House of Representatives
18 February 1971

27th Parliament · 2nd Session

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

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-I present the following petition:

Tothe Honourable the Speaker and members of the House of Representatives in Parliament Assembled the Humble Petition of 95 Aboriginal citizens of New South Wales respectfully sheweth -

Whereas the Aboriginal people in the Balranald area being in a serious stale of neglect with regard to -

lack of housing for persons living at present in old car bodies and makeshift humpies, and

inadequate, substandard and overcrowded houses for a significant percentage of the population, and

there being no employment for the majority of those able to work, both male and female, and

there being no security of tenure for residents living on the Balranald Reserve.

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

Adequate high standard housing for the Aboriginal people of the Balranald district on sites which are acceptable to the Aboriginal persons concerned whether the sites be in the town or on the Reserve, and

employment opportunities in the district for all those able to work, and

full legal title to the land on the Balranald Reserve for those residents of the Reserve. And your petitioners, as induty bound, will ever pray.

Petition received and read.



– 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:


the Commonwealth Parliament has acted to remove some inadequacies in the Australian Education system.

a major inadequacy at present in Australian education is the lack of equal education opportunity for all.

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.

Australia cannot afford to hinder the education of these 200,000 Australians.

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

The allowance of personal education expenses as a deduction from income for tax purposes.

Removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students.

Increase in the amount of education allowable for tertiary education expenses.

Increase in the maintenance allowance for students.

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.



– I present the following petition:

To the Honourable, the Speaker, and Members of the House of Representatives in Parliament assembled. The humble petition of residents of Victoria respectfully sheweth:

The Red Kangaroo, largest marsupial in the world, has through shooting for commerce become extinct or rare in many areas of Australia where it was once prolific.

All scientific evidence points to this decimation of numbers, which is clear evidence that State Governments arc unable to control commercial shooting within their boundaries.

We, the people of Australia, feel strong repugnance to the fact that industries should be allowed to operate, which in the past have decimated the koala to extinction over vast areas of this land and which have now similarly exploited the kangaroo. We feel that the taxpayer should not have the heavy burden of having to pay for the control of an industry which benefits but a few people in this country, and that live kangaroos through their value as tourist attractions are economically far more profitable to our economy and to us aesthetically.

We your petitioners, therefore humbly pray that you will:

Immediately ban the export of products made from kangaroos.

Strongly insist that State Governments prohibit the commercial shooting of kangaroos.

Enact legislation to give the Commonwealth Government control of all native wildlife throughout Australia.

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

Petition received.



– I present the following petition:

To the Honourable, the Speaker, and Members of the House of Representatives in Parliament assembled. The humble petition of residents of Victoria respectfully sheweth:

The Red Kangaroo, largest marsupial in the world, has through shooting for commerce become extinct or rare in many areas of Australia whereit was once prolific.

All scientific evidence points to this decimation of numbers, which is clear evidence that State Governments are unableto control commercial shooting withintheir boundaries.

We, the people of Australia, feel strong repugnance to the fact that industries should be allowed to operate, which in the past have decimated the koala to extinction over vast areas of this land, and which have now similarly exploited the kangaroo. We feel that the taxpayer should not have the heavy burden of having to pay for the control of an industry which benefits but a few people in this country, and that live kangaroos through their value as tourist attractions are economically far more profitable to our economy and to us aesthetically.

We your petitioners, therefore humbly pray that you will:

Immediately ban the export of products made from kangaroos.

Strongly insist that Slate Governments prohibit the commercial shooting of kangaroos.

Enact legislation to give the Commonwealth Government control of all native wildlife throughout Australia. and your petitioners as in duty bound, will ever pray.

Petition received.



– 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:

That the Australian Education Council’s report on the needs of State education services has established serious deficiencies in education.

That these can be summarised as lack of classroom accommodation, desperate teacher shortage, oversized classes and inadequate teaching aids.

That the additional sum of one thousand million dollars is required over the next five years by the Stales for these needs.

That without massive additional Federal finance the State school system will disintegrate.

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 House of Representatives in Parliament assembled will take immediate steps to:

Ensure that emergency finance from the Commonwealth will be 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.



– I present the following petition:

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

The undersigned electors of the Division of Grey humbly pray that the Government will take immediate measures to provide a television system to service the District Council areas of Murat Bay, Streaky Bay, Le Hunle and Elliston.

Your petitioners, as in duty bound, will ever pray.

Petition received and read.


Minister Assisting the Treasurer · FLINDERS, VICTORIA · LP

– 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 residents of the State of Victoria respectfully sheweth:

That it is proposed to establish a jetport in the Devon Meadows, South Cranbourne, Pearcedale area of Victoria.

That local residents over a wide area of the Mornington Peninsular will suffer an invasion of privacy and peace, both day and night, by the ear-assaulting noise of jet aircraft.

That the jetport and its associated industries would be a source of pollution over a wide area and would seriously affect the livelihood and living conditions of residents.

That as a result of subdivision in recent years, the Devon Meadows area is highly developed and consists mainly of farmlets, owners having spent much time and money in improving their properties. The blanket effect of the Department of Civil Aviation’s consideration of this area as a future site will impose great hardship on many of those now resident there.

That the land in this area is vital for the growth of urban settlement to support the industrial complex at Westernport Bay.

That Quail Island sanctuary and other pockets of bushland provide the ecological environment for native animals and birds which would be wantonly destroyed.

That the cost to the Government of purchasing and preparing the area for a jetport would be enormous and a waste of public money, compared to the alternative site on French Island.

That it is apparent that physical limitations imposed by features such as the main South Gippsland Highway cause serious doubts as to the adequacy of the Devon Meadows site, in view of the extensions found necessary for Tullamarine, even during its construction.

That should a jetport need to be established, it is felt that French Island with its

Crown Land, comparative lack of settlement, greater potential for extension if required, and noise buffer zone provided by the sea is clearly a more suitable site.

Your Petitioners therefore humbly pray that (a) action be taken to prevent a jetport being constructed in the Devon Meadows, South Cranbourne, Pearcedale area of Victoria, and (b) that the Government free this area from any restraint being caused by the Department of Civil Aviation’s consideration of it as a site for a possible Jetport.

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

Petition received and read.

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– Is the Prime Minister aware of the statement made at the University of New South Wales by the Chief Justice of the High Court, Sir Garfield Barwick, when he described the slow pace of anti-pollution efforts and warned Australians against putting off the issue any longer? 1 ask: When are we to be given any positive details of action to be taken by the Commonwealth to control the spread of pollution, which is destroying our environment?

Prime Minister · HIGGINS, VICTORIA · LP

– I did not see the actual statement to which the honourable member refers. I can only say that most of the action which requires to be taken in this field is action which the States can take Indeed,I think that the Government of New South Wales and the Government of Victoria have started and really begun a course designed to combat the evils of pollution.

Mr Uren:

– What have they done?


– The Commonwealth Government itself, I think it will be recognised, has played a not inconsiderable part in trying to make sure by a proper inquiry that the Barrier Reef will not be subject to pollution as a result of drilling in that area. This is an example of the kind for which the honourable member asked. We stated in our last policy speech that we proposed to set up an Office of the Environment and would write to all States in an endeavour to set up a council to advise the States and the Commonwealth of the sort of action that could be taken throughout Australia. We have written to the Stales. Four of them have replied. We are waiting for replies from the other two.

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– My question is directed to the Minister for Foreign Affairs. Is he aware that questions have been asked in another place about aircraft purchased by the Government for the foreign aid programme? Could the Minister let the House know the details of the purchases and when the purchase price can be announced? When considering further purchases will the Government keep in mind the Transavia general purpose aircraft? Is he aware that this plane of magnificent performance is wholly designed and constructed in Australia and sold at a third of the cost of similar aircraft?

Minister for Foreign Affairs · LOWE, NEW SOUTH WALES · LP

– In answer to the last part of the honourable gentleman’s question, I will keep in mind the qualities and characteristics of the Transavia aircraft and will make certain that the request is conveyed to the relevant departments as soon as question time is over. As to the purchase of the aircraft, a little over a year ago negotiations were commenced for the purchase and delivery to Cambodia. Laos and Nepal of 11 aircraft - 6 to Cambodia, 3 to Laos and 2 to Nepal. We were able to purchase immediately from the Royal Australian Air Force 5 aircraft of a military transport configuration. We made inquiries to find out whether they could be converted for civil/ military use but it was ascertained that the cost of doing so would be between $20,000 and $30,000 each. The purchase price for each of the Royal Australian Air Force aircraft ranged between $10,000 and $15,000. This was exclusively an intraCommonwealth transaction between the 3 departments involved, the Department of Supply the RAAF and myown Department.

The second part of the question relates to the purchase of aircraft from Jetair. There is some confusion in the minds of people that Jetair was controlled by Mr G. P. Barton ofIPEC. I am informed that while the Managing Director of Jetair, which is a subsidiary of Brins, is a Mr Barton, he is not the same Mr Barton as Mr G. P. Barton ofIPEC. The initiative for the purchase of these aircraft was solely that of the departments. No-one else other than departmental officials has had anything whatsoever to do with the actual negotiations for the purchase and sale. In other words, no Minister has been involved other than to read the departmental files and to agree to the recommendations made if they decided to do so. I agreed to the recommendation in documents that were submitted to me. Therefore, any idea of a Minister being connected with this-

Dr J F Cairns:

– What have you to defend.


– Because some of your companions - if you would like me to name themI will give you their names; they would probably be your friends - have created suspicions that Ministers were associated with it. No-one outside the officials were associated in any way. 1 would have made a statement about this before but as yet we have not received from the Department of Supply the official order to purchase. As we have not received the authority, although we expect to receive it today, 1 was not anxious to make the purchase price known because I believe it to be a transaction which when the figures are disclosed will show that it is a really worthwhile purchase and the price, far from being excessive is, I believe, well below the market price. To give a figure, if we purchased similar RAAF aircraft and wanted to give, as we have in the case of the supply of aircraft to Nepal and Laos, certificates of airworthiness we would have had to spend on the purchase price and conversion something of the order of $80,000.

Dr J F Cairns:

– You-


– Do keep quiet and be a good boy. You talk enough in Moratorium campaigns and you are always wrong anyhow.


– Order! I suggest that the Minister and the honourable member for Lalor cease their cross talk and that the Minister addresses the Chair.


– Sometimes, Mr Speaker, one cannot help but respond to insolent provocation. I have the figures for the actual purchase price which I can assure the House will be a purchase price substantially below $50,000. To that, of course, there will be added delivery costs of about $10,000 for each aircraft. That represents the cost of transporting the planes, the petrol involved, the movement of personnel and something of the order of an average of $4,000 to get the machines into the required condition. In each case we have advice from the technical officers involved in the Commonwealth civil service - men of unimpeachable integrity and ability - that it is a good buy, that the machines of Jetair are in good to first class condition, and I will be very happy to announce to the House the actual purchase price, the total delivery cost and a comparison with what would have had to be paid on the open market.

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– My question is directed to the Prime Minister. The right honourable gentleman told the House on. Tuesday night that the Public Service Board had advised that restraint on establishment increases could benefit the health and soundness of administration in the Commonwealth service and had suggested that a limitation should be placed on the increase in service employment. 1. ask the Prime Minister whether he had previously sought the Board’s advice on increases in the Commonwealth service or whether the Board had previously given advice or made suggestions to him on such increases.


– The Board had not made suggestions to me previously on such increases. On the other hand, beforeI left for the Singapore conference I got in touch with the Board and required it to exercise restraint, as I have publicly stated previously. As a result of my communications with the Board, the Board did advise me in the words which I used in this House on Tuesday night.

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– Does the AttorneyGeneral agree that it is most desirable for the stability of the economy to have a well regulated and impartially conducted stock and share market? Is he aware that a great deal of the manipulation and instability of the market springs from the fact that registered sharebrokers and members of the stock exchanges trade extensively in their own names and through nominees as well as acting as agents for other principals? What action can this Government take to prevent or restrain this kind of undesirable activity?

Attorney-General · BEROWRA, NEW SOUTH WALES · LP

-I would readily agree with the proposition which is expressed in the first part of the honourable member’s question. As to the second part, I think I should say that I cannot of my own knowledge confirm the substance of the allegations that are contained in it, but in saying that I do not for one moment suggest that the allegations may not be very well founded; I just do not know for myself. But I think it is commonly understood that conduct of the kind to which the honourable member has referred, that is, dealings by brokers in their own right as principals, either in their own names or through nominee companies, can give rise to risks of manipulation and the sort of problem to which the honourable member referred in the second part of his question.

As to the third part of the question,I would say that because there are no stock exchanges in any Territory of the Commonwealth, as the position now stands there is very little that the Commonwealth Government can do. Controls of the kind that the honourable member would have in mind are controls that, as things stand, would have to be exercised by means of State legislation because the stock exchanges are in the States. I understand that there are branch offices of Sydney and Melbourne broking firms in the Australian Capital Territory, but they are purely branch offices and there is no share trading on any market in the Australian Capital Territory. That is the position as I see it at the present time.

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Postmaster-General · PETRIE, QUEENSLAND · LP

– I am unable to answer the question at this moment. It is very difficult to keep in one’s mind all the detail associated with television installations around Australia. I will consult the Australian’ Broadcasting Control Board, Which is responsible for the technical detail in conjunction with the Post Office, ascertain the date of operation of the station and inform the honourable member by letter.

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– I address a question to the Minister for Primary Industry and refer to the dried fruits research scheme. I ask whether the Minister can indicate when the Bill to give it legislative authority will be introduced in this House and whether he can give any other information regarding this scheme.

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

-I understand that a scheme for dried fruits research has been approved by the Government. It involves a levy on prunes, dried nectarines, dried apricots, dried peaches and dried vine fruits and will, in character, be, similar to schemes which have been introduced for research on other primary products. It is to be matched on a$1 for$1 basis by the Commonwealth and, with certain limits, will enable research to be undertaken generally in order to ensure market access for these dried fruits. It is hoped that legislation will be introduced later this year.

The honourable member bas spoken to me of his concern about prospects for the industry and for growers in the industry and I hope to be able to accept his personal invitation to see something of the industry within his electorate at the earliest possible opportunity. It is an industry which has made a remarkable contribution to the development of the Murray River and I believe that this dried fruits research scheme will be of ‘ tremendous help in developing new market outlets for the products of that region.

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– Has the attention of the Minister for Foreign Affairs been drawn to a statement by the Leader ofthe Country Party and Deputy Prime Minister indicating that his Party was considering the recognition of Red China,no doubt because of the failure ofwheat sales to its Communist customers? If so, is it a fact that recognition of Red China is now under consideration and that economic considerations rather than the allegedhigh principles espoused in the past will be the major factor in the Government’s decision to turn a policy somersault and recognise Red China as soon as possible?


-Order! As the honourable member knows, this is a question of policy. The honourable member definitely has asked for a definition of the Government’s policy. However, the Minister may answer if he wishes to do so.


– I will answer briefly. The assumptions underlying the honourable member’s question are totally wrong. J have discussed this problem with the Prime Minister and I can assure you, Mr Speaker, that in looking at the problems, first of admission to the United Nations and, secondly, of recognition by other countries, we have looked at the facts. We have examined problems of diplomatic relationships and I doubt whether we have once mentioned as a decisive influence the question of sales of wheat or any other commodity to the People’s Republic of China.

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– Will the Minister for Shipping and Transport assure me that as soon as he has had time to grasp the helm of his new Department firmly he will institute early and urgent inquiries into the operations of the shipping conference system? Is he aware that many woolgrowers think that under the conference system as at present operating they and their wool are being taken for a ride which is rough, long and expensive?

Minister for Shipping and Transport · GIPPSLAND, VICTORIA · CP

– Because of the importance of the conference system to our export industries one of the first things I have been doing since becoming Minister for Shipping and Transport has been turning my mind to the problems of shipping as it affects Australian exports. The House will know of the Government’s interest in overseas shipping. We have now involved the Australian National Line in shipping services to the United Kingdom, Japan and, of course, to the west coast of America. It is easy to recognise the advantages of a conference system when one looks at the problem quickly because a number of ships in a conference can provide rationalisation both of services and of freight rates from port to port. It is not so easy to recognise the disadvantages until one comes to study the problem more closely. I propose to discuss with my colleague the Minister for Trade and Industry at an early date the conference system and shipping practices in general.

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– I ask the Minister representing the Minister for Air a question. Is it a fact that Air Force DC3 aircraft have been sold for about $8,500? Were they airworthy when they were sold and what is it that is required to be done to them that involves an expenditure of $40,000 or $50,000 to make them fit to be given as foreign aid?

Minister for the Navy · MORETON, QUEENSLAND · LP

– I regret that I am unable to supply the honourable member with that information. May 1 treat his question as being on notice and I will see that the information is provided to him.

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– I ask the Treasurer a question. Is he aware that Sydney agents of overseas organisations have received cables stating that there are rumours abroad that Australia intends to devalue its currency and that they wish to be kept advised in regard to this matter? I ask: ls it the Government’s intention to devaluate?


– I have yet to see a country voluntarily devalue its currency. Nearly every devaluation is unfortunately forced upon the country concerned. At the moment we have hanging over us the very serious threat of inflation. One of the most foolish things we could do at this stage would be to devalue our currency. The other point is that we have strong reserves. In fact, the honourable member might have noticed in a newspaper last night that these reserves have increased quite considerably in the last month and now stand at about $ 1,619m, having in the first 7 months of this financial year risen by $81m compared with a reduction of $196m over the same period last year. Our exchange outlook and our balance of payments are at present extremely healthy and are causing no worry. Therefore it is most unlikely that devaluation would be forced on us. In such circumstances I cannot imagine for one moment a government of this country taking the almost criminal action of voluntarily devaluing the currency.

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– I address a question to the Minister for Defence. Within the last few days another Australian battalion has sailed for Vietnam and inevitably a proportion of it will become casualties. Simultaneously the Minister has announced cuts’ in defence spending. Is there an Australian withdrawal timetable? Why is he more assiduous at saving money than at saving lives? For how much longer will the Government spend lives in Vietnam in order to save Australian Democratic Labor Party preferences?

Mr Malcolm Fraser:

– The honourable member’s question is entirely offensive to the Government and to everyone on this side of the House. To assist in achieving a major objective announced by the Prime Minister of combating inflation the Government is saving funds that would otherwise be spent. Even so, it would be wrong to adjust or change major policies of significance affecting relationships with allies because of the present economic circumstances with which we are faced. This was one of the reasons whyI directed that any economies that were to be found in the defence area should not affect relationships that we have in Vietnam or in the SingaporeMalaysia area. When there are changes in the deployment of Australian forces in the Vietnam conflict these will be announced, as they have been in the past, by the Prime Minister. As the Prime Minister announced on a previous occasion when the subject was under discussion, this matter is kept under close review by the Government.

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– My question is addressed to the Minister for Primary Industry. Will the Minister advise what were the reasons for the alternative offers of finance to the States for rural reconstruction? Was the provision of funds on the basis of 25 per cent grant and 75 per cent loan at 6 per cent more beneficial to the States than the full amount as a loan at 3 per cent? Could he further advise what was the basis used for the allocation of funds to the various States?


– The proposition which, as a result of discussions, it has been announced is being accepted by ail States except Victoria was put initially by my colleagues, the former Minister for Primary Industry and the Treasurer, on the basis of a loan over 20 years at 3 per cent interest. As a result of discussions within the meeting of Ministers, however, the States expressed some concern because the objective of the$100m would be that approximately half should be available for rural reconstruction and approximately half for farm rehabilitation and possible farm amalgamation. It was felt that on the basis of a division with the sort of interest rates available from the Rural Reconstruction Board in New South Wales taken generally as a basis on which the advances for reconstruction ‘ purposes would be made, the Statescould be at some disadvantage. For that reason, the alternative proposition was submitted to the States. This was that one-quarter of the amount should be provided by way of grant and that the balance would be available at 6 per cent interest. In fact, over the 20 year terms on the basis which has been offered to the Stales, the arrangement of 25 per cent free of interest and the 75 per cent at 6 per cent works out slightly more favourably to the States than it would on the other lower interest rate.

It is true that administration expenses are to be the responsibility of the States, but the objective of the scheme is to ensure that primary producers will be able to have some opportunity within this amount to embark on rehabilitation at a time when the rural crisis generally has so adversely affected them. The money should be available over a sufficiently’ long period for there to be some prospect for those who do become entitled to’ funds to get back on the way towards economic viability.

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– My question is directed to the Minister for Foreign Affairs. The Minister no doubt will recall telling the House on 14th October last in reply to a question from me that he had instructed bis Department to review the list of materials approved for export to China. As a result of this review, has any alteration been made to the arrangement which at present allows the export to China of materials capable of being used in the manufacture of armaments and other strategic items which could be used against Australian forces currently engaged in the lndo China war?


– Already there is an embargo against the export to Communist China, or to the Peoples Republic of China, of any goods which can be used for military purposes against any forces whatsoeverand that, of course, includes Australian forces. So, the honourable gentleman’s question is somewhat misguided and misplaced. There is no intention whatsoever to change this list and we will keep an embargo upon any goods which can be used directly for military purposes.

As to the substance of the honourable gentlemans question, 1 think that the Leader of the Opposition has a question on the notice paper relating to it. 1 understand, therefore, Mr Speaker, that consequently that part of the question asked by the honourable gentleman is out of order. Nonetheless, I can assure the honourable member now that 1 have carried out the review that so far as any goods that have no strategic implication are concerned I hope that in the not too distant future we will bc able to make an announcement about them.

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– 1 address my question to the Minister for National Development, ls it a fact that the design establishment of Dartmouth Dam is now - held up? What is the reason for this cessation of work which, when completed, will lift the South Australian entitlement of water by the enormous amount of 0.25 million acre feet? What can be suggest to resolve this impasse which is supported by ignorance and by the Opposition in this House and which could have tragic consequences for South Australia, particularly during a series of dry years?.

Minister for National Development · DARLING DOWNS, QUEENSLAND · LP

– lt is a fact that the early design work on the Dartmouth Dam was completed some time ago and that agreement had been reached between the governments concerned, that is, the Commonwealth Government and the Governments of New South Wales, Victoria and South Australia, to proce’ed wilh this work. Sub sequent to that, of course, as the House is well aware, whilst the agreement was ratified by the Commonwealth Parliament and the Parliaments of New South Wales and Victoria, it was not ratified by the Parliament of South Australia. That has held up this very important work. The delay is due solely to the action of the Government of South Australia. It is almost incredible that the State which has the most to gain from this work is still persisting with this action. We have had several discussions with the South Australian Government. We have been in negotiation with it about the Dartmouth Dam, and the situation at the moment is a complete stalemate because the Government of South Australia, particularly the Premier, will make no move to change the situation. I think this will have a disastrous effect on the future water supply of that State. 1 was having some discussions yesterday with representatives of the Victorian Government. Of course, Victoria is in a difficult situation. It has the work team ready to carry on with the work and is just awaiting South Australia’s ratification of the agreement. This team is being held up without any other work to do, and it could create a difficult situation for Victoria if this work force is dispersed. 1. can only say once again that I hope the Government of South Australia, particularly the Premier, will show some common sense in relation to this matter and will ratify this agreement as quickly as possible.

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– My question to the Foreign Minister concerns the Commonwealth Heads of Government Conference in Singapore last month. What attitude did he or the Prime Minister express on the staging of nuclear weapons tests by France and the dumping of chemical weapons by America in the south west Pacific area, to which the representatives of New Zealand and our three new Commonwealth neighbours expressed their strong objection? I also ask: Who represents Australia on the study group on the security of maritime trade routes in the South Alantic and Indian oceans, and when does the Minister expect that the study group will make its report, which the Conference decided should be made through the SecretaryGeneral as soon as possible? Has the right honourable gentleman discussed the question with the Secretary-General during the visit here?


– As to the last part of the honourable gentleman’s question, I have discussed the question of the study group with the Secretary-General during the time he has been in Australia. There has been a little delay about the appointments because of a difference of opinion as to what should be the level of representation of the various countries involved. There has been a little delay due to the fact that the Secretary-General has been out of the United Kingdom. As soon as he gets back he will take the matter up, and it is hoped that a decision as to representation will be made shortly after wards. As to the first part of the honourable gentleman’s question, the subject that he raised about nuclear explosions was not a matter of great concern to any of the countries at the Singapore Conference. In fact, it was mostly concerned with criticism of the British Government because of its attitude to the Simonstown Agreement. I now think a lot of that criticism would have abated because it is clear that there is a legal obligation on the British Government to supply certain types of equipment to the South African Government. So far as nuclear explosions by France are concerned we retain our position. When we heard that France was about to detonate a nuclear device we protested and we will continue to protest whenever we hear that this or any other kind of nuclear explosion is likely to be made in the Pacific theatre.

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– Has the attention of the Minister for Labour and National Service been drawn to an article in the ‘Australian’ yesterday in respect of the number of prosecutions pending for failure to register for national service? Is this article true? How many prosecutions have been authorised to date of young men failing to register under the National Service Act and how many are pending decision on the same offence?

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

– The honourable member asks me for figures and, of course, I cannot carry the precise figures in my mind. Therefore I shall have to deal with the question in more general terms and not give precise figures. There was a report in the ‘Australian’ yesterday which was drawn from an answer to a question on notice from, I think, the honourable member for Oxley. So far as prosecutions under the National Service Act are concerned it is very important to draw the distinction between the 3 prosecution points. They are: Failure to register; failure to attend for medical examination; and failure to render service. There is a very big distinction between them. The numbers of those who fail to attend for medical examination and are prosecuted for it is very small and the number of those who fail to render service is even fewer again, but I believe’ the honourable member’s question was specifically directed towards failure to register. Since the inception of the scheme about 600.000 men have registered and very few have been prosecuted. The number who have been prosecuted is a bit over 1,000 but there is another number which is being variously stated by bodies such as the Draft Resisters Union. Just what that body is I do’ not” know but it seems to make public statements.

Mr Foster:

– Join it and find out.


– I have no doubt that the honourable member would know all about it and indeed would give as much comfort as he could to members of that union who are encouraging other people to break the law and risk prosecution and imprisonment, and that is not a responsible act of any member of this Parliament. But there are other numbers which are frequently put about and it is most important to understand in relation to this that the vast majority of young’ men do register in accordance with ‘their obligation. The number who fail to register is a minute percentage of the total’ required ‘to register. There are periodic checks ‘made by my Department to see whether people subject to registration have failed to register. Honourable members will be well aware that everybody has an obligation. .to register even if it is unlikely that he will be called on for service because, for., instance, he is medically unfit and appears to be medically unfit or he is mentally retarded. But they all must register. There are other groups who will not be called on for service such as members of the permanent forces or people who have already contracted a marriage before the cut-off date in relation to registration.

There is yet another category of people who in fact do not exist but in relation to whom bodies like the Draft Resisters Union and other unknown persons put in false registration papers. Most of those registration papers are, on. their face, false and can be disregarded, but some are not. They put an administrative burden on the Department butI want to make it perfectly clear that every case is pursued to see whether there is an obligation to register. No matter how many false registration papers are put in the effectiveness of the scheme will not be affected. All this practice will do is place an added burden on officers in my Department. It will not in any way affect the efficiency of the scheme and it will in no way result in anybody not being called upon for service as the process develops or not being prosecuted for failure to register. A great number of people who fail to register subsequently register either voluntarily or at the prompting of my Department. I am bound to say thatI have recently noticed a very significant change in attitude. I used to receive letters from young men who would write to me, sometimes in offensive language and sometimes in very polite language, and say that they would refuse to register or comply in any way. I now find that many of them say ‘We will register’ because they accept the obligation to register in the first instance and then to proceed with their course of conscientious objection later.

page 256




– I ask the Prime Minister a question. Has he considered lifting the Queensland Mines Uranium Company Ordinance to allow a reconstruction of the debt position of Mineral Securities Australia Ltd by a consortium of which Conzinc Riotinto of Australia Ltd is a prominent financial member? Will he give an assurance to the House that under no circumstances will he allow CRA or its parent company Rio-Tinto-Zinc Corporation Ltd. Britain, or any other foreign company to secure control over the rich Nabarlek Qld Mines uranium deposit?


– The proposals of the consortium to which the honourable member refers would not require any alteration whatsoever of the ordinance to which the honourable member refers because it would not result in the ownership of Queensland Mines shares passing to the consortium.

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– In directing a question to the Minister for Trade and Industry I refer to the 25.50 United States cents duty which the American Administration levies against Australian wool of 44s and finer. Is it a fact that efforts were made in the Kennedy Round trade negotiations to reduce the duty on raw wool? If so will the Minister give the details of proposals put to the USA and also the nature of reciprocal concessions offered during the negotiations? Will he also initiate discussions with the United States with a view to having this tariff removed?

Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · CP

– As the honourable member said for many years there has been a duty of 25½c per lb on all Australian wools finer than 44s entering the United States. This has caused a great deal of annoyance to Australians because today the 25½c is such a high percentage of the value of the wool and I would say that it is causing a great deal of resentment. However it still applies in that form. Over the years successive Liberal-Country Party governments have approached the United States Government to try to bring about some reduction in this duty. In 1961 negotiations were held with the Americans and they asked that the matter be deferred and be incorporated in the Kennedy Round discussions. During the course of the Kennedy Round discussions the Americans agreed to reduce the duty by 50 per cent provided Australia made concessions on tobacco leaf coming into this country. During the course of the Kennedy Round discussions the Americans wanted not only concessions on tobacco leaf but also an extension of concessions to other industries. However, before the final wind-up of the Kennedy Round discussions the Americans, for their own reasons, withdrew the offer completely. In 1967 the then Prime Minister conferred with the President of the United States of America to see whether a reduction might be brought about. The outcome was that the Americans were completely intractable on this issue. AllI would like to say to the honourable member is that this is an issue which is causing a great deal of annoyance and resentment, and that the Government will continue its efforts to try to bring about a reduction in the duty.

page 257


PostmasterGeneral · Petrie · LP

For the information of honourable members, I present a financial and statistical bulletin on the activities of the Australian Post Office for theyear ended 30th June 1970.

page 257



Minis ter for Social Services · Mackellar · LP

– For the information of honourable membersI present details of sheltered workshops approved under the Sheltered Employment (Assistance) Act 1967-70 as at 31st December 1970. I ask leave of the House to make a short statement in connection with this matter.

Mr Hayden:

– Shall I have leave to make a short reply?


– No.

Mr Hayden:

– Then you will not have leave to make a short statement.


– Is leave granted?

Mr Hayden:

– Not unless I have leave to make a short reply.


– Leave is not granted.

page 257



– When advising the

House of the countries to which Jetair aircraft were to be sent I said that two were to go to Bhutan. That is not correct. Two of them are to go to Nepal, not to Bhutan.

page 257


Ministerial Statement

Minister for National Development · Darling Downs · LP

– by leave - Following a review by the Commonwealth of policy relating to the export of uranium the then Minister for National Development on 10th April 1967, announced a new policy designed to stimulate explora tion for this mineral and at the same time ensure that Australia’s future requirements of uranium would be met front domestic resources. While retaining a system of export controls the policy permitied limited exports from new discoveries in amounts which were related to the size and location of these deposits. In recent years the search for uranium has increased. Over 80 companies have been involved in exploration, and very gratifying results have been obtained. Discoveries by Queensland Mines, Peko-Wallsend-Electrolylic Zinc and Noranda in the Northern Territory have been announced by the companies.ExoilTransoil has announced discoveries in South Australia. None of these discoveries is as yet fully delineated, and complete investigation will take a considerable time. It is clear, however, that these reserves will put Australia amongst the leading uranium producers in the world, and it is not over-optimisticto expect that further discoveries will continue to be made.

Uranium is not only a valuable mineral and the probable future source of much of the world’s future industrial power, but it is also a material of strategic importance. The Government has decided, in common with the Governments of practically all other uranium exporting countries, to maintain a system of export control. For the present this will not involve any quantitative restriction upon exports. However, a close watch will be maintained on proven reserves and the amount exported, to ensure that adequate suppliesare retained for our future requirements. As with previous policy, all contracts for the export of uranium will be subjected to the approval of the Minister for National Development. This will ensure that the price negotiated for the sale of the uranium is satisfactory. Appropriate safeguards, to ensure that the materials exported are used for peaceful purposes only, will be mandatory. I present the following paper:

Uranium Export Policy - and move:

That the House take note of the paper.


– The principal objective of the speech of the Minister of National Development (Mr Swartz) today is to inform the House of the relaxation of the selective embargo on the export of uranium oxide. There will be no quantitative restrictions placed on exports, at least in the near future. In September last year the Prime Minister (Mr Gorton) made a rather dramatic statement in this House in which he guaranteed on behalf of the Commonwealth Government that the rich Nabarlek uranium deposits would not fall into foreign hands. There is little doubt that two of the reasons behind his statement were the great richness of the deposits and the commercial fact that these deposits allowed for a. considerable increase in export income. There is little doubt that these reasons were behind the Cabinet’s decision because there is no question that in world terms the vastness of the Nabarlek deposits is a national asset to Australia. However, the Prime Minister’s statement must have been an embarrassment to the Minister because, as honourable members will recall, only a matter of hours prior to the Prime Minister’s statement being made, the Minister released his statement giving the Government’s official forecast on the export of minerals for the next 10 years. The figure he gave was something like $3.400m. There was no mention of uranium.

It is clear, therefore, that there has been a change in policy on this matter. Since 1967 there has been this selective embargo which the Opposition has supported. The selective embargo was applied on the assumption that the total reserves of uranium oxide in Australia, were only approximately 20,000 tons. Since that date we have had further excellent discoveries - again in relative world terms - and estimates at Westmoreland near the Northern Territory border, at Valhalla north of Mount Isa and in South Australia. This rather large and latest find of Nabarlek shows reserves which are estimated to be at least 55,000 tons of very high grade uranium oxide yielding 540 lb to the short ton. This is certainly significantly higher in grade than that produced from the Mary Kathleen mines. The Minister has informed me that it goes up to a maxium of 1,400 lb per short ton. This, of course, shows not only the value of it but also the relatively low cost of producing it in terms of world figures.In many countries the cost of mining uranium oxide is around$5 per short ton. In Nabarlek the estimate is being put at less than $1 per short ton and possibly very much less than 50c per short ton. This gives one an idea of the tremendous value of this reserve to Australia and it is imperative, of course, that it remains in Australian hands and under Australian control at all times.

The total supply in Australia now is such that Australia must be recognised as a major source of uranium oxide. It has something like 10 per cent of the world’s known or estimated reserves. Australia is in a position definitely to influence the price as well as the supply and demand of uranium oxide. However, there is one feature of the Ministers statement in which I am disappointed and that is that it. is too sketchy. This is a very important subject. Although in qualitative terms he has mentioned the need to ‘closely watch’ the position of exports and to carry on with appropriate safeguards. I believe the Parliament is entitled to know in more detail the Government’s policy with respect to mines and the reserves of uranium oxide and particularly its policy in regard to Queensland Mines, a subject which is in the news from day to day, and the uranium reserve at Nabarlek in the Northern Terrritory. I do not know whether the Minister has deliberately not clone this but at some future date he should inform the House in more detail of the Government’s policy and attitude towards uranium deposits in Australia, the ownership of those deposits and these safeguards on export levels which he states he will watch closely, particularly with regardto importing countries. Safeguards are mandatory but it is a question of how we define safeguards. For example, to what countries does the Government believe the uranium should be sold?

Let us look at the present position. There are countries which by reason of their industrial capacity and industrial energy will need uranium oxide. Japan is an outstanding example. In recent months Japan has announced to the world that by 1985 40 per cent of the total electricity generated in Japan will be by nuclear energy. Of course, this means that Japan, which has no real coal reserves will have to rely on atomic energy. Japan is one country with which this Government must foster not only uranium markets but also reciprocal trade agreements. In regard to the United KingdomI do not think there is any argument, but there is some doubt about the United States and for what it uses its uranium oxide. We want to know these points and hear the Government’s policy and attitude towards uranium exports. On reading policy statements which are put out from time to time there does not seem to be any clear cut policy, particularly in relation to mineral exports of strategic importance such as uranium.

We also want to know the Government’s attitude and beliefs about the price of uranium. Will the price of uranium rise or fall? This is what worries me. If there are to be no quantitative restrictions on the export of uranium it could cause a reduction in price. If this is so Australia with its great Nabarlek reserves and their low cost of production could be in the box seat. We may bc pressured by other countries who have a high cost of production as compared with at Nabarlek. We want to know also whether the Government has done any work on the demand for uranium-, lt is expected that the demand will increase in future. This is commonsense but it is to be hoped it will increase for peaceful rather than military purposes. The European Nuclear Energy Agency and the international Atomic Energy Agency have both predicted a steady increase in the demand for uranium which could in 10 years time slow clown because apparently there are tremendous innovations in the development of fast breeding reactors which I am told use only approximately half the fuel or energy requirements .of conventional reactors operating at the present lime.

I state these points because although the Opposition supports the policy as enuciated by the Minister for National Development, we want to be given more detail of what the Government is thinking and what its attitudes and policies are in this field. This type of policy is the same as the policy we listened to on Tueday night when the Prime Minister (Mr Gorton) spoke about inflation. We want to be given more detail, not just a sketchy few words about a decision of the Cabinet. This is important because it involves not only the Opposition and the people of Australia but also a lot of- developers who spend a great deal of money on development. They also want to know what the Government is thinking in this field.

Question resolved in the affirmative.

page 259



– I have received advice from the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) that he has appointed Senator Hannan to be a member of the Joint Committee on the Australian Capital Territory to fill the vacancy caused by the resignation of Senator Withers.

page 259


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

That Mr Anthony be appointed a member of the Standing Orders Committee’ in place of Sir John McEwen, resigned.

page 259


National Service - Sheltered Workshops - Broadcasting and Television - Social Services - Drought in Queensland - Pharmaceutical Benefits - Rural Reconstruction

Question proposed:

That grievances be noted.


– I wish to use this opportunity to raise a matter of some urgency to individuals, lt concerns a young lad, Private Trevor Simpson of Western Australia, who is undergoing national service. As I understand it, he is soon to be advised of a date for departure to Vietnam. This is not unusual in itself as many parents throughout Australia are having to stiller the anguish of a departing son and are wondering whether he will ever return. These fit young men, the pride of all who know them, go where this Government sends them hoping, of course, to return. However. Trevor Simpson is not fit in the full sense of being able to say that he has had a normal life. Since childhood he has been forced to wear around his neck a tag indicating that he is allergic to penicillin, sulpha drugs and other antibiotic drugs. While he was a child his mother, along with the rest of his family, suffered the anguish of worrying whether he would be able to leave hospital to lead a normal life after suffering the adverse effects of one of these drugs. Fortunately, with medical care and the close attachment of his family he has been reared to young manhood only to be conscripted in this time of peace to lie sent overseas. His allergy is a constant danger to him. He is constantly afraid that some error in medical advice or treatment will be made in an emergency and he will receive a drug which is dangerous to him.

On his behalf I appealed to the Army, to the Minister for the Army (Mr Peacock), but what has happened? The Army investigations revealed that adequate medical facilities, including other antibiotic drugs, were available. What a ludicrous situation. This young soldier is going to a foreign land to fight in a foreign war, and some bureaucrat assures us that in all circumstances he will be safe. Did the authorities consider the question of emergency conditions, such as this young soldier losing his tag which tells the world of his allergy? If he were injured it is not improbable that his tag would become lost. Did the authorities check to see whether the Vietcong had sufficient supplies of other drugs, if this young soldier were to fall into their hands? ls he to be supplied with a tag covering all possible language problems that might arise? Of course not. With callous disregard the authorities replied to the effect that he will go away, anyway. He will be a worry to his comrades and to his commanding officer who has to accept the added responsibility if anything happens to this young man.

May the people responsible for this decision realise the gravity of their action. 1 am led to believe that if this young man had suffered from tinia, severe acne, dermatitis, asthma or any other allergic condition he would not be sent away. Is it any wonder that his mother, who has not enjoyed a healthy life, became further depressed and distraught, finally causing her doctor to recommend the return of her son to Western Australia. But what did the Army say? lt said there was ‘not sufficient hardship’. This is an appalling state of affairs, lt makes me wonder how many cases involving people in similar circumstances have not been reported. How many casualties have suffered further because of Army disregard? This is case of which the Army is aware before anything happens, but all the indications to date have been ignored, as has the commonsense approach of posting this lad to his home State or, for that matter, of discharging him. It is bad enough for the Army to interfere with the best years of this young man’s life and to cause anxiety to his mother and family, but to deliberately rua the risk of placing his life in further medical danger is callous and inexcusable.

Will the Minister give an- assurance that this soldier will not be placed in any position where he will have difficulty in receiving medical aid? We all still have in our memories the tragic circumstances concerning the South Australian lad who had difficulties with his eyesight and who was killed in action. Let this not be another case. However, ( fail to understand the need for the Services’ desire to induct people with these difficulties. I wonder whether they would accept these people in a volunteer army or whether in fact they would choose them in preference to people who had no allergy. 1 doubt it. This leaves one with the opinion that these young people who are being called upon to undergo national service are inducted no matter what.

I regret having to raise this matter in this way, but I am concerned that this young soldier, or others like him who have similar allergies, could have their lives unnecessarily jeopardised. If the Government must conscript our young nien, at least make sure that their medical conditions will not react if in an emergency they receive treatment in the form of a drug to which they are allergic. I am sure that not all the opposing armies would be able to provide the proper treatment for our young men, should their medics be the only ones available. I ask the Minister to have another look at Private Simpson’s case and to take a long considered look at Army practice in these matters.

Minister for Social Services · Mackellar · LP

– A few moments ago 1 laid on the table of this House for the information of honourable members some material regarding sheltered workshops, ft contained a list of the sheltered workshops which were set out in electorates. At the same time I sought leave of the House to make a short statement which had already been shown to the Opposition and cleared with the Opposition, but leave was refused. I now take the opportunity to make that statement.

Mr Reynolds:

– You wanted a one-sided affair, that was all.


– I think that when the honourable member for Barton hears what I have to say, which was known to the Opposition, he will not use this kind of language. I now make the statement. I have laid on the table of the House a schedule showing sheltered workshops approved under the Act as at 31st December 1970. Honourable members will see that these have been set out in electorates so that each honourable member can see at a glance all the organisations in his own area.

Mr Charles Jones:

– I take a point of order against the Minister for Social Service based on the fact that the Minister had an opportunity to make this statement earlier in the day on condition that the customary practice was followed, that is, that a spokesman from the Australian Labour Party would be given the opportunity to reply to the Minister. Now, during the grievance debate the Minister is taking up time which correctly belongs to private members. Ministers should not abuse their privilege, as the Minister for Social Services is doing at the present time.

Mr DEPUTY SPEAKER (Mr Dobie)There is no point of order. The grievance debate is an open debate for any member of this place.


-I continue.I have laid this schedule on the table of the House for the convenience of honourable members so that each honourable member can see at a glance all the sheltered workshops in his own area. I am arranging for copies of this list to be circulated to all honourable members with the double objective; firstly, of keeping them informed as to activities in their own electorates and, secondly, of mobilising their support for the maintenance and extension of our very excellent system of sheltered workshops. Honourable members will recall that on 8th April 1970 1 circulated a similar list concerning aged persons homes and have subsequently provided further information keeping that list up to date. I propose, from time to time, to issue further lists showing new sheltered workshop approvals.

I should like to express my gratitude to honourable members on both sides of the House for the assistance they render both to the sheltered workshop movement and to the aged persons homes movement. That is the complete text of the statement which I had proposed to make and which was known to the Opposition. As you well know, Mr Deputy Speaker, the custom in this House is that when ministerial statements are to be made by leave they are first shown to the Opposition and leave is obtained. It is also, 1 think, a similar custom that when the Opposition wants to make its own statement it shows a copy to the Government in advance so that, in the same way, leave can be obtained. This was not done on this occasion. I know that it is very difficult for the Leader of the House (Mr Snedden)to conduct the business of the House when he makes arrangements with the Opposition and those arrangements are not honoured and not kept. 1 have every desire, of course, to maintain the customs and usages of this House and to see that they are observed properly, but I have no desire at all to limit or inhibit any debate on the sheltered workshop movement. Indeed, 1 would welcome such debate, and I hope that it will proceed. 1 have tried in this statement, which honourable members will see is not a political statement, to express my gratitude to members on both sides of the House for what they do for the sheltered workshop movement and to express my hope that members on both sides of the House will extend and continue their work in this matter. This is all I am trying to do. I am not in any way endeavouring to stifle any comment on the statement I have made. 1 think honourable members will agree that it is an entirely objective, non-political, factual statement which is meant to assist members on both sides of the House in their own electorates and, what is more important, to assist the sheltered workshop movement by bringing in members of both sides of the House in support of it. I have no complaintsto make of the assistance which members have rendered in the past. Indeed, as I have said, I express my gratitude for what they have done. It beats me entirely why, when it was known that J was to make a simple non-political statement on this matter, leave should be refused.

If the honourable member for Oxley (Mr Hayden) wishes to enter this debate now, if he wishes to support or to oppose what I have said or if he wants to say anything which will further the interests of the sheltered workshops movement, he has his chance. He is as free as I to enter this debate.I would welcome from him, or from any honourable member, whether he be an Opposition member or a Government member, any support for this movement. It is an excellent movement which is meant to help people in the community who need and deserve the help of the Government, the help of honourable members and the help of other people in the Australian community.


– Two days ago during a debate on the second reading of the Broadcasting and Television Bill the Postmaster-General (Sir Alan Hulme) referred to a previous speech I had made during the second reading in relation to the ownership and control of radio and television stations in Australia. He said on that occasion that 1 had failed to comprehend the truth and challenged me to produce facts to substantiate my allegations. I accept his challenge and intend to show that in both the fields of television and broadcasting the Postmaster-General has allowed gross violations of the Broadcasting and Television Act. The Act provides that it is illegal for 1 commercial interest to control more than 2 television stations in Australia. I believe the Melbourne ‘Herald’ controls 4 television stations and I will expand upon what I said on 25th August last year in relation to this.

The Melbourne ‘Herald’ has a full controlling interest in HSV Channel 7 Melbourne where it holds 637,505 of the total 750,005 shares in the licensee company, Herald-Sun T.V. Pty Ltd.In BTQ Channel 7 Brisbane, it holds 2.6 per cent of the shares in the licensee company Brisbane T.V. Ltd. It also holds 40.45 per cent of the shares in Queensland Press Ltd which through 2 wholly-owned subsidiaries, Telegraph Newspaper Co. Pty Ltd and Queensland Newspapers Pty Ltd, holds 27.79 per cent of the BTQ licensee company. This is 1 2.79 in excess of the 1 5 per cent laid down in the Act as a controlling interest. So its indirect interest of 27.29 per cent plus its direct interest of 2.6 per cent means that it is firmly in control of BTQ Channel 7 with a 30.39 per cent holding.

In relation to ADS Channel 7 Adelaide, the Melbourne ‘Herald’ holds 30.66 per cent of the ordinary shares in Advertiser Newspapers Ltd which, through its wholly owned subsidiary Midlands Broadcasting Services Ltd, holds 40.97 per cent of the shares in the licensee company, Television Broadcasters Ltd. So here we have the Melbourne Herald’ in control of yet another television station with double the specified holding laid down in the Act as control. Lastly, in relation to television stations, I will lay before the House the extent of the Melbourne Herald’ interest in TVT Channel 6 Hobart. Of the equity in the licensee company, Tasmanian Television Ltd, 13.75 per cent is held by Davies Bros Ltd which is 48.18 per cent directly and 6.22 per cent indirectly owned by the Melbourne ‘Herald’. Coupled with this, Davies Bros Ltd has a 50 per cent interest in Commercial Broadcasters Pty Ltd which holds a further 3.33 per cent of the licensee company. This means that the Melbourne ‘Herald’ has a 17.08 per cent interest in the licensee company - 2.08 per cent more than is required by the Act for effective control.

The facts thatI have just laid out concerning these 4 television stations is an indictment of the Postmaster-General and his adviser the Broadcasting Control Board. It means they have allowed a contravention of an Act of Parliament which states that it is illegal for 1 organisation to have a controlling interest in more than 2 television stations in Australia. I have shown that the Melbourne ‘Herald’ controls 4 television stations and for the second time in 12 months illustrated what appears to be negligent administration of the Broadcasting and Television Act by the Postmaster-General. During the Postmaster-General’s second reading speech he referred also to my allegations regarding the broadcasting interests of John Fairfax publishers of the Sydney Morning Herald’. The Broadcasting and Television. Act stipulates that it is illegal for 1 organisation to control more than 8 radio stations in Australia or more than 4 radio stations in any one State. During my previous speech I said that the Fairfax group was in contravention of this aspect of the Act.

The Postmaster-General pointed out that I said that the Fairfax empire owns all the shares in the 2GB Sydney, 2WL Wollongong and all the ordinary shares in 2CA Canberra when, in fact, the shares were held by Macquarie Broadcasting Holdings Ltd. It is true that I said this and that the shares are held by Macquarie Broadcasting but, as he pointed out, Macquarie Broadcasting is still 26 per cent held by John Fairfax Ltd. Section 90e sub-section ( .1 ) of the Act states that a 15 per cent control over any licensee company means a controlling interest. So therefore he must realise that Fairfax controls Macquarie Broadcasting and that, in effect, what 1 had previously said still holds true. This is just an instance of the Minister splitting hairs.

He went on to say that Macquarie Broadcasting has only a prescribed interest in the radio stations mentioned. A prescribed interest is a holding of more than 5 per cent and less than 15 per cent. Macquarie Broadcasting has not just a prescribed interest but a controlling interest in all the stations I have mentioned, it owns all the shares in 2GB Sydney, all the ordinary shares in 2CA Canberra, all the shares in 2WL Wollongong, over half the shares in 2LF Young and just on 60 per cent of the shares in 5DN Adelaide. The Postmaster-General had the audacity to (ell the Parliament that I did not know the difference between a controlling interest and a prescribed interest as defined in the Act and he has the nerve himself to tell the Parliament that the whole equity is only a prescribed and not a controlling interest. 1 do not intend to let the Fairfax question end here. In my previous speech I said John Fairfax Ltd controls 2NM Muswellbrook and 2NX Bolwarra. I will prove it again. Fairfax holds a controlling interest in Newcastle Newspapers Pty Ltd which through a wholly owned subsidiary company, Newcastle Morning Herald and Miners Advocate Pty Ltd, holds 8,314 of the 30,220 shares of the licensee company, Hunter Broadcasters Pty Ltd. This represents 27.4 per cent of the total shares, more than 12 per cent in excess of the 15 per cent stipulated by the Act as a controlling interest. So when we sum up, John Fairfax Ltd has 5 broadcasting stations in New South Wales plus one in Canberra which is viewed by the Act as being in New South Wales. Six stations in one State contravene section 90F sub-section (c) of the Act which limits the total number of radio stations to 4 for one organisation in one State.

J have shown now that the PostmasterGeneral and the Australian Broadcasting Control Board have again displayed what appears to be further negligent administration of the Act in relation to broadcasting. If the Postmaster-General feels the conclusions 1 have drawn are wrong, 1 would like him to explain to me and to the House in the adjournment debate this evening how all these holdings that are listed in the 20th annual report of the Australian Broadcasting Control Board do not represent contraventions of the Act. I shall leave the matter here and await the reply of the Postmaster-General.

PostmasterGeneral · Petrie · LP

– Once again I say that I am surprised at the ignorance of the honourable member for Blaxland (Mr Keating). The honourable gentleman has suggested - I use his own term - that there has been gross violation of the Act. Let me go back a little into history because the honourable gentlemen apparently has nol gone back to what happened in 1964. Prior to 1964 a 15 per cent voting right in a television company represented a controlling interest. Many companies involved themselves in purchases of shares which on a basis of one vote per share gave them voting rights considerably in excess of 15 per cent. The articles of association of the companies were altered to provide that no quantity of shares represented more than 15 per cent of the voting rights. Therefore in legal terms these companies were quite correct and they were able to accumulate a controlling interest in more than 2 stations, which was the principle adopted in the Act and was also the policy of the Government. When I became Postmaster-General I had this matter on my plate. It had been considered by a Cabinet committee, by the then Attorney-General, Sir Garfield Barwick, and by the the then PostmasterGeneral, who is now Sir Charles Davidson. When I became Postmaster-General it was my responsibility to try to find a solution, to this problem.

In December 1964 I made a public statement indicating that what the Government intended to do by amending the Act was nol- to cause the people who had those stations to divest themselves of the shares in companies in excess of 2, because what they had done was quite legal, but to make it impossible for them to gain controlling interest in other television stations. If the honourable member reads the Act carefully he will note that those companies which had a controlling interest in excess of 2 were protected by the Act and were not called upon to divest themselves of those additional interests over and above 2. Therefore there is no gross violation of the Act whatsoever. What was done was completely in accord with the Act as it had been passed by this Parliament. I suggest that the honourable member should read the debate which took place in 1965 to see what was done by myself and by the Governemnt when we made amendments to the Act. Also, he will be able to see what members of the Opposition had to say. lt is very easy of course to say that we must cause a company to divest itself of its substantial interests. But believe me, the television companies by their structure in those days was substantially in the hands of the Australian public. The honourable member in a speech last August spoke of the public interest. Surely the interest of shareholders, who are members of the public, is a consideration of the public interest. Therefore we took into account the public interest and we amended the Act, having regard to ali of the circumstances, in a way that we believed to be a reasonable adjustment. A similar situation developed comparatively recently in regard to broadcasting stations. Again if the honourable member reads the history of this matter and the Act he will find that those who had accumulated controlling interests in more than 8 radio stations were protected. Exactly the same principle was applied to radio stations as was applied to television stations in 1965.

I believe that honourable members of this House should be reasonably temporate in their language. Surely if a Minister is administering an Act of Parliament in accordance with the provisions of that Act he cannot be accused of gross violation of the Act. If in fact the Act has been interpreted correctly surely imputations of contravention should not be made against a Minister. This is what the honourable member should be concerned with. If he has a view about the law being wrong he is quite entitled to express it but he is not entitled to impute wrong motives or actions on the part of public servants or indeed on the part of the Minister who is responsible for the Act. This is what I put to the honourable member the other day. I uaid that in fact the Australian Broadcasting Control Board or myself were acting in violation of the Act and we were approving contraventions of the Act we were doing so in extreme circumstances and I say extreme circumstances because this is a terribly difficult area. When the honourable member is in Melbourne he should spend an hour with the Board because this is the organisation which has more detailed information about holdings in the field of broadcasting and television than anyone else, including the broadcasting and television companies that are concerned.

At present I am looking at a matter which arises under the Act. I refer to the situation where a company which did have controlling interests and was allowed to keep them in terms of the 1965 Act invests as part of a portfolio investment in a company which is not related in any way to it and which in fact has a 5 per cent interest in a television station somewhere. This flows back and alters the investing company’s interest in television in terms of the Act. In such a course the Board would have to try to do something about it. Therefore, 1 believe from time to time there is a slight element of contravention, but I do not believe that any reasonable person would expect that we should make people sell hundreds of thousands of dollars worth of assets-

Mr Foster:

– They acquire them by stealth.


– That is pure poppycock; they do not acquire them by stealth at all. They go on to the open market and make a purchase as a portfolio investment in the same way as the honourable member invests his surplus funds. In these circumstances I do not intend to do other than endeavour to correct these small contraventions. I will endeavour to do this as far as 1 possibly can by amendments of the Act which could be regarded as reasonable by the vast majority of people within Australia. Therefore, I do invite the honourable member, quite conscientiously, to go to the Australian Broadcasting Control Board, discuss the matter with the Board, see what the implications are and see what the history is. I believe that, if he does that, he can criticise the Act and what is in the Act as much as he likes. But it is this imputing of improper motives to me, or a previous Minister or to the people who exercise these major controls that concerns me.


- Mr Deputy Speaker, the subject with which I wish to deal at this time concerns the Department of Social Services. BeforeI get onto the actual subject matter of my speech,I take this opportunity to support what my colleagues have said about the treatment of pensioners by this Government. It is not a worthwhile exercise for the Prime Minister (Mr Gorton) or members of the Government to try to compare the percentage increases in the age pension under the Liberal Party-Country Party Government with the percentage increases during the period when the Labor Government was in office unless they take into consideration also the value of money.

In the 1940s, a penny, for instance, bought a box of matches, some lollies or even an ice cream for a child. Today,1c, the value of which is more than the value of1d, will buy nothing like that at all. Unless Government members consider the value of money in conjunction with percentages they quote, they are not being fair dinkum and the figuresthat they are using are not reliable at all. In common with my colleagues, I was amazed that immediate action was not taken by the Government, following the increase in the cost of living, to grant a rise in pensions.I thought that a mini budget would be introduced. However, we will have to wait until Budget time in August before pensioners can be assured of any increase.

The matter on which I wish to speak relates to pensioners also. It is the matter of spectacles being made for pensioners on behalf of the Department of Social Services. In Queensland I believe - and I hope thatI am right - that the contract for spectacles in that State is in the hands of one optometrist, namely, Trevor Henderson, who is located in Brisbane, over 1,000 miles, for instance, from Cairns.

A pensioner in Cairns who wishes to apply for spectacles through the Department of Social Services first must go to the local hospital. The pensioner may be told to return in 4 months time when the Trevor Henderson’s representative will be there.

The pensioner comes back in 4 months time and is examined. I wantto be fair dinkum in what I say. Although some pensioners have told me differently, most of the pensioners to whom I have spoken say that when the lenses that they require have been established the representative of Trevor Henderson then opens a port to show them a variety of frames. In his case there are steel framed spectacles which come with the requiredlenses at no charge to pensioners. Also in that case is a whole heap of different frames and pensioners pick the frames they want.

I will instance to the House one case because it is typical of what has been happening to all pensionsers. The pensioner chose a frame thinking that it would be free or would cost no more than a couple of dollars extra, an amount that he did not mind paying. He had to wait until the person representing Trevor Henderson returned to Brisbane from where the spectacles were posted to him COD. The pensioner had to pay $23.50. An optometrist in Cairns would sell a frame and lenses for that price. Yet the pensioner had to pay $23.50 COD. Then he found that the spectacles were bi-focal. He never wanted bi-focal spectacles. He never asked for them. When he put them on, he could not read with them - in fact, he could not see with them. This pensioner came to me. He said: ‘Take these spectacles back to the Department of Social Services. Tell it that they are no good to me and I hope that they will fit some other pensioner.’

I do not know what the racket is at all. ButI believe that the Department of Social Services should study the situation. I do not know why pensioners in cities like Townsville, Rockhampton and Cairns could not be treated in their own areas where optometrists and eye specialists are available rather than have to wait for the representative of Trevor Henderson to provide the spectacles. A local service would not cost the Department any additional money. As a matter of fact, it may now take a pensioner 12 months before he receives a set of spectacles that will suit him.

Why cannot the Department subcontract work to optometrists or eye specialists in various areas and have the work done on the spot? Whycannot a person go to an eye specialist or an optometrist in his own area, be tested for spectacles and see immediately whether the spectacles provided are suitable for his requirements instead of being involved in this process where, over and over again, spectacles travel over 1,000 miles between Trevor Henderson and the pensioner who is to receive them? The case that I have instanced is not isolated. Many times pensioners, having paid $23.50 COD for their spectacles, find that those spectacles do not suit them.

In Cairns, there is a jeweller who has a whole heap of spectacles in his store. What I am about to say may be laughed at, but I have seen it happen and it works very well indeed. Pensioners go to his store, pick out a set of spectacles, and try them on. The jeweller has a sight board, just as an optometrist has. Spectacles are fitted on pensioners, who test them, read with them and pick out those that suit them. The jeweller supplies the spectacles for a fee of $10. Why would not a pensioner try to obtain spectacles from this source for $10 if he finds that he has to pay$23.50 COD for spectacles from Trevor Henderson who, I believe, holds the contract in Queensland from the Department of Social Services to supply spectacles? I want the Minister for Social Services (Mr Wentworth) and particularly his Department to have a good look at this matter because I do not see why an optometrist or an eye specialist in an area such as Cairns which is more than 1,000 miles from Brisbane cannot do this job for the Department of Social Services better than it is done by Trevor Henderson who carries out the work from Brisbane.


– First, I wishto say thatI understand the feelings of the honourable member for Leichhardt (Mr Fulton) on the matter of the spectacles. But I go a little further. I wonder why the Department of Social Services does not try to budget to provide pensioners with hornrimmed spectacles free of charge.In my view the supply of steel-rimmed spectacles relegates pensioners to the position of second-class citizens. I have heard complaints about this matter from all parts of my electorate recently, so I can appreciate what the honourable member has had to say about it.

The subject on which I wish to speak is the critical drought situation in my own area and in parts of the area represented by the honourable member for Maranoa (Mr Corbett). I do not propose to go over all the ground that has been covered in this chamber time and time again, but one thing I do wish to say is that with all the accent at the moment being placed on floods, heavy rains and the saturation of the country generally, it just may be forgotten that in an area from somewhere south of Charleville to north of MountIsa there is a long line of devastated country black with drought.

I wishto speak for these few minutes in support of the Premier of Queensland, the Honourable Jo Bjelke-Petersen. Last week he approached the Prime Minister (Mr Gorton) onthis subject. The Premier had just concluded a trip through these droughtstricken areas, and it was made terribly apparent to him again that they were in a condition of catastrophe. I am not being dramatic about the situation. I am using words which aptly describe the position and bring home its severity not onlyto this House but also to the nation.

The Premier of Queensland telephoned the Prime Minister. He requested that this area be declared a disaster area. One may imagine that the Premier was carried away and that he may have dramatised the situation. I proposeto bring forward just a few facts which should be appreciated by any fair-minded Australian who is concerned aboutthe lot of people who are still frontier people and who occupy areas which have been absolutely invaluable to this nation and, bythe way still are. I do not think that anyone can stand by and see an industry such as the wool industry scuttled. This industry even with the shrunken price of wool - I refer to the ridiculous price of wool that exists at the moment - and with the long years and years and years and years of drought has been reduced to the point where the value of its production to this nation is only $650m.I rather wonder whether there is or even was any other single industry that would produce this amount of overseas credits in those circumstances. We just cannot stand by. The industry is of national importance.I have a feeling that the people in the urban areas are beginning to realise that representations made on behalf of the people in these areas are not just parochial grievances but are of extreme national importance. Admittedly we now have the Australian Wool Commission sounding a warning that this nation cannot stand by any longer and see the wool industry at the mercy of the auctioneer or those who answer his call and buy the wool. 1 wonder whether we could even get to the stage - of course this would depend on the decision of the wool producers themselves - when the wool producers say: ‘We are not going to sell any more wool’. People may think that this would be playing right into the hands of overseas interests. That would not be the case. We remember that some years ago we could go into a shop and buy a tin of coffee for ls 6d in the days of pounds, shillings and pence. I was a very young man in those days. Some months later we could not buy coffee, and then after several more months had elapsed we could buy coffee but we had to pay about 5s 9d a tin for it, if I remember rightly. The producer of coffee and those depending on him, those who worked for him and the townspeople depending on him, found that they were suddenly being scuttled by a small group of buyers who had decided that they would dominate the world price of coffee. They took their coffee and dumped it in the ocean.

I am not suggesting for a moment that we would do this with our wool, but I am saying that the party is over and that the Wool Commission is issuing this warning. lt is buying wool. Let those who are criticising this and asking how long it can go on understand that a great part of the economic survival of this country depends on the success of the operations of the Commission. We have the primary, secondary and tertiary stages in the wool family, if I may call it that. I had discussions in New York with the Director of the International Wool Secretariat. He went to great pains to tell me about the advances that had been made in wool and about a new product manufactured from wool that could be thrown into a washing machine and swirled around and treated in the same way as an ordinary garment. He showed me some of the publicity features that were being promulgated throughout the United States. I heard him out and then said: ‘This is very interesting. It is wonderful to see that a manufacturer is producing such a wonderful garment. You have told me that there are 40 million garments in the retail stores of the United Slates. I am sure that none of this will bring consolation to people who are producing wool in my area; people who at one time used to sink dams and build fences and shear sheep, lt is not much consolation to the business people who are second, third and probably now fourth generations of families in that area and who are not there because of the profits they make’. Do not be mistaken in this matter. I am a small town businessman in inland Queensland. We have never made profits that were very worthwhile, but we like the way of life and we like living in those areas. It is a part of our existence, and -we will not stand by and see it scuttled.

The purpose of my few words here today is to appeal to the Prime Minister to take this appeal to heart. This is a disaster area. People may say that we are pouring millions of dollars into these areas, that we are providing drought relief, that we. are providing sustenance or that we now have a rural reconstruction scheme. I hope that time permits my colleague, the honourable member for Maranoa (Mr Corbett), to say something about the rural reconstruction scheme. In my view no-one is more qualified to do so. It is all very well to say that money is being poured into our rural industries, but let us look at some of the things that have happened over the last few weeks. We have seen Minsec crash and we are told that VAM is in financial trouble. These mining companies were glamour companies not so long ago, and people were pushing primary industries into the background as though they were of little importance. I think that the hard truth is at long last coming home to the people of Australia, that these primary industries will be with us for ever provided that they are permitted to survive. They are the substance of this nation.

Although we cherish the great mining companies and realise the value of what they have done for this nation and will continue to do, let us not imagine that we can regard our agricultural and grazing industries as being of secondary importance. Let me give a few figures showing the value of wool sold in Queensland. In 1965-66 the total amount sold was $95. 9m. Incidentally, that was a drought year. The average price of wool in 1965-66 was 48.5c per pound. In 1966-67 the value of wool sold was pretty well the same. It was valued at $95. 3m, and the price was 46.93c per pound. In 1967- 68, again a drought year, the total amount sold was valued at $97.4m. Finally, in 1969- 70 wool to the value of $72. 2m was sold at an average price of 37.55c per pound. With the concurrence of honourable members, I incorporate in Hansard the following table:

Figures include wool received from New South Wales. Approximately 10 per cent of Queensland wool is sold in New South Wales. Figuresdo not include wool sold privately.

D = drought year.

I have also a table showing the estimated indebtedness of sheep properties. I would like it to be incorporated in Hansard so that those who arc interested in the survival of an industry worth between $600m and $700m to this nation may read it. I am sure that no-one would object to these figures being disclosed. With the concurrence of honourable members, I incorporate in Hansard the following table showing the estimated indebtedness of sheep properties in the Queensland pastoral zone, primarily in the drought stricken zones, to the lending institutions:

Finally, I again appeal to the Prime Minister and his Cabinet to heed comments I have made about the great Australian wool industry.


– This being the Grievance Day debate, it is my intention in the brief time available to grieve on behalf of two of my constituents who, despite their great financial burden, have made tireless efforts to give their two lovely children every comfort, aid and medical assistance within their power, although, according to expert medical opinion, the life expectancy of their children is not in excess of 10 years. These parents have permitted me to mention their names in the Parliament. They are Mrs Marie Merrion and Mr Kenneth Brian Merrion, who reside at 67 Quarie Road,

Cardiff. The children who are suffering from this incurable complaint are Shelley, aged 4 years, and Paul, aged 2½ years. The father would not be among the high income group of the community, but let me stress to the House the heavy burden of medical costs placed on these very decent and law abiding parents to keep their beloved children alive.

I emphasise the need for the Minister for Health (Dr Forbes) to place on the pharmaceutical benefits list certain drugs essential to children similarly suffering or to make special provision for free drugs to be issued to parents who have children in a similar state of health. The complaint of the children has been diagnosed as cystic fibrosis, commonly referred to as dry lung. I understand that it is a genetic disease and that both parents have been identified as carriers. Gentamycin is a most essential drug for the treatment and relief of this complaint when other antibiotics are not effective. It is rather expensive and is not on the free pharmaceutical benefits list. I also understand that prophylene glycol, which these Merrion children must have constantly, is essential for the treatment of dry lung and it is also very costly and is not on the free pharmaceutical benefits list. These children, who are victims of cystic fibrosis or dry lung, have to be placed in a fog lent, for at least 4 hours a day and I understand that their lungs have to be kept damp 24 hours a day. They have to be given 30 tablets a day. Two machines purchased by the parents which are essential for keeping their children alive, plus the drugs that must be given to them, as well as the fog tent, have involved them in an outlay of approximately S6.000 since the children’s complaint was first diagnosed. I think that the House must feel some compassion for the unfortunate parents who have children with a life expectancy of only 10 years, but despite this the parents are quite cheerful and happy and meeting their responsibility in the true Australian way. 1 understand that an association was formed in Sydney some 3 years ago to appeal to the Government for special care for the unfortunate children suffering from cystic fibrosis. The association has been asking for recognition by the Commonwealth Government and also for financial assistance for the care, aid and treatment of the children. I understand that Professor Beveridge of Sydney has a special interest in and knowledge of this tragic and incurable disease. I therefore hope that ihe great human qualities allegedly possessed by the Minister for Health (Dr Forbes) will rise to an unprecedented height and that immediate steps will be taken to aid these unfortunate children and their parents and others similarly situated in bearing the crushing burden of medical costs in keeping their near and dear ones alive.


– 1 rise today to say a few words about rural reconstruction. I would like to commend the Government on its action in making J) 00m available lo the Slates for this purpose. I do not think it would be unfair to say that the drought committee formed by the Queensland members of the Australian Country Party in the House has been working very strenuously towards this end for the best part of 12 months or more and I am confident that their activities have resulted in helping to expedite the allocation of funds for this purpose. This is quite understandable because the drought situation which was referred to so eloquently by my colleague the honourable member for Kennedy (Mr Katter), is so dreadful. Because of the tragic situation in Queensland due to drought problems primary industries are in greater trouble in that State than they are - bad and all as these may be - in those parts of Australia which are not suffering in the same way from drought, lt is quite obvious that the SI 6m which has been allocated to Queensland will be quite insufficient to cover the amount required for the complete reconstruction of primary industries in that State, lt will require a great deal more than that but at the same time ii is a beginning and we are grateful that a start has been made. 1 am concerned, however, that these funds are not yet in operation even in Queensland where a board has been set up. I am concerned, too, that the funds available to that board - $16m plus the Si. 5m which was available to the Slate by virute of previous rural reconstruction schemes or similar types of operation - will be insufficient for it to carry on for very long if it is to do its work in time. So I hope that a review of this position will take place before the continuity of operation of this board has to be suspended for want of funds. 1 am very concerned about those people who. through tlo fault of their own, are in these very difficult financial circumstances and may not possibly participate in the first allocation of the $l6m which I hope will be only the. first allocation. I do want to refer, too, to the allocation of funds between the Slates. I believe that $16m was less than was deserved by Queensland from the total of $100m. 1 know that every Slate has to look after its own affairs and its own people and I know, too, that agreement was reached between the States in this direction, but 1 believe that Queensland got scant consideration from some of the other States, at any rate, when they knew that very severe drought conditions have existed in

Queensland for 12 years or more. I hope thai when further funds are made available a fairer and more equitable distribution might be agreed to between the States.

There is a lot that I could say about rural reconstruction but I want to mention another aspect of this matter which 1 feel does need consideration by the Government despite whatever alleviation might be obtained, and I am hoping it will be very great. We should help those people who are in serious need of assistance. It should be borne in mind, as has been mentioned before, that this is not simply a matter of helping people because they are in need, lt is helping one of the great industries of this country which has provided so much and is continuing to provide so much export income for Australia despite the uneconomic conditions under which wool in particular is being produced. The provision of funds for the assistance of primary producers is serving a national purpose in the same way as protection for our secondary industries is providing assisi alice to those industries to enable them to create greater employment opportunities for the people of this country. 1 will not enlarge on that; it is another story. But I do want to draw attention to the fact 1 hat there is a need to support our primary industries on a national basis. This is loo often lost sight of by people who say: ‘Oh well, you are in that position and that is nobody’s fault except your own or because of circumstances over which you have no control.’ But the Government cannot alford, as my colleague the honourable member for Kennedy has pointed out, to allow these conditions to continue without straining every possible nerve to provide assistance for primary industry.

One of the points that I particularly want to make on this occasion - this is something apart from rural reconstruction itself - is that there is a need for finance to be made available to our primary producers other than through the Rural Reconstruction Board. 1 am very strongly of the opinion - I have been advocating this for a long time now - that the Australian Development Bank should be rechartered to allow it to provide long term low interest loans to our primary producers for the conduct of their ordinary business.

The position is ill at these primary producers just cannot get the funds. 1 do not know whether this is due to the fact that a lot of funds have been tied up in primary industry and banks and other financial institutions are not anxious to increase the percentage of funds that they provide for primary industry. The position is that primary producers cannot get the loans which they need and the rechartering of the Development Bank is one way in which it can be done.

I would like to draw attention to the sort of thing that has happened in my own State of Queensland where money was lent by the Agricultural Bank over a period of 20 years on the basis of 5 per cent interest and 3 per cent redemption. But it was a flat rate of 8 per cent per annum over 20 years which serviced the debt. This was of wonderful value to the people in that area. It did not cost the community anything. 1 am sure that there are many primary producers in Australia today who would be very grateful for an opportunity to borrow money through some instrumentality on similar terms. Such a scheme is a very necessary adjunct to our rural reconstruction boards if we are to lift our primary industry out of the very serious position it is in today and indeed to relieve rural reconstruction boards throughout the Commonwealth of some of the very heavy burdens which will rest upon them during the time that this rural construction scheme is in operation.

The provision of funds under this scheme involves not only the people to whom the funds are made available but also the businessmen and the workers in our country towns. Our country towns are absolutely dependent in many instances on reasonable prosperity in our primary industries. We will therefore have to ensure that these towns recover some of the prosperity which they have enjoyed and which no doubt in the passage of time they will enjoy in the future. The best way to achieve this it to provide reasonable finance on a secure basis over a period of time to the primary producers who are served by these towns. I do not think I am being unfair when I say that banks are not confident of primary industry at this stage. The banks have permitted many primary producers to operate an overdraft and they are now asking that those overdrafts be reduced but the primary producers cannot afford to reduce their overdrafts. I strongly urge the Government to have a look at the proposition of rechartering the Development Bank to enable it to tackle and perhaps solve some of the problems which confront our primary industries. This could be done without cost to the community.


– The nation should grieve that after 21 years of Liberal-Country Party government pleas such as those that have been made in this chamber today are now required to be made for the men and women who have served this country so well on rural holdings, maintaining the economic life of this country, in this instance 1 think that the saying too little too late should be repeated. Rural construction is a term used by many but there is very little to it. The Commonwealth Government has left most of the details to State authorities. 1 wrote to the former Minister for Primary Industry seeking detailed information in regard to the activities of rural reconstruction organisations but I was unable to get it. The new Minister for Primary Industry (Mr Sinclair) promptly wrote to me giving as much information as he was able to give. However, the information he gave was too sketchy. Tt did not deal as thoroughly as one would expect with the problems of the man on the land - the areas of aggregation, what can happen to family groups, and so on. The position of people who live in the country is long overdue for correction. There are depressed conditions throughout the country but this Government has over the years remained unmoved. I can only hope that perhaps by the pleas that have been made today more positive action will be taken to overcome rural problems. The honourable member for Maranoa (‘Mr Corbett) quite rightly referred lo the difficulties-

Mr DEPUTY SPEAKER (Mr Lucock)Order! The time allotted for the debate has expired. I put the question:

That grievances be noted.

Question resolved in the affirmative.

Sitting suspended from 12.45 to 2.15 p.m.

page 271


Bill presented by Sir Alan Hulme, and read a first time.

Second Reading

PostmasterGeneral · Petrie · LP

– 1 move:

That the Bill be now read a second time.

The purpose of this Bill is to amend the financial provisions of the Overseas Telecommunications Act 1946-68 so as to provide, from 1st April 1970, for the implementation of revised financial arrangements between the Commonwealth and the Overseas Telecommunications Commission (Australia). The Bill also provides for an amendment to that section of the Act relating to retirement conditions. Since its inception the Commission’s financial arrangements with the Commonwealth have been governed bv the provisions of the Overseas Telecommunications Act which are essentially unchanged since being drafted over 24 years ago. The Treasurer has provided finance in the form crf advances on terms fixed by him which have always included liability for interest. Income which the Commission mav have obtained was exempted from taxa1 ion. and the derived net profit from the Commission’s operations has been used each year as directed by myself, as PostmasterGeneral, with the concurrence of the Treasurer. Up to and including 1967-68 the direction has been that the net profit be retained by the Commission.

Treasury advances totalled S4.4m in the first 15£ years of the Commission’s operations and retained profits in the same period only $4. 7m. However, the total retained profits had risen to $29.5m 6 years later, whilst Treasury advances now totalled $22. 5m. This was the position as at 31st March 1968. Coming as a direct result of the employment of coaxial submarine telephone cables and satellite communications and the increasing use of services provided by the Commission, this significant change has emphasised the need for review of the financial arrangements. The significant build-up of cash from profits and depreciation recoveries has occurred despite tariffs that compare more than favourably with world rates along with a relatively heavy and continuing programme of capital expenditure on new and replacement assets. In these circumstances it is proposed that the financial relations between the Commission and the Commonwealth be altered to provide:

  1. that the nature of the Commonwealth’s investment in the Commission be varied - from interestbearing Treasury advances to capital;
  2. that the Commission’s income be subject to income tax;
  3. that in lieu- of the interest that has been paid in the past on Treasury advances, a dividend be paid each year on the capital. A commencing rate of 7i% is proposed; and
  4. that the Commission’s requirements for new capital investment, additional to retained profits, be provided from the Budget or from authorised borrowings.

Achievement of the reconstruction of the capital structure will be by conversion of the existing Treasury advances to capital and by transferring from the Commission’s retained past profits, an amount sufficient to bring the initial capital to $35m. At present Treasury advances to the Commission stand at § 17.5m, following repayment of S5m to the Treasury in 1968. The proposals were designed for introduction in the financial year which commenced on 1st April 1968, but for a number of reasons this was not achieved. However, on the recommendation of the Commission and with the concurrence of the Treasurer, I directed that in respect of the profit derived from that year, an amount of S6.47m b; paid to the Commonwealth Treasury. This represented a payment in lieu of income tax and of a dividend on the Commonwealth’s funds employed. For the year ended 31st March 1970 provision has been made for a similar payment of S6.91m to the Treasury.

The proposed financial arrangements are similar to those for other Commonwealth statutory business undertakings. In the future it is anticipated that the Commission will require only modest drawings of new capital from the Commonwealth whilst there will be from time to time a need for a review of the level of capital. The Bill provides that, with the concurrence of the Treasurer, 1 may direct the Commission to transfer further amounts to the capital account from retained profits.

The Bill also seeks to amend section 24 of the Overseas Telecommunications Act. This section determines the conditions under which officers of the Commission may retire or be retired. At present, whilst prescribing a maximum age of 65 for male officers, a female officer must retire on attaining an age of 60 years, lt is proposed that this restriction on female officers be removed and that in cases considered desirable by the Commission, an officer, whether male or female, who has attained the age of 65 years may continue in the service of the Commission for a period not exceeding 12 months. These amendments provide conditions which are similar to existing provisions in the Commonwealth Public Service Act. I commend the Bill to honourable members.

Debate (on motion by Mr Crean) adjourned.

page 272


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

Second Reading

Minister for National Development · Darling Downs · LP

– I move:

This Bill is concerned with a grant which was announced on 15th June 1970 to be made under the new National Water Resources Development Programme. The Government has agreed to a request from the State of New South Wales for a grant under the Programme of up to S9m for assistance with flood mitigation works on 11 New South Wales coastal rivers. The new National Water Resources Development Programme was announced by the Prime Minister (Mr Gorton) in October 1969. Under the Programme the Commonwealth proposes to allocate to the States SI 00m over 5 years for rural water conservation and supply works, flood mitigation and water measurement, over and above the States’ own programmes for these purposes. The new Programme follows the original National Water Programme which provided over S50m in grants to the States. Under a previous measure of assistance, which terminated at 30th June 1969, the Commonwealth Government provided assistance to the State of New South Wales of$8m towards the cost of flood mitigation works on 6 coastal rivers - Tweed, Richmond, Clarence, Macleay, Hunter and Shoalhaven - to be spent in conjunction with contributions by the State Government and local government authorities.

The new programme involves additional works on the rivers included in the original programme but it has been expanded to include 5 further rivers - Bellinger, Hastings, Manning, Hawkesbury and Moruya - thus enabling completion of comprehensive flood mitigation works on the upper and lower reaches of all the major coastal rivers in the State. The financial assistance does not include maintenance of existing works, but is directed to the carrying out of new works, and will enable the local government authorities concerned to accelerate the completion of those works: The proposed works will provide a high degree of protection for areas subject to periodic minor and nuisance flooding, and will make an important contribution towards strengthening the rural economy of coastal areas of the State. Drainage works will enable flood damaged fields to return to production in the quickest possible time after major floods. In addition, flood damage to urban areas and to public installations such as roads, bridges and railways will be reduced. More detailed information on the schemes is contained in the explanatory memorandum distributed with the Bill.

I turn now to the Bill itself, which has been designed to follow the general pattern of legislation for projects assisted under the National Water Programme, but also taking in features of the earlier legislation providing financial assistance to New South Wales for flood mitigation works. The local government authorities participating in the Scheme and the rivers on which it is proposed that the works be carried out are listed in clause 3 (i) which also defines other matters relevant to the operation of the Act. Commonwealth financial assistance towards the cost of the flood mitigation works is provided under clause 3 (i) of the Bill for a period of 7 years commencing on 1 July 1969. A fundamental feature of the arrangements is that the level of assistance to be provided to the local government authorities, who of course, are representative of the landowners and other people who are most intimately affected by floodings, will depend on the amounts provided by the authorities themselves from their own resources towards the cost of flood mitigation works.

The State is to subsidise local authority expenditure at the rate of$3 for $1 in the case of the Hunter River and$2 for $1 in other cases. The Commonwealth assistance will match the State contribution.

Honourable members will observe that the Bill does not contain provision for Commonwealth approval of the individual works to which the Commonwealth assistance is to be applied. The programme involves a large number of individual items including levee banks, river channel improvement and drainage works on11 river systems. The proposals put forward by the State are subject to some amendment in the light of final investigation and design. We regard the final selection of such individual works as a matter for the State and the local authorities concerned. The Bill does, however, contain provision for the Commonwealth to be kept suitably informed about the works and to be furnished with information relating to expenditure and progress on the works.I have much pleasure in commending the Bill to the House.

Debate (on motion by Dr Patterson) adjourned.

page 273


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

Second Reading

Minister for Customs and Excise · Hotham · LP

– I move:

That the Bill be now read a second time.

The Bill now before the House provides for the payment of a bounty at the rate of 4c per lb with a maximum payment in any one year of $200,000 on cellulose acetate flake produced at registered premises and sold for use in the manufacture of cellulose acetate rayon yarn on and after 1 st December 1 970. The present Bill amends the Cellulose Acetate Flake Bounty Act 1956-1970, the operation of which was terminated by proclamation on 30th November 1970 and extends bounty payment at the new rates until 31st December 1973. This Bill and the termination of the operation of the Cellulose Acetate Flake Bounty Act 1956-1970 follow the Government’s acceptance of the Tariff Board Report on Vinyl Acetate: Cellulose Acetate Flake (Interim Report): Industrial Chemicals and Synthetic Resins - Review) of 30th June 1970 in which the Board recommended the rate of bounty and maximum annual payment prescribed in this Bill. Notice of the Government’s intention to introduce this amending legislation was given in my speech to the House on 22nd October 1970 when introducing Customs Tariff Proposals relatedto these and other goods.I commend the Bill to honourable members.

Debate (on motion by Dr Patterson) adjourned.

page 274



Ministerial Statement

Debate resumed from 16th February (vide page 36), on the following paper presented by Mr Gorton:

Economy: Reductions in Commonwealth expenditures - Ministerial Statement, 16th February 1971- and on the motion of Mr Chipp:

That the House take note of the paper.

Suspension of Standing Orders

Motion (by Mr Snedden) proposed:

That so much of the Standing Orders be suspended as would prevent the Minister for Foreign Affairs and the Leader of the Opposition speaking without limitation oftime.


– The honourable member for Newcastle will cease interjecting. I would like to know how the Speaker can put the question when he is continually rudely interrupted. The honourable member will be quiet.

Question resolved in the affirmative.

Leader of the Opposition · Werriwa

– Flexible as you are, Mr Speaker, I do not believe that you could permit the debate on the motion before the Houseto cover fully the matters that are causing such great concern and bewilderment to the people of this nation. Those questions are the state of the nation’s economy, the inflationary situation in which it finds itself and its impact on all sections of the community, particularly those wholly dependent on governments for their income or their livelihood or their opportunities. None of these questions were remotely dealt with in the extraordinary statement of the Prime Minister (Mr Gorton) on Tuesday which is the sole business before us. Therefore I move:

Australia’s economic development has been retarded again and again by inflationary inruptions and deflationary disruptions throughout 21 years of Liberal-Country Party rule. The current situation is not unexpected. It is not unprecedented. Stop-go has been the consequence and the characteristic of that rule. On 3 previous occasions Liberal governments have failed to take in time effective measures to maintain the economy on an even keel. Three times sudden, crude and belated action has brought the economy to a halt. We are now informed that we face a fourth Liberal inflation.

There is at least one difference in the present Government’s approach from that of its predecessors and that a difference not to the credit of the Government. For Prime Minister Menzies and Treasurer Holt made full statements and explanations to Parliament and the people at the time of previous inflationary siluatious in March 1956 and November 1960. The Prime Minister’s approach on this occasion shows the extent to which Liberal practice and principle in its attitude to the Parliament and the public have declined since then. There is as yet no statement by the Prime Minister or the Treasurer (Mr Bury) for us to debate. We are not even to be trusted officially with vital information on the economy which has been prepared by the Treasury, circulated by the Treasury and presumably leaked by the Treasury to private subscription newsletters. This whole secretive approach is typical of this Government’s conduct over the whole range of public affairs. It is itself a major contributing factor to loss of confidence in the community.

Short and perfunctory as it was, the Prime Minister’s statement did reveal the crucial aspect of his strategy. I mean his political strategy, not his economic strategy, lt is revealed in his very first sentence. He said:

I recently spoke to the nation on the state of the economy and on the likely inflationary effect of the Arbitration Commission’s award of a 6 per cent increase in wages and salaries. lt has been made quite plain over the last 3 weeks that the Government intends to place the blame and the odium for the current inflationary splurges on the Commonwealth Conciliation and Arbitration Commission and. especially, on the trade unions and white collar unions and Public Service associations which have approached the Commission. Wage and salary earners, their unions and associations are to be made the scapegoats.

I want to rivet on the public mind ihfraudulent nature of this tactic. The truth is that the Government and its policies have been the principal cause of the current inflation, lt has been caused very largely by the action’s and omissions of this Government, which means, in this present strange era, very largely the actions and failures of the Prime Minister himself. There have been warnings for over 2 years about the present trends in the economy. In 1969 the consumer price index was rising at an annual rate of just under 3 per cent. Even in that relatively tolerable situation, the discarded Treasurer, the present Minister for Foreign Affairs (Mr McMahon), observed in his White Paper for July 1969:

There are sign* of an accelerating trend here that cannot bc ignored. The danger, once costs and prices begin to climb faster, is that business and other calculations will be based on inflationary expectations. People will then be le.-s disposed to hold money or invest in fixed interest securities. They wilt be quicker to spend ahead of expected price rises which the faster spending will help io bring about. The demand for funds lo spend will build up and will not be much checked by higher borrowing costs.

It is a tribute to the powers of the Packer Press that the former Treasurer has been called in on this occasion to speak for the Government. Yet in 1970, with the index rate accelerating to 3,4 per cent in the firs! quarter, 3.5 per cent in the second quarter, 3.8 per cent in the third quarter and 7.6 per cent in the fourth quarter, the present Treasurer merely observed:

Economic prospects being, what they are, the Government must ensure that in its overall effect the Budget does not give additional impetus to demand.

The effect of the Treasurer’s scrutiny and caution was that as a direct result of the Budget the December index recorded the highest increase for any quarter since September 1956 and the highest for any December quarter since 1951. lt represents an annual leap greater by 3 times than the average to which we have been accustomed throughout the last decade. More than half this rise came from the Budget, that Budget which according to the Prime Minister was one of the ‘great budgets of all time’. And I emphasise thai this soaring increase occurred well before the national wage case decision began to operate. That decision had nothing to do with that rise: the Budget had everything to do with it.

Nor does the Budget in itself exhaust the catalogue of cost increases for which the Prime Minister has been responsible. Fees for university and other forms of tertiary education have again risen with Commonwealth connivance. Health insurance contributions are up, upon Commonwealth insistence. The Prime Minister is ‘appalled’ at extra fee demands from doctors. In what way is this threatened exaction more appalling than the 20 per cent extra contributed to doctors’ incomes over the last 6 months as a direct result of the new health scheme?

In March last year the Government lifted interest rates to their highest level iii our history. In April the bond rate rose by I per cent. In August indirect taxation was increased in the Budget and, as 1 have said, produced half the December rise in the consumer price index. The Prime Minister admits this, but has so far failed to tell us the impact of the other budgetary increases including those in postal charges and company tax. All these extra imposts have a cumulative effect on prices since they are unavoidable in the production and distribution process at almost every stage. They represent, yet another economic burden which this Government has imposed on the consumer and with which the wage earner and I he pensioner have to cope. May I remind the House that all the impositions in the Budget were opposed by the Labor Party and by the Labor Party alone and that all the exactions outside the Budget were exposed by the Labor Party and by the Labor Party alone.

So let us have no illusions about where the responsibility lies. It lies fairly and squarely with this Government. Nor should we suppose thai the consumer price index is an exact or an adequate measure of the grip which inflation has on the community. According to Treasury estimates the real extent of inflation was understated in the consumer price index for 1968-69 by 1 per cent and understated by 1.4 per cent last year. We may yet think ourselves lucky if in 1971 the real rate of increase is, in fact, the mere 6 per cent predicted by the Treasury and not 7 per cent or 8 per cent.

The consequences of such an increase are not matters for conjecture, lt is not difficult lo identify those sections of the community upon whom the burden will most heavily tall. Old people, invalids, widows, veterans and others who rely upon social service benefits for a sustenance existence will find themselves in circumstances more straightened than ever. Those on superannuation and fixed incomes will find their standards of living still further reduced. Wage increases paid to employees in marginally profitable industries, in Commonwealth and State semi-government enterprises and in the Public Service, will fail increasingly to make up for the loss of real buying power sustained by such groups. Secondary industry will suffer as forward planning is undermined by the unpredictability of costs. Primary industry will incutcost increases which must be absorbed. These are not penalties which ordinary Australians have brought upon themselves. Still less are they incidental hardships generated by the interplay of blind economic forces.

The Prime Minister and the Treasurer endeavour in all their public statements to pin the blame for inflation on any or every section of the community except themselves. 1 have shown how the last Budget itself is the major contributor to the startling rise in December. But in the longer term it is clear that our present economic situation stems basically from the Government’s refusal to accept proper responsibilities, to acquire proper economic powers and to exercise proper modern economic planning. Such an unplanned economy has just been unable to cope with the ravages of the past two Budgets which have been so much th-; personal handiwork of the Prime Minister.

He has this preoccupation with wages. He now advocates a massive transfer of employees from the public to the private sector. He makes the classic Liberal assumption that public employment and public enterprise are inherently wasteful and all private employment and private enterprise inherently productive. Can the Prime Minister deny that the great private bureaucracies of the Liberal health funds are wasteful? Can he deny that the archaic, over-blown structure of third party insurance glaringly exemplifies avoidable waste? The Prime Minister betrayed his real motive on Tuesday night by his refusal to reveal the retrenchments he intends to impose on the States, He wants that information withheld, until the conclusion of polls in Western Australia and New South Wales. He assumes it is the popular thing to bash Commonwealth public servants. He knows ii will be thoroughly unpopular and justly unpopular to retrench teachers, nurses and police in the States.

His preoccupation with wages is revealed in all his statements. He hopes to hold down wages within the private sector by threatening employers with the Tariff Board. He implies that protection is to be the reward of the tough employer. Toughness is to be the ‘with it’ image in this era. Toughness is the prefered stance of the Prime Minister - before the inevitable retreat. He fails to grasp the role prices play in inflation. Prices, far more than wages, are the cote of our current economic difficulties. Prices, far more than wages, should be the Prime Minister’s central concern. Employers are to be punished for negotiating decent wages. They are still to be protected even if they raise prices. They are to be discouraged from looking after the welfare of their employees but price rises which disregard the public interest arc to he ignored. Nor is there any indication that the Government will use its persuasive powers against price rises with companies which live on the Government’s own contracts and subsidies. Wages, and only wages, are to be the target.

No modern government should rely in economic debate on distinctions drawn between so-called ‘demand-pull’ inflation and inflation designated ‘cost-push’ - the intiation said to be caused by higher wages. Liberals seek political advantage by emphasising at Budget times ‘demand-pull’ inflation, but before the Arbitration Commission cost-push’. These are not unrelated and distinct causal processes but alternative perspectives used by economists as an analytical tool in the study of inflation. Expectations about the inevitability of increased wages being followed by increased prices affect significantly the ability of companies to pass increases on. The Government has given respectability, through its repeated statements and interventions on this theme, to assertions by employers that higher wages must be reflected in higher prices. The attitute of the Government and the employers is not. in fact, an expression of their attitude to inflation, lt is an assertion of their refusal to countenance any redistribution of income in favour of wage and salary earners. It is not economic policy, but Liberal philosophy.

Liberal governments have not merely failed to maintain the share of wage and salary earners in Australia’s prosperity; they have reduced that share. Figures published in the latest issue of the ‘Australian Economic Review’ show clearly that between 1955 and 1970 wages as a proportion of Australia’s gross national product fell from 63.2 per cent to 61.7 per cent. At the same time the proportion of the work force receiving wages and salaries rose from 89.6 per cent to 91 per cent. More employees are sharing less of the national cake. The Government last August, in the face of this inflationary trend, introduced a Budget which perpetrated the largest redistribution of income in favour of the rich ever seen in this country in a single year. Is it any wonder in these circumstances that Governments calls for restraint are received by employees with scepticism? Pressure for wage increases and dissatisfaction wilh the arbitration system arise not from union greed or demagoguery but from a well-based belief that employees in this country, far from improving their position in the economy, are actually falling behind. It is not sacrifice which employees reject but inequality of sacrifice.

The approach of the Government in this matter is not only dishonest but counterproductive. Rhetoric about wage-induced inflation obscures the reality of inflation arising from excess demand. Professor Pitchford points out:

If minimum wage rates are raised by say 3 per cent per annum then 0.27 per cent per annum will be added to the rate or change of consumer prices from this element. Putting this another way, the rise in minimum wages would need to exceed the growth rate of productivity by 3.4 per cent per annum in order to add an extra one percentage point to the annual growth of consumer prices.

Professor Hancock ascribes 88 per cent of the responsibility for price increases between 1948-49 and 1966-67 to demand, leaving only 12 per cent to be explained by wage increases and all other factors combined. The Senior Lecturer in Economics at the University of Melbourne, Mr J. P. Niewenhuysen has observed in summary:

Insofar as the tests stress the influence of demand on price increases, they do point to the great importance in inflationary policy of demand control through monetary and fiscal measures. This at least serves to emphasise the extent to which the monetary and fiscal authorities are responsible for controlling inflation, and the probably more limited extent to which the Arbitration Commission can of its own accord inhibit price increases.

Yet we have this nonsense about the Arbitration Commission and the unions being the sole culprits. The truth is that most of the elements of the current crisis were identified by the Constitution Review Committee which the Parliament established after the credit squeeze of 1956. The Committee recommended in 1958 and with full reasons in 1959 measures to deal with the basic causes of inflation and resource misallocation, including restrictive trade practices, company laws, capital investment, credit outside the banking system and interest on mortgages. These are all matters about which the Prime Minister has suddenly in recent weeks begun to talk. They are all matters over which the Government has no more power today than it had 1 1 years ago when the Constitution Review Committee completed its report. Let me remind the House that the Liberal members of that committee were 2 Senate Ministers, our High Commissioner in London - the son of one of the Founding Fathers of Federation - and Mr Justice Joske. The only decision the Government has made on the Committee’s recommendations was 4 years ago and it related to new States.

When he became Attorney-General, Sir Garfield Barwick decided that two constitutional reforms - trade practices and company laws - were unquestionably urgent but he believed that they could be achieved by co-operation between the

Commonwealth and the States. In his policy speech in November 1961 Prime Minister Menzies undertook to introduce legislation, in co-operation with State governments, against restrictive practices. ‘The public interest must be paramount’, he declared; ‘exploitation must not occur’. The undertaking was repeated in the Governor-General’s Speech 9 years ago this Saturday. Yet we still lack effective trade practices legislation because every Liberal and Country Party Premier has refused to introduce the companion laws, even in the watered-down version sponsored by Sir Garfield’s successor, the present Minister for Labour and National Service (Mr Snedden). In both Houses of this Federal Parliament, the Labor Party tried to enact the full Barwick proposals. In Tasmania the Reece Labor Government referred the necessary powers to the Commonwealth. Four years ago the Walsh Labor Government in South Australia promptly passed a Bill through the House of Assembly; the Liberal majority in the Legislative Council rejected it.

Last October the present AttorneyGeneral (Mr Hughes) expressed his pleasure at the announcement that the Dunstan Government proposed to refer the power to the Commonwealth. Again the House of Assembly passed the Bill and the Liberal majority in the Legislative Council rejected it. Throughout the current election campaigns in New South Wales and Western Australia the Liberal Premiers have reaffirmed their opposition to the legislation which Sir Robert - then Mr - Menzies promised in 1961. Only Labor in this Parliament or the State Parliaments has tried to secure effective laws such as Sir Garfield and Sir Robert promised a decade ago and which every comparable country has had for many decades. Four months ago the Attorney-General publicly stated that he would like the Commonwealth Act to be strengthened. Three weeks ago the Prime Minister publicly supported him. The Labor Party will support any strengthening of the Act. The Prime Minister also said that if the High Court held part of the Act invalid, the Government would consider seeking more power by referendum. The Labor Party will support such a referendum.

Similarly in matters of company regulation Australia’s international reputation is threatened by the prevalence of indefensible practices on the stook exchange. Debacles over Tasminex, Poseidon, Mineral Securities and Vam have inflicted unjustifiable damage on Australia’s standing in world financial circles and upon the international evaluation of Australian companies whose probity is beyond reproach. Company laws necessary to deal with such abuses and recognised as necessary for the last 12 years have not been brought in. Sir Garfield Barwick commenced consultations with the State Attorneys on uniform company laws in June 1959. The Commonwealth will not hold a referendum; the States have not exercised or referred their full powers. Mr Justice Eggleston and his committee have stressed the need for a Companies Commission and associated reforms on 5 occasions since I96S. The advice has been ignored by every Liberal government.

In 1961 Liberal policy for a third time stalled the economy. The Vernon Committee was thereupon appointed to analyse economic development and recommend measures for a continuing scrutiny of economic affairs. It prepared a wealth of recommendations and the Government rubbished or rejected every one. Liberals always turn to experts for advice when caught out or panic-stricken. They always disregard that advice when the immediate danger has passed or they regain their nerve. Even Liberals would now have less difficulty in managing the Australian economy if they had been less sceptical of the proposals they commissioned from experts in movements of economic crisis and electoral despair. The Prime Minister’s efforts to control office block construction would now be more effective if his predecessors had accepted the Vernon Committee’s advice on overseas investment. Building, manufacturing and farming in its more profitable forms have all been allowed by Liberal governments to pass substantially out of Australian hands. We import American capital to bake our biscuits, and colonels from Kentucky to fry chickens.

The Prime Minister’s own ad hoc decisions, disregard for advice, electoral opportunism and insensitivity to the indirect effects of particular actions have now produced just that sort of economic crisis with which his government is so clearly ill-equipped lo cope. At no stage in Australia’s history have decisions been so overwhelmingly determined by one man. The 2 basic concepts of our system - responsibility to Parliament and collective responsibility of Cabinet - have been set at nought. We all know his treatment of Parliament; and every member of the Cabinet knows that a fortnight ago he unilaterally nullified Cabinet’s decision on the help that should be given to the States. The impact on the economy of his 3-year progression from one grand gesture to another is only now beginning to be felt. Only rarely over the period has a month gone by in which some section of the Press has not reported personal rejection by the Prime Minister of advice from the Treasury. The cumulative and indirect effect of so much amateur decision making has operated with a time lag. lt is clear that time has now run out. The Treasury has had to take counter measures against the Prime Minister, yet these measures themselves have generated inflation.

Increases in interest rates announced by the Government last March produced a temporary contraction in some sections of the economy but have now been assimilated by industry as a part of its cost structure and even passed on to the consumer in the form of higher prices. Interest increases moreover are at best an economic bludgeon. Affluent Australians are not deterred from enjoying their luxuries. Those less affluent are obliged to defer or forgo necessities. The number of dwellings approved last year fell from an anticipated 175,000 to a meagre 144,000. Within the non-dwelling sector of the construction industry as in most other areas of commercial activity, business continued more or less as usual, in part because international companies were able to circumvent local restrictions by drawing on funds overseas. Hire purchase companies in particular and other costly ‘fringe* lenders outside the banking system created credit for luxuries without inhibition or interference. Restrictions on housing postpone but cannot eliminate demand. They lead inevitably to a renewed aggravation of inflationary tendencies within the industry as relaxation allows demand to revive at an abnormally pent-up level.

Interest rate increases have also had their impact on State and local government authorities. Crushing debt burdens imposed on these authorities by years of Commonwealth engendered immigration pressures and Commonwealth financial neglect must be met from a narrow tax base. Increases in interest have therefore been passed on in the form of higher State taxes, local government rates and semi-government charges. Higher rates and charges are no less a burden to ordinary Australians than a higher price for food. They fall most heavily on those sections of the community which are least able to afford them. They distress in particular pensioner householders for whose welfare the Commonwealth should have a special concern. Liberals naturally prefer monetary to fiscal measures as a means of combating inflation. It is easier to make the poor pay than to tax the rich. But the present Government has indulged this preference to irresponsible extremes. The sections of our community which got most benefit from last August’s S282m income tax reductions were given totally unnecessary encouragement for consumer spending described by the Treasurer as ‘currently very buoyant’. More important, the reductions created an additional political impediment to the use of fiscal regulation in the inflationary situation which successive Treasurers have so long anticipated and which has now in fact emerged.

In preparation for last year’s Senate elections, the Prime Minister insisted on fulfilling not in 3 years but in one year a House of Representatives election promise which in fact was never made. As I pointed out in my speech on the Budget, the really important aim - the promised benefit - was not to provide an acrosstheboard reduction in income taxation; the aim should have been to redistribute the burden of taxation, to afford relief to lower and average income earners. Having reduced income tax in August, the Prime Minister is naturally reluctant to increase it again in February. His Senate-eve tax concessions now oblige him to tackle inflation with one hand tied behind his back. They ensure that Liberal attempts to restore economic equilibrium will be inequitable in their impact, internally contradictory and ultimately unsuccessful. To depend on monetary measures in economic management is to avoid the decisions which a responsible economic policy would entail.

We are told that the mini- Budget which the Government’s Treasury advisers so clearly think necessary will not be introduced. We are asked instead to accept a mish-mash of unrelated proposals of which in each case the impact will be postponed. The Government’s firm rejection of its Treasury advice arises from a recognition that supplementary budgets are a source neither of electoral popularity nor of economic confidence. Let the Treasurer try to interject. He is not allowed to speak. Leave a pittance of self respect for the poor man. He is not allowed to speak in his party room.

Mr McMahon:

– Act like a larrikin and be offensive as usual.


-Order! I would suggest to ali honourable members that personal references are out of order.

Mr Daly:

– Put the Treasurer out.


– He is on the way out; 1 am trying to make it plain. Unpopularity in this instance is a result of unfamiliarity alone, lt would not now be a danger if the Government had reduced its emphasis on annual budgets as 1 suggested in my Budget speech 3 years ago. Governments have an obligation not only to use at any given time the most appropriate economic measures, but to ensure in advance that such measures are available and acceptable. It is ludicrous, in a post-Keynesian era. for any government to impose on its economic management the limitations of an annual accounting period entrenched since the conflict between Parliament and the Stuart kings, and appropriate to that age.

There is a further reason for the Government’s refusal to introduce a supplementary Budget. It would be intolerable if new measures did not include some pension relief, yet the Government refuses to review its unconscionable decision in the current Budget. A supplementary Budget would highlight the deficiencies of the Budget: so the pensioner must suffer hardship lest the Prime Minister suffers loss of face. Even a Liberal supplementary Budget could not avoid increasing pensions; to offset the cost it would be necessary to remove or reduce the tax concessions granted in the last Budget to income earners over $10,000 a year. That is why there will be no supplementary Liberal Budget.

Mr Speaker, the Australian economy is not unmanageably large, nor are the economic problems which confront us insoluble. Our balance of payments is strong and we are not bedevilled by the gnomes of international finance. We are free to act, as prudence dictates we should act, with foresight, precision, equity and vigour. The Prime Minister’s foresight injected last August $282m of tax relief into an economy already dangerously overstretched. His precision produced 30,000 fewer dwellings while allowing the construction of office-buildings to continue unchecked. Equity means for him a continuing reliance on interest rates, indirect taxation, pension skimping and other demand controls which fall most heavily on those sections of the community least able to bear them. Vigour the Prime Minister reserves for pursuit of public servants who leak documents on the state of the economy, not action to improve the economy itself.

A Labor Government would not procrastinate in the face of emerging economic difficulties or delay effective action until crises arise. Labor will not ignore the potential of fiscal management. We will not place excessive reliance on monetary measures of an inequitable and ultimately inflationary kind. If economic conditions make restrictions mandatory. Labor will see that their basis is selective. Labor will restrict luxuries, not housing, hospitals and schools. We will budget on a programme basis. We will see that State governments are kept as closely in touch with economic trends as the Commonwealth Government itself. It is impossible to have meaningful economic discussions at Premiers Conferences conducted with so little preparation and consultation as at present.

Migration has done great things for Australia. The post-war migration scheme introduced by Labor has made up our loss of population from the First and Second World Wars and the depression between. Migration, however, is one inflationary factor which is never officially questioned. It has been left to the Australian Institute of Political Science to arrange any public scrutiny. It is now 7 months since the

Minister for immigration (Mr Lynch) announced outside the Parliament his private, leisurely inquiry into some aspects, and no report is yet in sight. The most economic, humane scheme for migration is for the government to encourage and to assist in coming to Australia the relatives, friends and families nominated by those who are already here. Inflationary pressures should not be arrested, as the Prime Minister insists, by restricting the recruitment of teachers, nurses and policemen and postponing civic amenities - ‘amenities”, his word - and services; but by adjusting the strain on them.

Official and parliamentary discussion is discouraged not only on migration but on tariffs. The Prime Minister’s only reference to tariffs is as a weapon against ‘industries in Australia when internal prices rise unduly in those industries because of costs due to over-award payments and other concessions negotiated by employers in those industries’. Since 1966 the Tariff Board has sought to make a systematic review of tariffs, particularly where they cause undue rises in prices, as they clearly have in the whole field of rural equipment and supplies. The Board has been unable to look at the wood for the trees because of the feud between the Board and its former Minister which the Prime Minister allowed to persist throughout his term.

In tariff policy it is sometimes falsely claimed that there is a natural conflict between the Tariff Board and manufacturing industry. A significant sector of the responsible leadership of manufacturers is, however, prepared, indeed eager, to welcome a review of the present structure. The tensions which have come to exist between some manufacturers and the Board are directly due lo the Government’s inertia and indifference. The Board has been frustrated and delayed by the absence of staff. Last year’s report stated that the Board’s resources had been “fully occupied on normal tariff revision inquiries’ and went on to add that its recommendations for additional staff had not yet been sent forward to the Executive Council by the then Minister. Labor will support the Tariff Board in its efforts to modernise and rationalise the tariff structure. We will refer to the Board those tariffprotected industries which increase prices without regard to the public interest. Even where State governments will not exercise or refer their undoubted responsibilities over prices, a Labor Federal Government would lake the pricing policies of companies into account when awarding them contracts and subsidies.

Management of Australia’s economy has for too long been undertaken on the basis of inadequate powers. The Constitution Review Committee identified those innovations which are necessary; Labor supports the Committee’s recommendations. In some instances they may be achieved in co-operation with the States or through reference by the States. Federal and Slate Labor leaders have demonstrated their willingness. Failing co-operation or reference by Liberal State governments or upper houses, Labor is willing to seek through referenda those powers without which, as Liberal governments have now 4 times demonstrated, effective economic management is a myth. We will seek in particular effective power to eliminate restrictive trade practices and retail price maintenance and to control credit outside the banking system.

It may be that the predicament to which Liberal rule has again brought us is one from which there is no escape which does not entail sacrifice. Labor has never rejected necessary sacrifice. We will support wholeheartedly any proposal from the Government which is appropriate, equitable and which observes priorities. We will campaign with the Government in any referenda for the powers to which I have referred.

On one thing at least there should be no disagreement. Four crises are enough. There need never be another 1951, a 1956, a 1961 or a 1970. The origins of our economic difficulties are well known; the remedies are available or can be acquired. They must now be put into effect. Yet it is clear that they will not be pui into effect by a Gorton Government or any Liberal government. From the Prime Minister, we have the cheap and easy line that the first line of attack against inflation is against spending by governments’ - even if all he really means is that government spending must increase at a lesser estimated rate than the previously estimated rate. We have a cynical, sleight-of-hand suggestion that reductions in overseas aid and overseas defence purchases will damp down inflationary prices. From the Liberal Party as a whole, we have total rejection of rational planning of our national economy as being too socialistic to contemplate. So as long as that Party, its allies and its present leadership have been in government, this nation has faced an inflationary crisis on an average of every 5 years. This is a loss and a burden nol to be borne; it is made the more intolerable because it is so needless. These great matters should be tested and settled; they should have been tested and settled last November by holding an election for this House concurrent with the Senate elections. Those elections settled nothing, except to show the Liberal and Country Parties at their lowest ebb in history. Let us go to the real test: Give the people a chance by accepting this amendment.


-Order! Is the amendment seconded?

Mr Crean:

Mr Speaker, 1 second the amendment and reserve my right to speak.

Mr Gorton:

Mr Speaker, the Government accepts the amendment to the motion as a censure motion in terms of standing order 110. 1 thought he was going to speak on the economy.

Mr McMahon:

– So did 1.


-I call the Minister for Foreign Affairs.

Minister for Foreign Affairs · Lowe · LP

- Mr Speaker, you will have heard from the interjection made by the Prime Minister (Mr Gorton) that both he and I expected the Leader of the Opposition (Mr Whitlam) to speak about our current economic policies and our current economic problems rather than to give us a dissertation on the long term objectives of the Labor Party to socialise this country and to make certain that every member of the country was brought under Labor control.

Before I go into the body of the statement that 1 want to make to the House, this afternoon, let me say that I have no intention to descend lo the level of personal abuse that that feline character is so apt to indulge in not only in this House but also on the hustings. I felt that he might have learnt his lesson at the last elections when so many people disapproved of the characteristic of which I have spoken. The honourable gentleman, who is not known for his economic knowledge, read to the House a statement which 1 understand had only recently been delivered to him. Normally it is a custom to provide the opposite side with a copy of a statement beforehand. 1 always give the Leader of the Opposition the privilege of having a document that I am presenting to the House several hours before the actual delivery, lt would have been noted that the Leader of the Opposition was giving me pages of his copy after it was given to him at the table while he was making his speech, lt is not that I want them any longer, lt has been proved from what he said that they are of little value and have little to do with the context in which we have to discuss today’s economic problems. But let me mention just one or two matters, particularly one that concerns my own portfolio, to show how little he understands the problem of economics. During the course of my statement to the House I will touch upon most of the problems he has mentioned.

Mr Morrison:

– Who wrote the speech for the Minister?


– If the honourable member could sec, he would know thai I am not reading from anything but am making a speech without any notes given to me by any other person.


-Order! Before this debate goes any further I remind honourable members that this is an important debate. lt is not only a debate that members want to hear but also a debate that probably many members outside the chamber will bc extremely interested in. I suggest to honourable members thai they cease their interjections. The Leader of the Opposition was heard in comparative silence, and I ask that the same courtesy be given to the present speaker.


– This afternoon I will endeavour to explain to the House the historical background against which our problems have to be judged, the way in which the present problems have emerged, the identification of the causes and, consequently, if we wish to look at the matter properly, the kind of solution that can be made or the cure that can be applied and then to mention what the Government’s policy is to overcome the problem. But before 1 tlo that I would like lo point out some of the quaint notions that have been put by the Leader of the Opposition. Later on I will deal in detail with some of his propositions. First of all, he mentioned interest rales. I wonder whether anyone believes that we could possibly have solved our problems up to the moment unless interest, rates, at the recommendation of the Treasury and the Reserve Bank, had been increased. What is an interest rate? It is a payment to those who save money and are prepared to invest it in Commonwealth securities. If we do not pay them a market price for their money, we will not get the money and consequently we will intensify our liquidity problems. As I shall show later, it is through satisfactorily handling the liquidity problems that we have been able to put the brake on intensive inflationary pressures in the community.

Secondly, the honourable gentleman spoke about the reduction in taxation, promised by the Prime Minister in a policy speech despite what the Leader of the Opposition might have said. 1 would like lo explain the motive that drove the Government to agree to or to decide on the reduction. The true purpose of this was not to get a redistribution of income but, because we had inflation and consequently increased, average incomes, to ensure that there was equity between all income sections of the community and that those who were paying increased taxation because of these two causes should have some, but not permanent and for that matter not total, relief. Let me mention one other matter to which the honourable gentleman referred in his statement. He said that wc should be looking at the cost of inflation rather than at rising prices. If there is anything that shows his lack of economic understanding and that he does not understand that costs are the cause of rising prices, it is his use of that phrase. Because we do not get rising prices unless costs rise and consequently push prices up.

The Leader of the Opposition believes it is Government policy and Government action that is the root cause of our present problems. I hope that I will be able to show conclusively that, while demand has had some impact, not a decisive one, the real problem that faces us today is rises in average incomes and the effects that rises in average incomes of the order of 7 per cent, 8 per cent or 9 per cent can have on an economy like ours. But let me go back to the beginnings and relate the history of our present problems. It will be known that in the 1969-70 Budget, the one before last, we budgeted for a domestic surplus of S500m. We knew that the bite of that Budget would not take place until the June quarter of 1970. in other words, we knew that as corporation taxation and personal taxation, although not pay as you earn taxation, came in money would be drawn out of Australia from the spending section of the community. It would also reduce purchasing power and consequently reduce demand.

In the early part of 1970 we found that demand was increasing too rapidly and over a wide field, so we decided that monetary policy should be implemented to slow down the increases in the monetary supply and, as has been mentioned by the Leader of the Opposition, for once being accurate, this contributed to an increase in interest rates. Again I emphasise to you, Mr Speaker, that if interest rates had not risen we would have faced a much more severe problem than we in fact face today. When June came around we found that the effect of the 1969-70 Budget was as we had predicted. There was a slowing down and in fact it was thought that it was a little more severe than had’ been anticipated at Budget time. Between the June quarter and the end of November it was felt that the Budget methods of 1969-70 might have been too severe because it was found that up till then unemployment was not falling at a rate that might have been expected and because of various other indications that there might be too great a slowing down. I have long thought that we can never interpret indices over a period of one or two months. Consequently, we had lo wait a little longer before we could make up our mind about what was happening over the whole year.

I turn to the last Budget. At that time we decided again to adopt very much the same practices, and it was decided to budget for a domestic surplus of the order of $550m, and consequently it was thought that much the same result would follow. But the remedy would not work earlier in the financial year. It would come in the June quarter and then the impact could be quite severe. 1 think the simple answer to all this can be illustrated in the report that was given to us by the Reserve Bank. The Reserve Bank said to us that it believes that in the June quarter of this year there will be a severe liquidity difficulty. In other words, it does not think for one moment that we should be trying to impose greater liquidity restrictions or drying up the supply of money - certainly not in the June quarter - because it feels that the Budget by that time will be having its impact and i£ anything that we will have to somewhat liberalise the monetary policy in order to permit the supply of money to keep up with growing demand in the community.

As I said, at the end of last year in December we found that the inflationary tendencies that were inherent in the economy started to show themselves and these were highlighted by 2 phenomena. The first was undoubtedly the increase in the consumer price index of 1.9 per cent although we have pointed out approximately .7 per cent was due to fiscal policy, about another .2 per cent was due to an increase in local government rates and a little was due to the increases in State rentals. So it cannot be taken that the 1.9 per cent is typical. In fact, the strong opinion from our technical advisers is that it will be substantially less when the next quarter’s figures are made public. The next happening was that the Conciliation and Arbitration Commission decided in the national wage ease that the national wage should increase by 6 per cent and that, of course, meant that some action had to be taken by the Government. I am prepared to say that in the last Budget the Government took a stronger view of the difficulties of inflationary pressures than our advisers did and I can assure the House, too, that equally with that the Government took a much more sensitive view as to the impact of inflationary pressures than our technical advisers did on this occasion. So it is not to be thought for one moment that the Government and the Prime Minister were not sensitive to it. In fact, I believe that the leadership was taken as it should rightly be taken by the Government and consequently I for one could not be considered as a critic of what has been done.

Now, let me move on, if I can, to explain something about what has happened in terms of the 6 per cent increase in the national wage. At Budget time we anticipated that average incomes would rise at the rate of about 8 per cent per annum, or perhaps even a little less, but it was never contemplated by the economic and technical advisers that we would get a rise in the national wage of 6 per cent. What that did was to pump into the economy not S720m extra of purchasing power as stated by the Commission but S900m or more. That was something of the order of S450m more than we expected, and probably $350m more of disposable income than we expected was immediately injected into the money stream and will continue throughout the year and increase disposable income and therefore will probably have an impact upon demand itself. So this was the basis upon which we had to think and we therefore had to make our arrangements for additional contributions to the States. The wages bill which had to be paid. We had agreed with the States that they would be refunded $57m or S58m because they had agreed to give up their receipts tax and consequently therefore we were faced with an increase in our expenditure over the year of something like $240m.

If it had not been for this increase in the national wage the other problems could have been handled and could have been handled quite satisfactorily prior to the introduction of the next Budget. We could have taken action fairly easily. But they became well nigh insoluble when we had a rise of this unpredictable and. 1 believe, unfortunate character. Now let me come back to an analysis of our present problem because I think that is exactly what the Leader of the Opposition has failed to do. If one looks at the Australian economy one will see that we have to divide it into private and public expenditure, and when we are looking at the private sector we must first of all look at consumption expenditure.

Dr Klugman:

– Did the Treasurer go out?


– Order! The honourable member for Prospect will cease interjecting. If he interjects again I will deal with him.


– Then we must look at investment in plant and equipment and also at investment in civil construction and non-housing building. First of all, let me dispose of the item which is probably up as high as 60 per cent of the total gross national product, and that is consumption expenditure. Consumption expenditure today is not rising at excessive levels. In fact, I think it is fair to say to the House that far from being excessive it has maintained a plateau and consequently we cannot blame consumption demand for the problems. We do - and I want to repeat this - accept the fact that because of the difficulties we face with the addition of $350m to disposable income as a result of the national wage case and the stimulus to demand inflation. This would intensify the difficulties we face in the days to come. Secondly, there is one other kind of inflation and that is cost inflation. I believe that our present problems stem largely from the fact that we have difficulties associated with continually rising wages and rising average incomes. As those incomes rise over and above a certain level it must of necessity mean that there is an inbuilt inflationary factor.

May 1 mention to the House just one or two economic problems and give the answers to them. First of all, may I mention that if we have average incomes exceeding productivity - in other words, if we find that earnings increase by, say, 8 per cent per annum and exceed the increase in productivity of something like 2.5 per cent per annum - then automatically we find an inbuilt inflationary factor. At the time of the national wage case there was already this inbuilt inflationary factor, lt has now been added to so that we can expect over a period of years an increase in the actual rate of inflation in terms of gross national product at constant prices - it is now about 4.5 per cent - although we do not know over what period it is likely to occur. In other words, while we will get this inbuilt inflationary factor the real difficulty is to tell in what months of the year it will take place or whether it will be this year or next year. The second point that I want to mention - and again it illustrates the lack of understanding of the Leader of the Opposition - is that during the course of the last 3 or 4 months there have been 2 papers issued by the Organisation for Economic Co-operation and Development. It has a committee that deals with these economic problems which gives, I believe, the best analyses that can be given as to not only the causes of inflation but also the means by which they can be . controlled. Every Western country that I know of is faced with exactly the same problems as we are and only in the course of the last few days the OECD has issued a paper saying that restraint in demand expenditure cannot be the way in which these problems are solved because it can lead to a fall in production, a fall in productivity and vast unemployment and consequently can distort the economy in a way that certainly we as a Government think is completely impracticable. Secondly, I have before me an article from the ‘New Leader’ titled Inflation’. This is an American journal and is dated February 1971. This article sets out views on the causes of inflation by hail a dozen different technical economic experts. Everyone has a different solution to the problem of inflation, and, frankly, it has to be accepted today that no-one can tell us how to solve the problems of inflation for reasons that I will deal with a little later on. In other words, they are searching-

Mr Clyde Cameron:

– So much for the knowledge of the economists.


– At least it is better to have some than no knowledge at all. What you do find is that inflation appears to other countries to be an intractable problem. We have decided to try to cope with the problem of inflation in our own way.

May I now come to what are the real causes of the inflationary trends in this community. My purpose in mentioning this again is to emphasise that 1 believe that the forces of demand that could have Icd but need not necessarily have led to increased inflationary pressures have been intensified or driven forward by the action of the Commonwealth Conciliation and Arbitration Commission. I do not think that there is any economic mechanism within our power which can possibly overcome the effects of the Arbitration Commission decision, ft has made a decision. Average weekly earnings will increase and unless the Government embarks on taxation of a punitive and probably destructive kind there is little that we can do about it.

Lei me turn to Government expenditure. Government expenditure itself was rising, until last year, by about 8 per cent. That is Commonwealth and State expenditures as a whole. In other words, Commonwealth and State expenditures were expected to increase demand for goods and services by 8 per cent in the year before last. This year the increase will amount to 13 per cent.

When we look at these figures we have to recognise that a tremendously large proportion of the amount is paid by the Commonwealth to the State governments and the residue which is left or the area in which we can act is not tremendously large at all. In other words, as the Prime Minister has pointed out in his statement, of government expenditure of $7,800m the Stales take $2,700m. The Commonwealth has nol cut back the amounts that will be advanced to the States. In fact it has increased them. Defence expenditure was to be Sl.lOOm but this will be reduced by $21m. Social services involves expenditure of SI. 500m which cannot be reduced. Consequently action within our own area of activity is reduced to the order of S2,500m. While there has been an increase in government expenditure in 1970-71 the Government has decided - and I will mention this later - to cut. it back by $75m and is to establish the foundations on which the economy can be closely .regulated by fiscal and monetary measures during the course of the next Budget.

Let me turn to the 2 areas in which we have great difficulties. The first one without’ any doubt is the non-housing construction industry. This includes civil construction by the Commonwealth and State governments as well as the private sector. In the private sector we find that there has been a large increase in the construction of office buildings and factories. Allowing also for the fact that State expenditure is growing and that our own civil works expenditure is growing, we find that the increase in demand for resources for those purposes is of the order of 30 per cent greater than last year. This is one area in which action must and should be taken. I am sure that the Prime Minister and the Cabinet have these factors well in mind and will be watching them very closely. They are one of the reasons why we were not prepared to give any increases in funds allocated to the States to be spent during this current Budget year.

The second point that has to be mentioned is the other area where there is a large anticipated increase in expenditure. This is in private investment in plant and equipment. The increase in this field is about 15 per cent. We will take action to ensure that the rate of growth of private capital investment is in fact slowed down.

This brings me to the crux of the problem. I have identified the causes of our present problem, ft is not due to consumption expenditure. It is due to many causes other than the increase in Government expenditure which took place largely because of events outside our control. I refer to the decision on the receipts duty tax, which was a very wise decision taken by the Prime Minister, the Cabinet and the Government because it is an inefficient type of taxation. I believe it caused more difficulty and that it had a more disturbing effect on businesses than was justified. Equally too if I were to deal with other measures taken I think it would be found that each one was a wise measure in the interests of the Australian community and 1 believe in the long run each of them will introduce an increased element of efficiency which will be passed on to succeeding generations. 1 turn to other problems. One is our balance of payments. If I may put it more correctly. 1 would now like to deal with the position in our international balances. I believe this is a true reflection of the way in which this Government, by assisting the mineral industries, has been able to generate the kind of inducement to capital inflows which has removed a very great burden from Australia today. As at 31st January our international balance amounted to SI, 620m which is an increase of SI 08m compared to the same lime last year, when during a comparable period they fell by $74’m. Capital inflow was of the order of Si 75m. This brings me to the statement made by the Leader df the Opposition during a Lahor-in-power conference last weekend that the Government was taking action which deterred private capital inflows into this country.

I think I have given an analysis of causes. I will now deal with the remedies or what the Government has decided to do about them. 1 will first of all mention the goals of the Government. They are clear and they are beyond doubt. The first goal is that we want lo ensure that as we cut back government expenditure and we take action to control inflationary pressures we will act so that every section of the community bears an equitable part of the burden. Therefore we have decided that the Government must take the lead. Not only must it take the lead but it must be seen to be taking action on a psychological front to induce a more responsible attitude to expenditures in the future than have been adopted in the past. I think the approach to the psychology of this problem has been excellently handled. I think that most sections of the Australian community today are not only aware that we have problems of inflation and know the reasons but also are convinced that the Government, stands ready to act and will take whatever action it regards as necessary to keep inflation under control.

The second goal is not to interfere with the growth and progress of the Australian economy. In other words, we want to reduce the intensity of the pressures but we have no wish whatsoever to curtail growth, development and progress. We will ensure that the measures we take will have the least possible impediment to progress. The third goal - I shall elaborate on this later - is that we must act in areas where we feel the pressures lie. We should not move widely here and there but we should take action in a specific area to overcome a specific problem and to do so in a way that should it turn out that there is a change in the economic outlook we can rapidly reverse our policy and make certain that full employment is maintained and that our resources are effectively and adequately appropriated or allocated.

What has the Government done in order to achieve these objectives? ft is my view that in 2 speeches made by the Prime Minister there were clear statements for public consumption. Each of them was couched in simple and definite phraseology that could be understood by anyone. Any person listening to those statements on television or on radio would immediately have been impressed by the remedies that the Government intended to follow in order to overcome difficulties in the areas where we found them. The Prime Minister has said that we must take action to ensure that Government expenditure is restrained and that we should take the initiative and give leadership to the rest of the community by restraining our expenditure. Consequently, expenditure has been reduced by S75m over the course of the year. That occurs over a 4 months period. If one converts it into a yearly figure one will see that it is a very substantial amount.

Secondly, in order to handle the problems in investment in plant and equipment the Government has decided to suspend the investment allowance which, in a full year, amounts to about S25m. Thirdly, the Prime Minister himself gave instructions that there should be a reduction in the rate of increase in the growth of the Public Service. I understand that the estimated increase rate of about 4.8 per cent per annum will decrease to about 3.6 per cent per annum for this year.

We are looking at the problems of what to do about the expenditure for nonhousing construction. Ail of the measures that the Prime Minister has mentioned add up to the kind of programme that the Government feels will set the basis for the Budget for 1971-72 and, in the meantime, to keep restraint that is so necessary on expenditures so that the opportunity is provided for fiscal and monetary means to be effective. I mentioned a few minutes ago that the fundamental problem we face is one of the increase in the average incomes. Last year the increase in average incomes was about S per cent per annum or perhaps a little more. Now I think it can be predicted that, because of the increase granted as a result of the national wage case, it will be substantially in excess of 8 per cent. I do not want to hazard a figure, because nobody can safely do so. And, as I said before, nobody can tell exactly when the increase will show up in the consumer price index. Nonetheless, 1 would not be surprised if it were at least as high as 2 per cent. Some recognition must be taken for this. What does it mean? Surely it means that one of the avenues where we have to take action is in the Arbitration Commission itself. 1 believe that a change is occurring in’ the structure of the Australian industrial world and in the social world as well. The trade unions are becoming increasingly powerful. Under the Arbitration Act we have ‘no capacity to do more than influence the Commission. But we must be able to re-establish belief, trust and confidence in the Commission. Hitherto it has acted in a way that has been in the best interests of the Australian economy. I believe that we must first of all drive home the lesson that if average incomes or average earnings exceed productivity then the country itself must pay. Somebody has to pay, and every section of the community does. As these conditions create a built-in inflationary pressure leading to subsequent inflation it must mean that the trade unions will not accept a lower standard of living. Automatically, when they see that prices are rising they will approach the Arbitration Commission quickly for an increase in wages. So the Commission must have its integrity and its authority re-established. This is a problem that must be looked at by the Government.

Dr Everingham:

– You are doing your best to break it down.


– I am not. I am doing my best to try to protect it. In fact, I lived with it for 8 years, so 1 think I know a little more about it than the honourable member does. The Government has already taken action in the 4 weeks leave case before the Public Service Arbitrator. In that application the Public Service Board strongly opposed the application and asked that it be referred to the President of the Commission to see whether it could be referred to the Full Bench. Then we forecast the attitude that we would take before the Full Bench of the Commission if the President agreed. In other words, what we want to find out is the cost to the community, and therefore the increase in the consumer price index, of the inflationary pressures that would be generated by the 4 weeks leave if it were granted. I believe that this illustrates our attitude.

I confirm that I think we are on the right track. We will not be able to tell - I emphasise this - until February has elapsed, or probably well into March, what the trends for the rest of the year are likely to be. One should not draw any comfort from or any conclusions about the increase in unemployment published in the statement of the Minister for Labour and National Service (Mr Snedden) a few days ago. The number of unemployed had increased by about 6,800.

We as a Government will do what we can to restrain the inflationary pressures.

We are looking to ensure that whatever action we take identifies the cause and that we provide the appropriate remedy. We will try to ensure that no section of the community is unjustly and inequitably treated. Above all, I assure honourable members that the matter is one of great concern for the Government. The Government will act, and act decisively, when it feels it is necessary to do so. For that reason the Prime Minister was willing and anxious that the matter before the House be treated as a motion of no confidence. I am sure that the motion will be defeated and that all members of our own Party will support the Government’s action.

Melbourne Ports

– I find it somewhat astonishing to hear from the Minister for Foreign Affairs (Mr McMahon) that our difficulty in the economy at the moment is not in the field of consumption expenditure. If it is not, why is there this great alarm about the wage increase?

Mr McMahon:

– It is the cost.


– I would just like to point out for the right honourable gentleman that last year the gross national product rose by nearly S3, 000m and the increase in the aggregate amount of wages and salaries was SI, 800m during the 12 months. I-le seems to be concerned at the moment, as the experts’ estimates that he asked for indicate that instead of an increase in wages that would aggregate S720m the figure is $900m. This seems to me to be the kind of lack of perspective that the Government has about the magnitudes which now move the economy. The Leader of the Opposition (Mr Whitlam) in the course of his speech indicated that, taking the Australian economy in its totality, wages, salaries and supplements expressed as a percentage of the gross national product had fallen over a 15-year period from 63.2 per cent to 61.7 per cent and that in that time the number of people who are supposed to be sharing those wages had increased from 89.6 per cent of the population to 91 per cent. What we in this House want to know is: What does the Government propose to do about the other nearly 40 per cent of the economy? Why is there concern only about what happens to wages? The right honourable gentleman read us a lesson from the Organisation for

Economic Co-ordination and Development. I would like to read out to him what has been said in this House over many years. I quote from the Trade Union Advisory Committee to the OECD as far back as 1965. That body said:

An argument can be made out for planning and guiding incomes; and argument can also be made qui for leaving them unplanned and unguided; but there is nothing at all to be said for planning or guiding half the incomes and leaving the other half unguided and unplanned and subject to market forces of varying degrees of monopoly control.

I submit that in Australia we have planning of that part of the total income which is called wages but we have no planning in the other field, and that we have in this coutry more than in most countries an increasing degree of monopoly control. 1 am not able in the limited time I have to quote examples of this. I have only a quarter of an hour as against the 40 minutes that the Minister for Foreign Affairs had. But it is this failure to grapple with any of these other elements that shows the Government’s failings.

Looking at what has happened in the Australian economy over the last 10 years or so, it can be seen that there has been inflation at an average of 21 per cent per annum. 1 refer again to the Australian Economic Review which shows that in the same period, 1960-69, when prices rose by an annual average of 2.5 per cent, the average weekly earnings increased by 6.3 per cent and wages, salaries and supplements by 9.4 per cent. All that that serves to point out in the first place is that wages are not the only elements that are significant in the economy. There is no need to boggle at the point that the wage is the most significant single economic factor in the economy because the majority of people who get an. income do so as wage earners. To some degree the wage earner through the court is able to look after himself. But if inflation occurs something has to be done by a government to look after the rest of the community. I submit that that is not what is being done in Australia today. As a proportion of the work force of about 4.5 million there is nearly a quarter, that is, over 1 million people, of the Australian community dependent either on the pension paid by this Government or deriving a pension as superannuation which is fixed by the terms of the contract. They, of course, are some of the prime victims of inflation.

Our complaint about the Prime Minister (Mr Gorton) is that when he went on television the other night he told the Australian public he wanted to tell them briefly about the current situation, but when he came to Parliament he should have told us in some detail what the measures are. So far we have had this S75m reduction in Government expenditure out of a sum that is now close to S8,000m. The Government will reduce the likely intake into the Commonwealth Public Service from 10.500 to 8,000. What is supposed to happen to the 2,500 people who are not taken in? Is it thought they will be better in private industry or is it thought they will be better doing nothing at ali? I sometimes think the attitude of this Government is that it would be better to have a lot more people doing nothing at all. A government has to maintain some sort of equipoise in all sections of the community between growth and stability, and the examples that the Minister for Foreign Affairs gave indicate the difficulties. I agree with him. There is no single simple solution to this problem but we will not get solutions at all until we analyse what the difficulties are. Who is he to come along and say to a so-called independent tribunal that determines wages what the mechanism for deciding wage levels ought to be? I quote for the Minister the view that was expressed in 1968 by Sir Richard Kirby, Mr Justice Gallagher and Mr Justice Moore who gave a unanimous judgment that year. They said:

We all agree that in the present circumstance* of full employment and in the absence of an incomes policy, it is just not practicable for increases in wages and salaries to be kept confined within productivity increases. To believe otherwise is to ignore what has happened and what is happening in other countries of the Western world.

Yet the Minister wants to rivet upon that court the thesis that it ought to work not by the rule that it derived but by a rule he wants to put upon it. I suggest the workers of Australia and other sections of Australia will not accept that controls be imposed only in one place. Let us look at the other 40 per cent of the economy. The 2 great problems in a total economy are to do justice to people who have to live out of incomes and therefore ate concerned about prices - the majority of them in an industrial economy are wage earners - and to cut the right sort of balance between that part of the total which we do not consume today and that which we invest; that is, to strike a proper balance between consumption and investment, and to realise we divide investment into 2 great fields, public investment and private investment.

It is easy in these debates to trot out figures like $9 00m. Most people, of course, are horrified by that sort of sum anyway, ls there very much difference between the total impact, if that is the argument, that the wage bill will have if it is S900m instead of $720m on an economy that is deriving a total income of about $32, 000m? There is another point on what is able to be done in private spheres and what is able to be done in public spheres. I can only make a couple of snap shots because I have little time. I quote from one of those blurbs that circulate called the ‘Australian Newsletter’. It is really issued by a body called the Victorian Promotion Committee. Of course, it is for consumption overseas, lt says in relation to Westernport Bay:

In less than 5 years, Westernport has attracted committed and projected private investment in new industrial projects amounting to more than SI, 344m with more to come.

Has anybody got any idea what S 1,344m spent over 1 field of private endeavour in 1 State means in relation to some other things? I will tell honourable members something. The total expenditure in Victoria in the same 5 years in education at all levels - public, private, primary, secondary and tertiary - was less than that sum. Who makes the decision in the economy that where there are limited resources for investment, as well as having good machines there have to be educated people as well? We have to strike a balance between the money going into education and the money going into private endeavour. Who sets the figure of $l,344m? They are going to spend another $1,1 20m in the next few years building a steel mill alongside what is already there. Does anybody suggest there may not be elements of waste in that Si ,344m or that the money out of which it is financed may not have been purchased at too high a price? All of us have been astonished in the last couple of weeks by the spectacle of these financial monsters who seem to want to eat each other. After all, what has Mineral Securi ties Australia Limited, taken as an entity, done to take a single piece of ore out of the ground? It has acted as a go-between. It has bid up the price of money and it has brought financial disaster into some areas. But what happens? We get something which is called a consortium arising like Phoenix out of the ashes which is able to raise $35m. And at what interest rate? Six per cent. What happens when we want to find money for Commonwealth loans or to finance houses on mortgage? Can we get it at 6 per cent? Why are these people able to do this sort of thing so quickly and with such magnitude when the Government tells us it cannot find another $3 Om to raise the pension by 50c? Where are the perspectives in this kind of situation?

Mr Reynolds:

– Where are the priorities?


– Where are the Government’s prorities not only on the plane of economy, on the fiscal side, but also on the plane of humanity? 1 again agree with the Minister for Foreign Affairs when he said that Australia is going through changes. What he should have acknowledged is that those changes have been upon us for a long time and that the sort of measures which he is now taking should have been taken many years ago in order to mobilise, for the better development of this country, the resources that are at our disposal. One of the great problems when we change from primary industry to the mining industry as the field of potential export earning is how to go from the position of having the minerals under the ground to producing and selling them? In my view we have let the speculators in. I suggest that this country is living in the casino and that it is time it got back to the kitchen.

Minister for Trade and Industry · Richmond · CP

– There has been a lot of talk to the effect that the Prime Minister (Mr Gorton) has insulted the House by not making a longer statement than he did. But the fact is that the Prime Minister did exactly what he said he would do. He said he would make a statement setting out the Government’s proposals for reductions in Government spending. That is what he said he would do, and that is what he did. I think that there is need for a much more responsible approach to the problem of inflation than a petty attack on the Prime Minister for not doing what some people thought he was going to do. The basis of this responsible approach was laid 2 weeks ago by the Prime Minister in the lucid statement he made to the nation on the problem of inflation and his outline of the measures which the Government would take. Now he has followed this up with a statement in the House on the proposals for reductions in Government expenditure during the next 4 months.

After a long and deafening silence the Opposition has come out with what is supposed to be a stinging attack. This was the long awaited and deeply considered Opposition comment on a very serious subject - one of the most serious facing our economy. All I can say, after listening to the Leader of the Opposition (Mr Whitlam) this afternoon, is that it was just a lot of intellectual rhetoric on old Australian Labor Party philosophies. I believe that the Australian people have been stunned by the complete lack of interest by the Labor Party in this subject of inflation over recent months. In my view this problem of inflation is serious and important. The ALP may be concerned about it. I do not take that away from it, but I believe that when the Labor Party supports reckless spending policies, shorter working hours and disruptive moves by trade unions there is a lack of integrity and sincerity to act in a manner to avoid further increases in inflation.

Our economy basically is sound, but dangerous tendencies are developing. The whole Australian community must be made aware of this. For the past 20 years this country has had one of the soundest growth rates in the world. Its economic performance and its economic stability, with associated high living standards and full employment, have made it the envy of other nations. We have achieved this only by applying restraints when undesirable inflationary tendencies have occurred. The present inflationary tendencies must be accepted as warning signs requiring counter action if we are to maintain our coveted economic strength and stability. Today our overseas reserves are in a healthy position. Our reputation, and the confidence of overseas investors in us, is good. But if the present inflationary trends should continue and worsen, they would bring this country to its knees. Sections of the economy can no longer stand further increases in costs and must be forced out of business if these trends continue.

We have a good economy, and the Government is determined to protect it. If firm action is needed the Government will take it. The inflationary spiral is a true vicious circle. Excessive demand leads to pressure on resources. This causes the price of labour and materials to be bid up. This brings increased costs and thus increased prices. Higher wages lead to more demand for goods. Further wage demands follow and so the cycle goes on. This is truly a vicious circle with no-one really benefiting and many suffering. We need only to look at the tragedy of the fruitless inflationary spiral in other countries, especially the -United States of America and Britain to see how insidious inflation is. In the United States in 1970 the gross national product in real terms declined. This is a staggering concept - a country like the United States producing less as the year went by.

It is a world-wide phenomenon that a high rate of economic growth usually is accompanied by some degree of inflation. It is hard to avoid a degree of inflation when growth and full employment are basic aims. In Australia the rate of cost increases has been moderate when compared with the rate of cost increases in most other developed countries. But inflationary pressures have increased recently and the situation, while not one that should cause panic, is certainly one that must be viewed very seriously. Not only are prices rising rapidly, but so are wages. The average weekly earnings by adult males rose by 9 per cent in the 12 months to the September quarter of 1970, and this does not take account of wage rises since then - in particular, the 6 per cent increase awarded by the Commonwealth Conciliation and Arbitration Commission in December.

The effect of these increases is particularly severe on people on fixed incomes and on those - such as the people in the farming sector - who cannot protect themselves against rising costs. The farmer has no control over the prices he receives for the great bulk of his output. Inflation accentuates his problem and causes severe damage to his ability to export competitively. The impact of inflation and static or falling returns is clear from the fact that over the last 6 years the index of prices received by farmers has fallen by 7.3 per cent while the index of prices paid by farmers has risen by 19.8 per cent. This is an intolerable burden for many farmers, and the current rate of inflation is aggravating the problem and placing many more farmers in an impossible position. Country communities are suffering from the dual effects of low returns and increasing costs. Net rural income is declining. Businessmen, storekeepers and local government authorities are unable to pass on any more of these increased costs to their communities. This is affecting development and employment and is aggravating the already disturbing drift of population out of rural areas.

The impact of inflation upon exports of the mining and manufacturing industries may not be so severe because world prices for these goods, on the whole, are increasing and this gives scope for price increases. But inflation also affects the cost and therefore the growth of Government services. The costs of providing education, health services and public utilities are increased. Government action to cut back on these services inevitably disappoints the community and inhibits the opportunity of everyone in the community to enjoy the benefits of economic growth. The Government is not prepared to ignore the signs of pressure building up in our economy. In April and August last year we acted to contain consumption demand through monetary restraint, but now pressures are emerging in other key areas. Restraint in these areas is essential. Restraint is essential because part of the inflation cycle is a kind of fear about eroding values. People become afraid that inflation will hurt them. In trying to keep ahead of inflation they demand excessive wage and price increases, and this only stokes the fires of inflation. As well, a fear of inflation leads to misallocation of resources, as investment is diverted from productive and developmental works into pure speculation in fixed assets such as land and buildings, purely for hedging against further inflation.

The Australian people have shown their willingness and their ability to raise production and to develop this nation. They have a real and legitimate desire to share in the fruits of their efforts. What a tragedy it would be if their own lack of perception of the nature of the inflation problem should jeopardise their prosperity. There is a real danger that this could happen. It is true that inflation does not affect everyone in the community to the same degree. It is much more damaging to those on fixed incomes and those who export. The unfortunate thing is that inflation leads to action which affects everyone in the community as governments try to restrain inflation.

I am not attacking the responsible unionist or businessman but it must be understood by the whole community that it is not the number of dollars in the pay packet that counts but what each of those dollars will buy. Increases in the pay packet are a cruel illusion when the buying power of each of those dollars is eroded by inflation. There is a real need for wage and salary demands to be geared to real increases in productivity. The Government has taken a lead by measures to reduce the demand pressures in the economy. It has brought in monetary and fiscal measures to achieve acceptable levels of consumption. It is cutting Government spending to reduce the pressure of demand for goods and services. It has suspended investment allowances for manufacturers to help ease excessive pressures on construction and the demand for skilled labour.

Complementary action is needed, and this action must be taken by the Australian people as a community. Responsible restraint by unions and industry is needed. The Government has not intervened directly in this area, but it must certainly find itself coming into conflict with any irresponsible action by unions or industry groups to increase wages and prices unnecessarily. Excessive wage and salary demands, illegal strikes, defiance of the law or irresponsible use of bargaining power must be met with firm opposition from this Government.

In the area of prices, a close watch is being kept on the operations of the Trade Practices Act. Various means of strengthening its effectiveness will be considered by the Government. On the question of price control I want to say merely that I believe this method of controlling inflation has been discredited by the experience of those countries which have tried it. Surely it is far better to approach the problem of inflation with an informed and responsible community itself finding solutions rather than bringing in bureaucratic controls. Inflation is the concern of everyone in the community and solving the problem of inflation is the responsibility of all. The fight against the evils of inflation must be fought at every level. We are all involved. There must be a new pattern of behaviour in the Australian community’s approach to wages, prices and investment.

We must bring about a change in the national psychology of inflation if we are to break out of the inflationary complex in which rapid wage and price rises are becoming built into community expectations. This psychology flows like electric current into a motor, causing a faster and faster rate of revolution of the inflationary spiral. An inflationary psychology in the community tends to compel people to offset the effects of inflation by seeking higher and higher wages and prices to protect themselves. In this way, inflation feeds on itself. The Government is determined to give a lead to the community in trying to change this kind of thinking. As a nation we cannot allow this psychology to continue.

Inflation cannot be condoned: it must be arrested to the greatest degree possible. In 1961 it was stopped, but the community was so jolted in the process that there were unfortunate and undesirable side effects. Inflation is the insidious white ant that can undermine the very foundations of the stable structure of our economy. It can undermine and destroy the standards of living to which Australians are entitled through their bard work. By cautious and prudent action, and by displaying purposefulness and resolution, the Government is determined to come to grips with inflation. Until the need to do this is recognised and accepted by al] Australians there will be many unfortunate victims.


– I support the amendment moved by the Leader of the Opposition (Mr Whitlam). The 1970-71 Budget is now an anachronism. The Government has been galvanised into activity by the rather unique release of a Treasury report by courtesy of the publicity of Messrs Newton and Walsh. Of course, for the first time, we get a glimmer of the truth in contrast to the normal behaviour of the Government which relies upon both obfuscation and obmu- tescence. There has been a great flurry in the Government dovecote in recent weeks, due to the unprecedented post-war increase of 1.9 per cent in the cost of living index prior to the Arbitration Commission’s decision.

The last Budget contained a snide tax reduction in preparation for an electioneering Budget for the impending Senate campaign. At the same time it horrified orthodox economists with an 1 1 .2 per cent rise in Government expenditure. The Government gave, with one hand, a fictitious income tax reduction and, with the other hand, took it away by indirect taxation. It has been correctly said that no-one with an income of less than $6,000 a year benefited by the Budget. Those with incomes between $6,000 and 510,000 a year received a little. Those with higher incomes benefited by the Budget.

This Government, of course, has always had a vested interest in inflation. If honourable members want proof of that they need look only at the income tax structure which has remained unaltered, except for a 2* per cent variation, over the last 15 years. One of the more unique features of the Budget which appears to have escaped the attention of the Australian people is that there was a little nest egg of $634m buried away in it - more than what the Government needed for its current outgoings. The purpose of that was so that the Government could subscribe to its own loans or pay out those bond holders who wished to redeem their securities.

If one looks at the statement of the Prime Minister (Mr Gorton) one can discern his theme. He says, in effect: ‘There has been an increase from $7,882m to $8, 124m in the Budget expenditure - a rise of $262m. I intend, for publicity purposes, to put on an act to impress the Australian people, and cut it back by $75m. The residues I will finance in this fashion.’ Here again we are indebted to the revelations contained in the Treasury report to which 1 have previously referred. The Government anticipates that the 6 per cent increase will pump between S900m and $950m for a full year info the national economy in increased wages. For a half year the yield will be $1 15m to $120m by way of income tax. This is just a nice little nest egg to offset the $167m.

To take it a stage further, in the 5 months remaining in the fiscal year, with the abolition of investment allowances, the Government would recoup another $25m. In addition to that, with escalation of the wage tax scales, with everyone going up into a higher group, another $40m would be added. Further, the Government has a particularly high redemption programme in the next 7 months with a little matter of $61 lm worth of loans maturing. The Government proposes, because it is rather difficult today with the lack of confidence on the part of the Australian investors to get new money into Commonwealth loans, to have $634m up its sleeve and to put this amount through the Loan Consolidation and Investment Reserve into loans, or in this case into redemptions, and save itself the better part of another $30m. In other words, by some nice handsome sleight of hand the net impact of the Government’s proposal is very little in terms of its actual income.

The people who have been ignored in all of this are the pensioners. Before they had even received their 50c increase they had lost it by the immediate increase in inflation which resulted from the last Budget. The victims of inflation are always the aged, the poor, the unskilled, the civil servants, the small savers, the superannuants and’ the holders of small life assurance policies. Finance for schools, hospitals, housing, roads and harbours is to be cut. The whole of the State infrastructure upon which this national Government depends for its income sources is to be cut. The six States are to be reduced to a mendicant status. More than that, the six State Premiers have been treated like schoolboys. They receive one-third of the total revenues. They actually have to bear the burden nominally - and I will come to this later - of about three-quarters of the total loan indebtedness. But in actual fact the Commonwealth is still continuing to finance its capital works from revenue. There are financial relations and financial practices between the Commonwealth and the States which would horrify an orthodox economist if they were fully revealed. Today the Commonwealth is holding in State bonds an amount that is equal to its total capital debt. Worse than that, the Commonwealth is lending surplus revenue to the States and charging them interest on it.

The present problems as I see them are as follows. We have a record rate of increase in the cost of living. Record interest rates are being paid on Commonwealth bonds and charged by banks to borrowers on overdraft. We have record redemptions of maturing loans and minimum subscription to long term bonds. The last two cash and conversion loans at the end of 1970 were relative flops. The new money that came during the last half year amounted to $55m. In contrast $120m was received for the previous half year. Record interest rates have been charged on housing advances and the extra burden on the average young couple is anything from $2,500 to $4,000, depending on the period of their loan. There is record credit being issued today outside the control of the Reserve Bank. Record interest rates are being paid by prime borrowers for company debentures. Firms such as John Lysaght (Aust) Ltd are paying 9i per cent and 9b per cent is being paid by leading Melbourne retailers. Record borrowing rates are being paid to overseas lenders and the Government is prepared to offer even more. The last loan that was negotiated was at 7.75 per cent with a further provision for escalation in the event of an alteration of the exchange rate.

The Government had its fingers burnt when it floated a loan in Deutschmarks at 7 per cent following an upward valuation of the Deutschmark. Record remittances are being made to overseas companies that operate in Australia. In fact, we are coming to the point in 1974, following the forecast of the Vernon Committee’s report, where the outflow of our commitments - interest, royalties, dividends and so forth - will equal the inflow of capital. There is a record postwar low in the open market for Commonwealth bonds, thanks to the Government’s decision last year in a hamhanded way to up the long term Commonwealth bond rate to 7 per cent. People who a few months before had bought Commonwealth bonds in the expectation that they would be able to sell them in the normal way, less a nominal fee for brokerage, have found that the value of these bonds has dropped. In fact, in the case of some of the older bonds, a bond worth $100 is ranging in value, according to ils interest rate, from $85 to $96. This is scarcely a way in which to encourage future investments on the part of the general public.

There is a record postwar low for wool prices and a record unsold surplus of both wool and wheat. There is a record public sector debt and crisis. One-third of the rural community is in an, impossible position. There are record State loan debts and State Budget deficits. There is a record scale of shipping freights which is being imposed upon the Australian exporters and particularly on the primary producer. There are a record number of restrictive agreements which have been registered under the Trade Practices Act. Record percentages of wages and salaries are being paid under the present crushing taxation scale. There have been record company crashes. Mineral Securities Australia Ltd, or Minsec, is *he latest example. There have been a record number of stock exchange scandals, and public confidence in stock exchanges is at an all-time low. There is record foreign ownership of Australian natural resources. Finance is government and control of credit and the issue and stability of currency is a major function of government. It was Keynes who said:

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.

That applies whether the society is capitalist or socialist. It is nice to note that the Treasurer (Mr Bury) is at the table because I want to quote a remark made by the Prime Minister. He said in April 1970, contradicting the Treasurer:

The consumer price index is a bit higher than it ought to be, but it is nothing which anyone could regard with disquiet.

I say that today Australia regards Gorton and Gortonian economics with disquiet. We have inflicted upon us a presidential style of government with jawboning, guidelines and off the cuff decisions which result in hit or miss results. The Prime Minister would never use an economic knife or scalpel when an axe or bludgeon was at hand. His is capricious; he is uncertain and pragmatic. But even he now sees the need for national restrictive trade practices legislation to be introduced. He awaits, of course, belatedly the decision of the High Court in the Concrete Pipes case. But 1 repeat the offer of the Leader of the Opposition that the Prime Minister go to the people. He should go to the people not only on the question of restrictive trade practices but also on the question of prices. Price control would sweep the Australian community today if it were submitted to it by way of constitutional amendment.

In the time remaining to me I would like to illustrate my point. Prices control is always rubbished. Let us take the case of a recent increase in the cost of a pair of shoes which formerly sold at $15 and which have been immediately upped by 6 per cent to $16. The price of these shoes from the manufacturer was $10. The actual labour cost component was 30 per cent of that $10. The actual increase of the 6 per cent was a matter of 18c; yet immediately that is translated into a $1 increase in the price of these shoes. That is the type of thing that needs to be controlled, lt can be controlled only by a tribunal, established on a national basis, which can deal with all proposed price increases. The control of prices is a weapon. It is a serious weapon. It is a deadly one. But it can be used with discretion. It can be used with common sense. It can be used to make sure that the worker is no longer to be filched of his true earnings.

Here 1 wish to deliver a Parthian shot byreferring to a statement made by Mr Colin Clark, a well-known economist. This statement appeared in yesterday’s edition of the Sydney Morning Herald’. He said:

Some people put the blame on rising wages. Some more specifically, put the blame on the Arbitration Court: or on Mr Hawke as an advocate. But they are wide of the mark. Rising wages are a consequence, not a cause. The decisions of the Arbitration Court may make some difference to some public employees, and to others who do not have strong unions: but generally speaking, the Court does no more than follow what would have been the movements of the labour market in any case.


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

Treasurer · Wentworth · LP

Mr Deputy Speaker-

Mr Foster:

– Ah, at last! Where has he been? There are not many people in the House to listen to him.


– I guess that I shall be here long after the honourable member for Sturt as indeed 1 was here long before him. The Leader of the Opposition (Mr Whitlam) did pursue in his speech his normal course of going all round the mulberry bush with bits and pieces from here and there. But what the Leader of the Opposition has never done - I do not say that some of his lieutenants have never done it, but this is a serious omission on the part of a party leader - is to sketch out or to delineate what the total economic policy of the Australian Labor Party under Whitlam would be.

Mr Hansen:

– Why should he?


– Why should he? I could think of a good few reasons why he does not do it or does not want to do it. But he has never produced anything which would stand up and which would be a feasible consistent policy. What he has done consistently is to lead this country in the direction of advocating more and more public expenditure.

If he addresses a meeting of scientists, he says: ‘Oh, but you have not enough resources. Labor would see that resources were provided for you’. He goes to a meeting of town planners and states: ‘Well, look at what has happened. We need to re-plan our cities and to rebuild the roads’. These things cost millions of dollars. But the Leader of the Opposition says that these would be provided by a Labor Government. Everything that he says in practice as to what the Labor Party would do or would not do does brand him as someone who, in office, would be fiscally flabby.

He did mention a number of things. One was - this was repeated by one of his echoes, the honourable member for Cunningham (Mr Connor) - that the Government ignored Treasury advice. Now, this is extraordinary to me. I read this statement in the Press. I do not know where it comes from. In fact, the Treasury has given the Government an extraordinary amount of advice in the last month and it certainly has not been ignored. The honourable member for Cunningham repeated the charge of the Leader of the Opposition that the only information that was obtained had become known because a Treasury document - he said a Treasury report - had been published in the financial Press. Now, I do not need to repeat the fact that this alleged report was a document of low status. At that stage, it was a document compiled by a number of junior officers and. as is the practice in the Public Service, it was sent to their opposite numbers concerned with these matters in other departments. On the basis of this document, these officers discussed this subject with each other and exchanged views. Eventually such a document goes to their seniors and emerges, perhaps some of it still left, in the final document which is placed before the Government.

It certainly is quite untrue to charge the Prime Minister (Mr Gorton) with just brushing off Treasury advice, whether through me or not through me. In fact, the Prime Minister, the Treasury and myself have a very close and continuing relationship. Any suggestion that the advice of our experts is just brushed off or ignored by the Prime Minister or the Cabinet is utterly absurd.

I noticed one or two things that I thought might have been mentioned perhaps in the first place by the honourable member for Grayndler (Mr Daly) when speaking on legislation concerning immigration in the last 2 days. I refer to the recent speech that the Leader of the Opposition made at the Labor conference held in Brisbane. Now, for many years, dating back to the start of immigration with Arthur Calwell, the Labor Party al least has had a very consistent, easily understood and quite plain immigration policy. Now we have a new Labor doctrine on immigration. I do not know whether it goes beyond the Leader’s sort of private remarks made in the atmosphere of the moment, but the new Whitlam policy in regard to immigration is to bring to Australia the relatives of those who are here, but not to bring new members of the work force.

Wherever this controversy may settle - and a lot of people have different views - it is quite plain that the advantage that we get immediately out of the immigration programme is the acquisition to the work force of skilled workers who are immediately productive. The disadvantage is their dependants and relatives who come here not contributing anything to the work force or to the immediate income of the country but setting up a great deal of demand. In other words, the present Whitlam policy is to take the worst of both worlds. I do not know whether this new scheme will emerge as the new immigration policy of the Australian Labor Party. It would be interesting to know because the Opposition spokesmen on immigration, as well as other people, over the years have pointed out that the one thing that cannot be done with an immigration policy is to turn it on and off suddenly for temporary reasons. Ti such a policy is switched off, it can be a very difficult thing to revive again. Of course, it always can be cut right down but this is a most novel suggestion on which I think we need to hear the Leader of the Opposition expand in the near future.

The Leader of the Opposition and the honourable member for Melbourne Ports (Mr Crean), if I am not doing him an injustice, rather pooh-poohed the cuts that we have made in expenditure as being of relatively little account compared with the huge total expenditure of the Budget. Total Commonwealth expenditure proposed by the Budget was $7,783m. Out of this amount, $2,708m was for the States. This amount has not been cut. We are keeping up our payments to the States which represent over one-third of our total expenditure. This is the amount that we find for the States. Also, $l,473m is provided for welfare payments. Obviously, those payments canot be reduced for the rest of the financial year. The sum of $104m is provided for debt services. Debt services are something which are a fixed commitment; they cannot be reduced. These items total approximately S4,300m or well over half of the total proposed expenditure in the Budget. The area for possible reductions is very much reduced.

When we consider that, at this time of the financial year, most of the original expenditure appropriated has been committed already, it is very difficult to impose a cut of meaning at this stage. But this cut is part of the general picture of the economy as we see it. A number of people have referred to inflation. It clearly is a very considerable worry. My predecessor, the present Minister for Foreign Affairs (Mr McMahon), expressed concern when he was in my chair. I did myself at the time of my last Budget Speech. But we do not want to get this matter out of perspective.

Dr J F Cairns:

– The Treasurer still has 7 minutes in which to speak. 1 do not know how he will be able to fill it in.


– I thank the honourable member very much for filling in some of it for me, but I am not very grateful. The economy was, until about the end of last year, in a state which caused no grounds for excessive worry. It is true that the consumer price index was high in December, that this caused concern and that some action had to follow, but it was the huge overall increase in the national wages bill as a result of the national wage decision that has- increased these worries. In international terms Australia has done extremely well in controlling its rate of inflation. The Leader of the Opposition referred to the four Liberal crises when we brought in drastic measures, but on an international comparison Australia has been doing extremely well. Our consumer price index in 1970 rose by 4.9 per cent. The rises for the first half of last year in the consumer prices of other countries are as follows: Japan, 7.9 per cent; the United States of America, 6.1 per cent; France, 5.7 per cent; the United Kingdom, 5.4 per cent; Italy, 4.9 per cent; and Belgium, 4.2 per cent.

The real worry that the Government has and in relation to which it is now taking measures is of course the rapid inflation in wages and salaries. This is not the only element in the economy but it is the one which, over the rest of the Western world, has brought about continual rises in costs and prices. It has in the countries to which I have referred been forcing a rate of inflation- which is positively frightening. We have to avoid allowing the same process to operate in Australia. The rate of increase in salaries and wages in Australia has been accelerating in recent years. In 1965 average weekly earnings rose by 3.5 per cent. Over the years since then they have been increasing. The yearly rates of increase since 1965 have been 5.6 per cent, 6.3 per cent, 7.7 per cent, 8.7 per cent, and last year it was 8.9 per cent. It is quite clear that with productivity rising at the rate of about only 3 per cent per annum there must be a very considerable continuous increase in. costs. This is a progressive movement, and it feeds on itself. This pace of increase is of course the alarming thing we have to deal with at the moment.

It is true, as the Leader of the Opposition said, that we cannot really distinguish between cost push inflation and demand inflation, but if cost push inflation continues at the rate at which it has been increasing it must spill over to demand. We will have in the next few months increased demand arising from wage increases, and this is our danger. At present we have two major sources of excess demand. One is private investment, including investment in plant and equipment, which in the last quarter of 1970 was about 24 per cent above the figure for the corresponding quarter in the previous year; and the other is investment in non-residential building and construction. These are the two spheres in which we can act and to which we are currently addressing our attention. But we have this continuous cost push factor and, if costs go up, inevitably prices go up.

Several speakers have stated that we should be pursuing a course of prices control. The honourable member for Cunningham referred to prices control in a general way but did not talk about complete prices control. When prices control was operating successfully in this country, which has been only once - that was during World War II - prices were controlled and costs were controlled also. They were controlled by two main means. Firstly, all wages were controlled, lt has been stated that wages are controlled now, but they are not. The Commonwealth Conciliation and Arbitration Commission fixes a floor; it does not fix a ceiling. Secondly, and importantly at the time, manpower was controlled. These two measures are quite unacceptable to most Australians. To advocate a hard and fast price fixing system, which has been done quite extensively, is to propose measures for which we know - this was made manifest in a referendum on the subject in 1948 - that the Australian people will not stand. We would simply be deluding people if we led them to imagine that the Government could introduce prices control and keep all prices fixed and thus avoid the results of inflation. If or when demand begins to get out of hand, we shall take further action; but the action we have taken so far matches the situation which has developed.

Dr J F Cairns:

– The Prime Minister (Mr Gorton), the Government and almost everyone else now assert and agree that there is a serious and even critical national problem - the problem of inflation. If this is so, the Government does not deserve the confidence of the House and the people because what it proposes to do about this serious and even critical problem is insignificant, inappropriate, unfair and even ridiculous. Inflation is generally defined as an excess of demand for goods and services over the supply of them so that there is a continuing increase in prices fast enough to be unacceptable. But there is never a similar excess of demand for every kind of goods and services, and many people never have an excess of demand for goods and services.

If we are to deal with inflation, we have to know where the excess demand starts and who contributes to it. We deal with inflation by dealing with those who start it, and we stop it from starting if we can. We do not wait until it has gone on for a year or more and then try to deal with its effects. That is what the Government has done. That is why it does not deserve the confidence of this House, lt has watched inflation begin. It was aware of where inflation was beginning and it did nothing about it.

The ordinary citizen or worker does not have the power to start or carry on inflation. If he is a pensioner, he depends upon the Government to increase his pension so that he can increase a little his demand for goods and services. If he is a worker, he depends upon his employer to grant him an increase in wages so that he can increase his demand for goods and services. But the Government never grants an increase in pensions unless prices have increased already. Employers never grant an increase in wages unless the Commonwealth Conciliation and Arbitration Commission has decided that they can afford it or unless the employers themselves know that they can afford it. Most ordinary citizens are not able to start inflation or to carry it on. The best they can do is to try to follow the inflation that is started and carried on by others, and always after a long delay, and to a far lesser extent can they improve their position. Wage increases are a result of inflation, not a cause of it.

Who then is able to start inflation and carry it on? First of all. there are the trading banks. They can lend out money far in excess of what is deposited with them. They can create money. Secondly, there are other finance institutions such as hire purchase companies, which have close links with the trading banks and which can even more easily expand demand than can the trading banks. At present more money is being put into circulation by these finance institutions than by the banks themselves. They were formed to escape the Reserve Bank’s control on the trading banks, so that they could lend free of its controls and at much higher rates of interest. They have become an alternative banking system able to innate the economy outside Reserve Bank control and at the highest possible rates of interest. The Government permitted this and agreed with it. The third area in which money can be obtained as a result of pure economic power is that of the few hundred giant companies which can take vast sums of money from the public for the sale of their products enough to cover all costs and to provide for great programmes of expansion and take-overs as well. They are independent of both the shareholders and the banks.

The average citizen - the worker and the pensioner - is not in the same position as the banks, finance companies and giant industrial concerns. He cannot get money unless somebody else gives it to him. The banks, finance companies and giant industrial concerns can get money which is not subject to the say-so of anyone else. This is where the power to cause inflation lies. To start inflation and to keep it going one has to have economic power. One has to be able to get a large supply of money as a result of making one’s own decisions. Those who have the power to start inflation and carry it on can be seen from the statistics of company taxation. In 1967-68 there were a mere 936 companies in the whole of Australia - a mere .74 per cent of all the companies - that had taxable income of Sl,782m or 56 per cent of the taxable income of all companies. The remaining 138,175 companies had the remaining 44 per cent of income and they would be small companies without any real power at all. The power to determine prices, and therefore to start and carry on inflation, lies with some of these 936 giant companies.

The power to determine prices is the power to start and carry on inflation. Inflation cannot be dealt with unless that power is dealt with. These companies can turn away from stock exchange speculation when it suits them, bid up the price of land, erect multi-storey office buildings, take over companies until the snowball ceases to roll and then millions of other people have to pay for their power and folly. Not only is this so but the Government was told that it was so by its own Treasury Department. The ‘Treasury Information Bulletin’ of January 1970 - that was over a year ago - told the Government what was happening. On page 1 it stated:

The growth in demand continues to be led by private investment spending . . . private fixed investment spending was 15 per cent higher than a year earlier. Bank lending has been growing steadily in recent months . . . total trading bank advances outstanding were over 11 per cent higher than a year earlier.

That was a clear enough statement and that came from the Treasury to the Government. In April 1970 the ‘Treasury Information Bulletin’ made it even more clear. Again on page 1 we find:

Private business expects a massive growth in capital outlays during the current year.

Such a massive growth in capital could not take place without inflation. The Government, however, did nothing about inflation at the time when it may have been prevented. And so it went on. The ‘Treasury Information Bulletin’ of July stated again exactly the same thing:

In total, during the first three-quarters of 1969-70, private fixed capital expenditure rose very strongly and the indications are that this trend has continued in the categories of plant and equipment and non-residential construction.

But this was not the case in other things. The same ‘Treasury Information Bulletin’ reported:

There was however a fall in dwelling commencements for the June quarter.

Inflation is not too much money and demand everywhere. Inflation is too many multi-storey office buildings for business concerns and too few homes for the people. But again the ‘Treasury Information Bulletin’ went on warning the Government. In October 1970 the ‘Information Bulletin’ said on page 1 :

Preliminary indications are that the very strong rate of growth in demand have moderated . . . Non-dwelling private capital expenditure, however, continues to grow strongly; businessmen expect to spend 30 per cent more on new buildings and structures and 18 per cent more on new capital equipment in the first half of 1970-71 than they actually spent in the first half of 1969-70.

I think it should have been obvious that this was physically impossible to fit into the economy. This kind of massive growth in big business expenditure, based on massive big business profits derived from the power of massive big business to fix its own prices, could not go on without serious inflation. How can the Treasurer (Mr Bury) come into this House and say as he did that the Government was not warned by the Treasury about what was happening? How can he say that the Government did not ignore the Treasury advice? lt was impossible for these massive profits and outlays to take place without some increase in wages occurring but the Treasury is convinced that this massive big business activity should go on without any increase in wages and the Government accepts it, believing that it should go on, too, without any increase in pensions. The Government could have got away with this scheme of allowing its massive big business friends to inflate the economy in this way had it not been for the national wage decision at the end of the year. That is the thing that upset their apple cart of inflated profits.

The ‘Treasury Information Bulletin’, however, showed as 1970 went on that massive business operations were becoming even more massive but that other forms of outlay were already falling behind. Inflation is never too much money or too much spending everywhere. It is always too much in the hands of some people. Inflation does not come about because of anything that the average citizen, the average farmer or the average businessman does. Inflation is not too much for pensioners, lt is not too much for average wage earners. It is not too much for education. It is not too much for the aged and the sick. It is too much for the banks, the finance companies and the giant industrial corporations which increasingly have their head offices in some other country. The crucial thing about inflation is that it is a result of economic power and it is derived from economic power. It is caused by the ability of the giant business concerns to take money from the public otto create it themselves to use their vast resources to increase further their own wealth and power. Like everything else inflation is a matter of economic power and the more power one has the more one can cause inflation and the more one can gain out of it. Inflation cannot be dealt with unless there is some countervailing of this economic power.

Inflation cannot ever be dealt with unless the Government acquires enough power and builds up a system of national planning to arrive at programmes of private investment as well as public investment which are not in excess of what the nation s resources can carry and ensures that no business concerns or any other concerns exceed those requirements. But, of course, Conservative governments will never do this. Normally the Government decides to cut expenditure right across the board which hits people who have never contributed to the inflation and leaves those who have in fact caused it free to continue on their way. But if we can judge what the Government has done now about inflation we can say that there is no problem of inflation in Australia. First of all, the Government has called upon those who caused the inflation for restraint, but voluntary restraint cannot work. Which large business concern will restrain itself so its rivals can take its market? This has only to be stated to be seen to be completely inadequate. Then the Government proposes to cut its own expenditure. Certainly in its own expenditure the Government has power to contribute to inflation and the present Government and its predecessors have allowed some forms of government expenditure to expand to extravagant levels.

The 1970-71 Budget was an example of this but there are some forms of government spending that should never be cut to deal with inflation. There must be no cut in pensions, but there has been a cut in pensions because they have not been increased in the face of inflation. There must be no cut in health services and housing for the average citizen, but there has been a cut in health services and housing for the average citizen. There must be no cut in education, but there has been a cut in education because it has not kept up with the rate of inflation. What can be done about inflation? To deal with inflation I submit we have to prevent it from happening. We do not wait for it to happen and then try to deal with it. We deal with inflation as it is occurring and where it is occurring and, as I have said and as the Treasury Information Bulletins’ confirm, inflation starts with the giant business concerns, the banks and other concerns and the great industrial empires which have independent power to get money and to use it to determine their own rate of growth. In dealing with those companies something can be done by use of the powers of the Reserve Bank of Australia but there are weaknesses in those powers. In dealing with the giant companies that cause inflation something can be done by taxation but it must not be forgotten that those giant concerns have the power to avoid taxation by passing it on in their prices as they have with everything else. The crux of inflation policy has to be that the giant concerns must be made subject to the same controls as apply to everyone else. Their price policy must be subject to control by the people through the only means available to exercise that control - this national Parliament.

There must be a national plan for economic growth and we must establish the planning institutions able to put it into effect. It is completely negative and irresponsible for speakers on the Government side to ignore the possibilities of developing these institutions that have come about in almost every free enterprise country in the world except Australia. Without this we will simply go on forever in this stop-go process of inflation and deflation. Li no other way can inflation be dealt with. In no other way can justice be done to pensioners and other lower income earners. In no other way can the crisis in education be solved. In no other way can the power of the giant companies be prevented from dominating this nation and its people. Unless an Australian government is prepared to devote itself to this objective it cannot earn, and it. should never be given, the confidence of this House or the Australian people.


– This debate initiated by the Opposition is a remarkable one. The Australian Labor Party is a Party which has a habit - perhaps a policy - of promising everything to everyone; more for education; more for local government; more for conservation; more for urban renewal; more for the pensioners and at the same time it would double the number of pensioners by the abolition of the means test. The Opposition promises more subsidies for agriculture, more of this and more of that. This is almost endless and then it adds the 35-hour working week. A simple question such as ‘where is the money coming from?’ brings forth the attitude of ‘Do not confuse us with facts’. As the honourable member for Melbourne Ports (Mr Crean), who is the shadow Treasurer, said last year;

I suggest that there is in Australia an undue obsession with inflation.

The Leader of the Opposition (Mr Whitlam), who is prepared to promise anything to anyone, in the last Budget debate said:

Happy is the country where $32,000 is a middle income.

He omitted to mention that in his inflationary Labor paradise $32,000 probably would not buy as much as $3,000 does today.

As a nation we are not as affluent as is sometimes suggested. It is true that under a wise government ours is a country which has grown steadily richer in the last 20 years and should it continue to have a stable government we can expect this trend to continue in the future. But nevertheless we cannot do everything at once. We must make choices. Should we try to do everything at once as the Opposition would have us do the result would inevitably be galloping inflation and the destruction of our society and its values. Perhaps this is what the left wing of the Opposition would like to happen.

I think honourable members opposite should study some of the words used by a former Commonwealth Treasurer who said: 1 am deeply grateful for the support that my colleagues have shown me in my fight against the great danger of inflation. I know that some of them have not readily seen the force of many of the economic theories on which I have had to act.

Those words were used by the late Mr J. B. Chifley quite some time ago and I have no doubt that if he were alive he would still adhere to those remarks about the dangers of inflation and the lack of understanding of the economic theory by the Labor Party.

Mr Crean:

– And inflation took place after that and it was the fastest in the world.


– At least he was aware of it. The members of his Party have now forgotten it. He was aware of the dangers of inflation and the damage it would do to our society. Inflation causes industrial turbulence; it discourages savings and makes exports more difficult. It harms those on fixed incomes and at the lower end of the economic scale. Perhaps most importantly, as was pointed out by the Organisation for Economic Co-operation and Development the other day, inflation tends to strengthen other forces making for disenchantment with governments and existing political parties. Honourable members opposite, as they flirt with inflation in the hope of electoral gain, should ponder those sober words. But inflation is not a problem peculiar to Australia. It is a post-war disease of the whole world. In fact in 2 decades of Liberal rule Australia has achieved a remarkable combination of steady growth and reasonable control of inflation. Now that balance is threatened by forces, some of which are not and constitutionally cannot be under the control of the Government. Nevertheless the danger of inflation to our society and our economy is so serious that the Government must be prepared to take all useful actions within its power. Clearly it is . prepared to do this. Control of inflation is partly psychological and it would be greatly helped if this Parliament were to itself firm in its determination to fight. Lack of determination in this cause by honourable members opposite will in the short term damage the nation and in the long term destroy their own Party.

The question of what measures we should take to control inflation without halting our expansion is a desperately difficult one to answer. Someone said the other day that if all the economists in the world were laid end to end they would all point in different directions. I should have thought this barbed shaft could more appropriately have been aimed at honourable members opposite. The Prime Minister (Mr Gorton) has announced several measures to control inflation and is clearly determined to lake more action if necessary. In many ways the most significant step was the decision to review tariff policy. This even produced a comment on tariff policy from the Leader of the Opposition (Mr Whitlam) which must have outraged at least 8 of the 9 sections of his Party.

What should we do about tariffs? Tariffs have served us well in the past. They have enabled us to build up great secondary industries which never would or could have survived without tariffs. But our industrial pattern is changing. Twenty years ago the contributions of agricultural and manufacturing to the gross national product were approximately equal. Now that of manufacturing is 4 times greater. Twenty years ago our manufacturing exports were negligible. Now they are substantial and growing fast. With the decline in world prices for agricultural products they will have to grow even faster in the future unless we are content to survive merely as a quarry.

Some of the traditional arguments for high tariffs are quite unsound. The one that irritates me most is the claim that industry provides employment and that on that ground alone it must be protected. Then we have to import at additional expense immigrants to provide labour for the industry which provides the employment and so on in never decreasing circles - a feeling which honourable members opposite are no doubt familiar with. What would happen if we decreased tariffs? Weak companies would disappear possibly by absorption and there would have to be some retraining of labour. The results would undoubtedly be politically unpopular and special cushioning arrangements would probably have to be introduced. On the other hand moderately efficient companies would be forced to improve their performance in their use of their capital and their labour. This would be a clear gain. The efficient companies should be unaffected. A reduction in tariffs would also make it easier to export good products. We should not continue to try to make everything. Let us make more efficiently the things for which we have the natural resources and adequate capital and labour and import those things for which we do not. This would be much less inflationary and should improve our balance of payments.

Sweden, which has the highest standard of living in the world - higher than America - is an example of the successful implementation of such a policy. I should like to see the word ‘economic’ in the economic and efficient words of the Tariff Board Act interpreted to mean economically sensible to manufacturers in Australia. Many of the present high tariffs would pass this test but some would not. An exception to this rule must be our defence industries. The disintegration of the machine tool industry in recent years has been a tragedy caused, in my opinion, by giving protection on too wide a front but not giving adequate protection to the really important industries. Where an industry is essential to our defence capability it must be protected whatever the tariff cost may be. Of course, reduction in tariffs alone is not enough. We must improve our rate of growth in productivity, which is alarmingly low. The most obvious means of increasing productivity is to increase capital investment. Although I accept it as necessary I was sorry to see the investment allowance being made the first victim of the anti-inflation campaign. I hope that it will be restored as soon as possible, despite the feeling of the honourable member for Lalor (Dr J. F. Cairns) that investment spending is not desirable.

We must also make better use of the capital equipment we have, lt is absurd to see expensive equipment lying idle for twothirds of the time. The amount of shift work in Australia is deplorably low. These are big subjects in themselves. I mention them only because I want to make it clear that there is no single panacea for our industrial development problems. Is the Tariff Board suitable for developing such a policy as I have outlined? I think that the answer is clearly no. It needs public guidance from the Government on national industrial policies. The guidance must be public, because manufacturers before they invest capital must be able to make some estimate of the likely future for their products. The tariff level is a vital component of such an estimate. We have limited capital resources. We must give sufficient information to ensure that that capital is used wisely. Tariffs have served us well in the past. The time is now ripe to review our tariff policy. It is one of the key decisions of the 1970s. I am delighted that the Prime Minister is determined to look at it.

Tariffs are only one aspect of the antiinflation struggle. This House must show itself clearly determined to take all measures necessary, however unpopular they may be in the short term. I know that this will be difficult for honourable members opposite, for it seems that they will promise anything to achieve power, even if they destroy the economy in the process. The attitude of the Leader of the Opposition was described by a well known poet as ‘I promise you, I promise you, anything you want me to.’ Every group in the community has been asked what it wanted and then told: ‘That is Labor policy’ regardless of the impossibility of meeting all these promises at once. But the electorate is wiser than the Leader of the Opposition thinks and has rejected his second-hand Utopia. Now the Labor Party does not know where to turn. Its leader pushes his followers on with the rallying cry: ‘Now that we have lost sight of our objective we must redouble our efforts’. They obediently gallop off in all directions. They are in such disarray that they do not look like an alternative government; they do not even look like a credible opposition.


, who has just resumed his seat, apparently was not capable of reading from copious notes or even of going the full distance of a most limited time of 15 minutes. However, I am not going to waste much time on what he had to say in his criticism of what happens on this side of the House. What I want to do is remind inefficient people - parliamentarians such as himself - who see fit continually to support and jack up the false promises of their leader, the Prime Minister (Mr Gorton), that along with the Young Liberal contingent we had a visit to this national capital this week by the once leader of the Liberal Government in South Australia, now the Leader of the Opposition, Mr Steele Hall. He came into this chamber somewhat briefly, cast a glance along the front benches, went a mile up the road and addressed the Young Liberal gathering and said that if he were in office again or if he were to be elected to this Federal House he would suggest that Cabinet ought to be drawn from the public. No doubt he, though not a very clever person, was able to deduce that there was not much talent on the front bench and that we ought to rely on the outside public to provide Cabinet members.

The motion before the House is one of no confidence in the Government, lt is about time that this House carried a vote of no confidence in the Government because there was a vote of no confidence carried by the people in Australia at the last

Senate elections. More recently a vote of no confidence in this Government was carried in the New South Wales elections last Saturday. There will be a vote of no confidence in it carried by the people of Western Australia next Saturday, lt is about time that we joined the band and carried a motion of no confidence in the Government. What has the anti-Labor coalition achieved since it has been in office since 1949? The honourable member for Isaacs who is now leaving the chamber made some reference to what ihe late Benjamin Chifley had to say about a number of matters when he was Treasurer. The honourable member completely omitted to mention the. plan that the late Ben Chifley had for the nationalisation of banks. Portion of that plan has been accepted by the present Government, but with one important difference, ft has allowed fringe banking, which is largely owned by the existing socalled free enterprise banks, to reign supreme. On the point of inflation the honourable member made some reference to Ihe late Treasurer. I want to quote from a document which states that, in the year mentioned by the honourable member, Australia had the highest inflation rate in the world with the exception of one country, Austria, which was in one hell of a lot of strife as a result of the world conflict which had ended shortly before that time. So much for the honourable member for Isaacs. lt seems somewhat odd today that after having heard a very short speech by the Prime Minister the other night regarding the state of the economy and inflation - it lasted about 7 minutes, and I have been accused of making interjections in this House covering almost that length of time - the first principal speaker on behalf of the Government was none other than a previous Treasurer, and ihe present Treasurer (Mr Bury) was seen to leave the House. Whether or not he went along and had some violent argument with the Prime Minister. I do not know. But he finally came back here and gave a 15-minute slow drawl on what he considered ought to be done. Inflation has been caused by this Government. What my colleague said a few minutes ago in regard to who and what cause inflation is very true. 1 do not intend to go over that ground again. What I intend to do is make some brief reply to the Deputy Prime Minister (Mr Anthony) whose electorate most certainly carried a no confidence motion in him last Saturday. Incidentally, during the course of his speech the Minister for Labour and National Service (Mr Snedden) interjected now and again with a ‘Yes, yes’ regarding the reduction of production. The Government by its own actions and by its insistence at State government level has forced a reduction of production in the rural sector as a policy of the Government.

Mr Giles:

– What nonsense!


– lt is an absolute truth, and the honourable member knows it. The honourable member for Angas (Mr Giles) sees fit to interject. He has been part of the plan and continues to be part of the plan to reduce further the production of rural industries in this country. Yet we have had members on his side of the House this afternoon saying that the earnings from the rural’ industries are the principal income of Australia. What is this Party on the other side doing to the wool industry at the moment? The Minister for External Territories (Mr Barnes) was interjecting at one stage when a Labor member was on his feet. He said: ‘Would you increase the price of wool?’ lt is time he had enough sense also to realise that it is not so much the increase in the price of wool that ought to be concerning his mind as a so-called representative of a rural electorate; what he should be considering is a greater percentage to the producers. He should concern himself, as honourable members on this side should concern themselves, with the tremendous gap between what the producer gets and what the consumer has to pay. That is what the Government has to consider. It will not cure inflation by coming in here and suggesting as it has done over the years that one or two particular sectors of the community will have to bear the burden of the shocking inequalities it has imposed through the years. The Government has imposed absolutely shocking inequalities.

Its involvement in Vietnam has cost hundreds of millions of dollars, and this is unproductive money, to render three-fifths of a country. South Vietnam, impossible for habitation and vegetation for God knows how many years. If that is not inflation for goodness’ sake tell me what is. Has that not been the reason why the

United States has been in a position similar to ours? The only difference is that this Government is in a better position to tackle inflation than the United States is because, whilstthe United States involvement in Vietnam is a tremedous waste of money apart from the tragedy of loss of life, it is reliant for a large percentage of its employment on the production of war materials and equipment which this country is not. That is where our money is going. Coming back to what the Prime Minister had to say in regard to some immediate effect, he is going to cut down on a particular sector. He will cause kids to go back to school with less finance to provide for their further education, if they are fortunate enough to be able to avail themselves of it, or to walk the streets or go onto meagre unemployment benefit from the Department of Labour and National Service. The Prime Minister saw fit to make some criticisms of one of his Ministers over a guard that came to Canberra in the last couple of weeks. The fact is that the Prime Minister himself in the last few days has been entertaining at the Lodge what he considersto be the cream of the Young Liberal Movement in Australia, no doubt at the expense of the taxpayers. I read recently that some Commonwealth Government Departments will have floats in the Moomba Festival that will cost some scores of thousands of dollars.

The Government’s approachto curing an inflationary spiral of its making due to its irresponsibility will do nothing for the pensioner. For the Prime Minister to sit in this House yesterday afternoon and say he would not give consideration to a Budget which would have the purpose at least of giving some consideration to the position of those on fixed incomes and those on social welfare benefits, was to display an arrogant and absolutely pigheaded attitude. It could not be described as anything else. His attitude is one which is absolutely pigheaded and stupid. What then did the honourable member for Isaacs consider he had to be proud of when he stood only a few moments ago defending - as one would expect himto defend - the business interests of this country. When I talk about business interests 1 am talking about the huge take-over organisations, the huge monopolies that are allowed to grow here, and the 1,300-odd companies that sit over in Norfolk Island dodging their taxation responsibilities.

Mr Dobie:

– It is nice weather.


– It is good weather and as far as this Government is concerned it is in the same climate. It considers it is in good weather when perhaps it is not. The fact is that it has a responsibility to ensure that these companies which are registered in Norfolk Island and dodging their responsibilities pull their weight because they are getting their profits out of the people of this country. The Government is helping them get away with one hell of a racket: it is no more than that. Then the Treasurer gets up and says: ‘Of course, the Department considers it has certain powers for extracting taxation from those companies as though they were registered in Australia’. What I am getting at now that the honourable member for Isaacs has returned to the chamber is this.

Mr Giles:

– He never left it.


– Yes, he did leave it. Do not tell lies. He left it all right.


– I suggest that the honourable member for Sturt curb his language during his speech.


– I spoke the truth. I do not want to waste mytime debating whether or not the honourable member for Isaacs left the chamber. He was expected to make the type of speech he made this afternoon because he belongs to a party which represents what? Big business, wealth and monopoly, the take-over, the get big or get out’ attitude. That is the party he belongs to. That is the party he represents. It is a big business oriented party and he stands here and makes criticisms of industrial organisations. He does not make criticisms of pensioner organisations because he lacks the courage to do so, but he does a far worse thing by completely ignoring the wants and needs of 75 per cent of pensioners in this country who are reliant on the dole and handouts that this Government saw fit to give them only in the last few weeks. Honourable members opposite stand here like a bunch of hypocrites. That is the only way in which they can be aptly and properly described.

They have sent the word along to big business undertakings that if they dare entertain any thoughts with trade unions of over-award payments the Government will do something to them so far as tariff proposals are concerned. The Treasurer, when he reluctantly and finally decided to stand in this chamber, said: ‘Well, of course the Arbitration Commission only set the floor and not the ceiling”. How hypocritical can he be?

This Government has sat completely idly by and watched the mineral wealth of this country being exploited because it considered it had to do no more than give handouts in some way or other to those who want to explore and take from this country our mineral wealth. The Government has done little or nothing to ensure that this country will grow as a result of the discovery of mineral wealth by at least giving us some plan for the production from that metal even of some mineral in ingot form. The Government has been in office since 1949. It has, as has been said in this House this afternoon, gone through a number of periods similar to the one the country finds itself in today. It still has not the good sense, the capability or even the common sense to lay down a plan. If it did have any such thoughts of laying down a plan it would most certainly go about it in the most stupid manner. In the last couple of weeks the Prime Minister again had coming to this city leaders in commerce, trade unions and what have you, pleading about the state of the economy. He has not the brains to insist somewhere along the line that it is about time there was a national plan. It is about time he changed his and the Government’s attitude to worker organisations in this country for the country’s good instead of hurling abuse at them day after day in Press statement after Press statement and having Press Secretaries to add to all of this. Why is not the Government prepared to sit down sensibly and soberly-

Mr DEPUTY SPEAKER (Mr Corbett) Order! The honourable member’s time has expired.

Minister for Labour and National Service · Bruce · LP

– The year 1970 showed to the public in Australia as a whole the increased use of the strike weapon to force up over-award payments and wages and conditions generally.

During the course of 1970 the time lost by industrial strikes grew to an extremely high level. In 1970 2.3 million man days were lost by strikes. The purpose of the strikes, of course, was to increase over-award payments and to win by threat of action or actual action improved conditions. All those wages and all those conditions add to the cost factor in the production of goods and the provision of services. During 1970 the average wage increased by 8 per cent. Forty per cent, or two-fifths of that 8 per cent increase was occasioned by overaward payments. Then at the end of 1970 there was a decision by the Commonwealth Conciliation and Arbitration Commission in the national wage case to increase national wages by 6 per cent. When this occurred there was a tremendous focus of public attention on wage increases and what they would do to costs and, in turn, what they would do to prices. Not unexpectedly, having regard to what had been occurring in 1970, early in January the Commonwealth Statistician issued his consumer price index series for the December quarter, which revealed an increase of 1.9 per cent in consumer cost prices.

At this point of time the Government and the public were very greatly concerned about inflation and the problem of how to deal with it. At this time the commentators and the public media generally, reflecting initially the concern of the Government and of the public, printed a great deal of material about inflation and made all sorts of prognostications. Then essentially, over a short period of time, it was elevated by the public media and by the commentators into a crisis situation, but it never was a crisis situation. What it required was a very close analysis of our economic position to decide exactly what problem we faced, to identify the nature of the problem and to measure the intensity of the force of the problem. Following on that close analysis we also had available to us the experience of other countries which had been confronted with similar situations during earlier years.

We have full employment in Australia and we want to maintain full employment. That is part of our national ethos and it is an objective subscribed to very vigorously by all political parties in Australia. In previous years we had quite a low cost increase in prices, and we want to return to that position. But in the analysis it was vital that the diagnosis of the problem was correct in order that we could apply the correct remedy, for to apply the wrong remedy would mean creating new problems, such as under-employment and under-production which other countries are experiencing, without curing the problem of inflation. “These other countries have under-employment which would be intolerable in the Australian sense of underemployment, but they still have inflation at a higher rate than we have. So we faced the danger that unless we made the right decision to cure the problem we would merely create another problem. Therefore, it was vital to decide whether we were confronted with demand inflation or cost inflation.

In examining that proposition we had to look at the current situation. That examination disclosed without any doubt that there was not an excess aggregate demand. At the end of January of this year the number of unemployed exceeded the number of registered vacancies. Nor was there any evidence of an internal excess demand spilling over into imports to satisfy demand spending. In recent months imports have been rising at a slower rate than gross national spending. There was other evidence to indicate that there was no excess demand. Overtime worked throughout the community was less than the peaks in the first half of 1970. Surveys conducted by the Associated Chambers of Manufactures of Australia and the Bank of New South Wales showed that the great majority of firms surveyed were not hampered by shortage of labour, materials or capacity. Industrial production was not increasing rapidly. In the December quarter, out of 34 indicators of production, 14 showed lower levels for the December quarter than for the same quarter of 1969. There was no evidence to indicate that the consumer spending growth was faster than productive capacity. At constant prices, retail sales value for the December quarter represented an increase of only1¼ per cent over the 1969 figures.

The economic outlook for 1971, as it appears, is that in 1971 there is an excess demand threat, but excess demand does not presently exist. Of course, there is always a threat of excess demand in a fully employed economy such as ours, but unless it can be regarded as a serious threat it is not a proper base on which policy decisions should be taken. In Australia there is a danger of excess demand. After the last Budget was presented other decisions were taken which could have resulted in an over-expansionary Budget. Private investment was a little over-ebullient, but the threats from these 2 sources were dealt with by measures announced by the Prime Minister (Mr Gorton) a few months ago. Current wage inflation does not necessarily mean that there will be an excess demand except temporarily, because prices will increase as a result of increased wages, and the money increases are likely to be illusory. There may be no actual excess demand for goods as distinct from excess prices.

There is a fallacy to which, I regret to say,too many trade union members and leaders and honourable members on the Opposition benches subscribe. It is that by increasing money wages beyond productivity people receive increased purchasing power. This does not increase purchasing power at all. If that happens it pushes up the price structure which hurts the exporter and those people on fixed incomes. There are sectional excesses now but they are not new and they are not worse than previously. This is not an explanation of the current pressures. The currect pressures are cost pressures which have arisen from the gap between the growth in average money incomes and average productivity. Average weekly earnings increased by 6 per cent in 1967 and 1968, by 9 per cent in 1969 and by 8 per cent in 1970, and in 1971 there is a danger that the rate of increase will accelerate, and consequently prices will increase. It is not appropriate to deal with this problem by adopting deflation policies because the problem is not one of general excess demand. Deflationary fiscal policies. which apparently the Opposition would like the Government to adopt - the Opposition has not analysed the problem but it believes that it can gain some political advantage out of the situation - are counter productive. They would raise prices which would further stimulate wage demands. Deflationary fiscal policies also would slow the growth of demand and adversely affect demand which would be likely to stop productivity growth.

The answer to the present problems is that there should be more restaints on wages, and the onus is on tribunals, union leaders, employers, the Government and the community to put restraints on wages to enable restraints to be placed on prices. Positive measures are required to combat the current inflationary situation. Some of those measures have already been taken. The short term measures have been taken. The longer term problem is to deal with something which must essentially be regarded as a longer term problem, and that is, we must avoid excess demand by maintaining general fiscal and monetary discipline. There must be intervention by governments before tribunals - not merely Commonwealth Government intervention, but also State government intervention - because more people are covered by State tribunal awards than by Commonwealth tribunal awards. Strong action must be taken to uphold the authority of tribunals when they have made an arbitration decision. There must be support for the resistance by employers to withstand unreasonable demands. Also, employers must be encouraged to absorb costs by achieving greater efficiency of management. We must use all our powers of persuasion and influence to restrain wages, costs and prices, because the wage earner or union member is not separable from the community as a whole. As much as possible we must diffuse technical and managerial knowledge through productivity groups, advice on personnel practices and things of that sort. We need publicity to encourage more productivity consciousness.

It is interesting to note that the Leader of the Opposition (Mr Whitlam), in launching this censure motion, made not one single mention of productivity. The greatest single factor that we have to face today is that we have to improve the real standards of living in order to allow the granting of wage increases without those increases effecting increases in prices. As I have said, the Leader of the Opposition did not say one single word about productivity. He volunteered the support of the Labor Party for constitutional reforms on a variety of issues. Why did he not offer the complete co-operation of the Labor Party and, so far as he was able to influence and persuade it, the support of the trade unions in improving productivity.

We should take action to improve the range and quality of training facilities and training methods. I have never heard an Opposition member in this House talk about the need to improve training for the whole community, to allow the individual worker to realise the full possibilities of his intellect, dexterity and skills so that he could improve his own position and thereby improve the quality of the manufacturing and productive services in the community. We need the promotion of a more efficient and socially desirable allocation of resources through tariff rationalisation, moral suasion of financial institutions and selected Government expenditure. We need new and urgent attention given to higher business management education and we need the encouragement of competition, internal and external.

In launching this censure motion the Leader of the Opposition said that the House has no confidence because of the Government’s failure to report to the House on the details and purposes of its monetary measures. The monetary measures were applied last April and have continued. They were fully reported to the House. The Opposition did not even choose to debate them. That was the first point made by the Leader of the Opposition. Secondly he referred to fiscal measures. The fiscal measure taken by the Government is the suspension of the investment allowances for plant and equipment. A Bill is before the House now. Thirdly, the Leader of the Opposition mentioned the constitutional position. The Prime Minister has indicated that we will not know our constitutional power until the High Court gives a decision in the pipe companies case which is before it. The Prime Minister said that if the decision is that we do not have power, we will have to consider going to the people. So the Government has reported on that aspect.

The fourth matter concerned industrial policies. I regret to say that we have been reporting constantly on the industrial policies. What we have not found is the slightest measure of co-operation or understanding on the part of the Opposition as to what our industrial policies are and how we are pursuing them. We have reported them, but they have passed completely over the head of the Leader of the Opposition and his followers.

One point in the long speech of the Leader of the Opposition will illustrate how unreliable was the totality of it. He said that between 1955 and 1970, wages, as a proportion of the gross national product, fell from 63.2 per cent to 61.7 per cent. He alleged a fall. If he examines the national accounts prepared by the Com.monwealth Statistician he will find that in 1954-55 the figure was 56.47 per cent and in 1969-70 it was 57.52 per cent. In other words it increased, not decreased, over the period. That indicates how reliable was the totality of his speech.


– The Minister for Labour and National Service (Mr Snedden) has attempted to tell the House that wage increases in Australia have been the real cause of inflation. He mentions, as the one positive action that should be taken, a restraint on wages. There was no mention, of course, of a restraint on big business which, on the very accounts which the Minister mentioned, is showing a gross national product increase of 40 per cent for the last 5 years. Big business, which is protected by outrageously high tariffs and is able to increase prices at will, makes record profits. That is the sector on which economic restraint should be applied today. The Government should strengthen the Trade Practices Act and try to encourage more competition in Australia. The Government speaks of productivity, but what we need is competition in big business.

The Prime Minister (Mr Gorton), by his own actions and by Cabinet action, unquestionably has given the impression to the Australian people that the Australian economy is critical and vulnerable to the possibilities of galloping inflation and a consequent collapse of the nation’s economic stability. The Federal Treasury has warned the Government of the consequences to the economy if the current rate of overspending continues in certain sectors of the economy. The Institute of Applied Economic Research, after intensive investigation, has found that the problem of inflation has moved now into the social and moral field. It says that the whole community is responsible for what now threatens and that the whole community will be affected by the disastrous effects both of accelerating inflation and of the policies needed to control it if it persists.

The rate of increase on consumer prices and wholesale prices in Australia is at a level which, if sustained or increased, will have a crippling effect on important productive sectors of the Australian economy. If one examines the economic indicators which are used to measure inflation, it can be seen that wholesale and consumer prices have shown a dramatic increase, running at present at anything from 6 per cent to 8 per cent. The disposition of the gross national product shows the weaknesses of certain sectors. The level of the monetary supply itself, and the velocity of that supply, indicate a serious position. The productivity factors - productivity per mim hour, including agriculture and excluding agriculture - all point to one thing, namely, an increase in overspending and an increase in inflationary pressures. All the economic indicators available point to a serious position unless the brakes are put on the economy.

The Minister for Labour and National Service spoke about wage increases, but wage increases are a consequence and not a cause. Economic theory would explain inflation in this way: An increase in spending in the Government and private sectors creates an accelerated business investment which, in turn, creates an excessive demand and together, when an excessive demand is measured in relation to productivity, if demand is rising at a greater rate than productivity, they create an inflationary force. When there is an increase in profits and an increase in prices there is a consequential increase in wages and at that point the cumulative forces of inflation are in full swing. Every person in Australia, except those who are making a lot of money out of inflation, is fed up entirely with this cruel, vicious and evil tax which is undermining the economy and forcing misery on those people who cannot fight inflation - the pensioners, those of fixed incomes and the export farmers. The whole stability of the nation is at stake. I have mentioned the farce that is our Trade Practices Act. Amendments should be introduced to provide the Trade Practices Act with real teeth so that it can engender competition in the economy.

I deal now with one sector of the economy which is of special interest to me. I am concerned with farm costs, particularly as applying in the export sector. I have not time during this debate to mention all of them but I will mention some farm costs over which the producer has no control to illustrate how insidious cost increases are eroding the financial position of Australian exporters. Official figures are available from the Bureau of Agricultural Economics relating to farm costs during the last 10 years. I cannot mention them all but will cite some as examples of the situation. The cost of insurance on farms has increased by 37 per cent in the last 10 years. The producer has no control over such costs. Farm rents have increased by 23 per cent. Rates and taxes - and I ask honourable members to listen to this - have increased by an average of 57 per cent in the last 10 years and interest costs on farms by 28 per cent. These are not my figures but the official figures of the Department of Primary Industry determined by the Bureau of Agricultural Economics. During the same period the average prices received by farmers for farm commodities have shown no increase. Many commodity prices for primary products have decreased. Does anyone want any more proof of the seriousness of inflation in the farm sector? The net farm income has shown a decline in real terms in the last 5 years. The gross national product of the interests which the Ministers represent - big business - has shown an increase of 40 per cent or 8 per cent per annum in the last 5 years. These are the villains which have to be tackled. This is why honourable members on this side of the House have stressed that there is a need to change the Constitution and to give this Parliament the right to intervene and control the basic commodities of this country such as steel, aluminium, oil, petrol and chemicals. If we can control those prime movers we can get a degree of stability. Honourable members on this side of the House and every Australian who is being hurt believe that there has to be some restraint and control on basic commodities.

Unless the Government has the political courage to stop and control the forces of galloping inflation which are taking charge of this nation the export sector of the rural economy will be engulfed in bankruptcy. That is not an overstatement. One has only to read the report on reconstruction by the Bureau of Agricultural Economics to realise the hard facts of that statement. According to the Reserve Bank, rural debts in Australia are now running at the rate of $1,9 80m per annum although 5 years ago they were $150m per annum, lt is a scandalous situation for this debt to increase from $150m to $l,980m over 5 years. The Government’s fiscal and monetary policies have now been proved a monumental failure. Rather than put a brake on the rate at which costs are rising the Government’s policies, as listed in the last Budget, are now accelerating costs in Australia. Wool, which is Australia’s major export earner, is in a desperate financial position. This position is worse now than during the great depression 40 years ago. At least there was a future for wool during the great depression because we knew that there would be a demand for wool at reasonable prices once world stability was restored. But under present conditions in Australia economic strangulation is completely crippling Australia’s No. I industry. This is a tragedy for Australia.

No export primary producer - not even the beef industry which possesses a sound future or the highly organised and deliberately controlled sugar industry - can withstand the onslaught of the uncontrolled wage-cost spiral if it continues at its present rate. There are certain regions in Australia where the export sector is highly vulnerable. I refer to regions in Tasmania where 90 per cent of income from the apple and pear industry is dependent on exports. These are highly vulnerable areas. The fruit canning areas in northern Victoria are also highly vulnerable because their economic dependency is on the export sector. It is in these previously viable areas that we now see the commencement of poverty, worry and misery. In the dairying industry we now see widespread and intensifying poverty. Poverty is increasing to the degree where many dairy farmers are forced to work their families under conditions of almost slave labour. Children are being dented the opportunities of a decent education. As a result the dead hand of poverty takes a wider grip. Even the established mineral industry is now starting to feel the squeeze of these inflationary forces. Already investment plans of some mineral companies are being slashed.

Sitting suspended from 5.58 to 8 p.m.


– Before the sitting was suspended, I was explaining by example some of the plights of some of the rural industries in Australia as a result of the inflationary forces which are crippling those industries. I said that unless the Government has the courage to stop and to control the forces of galloping inflation which are taking charge of the nation the export sector will be engulfed in widespread bankruptcy. Inflationary forces coupled with stagnating wool prices have crippled the wool industry. No export primary industry, whether it be the beef producing industry which has a reasonably sound future or the highly organised and deliberately controlled sugar industry can withstand the onslaught of the uncontrollable wage-cost spiral. 1 said that the tragedy of inflation is being shown vividly in the dairy industry. Poverty is increasing to the degree that many dairy farmers are being forced to work their families under conditions of slave labour and children are being denied the opportunities of decent education. As a consequence, the effects of the dead hand of poverty are widening.

The Federal Government has the power to stop and to control the cumulative wage price spiral. Inflation or gross over spending is a cruel and vicious tax on people whose incomes are fixed or are determined by export market prices. Instead of adopting strong measures to put a brake on overspending and speculation and to implement action to control the prices of key commodities in Australia, the Prime Minister acts like some swashbuckling cavalier in this field. In the last Budget we saw not deflationary policies but inflationary factors with respect to certain prices of commodities which have been responsible for increases in the cost price spiral.

Australia is now mortgaged to the hilt. Dividends to foreign owners are now running at approximately $800m per year. The severe deficit of international trading each year has to be met by the inflow of foreign capital which is progressively buying or exploiting Australia’s natural resources. Private and public spending is increasing at the rate of 10 per cent per annum whereas the level of Australian production is increasing by 6 per cent per annum. This excess spending must generate inflationary forces to the degree that total demand is significantly greater than pro ductivity capacity. As a result of this excess spending in the private and the public sectors, prices have increased. This has resulted in a substantial rise in profits, particularly in the big business sector heavily protected by tariffs. As a con.sequence of these factors, wage increases and the self generating cumulative forces of inflation have gathered momentum at an alarming rate.

To put the position bluntly, no longer can primary producers tolerate the fools paradise into which they have been allowed to drift. Government policies have failed, and they have failed badly. The Government consistently has refused to inform farmers as to the facts about the serious future of our export rural industries as a result of changed international marketing arrangements. Look at the present position in the wheat industry with respect to China and the policy in relation to wheat sales to the Arab States, (licenceeived subsidies, pious hopes, non-existent export markets and desperate ad hoc decisions have resulted in a collapse in the viability of Australian agriculture. In desperation, the Government tries to blame the Australian Labor Party. But the cold facts are that the Liberal Party-Country Party Government has been in power in this country for 21 years. The economy is crumbling. The financial mess in which rural Australia finds itself today is the entire responsibility of the Liberal PartyCountry Party Government - and no-one else.

If the Prime Minister continues on this reckless cavalier course, export primary producers throughout Australia will be correct in ranking him as one of the most infamous Prime Ministers. On the other hand, big business, such as steel, chemicals, oil and the joint foreign companies, which now are controlling much of the economy of Australia, will be fully entitled to rank him as one of Australia’s best Prime Ministers.


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

Prime Minister · Higgins · LP

Mr Speaker, the amendment to the motion which the House is now discussing reads: . . this House has no confidence in the Government because of ils failure to report to the

House on the details and purposes of its monetary, fiscal, constitutional and industrial policies for curbing inflation.

Well, let us examine this amendment, Mr Speaker. Let us examine it a little closely. Firstly, we are criticised for not telling the House the details of the monetary policies that we propose to adopt. But on 29th January, I spoke to the people of Australia and, for reasons publicly given then, I stated:

We do not believe that the present situation requires a lift in interest rates already high, and we would prefer to look forward to a future time - necessarily indefinite - when other measures we take might permit a reduction in such interest rates.

Are we really expected to come to the House to explain the details and purposes of monetary action which we have clearly stated we are not going to take and we do not believe it wise to take?

Similarly, I informed the nation that we did not think the present situation calls for a rise in taxation, either direct or indirect. The reason for that is that the rale of growth in consumer spending is not growing significantly as yet. I pointed out publicly that to levy either indirect or direct taxation at this time would be to seek to damp down demand in an area where demand is not now excessive and 1 therefore rejected fiscal measures in speaking to the nation. Should we really have come to the Parliament to report on the details and purposes of fiscal action which at this time we have said we will not take? Yet, this is what this amendment to the motion suggests we should have done.

Constitutional action may or may not be necessary as regards the Trade Practices Act. In spite of what the Leader of the Opposition (Mr Whitlam) said, he does not know that we do not have the full powers required constitutionally in this field. I do not know and he does not know the extent of the constitutional powers we now have and we will not know until after the High Court’s decision on the case before it. Are we supposed to come to the House and discuss the constitutional actions required when nobody at this moment knows what the present constitutional position is and, therefore, whether any constitutional action is required? Is it seriously put forward?

I think we can dismiss this amendment in the way in which it is put and consider instead the important matter of our present economic situation, the causes of it and the cures for it - in other words, consider the economic situation which I had thought was going to be the subject of the Leader of the Opposition’s speech but which in fact was not the subject of his speech at all. Our assessment is that underlying inflation is higher than it should comfortably be, but we also believe, as I have told Australians, that too much can be made of the increase of 1.9 per cent during the last 3 months of 1970.

I was told by the Leader of the Opposition that 1 had agreed that half of this rise of 1.9 per cent was due to Government actions. I have never agreed to that. It is a typical mis-statement. Somewhere between 7 per cent and .8 per cent of the rise was due partly to increased indirect taxes - taxes not levied on essentials but on those luxuries which the Opposition tells us it would restrict - and partly on increased charges made by, for example, the Post Office. Why were there increased charges made? They were made because of the inexorable results of increased wages awards for Post Office employees and, indeed, of increased costs for the materials used by the Post Office, again largely because of increased wages pushing up the costs of those materials.

Having said that, even so and discarding that effect on the consumer price index, the rise remained uncomfortably high at 1.1 per cent or something of that kind, lt was worrying. But on top of that the real danger of inflation in the future as we saw it came from the recent 6 per cent increase of the Arbitration Commission and from the flow on results which that will undoubtedly engender. The Leader of the Opposition contests this.

Mr Crean:

– Why?


– Why will it flow on? It is because it will be carried not only across the spectrum of wages and salaries but into such matters as overtime, into over award payments. It will be all added into all aspects of wage increases.

Mr Crean:

– Is overtime a bad thing?


-Order! The honourable member has already spoken in the debate.


– Overtime is not bad; overtime is good. I heard from somewhere a suggestion that I was saying overtime was bad. It is good. But it is not so good if it is so increased in rewards that it results in an inexorable increase in prices, and that is the basis of our case.

The Leader of the Opposition, and I think the Opposition generally, contest this argument which I am putting. The Leader of the Opposition claims that the danger of inflation stems from the budgetary actions of this Government over the last few years, and this having been put before the House, let us examine it a little more closely. The present Government brought down its first Budget in August 1968. During that financial year, 1968-69, the consumer price index rose by 2.6 per cent over the year before, the smallest rise in 5 years. It would of course be better to have no inflation at all, but a 2.6 per cent rise, the smallest for 5 years, is hardly evidence of inflationary government action; yet the Leader of the Opposition claims it is. In the financial year of the second Budget that this Government brought, down the consumer price index rose by 3.2 per cent, again scarcely evidence of inflationary government action. Indeed, the Government in that year budgeted for and achieved approximately a $500m internal surplus - surely, as all members must admit, not an inflationary but a deflationary action.

During the first 2 quarters of this financial year, excluding the special factors affecting the December rise, of which I have spoken, the consumer price index was rising at a rate of about 3.4 per cent, but that rate was beginning to accelerate and it indicated a likely rise during the year which would be too high. Was this rise due to Government budgetary action? It has been claimed by the Leader of the Opposition that it was but there was no argument put forward to sustain it. It was merely an ex cathedra statement. Was it due to Government budgetary action and, if so, how? The income tax deductions which we made in accordance with an election promise, partially offset by indirect tax increases, might be argued to have increased personal demand and therefore to have influenced price rises but, as at the end of the year, consumer spending had not risen unduly and was not a significant factor in price rises, and therefore the income tax deductions made cannot be claimed to have been a significant factor in price rises during that period.

Then was it Government expenditure, expenditure in the public sector? Perhaps it was to some extent. But if the Opposition is to argue that, and that that should not have happened, then their constant calls for more and more money for expending in the government sector on all the heads we hear about every day on which they are demanding more - even on their own argument those suggestions they make must be uattainable. In any case, the level of our effort to help in the provision by the States of schools, hospitals and other public services, great though it was in comparison with any past year, would not have caused the need to combat inflation now unless there were other factors at work, and there were and are other factors at work. The 6 per cent wage and salary rise, to which I have referred, granted by the Arbitration Commission, greater than anybody could reasonably have expected, raised those payments for wages by much more than production was increasing or was expected to increase.

The effects of this rise, as I pointed out to the House before, will be much greater than resulting merely in a 6 per cent rise in wages. In fact, as a direct and indirect result of this increase, average earnings are expected to rise by 9i per cent to 10 per cent while productivity is expected to increase by 24- per cent to 3 per cent. Will anyone, even in the ranks of the Opposition, seriously argue that if average wage costs rise by as much as 9 per cent, or 10 per cent per annum and productivity increases only by 2 per cent to 3 per cent per annum it will be possible to avoid a rise in the price of finished goods or buildings or services? If there is anybody in the Opposition from the Leader down who is prepared to get up seriously, as the Leader of the Opposition did, and to say that you can increase wages by 9 per cent or 10 per cent and productivity by only 2 per cent or 3 per cent and not run into increased costs, then he is talking the most arrogant economic nonsense.

It is true that in certain instances industry can absorb some of those increased costs but only some of them, and on each occasion to a reducing degree, and I believe that most members of the Opposition know this. It remains true that no matter what action a government takes, no matter how severely it taxes or how ruthlessly it cuts government expenditure, it will not be able to beat inflation if wages and salaries rise significantly more quickly than productivity. Demands for over-award payments, for extra holidays, for additional holiday pay, for shorter hours, for all those things which are advocated by the members of the Opposition can be met only in one of two ways. Either the amount of goods and services produced is increased sufficiently to enable those requests and those demands to be met without inflation or the requests are met at the cost of inflation, which ultimately destroys the benefits sought and leaves us all worse off and immediately attacks those in whom the Opposition pretends to have a particular interest - those who have retired on fixed incomes, those who are pensioners, those who are living in rural areas. It immediately attacks those, and that is why we are attacking this problem now and receiving neither constructive criticism nor suggestions of any merit from the Opposition, merely statements that you can allow wages to rise without restriction and not expect costs to rise at all.

That is the case as we see it. The Leader of the Opposition characterises it as nonsense. He does not argue his case. He has not argued his case. The people will make up their minds on their knowledge and their experience of whether it is nonsense or whether it is not, but 1 shudder at the damage which will be done to Australia and its citizens if they ever have a government which believes that payments of this kind can increase much more greatly than production and that that will have no economic effects on costs and prices and on the wellbeing of Australians generally. We believe the danger caused by recent wage rises can be overcome. (Extension of time granted.)

I thank the House. We have identified 3 of the areas in which demand has been growing too strongly recently. The field of Government expenditure is one, and as the country knows we have acted ourselves in this field. We have met with the Premiers and we have indicated that we believe all governments will have to reduce their rate of spending. But let me make it clear that a reduction in the rate of increase of their spending is what is required. The field of private investment in plant and equipment which has been growing by some 20 per cent in the last year compared with the year before is another in which demand is too strong. We have a Bill before the House on this. Should we have come and made some statements about the Bill before it was introduced for debate in the House? Is this what is suggested? Apparently it is, but can there be a more stupid suggestion?

The field of non-dwelling construction is another area in which demand has been rising too quickly and we intend to see that this levels off. But we do not believe that panic rises in taxation such as the Leader of the Opposition inferred should be brought in are necessary to deal with the situation, nor do we think that if they are brought in in the future they will deal completely with the real problem because the real problem, in spite of what we have been told by the Leader of the Opposition, is cost push inflation leading, of course, to demand - but basically the rise of prices, because of the cost increases and because of wages increasing faster than productivity. The biggest single influence now which can prevent inflation is a conscious and firm effort on the part of wage-fixing tribunals of all kinds to see that rises in wages do not outstrip rises in production as they are now doing.

The second biggest influence in combating inflation would be to see that productivity is increased as a result of all those engaged in various areas of production realising that by increasing productivity they are improving not only their own living standards but also the possible living standards of all Australians. The biggest single boost to real rises in living standards will be an increase in production. If that can be achieved then we can attain the real objective of most Australians and of this Government, and that is to see real buying power increased, flowing from increased real wages: to see continued expansion of industry to provide the employment we all say we want: to enable the building of the schools and hospitals the people want and to know that when plans and estimates are made by governments for such buildings the cost of the finished product will not exceed those estimates. We want the fruits of labour and management - because the fruits come from co-operation of labour ‘ and management not from just one or the other - tobe shared between labour and management and the community through governments in a real way. We want a community which can provide for its needs without self-defeating and crippling taxation and without being misled by money wages rising which do not in fact mean real wages rising.

That is our objective and I believe that this debate has shown that the approach of the Opposition will defeat the attaining of those objectives but that given restraint in wages, increased production and proper sharing of that increased production we will attain those ends, and we will attain them without that overall, constant detailed planning of every section of the community which the Leader of the Opposition asked us to accept. We will see in this country what we were told by the Leader of the Opposition we see abroad as a result of this Government having been in office, and that is a Government which is not subject to the gnomes of Zurich, which has strong overseas reserves, which has been enabled, through good management there, to raise Australia’s name high among the nations of the world and which, given responsible government and opposition here, will inside this country do the same.


– The Prime Minister (Mr Gorton) has identified the source of inflation as being in the decisions of the Conciliation and Arbitration Commission. He mostly concentrated, of course, on the trade unions but the crime of the trade unions is that they have had a successful case before the Conciliation and Arbitration Commission. What he omitted to say in forecasting that average wages would rise by 9 per cent or 10 per cent and productivity would rise by 2.5 per cent or 2.9 per cent is that the Conciliation and Arbitration Commission was not dealing in futures but was dealing in the past. It was dealing in past increases in prices and it was belatedly pushing wages up to meet them. The Prime Minister’s statement in the House was much less informative and less significant than his statement on television and his statement to the Young Liberals, both dealing with inflation. I am referring to his original statement which we moved be printed.

There is not much party political mileage to be made out of his statements on inflation - not from his point of view anyway. He cannot, like Sir Robert Menzies and Sir Arthur Fadden, represent himself as wrestling homerically with inflation caused by Mr Chifley and putting value back into the £1. Incidentally, if we recall that halcyon election and look at the figures given in World Wide Inflation - A Study of the Phenomenon’ we will find that in the 4 years after the Chifley Government fell only one country in the world exceeded Australia in inflation and that was Austria which was then crippled by its post-war problems. In the first 4 years of this Government the Australian consumer price index rose by 12.6 per cent, exceeded in the world only by Austria with 14.3 per cent. He has, however, done the next best thing. He has blamed the trade unions and wage rises. This makes him unique among economists and’ brings him back to blaming Labor. If a Labor government is in office it causes inflation, though anyone knowing Chifley would know how tightly he set his field against inflation, if I may use a cricketing analogy. If a Labor government is not in office then it is the trade unions at fault, so in or out of power Labor can be blamed. If the Prime Minister wants a united national effort against inflation he would be well advised not to try to wage class war downwards, which was the feature of his speech tonight.

Let us agree on the fact that in the Aus.ralian economy today the farmer is the hardest hit and we must bend our efforts to ensuring he is not hit mortally. If inflation is a condition of sharply rising prices, there is for certain no inflation in the price of wool, wheat, meat, fruit or vegetables as far as the producer is concerned, although no-one notices a consequent fall in the price of clothing, bread, flour, meat in the cities, fruit in the cities or vegetables in the cities. The farmer sells in a largely free and open market, even internally in Australia, and of course most definitely in the world market. The manufacturer, while paying lip service every federal election to the great doctrines of free enterprise and free competition, spends his time avoiding competition like the plague. It is not merely by tariffs; it is by cartels, agreements and unfair trading practices. We all believe in the socialisation of our losses and the individualisation of our gains. Tariffs for the manufacturer and subsidies for the farmer are alike socialised losses. As a result of Australian business practices a packet of Kellogg’s corn flakes costs 46c and contains 3c worth of maize.

The pace for inflation has been set in one area and can be curbed there. The pace for inflation is set by hire purchase and the structure of finance built on it, and the decision of the Government which excluded the Commonwealth Bank from entering the field of hire purchase lo force down its interest rates and dividends was the key decision in the sometimes creeping and sometimes trotting inflation of the last 20 years. Over the 20 years since 1949 to 1968 Australia has been second in the world in the average rise in the consumer price index.

And it should be remembered that the Liberals came lo power with slogans of reducing prices and decreasing the size of the civil service by 10,000. When it took office the basic wage was about £6 or S12 a week, lt has quadrupled. The civil service today as a force makes the civil service of Chifley’s day look like a Waterloo sized army compared to a Second World War sized army. Concealed or openly, hire purchase dividends can frequently exceed 30 per cent and 40 per cent. This sets the pace. No-one would invest in bousing if its return is significantly lower than the dividend from the field of hire purchase industries. The result is inflated rents and inflated land values. When I was a teacher I earned £580 a year, and I could buy land in Applecross for £45 a building block or £80 a corner block. Peat and Company advertised their land at a definite price. The auctioneering stunt to play young people off against one another had not been developed. This means that I could buy land for my home for one or two months’ wages.

A teacher today in my former position would get $3,500 to $4,000 a year, and would be lucky to get equivalent land for $7,000 or $8,000-2 years’ wages. Fortytwo per cent of people within the Fremantle City Council area pay more than half their income in rent. This is the cost to young people of the privileged hire purchase finance, and of the decision by which the action of the Commonwealth Bank within the field of hire purchase was struck down as a weapon of control. In strikes at Kwinana last year it was possible to say that some men were being paid $90 a week. They were mostly migrants. The rent for a caravan to live in was $31 a week - $21 for the caravan and $10 for the pocket handkerchief of land on which a caravan unit stood. Homes rented at much more so that the man on $90 a week was actually in straitened circumstances, and totally deprived of the opportunity to save to buy land or buy a home. These people were mostly migrants who had just come to this country. In other words, skilled migrants are doomed to be rent payers all their lives because their rents will prevent their saving money to be home owners.

The comments of an economist on the current policy of the Government are worthy of thought. He said:

The Commonwealth Government is understandably reluctant to restrict the flow of migrants. This however would seem to be a necessary precondition of a disinflationary budget in August

The present policy is rather like trying to check a galloping horse by pulling on the reins al one end, while continuing to flog him at the other end.

I would add the comment, by way of illustration, that if the Government brings in 175,000 migrants again it inevitably puts upon the States the duty of making available classroom space and teachers for the children, more hospital accommodation, more housing, more transport. If at the same time it imposes cuts upon the States so that they cannot supply these services it is merely producing a crisis. This is what underlies the comments crf the same economist, who said:

Notwithstanding the rapid growth in government expenditures on capital projects, the facilities provided in the main centres of population ara failing to keep pace with needs and the Ufa environment of the major cities, far from improving, is deteriorating.

Recently the N.S.W. Planning Authority estimated that Sydney alone required $700m for water and $l,200m for sewerage. It also said that spending on roads was only about a quarter of what was needed . . .

The standards of living, considered in narrow terms of consumer expenditure, are improving but the overall quality of life, with which people are becoming increasingly concerned, is declining.

I suggest, firstly, a drastic revision of migration, with emphasis on skills and quality, not numbers. Secondly, I suggest an end to the privileged position of hire purchase finance and like finance, which has become a major feature of our economy and a great sector of virtually uncontrolled banking with uncontrolled interest rates, and the use of the Commonwealth Banking Corporation as a weapon in this field to bring in and insist upon the social interests instead of the individual interests of the hire purchase sector of the economy. Thirdly, I suggest a request to the States to take strong action on land and housing values, which they can control, and on rents if they show no downward trend. Fourthly, J suggest an endeavour to get a united community effort. The wage efforts of unions follow prices and rents. I warn the Government that it will get nowhere with a policy of an open run for prices and a fixed price for labour.

If there is any philosophy that is perfectly clear in the Prime Minister’s speech today it is that he believes that we should go on having an open slather for prices and controlled wages. In fact he told the arbitration tribunals of this country what they are to do about wages. They are to keep them down. In other words, he believes in no fixed prices of any kind except the price of the commodity labour. He stood in this House tonight and instructed the Commonwealth Conciliation and Arbitration Commission that that is the one commodity on sale in this community whose price must be controlled. In theory that is very fine but realistic economists have pointed out that the position that has been reached today is that if you tell the wage earning sector of the community that it must bear the brunt of inflation - the farming community is bearing it now - and that you will do nothing about the level of hire purchase interests which competitively result in dearer land, housing and everything else, since the people have to get the same sort of return they would get from the ice cream sector of the economy, they will not go into the more important ones. If the Government tries to saddle this on one section of the community there will be industrial unrest. I think that the Prime Minister is taking a responsible attitude, if he considers that inflation is a likely feature of the future, in taking some steps to curb it. Nobody could possibly say, however, that S75m in a Budget exceeding $8 billion - less than 1 per cent of the Budget - will have any significant effect on the community. I take it that it is supposed to be the force of example but if the Government’s migration policy imposes on the States needs for increased expenditures they will not be able to follow his great example. I wish the Prime Minister well in trying to lead the whole community as a united community to deal with the problem of a potential inflation. But I am concerned that he says nothing about the farmers, whom nobody could possibly accuse of being responsible for inflation and whose prices are not inflated. He says quite clearly that, as far as his disposition of mind is concerned, he will single out one section of the community only for attack, and that is the wage earning section. I would like to hear him speak about hire purchase, fringe finance and a few other things in these fields and hear what he proposes to do about them, because when he tackles every sector of inflation he is likely to get a united community.


– The action of the Government in reducing expenditure by $75.5m for the 1970-71 financial year is a responsible move against inflation. It is timely and positive action which has already received the wide support of the general community of this nation. In the face of a totally ineffective attack this afternoon in this Parliament the Government has withstood the effort of the Opposition to support a censure motion. The Opposition has failed to put forward any effective alternative to the Government’s proposals. It has moved a no confidence motion but, judged from any constructive angle, it has failed miserably. It has advanced a great deal of superficial comment but has not dealt with the present day cost-price spiral. The honourable member for Fremantle (Mr Beazley) chose a course which produced nothing constructive and did not rebut the magnificent explanation of the position given, by the Prime Minister (Mr Gorton) a little earlier in this debate.

I want to refer to the Prime Minister’s statement to the nation on 29th January, because it is pertinent to the debate in which we are engaged. In that statement the Prime Minister pointed out, firstly, that there had been a rise of 1.9 per cent in the consumer price index during the last 3 months of 1970. the largest rise for .14 years. Secondly, he pointed out the likely effects on the economy of the Arbitration Commission’s award of a 6 per cent increase in wages and salaries, a much greater increase than, anyone had thought possible. That was a frank statement. It was not a case of embellishing the facts or ignoring them. The Prime Minister was being realistic. Yet today we have listened to a tirade which would suggest otherwise. On that occasion the Prime Minister also said:

We therefore believe our first line of attack should be to ensure noi only a restraint on Government expenditure but a reduction in Government expenditure this financial year.

He went on to say:

We are now working out reductions in the Government’s budgeted expenditure in other directions. Implementing these reductions will be uncomfortable. Australians will not get as much as they had hoped to get in the way of new public amenities of various kinds. But the reductions are necessary.

On Tuesday last in this House the Prime Minister announced the Government’s decisions and indicated in a very positive and clear fashion exactly what the conclusions were that had been reached after very careful study of the position by the Government. He outlined cuts in Government expenditure and referred directly to the circumstances that had arisen since the Budget last August. The reductions in expenditure have been realistic. 1 am sure that no-one can really challenge them. Certainly they have not been effectively challenged in this debate. We see defence spending cut by $21. 5m out of a total of $l,149.lm, which is a realistic approach. The second largest cut is in capital works, the advance of capital to the PostmasterGeneral’s Department. This cut is $10m out of a total of $252m in that sector. Again that is a reasonable approach. If we follow through the 8 items in which cuts have been announced we see a very responsible approach. Yet there has been moved today a censure motion.

A motion of censure is a very serious step for an Opposition to take. The grounds proposed were certainly not of great substance. They evaded the main issue and put to the House that the Government had failed to report to the Parliament and had not given details of its monetary, fiscal, constitutional and industrial policies for curbing inflation. What utter rot! Honourable members will recall the very responsible statements by the Government in the last session of this Parliament and the equally responsible statements made by the Prime Minister to the nation since that time. Then, on the very first day of the sitting of this House we had the Prime Minister’s announcement of the Government’s decisions. There is no substance whatever in what has been advanced by die Opposition. It has been made clear that these reductions in expenditure have been made across a wide range of Commonwealth departments. But they do not include any reduction in payments lo the States. The Government has endeavoured to avoid reducing expenditure on essential developmental activities.

The question one might well ask is: What would the Opposition have done if the responsibility had been imposed on it as a government? One can only guess. We certainly have not been told by the Leader of the Opposition (Mr Whitlam). He dealt at length with a number of questions, including constitutional reform. He talked glibly of stop-go measures by the Government. He ignored the facts of the situation. He failed to acknowledge the present day relationship of the Australian economy with that of other countries on whom we depend for trade, balance of payments and, in short, our economic stability. Few Opposition speakers have advanced any justification for their motion of censure. Notable for his verbosity was the honourable member for Dawson (Dr Patterson) who was talking like a thrashing machine before the Prime Minister spoke - as he usually does. What of his credibility as a spokesman on primary industry for the Opposition? He spent most of his time telling the House of the problems of the farmer. He did not propose his solution to those problems. He said a lot about the need for changing the Constitution. He performed as a true puppet of his leader, clothed to put one side of the Australian Labor Party’s double headed coin. Let us recall his somersault at the time of the Senate election campaign. Out he came, loud voiced, to the country - not the city - and said: “l am opposed to the 35-hour week’. He said: ‘The farmers cannot stand it’. He made his plea just as the last session of this House ended before the Senate election campaign but I doubt, from recollection, that he said it in this House.

Tonight the honourable member for Dawson called for a stop and a control of the forces of galloping inflation. Did he forget that his leader, at the time of the Prime Minister’s statement on 29th January, accused the Government of propping up industry? A very lengthy reference to tariffs was made by the Leader of the Opposition. He went further and said: ‘We are propping up unprofitable industries and making big handouts to farmers’. Yet a few moments ago the honourable member for Fremantle claimed that the Prime Minister had not mentioned the problems of the farming community. What the Prime Minister did was to tali about the interests of the whole nation, of every section of the community, and this certainly included the farming community. The Leader of the Opposition made great play of what he called ‘on again off again’ policies. He failed to acknowledge the differences between the problems of 1961, for example, and those of 1971. He failed to recognise the cost of Mr Hawke.

We all recall that in 1961 the economy was in difficulties but from a different cause. At that time our overseas reserves had declined to a dangerous level. Today our overseas reserves are buoyant. In simple language, the major problem is the effect of a cost push pressure. Last year the Commonwealth Conciliation and Arbitration Commission awarded a 3 per cent rise and the overall rise turned out to be about 9 per cent. This year the Commission has given a 6 per cent rise and unless action of the kind now being taken by the Government is implemented the ultimate effect could be to the order of 12 per cent. We just cannot stand rises of this kind and their effect on prices. What of the sections of the community that cannot pass on cost rises - the farmer, the pensioner and those on superannuation? Like all sections of the community who have a reasonable attitude to the problems of inflation they expect this Government to take action. They support the move for restraint undoubtedly. They do not want to lose standards of living brought about by a persistent Government determined to look after the interests of the whole nation and see in its place a lowering of living standards through wild inflation. I hope the honourable member for Fremantle will remember this when he looks through the speech he made just a moment ago.

A major effort is being made to turn down Government spending during the next 4 months. This is a responsible start. It is no’, the only thing the Government must and, I believe, will do nor is it the only thing the people of this nation, expect from a stable government. Could we have done more? The test in this debate is, of course, to sift through all the proposals put forward. We find that nothing has been offered as an alternative to deal with the immediate problem. There has been a lot said about principles and constitutional problems and the like. The honourable member for Fremantle proposed 4 solutions. ‘ First of all he wants to whittle away almost completely our immigration programme. Of course, we have known that this has been a section of the Labor Party policy for a long time. It would like to get its hands if it had the opportunity on that section of government expenditure that flows in the direction, of immigration and put it into other fields of expenditure. But if this were to be implemented what would be the position within a matter of 3 years? We would find that our nation was losing the growth rate that is absolutely essential for security and developmental reasons. The approach of the Government, however, to reduce the immigration intake by about 10,000 people is a reasonable approach and is, I believe, the kind of action that any responsible government would want to take. 1 would refer the honourable member for Fremantle, when he speaks of policies that could be implemented and says that wage restraints would not achieve results, to the experience of his political bedfellow, the now Leader of the Opposition in the United Kingdom, Harold Wilson. Just have a look at his record of trying to do the very things the honourable member for Fremantle has advocated this evening and we see a dismal failure indeed. Australia cannot live in isolation. We would face ruin tomorrow if we cut ourselves off from world trade and world financial links. Yet we have managed in the face of great difficulties to hold the nation on a reasonable level of stability. Of course, there are problems in many sectors. We see them in primary industry, with its disastrous losses of markets and - what is worse - losses of profitable markets. We see industrial unrest and other major disabilities. Yet compared with other countries our consumer price index shows a rise up until now of only 3 per cent whilst the United States, for example, faced a rise of 6 per cent to 7 per cent. In Japan there is an increase in wages of 18 per cent per annum. In the United Kingdom there is a 13 per cent rise and it is getting worse. New Zealand has had a 20 per cent rise in costs and imposed a freeze all round and it is very doubtful indeed whether this measure will work.

We have maintained confidence in this country through responsible government. Once again it is to the Government’s great credit that it is showing its capacity to face up to the difficulties not in a sense of panic or scare tactics but in a responsible way; not too timidly but positively and objectively. The motion before the House is without justification and, despite what we have heard this evening from the Opposition, there is no doubt that the nation will support the Government and that this House will throw out very solidly the proposition put to it by the Opposition. I oppose the motion.


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


– The honourable, member for Cowper (Mr Robinson) has thrown out a challenge to the Opposition in which he invites us to say what we would do about the inflationary position if we were in government. If 1 wanted to get over this one lightly the obvious answer would be that if we were in government the inflationary problem would not have arisen to the extent that it has. But I am not going to evade the issue like that. I will say something quite honestly and perhaps unpoliticianlike. If 1 were asked what 1 would do about the inflationary position today and 1 had the responsibility my answer would be that 1 do not know. I want to add to that that I cannot be expected to know and the reason I cannot be expected to know is that the expertise available to the Government is not available to me; the power available to the Government is not available to me; and the facts available to the Government are not available to me. When the Minister for Immigration (Mr Lynch) authorises a cost benefit analysis of immigration as it affects the economy the facts arising from that investigation are not available to me. When a report is sought on tariffs, that is not available to me. When the Treasury makes a submission to Cabinet that, of course, is not available to me. I suppose it need not be avialable to me. Who am I? The merest backbencher. But it is not available either to (he shadow Ministry and it is not available to the Leader of the Opposition (Mr Whitlam), lt is not available to our shadow Treasurer. So honourable members opposite should not start throwing out this sort of empty challenge. Give us the responsibility and they will see that we will meet it.

The very things 1 have been putting to the House now are in fact the basis of the amendment moved by the Leader of the Opposition and I think it is worth referring to its terms, lt reads:

This House has no confidence in the Government because of its failure to report to the House on the details and purposes of its monetary, fiscal, constitutional and industrial policies for curbing inflation. [ believe that the terms of that amendment are worth stressing because they make perfectly clear what it is the Opposition is not saying in this debate. For example, we are not saying that the Government’s measures so far as they go are necessarily to be condemned. Neither are we proposing alternative measures for immediate action in any dogmatic way. What we are saying is that on the one hand the Government asserts that Australia is faced with a serious inflationary situation. On the other hand it has been doing nothing to indicate what its understanding is of the causes and nature of that inflation or even of the degree of inflation which it would consider tolerable. Accordingly, we have neither known what we are supposed to be fighting against nor what we are aiming for. In these circumstances how on earth are we to make a proper evaluation of the Government’s anti-inflation programme? The truth appears lo be after all the discussion today that we do not even know what the prevailing inflationary trend is.

The Treasury’s ‘Information Bulletin’ No. 61 confirms that prices increased in the last December quarter by 1.9 per cent, that is, at an annual rate of 7.6 per cent. On the other hand the Bulletin also indicates that taking calendar year 1970 as a whole the increase in the consumer price index was 4.9 per cent. For a start, which of these 2 figures is closest to the position applying now? Again, what is the economic effect in practice of the 6 per cent increase in the national wage case? How much or how little of that increase has been absorbed in preexisting over-award payments? How much or how little of the increase in prices since that award were really necessary to meet increased wages bills, lt is important to know what is happening in these areas or, at the very least, to know what the Government believes is happening. But until today we have had nothing but the vaguest generalities, and even today there has been little more than that, and that had to be dragged out of the Government by our moving a no confidence motion. 1 think that everything we have learned from the Government today can be summarised in 2 points which the Prime Minister (Mr Gorton) made. The first of his points was that there is nothing a government can do to defeat inflation where wages advance faster than production; that there is the problem of wages going up too fast. All right, let us accept that this is a problem. As it happens, we do not accept that that is the complete problem, but for argument’s sake, let us accept that it is. Even accepting that, how will the Government’s measures help? What does the Prime Minister’s whole argument amount to on this score but an attack on the operation of the arbitration system? Even that would be all right if he was offering us an alternative, but he does not do so.

The Prime Minister’s second point was that what we need is greater productivity, but again be gave no indication of how we might arrive at that. In other words, we are being told that the Government has 2 problems neither of which, according to the Government’s view, is soluble. Tt is a philosophy of despair, and that is reflected in the measures which the Government has adopted and which we are discussing in this debate. This brings up for consideration the question of the effectiveness of the Government’s measures, ignoring for the moment the premises on which they are based. lt seems to me the situation is that either the current inflationary trend is serious or it is not. If it is serious then it demands serious measures to combat it. If it is not serious, then minor measures will do. What we seem to have, however, is a curious and impossible com- bination of the two; that is, the Government declares the position to be very serious indeed but then proceeds to tackle it with a series of measures of comic opera character.

Canberra’s grass is to be cut less often. Floodlights on public buildings are out. The reading hours at the National Library have been cut, and so has the operation of the water spout on Lake Burley Griffin. I understand that a rumour is about that in future public servants will have to lick their own stamps in order to save the water m the office sponges. 1 believe that rumour, lt is just the sort of thing which the Government would do to be consistent with the empty sort of measures that it has been adopting until now. Even the more substatistical cuts seem to fail to meet the situation at which they are directed. Would someone please explain how a reduction of $3. 8m in our expenditure in Papua and New Guinea will help to dampen inflation in Australia? What sort of inflation is it that responds to measures like that? At the same lime could we perhaps have some clarification of other matters that have arisen in. the course of the discussion on inflation?

In particular, references to the size and rate of growth of the bureaucracy obviously are incomplete. In his statement on Tuesday night the Prime Minister made these 3 points: Firstly, the Public Service was to have grown by 10,534 in the current year; secondly, this figure has now been, trimmed down by 2,735; and, thirdly, and most significantly, I suggest, the Public Service Board has advised that the ‘restraint on establishment increases could benefit the health and soundness of administration in the Commonwealth Service’. If that is so - if a recruitment of 7,800 public servants can be expected to produce a Commonwealth Service that is actually healthier and sounder than one increased by 10,500 officers - how is it that the recruitment of the larger number was ever contemplated? Moreover, as the original contemplated increase this year was in line with proportionate increases in previous years, what inferences are we being invited to draw as to the efficiency, health and soundness of our vast administrative complex. I do not want to be side tracked into a discussion of that question at this point, but obviously it is one to which the Parliament will have to return.

I revert then to the $75m reduction in Commonwealth expenditure. Some of it, such as the decrease in expenditure on external aid, may in fact be irrelevant to the local inflationary process. The benefit of other measures as well could well turn, out to be illusive. Take, for example, the decision to suspend the transfer of Public Service families from Melbourne to Canberra and the consequent postponement of the construction of 50 Commonwealth homes here. The net effect of that exercise would seem to me to be that 50 fewer homes will be built this year in Canberra and 50 more homes will have to be built in Melbourne to accommodate the families who would otherwise have taken over the homes of the transferred public servants. How, I wonder, will that reduce inflation?

To try another tack, let us assume for purposes of discussion that the whole $75m reduction will in fact go directly to reduce demand. Even given this unwarranted assumption, the conclusion seems inevitable that the measure simply will not help. It does not go far enough given the major part which this one device has been given in the Government’s programme. That Commonwealth expenditure is to be decreased by $75m may seem impressive in isolation. But when one looks at the reduction in perspective one realises that this amount has to be seen against an annual Commonwealth expenditure of $8,000m; that is, it represents a reduction of less than 1 per cent in the Budget - a Budget, moreover, which has swollen by 11 per cent over the Budget income and expenditure of last year. To put it another way in round figures, the Government is saying that its expenditure this year will be only 10 per cent, instead of 11 per cent, greater than it was last year. That is not really as dramatic a situation as the Government has been attempting to pretend it is. Why then has the Government bothered to make the pretence?

The Minister for Foreign Affairs (Mr McMahon) gave us the reason perfectly clearly in his speech this afternoon. He pointed out that the whole exercise is to be seen as a psychological attack on the inflationary mentality afflicting the Australian community. Put less pretentiously, what this amounts to is an admission that the Government is trying to bluff the nation out of inflation, and I would not mind that if I could only believe that it might work, but it cannot work. Within the short time I have been in this Parliament 1 have already seen the Government try to bluff the union movement into payment of fines imposed under the penal clauses. I have seen the Government try to bluff the postal workers out of strike action by appealing to the special principles supposed to govern the Public Service. I have seen the Government try to bluff the professional engineers out of militant action by calls for respect for impartial arbitration. As each bluff has been called the Government has retreated. Surely we can take it for granted that if the Government cannot bluff the postal workers and the engineers, certainly it will not bluff the BHP, General Motors and hire purchase companies. It will not bluff the public, either. That this is so is evident on all sides.

With all the talk of inflation and these drastic Government counter measures one would have thought that at least public spending would have faltered, but it has not. Again the Minister for Foreign Affairs confirmed that this afternoon. The reason it has not faltered is that people have lost respect for the value of money. Everyone with cash in hand today seems to be trying to advance rather than to postpone his expenditure for fear - and it is a well justified fear - that if he does not spend today the price will have gone up by tomorrow. That is the situation of people with money in hand. It only serves to emphasise the special problem and difficulty of those who do not have cash in hand. Their position, as exemplified by the pensioners but certainly not restricted to them, shows their position to be particularly precarious, and irrespective of all its inflation counters, the Government should not be ignoring these people as it has been doing and indeed as the Prime Minister insisted this week - not stated but insisted - it will continue to do.

This debate has thrown up a number of areas which demand at least consideration and, in some cases, early action, lt has shown the need for Commonwealth powers to regulate the fringe banking institutions. It has shown the need for Commonwealth power on prices. The extent to which prices are controlled is a matter for future consideration by governments as problems arise but, in general principle, the power has to be found. It has shown the need, in the context of inflation, for fuller study of our tariff system, our immigration programme, our powers in respect of restrictive trade practices and of our taxation structure. Where the Government is not studying these matters, it should be. Where it is studying them it should take the Parliament and the people more into its confidence and not wait for a want of confidence motion to pry out of the Government its attitude and some of the facts at its disposal.


– Inflation is an endemic problem of all Western countries with their kind of economy. One of the fundamental causes is the economic surges that one gets in an economy, such as that which came about through the recent wages decision. The psychology of business, with expectations of a rapid expansion, is a grave problem for all Western type countries - indeed, all countries. This is a problem for the Government and I am glad to see that it is meeting it with the courage that one would expect from it. I pay tribute to the Prime Minister (Mr Gorton) for his statement. I think that it is the finest statement that he has made in this chamber. Tt is a model for all, for its clarity and its brevity. It contains the kind of message that needs to be spelt out. We have had too much of a feeling of limitless expectation. Everybody says: ‘We can afford this. We are an affluent society. There are no limits to the things we can do’. They forget, far too often, that we are a country of limited resources. Only those who know the rural problems know how limited are these resources. It is true that we have had good luck, good management and a mining boom; nevertheless we are a country with limited resources.

We wear the economic hobbles that all countries wear. It is no good pretending that we can pay for things we cannot afford. It is no good pretending that we can build schools and universities to a limitless extent. We have to depend on our economic resources. We have to wear economic hobbles. Hobbles are queer things. If one ignores them, they bring one down. We as a community have to realise that we are wearing economic hobbles that prevent us from doing the things we all want to see done. We can do only those things we can afford to do. This is a challenge that the Government must meet.

I must do what I can to explain some of the things that I think the Government must do in the future. I know that it is prepared to do them. I know that it is going through the planning stages. The kind of thing that we hear as the easy solution is the income price policy. This is held up as the easy solution. It has been tried in Europe - in Britain in particular - and has proved wanting. What does an income price policy really mean? It means holding wages and prices down by government regulation. I have heard it so often recently that the Commonwealth Conciliation and Arbitration Commission is holding wages down. It is not. lt is holding wages up. They are minimum wages and all honourable members know the size of the wages drift. People say: ‘Let us hold prices down: Let us have price control’. It is worth remembering the difficulties of doing this. First, we should realise that we do not have constitutional power to do it. Secondly, we should remember that it has never worked in peace time.

Mr Snedden:

– Nor in war time.


– It works with great difficulty in war time. I recall the war time story of 2 doctors who were exchanging experiences about their work. One said: M have 4 cases of meningitis in my district’ and a chap behind him tapped him on the shoulder and said: ‘Look, I will take the lot’. Price control works with difficulty when it is sustained by patriotic fervour in war time, but it has never worked in peace time in any Western country. We can do something about prices. Recently 1 was interested to read of the experience in Japan where several big electrical companies jacked up the prices of their products. Although there was no legislative sanction, they had to appear before a tribunal to explain their prices increase. They were unable to do so and their prices were brought down by the weight of public opinion. We could do the same kind of thing in Australia, particularly as we have a larger concentration of industrial strength than almost any other country. We have an opportunity to establish a tribunal like this to which companies must go if they are asked to explain their price rises. It n> be said that it would be a watchdog that could growl loudly but not bite. However there is much sense in growling loudly in public, and this would have a tendency to bring prices down and keep them from rising.

I was glad to hear the Prime Minister bite on the bullet of restrictive trade practices legislation. I feel we must do this and I know that the Government has the determination to do it. I should like to see it take in the shipping conference side of our economy as well. I was particularly impressed to hear the honourable member for Isaacs (Mr Hamer) talk so wisely and well about tariff policy. For far too long the voice of the rural industries is the only one that has been raised in respect ot tariffs and it was refreshing to hear a man of the honourable member’s quality discuss quite objectively and sensibly the problem that an unwise tariff policy poses for our cost structure. I put forward one suggestion. Most of us are inordinately proudI know I am - of the performance of the Australian iron and steel industry. This is the classic case of an infant industry that has grown up and has justified the policy of protection. All the same, it is now far from an infant industry and I believe the Government could let in the cold draft of competition. We are proud that Australian iron and steel can compete with all steel around the world, and yet we still have a low tariff against it. If the Government wanted to bring in the cold draft of competition to stop prices rising it could let iron and steel in duty free.

In respect of wages I should like to see the Arbitration Commission with the statutory obligation, which it used to have until 1930, of taking into account the effects of inflation when making its decisions. This obligation was removed; I should like i; restored. We have heard much today about the effects of inflation. A man would be silly to deny the fact that wage determinations have some effect on inflation. We have to face the fact - and the Prime Minister and the Minister for Labour and National Service (Mr Snedden) have faced it - that the key to the wage earner getting a bigger slice of the economic cake is increased productivity. We all know that if wages go up, prices go up and the only gain to the wage earner comes from increased productivity. This is not peculiar to Australia. The theory of constant shares has been spelt out in many places, and it is not common to us. The Leader of the Opposition (Mr Whitlam) stated that in Australia it is peculiar that the share that the wage earner receives tends to fall microscopically. The fact is that if we look at the experience of the Western world we see that exactly the same thing happens. Exactly the same thing happened in the United Kingdom when that country had a Labor government: We have to recognise the plain fact that in a capitalist system we have this phenomenon of constant shares and the only way the wage earner will ever get a bigger slice of the cake is for that cake to be bigger. The key to the wage earner obtaining improved living standards and increased real wages is by increased productivity.

The wage earner has some responsibility in this respect. We have to realise that every time there is a strike, productivity suffers and the wage earner’s slice of the cake is unnecessarily smaller. Each time the amount of work is limited it is not the boss who suffers because he takes the same share. The worker does not get at the boss. The man who suffers the most is the wage earner. It is the wage earner’s slice of the cake which is made smaller. We have to have a sense of community endeavour about this. People say that the only way to cure inflation is to have unemployment. I do not believe that. If the people would work with a will, as best they could and did not have the feeling that they had to beat the boss, there would be no question of using unemployment as a spur to beat inflation.

The way to beat the problem of inflation is to make the community realise that productivity is the key. This proposition should be put clearly to the community. Again I would, like to pay a tribute to the Prime Minister. If he could spell out this proposition so that even I could understand it we would get an understanding from honourable members in this House as well as from the community that productivity and the ability to produce better is the key to the wage earner getting a bigger slice of the cake. This is why it is important for us to take the actions about prices that 1 have mentioned. There is a real responsibility on the wage earner and on the trade union leader. Such a person has to have the feeling that he is not being robbed by big business. If we could get a sensible responsible attitude towards prices - not price control by government which we al! know would not work - let in the draught of competition wherever we can and if we do our best to keep prices down and let trade union leaders know that they are not being got at, we would get a feeling of responsibility throughout the workers themselves and their leaders in particular and an acceptance of the fact that they and the employers have to work together to produce a bigger cake. If this were done we could produce a bigger cake which could be cut up into more equal sizes, if that is what is wanted. But the size of the cake is the thing that matters.


– I suppose there should be a word of congratulations that the Government has suddenly discovered inflation. Certainly it has increased the bond rate. It has increased the interest rate; it has increased indirect taxation. - The Government has permitted the development of more doubtful speculation in our country today than we saw in Chicago during the regime of Al Capon: In the last 6 months I have met 6 new millionaires and 1 might say that their millions were not based on productivity but on paper speculation. Indeed, the Government has surrendered the control of the pace and development of the nation to monopolists and speculators to such an extent that we have become notorious across the world as having the most hag-ridden economy in the West. We have more monopolies, more restrictive trade practices and more outside domination .han has any other advanced and developed country. The Government may have only just discovered inflation in Australia out the people in the countryside have been suffering from this cancer for some time.

Inflation in the past 7 years has added 20 per cent to the cost of the primary producer. In fact inflation has added more to the cost bill of farmers than wage increases. The Deputy Prime Minister (Mr Anthony) and the Prime Minister (Mr Gorton), who spoke tonight as one in the Parliament, blame wages and wages alone for the disasters of the countryside but every economic authority in the world recognises that rising wages are a symptom of inflation and not the cause. Professor Colin Clark put this clearly only this week, and for once he is in step with practically all of his economist colleagues. The Deputy Prime Minister came to the Parliament this afternoon to tell the country people that they have a crisis. He told us that farmers are suffering, that businessmen and employees are also suffering. This is hardly news to the countryside. The countryside is well aware of its problems. It is well aware of the cancer of inflation. I raised those problems in my very first speech in this Parliament and the then Minister for Primary Industry merely smiled. He did not smile this afternoon. His prescribed cure for inflation was to cut basic services. He joined his Prime Minister - I am not sure who joined who in this exercise - and they spoke together in support of the concept of cutting vital aid to the States. This means that there will be a cut in funds for hospitals, schools and basic services. The Deputy Prime Minister joined the Prime Minister in blaming the wage earner who is so well off in affluent Australia today that he has to send his wife to work to keep his children at school. The Deputy Prime Minister, whs claims to be the voice of the countryside, boasted of the cut in investment allowance to manufacturers. But this cut could seriously injure the expansion of decentralised rural industries.

The Government cuts services to people, attacks the wages of people, maintains and sustains the most vicious monopolies in the world, though they have robbed primary producers of their just returns, but leaves untouched the real causes of intiation - the faceless villians of the piece; the speculators of the 1970s. This Government has created a milk bar economy staffed bv topless speculators. They hustle their wares and they have had great success in doing this. But the Government has taken no action and has not given any direction lo the economy. It has permitted the plundering of our country and its resources. The figures tell the story. At the time the Prime Minister announced the $75m CUt.: in Commonwealth services there was announced in Sydney on the very same day the proposed construction of another office block complex on The Rocks, symbolically, to cost $500m.

At a time when the school systems are slipping further behind we have the spectacle of private office buildings - the new skyscrapers of the paper empires - going up at a rate twice that of government buildings and offices. The investment in new offices to house more clerks and more bits of paper in the past financial year 1969-70 amounts to about $300m across Australia. These were the approvals and the commencements are not very much less. Yet there is no move to deal with this non-productive expenditure. At a time when the hospital and medical systems are creaking with inadequacy we have oil companies putting up 30,000 service stations, one on every corner and sometimes 2 together. They open them and they close them. One-third of these service stations have opened and closed. But still the building and speculation goes on. How much inflation and speculation lie in this direction? This can be gathered by the fact that in the Australian Capital Territory 10 years ago the top price paid for a service station site was a bit more than $100,000. One might say that this was quite enough. But this year for one site alone $320,000 was paid by an oil company. In the Australian Capital Territory $7.4m have been, put into land alone in the rash of service stations that have been constructed in the past 10 years.

International oil company profits have created the most powerful private governments in the world. The oil companies have continued unimpeded. The shipping monopoly has taken $150m from wool growers alone in surcharges in 2 decades. They charge 4 times as much to take the product out of Australia as would apply under open competition. But their monopolies have continued to do well. The army of paper workers has increased. The number of paper handlers has increased by 16 per cent in Sydney, for example, over all other categories of employees in recent years.

A basic cause of inflation is contained in these figures to which I ask honourable members to listen well: In the past 5 years, the percentage of the work force engaged in handling money and property has risen by 31.25 per cent - 50 per cent more than those engaged in production. So, those in production increased by only 21.25 per cent, but the paper explosion created a 50 per cent increase in the burden to be carried by those in production. The result is thousands of men and women sitting in skyscraper offices exchanging pieces of paper at an ever increasing rate and hoping to God that the nation’s productivity is adequate to keep them in a style to which they are accustomed now. If it is noi, the Government’s solution is simply: Sell a bit more of the nation to bridge the gap.

While the uncontrolled expansion of nor productive spending by the monopolies continues without check, the Government has failed also to adjust the trade situation which has contributed to the strains in the economy. Our trade with the United States runs at 2 to 1 against us. Our trade with Britain is more than $350m against us each year. Our preferences are $200m against us in addition. That is the difference between what we give in preference and what we receive. On top of this, we have a massive outgoing to overseas interests amounting to $l,227in in invisibles in 1968-69 on such things as freight insurance and dividends on investments. This is a jump in one year of $200m. So, we have massive increases in payments overseas for services that we could provide for ourselves - in a single year, a S200m increase in that direction. Yet this has gone without a comment from the Prime Minister, without a comment from the Treasury and of course deadly silence from either the present Minister for Trade and Industry or his mentor.

Let us examine the waterfall of payments to overseas companies. The amount rose from $27 lm 5 years ago to $505m last year. Overseas investors receive in fact 30 per cent of Australian company profits. We have to use 16 per cent of our export income to pay profits and dividends to the overseas controllers of much of our economy. Instead of massive wastage on non productive development in Australia which has lead to speculation and inflation, the Government should have been using what it is pleased to regard as hot money to make its own overseas investments to buy into outlets for our exports to claim even a modest share of expanding overseas trade. We are not doing that. But, no; the Government has not only slept on the job but also has connived with the interests which support it to leave the speculators untouched. What a pathetic gesture it is to cut basic services while ignoring the syphening off of$1, 227m in payments for foreign services that we could provide ourselves, ignoring the profits and practices of international operators in shipping and oil, ignoring the worsening balance of payments with Britain and the United States of America and the lack of balance in our out of date preference system which is costing us $200m a year.

What is the Government’s reply? It is to cut basic services by the States and to order a reduction in the incidence of lawn mowing in the Australian Capital Territory. In these figures and in this performance lie the explanation as to why one of the richest countries in the world has bad roads, overcrowded schools, inadequate hospital buildings and 1 million poor people with half of its rural industries in crisis. The indictment of this Government is that it has allowed the economy to be plundered and the nation to be made poor in its riches. Government members have a parrot cry. ‘Where is the money coming from? they ask.Where is it coming from?’ The question before this Parliament tonight is not ‘Where is the money coming from?’ but ‘Where is the money wealth of the richest country in the world going?’ While the money pours out, the overseas penetration of our country continues to such an extent that people are beginning to ask. ‘Who owns Australia?’ One hundred million acres of Australian pastoral and agricultural land is now overseas controlled. Three new projects are mooted, the largest of which is 2.5 million acres, planned by overseas interests to grow crops that they are seeking for their own purposes.

This brings me to the quintessence of Government failure of our country and of our people. Side by side with inflation, we have depression in the countryside. I want to challenge in these last moments of my speech-

Mr Turnbull:

– Another challenge?


– Yes. My challenge is to the Government to tell the truth about its rural policy. I challenge the Government to table the report on the rural crisis which it commissioned for circulation to the States. This is a report which is in the hands of State Premiers and Ministers responsible for agriculture but a report which has been rigidly suppressed as far as this Parliament is concerned. Let us see what this secret document says. It expects a large number of rural bankruptcies. The report in effect welcomes rural bankruptcy as an effective method of rural adjustment. This Commonwealth Government secret report states that the best single form of adjustment is for farmers to leave, for properties to get bigger, for companies to replace family enterprise and the encouragement of farmers to sell their properties and to move to the cities. This is the secret formula for reconstruction with the added ingredients of higher interest rates to prevent - and I quote from the report - ‘any rise in land values and to discourage too many farmers in trouble from staying on their farms’. So, this is the confidenctial guidance from the Commonwealth to the States. Cut down the number of farmers, get them off their land and into the cities, promote company enterprise and replace the families. This is the report of the secret commission on rural reconstruction. I challenge the Minister for Trade and Industry, the Minister for Primary Industry (Mr Sinclair) and their minions to release the report and to defend it.

Yet, the very rural crisis is a product of Government mismanagement. The Government panicked about wheat. It allowed international cartels to dominate the wool industry. The Government has taken no steps whatsoever to help any situation which has caused grave hardship in the countryside. This is the situation that we face at the present time. The report is clear. It has been circulated. The challenge to table it remains.

It is obvious that some honourable members opposite have not seen it. They are so upset by it that they are doubtful whether it exists. I suggest that they ask their Ministers where it is, who authorised its distribution and to table it in the Parliament. They should then ask their Ministers whether they will stand here and defend it and not cower away in their secrecy. The Government will have a rural reconstruction scheme which will empty the countryside. Its Ministers have not the courage of their convictions to come in here and to say so. I challenge them to do so.

The Prime Minister and the Deputy Prime Minister have come to the Parliament on this occasion with a series of words which have ignored the basic fundamental inequalities and difficulties facing the nation at the present time. They have given us cuts in Commonwealth expenditure totalling $75m - that is, $75m against the situation which I have described. Where do they live? Where do they go home to? What papers do they read in their offices? What kind of advice have they ignored from their own official and from their own skilled people? They must live in a world which does not exist if they believe that the nation can be restored to a healthy situation by reducing the incidence of lawn mowing in the Australian Capital Territory, by some minor cuts in the Public Service and by denying the States the right to provide the basic amenities which are enjoyed by other people outside Australia. This is a poor philosophy.

The Prime Minister entered the debate tonight most unexpectedly. It was good to see him in the Parliament. We gave him a rousing welcome. If the Prime Minister has the courage of his convictions, let him test what he said tonight with the country tomorrow. Let him say to the people tomorrow: ‘What is your answer to the Gorton philosophy?’ I would suggest that the country would give him the answer that the Opposition gives him tonight - no confidence!


– The issues are quite clear cut. The Government stands for a policy of development and progress. It stands for a policy of full employment and all that is good for this country. The Opposition adopts purely a negative approach in everything that it says and does. I am following the honourable member for Riverina (Mr Grassby) whom I would class as ‘Mr Words’ because he is a user of words and words. If honourable members can decipher or determine what his real meaning is, they are better than I am. Out of the final statements that he has made, the only conclusion to which I can come is that he is against and opposed to all the efforts to achieve stabilisation in primary industry that the Government has undertaken in conjunction with, and with the approval of, industry leaders. That is his attitude. Let me sum it up in this way: The honourable member is against anything being done to try to help or to stabilise primary industry.

There has been criticism that the Government is to cut its expenditure by only $75m, but it will do better than that. The $75m represents the reduction that will be achieved over the remaining 4 months of this financial year. In fact a reduction of $200m will be achieved in a full year. The Government is adopting a responsible attitude in its approach to inflation.. I believe that this country should remain, as it is, a developing country. In development there is always a measure of inflation because everything that, is done to develop a new industry does not become reproductive immediately. It becomes an asset to the country. But we have to guard against excessive inflation and excessive costs in establishing new industries.

Queensland has an aggravated position because of other difficulties from which it is presently suffering. It is not responsible for inflation in any respect. I agree with what the honourable member for Dawson (Dr Patterson) has said about primary industry, and I commend the arguments advanced by him to the honourable member for Lalor (Dr J. F. Cairns). They are an answer to his own statement that inflation is more a consequence than a cause. Queensland, parts of northern New South Wales and Western Australia have not been responsible for any inflationary spiral. Twice in his speech the honourable member for Dawson said that primary industry cannot stand this wage-cost spiral. By using that terminology he admitted that wage increases are a factor in cost increases. We cannot keep an immunity from cost increases and present to the employees of this country a net increase in wages as a consequence because costs come into the picture, lt is still necessary to keep development going.

The honourable member for Dawson offered a solution and it was supported by the honourable member for Riverina (Mr Grassby) because he wants to attack all monopolies. The honourable member for Dawson did not use the term ‘monopoly’. The effect of his statement was that the burden of inflation is caused by the big industries such as the steel, oil, mineral and manufacturing industries. In other words, the Australian Labor Party wants to tax these industries to stop inflation. The policy of this Government, as I understand it, is to maintain full employment. How are we to get full employment if we do not allow sufficient capital to enable industry to expand and to cater for the ever increasing number of employees year by year? So we can only take it that the Australian Labor Party does not stand for expansion of industry or full employment. It is prepared to tax those businesses that are successful and thus create unemployment. It is Labor policy also that there should be less production because it is the policy of at least the Queensland Labor Party, and I think it is the policy of all members of the Federal Parliamentary Labor Party, to introduce a 35-hour working week. That would mean less production and less money to enable industry to provide further employment. Let members of the Australian Labor Party say to the farming industries of Queensland that they are in favour of a 35-hour week. A 35-hour week would add to costs.

The arguments put forward by the honourable member for Dawson, many of which 1 agree with, effectively answer the statement made by the honourable member for Lalor that the wage increases are a consequence, not a cause. I want to analyse that statement. The other day a Queensland public servant said to me: ‘I have had three wage increases since 1st November last amounting to a 2.1 per cent increase in my wages. I have received not merely the 6 per cent. That was only one increase. I have received total increases of 21 per cent’. I have an accountant friend who tells me that he has had to pay his employees three increases since that time. Is that arbitration being applied correctly? If the actual wage increase should be 6 per cent, why is it not 6 per cent? Why is there that snowballing effect between the courts of the States and the courts of the Commonwealth? That is why we get excessive increases. This public servant was honest enough to say to me: ‘It is not warranted that I should have received a 21 per cent increase in 2 months’.

Mr Daly:

– I raise a point of order. There is a standing order which provides that the judiciary shall not be attacked in the Parliaments. Is it right for the right honourable member to launch a bitter personal attack on the arbitration commission?


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


– The honourable member for Grayndler, who came into this Parliament the day I did, is slipping a bit, because we can criticise arbitration awards. What I am criticising, if the term .–.:— can be applied, is that we cannot reconcile State arbitration awards with Federal arbitration awards in order to avoid an unnecessary snowballing effect which causes an injustice to somebody or other. Industry cannot afford to pay a 21 per cent increase or a 30 per cent increase, as was the case in one instance.

Others have to bear the extra burden when the Commonwealth Conciliation and Arbitration Commission decides that the wage increase should be 6 per cent. The effect of such wage increases is more detrimental to country interests and country industries than it is to metropolitan people because the country areas have double transport costs, added burdens of delivery, and higher costs of distribution because these areas are more sparsely settled. These are the things that put the burden on the country people. So we must have regard to a just arbitration system. I am for arbitration all the way, but if there is a necessity to have a reconciliation between State and Federal awards to ensure fair decisions in the courts I am all for it.

I think that in certain cases the Government should look at the transport costs which affect so many people. Exports have been mentioned considerably in this debate. I think that the Commonwealth Government should look further afield at the necessity or otherwise of purchasing more ships for Australia so that we can have more competitive freight charges and so that we are not fleeced or unnecessarily charged high freight rates for all our export products. I think also that States might have regard to giving us a cheaper transport system intrastate because road haulage attracts such high taxes these days that road transport costs are an unnecessary imposition and charge upon the country people.

I submit that the Government has carried out correctly what the Prime Minister has said is a necessary action to curtail inflation to a degree. We have not adopted a panic policy which is apparently what the Labor Party wants. Much discussion has centred upon price fixing but the Opposition knows that we do not have the power to enforce it. The Opposition knows that this matter was submitted to the people of Australia by referendum by the then Labor Government in 1947 but after the experience of 7 years of price fixing during the war the people of Australia turned the proposal down. Of course, associated with the fixing of prices of materials was the fixing of wages but the submission that Dr Evatt put to the people was that the Commonwealth Government should continue to have the necessary authority to fix prices. Those who lived through the war know all the evils and the good that was associated with price fixing, including the blackmarketing that occurred. One had to know a friend who knew a friend to get something from under the counter.

Mr Daly:

– Who did you know, Charlie?


– I could not find a friend, and quite frankly the people turned down the proposal that the Commonwealth should have the authority to fix prices. But if the Trade Practices Act is ruled by the High Court to be invalid, action should be taken to see that we do get power to prevent collusive trading and unnecessary increases in prices. 1 am all for the strengthening of the Act. 1 favoured this legislation when I was in the Ministry and I favour it now. I hope that the Act will not only be implemented but also strengthened immeasurably to help us. I support the Government in the actions announced by the Prime Minister in the fields of Government expenditure, private investment and non-dwelling construction. Do we need to panic? Do we need to take any further action? I do not think we ought to take the socialistic approach of the Labor Party. To adopt the suggestions made by members of the Opposition tonight would lead to less production. There would be added costs and unemployment if all the successful industries in Australia were subjected to further taxation.


– I support the amendment proposed by the Leader of the Opposition (Mr Whitlam); The Australian economy is facing siege from a potentially dangerous inflationary prob lem. Unchecked, the inflationary stress could manifest itself in price increases of up to 7 per cent or even high, if appropriate counter-inflationary moves are not applied. Not only does inflation gravely and unfairly disadvantage pensioners, fixed income recipients and low wage earners but also it erodes the vigour and competitiveness of our export industries. For instance, primary industry which is the source of 60 per cent of our export income is already overtaxed in most fields because of oversupplied and highly competitive world markets. Given these conditions and the added burden of unrectified structural defects it is inconceivable that the farm sector can take many more, if indeed any more, body blows from rampant inflation.

Another consequence of inflation is that the rate of savings, which provides investment capital, is likely to fall. This may arise because businesses fail to make adequate allowance for inflationary movements in their depreciation calculations. Since depreciation contributes approximately 28 per cent of national savings the importance of this point is obvious. A fall off in savings causes a fall off in investment, a fall off in economic growth and a slowing down in the rate of improvement in living standards. While real estate speculators, stock exchange gamblers and manipulators, profiteers and their ilk stand to gain in the short term, overall unchecked or feebly modified inflation will sap an economy and cause grave social and economic damage.

The counter-inflationary proposals of the Government seem inappropriate and inadequate and it is doubtful whether they will be applied with the sensitivy required and the competence demanded. In the first place, abolition of the $60m investment allowance is an unselective withdrawal of assistance. The impact of this will especially affect the savings of those industries which are unable to make this loss up through increased prices. Growth will be affected. It is highly likely that those industries which are able to cover this loss through increased prices will be those contributing most to inflation. Among those unable to cover this loss will be many firms whose contribution to the economy is valuable and desirable and ought to be fostered. Those firms which do cover their loss through increased prices to consumers will be aggravating inflation.

Secondly, voluntary restraints will not work. Private enterprise by its very nature must make the best of every opportunity to profit. Even if 3 out of 4 firms honour voluntary restraints, these 3 will break if the fourth profits by thumbing his nose at those restraints. Thirdly, vague allusions to tariffs further illustrate the confused, fragmented and uncertain approach of the Government to countering inflation. There is certainly a case for rational and efficient allocation of economic resources, but this applies to all levels of industry - primary, secondary and tertiary. Apart from the Public Service, what are the proposals of the Prime Minister (Mr Gorton) to contain the tertiary sector where 60 per cent of the work force is employed and where there is least competitive pressure in an overall economy that badly lacks a competitive edge.

Further, apprehension at proposed cuts in public expenditures by Commonwealth, State and local authorities is justified. Clearly, the needs of the cities, education, health and welfare will suffer through these programmes. Australia’s problem is not one of over-expenditure in the public sector but rather of under-expenditure - grave under-expenditure in many cases. Our public hospitals and schools testify to this too well.

We win no laurels for moral responsibility by paring away at foreign aid. Developed countries, like ours, with 30 per cent of the world’s population monopolise 76 per cent of world income. The undeveloped countries have to spread thinly and inadequately for their needs 24 per cent of world income among 70 per cent of world population. There is no grace in cutting away at foreign aid when we are now the fourth wealthiest advanced economy in the world with per capita gross national product of $1,991, while Ceylon’s per capita gross national product is $200 and India’s and Indonesia’s only $110.

Further, repeated attacks on wage earners and labour organisations are a socially divisive tactic, and therefore undesirable, which refuses to confront the real nature of the current problem. The Treasury document ‘The Australian Economy 1970’ said of the causes of price rises in the preceding 12 months:

A good many other factors have contributed, larger profit margins probably more than most. Also any tendency for demand to run to excess quickly reflects itself in the elements making up costs but the directly consequential rise in wages are the symptoms rather than causes of the prevailing inflation.

Indeed, what is of interest is the way in which the Federal Government has battened onto and fattened from average weekly earnings increases. In the last 5 years pre-tax average weekly earnings increased by 37.36 per cent; after tax they increased by 32.10 per cent for a man supporting a wife and 2 children.

Again if one analyses the 6 per cent national wage increase, instead of emotionally over-reacting, it is clear that there was little room for any other decision if economic justice was to prevail. Last year productivity increased by about 2.5 per cent and prices by 3.21 per cent; that is nearly 6 per cent. In view of the fact that wages and salaries fell from 63.2 per cent GNP about 15 years ago to 61.7 per cent GNP last year while employees as a percentage of the work force grew from 89.6 per cent to 91 per cent there is a convincing case that wage earners have not fared all that favourably in participating in the nation’s wealth during the last decade and a half. The exaggerated and prejudiced attacks on wages serve only to alienate a large section of the community at a lime when concern to support common objectives ought to be fostered.

In any case Professor Pitchford has shown that it takes a 3.4 per cent increase in wages over and above productivity rises to effect a 1 per cent cost increase. This evidence, coupled with the assertion of the Treasury that wage increases in the last year were ‘symptoms rather than causes’ positively establishes that wage freeze policies are unjustified and that any such recommendation is an endeavour to shift the burden of responsibility for getting on top of the current inflationary problem to largely innocent parties. This is the situation with those unfortunates dependant on social service benefits for their livelihood. It is cruel and unjust that they should now be carrying such a large proportion of the Government’s counter-inflationary policies.

The very heart of our inflationary problem lies in deep seated structural defects in the economy. These defects have developed over a very long term, they are well entrenched and efforts to pare away the inefficiency that they cause in the economy will be vigorously resisted by pressure groups identified with the causes of some of these objects. Australia needs a more competitive economy where the price mechanism can be given a reasonable chance of working. What is needed is a rational allocation of economic resources according to economic criteria so that uneveness in the pattern of our economic development can be minimised. The most hopeful prospect for achieving this sort of end is through indicative economic planning involving private as well as public participation.

We need teeth in the Restrictive Trade Practices legislation. Even the AttorneyGeneral (Mr Hughes) acknowledges this. Without more effective provisions in this legislation, and equally importantly, without State backing through complementary legislation, business will pretty much govern itself and often in the least efficient ways. Conscription and the Vietnam war have cost us about $300m. This is a cost borne by the rest of the economy and contributes to inflationary strains.

The end result of a more efficient allocation of resources would be improved per capita growth rates. It is well known that although Australia has one of the highest rates of investment in the world, it has among the least impressive growth rates in gross national product per capita. Thus we achieve on average 2.4 per cent whereas Italy achieves 4.6 per cent, France 3.4 per cent, Austria 3.6 per cent, and West Germany 3.4 per cent. But attacking these problems - mat is, aiming at structural reform - in the economy takes time. They are long term measures, since there will be a lag between implementing action and reaping benefit. In the meantime our short term problem is to deal with an inflationary rate which gives every sign of getting out of control. We do not want to end up in the position of savage fiscal and monetary measures and devaluation policies of draconian proportions. Yet this will be the result of official incompetence in handling the present situation. in the short term we have available fiscal and monetary policies. Neither is suitably effective at this point. Buoyant optimism leads to increased tax charges or interest rates being passed on to consumers which only further aggravates the inflationary trend. Further, more money is now moved outside of the official banking institutions and between companies than is moved within the trading bank system. This means that monetary controls of the volume of money moving around the economy fall largely on smaller enterprise and are fairly limited, and certainly unselective, in effect.

The most effective and least harmful way of handling this present situation is to impose a temporary prices freeze. Normally I am not an enthusiast for direct controls, but I see no way around this problem in the short term. I know that the States have the power to regulate prices. I cannot believe that, if the situation is as serious as many see it, the State governments will shirk their duty by refusing to co-operate in a temporary price freeze. This is a time for shibboleths, prejudices, and narrow regionalism to be sunk by statesmen concerned about the economic health of the community.

In addition to a temporary prices freeze, it is clear that the Government must also broaden its tax base. Expanding public needs financed by tax burdens growing faster than the rate of growth in wages only accelerates further wage demands. So far inflation has been a boon to Federal government expenditure needs by extracting greater proportions of wages as taxation. We have now reached the danger point where this can no longer be done with safety to the economy.

There is nothing sacred about accumulated wealth. Capita] gains and net worth taxes should be instituted. As 1 example of the clear justification of this sort of tax let me refer to the Broken Hill Pty Co. Ltd and Mount Isa Mines Ltd. Between 1957 and 1960 more than 40,000,000 bonus shares were issued in BHP and their market value last year was in excess of $583m or more than 28 per cent of issued capital. Between 1957 and 1963 Mount Isa Mines issued more than 72.000,000 bonus shares worth more than SI, 082m at the end of last year. This was nearly 76 per cent of issued capital.

Bonus shares are issued to shareholders to cover capital appreciation of organisations. The appreciation comes largely from capital earned from consumers, retained from profits and ploughed back into the enterprise. About 40 per cent of new capital requirements for Australian secondary industry comes from this source. That is, a form of unofficial tax is charged consumers to bolster the finances of undertakings without any value being given to the consumer for this charge. Even with the present tax base there is room for improvement, for example, income-splitting, companies formed for tax-avoidance purposes and related practices.

Finally, serious consideration should be given to a mild revaluation. A slight edge from this source would create more internal competitiveness. The healthy state of our balance of payments gives some credibility to this line of action which, if successful, should improve competitiveness and restrain prices. Temporarily there would probably be a need for a two level exchange rate in recognition of the difficulties of rural industry. The temporary benefits of a lower exchange rate favouring primary industry must be stressed. It should be introduced only on the clear understanding that additional structural improvements, particularly in the rural sector, will be carried out. However, let it be clearly understood that short term remedies applied without the necessary deep seated structural changes in the economy, which are the main source of our present problems, will be largely a waste of time. In other words, appropriate steps must be set in train now to create a long term strategy aimed at achieving a rational allocation, and therefore efficient utilisation, of scarce economic resources.

The Federal Parliament must have the courage to confront pressure groups and vested interests wherever it is necessary; and it will be necessary in order to achieve this end. Frankly, it is the long term implications of our slipshod, piecemeal handling of the economy which causes me greatest concern. The current problem can be overcome with a minimum of pain and in a relatively short time if competent, appropriate and adequate action is applied. I fear however that we cannot continue to batten on to completely fortuitous circumstances such as wool, wheat, beef and min eral booms popping up in a cyclical fashion to prop an otherwise flagging economy. Indeed the evidence is starting to grow that time is running out on us at an increasing rate.


– I listened with some care to the speech made and the amendment proposed by the Leader of the Opposition (Mr Whitlam) this afternoon. I believe his speech to the national Parliament should have been seriously presented, seriously intended, seriously prepared and carefully researched to meet the Government policy squarely with clear counter proposals demonstrating solutions, analysing the economy and giving a clear statement of high policy. Nothing of the kind happened. The Leader of the Opposition has moved a censure of the Government and asked all honourable members to support the motion but he has no proposals and no solutions to offer. Worse still he did not even offer a few sentences to show a nodding acquaintanceship with economic conditions. His speech was a hotchpotch and I think it was clear that he had the greatest trouble in delineating what the problems are in our economy. Of course his lack of solutions is typical. It is true that we have been spared yet another proposal to set up a committee to examine the problems of our economy. That is a proposition with which we are becoming very familiar. It is proposed when the Australian Labor Party wants to oppose Government policy but has no policy of its own.

The Leader of the Opposition said that the Prime Minister’s statements were the sole matters before us so let us have a look at them. The Prime Minister has made 2 statements on this subject. One was a broadcast to the nation on 29th January and the other was a statement in this House on Tuesday 16th February. In the first statement he mentioned developments which had taken place and said that the problems facing the economy today were two-fold, firstly a 1.9 per cent increase in the consumer price index for the 3 months ending December last year and on top of that the effect of the Commonwealth Conciliation and Arbitration Commission’s award of a 6 per cent increase in wages. The Prime Minister gave an appreciation of Cabinet’s view and stated that the consumer price index increase was regarded as too rapid but not alarming. He said that it included once and for all cost increases due to indirect taxes. The Prime Minister drew attention to the 6 per cent wage increase which would amount to a demand of $900m in a full year. This is a far greater amount than the present increase in production of the goods manufactured in this country available for sale. Such situation is clearly a great boost to inflation. I think that all speakers today have agreed that inflation hurts everybody. The Prime Minister pointed out that consumer spending is not growing very strongly at present, and therefore announced that the Government did not propose to increases taxes. As honourable members would be aware, that measure has been adopted by a number of European and other nations in recent times, without much good effect. If anyone is interested, it is set out in considerable detail in a comprehensive report on inflation published by the Organisation for Economic Co-ordination and Development in December 1970.

The Prime Minister said that the Government was looking at 3 particular areas which it considered warranted attention - the public sector of expenditure, private investment on plant and equipment, and non-dwelling construction. He submitted the action which the Government proposed to take in the last 2 areas. His statement to the House on Tuesday was a logical extension, in that he outlined the cuts in the public sector, amounting to about $75m for the next 4 months. Although it has been said that the total Budget is an amount of $7, 800m. as has been pointed out earlier today, when one takes from that the amount paid to the States, the amount devoted to social services and other fixed amounts, the Government really has at its disposal in sums that it can directly influence only about $2,600m. So its reductions have amounted not to 1 per cent, as has been widely publicised, but to 3 per cent. Let us look now at the motion moved by the Leader of the Opposition. He says:

There has been a failure to report details and purposes of the Government’s monetary, fiscal, constitutional and industrial policies.

That is rather a a mouthful, lt seems strange to me that he comments with great certainty in his speech on what he believes the Commonwealth Government’s policies are. They are inadequately described, and embroidered with the usual personal abuse, but the Leader of the Opposition firmly claims to know what they are. Yet in the words of his motion he says there has been a failure to report. As I have indicated elsewhere, and for those who heard it, it was a rambling address, lt was certainly not an economic treatise, but a glib, superficial reference to certain monetary and fiscal measures and financial and commercial structures; with a nod as he passed by to classical socialist theory which, I believe, has been proved wrong around the world for about 30 years.

These economic and other considerations are complicated and widely spread. They are all-embracing matters which he touched on. There are about 54 sections in the Department of the Treasury alone dealing with various aspects. All of us are aware of the many institutions - perhaps the most powerful being the Reserve Bank - in our economy which are involved, in all aspects. Let me take up some of the main points mentioned by the Leader of the Opposition. Firstly he called on that tired, old cliche, ‘stop-go economic policies’. He says that since 1949 this is the fourth Liberal inflation period. He later says, with the abuse for which he is noted, that this present situation is caused by the actions of the Prime Minister himself. That would appear to be a contradiction. He says that Stop-go is characteristic and consequent of that (Liberal) rule.’ Does anybody think that a complex, industrialised nation, a great trading nation overseas - the tenth trading nation in the world - can run its affairs without changes arising from the progressive and rapidly changing events and influences? Is there any economic understanding in the comment that the Leader of the Opposition made? No individual in this country spends each day in exactly the same way. How much less does a thriving nation? As the former Prime Minister of Great Britain once said of a criticism of stop-go economic policies: How else can you drive a car in busy traffic?’ Of course there are restraints and on the other hand encouragements are needed from time to time. The restraints must be implemented as smoothly as possible.

The second point I noted was that the Leader of the Opposition showed himself to be the true disciple of the trade union movement. He attacks the Prime Minister for pointing out the inflationary effects of the decision of the Arbitration Commission, coming as it did at this particular time. I suppose there is no doubt that he will go on and on repeating this, because he fears the censure of the trade union movement far more than the censure and the criticism of this House. Let everybody be aware that his political support in the main rests squarely on the trade union movement. He knows it; and so does Mr Hawke. The Leader of the Opposition quoted Professor Hancock as saying that 88 per cent of price rises since 1949 are caused by demand. Well, here is the Prime Minister’s complete answer to that. The Leader of the Opposition in the censure motion asks for a report from the Government of its views. One need turn only to the first statement to which I have referred to see that the Prime Minister gave a completely precise answer to it. He said: i come to what constitutes the major threat of inflation. No matter what action a government takes - no matter how severely it taxes or how ruthlessly it cuts government spending - no matter how it seeks to redirect resources if that is what it wishes to do - it will not be able to beat inflation if wages and salaries rise more quickly than production. Demands for over award payments, for extra holidays, for additional holiday pay, for shorter hours can only be met in one or two ways. Either the amount of goods and services produced is increased sufficiently to enable these requests to be met without inflation - or the requests are met at the cost of inflation which ultimately destroys the benefits sought and leaves us all worse off.

If the Leader of the Opposition cannot understand that and cannot see the point, all I can say is that there is none so blind as those that will not see. Everybody knows that production is the real wealth of any country.

The measures taken to meet inflation and the threat of inflation - that has been emphasised by the Prime Minister to be mainly a threat - must be right and they must be effective for the circumstances and not the result of panic or being too harsh. The economy is complex. As honourable members know, there are many economic theories. The operation and administration of an economy is detailed and complex. The Commonwealth has not sufficient power to cover all its aspects. There is, I believe, a very proper role for the States within the national economy in the maintenance of our federal system. That is a basic belief of our Party. Hie people of Australia will never give powers to the Commonwealth to govern all these demands, as my right honourable friend said a little while ago. Many proposals for changes in the Constitution have been put forward but few have been agreed to. Labor Party demands amount to complete control of everything. Indeed, that would be necessary to implement many of its suggested measures. It is not possible to control prices without controlling every aspect of the economy.

Mr Garrick:

– Hear, hear!


– I am glad to hear the honourable gentleman’s agreement, because it is the basic No. 1 objective laid out in the Labor Party’s platform. It states in its first sentence that its objective is ‘the democratic socialisation of industry, production, distribution and exchange.’ That is a very broad scope. The actions of Labor governments show the Labor Party means it. no matter how much honourable members opposite try to hedge it. It is not spelled out, with respect to my honourable friend opposite, very clearly by leaders often, but be in no doubt that the Labor Party is a party of doctrinaire socialists. No-one should ever forget it. It has tried all these experiments before and failed. Instead of building people up and providing more opportunities and more national wealth in which to share, they would bring all down to the lowest common denominator. That policy leads to a tremendous acceleration in restrictions on growth and independent freedoms. An appreciation of this makes the point of the speech of the Leader of the Opposition fall into place. When he speaks of price control and getting the constitutional power for it we know what he means. Labor has always wanted price control and implemented it: it has been a policy and measure that has failed in peace and in war. It results in shortages. It results in controls of every aspect of business both small and big. It results in inspectors everywhere, in blackmarkets and rackets, and still the prices go up!

The Government has promised further action on restrictive trade practices and the

Leader of the Opposition this afternoon affects to be a supporter. But at the time that measure was introduced he regarded it as being unsatisfactory and inadequate. He wanted more controls. Elsewhere he speaks as though with a few changes all the finance would magically be available for the many competing demands of this country. But there is only so much to supply and for the highlight in superficiality he speaks quickly of answering all the demands of Slate governments, local authorities, bousing and public works. It is easy to promise and while he speaks with such indignation of the last Budget and of inflation, his own speech on that Budget and the 2 policy speeches he has made in the last 18 months are a catalogue of vast additional expenditure that he would make. It is a formidable increase which, if implemented, would result in catastrophic inflation.


– I support a vote of no confidence in this Government. Tonight the Prime Minister (Mr Gorton), as he did on 29th January, blamed the trade union movement for the inflation that exists in this country. For too long people have had to struggle from week to week to meet their economic needs. Every worker knows that he has to work long hours of overtime or take a second job to meet his economic commitments, or his wife is forced out to work. In most cases his wife has never been trained or educated to use her full talents so that she may give her best and share in the development of the country and its prosperity. In fact, she is an economic slave. But under this Government for far too long this has been the economic situation in this country. No worker can meet his commitments. That is why there have been strikes from one end of the country to the other of people in all fields of economic thought, whether they be white collar workers, whether they be blue collar workers, whether they be clerks or whether they be technicians. There have been more strikes and more man hours lost in the last few years in this country than ever before in its history and the only thing which can be blamed is the inflationary economic condition of this country.

I am a little sick and weary of this Government with its laissez-faire policy of blaming all its shortcomings on others. The

Prime Minister in his statement on 29th January said - and this is the major aspect of his speech - that he wants to tackle government spending, new private investment in plant and equipment and, as his main proposition, non-dwelling building. Why cut back on government spending? There is this great emphasis on cutting back on government spending; but only to the extent of $75m in a Budget comprising many thousands of millions.

Mr Daly:

– One per cent.


– One per cent, as my colleague, the honourable member for Grayndler, has said. Of course, the private sector has applauded this reduction in government spending. One agrees that in certain sections the government can prune its expenditure. I have no doubt we can prune a great deal off our defence expenditure which has increased in the last 6 years from $400m a year to$1, 200m a year because of the myth of fear of the north. We know it has drained the resources out of every Commonwealth and Stale Government department in this country. There should be a reallocation of finance for the government departments. Universities are starved. Education as a whole is in low gear. There is injustice in social services which are a mockery, particularly in regard to the treatment of our pensioners. Hospitals and health services cannot meet their commitments. Local government is crying out for Commonwealth assistance. We require control of pollution in our environment. There is chaos in our cities. Our road services are so poor that we cannot meet the requirements of our automobiles and deaths by road accidents are increasing year by year. This is not a time to curb public expenditure.

Why does the Government not attack inflation where it begins, within the monopoly and oligopoly sector of our community? This is the sector which really controls the destiny of the men sitting opposite. It presses the button and they act. Let us look at the facts of life. An examination of the most recent report of the Commissioner for Taxation discloses that 76,000 companies made a profit in the year to which it refers. That on the face of it looks like a free enterprise system. But let us look in closer detail. Nine hundred and sixty-nine companies, or1¼ per cent of all the companies, earned 57 per cent of the $3,000m profit made last financial year. A little over I per cent of companies made 57 per cent of the profit. This is where we have to look: this is where inflation begins. It is the monopoly control of this country which is controlling our future development. The remaining 99 per cent of companies shared 43 per cent of the profit.

It is the monopoly sector which determines prices, lt determines its own future growth and ils own price structure by passing on cost* in the price of goods it manufactures, it determines its priorities whether they are good for this country or not. lt determines its advertising expenditure. Let us examine the fact that this sector spent the greater part of $500m on advertising last year. It determines priorities as to what should be advertised, lt has this ‘What is good for us is good for Australia’ mentality. No control has been undertaken by the Government. The former Secretary of Defence in the United States, Mr Wilson, said when he was chairman of directors of General Motors: ‘What is good for General Motors is good for America’. Of course, the same monopoly sector here says: ‘What is good for the monopolies is good for Australia’. The monopoly sector determines it. It is not elected by the people - the general public: - and it is about time this laissez-faire Government that has been sitting in power for over 20 years and which blames everybody but itself every time a crisis occurs, faced up to its responsibilities. Why has the Government not used its taxation powers to curb this section of industry? There are many powers within the Taxation Act which could assist in curbing and controlling the priorities within the monopoly sector. Power is not lacking in our Taxation Act.

The Government stands condemned for the treatment of pensioners and people on fixed incomes. The Minister for Foreign Affairs (Mr McMahon), the former Treasurer, tonight said that the Government stood for justice for everybody. I want to examine this proposition of providing justice for everyone to which this Government referred when it presented its last Budget. In the last Budget the Government gave a flat 10 per cent reduction in taxation to nearly all taxpayers. Let us take a person who receives an annual salary of $9,500, which is what Federal Parlia mentarians and some people in the Public Service and private industry receive. A person who receives S9.500 a year with wife and 2 dependants, plus 10 per cent tax rebate, would benefit by $242 from the taxation reductions granted last year. If we add the 6 per cent increase granted by the Commonwealth Conciliation and Arbitration Commission, the salary of that person was increased to $10,070. He received a gross increase of $570 or a net increase of $340 a year. If we add the $242 which that person received from the taxation reductions granted last August, it means that since the last Budget was presented that person has received a net increase of $582 a year. But pensioners have received an increase of 50c a week or $26 a year. Let us compare that position with the hypocrisy of this Government which says that there is justice for everybody.

Let me now turn to the social priorities of the young, in particular of the young married couple seeking the security of a home. Let me recall to honourable members a statement made by the Prime Minister (Mr Gorton). Speaking in Brisbane on 22nd January 1968 he said:

There are achievements in the field of social welfare which I would like to see brought to fruition during my time as Prime Minister.

He has now been Prime Minister for 3 years, but instead of making progress in the field of social welfare, his Government has regressed. Housing is in a deplorable state. On 29th September last the Minister for Housing (Senator Dame Annabelle Rankin) said:

One of the major aims of our housing contribution in the next 3 years will be to encourage the States to provide decent housing for lower income families who are unable to obtain satisfactory private rental accommodation.

In order to expose the emptiness of such a proposal, one has only to examine the record of housing achievements. In 1954- 55, 17,900 homes were built by the State housing authorities. Those homes represented 22 per cent of all housing built in that year. Last year State housing authorities built 12,300 homes, or 9.7 per cent of all housing. So much for the Government’s so-called good intentions. One gets a little sick of hearing the pious statement that the Government believes in justice for everyone.

If one examines the position of low cost housing one finds that low cost housing just does not exist. It is a faint dream of what the Chifley Government guaranteed, and that was that no person would pay more than one-fifth of his income for a housing commission dwelling. In this year when the Government says that it believes in justice for everyone we find that if a person rents a housing commission dwelling he has to pay in his rent the interest burden of 6 per cent which is the highest rate in the history of State housing authorities. This would amount to $17.20 per week on a hypothetical cottage costing $10,000, but 1 point out that the average cost of a block of land and a home throughout Australia is $14,000.

Last year, prior to the action which was taken by the Reserve Bank of Australia in April, the Commonwealth charged housing commissions 5 per cent interest on loans. The increase of 1 per cent in the interest rate meant that a person in a housing commission dwelling had to pay an extra $1.80 per week. Last November all the State Housing Ministers met in Melbourne. Five of the six were Liberal Party or Country Party Ministers. Only one was a Labor Party Minister. They unanimously requested the Commonwealth to reduce the interest rate to 4 per cent. This is the position regarding low cost housing which is supposed to be the Government’s major priority. A reduction to 4 per cent in the interest rate would have meant a saving in rent of $3.45 a week for a person living in a housing commission dwelling. Money is needed urgently for housing in the public sector. In 1970 we completed only 144,000 homes throughout Australia. Our requirements are nearer to 175,000, so we are at least 30,000 homes short. So much for the Government’s policy of giving top priority to low cost housing.

Let me turn quickly to the private sector of housing. There is no confidence in this Government because of its action last April when it placed its heavy hand on the home building section of the building industry by increasing the Reserve Bank interest rate. We warned the Government then that it was not the non-dwelling building sector where the danger signs occurred. My colleagues and I warned the Government that there were no real pressures on the home building sector of the building industry, but our warnings were not heeded. Interest rates were increased not only for the home building sector but for all housing. Therefore, the private sector started to inflate its prices. Interest increases did not slow down the commercial sector. It continued to build because it was building for the monopoly sector. Consequently, the value of approvals in the commercial sector increased from $200m in 1969 to $357m in 1970, which is an increase of 78 per cent in one year.

We on this side of the House called for special consideration to be given to the home building sector. We asked the Government to instruct the Reserve Bank to reduce the interest rates on loans for home building. The Government granted special concessions to the rural sector. Therefore, we claim that ~ the home building sector should receive special consideration. Instead, the Government increased the interest rates which continued the inflationary spiral. I support the no confidence motion against the Government.


-Order! The honourable members time has expired.


– I welcome the opportunity to take part in this debate on the amendment which has been moved to the motion relating to the excellent and concise statement by the Prime Minister (Mr Gorton) regarding his action to deal with the state of inflation which, it is apparent to all, presently exists in some quarters of the economy. The Government has accepted this amendment as a motion of no confidence, and today we have listened to the Opposition attempting to make a case. I think that right from the very first speech that was delivered it was apparent that the whole effort would fizzle.

The first speech made no impact, it was not good economics as, of course, the second speech was. Indeed, the first speech seemed to be an attempt to set a pattern for some future hypothetical situation that nobody can quite understanad. Throughout the day we have heard a procession of speeches, one or two of which I thought were very good. I can even think of one from the Opposition side, but I will not mention the honourable member who made it because he is young enough for his head to swell. Where his speech was of value was that it completely supported the type of action which the Government is taking at this point of time. It was probably no coincidence that this person happened to be well versed in economics.

By and large the rest of the speeches from the Opposition were highly artificial in regard to the information which the speakers were attempting to give. We have had the ludicrous situation, to which I should like to refer in greater detail later, of the honourable member for Riverina (Mr Grassby) pretending that he went to his electorate and asked why his constituents felt there was any increase in costs. This just shows how dissociated and divorced he is from his rural electorate because there is absolutely no question that the straight answer he would have received was that wages were going up too fast and too often. All I can say is that the honourable member did not tap his own electorate or he is totally divorced from the interests of his contituents

I would suggest that the honourable member for Reid (Mr Uren) should take note of one or two matters in order to achieve a balance. All honourable members know that he feels sincerely about some of the matters to which he referred but let me tell him that only last week I found, in my electorate, a postmaster complaining that the increase in his salary was, in his opinion, too high. I never thought I would live to hear the day when a man would make such an assertion. It is easy for people whose mouths are bigger than their minds to express derision. When 1 asked the man why he felt this way he pointed out that the rate of increase in wages in some sectors of the economy was not giving the people he serviced as postmaster a fair opportunity and a fair slice of the national cake. That man lives very close to the electorate of the honourable member for Mallee (Mr Turnbull). He had a conscience - unlike one or two honourable members whom 1 should like to take on in a minute - and had guts enough to say what he believed. He was not caught in the selfish scramble, based on materialism, for higher and higher wages. He realised that although he was in a senior position there were people around him who were not getting the same sort of go as he did.

I make one more comment on this incident which does not necessarily suit my case, but I think it is important to be open and honest about these things. The postmaster pointed out that all his life he had struggled for an adequate wage on which to maintain his family. He is now nearing 55 years of age and he has more money than he can conveniently use. He thought that situation was wrong. He suggested also that there was something wrong with the pressure exerted by unions and union leaders that brought about this situation.

Only 2 days ago i was talking to a workman from Chrysler Aust. Ltd whose wage had doubled in 3i years. The next day a Commonwealth driver in South Australia informed me that his wage had doubled in 4 years. I am not suggesting that these 2 examples mean the ultimate: 1 am saying that the average person in Australia today is much better off then he ever has been in his capacity to acquire commodities, consumer goods and enjoy the services provided by a government which has some thought for all sections of the community. It is not, as the honourable member for Reid described it last session, a sectional government which aims only to help rich rural producers. That is something that I will not forgive or forget the honourable member for Reid for saying. A quick look at the current income tax laws will soon show who has the capacity to pay income tax this year and who has not.

The honourable member for Reid spoke of profits. Of course, he has an obsession about anyone who makes a profit. He has never quite been able to absorb the fact that nobody goes into business unless he can make a profit. People make profits in a variety of ways, but generally not in the way in which the honourable member for Reid usually makes his profits.

Mr Graham:

– Out of court cases.


– That is right. Another honourable member opposite, who spoke briefly, criticised the Broken Hill Pty Company Limited. Probably no other company in Australia has more shares owned by the general public. Members of the Opposition might say - J do not know - that it is wrong for anyone to own BHP shares. The company’s net profit for the last year was S60.5m, and its wages bill for 54,000 employees was $222,270,000. I am very grateful to the honourable member for Mitchell (Mr Irwin) for supplying me with these remarkably accurate statistics. Is the rate of profit too high in relation to the number of people employed and in relation to the wages paid? The company has to pay payroll tax, workers compensation and a 6 per cent wage rise. The actual amount will be much higher, but 6 per cent of the wages bill amounts to $14m. The Broken Hill Pty Company Limited has to find that amount in one year.

Money does not grow on bushes, although I could be forgiven for thinking that the honourable member for Sturt (Mr Foster), who is interjecting, thinks so on occasions. That money has to be found. It will be found by increasing the prices of the commodities produced by BHP or by reducing the interest paid to its shareholders, many of whom are Australians. Probably the honourable member for Sturt owns some shares in that company. His shareholding will not be able to absorb that kind of increase. Surely it is obvious that any exercise which tries to encourage investment into a profitable enterprise in this country is in the nation’s good. By and large, the industry does not require heavy tariff protection for the commodities it produces. The industry is an economic one, with a high export component. The Labor Party looks on it as a great black bear that frightens it and as something that will distract from its power or from the power of the unions. That is the impression that I have gained from listening to honourable members opposite.

As honourable members travel in their electorates they should look at the plight of local government and see what it had to find in wages last year and what it will have to find to pay the 6 per cent increase. For instance the local council at Loxton in my State, which is in the Mallee area - the Mallee has had 3 years drought out of 4 years - will have to find $10,000 extra. The honourable member for Sturt should not treat this matter lightly. The matter is a serious one. Where will that Council raise the extra $10,000? It cannot raise the money from the farmers; they have been broke for almost 4 years.

Mr Keating:

– The Council should get the money from the Federal Government.


– You can continue in your youthful ignorance.


– I shall withdraw that remark.


– Order! I did not ask the honourable member to withdraw the remark. I was about to ask the honourable member to address the Chair.


– I am sorry, Mr Speaker. Some people in their youthful ignorance, have not talked to members of State governments. When they do, if they grow up enough to do so, they will find that no State government wants the Commonwealth to take over the responsibility or the control of local government. Another brief example of the effect of the 6 per cent increase on wages bills is the effect on the Postmaster-General’s Department. This year that Department will have to find an extra $34m. How will it do that?

Mr Daly:

– Sack the Postmaster-General.


– That is a facetious suggestion, which is no better than any that we have heard today.


-Order! I suggest to the House that a motion of no confidence is one of the most serious motions that can come before the House of Representatives. I would suggest that honourable members give it the respect that it deserves.

Mr Uren:

– I rise on a point of order. The fact that it is the Deputy Whip of the Liberal Party who is making this statement


-Order! There is no substance in the point of order. The honourable member will resume his seat.


– I am sorry that a member of the Labor Party front bench has tried to deprive me of the short time that is available to me to wind up this speech. There is no question that all day not one point of any consequence has been made by members of the Opposition. From the time when the Prime Minister made his speech - which was, I think, clearly the greatest speech he has made in this House - there was no case to be made. The Opposition failed to appreciate in what areas the Government was tackling this problem or else it conveniently forgot.

I would like to finish my speech in exactly the same way in which I started some time ago. The Opposition’s motion of no confidence has been a fizzle from the word go. This has been an anaemic effort by an Opposition which is not uniform in its thinking. There is no question that the amendment wm be rejected by the House. This will be the result because so many of the arguments used during the day have been frivolous and in some cases unworthy of the people who made them. The amendment will be rejected for another reason. The people of Australia know very well that if a government sees a situation coming and is prepared to act with a bit of courage and economic sense they will back it. However, the people will not back a party whose whole attitude is one that would encourage an increase in prices and an increase in inflation which is the very subject which is under discussion today. 1 reject most wholeheartedly the Opposition’s amendment.


– 1 rise to support the motion of no confidence in what 1 confidently believe is the last 5 minutes of. the life of the Gorton Government. If any motion of no confidence deserved support it is certainly the one moved by the Leader of the Opposition in relation to the statement that was made on Tuesday by the Prime Minister (Mr Gorton). We listened for 7 minutes to the Prime Minister outlining his remedy for what is wrong with the Australian economy. One of the things that the Prime Minister can never be accused of is wasting his time on speeches. When he was first elected to this place he look months to come into the Parliament. The first speech which he wrote for His Excellency the Governor-General for the AddressinReply lasted 59 seconds. Now we have heard the Prime Minister describe the state of the economy in 7 minutes. I was interested to see that the major speaker in support of the Prime Minister’s statement was not the Treasurer (Mr Bury) but the Minister for Foreign Affairs (Mr McMahon). Just who is the Treasurer of this country? Have we a shadow Treasurer to the Treasurer and if not why did not the Treasurer take his place and defend the policy that was put before us - the policy on which the Prime Minister had based his statement?

I wish to refer to an extract from the Brisbane ‘Telegraph’ of 11th November 1969: ‘The Treasurer sacked’. The article stated:

The Prime Minister, Mr Gorton, today told his Parliamentary Liberal Party deputy leader, Mr McM.,hon, that he was being dropped as Treasurer . . . lt is clear Mr Gorton believes it is impossible for him to work closely with Mr Mc Mahon on domestic affairs and that there is less likely to be a conflict in the making of Government policy if the Treasurer moves to External Affairs.

Today they resurrected the Minister for Foreign Affairs from the grave and brought him in to support the policies foisted on this Government not by the present Treasurer or the former Treasurer but by the one man band that is the Prime Minister. 1 noticed the Minister for Foreign Affairs looking around all the time as he spoke. Why wouldn’t he? He wondered whether he was going to be stabbed by those around him. Mr Speaker you know as well as I do that the Treasurer was appointed to be what 1 might call - I do not say it in any disrespectful sense - the Charlie McCarthy of the Prime Minister on Treasury policy. The previous Treasurer was sacked because he realised


– Order! I remind the honourable member that all personal imputations against any other honourable member are out of order. I ask the honourable member to withdraw his remarks.


– What I indicated was that he was there to serve-


-Order! I ask the honourable member to withdraw the remarks.


– I withdraw the remark but say that he was there to serve the purpose of the Prime Minister’s point of view irrespective of its effect on the country. Out of all this conglomeration comes one thing: The disunity in the Liberal Party amongst the top level Ministers indicates why the economy is in the state it is in today. To hear Government supporters speak on this issue anyone would think that the Australian Labor Party had been in office for 20 years. Anyone would think it was our policies that had brought disaster to the nation. Anyone would think that we had appointed the judges to the Commonwealth Conciliation and Arbitration Commission. Anybody would think that we had given the economy the fillip, as one says, and the wage increases and all those things. The guilty men sit on the Government side of the Parliament. In 1949 from one end of the country to the other placards told the people: ‘We will put value back into the Australian £1.’ Do honourable members know what happened? The Government had to change the name of the currency to get away from the promise because it has not been fulfilled to this day. That is why we have decimal coinage. It is to get away from the promise of the Liberal Party because it could not fulfil its obligations in that respect.

Now with a spiralling economy honourable members opposite attack the Arbitration Commission. A Minister threatened the Commission today, telling it not to give workers wage increases. He said: ‘You are destroying the economic policy of this Government.’ All the time he was trying to put responsibility for all the shortcomings in the economy and the inflation which exists on to the Arbitration Commission and on to the backs of the judges whom the Government has appointed. All the time the Government has evaded its responsibility, although it said that it would put value back into the Australian £1. Let the people listening tonight - I know literally millions of them are listening to me at this time - listen to this. If honourable members opposite believe the people are not interested in the state of the economy they should look at the election results in New South Wales and at the number of votes received by the Liberal Party at the last Senate election. The 2 Government Parties rated about 32 per cent of the votes. One out of 3 people in Australia voted for this Government’s financial policies. As late as last Saturday they would not support the Government Parties in New South Wales simply because the policy the Government has foisted on the Australian people is one which is completely destroying the economy. Why, the Government has gone from the blimey to the gorblimey.

I invite honourable members to look at the Prime Minister. He is called Mr One Per Cent now - 1 per cent reduction in expenditure. This amounts to $75m. The Government did not think of cancelling the F111 contract until it had spent $400m. As my colleague said tonight Vietnam conscription has already cost $300m. But this is what the Government is doing to relieve the economy. In Canberra, for instance, the tennis courts cannot be cleaned and no top soiling, landscaping, grassing and lawn watering can be undertaken. In addition the grass will be cut but it will not be removed. What a magnificent contribution that is to the welfare of Australia. No Commonwealth buildings will be floodlit and the Captain Cook Memorial Jet which was built at a cost of about $1m will spout for only 3 hours on Sundays. Look at the economy drive of the Prime Minister. What do we find? We find that the frequency of watering and lawn mowing is to be reduced. This work will be done by 2 people instead of 4. Evidently nobody told His Excellency about this economy drive so in the middle of it a guard came here at a cost of $600 a minute and he winged off to Sydney in a VIP jet to see the cricket. This completely destroyed the economy drive the Government is making on the watering cans and things associated with Canberra. Does this not show the stupidity of the approach of this Government? What miserable, petty little things it is doing to stop inflation in the community. As I say, the Government has thrown $300m down the drain for Vietnam. In addition to that, we find that Australian troops in Vietnam could be pulled out now thereby reducing costs. If we are talking about economies and what people are spending, let us take the case of the Prime Minister and the Minister for Foreign Affairs who travelled in different planes to the Heads of Government Conference in Singapore. One went by VIP aircraft and the other travelled by Qantas-

Motion (by Mr Snedden) put:

Thatthe question be now put.

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

AYES: 57

NOES: 52

Majority . . . . 5



Question so resolved in the affirmative.

Question put:

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

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

AYES: 57

NOES: 52

Majority . . .. 5



Question so resolved inthe affirmative.

Original question resolved in the affirmative.

page 343


Law and Order- Eyre Highway- Honours and Awards

Motion (by Mr Snedden) proposed:

Thatthe House do now adjourn.


– Last night my 2 colleagues, the honourable member for Lalor (Dr J. F. Cairns) and the honourable member for Reid (Mr Uren), raised the question of what one might call justice, for want of a better term, in the lower courts of both New South Wales and Victoria. To add something to what they said, I remind honourable members of an incident which took place outside La Trobe University last year and which was featured in the newspapers of Melbourne, Photographs showed rather brutal behaviour on the part of some of the constabulary. As a result of this incident a number of young men and a young woman whom I know were taken to the local court and were sentenced rather savagely. One young man, a constituent of mine, received a sentence of 14 days’ imprisonment and a very heavy fine. As far as one can tell from the evidence, the sentence was unjust. I suppose that this sort of thing happens a large proportion of the time in the lower courts.

The sequel to this story occurred last Friday when the case was taken on appeal to the higher court. The appeal was upheld, the prison sentence was quashed and the fine was revoked. I simply want to place it on record that there are before us, if we care to look, ample cases in which lower courts have inflicted unjust penalties, have accepted police evidence against all the weight of the facts and have visited very serious injustice and hardship upon people in this community. This is one of the facets of justice to which we ought to turn our attention.

I personally do not believe that one man ought to be able to send another to gaol. I believe that if a person is to be sent to gaol the case should be determined by a jury. Here we have an instance in which my friend from Reid produced before a court evidence which could be either accepted or rejected, but the fact is that the magistrate concerned visited upon him a penalty. It seems to me that there is no place in the Australian system for such a form of injustice.


-Order! Will the honourable members who are outside the precincts of the chamber please resume their seats?


– 1 add this to the record so that my friends from Lalor and Reid will be supported by the fact that in one case a lower court in Melbourne visited a serious injustice upon one young man, but fortunately by the use of the appeal system it was removed.


– I wish to raise a question that I have raised in this House on a number of occasions; that is, the sealing of the Eyre Highway in the western part of South Australia. When this question has been raised we have always received the same reply from the Minister for Shipping and Transport, namely, that the State of South Australia was given a grant of $13. 6m for rural arterial roads and that the South Australian Government should use portion of that money to finance the project. In my electorate of Grey, which takes in well over half of South Australia, there are 3 main highways - the Stuart Highway to Alice Springs, the Flinders Highway from Port Lincoln to Ceduna along the coast, and the Eyre Highway from Port Augusta to the Western Australian border and beyond. From Ceduna to the border the Eyre Highway is an unsealed road and is very dangerous. There is bulldust, which has been the cause of very many accidents.

The Federal Government has always maintained that the Eyre Highway is a State responsibility, despite the fact that the Ceduna to the border section is part of Highway No. 1 and statements have been made by Ministers emphasising the importance of the Highway and expressing the hope that it would be completely sealed to complete a strip of bitumen around the coast from North Queensland to the coast of Western Australia. But the Government refuses to recognise that this is the only land link by road in the southern’ half of the continent. It has refused to recognise the defence potential of this road. All it has done is place the full responsibility on South Australia’s limited resources.

Despite many appeals from South Australian governments, both Liberal and Labor, for a special grant for this project, the Federal Government refuses to recognise the urgent need for this grant. The number of people killed and injured is surely sufficient justification for the completion of this project. As I pointed out in a question yesterday, the number of people from outside South Australia points to the great interstate use of this road. The South Australian Government has 3 major road projects for the western portion of the State, and it would certainly be unfair if 2 of these were stopped to allow the third to proceed. The South Australian Highways

Department is already committed to sealing the bad stretch of 45 miles from Ceduna to Penong.

It is interesting to note that 5 previous submissions to the Prime Minister (Mr Gorton) calling for Commonwealth assistance for the sealing of the Eyre Highway have been made since 1967. The most recent was a submission by the South Australian Premier, Mr Dunstan, on 6th July 1970. Following a delay of about 8 weeks, a reply dated 29th July 1970 came - not from the Prime Minister, but from his personal secretary. The letter said:

The Prime Minister will be writing to the Premier on this matter as soon as possible.

After this nothing more was heard from Canberra. On 22nd December 1970 Mr Dunstan sent a further letter asking for something more positive than a 6 months silence. Mr Gorton replied on 12th January 1971, once more disclaiming Commonwealth responsibility.

Perhaps it is considered that South Australia is being selfish in this. Let me quote from the editorial in today’s Adelaide Advertiser’:

Mr Nixon has overlooked that help given Western Australia in providing ‘beef roads has made it easier for that State to finance other highway projects. As a recent report shows, 2,000 miles of road have been sealed under that plan at a cost to the Commonwealth of $75m. With a much smaller sum, South Australia could end a national reproach.

And perhaps we can quote the Western Australian Premier, Sir David Brand, in an item in the Adelaide ‘News’:

The Western Australian Government believes the Federal Government should help the South Australian Government seal the Eyre Highway.

I do not blame the South Australian Government’, said the WA Premier, Sir David Brand.

Sealing the road will not benefit them as much as us.’

The State Premier heads a big list of WA politicians, residents, newspaper opinion-letter-writers, and others who believe the sealing is mainly a Federal Government responsibility, and is also a national disgrace.

The expressed view of Western Australian Government spokesmen is that the $9m needed for the sealing is just a drop in the ocean of Federal Government funds, and that at least it could contribute S6m with the South Australian Government the remaining $3m.

As a means of overcoming the impasse that exists on this matter, I understand that the South Australian Government has sent a telegram to the Prime Minister (Mr

Gorton), agreeing to make S3m available conditional on the Commonwealth finding a further $6m. I would certainly hope that the Minister recognises the offer made by the South Australian Government, and comes to the party by providing the other $6m needed to complete the project, and by doing so, allow the full economic use of this highway to all States of Australia, and help to cut down on the growing tragic loss of life.


– I rise to loin with my colleague the honourable member for Grey (Mr Wallis) in a plea to the Minister for Shipping and Transport (Mr Nixon) but more particularly to the Government to reconsider their attitude to the repeated claims by the Labor Government of South Australia lor Commonwealth financial assistance to South Australia to enable it to complete the sealing oi the 300 mile stretch of the Eyre Highway between Ceduna and the Western Australian border and to accept the offer of S3m by the South Australian Government towards the cost of the road. The Western Australian Government has. I understand, consistently and until yesterday solidly supported the stand of the South Australian Government in ils claim to Commonwealth financial assistance. Both governments are conscious of the importance to this nation of the sealing of this section of the highway. As the Minister must be aware it is vital to get on with the constructive job of meeting fully our developmental, tourist, trade and defence responsibilities. To overcome what is beyond any question the obvious impasse and bias of this Government levelled against the people of South Australia the South Australian Government announced today as a reasonable compromise it is prepared to allocate some §3m if this Government will appropriate the remaining $6m needed to complete the link.

It is completely monstrous and totally ridiculous for any Federal government to tolerate a situation where half a road is built. One can travel on a sealed highway from the northern end of Queensland to the north western section of Western Australia with the exception of 300 miles of unsealed road, a section which, because it is in fact unsealed and because of its geographical location, is turned into a dust bowl by traffic and this has resulted in 8 tragic deaths in the last 18 months. Deaths will continue to occur until such times as the road is sealed. Let me turn briefly to the reasons why I contend that the offer by the South Australian Government is not only reasonable but also responsible because it obviously means that it has to sacrifice priorities in road construction in other areas of the State. Yesterday the Minister for Shipping and Transport said:

I notice that on the Western Australian side of the horder the Western Australian Government has managed to seal its section of the road, and while it is to be deplored that these road accidents do take place I think that the Commonwealth Government has been fairly generous to the South Australian Government and it ought to be up to the South Australian Government to upgrade the priority of the sealing of that oad against other demands. 1 have read the Press statement by the Minister this evening, but that docs not alter the situation. The honourable member for Gray has already dealt with the latter portion of that statement.

In regard to the alleged generosity to the South Australian Government following the 1969 road grants, it is quite obvious that the present Minister for Shipping and Transport is new to his portfolio and that he has not done his homework. Let me turn to his concept of generosity. 1 state categorically that this Government had completely ignored the recommendations of the Federal Bureau of Roads made prior to the roads grants conference. The mere fact that the Government refused to adopt the recommendations is the basic reason why Western Australia was able to achieve its goat hut South Australia was not able to achieve hers. To put it bluntly, why were allocations for the other States increased when the South Australian allocation was cut? Increased road grants to the States in March 1969 were as follows: For New South Wales, $171.3m; Victoria, $ 107.5m; Queensland, $94.6m; Western Australia, $66.8m; South Australia, $43m; and Tasmania, $18. 75m. The breakdown for South Australia is $59.43m for urban roads: $1 3.67m for main trunk roads; $45. lm for other rural roads; and ancillary $9m.

In substantiation of our contention 1 point out that it was not a Labor Government which negotiated the 1969 road grants on behalf of South Australia. They were negotiated by a Liberal Premier, Mr

Steele Hall. On his return from that conference he made one of the most bitter and scathing attacks upon this Government. He said:

I could not imagine a more disgraceful treatment by the Commonwealth than South Australia received on the issue of relative grants. The Commonwealth has played favourites to an outrageous degree and has ignored the recommendations of the Federal Bureau of Roads. Are we expected to spend $30m of our substantially reduced funds to complete the national roads to the Western Australian and Northern Territory borders?

What did the Federal Bureau of Roads recommend? My analysis of the situation is precisely this: The Bureau recommended that under the Commonwealth Aid Roads Agreement that South Australia should receive a grant of $ 1 36.6m. South Australia was dished up $129ra, which means that the Stale had a deficiency of S7.6m. If this Government were to accede to the request of South Australia at this point of time, the Federal Government would still be $1.4 better off as was recommended by the Federal Bureau of Roads. These are indisputable reasons why South Australia cannot build this important interstate link without financial assistance from the Commonwealth.

Beyond question there has been a consistent policy of financial irresponsibility towards South Australia over the last 4 to 5 years. Following upon the road grants made in March 1969 we had the spectacle in June 1969 at the Australian Loan Council meeting of the South Australian Premier attacking the Commonwealth Government’s attitude towards South Australia. He attacked the 5-year formula providing for taxation reimbursements, claiming that it was no longer of any value and saying that the whole system had broken down, that it was just a holding operation, and that the way the agreement was working was destroying South Australia.

In the same year when the question of expenditure on public works arose South Australia again got it in the neck. Tasmania received an allocation of $48m. The South Australian allocation on that occasion was $ 1 0.35m. To add insult to injury, the allocation to South Australia was not only the lowest of the allocations to the States but was also $600,000 less than the allocation for the previous year. For how much longer must the people of South Australia tolerate what in my view is open political bias and prejudice against South Australia? Beyond any doubt, had South Australia received the allocation recommended by the Federal Bureau of Roads there would not have been constant pressure from that State to obtain a semblance of justice to complete the Eyre Highway.

The offer by the South Australian Government is constructive and conciliatory. Above all, it is politically responsible. In my view and the view of the people of South Australia the Commonwealth Government has a clear obligation to appropriate an additional $6m to complete this important interstate highway. I sincerely trust that the offer by the South Australian Government will be favourably received by the Commonwealth, and implemented so that this all important interstate highway can be completed.

Minister for Shipping and Transport · Gippsland · CP

– The honourable member for Sturt (Mr Foster) thinks that he will be very clever and speak after I have spoken. I will be delighted to hear what he has to say. The 2 previous speakers in this debate, the honourable member for Grey (Mr Wallis) and the honourable member for Hawker (Mr Jacobi), showed that they are under a misapprehension. The honourable member for Grey made some play of the fact that Western Australia had received money under the beef roads programme. He apparently overlooked the fact that South Australia is also receiving money under that programme. The honourable member for Hawker said that I have not done my homework and that the grant to South Australia under the Commonwealth Aid Roads Act had been reduced in the last allocation. I hope that after I cite the relevant figures he will be generous enough to correct any wrong impression he may have given. In the period from 1959 to 1964 the grants to South Australia totalled $57.344m: in 1964-69 the grants rose to S85.965m; and in the period from 1969- 1974 the grants will total about $129m. I am sorry if those facts destroy part of the honourable member’s argument.

It has also been argued that the Eyre Highway is not an arterial road but a major highway. All honourable members will recognise that they have major highways in their home States, of equal importance to the Eyre Highway, despite the opinion held by the people of South Australia to the importance of that road. The other State governments have sealed their highways either from funds from their own resources or through assistance by Commonwealth aid road grants. The other State governments have recognised the importance of those highways and have given them a priority high enough to make them part of the road building programme.

South Australia has not recognised the Eyre Highway as having sufficient importance to rate a priority equal to that granted highways that have been sealed in the other States. Even Western Australia, with very long roads throughout the State, has gone to the trouble and expense of sealing the highway to the Western Australian border. In respect of finance one cannot say that South Australia has not been treated generously by comparison with the other States. For the purposes of the Commonwealth aid roads programme roads like the Eyre Highway are termed rural arterial roads. I remind honourable members that the Prince’s Highway which runs a great distance around Australia is termed a rural arterial road as are the Hume Highway and the Stuart Highway. For the purposes of the Commonwealth aid roads grants each of those highways is defined as a rural arterial road. There is no difference in this respect between the Eyre Highway and any other highway in Australia

In specific terms, the South Australian Government has in its programme $1 3.67m for rural arterial roads plus a special grant of $9m, making a total of $22. 67m, as well as the money that it spends on roads itself. We should keep in mind that the Commonwealth Government provides about one-third of the money spent on roads throughout Australia. I do not think that proportion would be much different in South Australia. The Government does not lay down any conditions as to how the South Australian Government should spend its own tax raisings or its own finance on roads. The simple fact is that, whilst every other State in Australia has seen fit to seal the highways for its own benefit, South Australia has not seen fit to seat the Eyre Highway.

Today the Labor Government of South Australia sent a request to the Prime Minister (Mr Gorton) saying that it is now prepared te divert $3m from the special allocation to the Eyre Highway if the Commonwealth Government will give a $6m grant. 1 do not think that honourable members from New South Wales. Victoria, Queensland or Western Australia would think that that was fair when those States have had to allocate money and take responsibility for the setting of priorities for their roads and for sealing the highways. 1 regret to say that the Commonwealth at this point of time must leave the responsibility for the Eyre Highway where it rightly belongs, and that is in the lap of the South Australian Government. There is little else I can add to the case other than to say that the Commonwealth certainly recognises the importance of the Eyre Highway as a link, bin it is not alone in that. The South Australian Federation of Chambers of Commerce recognises the importance of the Eyre Highway as a link. lt has been asking the State Government to do something about it. It believes that the number of tourists who would go through there and spend money in South Australia would increase from 79,000 in 1970 to 500.000 in 5 years. The Federation believes that there would be an increase in capital inflow of about 300 per cent in that period, lt believes that the industries of South Australia would benefit a great deal if the South Australian Government were to seal the Eyre Highway.

All I can say is that it is the responsibility of the State Government of South Australia to lay down the priorities for the construction and the sealing of roads. If the South Australian Government does not believe Ihe Eyre Highway is of high enough priority and it wants to spend money m other areas, that is its business.


– I am most disappointed by the remarks of the new Minister for Shipping and Transport (Mr Nixon) tonight during the adjournment debate. I give him no first prize for thinking that he was going to con me on to my feet before be got up. The facts are that, whilst he may indulge in figures and statistics, they do not fool me and they do not fool the people of South Australia. Taken as a percentage of the whole, Western Australia was about $39m better off, which is a lot of money when it comes to road construction, particularly of a road of this nature. The Minister has gone on record in this place tonight as having said that a number of State governments would not support South Australia’s attitude to the sealing of the Eyre Highway. The Premier of Western Australia has gone on record in the last 24 hours as saying that it is not the responsibility of the South Australian Government, taking into consideration the grants that have been received oyer -the last few years. So the Minister is quite wrong there. At the first opportunity he should avail himself to the procedures of this House to retract the statement which he so recently made in this place, lt is not a fact, but that is not the main point. 1 am not standing here to belabour a comparison with Queensland, South Australia, Tasmania, Kangaroo Island or Norfolk Island. The fact is that the South Australian Government already is running at a deficit as a result of the actions of the Federal Government and the Federal Treasurer but has seen fit, because of the urgency of the situation and in the interests of preserving human life and preventing family suffering, to recognise that it cannot continue to permit the Eyre Highway to take such a tragic toll of life. The situation is particularly tragic because most unfortunate victims of this highway are killed during the festive season when people are in a lighter mood and are going on holiday and because the highway is used by many people who are not experienced in driving on a country road of this nature.

The offer of the South Australian Government of $3m as its contribution to the cost of sealing the highway and its attitude in requesting only a little more than S6m from the Federal Government for this purpose are worthy of serious and humane thought by this Government in the interests of humanity. I appreciate that the Minister for Shipping and Transport, who is now at the table, has not been in this portfolio for very long and that the job of sealing the highway is somewhat different from turning off a jet of water in Lake Burley Griffin - it is a problem which commands much more serious thought - but in my lighter moments I hope that the Minister will give sympathetic and serious thought to what I have proposed. I do not know whether the Cabinet has discussed this matter, nor do I know how many members of the Cabinet have an opportunity to express their will during meetings of the Cabinet, but if the Cabinet has not discussed this topic I would suggest that for the reasons I have mentioned already it should give serious consideration to the offer made by the South Australian Government and should at least double the Commonwealth’s contribution to enable the sealing of the highway to proceed. This question should not be approached on the basis of whether we have a beef road at Oodnawoopwoop and somebody else has a beef road in some other remote area of the Commonwealth.

The fact is that from the defence point of view, as was mentioned by one of my colleagues earlier, it is a disgrace that the highway has not been sealed. The attitude prevailing in Western Australia for God knows how many years before the advent of the airlines as we know them today was that Western Australia was almost completely isolated from the rest of the Commonwealth because of the difficulty of transport and communications. Although we have much improved rail and air facilities today, we ask that the road be sealed in the interests of humanity and for the benefit of commerce also. The Minister has mentioned that the Chamber of Commerce or the Chambers of Manufactures is in favour of the road being sealed. I can assure the House that neither body is affiliated with the Trades and Labour Council in South Australia or the Australian Labor Party. Those organisations support and vote for the Government. On other occasions their interests are represented in this place when a demand is made for work to be performed in some area which concerns their interests. On this occasion I suggest that the Government should listen to their views. I would applaud it for doing so.

I ask the Minister to ensure that the road is built. I leave it on the basis that the Minister will reply to representations made in this place tonight by South Australian Labor members of Parliament. I appreciate that the Minister’s knowledge of this subject would probably be limited, bearing in mind that he has held this portfolio for a short time only, but I hope that he will undertake to have this matter con sidered seriously by the Cabinet and that he will make a statement to the House in the very near future. I make this request on the basis of humanity - not on the basis of political emotions.


– During the recess a national event occurred, an event which is somewhat analogous to an annual pantomime which erupts with predictable regularity like a poor after dinner joke. During the recess we saw once again the New Year’s Honours List.I am one who is totally opposed to the sorts of values that this annual performance represents in our society. I feel that it is outmoded, that it is now alien to Australia and irrelevant to the sorts of aspirations and values that we ought to be projecting in this society.I want to make some comments on it in support of my argument that we should abolish the system. If there must be some sort of honours system it should be something quite different. But before I make those comments I would like to say that if we are to have such a system in this country - and that will be while ever the present Government is in power no doubt, and no doubt they feel a system as antiquated and alien as this is reflects the values they wish to foist on this community -I feel the people who are honoured should be honoured on more valuable grounds of merit than those that presently prevail. As I went through the list it was quite clear that those overwhelmingly represented were people who had dedicated their whole lives to the services of humanity by earning as many quids for themselves in the shortest possible time. The more quids they earned and the shorter the time in which they earned them the more likely they were to be on the Honours List and the greater the honour they attracted.I fully recognise that there was a small smattering of other people who might not have been quite so successful in raising a quid in the community, but they are there no doubt to give the system some semblance of acceptability in the community. I noticed that while a prominent newspaper proprietor whose main distinction in life had been to pour money out like a madman churning it off a counterfeit press in an abortive attempt to win a sailing race, another man, a community doctor in the field of public health services was able to rate only a mention in dispatches in the Honours List. To me there seems to be an inversion in priorities in the making of this distribution of national honours, lt would seem to me that the community doctor who had dedicated his life to community service deserved more. As it happens he was in a Queensland provincial centre. There were many other people who were also-rans, and missed out on the top titles, whose contributions to this community have been invaluable and who have been dedicated and selfless. Yet disproportionately they are represented in the mentioned in dispatches area while on the other hand other people who have made a lot of money, who have been near the Government and have been no doubt able to assist the Government at times when it has been under stress, such as during an election campaign, have been disproportionately represented in the award of high honours.

This is a foreign system; it is an alien system which belongs to Great Britain. It is entrenched in tradition, a tradition which has no place in this country of ours. Frankly, the rapidity with which changes are occurring in our society and in the British society and the relationship between the 2 countries must compel agreement from any intelligent person who is listening to this speech. That, of course, kindly exempts the honourable member for Cowper (Mr Robinson). I repeat, it is a foreign system. Australians are now aliens in Great Britain, and they are treated as such. Great Britain is welcoming the opportunity, it would appear, to sunder any meaningful ties with Commonwealth countries, especially with Australia, to help it gain entry to the European Common Market. Then more than ever before will it become abundantly clear to any intelligent Australian who wants to stand upright rather than grovel that this system of honours is alien and irrelevant to Australia’s needs. If we are to have this sort of system operating I want to make one quick qualification for some people who, 1 feel, deserve some recognition. This House of the Parliament is the most important centre in the democratic system of administration of this country - theoretically anyway. I rather feel there are 2 gentlemen who are in this chamber now who should be recognised for the contribution they have made to the running of this country.

They are the Clerk of the House, Mr Alan Turner and the Clerk Assistant, Mr Norman Parkes. Perhaps our Clerks could be Sir Alan Turner and Sir Norman Parkes. We could give them the highest honours, the first degree to Alan and the second degree to Norman. If there is any third degree to be handed out perhaps we could get Bert James to do it. I suggest this to the Government while the present system is operating. I also suggest seriously that we get rid of the present system as soon as we can.

We should has’e a system of Australian honours whereby people with real merit are honoured as a matter of national prestige much as the French have their Legion of Honour. The sort of people I would like to see honoured are not those who have been successful in extracting money by clever manipulation on the Stock Exchange. I dare say the honourable member for Evans (Dr Mackay) would be on the list if that were the criterion for entering this rather rarefied area. In any event, gamblers on the Stock Exchanges and manipulators in real estate and other business interests should not be the people honoured. I would rather see proper recognition given to people who have made contributions to mankind as distinct from those who have thought only of themselves and of how much wealth they can amass.

T would like to see the distribution of recognition across the board in Australian society rather than have it isolated to a few of the people in the top strata of Australian society. We need to keep in mind that the top strata of Australian society is selected by the money it makes rather than by its intellectual contribution. I cannot understand why trade union leaders, housewives, family doctors in small practices, accountants and average people in the community who have made contributions in terms of economic growth, which in turn gives us the wealth that we have to distribute in the community, should not be included. Their work is invaluable. Without their support the Australian economy would not be as stable as it is and our progress would not be so great.

This seems to me to be the more realistic and responsible approach to recognising the value of the role of people in society. It is a completely hollow and counterfeit value judgment on the part of the Government to always be obsessed with the fact that if a man makes a lot of money he clearly has an A priority right to appear at the top of the New Year’s honours list. On that basis the gentleman who operated the Rural Bank in New South Wales would have a very high place on the honours list.

The sooner we scrap the system of having State Governors, and replace the Governor-General by a President with a truly representative role to play related to

Australia and its aspirations, instead of performing some meaningless functions at the State and Federal levels as an unexcelled opener of Saturday afternoon fetes and bun shows for old ladies, the better it will be. I think we would be giving more dignity to the office and attracting more respect to it.

Question resolved in the affirmative.

House adjourned at 11.53 p.m.

page 352


The following answers to questions upon notice were circulated:

Australian Capital Territory: Education (Question No. 2225)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

How many class periods in government secondary schools in the Australian Capital Territory during the year 1970 were conducted (a) by teachers without appropriate qualifications in the relevant subject, (b) with classes combined, (c) by casual teachers,(d) by part-time teachers, (e) by married women teachers and (f) by full-time permanent staff, showingthe answer in a tabulated form classifying forms 1 to 6 and by each major subject inthose forms.

Mr N H Bowen:

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

  1. The honourable member is no doubt aware that views of educationalists differ on what are appropriate qualifications for leaching mostsubjects. Required qualifications vary with the nature ofthe subject, the level at whichit is to be taught, andthe particular teachers experience. In practice, teachers are appointed to their classes by the Principal in consultation with them, and in this way the most appropriate distribution of available staff is made.
  2. It has not been possible, with the resources availableto my Department and the New South Wales Department of Education, to obtain the information sought by the honourable member.
  3. and (d)
  1. This information is not available in the form requested by the honourable member.

Australian Capital Territory: Education (Question No. 2229)

Mr Enderby:

asked the Minister for Edu cation and Science, upon notice:

How many teachers in each year since 1964-65 have, while employed in the Australian Capital Territory government schools, been awarded degrees at the Australian National University.

Mr N H Bowen:

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

The number of teachers awarded degrees at the Australian National University while employed at Australian Capital Territory government schools was as follows:

1968- 5

1969- 4

1970- 7

Information has been obtained from the Australian National University Administration and from that University’s Counselling Service. Records for the years priorto 1968 are unavailable.

Australian Capital Territory: Education Expenditure (Question No. 2231)

Mr Enderby:

asked the Minister for Edu cation and Science, upon notice:

  1. Has he received from private schools in the Australian Capital Territory a submission with respect to their operation and requirements during the period 1971-75.
  2. If so, what are (a) their proposed (i) recurrent and (ii) capital expenditures, (b) the (i) numbers and (ii) location of proposed new schools, (c) the government loans sought and (d) the government grants sought for science laboratories.
Mr N H Bowen:

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

  1. Independent schools in the Australian Capital Territory provided information as part of the nationwide survey of educational needs in primary and secondary schools and in teacher education for the period 1971-75.
  2. This information was furnished in respect of each independent school in the Australian Capital Territory on a confidential basis. Because of difficulties in obtaining a clear picture of the needs of independent schools throughout Australia, all independent schools were subsequently asked to furnish information in the form of answers to a questionnaire, returnable towards the end of February.

Cigarettes: Tar Content (Question No. 2249)

Dr Everingham:

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

  1. Does Issue 4 of the Bar List used on Trans-Australia Airlines include 9 brands of cigarettes.
  2. Is he able to say whether according to the Anti-Cancer Council of Victoria, the 9 brands include some with a tar content of up to five times as high as other brands.
  3. Will he disclose the grounds on which brands are listed or excluded.
  4. Will he recommend to the airline that the tar content in milligrams per cigarette for each brand be included on the Bar List.
Mr Swartz:

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

  1. Issue 4 of the Bar List of Trans-Australia Airlines includes only 6 brands of cigarettes.
  2. I am aware that the findings of the AntiCancer Council of Victoria show considerable variation of the tar content as between the various brands.
  3. The brands which are listed are those which experience has shown the airline to be in greatest demand.
  4. There is no obligation for an airline to publish the tar content of the various brands of the cigarettes it carries. If this information is to be made available the more appropriate place would seem to be on the cigarette packet itself.

Taxation (Question No. 2254)

Mr Allan Fraser:

asked the Treasurer, upon notice:

  1. Are payments under the New South Wales Workers’ Compensation (Dust Diseases) Act 1942- 67 regarded as assessable income for taxation purposes.
  2. Are regular payments under the Tuberculosis Act 1948 disregarded, under section 23 (ka) of the Income Tax Assessment Act, in assessing income for taxation purposes.
  3. Are payments under these two Acts of a somewhat similar nature.
  4. If so, will consideration be given to disregarding payments under the New South Wales Dust Diseases Act in assessing taxable income.
Mr Bury:

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

  1. Yes.
  2. Yes.
  3. Payments made under the New South Wales Workers’ Compensation (Dust Diseases) Act and the Commonwealth Tuberculosis Act are considered to be dissimilar in character. Allowances under the Tuberculosis Act are paid by the Commonwealth to encourage tuberculosis sufferers to refrain from working in order that they may undergo treatment which will lead to their rehabilitation. Entitlement to the allowance is not governed in any way by the recipient’s occupation or employment and, consistently with the treatment accorded other forms of Commonwealth social services benefits, the allowance is exempt from Commonwealth income tax.

On the other hand, periodical payments under the New South Wales Workers’ Compensation (Dust Diseases) Act are designed to compensate employees for the loss of earnings resulting from disease contracted during employment. The payments are consequently comparable with other forms of workers’ compensation paid to employees in respect of disablement through injury or other industrial diseases and which fall within the category of income liable to tax.

  1. The question of exempting periodical payments made under the Dust Diseases Act could not be considered in isolation from other forms of workers’ compensation payments. The possibility of excluding all payments of this nature from liability to income tax will be kept under review.

New Zealand: Quarantine Station (Question No. 2265)

Mr Grassby:

asked the Minister for

Health, upon notice:

  1. Is he able to say whether the New Zealand health and quarantine authorities have decided to establish a total quarantine station for that country.
  2. If so, will this mean that New Zealand primary producers will then have access to a wide range of genetic material which is not now available to them or in Australia.
  3. Where and when is the New Zealand quarantine station to be established, and is it intended that Australia will rely on this station.
  4. Has Australia any plans for a total quarantine station along the New Zealand lines.
  5. If so, (a) do these plans embrace a quarantine station and associated laboratory which would obviate Australia’s reliance on centres 12,000 miles away, (b) where would it be situated and (c) when would it be operative.
  6. Has the present absence of facilities prevented the introduction directly of new blood in the animal industry since 1958.
  7. Is the lack of facilities stultifying Australia’s genetic material in plants and animals and denying access to advances in breeding being enjoyed in many cases by competitive countries.
Dr Forbes:
Minister for Health · BARKER, SOUTH AUSTRALIA · LP

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

  1. New Zealand has built a high security animal quarantine station.
  2. This will be a decision of the New Zealand Government.
  3. The New Zealand station is on Somes Island in Wellington Harbour. The station is designed to facilitate imports of animals into New Zealand, which are at present prohibited. There is no arrangement for Australia to rely on this station. The New Zealand station is not yet in operation.
  4. Australia is considering the establishment of a high security animal quarantine station.
  5. (a) Australia is also considering the establishment of a maximum security laboratory for animal diseases but this would not preclude the use of expertise in overseas laboratories such as the World Reference Centre for Foot and Mouth Disease in England which is about 24 hours distant from Sydney by air.

    1. The present thinking is that the station should be on an island but the actual location has not been decided.
    2. It is not possible to predict when the station or the laboratory would be operative, both are in the investigational stage to ensure that detailed planning is as effective as possible to ensure disease agent security.
  6. There have been large importations of bovine semen from the United Kingdom and from New Zealand. More recently there has been an expressed requirement for new blood not available by imports of semen. It is for this reason that a high security animal quarantine station is under consideration.
  7. Quarantine considerations restrict the importation of animals and to some extent animal semen. There is a procedure for the introduction of any new variety of plant unless it is a prohibited weed.

Cigarettes (Question No. 2267)

Dr Everingham:

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

  1. Does the Trans-Australia Airlines Bar List, Issue 4, include 9 brands of cigarettes.
  2. Is it a fact that 3 of these brands are manufactured by South African firms.
  3. If so, should these products be boycotted in conformity with United Nation Resolutions.
Mr Swartz:

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

  1. Issue 4 of the Bar List of TAA includes 6 brands of cigarettes.
  2. and (3) None of these brands of cigarettes are manufactured by South African owned or controlled firms.

Education (Question No. 2206)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

What amounts were paid by private schools in the Australian Capital Territory for (a) general rates, (b) water rates and (c) sewerage rates each year from and including 1958-59.

Mr N H Bowen:

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

  1. Private schools in the Australian Capital Territory did not pay general rates in the period covered by the honourable member’s question.
  2. and (c) Information of sewerage and water rates paid by private schools in the Australian Capital Territory since 1961 are set out in the table below:

Education (Question No. 2210)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

How many (a) male and (b) female teachers were there in Australian Capital Territory schools in each year from 1958-59 classified under the headings of (i) government (A) primary and (B) secondary schools, (ii) private (A) primary and (B) secondary schools, (iii) grade of teachers, (iv) permanent full-time teachers, (v) temporary fulltime teachers, (vi) part-time teachers and (vii) casual teachers.

Mr N H Bowen:

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

The information currently available to my Department of the New South Wales Department of Education in answer to these questions are set out in the tables below. The basic records are held by the New South Wales Department of Education as far as government schools are con cerned. That Department is not in a position to allocate resources to obtaining more specific replies to the questions asked.

Education (Question No. 2211)

Mr Enderby:

asked the Minister for Edu cation and Science, upon notice:

How many days were worked by (a) male and (b) female casual teachers, or for how many day; were they paid, in government (i) primary and (ii) secondary schools in the Australian Capital Territory in each year from 1958-59.

Mr N H Bowen:

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

The information requested by the honourable member is not available to me.

Education (Question No. 2214)

Mr Enderby:

asked the Minister for Edu cation and Science, upon notice:

How many (a) male and (b) female teachers of each grade in government (i) primary and (ii) sec ondary schools in the Australian Capital Territory in each of the years since 1958-59 had continuous teaching experience of (A) less than one year, (B) one to two years, (C) two to three years, (D) three to four years, (E) four to five years and (F) over five years.

Mr N H Bowen:

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

The only reliable source of this information is with the New South Wales Department of Education, which is unable to devote the resources necessary for its extraction in the detail required.

However, the following tables for the years 1969 and 1970 have been prepared from staff returns available in the Canberra Office of the New South Wales Department of Education. The information covers about 80 per cent of the teachers employed in each of those years.

Education (Question No. 2212)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

How many (a) male and (b) female teachers of each grade in government (i) primary and (ii) secondary schools in the Australian Capital Ter ritory had (A) a major degree (showing the number holding each particular degree), (B) other professional qualifications and (C) pre-service teacher training in each of the years from 1958-59.

Mr N H Bowen:

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

Details of qualifications of Australian Capital Territory teachers in government schools are held by the New South Wales Department of Education. These are not available to me foi the whole of the period for which the information is re quested. However, the following figures are based on staff returns for 1970 held by the Canberra Office of the New South Wales Department.

Education (Question No. 2215)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

How many (a) male and (b) female teachers of each grade resigned while employed in government (i) primary and (ii) secondary schools in the Australian Capital Territory in each year since 1958-59.

Mr N H Bowen:

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

Figures for resignations from Australian Capital Territory schools in the form requested can only be obtained from the individual teachers’ personal record cards which are held by the New South Wales Department of Education. This Department is unable to provide the necessary resources to obtain the information. However, the following table relating to teacher resignations in 1970 may be of interest to the honourable member.

Education (Question No. 2216)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

  1. What was the average age at which headmasters were appointed to their positions in (a) primary and (b) secondary government schools in the Australian Capital Territory in each year from 1958-59.
  2. How many headmasters in these schools retired from the service during each of the same years.
Mr N H Bowen:

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

  1. The age at appointment of headmasters in Australian Capital Territory schools can only be obtained from personal record cards which are with the New South Wales Department of Education, and not available to me. However, the following information supplied by the New South Wales Education Department relating to all promotions positions may be of interest.

Education (Question No. 2218)

Mr Enderby:

asked the Minister for

Education and Science, upon notice:

  1. What was the average size of classes 1 to 6 in government primary schools in the Australian Capital Territory based on school census dates or a specified standardised alternative date, in each year since 1962.
  2. What was the average size of classes in (a) English, (b) Science, (c) History, (d) Mathematics,

    1. French and (f) German for each form in government secondary schools in the Territory for the same years.
Mr N H Bowen:

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

The information available to me on (1) and (2) is set out in the following tables. The source of information prior to 1969 for (1) and prior to 1970 for (2) is the New South Wales Department of Education and this Department is unable to extract it with the resources they have available. No further information can be given.

Education (Question No. 2220)

Mr Enderby:

asked the Minister for

Education and Science, upon notice:

What total subsidies on a dollar-for-dollar basis have been paid to government (a) primary and (b) secondary schools in the Australian Capital Territory each year since 1958-59.

Mr N H Bowen:

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

There are no subsidies paid on a dollarfordollar basis to A.C.T. government primary or secondary schools. However, the following subsidies are provided -

40 cents in$1 for library books purchased by Parents’ and Citizens’ Associations.

25 cents in $1 for physical education equipment purchased by Parents’ and Citizens’ Associations.

Amounts of these subsidies for 1968-69 and 1969-70 have been:

Similar information is not available for years prior to 1968-69.

Education (Question No. 2221)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

What fees have been received by and what contributions have been made by Parents and Citizens’ Assocations to (a) government (i) primary and (ii) secondary schools and (b) non-government (i) primary and (ii) secondary schools in the Australian Capital Territory each year since 1958-59.

Mr N H Bowen:

– The answer to the honourable member’s question is is follows: The information requested is not available to me.

Education (Question No. 2226)

Mr Enderby:

asked the Minister for

Education and Science, upon notice:

  1. What was the total number of (a) male and (b) female persons (excluding ancillary staff) employed in the Australian Capital Territory government (i) primary and (ii) secondary schools for any period of time during 1970.
  2. What was the average number of teachers instructing classes throughout the year in (a) each form and (b) each major class subject in Australian Capital Territory government schools during 1970.
  3. What type of ancillary staff and number of (a) male and (b) female ancillary staff was employed in (i) primary and (ii) secondary schools in the Australian Capital Territory in each year since 1958-59.
Mr N H Bowen:

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

  1. Part (1) of the honourable member’s question requires further clarification. It is not clear to me whether figures are required for all teachers, including those who taught for a portion of the year, or whether the information is required for a sample time period only. Figures for this latter interpretation follow:

Education (Question No. 2228)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

How many positions of (a) headmaster, (b) deputy and (c) subject master in the Australian Capital Territory government schools were in each year since 1964-65 filled by promotion of a teacher then currently employed in those schools.

Mr N H Bowen:

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

Education (Question No. 2230)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

  1. Did the Nationwide Survey of Educational Needs specify projected expenditures for government schools for the period 1971-75.
  2. If so, what are the projections of (a) recurrent and (b) capital expenditures for Australian Capital Territory government schools for (i) each year of the quinquennium and (ii) the whole period.
  3. In formulating these projections what were (a) the assumed rates of increase of (i) primary and (ii) secondary school populations, (b) the assumed number of (i) primary and (ii) secondary teachers in each year, (c) the assumed (i) primary and (ii) secondary pupil/teacher ratios for each year, (d) the assumed rate of increase of teachers’ salaries, (e) the number of new (i) primary and (ii) secondary schools proposed, (f) the size in terms of planned enrolment of each (i) primary and (ii) secondary school proposed, (g) the proposed location of new schools and (h) the estimated capital costs of the proposed new schools.
Mr N H Bowen:

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

  1. Yes. The information which follows is drawn from the material prepared by my Department which carried out the survey in respect of government schools in the Australian Capital Territory and the Northern Territory.
  2. Projections of recurrent and capital expenditures for the Australian Capital Territory government schools for each year of the quinquennium and the whole period are:
  1. (a) Projected primary and secondary enrolments for the years 1971 to 1975 are:
  1. (c) (d) The New South Wales Department of Education provides teachers for the Territory’s primary and secondary schools on the same basis as for New South Wales. Costs were estimated directly from existing costs with allowance being made for an even progress towards the class sizes recommended by the Scott Committee in New South Wales for secondary schools and for a maximum of 30 pupils per class (with 25 as the upper limit for composite groups) in primary schools. Allowance was also made for increases in salary costs estimated at 5 per cent per annum.
  2. A total of 16 new primary schools and 4 new high schools is proposed for the period 1971-75.
  3. (i) (ii) The planned enrolment for these schools varies between 500-800 for primary schools and between 1,000-1,300 for secondary schools.
  4. Primary and secondary schools will be located to meet the needs of the catchment areas they serve.
  5. Capital costs were estimated by assuming some increase over the current capital costs of approximately $1,100 per pupil place in primary schools and approximately $2,000 per pupil place in secondary schools.

Postage Stamp (Question No. 1339)

Mr Hansen:

asked the Postmaster-

General, upon notice:

Will he consider striking a postage stamp commemorating the 25th anniversary of Rural Youth in Australia.

Sir Alan Hulme:

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

My Department receives very many requests for the issue of special stamps covering a wide range of subjects. However, because our production facilities allow only a few stamps to be issued each year, all of these requests must be examined on a very selective basis.

The many requests for stamps, particularly for the recognition of worthwhile causes and organisations, present special problems in distinguishing between the merits of the various proposals put forward by the interested parties. We have had to refuse many of these requests from worthy organisations, both Australian and international, and in recent years we have been able to issue stamps for only a few organisations, such as Rotary, Lions Clubs and YWCA. In this connection, and because of the number of requests, we have had to stipulate that anniversaries of Australian significance, as a general principle, must be at least of 50 years, or multiples of 50 years. While I appreciate the position in the community of Rural Youth in Australia I am sorry that I am unable to meet this request for the issue of a special stamp.

Telephone Directory (Question No. 2030)

Mr Webb:

asked the Postmaster-General, upon notice:

What was the total cost of (a) advertisements throughout Australia similar to that inserted by his department in the ‘West Australian’ on 12 September 1970 advertising the telephone directory and (b) other advertising of the telephone directory.

Sir Alan Hulme:

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

  1. $42,000
  2. $55,000

The telephone directory advertising referred to by the Honourable Member forms part of action taken by the Post Office to reduce the cost of providing the Telephone Numbers Information Service. This free service to callers is costing more than $1 million each year for the six State capital cities alone. Although it is primarily provided to enable callers to obtain required numbers not in their current directories, studies indicated that about 70% of inquiries received were for numbers in the directories.

The objective of the advertising campaigns which have so far been undertaken in ‘Brisbane, Sydney, Melbourne, Adelaide and Perth is to motivate people to look in their directories for required numbers before deciding to call the Telephone Numbers Information Service for assistance. In Brisbane, where the first advertising campaign was undertaken last year, the volume of inquiries for numbers has been reduced substantially and it is estimated that a saving of $65,000 in running the service will be achieved over three years. In addition, the reduced traffic enables a better service to be given to callers. Although it is too early to assess the results in other capital cities, it is expected that cost savings of a similar order will be obtained.

Vietnam (Question No. 2073)

Dr J F Cairns:

ns asked the Minister for

Defence, upon notice:

How many Australians of all Services have been (a) killed and (b) wounded in the Indo-China area since operations began there?

Mr Malcolm Fraser:

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

Operations involving the Australian Forces in Indo-China have been restricted to South Vietnam, where the number of Australians killed and wounded from July, 1962 to 4th December, 1970 is:

Medical Benefit Organisations (Question No. 2135)

Mr Reynolds:

asked the Minister for

Health, upon notice:

  1. What are the (a) numbers and (b) names of approved medical benefit fund organisations in each State.
  2. Which of these organisations (a) pay a fund benefit for eye examinations and (b) require the contributor to be seen by an eye doctor.
  3. Which fund organisations pay a benefit for spectacles.
  4. Which fund organisations require the contributor to have had the spectacles prescribed by an eye doctor before benefit is payable.
Dr Forbes:

– The answer to the honourable member’s question is as follows: (l)(a) As at 1st October 1970 there were 76 medical benefits organisations registered under the National Health Act. The number of organisations in each State were:

(l)(b) and (2), (3) and (4) For ease of reference, the organisations have been listed under the various categories suggested by your question. These categories include the names of all medical benefits organisations registered under the National Health Act at 1st October 1970.

page 362


Organisations which:

New South Wales-

Australasian Holy Catholic Guild of St Mary and St Joseph, Sydney.

Mechanics’ Medical Assurance Scheme, Newcastle.

Hibernian- Australasian Catholic Benefit Society of New South Wales, Sydney.

M.M. Hospital and Medical Club, Port Kembla. The Hospitals Contribution Fund of Australia Sydney.

Medical Benefits Fund of Australia Limited, Sydney.

United Ancient Order of Druids Friendly Society, Grade Lodge of New South Wales, Sydney.

Tasmania -

Tasmanian Government Insurance Office, Hobart.

Friendly Health Services, Hobart.

Coats Patons Employees’ Medical Benefit Association, Launceston.

Other States- Nil

page 363


Organisations which pay a fund benefit for eye examinations and for the purchase of spectacles when the examination or prescription is carried out by either an optometrist or a legally qualified medical practitioner?

New South Wales -

The Australian Chilling and Freezing Company Limited, Medical Benefits Scheme, Aberdeen.

New South Wales Teacher’s Federation Health Society, Sydney.

The Commercial Banking Company Health Society, Sydney.

E.R. & S. Hospital and Medical Club, Port Kembla.

Reserve Bank Health Society.

Manchester Unity Independent Order of Oddfellows Friendly Society in New South Wales, Sydney.

Protestant Alliance Friendly Society of Australasia, Grand Council of New South Wales, Sydney.

Grand United Order of Oddfellows Friendly Society of New South Wales, Sydney.

The Phoenix Welfare Association Limited, Newcastle.

Independent Order of Oddfellows, Grand Lodge of New South Wales, Sydney.

Hunter Medical Benefit Fund Limited, Cessnock.

Newcastile Industrial Benefits Limited, Newcastle.

Commonwealth Bank Health Society, Sydney.

Tasmania -

United Ancient Order of Druids, Grand Lodge of Tasmania, Launceston.

Associated Pulp and Paper Makers’ Council Medical Benefits Fund, Burnie.

Other States- Nil

page 363


Organisations which:

New South Wales-

Post Office Mutual Benefit Society of New South Wales, Sydney.

New South Wales District, No. 85, Independent Order of Rechabites, Salford Unity, Friendly Society, Sydney.


Manchester Unity Independent Order of Oddfellows in Victoria, Friendly Society, Melbourne.

The Army Health Benefits Society, Melbourne. Naval Health Benefits Society, Melbourne.

Queensland -

Ancient Order of Foresters (Queensland) Medical Services Fund, Brisbane.

Protestant Alliance Friendly Society of Australasia, in Queensland, Brisbane.

Grand United Order of Oddfellows, Queensland, Brisbane.

Independent Order of Rechabites, Salford Unity, Queensland District, No. 87, Brisbane.

Hibernian - Australasian CatholicBenefit Society, Southern Queensland District, No. 5, Brisbane.

Manchester Unity Independent Order of Oddfellows, Queensland Branch, Brisbane.

Other States- Nil

page 363


Organisations which pay a fund benefit for eye examinations when carried out by a legally qualified medical practitioner but pay no benefit for the purchase of spectacles.

South Australia -

National Health Services Association of South Australia, Adelaide.

The Mutual Hospital Association Limited, Adelaide.

South Australian Police Department Employees Hospital Fund, Adelaide.

Western Australia -

Government Employees’ Hospital and Medical Benefits Fund, Inc., Perth.

Other States- Nil

page 363


Organisations which pay a fund benefit for the purchase of spectacles prescribed by either an optometrist or a legally qualified medical practitioner, but pay no benefit for eye examinations.

New South Wales-

The Store Hospital and Medical Fund, Newcastle.

South Coast Medical Benefits Fund, Wollongong.

Western District Medical Benefits Fund, Lithgow.

Victoria -

Australian Natives’ Association, Melbourne

Hibernian-Australasian Catholic Benefit Society, Victoria District, No. 1, Melbourne.

The Ancient Order of Foresters, in Victoria, Friendly Society, Melbourne.

United Ancient Order of Druids, Grand Lodge of Australia, Melbourne.

Protestant Alliance Friendly Society of Australasia, Grand Council of Victoria, Melbourne.

Independent Order of Rechabites, Victorian District No. 82, Melbourne.

Irish National Foresters’ Benefit Society, Melbourne.

Grand United Hospital Benefit Society, Melbourne.

Independent Order of Oddfellows of Victoria, Melbourne.

Yallourn Medical and Hospital Society, Yallourn.

Geelong Medical and Hospital Benefits Association.

South Australia -

Manchester Unity Independent Order of Oddfellows Friendly Society in South Australia, Adelaide.

Tasmania -

The Queenstown Medical Union Hospital and Medical Benefits Fund, Queenstown.

St Luke’s Medical and Hospital Benefit Association, Launceston.

Other States- Nil

page 364


Organisations which pay a benefit for the pur chase of spectacles when prescribed by a legally qualified medical practitioner, but pay no benefit for eye examination,

Victoria -

Latrobe Valley Hospitals and Health Services Association, Morwell.

The Hospital Benefits Association, Melbourne.

Western Australia -

The Hospital Benefit Fund of Western Australia Incorporated, Perth.

page 364


Organisations which pay no benefit either for eye examination or for the purchase of spectacles.

New South Wales -

Lysaght’s Hospital and Medical Club, Port Kembla.

Northern District Miners’ Medical Fund, Newcastle.

Victoria -

Grand United Order of Free Gardeners of Australasia, Friendly Society, Melbourne.

The Mutual Benefit Society of the Employees of the Melbourne and Metropolitan Tramways Board, Melbourne.

Mildura District Hospital and Medical Fund,. Mildura.

South Australia -

Hibernian-Australasian Catholic Benefit Society, Adelaide District No. 7, Adelaide.

Independent Order of Rechabites, Salford Unity,. Albert District, No. 83, Adelaide.

Independent Order of RechabitesFriendly Society, South Australian District, No. 81, Adelaide.

Western Australia -

Warren Medical and Hospital Fund, Manjimup. Yarloop District Medical and Ancillary Fund. Pemberton Medical Accident and Hospital. Fund, Pemberton.

Norseman District Hospital and MedicalFund Norseman.

Friendly Societies Health Services, Perth.

Goldfields Medical Fund, Boulder.

Tasmania -

Electrolytic Zinc Employees’ Medical Union, Hobart.

The Rosebery Hospital and Medical Benefit Society, Rosebery.

NOTE - The rules of organisations vary considerably in regard to the description of the medical practitioner who carries out an eye examination or prescribes spectacles. Organisation’s rules refer to ‘eye specialist’, ‘oculist’, ‘legally qualified medical practitioner’, ‘ophthalmologist’, doctor’, ‘specialist’, or ‘eye doctor’.

In answering the above question, the term eye doctor’ was taken to include all the legally qualified medical practitioners mentioned above.

Australian Capital Territory: Education (Question No. 2219)

Mr Enderby:

asked the Minister for Education and Science, upon notice:

What have been the recurrent expenditures on government (a) primary and (b) secondary schools in the Australian Capital Territory in each of the years from 1958-59 for (i) non-salary allowances paid on account of teachers, (ii) costs of transfer of teachers moving from New South Wales to the Territory, (iii) school supplies, (iv) repayments to New South Wales, (A) including and (B) excluding teachers’ salaries and allowances, (v) heat, light and power, (vi) telephones, (vii) water and sewerage services (viii) school cleaning services, (ix) ground maintenance, (x) buildings maintenance, (xi) caretaker or janitor services, (xii) milk for school children and (xiii) school transport.

Mr N H Bowen:

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

It is not possible to provide separate figures of recurrent expenditure on primary and secondary schools in the Australian Capital Territory. Information is not available in relation to (i), (ii), (ix). Information is provided on part (iv) but there is no dissection between (A) and (B). The following table gives details available on recurrent expenditure on Australian Capital Territory schools.

Diplomatic Recognition of China (Question No. 2335)

Mr Whitlam:

asked the Minister for Foreign Affairs, upon notice:

What countries have taken steps to extend diplomatic recognition to the People’s Republic of China since his answer to me on 28th October 1970.

Mr McMahon:

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

Since 28th October 1970, the Governments of Italy, Ethiopia and Chile have extended diplomatic recognition. In addition, Nigeria has now announced that it recognises ‘the Government of the People’s Republic of China as the sole legal Government representing the entire Chinese people’.

National Service (Question No. 701)

Dr Klugman:

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

  1. How many birthdates were drawn in each of the national service ballots to date.
  2. How many of the birthdates so drawn were used in each case by him to determine the classes of persons selected for national service.
  3. Has his Department ever selected for national service anyone whose birthdate was not drawn in the relevant national service ballot.
  4. Is he able to say whether the United States Government has made statutory provision for its draft lottery and also published the results of its first draft lottery.
  5. If so, will he reconsider his Department’s previous refusal to act in a similar fashion.
Mr Snedden:

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

  1. In the order in which they were held the number of marbles drawn in each of the ballots in the present national service scheme is as follows:

96, 67, 48, 38, 45, 39, 46, 35, 52, 30, 30, 42

  1. and (3) Each registrant whose birthdate is drawn in the ballot for his age-group is considered for call-up. However, some men fail to meet the standards of fitness required by the Army. Others such as Ministers of Religion or men whose conscientious beliefs have been determined by a court, may be granted exemption from the liability to render service under the relevant provisions of the National Service Act. Other men may be granted indefinite deferment because they are married before call-up action for their age-group commenced.

Men who fail to register at the required time and who do not fall within any of the above groups may be called up irrespective of the result of the ballot and men who are balloted out may volunteer for service.

In addition men who choose not to be included in the ballot at the time when they are required to register but instead undertake to render alternative service in the Citizen Forces, may be called up for national service if they do not comply with their undertaking.

  1. Yes.
  2. The results of the 12th National Service Ballot drawn on 28th September 1970 have been published. The results of future ballots will be published.

National Service (Question No. 1904)

Mr Clyde Cameron:

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

  1. What percentage of men examined for national service in each year since 1965 failed to meet the required medical or psychological standards for Army service.
  2. Is it a fact that the rate of medical or psychological failure has been greater among the sons of high income families than among those who come from the lower and middle income groups.
Mr Snedden:

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

  1. The following table shows the percentages of men examined who have not been accepted for national service for medical, educational or psychological reasons in each year since 1965.

1965- 39.7

1966- 48.8

1967- 51.2

1968- 50.0

1969- 47.9

1970- 51.2

  1. No information is available or required to be made available to me or officers of my Department concerning the incomes of families of national service registrants.

National Service (Question No. 1124)

Mr Clyde Cameron:

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

  1. Will the Government consider an amendment to the National Service Act to provide that, where an employee is called up for national service, his employer shall be required to pay the difference between his national service pay and the amount which he would have received but for his call up.
  2. If not, will the Government take steps to amend the Act in such a way as to require the Commonwealth to pay the difference between the national service pay and the amount which a national serviceman would have received but for his call up.
Mr Snedden:

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

  1. and (2) Under the National Service Act registrants have the same rights, obligations and liabilities. When called up they are required to render the same period of service and, subject to variations arising from differences in rank and trade grouping, receive similar rates of pay and allowances. Accordingly, it has been decided that employers should not be required by law to make up the difference, if any, between the pay which a national serviceman would have received in his civilian employment and his service pay. This is the policy the Government adopted when the National Service Scheme was introduced and which it has maintained.

I might add that it is most difficult to make an unqualified comparison between a man’s civilian pay and his position in the Army. In addition to his basic pay, a soldier receives allowances related to the particular circumstances of his service and benefits such as free medical and dental care. Some, including quite a proportion of those with higher qualifications, are selected for officer training or allocation to postings carrying special group classifications. Additionally, a national serviceman contributes to the Defence Forces Retirement Benefit Fund which provides him with a gratuity on discharge and insurance against the risks of invalidity or death. He may also receive various other benefits on discharge such as entitlements under the Defence (Re-establishment) Act and the War Service Homes Act.

It would be inconsistent with the present policy bases if the Government were to act as the honourable member suggests.

Television (Question No. 2059)

Mr Enderby:

asked the PostmasterGeneral, upon notice:

  1. Has he any information of the number of television actors, writers and producers who are at present out of work in Australia.
  2. Has his attention been drawn to the concern expressed by members of Actors Equity and the Writers and Producers Guild about the number of overseas television programmes being shown on commercial television in Australia to the detriment of the Australian television industry; if so, does he share the concern of these bodies on this matter.
  3. Has he any information as to the number of people who were once employed in public affairs programmes on commercial television stations in Australia who are no longer so employed, and who have had to leave Australia to find employment in overseas countries; if so, what are the relative figures.
Sir Alan Hulme:

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

In a letter of 11th November, I advised the honourable member in the following terms:

Due to the nature of the industry, in which free lance activity is prevalent, it is difficult to arrive at a reliable estimate of the number of actors, writers and producers who are in full-time employment in television at any given time. I can say, however, that according to figures supplied to the Australian Broadcasting Control Board, full- time employment by television stations and independent production companies did not vary significantly in numbers over the past two years.

I have received representations from members of Actors Equity, the Writers and Producers Guild and other industry employee organisations on the matter of the Australian content of television programmes. The matter is being investigated by the Australian Broadcasting Control Board at the present time, and because most complex issues are involved, about which there are conflicting points of view, it will be several weeks before the Board is in a position to announce its findings.

No. As explained in the answer to question one, it is not possible to provide reliable estimates of the level of employment outside those permanently employed by television stations and independent production companies.

Since I wrote to the honourable member, the Australian Broadcasting Control Board (on 13 th November 1970) has announced new requirements for Australian content in commercial television programmes. These involve substantial increases in the amount of Australian programmes to be televised in the most popular viewing hours from September 1971, to further increases from July, 1972.

Cite as: Australia, House of Representatives, Debates, 18 February 1971, viewed 22 October 2017, <>.