has referred to him, said-

Mr Turnbull:

– That is completely untrue.

Dr PATTERSON:

– You know that is the truth. This is what the Minister for Primary

Industry said on 30th April 1969: ‘The limit of $440m must be observed. The amount is a large one. As honourable members know, the industry, through the Wheat Board, is now heavily indebted to the Reserve Bank and is likely to have an overdraft of as much as S200m at the time when advances on the next crop will be around their peak. In other words, there may be as much as $640m advanced to the industry in the early months of 1970.’ That is exactly what I said. I suggest the honourable member for Mallee listen to this. The Minister continued: ‘Let me make it clear that the sums I have mentioned will not be exceeded’.

A warning. The Minister continued: ‘If quotas are not implemented and if the quantity delivered to the Wheat Board exceeds 357 million bushels, then the first advance will have to be something less than $1.40’. This is far more than I ever said. Is the honourable member for Mallee going around the countryside saying that the Minister for Primary Industry said they will get less than $1.40? I ask the honourable member for Mallee to have some respect for the spoken word. He knows full well that what I said was a complete endorsement of Government policy on this, -because we argued in this Parliament for most of last year on the wheat crisis that there had to be some control on production and if the industry had a larger peak it was obvious that the first advance payment would have to be reduced. At no stage have I ever indicated, as the honourable member has been alleging about the countryside, that I am opposed to paying $1.10 as a first advance to wheat farmers. It is an untruth and he knows it.

Mr TURNBULL:
Mallee

First of ali I take exception to the last few words of the honourable member for Dawson (Dr Patterson). The words were: ‘It is an untruth and he knows it’. I cannot talk to the new members in the House but I can talk to the older ones who have been here for years. If the new members talk to the older members they will find I have never been accused of not telling the truth in all my years here. Before I refer to what has been said - I can prove that what 1 have been saying is true - I want to deal with what has been said about the Minister for Primary Industry (Mr Anthony). The honourable member for Dawson could not help but say what he did. Perhaps he tried to control his remarks. After all, the first and best victory he could have is the victory of self control. He tried to control himself, but he had to say - he knew that I had explained this before - that I called the Minister for Primary Industry an office boy.

The circumstances of what happened need to be explained. I spoke at a big meeting of wheat growers at Bendigo. I said that they should go to Canberra and arrange to meet the Prime Minister (Mr Gorton), the Deputy Prime Minister (Mr McEwen), the Treasurer (Mr Bury) and the Minister for Primary Industry in a panel. Someone said that this would be impossible but I had done it already for the dried fruits industry. I said: ‘What you are doing is seeing one Minister, say the Minister for Primary Industry, and then you may see the Prime Minister or the Treasurer. You will be seeing different Ministers but you will be putting your case chiefly to the Minister for Primary Industry. He will be going backwards and forwards to Cabinet and you will have him running about like a messenger boy. I said like a messenger boy’. I did not say office boy’. That is completely wrong. I hope that the honourable member for Dawson did not know the truth because I would like to think that he tells the truth. I had been going around the country and 1 was just as ashamed of the statement I am about to quote as the honourable member should be. The only place I quoted it was in the debate I had with the honourable member for Riverina (Mr Grassby) at Barham. I had already quoted it in the House some time prior to that. Hansard will verify that. Let me read one or two things that were said by the honourable member for Dawson in a speech made on 1 0th March. He said:

The Minister gave an estimate with respect to the 1968-69 wheat harvest of deliveries of 435 million bushels which involved the Reserve Bank covering the first advance and expenses of $509m. That estimate was sadly wrong. As we know, the actual deliveries were in excess of 500 million bushels, and the loan from the Reserve Bank to the growers had to he increased. Provision was made for a loan of up lo $634rn, which is very big money.

It was obvious to everybody, to the industry and to the Government, that last year there would be large sums of money unrepaid in respect of the 1968-69 harvest. The Government then made another advance of $440m. Looking at it in perspective now, in March 1970, we see a total of $440m as the first advance for last year’s crop and approximately $250m in unsold wheat or the equivalent still on hand. This amounts to a loan of from $650m to $700m having been made. The disturbing thing of which Parliament must take note is the very serious economic problem of the consequence of making large advances to anyone when the money has been spent and the product for which it has been advanced hasnot been sold. This is the very serious problem with which we are faced now and with which we will be faced this time next year. In anybody’s logic it is wrong economically to provide large loans or finance for anything that is difficult. The money has been spent but the wheat which it represents has not been sold.

I will go further. The honourable member for Dawson later stated:

The Opposition gives warning that if this state of affairs arises next year very serious consideration must be given to it. The Government has now been warned about what can happen by being a guarantor for large proportions of wheat that cannot be sold at this point of time.

The point that I make is that the honourable member for Dawson is condemning the advance of money on wheat that has not been sold.

Dr Patterson:

– Rubbish.

Mr TURNBULL:

– Of course he is.I will read the passage again. It reads:

The Government has now been warned about what can happen by being a guarantor for large proportions of wheat that cannot be sold at this point of time.

During his speech just now the honourable member for Dawson said: ‘I will quote what the Minister for Primary Industry said’. But honourable members will notice that he did not quote it at all. I challenge him to quote it in the words that appear in this document.

Dr Patterson:

– I did quote it. I have it here.

Mr TURNBULL:

– The honourable member said he would quote it but he did not.

Dr Patterson:

– I did quote it. I read it out.

Mr TURNBULL:

– The honourable member did not quote it on the lines that I have here. Let me go further on this matter. The honourable member for Dawson in making his speech got himself into a very serious position. There is no doubt about that. Honourable members opposite may laugh if they wish, but what would have been the position of the wheat industry if the advances had not been made? The advances for this coming year were announced 6 months before it was to be made. It was announced in about March. Previously we have always found out about it in November. Supposing the Government said: ‘We have been warned by the the honourable member for Dawson of the consequences of making these advances. We must take notice of this warning because he is the shadow Minister for Primary Industry. We must take notice of what he says. Therefore we will not make the advance on this coming harvest of $1.10 a bushel because there is too much money out at the present time and we have been warned by the shadow Minister for Primary Industry.’ This would be a very dangerous situation.

I and this fine body of men behind me in the Country Party believe that these advances are justified. We believe that the advances have to be made this year - as they are being made - and we believe that they will have to be made next year and the year after that. If a time comes when quotas disappear and we return to normal and we find that an amount of $300m or $400m is owing by the wheat growers for these advances on wheat that was not sold, then I believe that whatever government is in office should wipe the slate clean. ] say this because we know - and it has been said by members of the Labor Party in this place - that primary industry is the very basis of the prosperity and progress of this nation. Primary industry is the main factor in our national life. The clipping of the golden fleece, the harvesting of the golden grain and the cultivation of countless other products of the soil are so important to this country that we will not take any notice of the warning that I have quoted and which appears in Hansard and which was issued by the shadow Minister for Primary Industry, the honourable member for Dawson.

Question resolved in the affirmative.

House adjourned at 1.29 a.m. (Thursday)

page 2177

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Aboriginals (Question No. 626)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister in charge of Aboriginal Affairs, upon notice:

  1. What is the (a) name, (b) area and (c) estimated Aboriginal population of each Aboriginal reserve in each State and Commonwealth territory.
  2. Over which reserves have mining or pastoral rights been granted, and to whom have they been granted.
  3. In respect of which reserves where mining or pastoral rights have been granted are royalties or other considerations to be paid for the benefit of the Aboriginal people, and what are the particulars of these considerations in each case.
  4. Is ownership of any reserve vested in Aboriginal people; if so, which reserves.
Mr Wentworth:
LP

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

page 2177

NEW SOUTH WALES

Information concerning the granting of mining rights in respect of Aboriginal reserves is not available at this stage.

Violet Valley, has been leased to the East Kimberley (1963) Ply Ltd, pastoral company to 31st December . 1982.

In addition to certain developmental requirements, which could be of benefit to an Aboriginal enterprise in the future, the agreement requites that the lessee will use its best endeavours to co-operate with the Department in giving further practical training in pastoral handicraft to Aboriginal youths who have been given basic training in appropriate trades.

page 2178

TASMANIA

Tasmania has no Aboriginal Reserves. An area on Cape Barren Island which previously was a reserve ceased to be one following a 1948 recommendation of a Joint Parliamentary Committee.

page 2178

NORTHERN TERRITORY

The information for the Northern Territory has been provided by my colleague the Minister for the Interior.

Arnhem Land:

Swiss Aluminium Australia Pty Ltd and

Gove Alumina Ltd

Western Nuclear (Australia) Pty Ltd

Groote Eylandt:

Groote Eylandt Mining Company Ply Ltd

Anthem Land:

The Broken Hill Pty Coy Ltd

United Uranium N.L.

Noronda Australia Ltd

Air Navigators Pty Ltd

G. D. Stevens, C. M. Stevens and P. N. Craven

Nevsam Mining Company

United States Steel International (New York) Inc.

H. Brennan

Queensland Mines Ltd

Alusuisse Mining Pty Ltd

Australian Acquitaine Petroleum N.L. Geopeko Ltd

D. Namilmil

Larab (No. Nine) Pty Ltd

BathurstIsland:

John Holland (Constructions) Pty Ltd

Daly River:

Plant Mining Coy Pty Ltd

Haasts Bluff:

G. C. Baldissera

Central Pacific Minerals N.L. and

Magellan Petroleum (N.T.) Pty Ltd (joint holders)

Gustav Malbunka

Melville Island:

Alusuisse Mining Pty Ltd

Petermann:

Newmont Pty Ltd

B. E. Bitters

Docker River Social Club

Wagait:

J. Smith and R. Bettencourt

Corella Exploration No.1 Pty Ltd

Woolwonga:

Geopeko Ltd

The rates for these royalties and rents are determined by or under Northern Territory Legislation.

Royalty payments from the Groote Eylandt Mining Company Pty Ltd operation are payable as determined by the Northern Territory Mining Ordinance 1939-1969 and are at double the normal rate that applies outside an Aboriginal reserve. The total amount paid into the Trust Fund from this source was $576,090 at 30th June 1970. The Company also pays by private arrangement special royalties approximating half the Government royalties to the Church Missionary Society. These funds are used for the benefit of Aboriginal residents on Groote Eylandt. The Groote Eylandt Aboriginal Trust, the executive members of which are all Aborigines, exercises the power of disposition of royalty payments made to the Society.

Royalty payments from the bauxite operation at Gove, Arnhem Land, are payable as set out in Clause 3 of the Special Mineral Lease appended to the Agreement which was approved by the Northern Territory Mining (Gove Peninsula Nabalco Agreement) Ordinance 1968 and which is published as a schedule to that Ordinance. No payments are expected from this source before 1971.

Royalty payments from the Western Nuclear (Australia) Pty Ltd operation are payable as determined by the Northern Territory Mining Ordinance 1939-1969, and are at double the normal rate. Royalties on this operation are not yet payable.

An amount of $3,379 has been paid into the Trust Fund up to 30th June from royalties from various other limber operations on Aboriginal reserves.

In no case has the legal title to the land within an Aboriginal reserve been vested in the Aboriginal people. Legislation has been passed by the Legislative Council for the Northern Territory to enable leases of land within Aboriginal reserves to be granted to individual Aborigines or to Aboriginal groups for pastoral, agricultural ormiscellaneous purposes. Under this legislation land within an Aboriginal reserve can only be leased to Aborigines, and leases cannot be transferred to non-Aborigines.

Burdekin River Project (Question No. 1380)

Mr Whitlam:

asked the Prime Minister, upon notice:

What has been the (a) date, (b) nature and (c) outcome of any communications between the Commonwealth and Queensland concerning the Burdekin River project since his answer to me on 19th September 1969 (Hansard, page 1713).

Mr Gorton:
LP

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

In my answer to Question No. 1754 on 19th September 1969 I said that the timing, nature and extent of the Commonwealth’s participation in the reappraisal of the Burdekin River Scheme were to be worked out by appropriate Commonwealth and State officials. On 20th August 1969, the Secretary, Department of National Development asked the Queensland Co-ordinator-General of Public Works if he would arrange for an inventory to be provided of the information held by Queensland authorities on the natural resources, agricultural and engineering investigation findings and development programmes relative to the Burdekin. In response, material was provided by the CoordinatorGeneral on 2nd and 9th March 1970. In a letter dated 5th June 1970 from the Secretary of the Department of National Development and a reply dated 10th June 1970 from the CoordinatorGeneral, it was agreed that a group of senior Commonwealth and State officers will confer to discuss the material which has been collated. In addition to the correspondence referred to, there have been several discussions between Commonwealth and State officials on points of detail. The purpose of these communications has been to determine the overall extent of the reappraisal and the further work which will be necessary with a view to reaching agreement on the timing, nature and extent of the Commonwealth’s participation in the reappraisal.

Civil Aviation: Australia - United States Services (Question No. 1452)

Mr Whitlam:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Between which airports in the United States and Australia does any United States airline provide, but Qantas nol provide, direct services.
  2. When will Qantas be permitted to provide services between those United Slates and Australian airports.
Mr Swartz:
LP

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

  1. Los Angeles at the present time.
  2. Bilateral Air Services Agreements normally perm.il an airline a free choice of points in its own country but stipulate the precise points that ii can serve in the territory of the other party and this applies to the Australia/USA Air Agreement. Currently, Qantas can exercise traffic rights at Honolulu, San Francisco and New York. An amendment to the Agreement to enable the Austalian airline to serve other points in the United Stales is not being contemplated at the present lime.

Civil Aviation: AustraliaYugoslav Services (Question No. 1453)

Mr Whitlam:

asked the Minister representing the Minister for Civil Aviation, upon notice:

Why does Qantas not yet provide services between Australia and Yugoslavia which has now become the third largest source of migrants to Australia.

Mr Swartz:
LP

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

The feasibility of introducing a scheduled service catering for the regular travelling public between Australia and Yugoslavia has recently been studied by Qantas, lt was concluded that the amount of normal traffic with its origin and destination in Australia and Yugoslavia is not sufficient to commercially justify the introduction of a viable scheduled service on this route at the present time.

The amount of traffic available between Australia and other countries, including Yugoslavia, is reviewed from time lo time by Qantas as part of the airline’s continuing assessment of the need to develop further its services.

In recent months, Qantas, and the Yugoslav airline JAT, have commenced operating charter flights out of Belgrade to provide for Yugoslav migrants travelling by air to Australia.

JAT has also operated several affinity group chaner flights under the Commonwealth Government’s chatter policy.

Civil Aviation: Aircraft Noise (Question No. 1493)

Mr Morrison:
ST GEORGE, NEW SOUTH WALES

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did recommendation No. 5 of the Interim Report from the House of Representatives Select Committee on Aircraft Noise presented in June 1970 recommend that the Department of Air and the Department of Civil Aviation institute an extensive investigation of complaints into the effects of overflying aircraft on structures so as lo establish the cause of damage.
  2. If so, what steps (a) have been taken, and (b) are intended to be taken by the Department of Civil Aviation to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. All complaints received by my Department concerning .damage to buildings allegedly from the effects of overflying aircraft are investigated. In the absence of precise data on the strength of vibration, wake turbulence and engine exhaust velocity at the disturbances between aircraft and the buildings concerned it is difficult to establish the effect, if any, of the overflying aircraft on the buildings. In many cases, the cause of damage to buildings has been directly attributable to sources other than the overflying aircraft.

On the initiative of my Department, the University of Sydney was requested to carry out a study on the strength and behaviour near the ground of wake turbulence left behind aircraft during take-off. Although this work produced useful data it simultaneously indicated the complexity in predicting with any accuracy the strength of the turbulence at any point in given circumstances. This has been confirmed by more extensive research conducted overseas on the subject. Although this work was motivated by consideration of safety for following aircraft, it does have application to the possible effect on structures on the ground.

As aircraft increase in weight and size the effects of wake turbulence and possibly engine exhaust velocity could increase. Whether or not aircraft have been responsible for property damage in this country up to the present time or whether or not damage claims are likely to increase as aircraft increase in size, I believe that the mailer is quite important and that the Select Committee’s recommendation should he pursued.

The course of action that would appear to be appropriate from this point, I believe, is for the Department of Air and my Department to refer the matter of further research to an existing establishment, such as the Aeronautical Research Laboratories in the Department of Supply and I have already written to my colleague the Minister for Air in this regard. The honourable member will appreciate, 1 am sure, that my Department of Civil Aviation has neither the expertise nar the necessary equipment to undertake a study such as the Select Committee has in mind und, although 1 cannot speak for my colleague the Minister for Air. I would think that much the same situation would apply in his Department.

In summary, what 1 have suggested to my colleague is that we make a joint approach to the Minister for Supply asking whether ARL could make a proper study of the possibility of damage to buildings, dwellings, etc., being caused by trailing vortices, vibration, sonic booms and the like.

Civil Aviation: Aircraft Noise (Question No. 1495)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation 9 of the interim report from the House of Representatives Select Committee on Aircraft Noise presented in June 1970. recommend that the Department of Air and the Department of Civil Aviation introduce a standard method of recording complaint information as outlined in the text.
  2. If so, what steps (a) have been taken, and (b) are intended to be taken by the Department of Civil Aviation to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. Although not applicable in all Regions, my Department of Civil Aviation has, for some time, used a standard complaint pro-form a almost identical with that proposed by the Select Committee and I urn aware that much the same situation applies in the Department of Air.

In any case, my Department has already taken action, in conjunction with the Department of Air. to ensure that, where appropriate, the Select Committee’s suggested modifications ate incorporated with a view lo standardising the complaint pro-form;i used by both Departments.

Civil Aviation: Aircraft Noise (Question No. 1496)

Mr Morrison:

asked the Minister representing the Minister for Civ il Aviation, upon notice:

  1. Did Recommendation 10 of the interim report from the House of Representatives Select Committee on Aircraft Noise presented in June 1970. recommend that the Department of Civil Aviation and, where appropriate the Department of Air. pay continuing attention lo the administrative arrangements as set out in the text.
  2. If so, what steps (a) have been taken, and (b) are intended to be taken by the Department of Civil Aviation to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. Insofar as my Department of Civil Aviation is concerned, I can assure the honourable member that the spirit of the Select Committee’s recommendation will be met in the future as it has in the past. As I have pointed out on numerous occasions my Department is extremely conscious of the aircraft noise problem in all its aspects and I believe it would be true to say that all of the items listed in paragraph 6.3.3 (a) to (f) of the Select Committee’s Report have in fact been receiving my Department’s ‘continuing attention’ for some considerable time.

However, the recent establishment of a new Noise Abatement Branch in my Department’s Central Office will enable it to pursue an even more active role in the investigation and evaluation of aircraft noise problems and to plan, develop and establish standards and procedures for aircraft noise abatement on a Commonwealth-wide basis, thus ensuring no relaxation of effort in the perpetuation of Recommendation 10.

Civil Aviation: Aircraft Noise (Question No. 1498)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation II of the Interim Report from the House of Representatives Select Committee on Aircraft Noise presented in June 1970, recommend that at Sydney during the hours of curfew (11 p.m. lo 6 a.m.) movements be confined to operations over Botany Bay except in cases of emergency.
  2. If so, what steps (a) have been taken, and (b) arc intended to be taken to implement this recommendation.
Mr Swartz:
LP

– The Minister for Civil Aviation has provided the following answer to the honourable member’s question: (0 Yes.

  1. On the basis that the Select Committee envisages the term ‘emergency’ to include those occasions where use of the north-south runway is precluded because of operational reasons (which would, of course, include safety), I believe I can slate wilh every confidence that the Committee’s recommendation is already being met by my Department and will continue to bc met in the future.

My Department’s air traffic controllers at Sydney (and elsewhere for that matter) have very explicit instructions in respect of adherence to noise abatement procedures and they do not permit operations other than over Botany Bay during the hours in question unless valid operational reasons such as strong crosswinds, low cloud base and/or visibility preclude such an arrangement.

In summary, therefore, 1 believe I can assure the honourable member thai this recommendation is already being met in every respect.

Civil Aviation: Aircraft Noise (Question No. 1499)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation 12 of the interim report from the House of Representatives Select Committee On Aircraft Noise presented in June 1971), recommend that criteria authorising jet movements in curfew hours be applied more stringently to ensure the preservation of the original intention of the regulation.
  2. If so, what steps (a) have been taken, and (b) are intended to be taken to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. Recommendation 12 deals with a most difficult aspect of the aircraft noise problem in that the Select Committee requests that the criteria authorising jet movements in curfew hours be applied more stringently to ensure the preservation of the original intention of the regulation.

As the honourable member will be aware, there is a curfew imposed on jet aircraft operations at a number of our major capital city airports. From time to time approval is sought by the operators to either continue an off-schedule operation into the curfew hours or to conduct a special flight, some or all of which is to be carried out during such hours. in the case of off-schedule operations, either my Departmental officers or myself are faced with the problem of weighing the inconvenience caused to the residents living in the vicinity of the airports in question, versus the inconvenience caused, in the case of a single aircraft, to upwards of 100 airline passengers who, were they not able to continue to their ultimate destination, could be faced with the possibility of being stranded without the necessary items normally carried by the overnighting passenger - in many cases the situation is likely to be much more serious because of medical problems. Additionally, the companies would be placed in a very difficult position and the travelling public seriously inconvenienced if aircraft were not available for positioning at the appropriate departure points for the commencement of each day’s operations because of enforced overnight stays at some intermediate point.

In the case of the special flights, these require my specific approval and are very carefully considered from all aspects. Normally, they are granted during holiday periods such as Christmas, Easter and certain school vacation periods when the overall public need for seating availability is exceptionally high. The honourable member will appreciate that the airlines normally operate with a limited number of aircraft, most of which (particularly the jets) have a very high utilisation rate involving quite high load factors, i.e. compared with many overseas countries. It will be seen, therefore, that the most practical and economic way to meet the minimum public need during the peak periods mentioned is to permit a certain number of special flights to operate during the curfew hours - even then, many persons wanting to fly interstate are precluded from doing so because of the non-availability of aircraft seats. There are two alternatives to the current arrangement, neither of which I believe would be acceptable in the overall public interest The first, which would be completely unrealistic as well as grossly uneconomic, would be to have the companies equip themselves with sufficient aircraft to cater for the peak holiday period loadings outside curfew hours, a situation which would result in a considerable amount of excess capacity in what is recognised as a notoriously high capital cost industry. Higher fares doubtless would be only one of the penalties. The remaining alternative would be to ban special flights altogether, thus failing by a significant margin to serve the overall public interest during periods of high travel demand.

In essence, therefore, the approval of special flights is a matter of judgment on my part, but 1 believe I can say with conviction that I approve of no more special Sights than are absolutely essential to meet the needs of the air travelling public as a whole, many of whom are still not able to travel when they wish during peak holiday periods as it is because of the particularly high demand for air travel.

I can assure the honourable member that 1 shall continue to judge each special flight application in its merits as I have in the past and approval shall only be given for such flights in cases of genuine necessity.

Civil Aviation: Aircraft Noise (Question No. 1500)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation 13 of the interim report from the House of Representatives Select Committee on Aircraft Noise presented in June, 1970, recommend that the Department of Civil Aviation thoroughly examine flight patterns within a 5-mile radius of airports in order to avoid residential districts by directing aircraft over water, open spaces or industrial areas, wherever possible.
  2. If so, what steps (a) have been taken, and (b) are intended to be t a keri to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. Whilst appreciating the Select Committee’s opinion that even a minor variation in the flight path of an aircraft may produce a marked relief for people living in noise-sensitive areas around airports, nevertheless there is a limit to the extent that my Department can or should go, having regard to safety, by way of requiring large, heavily-laden aircraft to manoeuvre close in to an airport. The flight path is very largely governed by the requirement to approach straight in from a distance of some 5-7 miles, or even more, especially when an ILS (instrument landing system) or other approach aid is used. Similarly, except in low density traffic conditions, departure tracks are governmed by separation requirements which do not permit a great deal of flexibility in the choice of such tracks.

However, 1 should like the honourable member to be ‘ aware that my Departmental officers are continually re-appraising all aspects of aircraft operations in the vicinity of airports with a view to keeping aircraft noise levels to a minimum at all times and, in view of the Select Committee’s specific recommendation, f have asked all concerned to pay particular attention to the express wishes of the Committee as set out in Recommendation 13.

Civil Aviation: Aircraft Noise (Question No. 15(11)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation 14 of the Interim Report from the Mouse of Representatives Select Committee on Aircraft Noise presented in June 1970 recommend that the Air Co-ordinating Committee examine the feasibility of re-allocating airspace to facilitate the re-routing of flight paths to minimise noise over residential areas.
  2. If so, what steps (a) have been taken, and (b) are intended to be taken by the Department of Civil Aviation to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. Generally, airspace is at a premium in most of our major terminal areas because of the conflicting requirements of civil and military airspace. However, in view of the prominence now given to the aircraft noise problems as a result of the Select Committee’s activities, it may be possible to influence the military authorities, through the local Air Co-ordinating Sub-Committee, to accede to any future requests my Department may have for additional airspace, or for more flexibility in the use of shared airspace, if it is clear that such action would provide worthwhile improvement.

I think it would be fair comment to say that, even in a busy and complex terminal area such as Sydney, my Department has an extremely good working arrangement with all military authorities, particularly since a special interdepartmental review of airspace within 100 miles of Sydney Airport was made in 1963.

It would also be true to say, I believe, that any re-arrangement of the airspace in the Sydney terminal area would not see any significant alleviation of the aircraft noise problems. The current civil/military air traffic control working arrangements, particularly since the establishment of a RAAF Sector in the Sydney Area Approach Control Centre, leave little to be desired and civil traffic rarely is denied access to military airspace. This is not to say that matters would not be made easier from an air traffic control point of view in terms of greater flexibility where more airspace allocated for civil purpose., om, a.-, the main source of noise at Sydney (and al other airports, too, for that matter) is from aircraft either in the approach or departure phases within, say, 10 miles or so from the airport, I can envisage Huie or no noise alleviation resulting from the allocation of more airspace for civil purposes.

In any event, the honourable member has my assurance that my Department of Civil Aviation will follow up the spirit of the recommendation wilh a view to effecting further alleviation of the aircraft noise problem whenever possible.

Civil Aviation: Aircraft Noise (Question No. 1S05)

Mr Morrison:

asked the Minister representing the Minister for Civil Aviation, upon notice:

  1. Did Recommendation 16 of the interim report from the House of Representatives Select Committee on Aircraft Noise presented in June 1970, recommend that as a noise abatement measure the glide slope at Australian airports should be standardised at 3.(1 degrees wherever possible.

    1. If so, what steps (a) have been taken, and (b) are intended to be taken to implement this recommendation.
Mr Swartz:
LP

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

  1. Yes.
  2. There are a number of significant operational, technical, and economical aspects to be considered in respect of this recommendation, but the honourable member has my assurance that, insofar as is practicable, the recommendation will be met. 1 have requested my Departmental officers to provide me wilh the details of what is involved and already an engineering study is under way to establish what is required to change the various glide slope angles, wilh particular emphasis on Sydney which I regard as being the airport with the most critical noise problem. Departmental engineers are preparing an estimate of the work programme and costs involved at Sydney, together with details on the periods during which the runways are likely to be out of action for instrument landings, i.e., advice on the effects on the operational usage of the instrument runways as a result of the possible necessity to alter existing threshold lighting, change glide slope aerials, etc. From the foregoing, the honourable member will appreciate that implementation of Recommendation 16 will be a lengthy procedure and priority will be given to the noise-critical locations, as appropriate.

United Nations Association of Australia (Question No. 1553)

Dr Everingham:
CAPRICORNIA, QUEENSLAND

asked the Minister for External Affairs, upon notice:

  1. Does the Government spend $14,000 yearly at the instance of the late Dr H. V. Evatt to subsidise the United Nations Association of Australia.
  2. Hashas amount been varied; if so, when and to what extent.
  3. Does this Association provide Australians with a sufficient awareness of the actions and inadequacies of the United Nations and its prospects for development as a law-making and lawenforcement organisation of the citizens of the world in matters affecting world peace, civil rights, economic development and the conservation of man’s environment.
  4. Is he able to say what was the membership of this Association in 1950, 1960 and 1970.
Mr Swartz:
LP

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

  1. The Government provides an annual grant to the United Nations Association of Australia. An annual grant of $200 was made available from 1936 to 1945 to the Australian League of Nations Union. In 1945-46 a grant of $2,000 was made available to the United Nations Association, the successor organisation to the League of Nations Union. In 1948, the Australian National Committee of United Nations was formed, to include representatives of a number of voluntary organisations including the United Nations Association. The Australian National Committee of -United Nations and the United Nations Association continued to receive annual grants. In April 1950 a new body, the United Nations Association of Australia, was formed by the amalgamation of the United Nations Association and the Australian National Committee of United Nations.
  2. The annual Commonwealth grant to the United Nations Association of Australia has been as follows:
  1. In addition to the information and educational services it provides to its members, the Association has informed me that it services annually many thousands of individual inquiries for information and literature on the United Nations. In this way it acts as a useful supplement to the services provided by the United Nations itself through the United Nations Information Centre in Sydney.
  2. The Secretary of the United Nations Association of Australia has provided me with the following information on the Association’s membership in 1950, 1960 and 1970:

The estimated number of individuals included in the corporate membership in 1970 is as follows:

Asthma (Question No. 1652)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister for

Health, upon notice:

  1. Has any Commonwealth investigation been made into the treatment of asthma being undertaken by Dr Alexander James of Wollongong, New South Wales; if so, with what result.
  2. Can he say whether the treatment used by Dr James, consisting of a natural physical system of methods such as breathing exercises and mechanical vibratory stimulation, has achieved a remarkably high incidence of partial relief and complete cure.
  3. Has his attention been drawn to the stated aims of the Asthma Action Society which seeks to support Dr James in the expansion of his work through (a) establishment of a central clinic to combine the training of medical personnel in the James system of asthma management with the treatment of asthmatics by these methods and (b) the subsequent foundation of district asthma clinics using the James system of asthma management in centres throughout Australia.
  4. If so, what Commonwealth Assistance can be given towards the fulfilment of these aims.
Dr Forbes:
LP

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

  1. and (2) Yes. The National Health and Medical Research Council conducted an investigation and reported in November 1969, that:
  2. The available evidence suggests that the methods used by Dr James have been notably successful in cases of asthma treated by him. However, there is no evidence before the Council to suggest that greater success could be expected using Dr James’ methods than could be achieved using other accepted methods, including physical methods, in treating asthma.
  3. There is nothing sufficiently unique in Dr James’ methods to warrant conducting a full-scale, objective, clinical trial.
  4. The good results achieved by Dr James emphasise not only the value of physiotherapy in the treatment of asthma, but also the importance of gaining the patient’s full confidence and co-operation.
  5. Dr James’ methods have now been well documented and could be made available to medical practitioners who may wish to use them. There should no longer be concern that the knowledge of Dr James’ methods will be lost.’

Dr James has subsequently claimed that the Council was not fully aware of all the details of his treatment at the time the assessment was carried out. The Council, in consequence, asked Dr James to provide full documentation of his methods and an objective report on the results he has achieved, so that any information not available for the original investigation can be further considered by the Council. Dr James has provided this information, and this will be discussed at the next Session of the Council in late October, 1970.

  1. Yes.
  2. The provision of medical and hospital services to the community is primarily a State Government responsibility. Each State must therefore determine its own policy in regard to this or any other form of treatment.

Man-made Fibres (Question No. 1674)

Dr J F Cairns:
LALOR, VICTORIA · ALP

rns asked the Minister for Trade and Industry, upon notice:

  1. Have representations been made since the enactment of the Customs Tariff Bill 1970 for changes in Schedule 13 of that Act, or for action to offset or modify the effect of that Schedule.
  2. If so, what were these representations, and what action has been taken as a result of them.
Mr McEwen:
CP

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

  1. Yes.
  2. The tariff changes followed adoption by the Government of a Tariff Board report on manmade fibres and yarn. Firms in the industry, and the Textile Council of Australia, have made representations to the Government expressing concern about a number of issues raised by the adoption of this Report in April of this year. The industry believed that the lower rates of duty which followed the adoption of the report could be damaging to the entire textile and apparel industries.

I indicated to representatives of the industry that the Government could not consider taking action merely on the expressed disquiet of the parties involved. There was an obvious need for the Government and the industry together to watch the effects of the new duties on the Australian industry. If it could be shown from the evidence available that serious damage was occurring, or was likely to occur, then an application could be made for a reference to the Special Advisory Authority. The Authority has the power to recommend temporary duties.

A Liaison Committee consisting of members of the Textile Council and officers of the Department of Trade and Industry was established shortly after the new rates were introduced. Special arrangements were made to supply the Textile Council with statistics on imports and these figures have been regularly discussed with the Committee, along with trends within the Australian industry. I am informed that to date there is no evidence of any upsurge in imports, but the position will remain under close watch.

The industry also sought a review of existing and proposed by-law procedures. As you know, the administration of by-laws is a matter for my colleague, the Minister for Customs and Excise. I am informed that the Liaison Committee has had useful discussions on this issue, and as a result by-law entry has been accorded until the end of this year on yarns which were previously dutiable at non-protective rales or admitted under by-law. This decision was welcomed by the industry, and discussions are continuing to determine the longer-term position under the by-law situation.

Taxation: Works of Art (Question No. 1695)

Mr Whitlam:

asked the Treasurer, upon notice:

What would be the loss to revenue which would result if (a) deductions were allowed under the Income Tax Assessment Act for gifts for works of art to be exhibited in parks or squares or buildings open to the public and (b) exemptions were granted under the Estate Duty Assessment Act for works of art devised or bequeathed for exhibition in parks or squares or buildings open to the public (Hansard, 21 April 1970. page 1379).

Mr Bury:
LP

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

  1. Gifts of S2 and upwards to a public library, public museum or public art gallery are allowable under section 78 of the Income Tax Assessment Act as deductions for income tax purposes. Deductions are also available under this provision for gifts to such institutions of property purchased by the taxpayer within 12 months immediately preceding the making of the gift. No statistics are available that would enable a reliable estimate to be made of the loss to revenue that would result from extending the range of gifts deductible for income tax purposes to cover all gifts of the kind mentioned in the honourable member’s question.
  2. Bequests of works of art lo public libraries or religious institutions are exempt from estate duty whether or not they are for exhibition in buildings or areas open to the public. Bequests of works of art to public museums and public art galleries in Australia are exempt from estate duty as bequests for public education purposes. No information is available on which a reliable estimate could be made of the loss lo revenue that would arise if the range of bequests exempt from estate duty were extended to cover all bequests of the kind referred to in the honourable member’s question.

Kangaroos (Question No. 1704)

Dr J F Cairns:
LALOR, VICTORIA · ALP

ns asked the Prime Minister, upon notice:

Will he, in the hope that it will guide action to ensure preservation of all species of kangaroos in Australia and of pastures at the same time, arrange for discussions with State Ministers and his own Ministers particularly those who have presented petitions asking for protection for kangaroos and prohibition of export of kangaroo meat and skins, to see if a cease fire in the killing of kangaroos hi Australia can be decided upon and enforced until the report of the Select Committee on Wildlife Conservation becomes available.

Mr Gorton:
LP

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

As the honourable member will be aware, the direct responsibility for the conservation of wildlife lies with the States except in respect of those

Territories administered by the Commonwealth. The shooting of kangaroos is either forbidden or controlled in the Commonwealth Territories.

The Australian Fauna Authorities Conference, which mct in Darwin last May, discussed the widespread public concern that the kangaroo was in danger of extinction and expressed its confidence that there was no such threat. In the light of this view, further discussions with the Slates would appear unnecessary at this juncture.

Nevertheless the position will be kept under review. The Government’s desire to ensure the preservation of all species of kangaroos and other wildlife has been clearly demonstrated through the establishment of the House of Representatives Select Committee to enquire into these matters. The matter will be given further consideration in the light of that Committee’s report.

Aboriginals (Question No. 1717)

Mr Enderby:

asked the Minister for the Interior, upon notice:

  1. Has he stated that the Government does not recognise traditional Aboriginal land rights; if so, what is the explanation of, and what are the reasons for, this policy.
  2. Does the Government have any alternative to the granting of land rights to Aboriginals.
Mr Nixon:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

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

  1. The Government’s policy was explained in my statement in the House of Representatives on 3rd September 1970- see pages 967 to 973 of Hansard.
  2. Aborigines can and do own land. As mentioned in the statement referred to in (1) above, the Government believes that they should secure land ownership under the system that applies to the Australian community, and not outside it.

Aboriginals (Question Ni>. 1721)

Mr Wallis:

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

  1. Has there been any approach to the Office of Aboriginal Affairs for financial assistance in the purchase of Mount Arden Station, near Port Augusta, South Australia, for development by Aborigines as a rural property.
  2. If so, were any feasibility studies carried out by any section of the Office of Aboriginal Affairs to determine whether this property could be developed as (a) a viable property which could be successfully worked or (b) a training area for Aborigines in pastoral industry requirements.
Mr Wentworth:
LP

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

  1. and (2) A request was received through a Bank in Port Augusta on 5th June 1970 for a Capital Fund loan to purchase and stock Mount Arden Station. It was intended that a small Aboriginal co-operative be formed to own and operate the property.

From information provided by the applicant, the Bankers and the selling agents an assessment of the proposal was carried out.

The assessment was based on known income/expenditure figures for sheep raising in similar conditions to those found at Mount Arden and the proposal was found to lack viability and long term prospects of success. In this case it is doubtful whether surplus income would have been sufficient to provide loan repayments, without considering any benefits for the members of the proposed co-operative.

Since the formation of the Capital Fund my Office has carried out a great number of investigations un rural proposals; it has been found that wilh the larger type ventures it is difficult to demonstrate that sufficient income can bc generated to service 100 per cent plus borrowings.

My Office is awaiting the views of the South Australian Department of Aboriginal Affairs as to whether Mount Arden would have value as a training school for Aborigines in pastoral requirements.

Armed Forces: Married Quarters (Question No. 1752)

Mr Hayden:

asked the Minister for Defence, upon notice:

Is he able to say whether married officers of the British and United States Armed Forces are provided with married quarters in which all furnishings down to cutlery are provided by the Government.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

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

Investigation shows thai the British Armed Forces have both furnished and unfurnished married quarters. Whilst it is understood to be the aim to provide service housing for all those who require it, there are currently waiting times of up to 6 months. Furnished married quarters are provided with all furnishings down to cutlery. This however reflects in the rental, which is higher for a furnished married quarter than for an unfurnished one. The United States Armed Forces provide married quarters only when housing is not available in the local community. These quarters are not normally provided with furniture or furnishings by the Government, though certain basic items of furniture are often supplied as fixtures or fittings. Smaller items, such as cutlery, are nol provided. Rental is charged for service quarters, although a basic quarters allowance is paid to each member whether he rents service or private quarters.

Nuclear Weapons (Question No. 1762)

Mr Hurford:

asked the Minister for External Affairs, upon notice:

  1. Did Australia abstain from voting on United Nations resolution 2602A which appeals to the Union of Soviet Socialist Republics and the

United States of America as an urgent preliminary measure to declare a moratorium on further testing and deployment of new strategic nuclear weapons systems: if so, why.

  1. Did Australia abstain from voting on United Nations resolution 2602C which seeks effective methods of control of nuclear weapons that maximise radio-active effects and asks the United Nations Committee for Disarmament to inform the General Assembly al the next session the results of consideration of this subject; if so, why.
  2. Did Australia, . in company with Portugal and the United Slates, vote against United Nations resolution 2603A which opposed any chemical and biological agents used in war, and yet in resolution 2603 B voted for wider distribution of U Thant’s chemical and biological warfare report (A/7575); if so, why.
  3. ls Australia in favour of convening a conference on the law of the sea to review the regimes of the high seas which lie beyond the limits of national jurisdiction, namely, resolution 2574; if not. why not.
Mr McMahon:
LP

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

  1. Yes. Australia, together with 36 other countries, abstained because it was considered that the General Assembly should nol lake any action that might impede the progress of the SALT talks which were then in session in Helsinki. Moreover, resolution 2602A singled out one aspect only of the many complex issues being considered by the United States and USSR at SALT. In the First Committee on 28th November 1969, the Australian representative said that the Australian Government welcomed the opening of SALT and expressed the Government’s view that a balanced and verifiable agreement on limitation of strategic arms would bring great benefits to all peoples.
  2. Yes. Australia, together with 36 other countries, abstained because it was considered that this request was premature at a lime when the Conference of the Committee on Disarmament already had several incomplete items on its agenda which demanded priority and were likely to require more than the time available before the 25th session of the General Assembly.
  3. Yes. The reasons for Australia’s vote on resolution 2603A are contained in a reply to a question on notice (No. 318) given by the Minister for External Affairs on 17lh March 1970 (Hansard, pages 524-525),
  4. The replies which countries have given to the Secretary General of the United Nations in response to his inquiry under resolution 2574 (A) are an item for consideration during the current session of the General Assembly in New York. The Australian reply has stated that Australia is agreeable to the holding of one or more than one international conference to consider desirable developments in the law of the sea.

Electoral (Question No. 1798)

Mr Daly:
GRAYNDLER, NEW SOUTH WALES

asked the Minister for the

Interior, upon notice:

  1. What percentage of the primary votes was received by each candidate whose name appeared in the first position on the ballot paper in each electoral division in Australia at the 1969 Federal elections.
  2. What was the average percentage of the votes for these candidates’ in (a) each Slate and (b) Australia.
Mr Nixon:
CP

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

Commonwealth Buildings: Parking Facilities (Question No. .1777)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

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

  1. Does the Government have a consistent attitude regarding the extent to which the requirements of local government authorities are met in respect of the provision of car parking facilities for new Commonwealth buildings.
  2. Where it is not practical to provide the onsite car parking spaces required, does the Commonwealth make any contribution to enable local government authorities to provide off-site parkins facilities.
Mr Chipp:
LP

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

  1. lt is Commonwealth policy to adopt the applicable local government regulations unless the Commonwealth’s requirements in respect of buildings make the application of these impracticable. However, there is a lack of uniformity in the policies and practices of the various local government authorities and also in their applications to specific projects. This means it is not practicable to supply a simple measure of the extent to which the requirements of those authorities are met in respect of car parking facilities for new Commonwealth buildings. Each new project receives individual consideration.
  2. The Department of Works has not made any contribution to enable local government authorities to provide off-site parking facilities. Enquiries made of the Departments of the Treasury and Interior show that they are not aware of any contribution having been made for this purpose.

Natural Resources (Question No. 1790)

Mr Grassby:

asked the Minister for National Development, upon notice:

On what date did he receive from his Department the document referred to in his answer to my question No. 1325 (Hansard, 19th August 1970, page 217) which discusses in depth developments in natural resources, particularly minerals, forests, water and energy.

Mr Swartz:
LP

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

The document has been in preparation and under consideration over 9 months. In that period there has been continuous preparation of the document jointly by me and officers of my Department.

Australian Capital Territory: Freehold land (Question No. 1810)

Mr Enderby:

asked the Minister for the Interior, upon notice:

  1. Has his attention been drawn to a recent advertisement in a Canberra newspaper stating that the Australian Capital Territory freehold property known as the Mount McDonald Block was for sale and to the advertised claim that it had particular value because of ite sub-division potential.
  2. if so, has his Department changed its attitude to the control of freehold land in the A.C.T. as it was last expressed in 1967.
  3. What is the Department’s attitude to the advertisement and to the control of freehold land in the Territory.
  4. Is it intended to acquire the remaining freehold land in the A.C.T.
Mr Nixon:
CP

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

  1. Yes.
  2. The Government’s view is unchanged.
  3. At the present time there is no law enabling the control of sub-division and use of freehold land but work is nearing completion on the preparation of an appropriate Ordinance.
  4. Action leading to acquisition of freehold land in the Tuggeranong area exceeding 20,000 acres has been commenced. The landholders involved have been informed.

The Government’s attitude to the acquisition of the remaining freehold, including land already offered to the Commonwealth, will be announced when it has had opportunity to consider the results of an investigation recently completed by the Department of the Interior which has had regard to all aspects of future land use needs and planning and economic implications.

Australian Broadcasting Commission: Prime Minister (Question No. 1872)

Mr Whitlam:

asked the PostmasterGeneral, upon notice:

  1. Have arrangements been made for the Australian Broadcasting Commission to provide staff and facilities at its Canberra studio for a programme of training and familiarisation in the use of television for the Prime Minister before the Senate election campaign.
  2. If so, what fee is payable to the Commission in respect of these arrangements.
Mr Hulme:
LP

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

  1. No. But the Prime Minister recently visited the Canberra studio of the A.B.C. for familiarisation with the use of autocue equipment which it is considered might be used in recordings made at that studio.
  2. None.

Conciliation and Arbitration (Question No. 1948)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

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

Has he had any discussion with the President of the Conciliation and Arbitration Commission concerning the policy of the legislation in regard to sanctions.

Mr Snedden:
LP

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

I would draw the attention of the honourable member to my answer to his question No. 1088.

Perpetual Calendar (Question No. 1881)

Dr Everingham:

asked the Minister for External Affairs, upon notice:

Will he consider referring to the Joint Committee on Foreign Affairs for consideration, the United States Bill proposing the adoption of the The Edwards Perpetual Calendar from New Year’s Day .1973, as at present referred to the United States Congressional Committee on Foreign Affairs and recommended with supporting arguments in (a) House Resolution No. 79 adopted by the Territory of Hawaii on 28th April 1943, and (b) resolutions memorialising the Congress of the United States to adopt The Edwards Perpetual Calendar, adopted by the House of Representatives of the Commonwealth of Massachusetts on 6th February 1952.

Mr McMahon:
LP

– The answer to the honourable member’s question is as follows: 1 am not prepared to take the action suggested as in present circumstances 1 do nol think that this would be productive.

Federal Industrial Laws (Question No. 1946)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

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

  1. Did the editors of Butterworth’s Fourth Edition of ‘Federal Industrial Laws’ at page 380 slate that Mr Justice Dunphy exhibited some rather dubious reasoning when he ruled in the case of Commonwealth Steamship Owners Association v. Waterside Workers’ Federation of Australia that an organisation, party to a batt, is concerned in that ban at every moment of time that the ban continues.
  2. Did he say in answer to question No. 1556 that the editors did not express the view that the Judge exhibited some rather dubious reaso’ning in his judgment in the abovementioned case; if so, why.
Mr Snedden:
LP

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

  1. In ‘Federal Industrial Laws’ at page 379 of the fourth edition, the editors quote, in part, the remarks of Mr Justice Dunphy set out in part (I) of the answer to the honourable member’s question No. 1556. The remarks of the Judge appear in his judgment in Commonwealth Steamship Owners Association v. Waterside Workers Federation of Australia (1960) 2 F.L.R. 328 and it is this case to which the editors refer when they say that the Judge’s remarks were ‘obviously going too far’. On page 380 of the .same edition, the editors express the view that the judgment of Mr Justice Dunphy in Commonwealth Steamship Owners Association v. Waterside Workers Federation of Australia (No. 2) (1963), 5 F.L.R. 103 exhibits some rather dubious reasoning’.

    1. Yes, because, as will be seen from the above, the editors do not express the view that the judgment of Mr Justice Dunphy in the 1960 case at 2 F.L.R. 328 ‘exhibits some rather dubious reasoning’ as suggested by the honourable member in his question No. 1556. They express this view as lo his judgment in the 1963 case at 5 F.L.R. 103.

Cite as: Australia, House of Representatives, Debates, 14 October 1970, viewed 22 October 2017, <http://historichansard.net/hofreps/1970/19701014_reps_27_hor70/>.