27th Parliament · 2nd Session
Mr SPEAKER (Hon. Sir William Aston) took the chair at 2.30 p.m., and read prayers.
Kangaroos Mr FOX - 1 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 the State of Victoria respectfully sheweth:
That because of uncontrolled shooting for commercial purposes, the population of kangaroos, particularly the big red species is now so low, thai they may become extinct.
There are insufficient wardens in any State of the Commonwealth to detect or apprehend those who break the inadequate laws which exist.
As a tourist attraction, the kangaroo is a permanent source of revenue to this country.
It is an indisputable fact that no species can withstand hunting on such a scale, when there is no provision being marie for its future.
We your petitioners, therefore humbly pray, that: The export of kangaroo products be banned immediately, and the Commonwealth Government take the necessary steps to have all wildlife in Australia brought under its control.
Only a complete cessation of killing for commercial purposes can save surviving kangaroos. And your petitioners, therefore. as in duty bound will ever pray.
– 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 are 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 kangaroo;.
Enact legislation to give the Commonwealth Government control of all native wildlife throughout Australia. and your Petitioners as in duly bound, will ever pray.
– 1. 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 nf one thousand million dollars is required over the next five years by the States for those needs.
That without massive additional Federal finance the Slate 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.
– I ask the Prime Minister a question. Will the right honourable gentleman back up his expressions of a fortnight ago on his Government’s abhorrence of racism by informing the Australian Cricket Board of Control that his Government does not approve of a visit of a cricket team from South Africa since the Government of that country has rejected a request by the South African Cricket Association that 2 non-white members be included in the team?
– On several occasions both I and other members of the Government have expressed our abhorrence of separatism or apartheid, and I am sure that most members of the House will have heard with bitter disappointment and regret that the South African Government had refused a request of the South African Cricket Association to permit 2 native South Africans to come to Australia with their cricket team. But I also want to make clear to the honourable gentleman that there are some principles which we have consistently observed and will continue to observe. The first one is that we do not believe in interference in the internal affairs of other countries.
– What about Vietnam?
– You do, we do not. So if you want to keep on interfering, you keep on and get your just deserts. At the recent Prime Ministers Conference the question of British supply of arms to South Africa was raised, and we there took the point of view that this was a matter for the British Government itself to decide. In other words, all of the countries which were there finally accepted the principle that they should not interfere in the internal affairs of the United Kingdom Government, and this principle we will religiously observe. It is consistent with our policy relating to New Guinea. If we hear of other countries telling us, outside the Trusteeship Council, how we should spend our money in the development of New Guinea and the decisions we should make in our right to assist the people of that country to self-determination, we usually tell them to mind their own business. This is a matter for the people themselves and the Australian Government.
– That is not cricket.
– We are not playing it now. There is a third point that I wish to make relating to the necessity to divorce our politics from our other international relationships. We divorce our politics from our trade relations. If we did not do so we would not trade with the Union of Soviet Socialist Republics. Neither would we trade with the People’s Republic of China. Equally, we believe that sport should be left to the sporting associations themselves. It seems a strange thing to me that members of a sporting association that has exactly the same views as we have on apartheid, which believes that separatism should not be associated with sporting activities and whose members have shown their dislike of apartheid on the sporting field, should be prevented from coming to this country and participating in sporting activities with our people.
There is one other point which 1 wish to make to the House. When the South African surf life saving team came to Aus-‘ tralia recently many Australians not only resented the activities of the anti-apartheid demonstrators but also showed their approval of the visit by the South Africans.
I have taken action on 2 fronts since I have been Prime Minister. I have already communicated to the South African Government the disappointment and regret felt by a great number of Australians that native Africans should be prevented from coming here to participate in a sporting event. I also have advised the secretary of the Australian Cricket Board of Control that we do not think that any objection should be taken by the Government to the visit by the South African cricket team. I make only one other comment. I hope that every sporting association will remember the statement alleged to have been made by the Leader of the Opposition yesterday - and not denied - that he is in the forefront of anti-apartheid activities and that he will resist the visit to Australia of sportsmen from South Africa.
– Has the Prime Minister seen an article in today’s issue of the ‘Australian Financial Review’ which speculates that the legislation that the Government proposes to introduce to control the practice of resale price maintenance will provide an opportunity for particular instances of the practice to be justified, but on the basis that the onus of proving such justification will be placed squarely at the feet of industry? In view of the considerable public interest in the proposed legislation, will the Prime Minister indicate to the House the nature of the provisions, if any, the Government has in mind with respect to permitting the practice to continue where it is justifiable?
– The Government has decided on the basic concepts that will be included in the Bill on resale price maintenance shortly to be presented to the House. The first provision is that resale price maintenance will be declared to be unlawful and therefore vertical arrangements of this kind in the future will be contrary to the law. This provision will be similar to the provision in the British Act and will not be along the lines of the somewhat old-fashioned and cumbrous methods which have been proposed by the Leader of the Opposition and, until recently, by the Leader of the Opposition in the Senate.
The Act will provide also that where people think that resale price maintenance is in the public interest they may apply to the appropriate tribunal for an exemption. We will include in the Bill guidelines to assist the tribunal so that it may make up its mind whether an exemption should be granted. I mention in this respect that the Government of the United Kingdom has incorporated a similar provision in the British Act and of a large number of applications for exemption only 2 have been granted by the relevant United Kingdom tribunal.
There is a third point which I think is important: it relates to suppliers. Suppliers will not be able to deny the supply of goods to purchasers purely and simply because the suppliers wish to sustain a resale price maintenance scheme. But in other cases, particularly when genuine commercial considerations are involved - and that relates particularly to cases in which a purchaser is not considered to be credit-worthy - these provisions will not apply.
Later the Attorney-General will bc explaining the full details of the Act, but I felt it was desirable to give members of the public the details of the basic concepts so that they may make their plans based upon those concepts.
– My question is addressed to the Postmaster-General. It refers to the radio broadcasts covering the pick-up roster for waterside workers, ls the Minister aware that in Adelaide the metropolitan commercial radio stations have discontinued their long-standing arrangement in handling this business because, they claim, during such broadcasts their listening audience falls away? As a consequence, new temporary arrangements have now been made with 5PI, a regional station, which are most unsatisfactory in regard to both the times made available and the very poor reception during some periods. Could the Minister arrange for these most important broadcasts to be made over the national station at times most suitable to the parties concerned? If this is not practicable, will he confer with his colleagues, the Minister for Labour and National Service and the Minister for Shipping and Transport, with the object of expediting a satisfactory solution to this important problem which, if not resolved, could lead to unavoidable and costly delays in shipping movements?
– I do not know the full arrangements by which waterside workers are called to particular jobs on particular days. I understand that, generally speaking, notification of times is printed in the daily newspapers and that the custom has been for radio stations to broadcast such times. I am not sure whether the commercial stations are the ones which broadcast the times. From the honourable member’s question, I assume that commercial stations made the announcements. They, of course, have the right to determine their programmes. However, I will be pleased to have a look at the matter the honourable member has put to me to see whether it is possible for waterside workers to be informed in the modern way, by radio, or by such other means as are available.
– My question is directed to the Minister for the Army. How earnestly is the Australian Regular Army seeking recruits? How is it that a constituent of mine who applied to join the Regular Army was rejected on medical grounds, but within a week or two was ruled fit for national service? Further, how is it that another constituent of mine, who had completed 2 years national service training, including a year in Vietnam, was subsequently ruled medically unfit for the Regular Army because of his disclosure that as a child he used to sleepwalk?
– The honourable member will be aware, from statements that have been made in the House previously, that my Department and the department of my colleague, the Minister for Labour and National Service, work closely together in determining the medical standards for those who are called up for national service and the medical standards for those who volunteer for the Australian Regular Army. I would like the honourable member to supply to me specific details of the cases he mentioned so that I can investigate them and give him a detailed answer. As to the latter part of the question, for reasons which I could explain to the honourable member, sleep walking, which is no laughing matter, relates to the psychological assessment of personality.
– I address a question to the Minister for the Interior. I have asked questions in this chamber on previous occasions about pressure from the United Arab Republic upon the Imperial War Graves Commission to have removed from the city of Alexandria British war cemeteries in which many Australian servicemen lie. Has this pressure ceased? If not, what stage have the negotiations reached?
– The pressures from the UAR upon the War Graves Commission have not ceased. The UAR remains firm on the removal of war graves from the city of Alexandria, but negotiations are proceeding and I gather that they are at a very delicate stage. I share the honourable member’s hope that these discussions and negotiations will reach a satisfactory conclusion in the not too distant future.
– I ask the Attorney-General a question. Is he aware that the Parliamentary Refreshment Rooms have been informed by Drug Houses of Australia that they will no longer be able to purchase the tablet ‘Disprin’ as it is designated a chemist only’ line, despite the fact that for years this line has been available in the House for honourable members who do not wish to have their kidneys poisoned by other pain relieving tablets that contain the drug phenacetin? Is he also aware that this restrictive trade practice is practised widely throughout Australia by many com panies? Will he take action in the proposed legislation to outlaw such practices?
-I am not aware of the circumstances which the honourable member has mentioned in relation to the Parliamentary Refreshment Rooms. However I will look into the matter and if there is anything further I think I should tell him about I will do so. In the meantime if he is short of Disprin I may be able to help him.
– Does the Treasurer realise that the cancellation of the plant investment allowance for manufacturing and mining industries is seriously threatening the ability of some companies to produce and export competitively? Has the Government seriously weighed the effects of the cancellation of this allowance or can it be reintroduced to assist at least those companies which export?
– In its review of the economic situation last January the Government reviewed the entire range of the economy and identified a -very real area of excess demand, namely that of expenditure on plant and equipment. At that time the Government decided that it was essential to dampen down the degree of demand in that area. It therefore suspended the investment allowance on plant and equipment. I emphasise that this was a matter taken in the context of the then economic situation. The measures taken to deal with the economic situation must be maintained at this stage and at the appropriate time the Government will reconsider the matter and reach appropriate decisions.
– In directing a question to the Prime Minister I am fully aware that the question relates to an incident which occurred when the right honourable gentleman was Minister for Foreign Affairs. I ask: Is he aware that some of the directors of Jetair Australia Limited were also directors of a large bankrupt company? Is it correct that Jetair Australia Limited had a paid up capital of only $77.50? Did the Department of Foreign Affairs depart from accepted government procedure of calling public tenders when it recently purchased from
Jetair Australia Limited 6 DC3 aircraft at a total cost of $275,000? In view of the unsavoury background of some of the directors of Jetair Australia Limited-
– Order! The honourable member will not make comment.
– In view of this serious breach “of accepted government methods of purchasing will the Prime Minister table all papers and documents relative to the reasons for purchasing the 6 DC3 aircraft?
– I was aware that Jetair was a subsidiary of Brins Investments and 1 understand that one of the directors has been involved in court proceedings of one kind or another. 1 do not know enough about him to be able to reply to any of the allegations made by the honourable member. I have never met him, spoken to him or written to him. Concerning the actual transaction, my colleague the Minister for Supply made a statement in another place. That statement sets out the full course of events in this matter. My personal belief is that the purchase of the aircraft from both the Royal Australian’ Air Force and from Jetair Australia Limited was al a remarkably cheap price. J believe that instead of being critical of the Commonwealth and the Department of Foreign Affairs for carrying out a satisfactory deal honourable members should be complimenting the Government for the amount of money it saved and for the fact that Government policy has been applied in a most sensible and practicable way.
– Did the Minister for National Develoment see a recent Press report which stated that a drum of radioactive fuel had fallen accidentally from a truck in the Sydney area? If he did, can the Minister advise the facts of the matter and, more importantly, can he say whether strict safety procedures were followed in this case?
– I did see a report which appeared in rather startling form indicating that some damage had occurred and some danger had resulted from a minor accident. Some drums of a material - thorium hydroxide - were being removed from a Department of Supply store, which has now been closed, and taken to the Atomic Energy Commission store at Lucas Heights. On the way a minor accident occurred and a drum of this material fell to the roadside. It was later collected and replaced on the vehicle and returned. Normal precautions were taken at the time. A geiger counter was produced and checks were made in the area, lt was found that there was no indication of any dangerous radioactivity. The Press report stated that a nuclear fuel was involved, but this was quite incorrect. It is not a nuclear fuel. It is a beach sand product which had been used for experimental purposes some years ago to determine whether a nuclear fuel could be produced from it. In fact, it is only the basic material with a low degree of radioactivity. There was no danger whatever in carrying it as it was carried on a vehicle across the centre of Sydney. I emphasise that extreme precautions are taken by the Atomic Energy Commission in handling material of any type which comes within its possession. It observes very strictly all the precautions that are laid down by the world agency. No country is more strict than Australia in applying these particular safeguards.
– I preface my question to the Prime Minister by referring lo the economic measures which were announced by the former Prime Minister, Mr Gorton, cutting back public expenditure and refusing help to pensioners and the States. These were stated to be measures directed towards arresting the alarming inflationary movement. I ask the Prime Minister: In view of the Government’s decision to increase pensions by 50c a week and to grant the States S43m in special revenue assistance grants - both of which measures I agree with - does this mean that the Government is now satisfied that the menace of inflation is over and that other deserving projects previously refused assistance by the Government may look forward to such assistance, or is it just that there has been a change of Prime Ministers?
– I went to enormous trouble, as did the Treasurer, to try to explain the economic impact of the decision to permit the States to reduce their cash deficits by the order of $43 m. It was given on the strict understanding, and unanimously agreed to by every Premier, that the money would not be spent. What will happen is that our internal surplus, whatever the amount happened to be, will be reduced by $43m and that the States’ very big deficits will be reduced by $43 m as well.
– It is only a book entry.
– It is a book entry. The honourable member is right. I am glad he has understood because in all the time that I have been here this is the first time I have seen a glimmer of understanding on his face.
Having said that, may I repeat what 1 have said before - and this is a view which is held by all our economic advisers as well as the Treasurer, myself and the Government - that the economic significance of this is minimal. We have put the States into a position where they can commence their examinations of their budget proposals for 1971-72 in a more healthy state than would otherwise have been the case. I think it is a sensible measure which has been agreed to by the former Prime Minister, and for that matter by the Government as a whole.
As to the second part of the honourable gentleman’s question, the point here is clear. In my view the most deserving section of the community, and the ones which I ranked in the highest priority, were those on the maximum rate pension. We decided that in order to meet this priority the Government would increase the maximum rate pension by $1 for a man and wife and by 50c in the case of a single individual.
– My question is directed to the Minister for Shipping and Transport who is representing the Minister for Trade and Industry. Is the Minister aware that the Japanese like our lamb and mutton to eat but that the odour created in cooking is nauseating to them? Is it possible for scientists to overcome this difficulty? Would it be possible to have the sheep dipped in the Yarra prior to export?
– I am aware that the lamb market in Japan is of growing significance to the Iamb industry and to exporters of lamb from Australia. I think that the honourable member’s question turns on the point as to whether the dipping of sheep in the Yarra may resolve some problems of smell associated with the cooking of lamb. I have to say this: As the honourable member represents a Sydney electorate I think it would be far better to dip sheep in the Yarra than to dip them in the sea off Sydney.
There is no doubt that there is a great lack of understanding - and I have struck this in a couple of countries that I have visited - about how to simply grill a lamb chop or how to grill a lamb chop simply, whichever way one likes to put it. I would like to tell of an experience I had in Canada which may well be like the experience of the housewives in Japan. When I was in Canada I was told that Canadians did not like old cracker mutton. Apparently this was a bit of a hangover from the days of the war when it was a fact that those who were in the Canadian Air Force either in Canada or serving overseas were often fed Merino cracker mutton. I think that all of us who know the taste of Merino cracker mutton would agree that it is not delicious. I am pleased to say that the sheep breeding industry, knowing this, has faced the problem and is. producing lambs of a breed and quality that give meat of a far better flavour than that. I think that the Australian Meat Board could well encourage the Japanese housewife to learn how to cook a lamb chop from the new breeds of sheep that have been developed over the years.
– I direct my question to the Minister for Defence. Has the right honourable gentleman seen reports that the United States Air Force is considering the development of an electronics warfare version of the Fill aircraft to be known as the EF111? Would this indicate to the Minister that the Fill is vulnerable to conventional anti-aircraft weapons and needs extra electronics cover? Would Australia need this sort of aircraft if the Fill procurement proceeds?
– I think the honourable member would agree that at the present moment any aircraft in service of which I have ever heard is vulnerable to ground fire, anti-aircraft fire, SAM missiles or fire from the ground of one kind or another. The concept of the Fill as in the configuration in which it has been ordered by Australia renders it less vulnerable to such fire than almost any other aircraft known because of its capacity to fly at very low levels at high speeds and follow the terrain by the electronic instruments inside it. However, in the matter of ail these weapons of war constant experiment is going on and constant attempts to improve the operations of whatever weapon it may be. I have not seen the particular article to which the honourable member, refers. 1 can say only that attempts at improvements are constantly being undertaken and that at the moment 1 believe that most military men will agree that the FI 1 1 is less vulnerable than other aircraft to anti-aircraft fire because of the reasons I have given.
– My question is addressed to the Minister for Education and Science in his capacity as Minister in charge of the Commonwealth Scientific and Industrial Research Organisation. Does the Minister recall that when he visited Kerang in Victoria as Minister for National Development his attention was drawn to the deterioration of the ibis breeding rookeries? Does he know that now, with fewer ibis, district crops and pastures are menaced by a plague of crickets? Will the Minister arrange for the CSIRO to make investigations with a view to the preservation of wild bird life in irrigation areas along the Murray River?
– I certainly recall the delightful few days that I had with the honourable member in his electorate. I do recall making some arrangements with the River Murray Commission to try to keep the water at a certain level during the breeding season of the ibis so as to encourage greater breeding. I am informed that there is a threat generally not only to the ibis but to alt water fowl in the Murray and Darling areas because of the greater control of flooding that has been exercised as a result of conservation. But there is no actual threat of extinction to the ibis. So far as the honourable member’s question relates to the ibis eating large numbers of grasshoppers and other insects, it is undoubtedly true, but I am informed that there would be no possibility of controlling major plagues of grasshoppers however many ibis we had. It has been pointed out to me that it was estimated by the Division of Wildlife Research of the CSIRO that one plague covered an area of about 4 miles long by about 4 miles wide and that there were 50 grasshoppers per square foot in this area. It would be difficult, I am sure, for all the ibises in the world to consume this number. However, the Division of Wildlife Research of the CSIRO is not at the present moment undertaking any work on the ibis, but it has put out 2 excellent reports. I should be glad to make those available to the honourable member.
– Is the Treasurer aware that income tax avoidance is being widely practised by companies and big businesses due to loopholes in the Income Tax Assessment Act? Is he aware that this legal tax avoidance is the cause of a loss of revenue amounting to hundreds of millions of dollars each year? Will he investigate this matter and consider closing the loopholes by appropriate legislation? Does the Treasurer agree that this would be a more positive way of combating inflationary pressures?
– The honourable gentleman will find nobody more anxious than myself to pass legislation which will limit the capacity for taxpayers to avoid taxation. It is a constant game. Tax evasion is something which is criminal in nature; tax avoidance is something which every taxpayer seeks to achieve. The consequence is that, as he seeks to achieve avoidance, so we, the Government, have to take action to cut off that avoidance. The Ligertwood Committee was a perfect example of this. lt was set up to examine the way in which very large amounts of revenue were being lost because proprietary companies were avoiding tax through all sorts of configurations of the private companies. Subsequently legislation came before this House and was passed. I do not recall what the Opposition’s attitude to it was at that time. But since then the Taxation Commissioner and his expert advisers have been constantly looking for ways in which tax avoidance can be prevented. Knowing that the honourable gentleman has a history as a tax investigator, I ask that if he has any information that is still residual in his head, will he please tell me and I will do all I can to follow it through.
– I direct my question to the Minister for Primary Industry. When is it proposed to introduce legislation to make available the $100m for rural reconstruction? If this legislation is delayed will money be made available to the States prior to the passing of such legislation?
– As I have explained in this House on several occasions, there is a necessary agreement to be finalised between the Commonwealth and the respective States. The discussions at officer level are well advanced, I understand, with most States. Indeed, I think all except perhaps a couple of States have agreed to the format of the agreement at the officer level and I am hopeful that as a result it will shortly be possible for the legislation to be introduced into this House and the main body of the funds within the $100m rural reconstruction scheme thereby to be made available to potential borrowers. In addition, the honourable gentleman has asked me whether there are any funds that might be utilised for rural reconstruction purposes in the meantime. The honourable gentleman will recall that there are in most States funds residual from the various forms of assistance provided after the 1930 depression. In each instance those funds are available to the State bodies. In some States, I understand, they have already been advanced and I think are now exhausted. Consequently the State authorities are waiting on the additional $100m fund to extend the scheme generally. But in all States there are some funds available from that post-1930 scheme for immediate lending to borrowers.
– I ask the Prime Minister a question. Is it a fact that the British Government has sent on to him a communication from the People’s Republic of China? Did the Chinese Government intimate that following a recent statement by a senior Australian Cabinet Minister - believed to be the Minister for Trade and Industry - it had decided to make no further purchases of wheat from Australia?
– We did receive a communication from the British Government from a source within China. It could not be regarded as speaking on behalf of the People’s Republic of China. In that communication the statement was made that for political reasons the People’s Republic of China would not be purchasing Australian wheat. There were many people who urged us not to get too heavily involved with the People’s Republic of China because it might try to intimidate us for political reasons. If this was its objective it has failed, and failed dismally. World demand for wheat has risen substantially from, I think, about 54 million tons to 57 million tons during the current year. Our own reserves of wheat will be reduced to less than 200 million bushels at the end of the year. Consequently we are not so heavily reliant upon the People’s Republic of China - that is, Communist China - for the sale of our wheat this year.
– I address my question to the Minister for Labour and National Service. I ask the Minister whether the rolling strikes by tug crews on the waterfront in Melbourne are likely to cause the diversion of giant container ships to other ports. Are these strikes, of which there have been 8 since 12th March last, causing great damage to producers, exporters, carriers and consumers? Why cannot the waterfront workers realise the tremendous inflationary results of their actions?
– I only wish that the waterfront employees did recognise the disastrous economic effects of the present industrial stoppage on the Melbourne waterfront and, in fact, the effects of all the stoppages which have taken place in recent years. As I recall it - this is off the cuff and I would need to check the figures - the number of man hours lost by waterside workers in all Australian ports during 1969-70 was in excess of 1 million. That figure will indicate the very serious nature of the situation to which the honourable member draws attention. I understand from my colleague the Minister for Shipping and Transport that at the present time there are a number of ships held up in the port of Melbourne at considerable cost to the industry and the shipowners concerned. That is to be deplored in the strongest possible way, and I only regret that a more responsible attitude has not been adopted on the waterfront to seek to bring about a sense of sanity which might reduce the industrial stoppages which have characterised what is a very important part of Australian industrial life.
So far as the disputes referred to by the honourable member are concerned, I have a paper before me showing the losses sustained. I do not wish to weary the House with details of them. Certainly these members of the Opposition who are trying to interject would not be interested in the losses which have been incurred. However, I will be quite happy to provide the honourable member who asked the question with details of the disputes. One dispute involving the Seamens Union of Australia falls, as the honourable member will appreciate, within a State jurisdiction. Consequently, it would be quite improper for me to make any comment on it.
– My question is directed to the Minister for Foreign Affairs. Will he inform the House as promptly on the situation in East Pakistan as did his predecessor regarding similar events in Tibet? Will he use bis good offices with our ally in the South East Asia Treaty Organisation to try to restrain the escalation of violence as a means of restoring national unity? Is Australia, as a member of SEATO, committed to assist Pakistan if, as alleged, the conflict involves outside intervention on the side of the rebels?
– On 2nd April about 18 dependants of Australian personnel in East Pakistan were flown out either to Bangkok or to Singapore. There are remaining about 42 Australians including essential embassy staff and people working under the Colombo Plan, many of whom are up country either where they are considered safe or from where it would be hazardous to undertake the journey to Dacca at the present moment. The Australian Government does deplore the violence and bloodshed which appear to have taken place in this unfortunate territory, particularly coming so soon after the disastrous floods and other catastrophes of only a few months ago. The Government of Pakistan which has sole responsibility for this area, is in fact taking steps to restore martial law as it recently existed over a wide area. On 26th March the President made the statement that his aim was to restore parliamentary and democratic government to the elected representatives of East Pakistan and West Pakistan as soon as this proved practicable. We rest on this statement, but we deplore what is alleged to have taken place - certainly the disorder and bloodshed - in a country which for many years has been a very good friend of Australia. It is a matter for the concern of the Pakistan Government itself. I hope to expand on this answer tonight.
- Mr Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– I do. At question time I asked what I thought was a quite serious question involving some constituents of mine, lt will be recalled that I asked the Minister for the Army (Mr Peacock) how it came about that although a constituent of mine had completed 2 years national service, including a year in Vietman, his subsequent application to join the Regular Army had been rejected because of his disclosure that he was a sleepwalker as a child. In his answer the Minister clearly implied that I regarded sleepwalking as a laughing matter. This is completely at variance with my view; it is a gross misrepresentation of my view. My concern was about the double standards which apply whereby a man can be sent to Vietnam whilst undergoing national service but later be rejected for membership of the Regular Army.
Assent to the following Bills reported: Customs Bill 1971.
Australian Capital Territory Supreme Court Bill 1971.
Naval Defence Bill 1971.
– I have received a letter from the Leader of the Opposition (Mr Whitlam) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The lack of machinery for government consultation and public information on Commonwealth, State and regional finances and functions.
I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places).
- Mr Speaker, in February the Premiers came cap in hand to Canberra for funds with which to meet their Budget deficits. Cabinet had said that they could have $40m but the former Prime Minister and Treasurer ignored Cabinet’s decision and told the Premiers to live within their means. Yesterday the Premiers came again to Canberra and were given - $43m. They could scarcely have received less than the .$40m originally authorised by Cabinet even if there bad been no change of Prime Minister. Differences between (he Gorton and McMahon Governments over Commonwealth-State financial relations amount at the most to $3m.
The minimal magnanimity of the new Prime Minister (Mr McMahon) solves nothing and changes nothing. Financial arrangements between the Commonwealth and the States will remain unsatisfactory so long as they are irrelevant to the central problem of public finance in the 1970s, which is how best to match public, functions at each of our 3 levels of government with the resources required to discharge them effectively. None of the Treasurers or heads of government yesterday seems to have spared a thought for the local and semi-government authorities which the Slates have created. The relations between the Commonwealth and the States and the State authorities are conducted on the basis of one-day meetings held 2 or 3 times a year without machinery for government consultation or public information.
The McMahon Government today, ‘ike the Gorton Government before it, is insensitive to the mounting frustration among ordinary Australians who no longer know which level of government they are to hold responsible for the growing inadequacy of the schools, hospitals, law enforcement agencies and other public facilities on which the quality of their lives depends. The buck-passing between the Commonwealth and the States has eroded the foundations of democratic responsibility end accountability. It suits the Prime Minister to insist that public functions on which he would prefer little or no money to be spent are responsibilities of the States. It suits his colleagues, the Liberal and Country Party Premiers, to insist that most of these responsibilities belong in fact to local government. This is the Liberal way not just of passing the buck but of restricting public expenditure and conscripting public authorities.
Sir Robert Menzies at least used no cant about State responsibilities when he declined to involve the Commonwealth in urban affairs. Sir Robert said simply and brutally that such involvement ‘could mean the assumption by the Commonwealth of a new and costly responsibility’. The whole meaning and purpose of the Liberal phoney war over States’ rights is to protect private affluence and perpetuate public squalor. How can the Liberals justify after 21 years in office the fact that S3 per cent of the population of Perth are still without sewerage as are 34 per cent in Brisbane, 20 per cent in Sydney and in Melbourne and 5 per cent in Adelaide and Hobart, over 1,600,000 in all? How can they justify a deterioration in public transport in all our cities which is exemplified by the fact that 63 per cent of the carriages currently used in Melbourne’s suburban railways were built between 1910 and 1928 and 12 per cent even earlier? The whole pattern of Australia’s urban and regional development will be deformed and distorted by inappropriate financial pressures unless and until the Federal Government provides relief. The burden of the outer suburbs, the developing regions of this country, is far too great to be met by those who pay rates and charges to local and semi-government authorities.
There is at present no-one who will speak for our 950 local and more than 100 semi-government authorities. They themselves have failed to speak either collectively or regionally. The States have failed to amalgamate them as population has shifted and communications have improved. It is unrealistic to expect that decentralisation of functions such as education, social welfare, urban planning, resource development and law enforcement can be achieved without a regionalisation of local and semi-government authorities and a rationalisation of finances. A Labor government will initiate a new financial Agreement under which local and semi-government authorities in each State will secure direct representation on the Loan Council.
The financial burdens of the States and local government are magnified because they must finance so much of their works programmes from loan funds and not, as the Commonwealth does, from revenue. A school in Queanbeyan or Yass, just over the New South Wales border from Canberra, costs two and a half times as much as a similar school in Canberra. The States pay as much finally for railway development projects as the Commonwealth which makes an outright advance of 70 per cent of the original cost. Debt charges absorbed an average 17.01c in every $1 of local government revenue in 1954-55 and today absorb 21.8c. Although the Commonwealth now meets charges on $ 1,000m of State debts, the States have not shared this benefit with their local and semigovernment authorities whose debts will exceed in less than 5 years those of the States and whose debt charges already exceed those of the States.
No member of this Parliament would denigrate the transformation which has taken place in Australian universities or deny that it has been achieved through processes of systematic, impartial and objective inquiry followed by the establishment of national priorities and the provision of appropriate funds. Too little notice has so far been taken of this clear and fruitful lead. The approach which has yielded so much for universities should now be applied to all those other public undertakings of everyday and universal concern in which our shortcomings are blatant or our achievements are far smaller than those of other federal nations comparable with our own. It is this approach which informs and links proposals for Commonwealth-State-municipal cooperation upon which I now touch. It is this approach alone which truly merits the title of creative federalism.
The Constitution itself provides for an Inter-State Commission. Originally its principal purpose was to end the centralisation fostered by all the State governments through their railway systems. It could provide not only for the co-ordination of our 6 mainland railway systems and our major ports in the period before the Commonwealth, like other federal governments, inevitably takes responsibility for railways and ports; it could also provide for the co-ordination of our major roads, airlines and pipelines. Unlike the Bureau of Roads and, one expects, the Bureau of Transport Economics, it would make periodic public reports.
The greatest field of additional public expenditure in Australia will be education. Until recently the States were not much involved in higher secondary education and they are still not significantly involved in pre-school education. Without Commonwealth participation Australians cannot overcome the situation where places in recognised pre-school centres are available to only 2.9 per cent of the eligible children in New South Wales, 7.3 per cent in Queensland, 9.9 per cent in Western Australia, 14.3 per cent in Tasmania, 14.4 per cent in South Australia and 27.1 per cent in Victoria, whereas a year’s pre-school education is provided in Canberra for every eligible child. The 4 Liberal and Country Party State governments have still not released the full texts of their sections of the nation-wide survey of educational needs which they received last May. The increased expenditure which must take place if Australians are to receive proper opportunities of pre-school education and higher secondary education is certain to outpace any growth tax which the Commonwealth might forgo in favour of the States. Under the Holt, Gorton and McMahon governments the Australian public has not been told how serious the position has become in education. The very large increase in expenditure on universities was supported by all Australian governments because Sir Robert Menzies released to the public the full and frank views of the experts he appointed to the Murray Committee. Since then the Universities Commission has kept the public informed. The government action and public support on universities will be reproduced on schools when a Labor government establishes a schools commission and a pre-school commission.
Over a generation ago the Commonwealth Grants Commission was established to help the smaller States provide services equal lo those of the larger States. Inequalities between regions are now far greater than any between States. In developing regions in particular these inequalities and the burdens attendant on them are bound to grow. The areas with the greatest needs are those with the least adequate resources. A Labor Government will ask the Grants Commission lo recommend the amount of Commonwealth assistance required to remove the inequalities in servicing our developing suburbs and regions. Here again the public will be regularly and fully informed on the requirements and recommendations.
The break-up of the Snowy Mountains Authority and the break-down of the River Murray Commission make it appropriate and urgent that the Commonwealth should take the lead in establishing a Murray-Darling authority as a step towards a national conservation and construction authority to carry out, in association . with State governments, the systematic development of soundly based water storage projects in the major river systems serving those established and proven areas which are periodically devastated by recurring droughts. The Murray-Darling authority could use the Snowy’s investigation, design and construction teams as well as those of the 3 State water conservation authorities. It could take over the River Murray Commission which is discredited over the Chowilla and Dartmouth disputes. It would ensure full and pure supplies of water for agricultural, pastoral, industrial and urban development in Australia’s greatest river system. It would derive its capital from the repayments which the Commonwealth is now receiving from the Snowy and which will rise by 1974 to a steady $50m a year.
I have cited the establishment of the interstate commission for which there is authority in the Constitution and the extension of the commissions for which there is already statutory provision as the proper machinery for government consultation and public information which my Party advocates in the field of Commonwealth, State and regional finances and functions. In addition an Australian hospitals commission would give a lead in modernising and regionalising our hospitals and a fuel and power commission would co-ordinate the operation and extension of
Commonwealth, State, semi-government and corporate power supplies based on coal, water, oil, uranium and natural gas.
Nearly 1 million Australians remain impoverished because our social welfare services are still fragmented, archaic and inadequate. We should now follow the example of our Canadian cousins whose Federal Government takes the initiative in consulting and reimbursing provincial governments, local governments and voluntary agencies on and for the provision of advice from social workers and assistance in kind. We need not local, State or even Federal measures in isolation, but an Australian assistance plan. In all these fields any increase in salaries is immediately felt principally by State governments and their authorities. If wages and salaries for teachers, police, social workers and nurses go up the Commonwealth budget benefits from increased revenue from income tax and State budgets suffer from increased expenditure on the salaries.
In all the matters on which I have touched, the Commonwealth alone cannot provide an adequate response. Each of our 3 levels of government has functions which it is best able to perform. The key to all these issues lies not in domination but in consultation; not in centralisation but in co-ordination. Our efforts should now bc turned lo devising institutions expressive of this attitude rather than patching up existing discredited arrangements. Above all, if the Australian people are to have faith in their system of government they must be given regular and reliable information on the finances available and the programme appropriate to each level of government. Can we be surprised if a public which is so consistently denied information becomes disillusioned and alienated? Why should the public trust Ministers to understand and apply expert advice which those Ministers are so seldom willing to divulge?
– Listening to the Leader of the Opposition (Mr Whitlam) one wonders where he dreamed up the terms of this matter of public importance which for the information of honourable members alludes to:
The lack of machinery for government consultation and public information on Commonwealth, State and regional finances and functions.
What the honourable member did was to take the opportunity, which he has so often done, to announce unequivocally and unashamedly that what he wants to achieve is total centralism of government in Australia and it has nothing whatever to do with a lack of machinery for government consultation. He knows that he cannot establish that point. And it has nothing to do with a lack of public information for there are masses of public information. What this matter has to do with, in his view, is to centralise completely government in Australia. That is a view which the Liberal Party and the Country Party in coalition in government cannot accept and it is quite clearly a view which the people of Australia will not accept. This is the dilemma facing the honourable member today. He is hoping that somewhere in the recesses of the minds of the people of Australia there will be a reluctance to accept that Commonwealth and State financial relations must be maintained. The honourable member in trying to capitalise on that then tried without their being witting to it, to divert people into supporting his centralist theories. That is just not the way the matter should emerge.
In passing the honourable member said that the States yesterday could hardly have got a lesser deal than $40m. I do not know what he intended to imply by that. It is quite clear that he does not understand the way in which the grant was made, the way in which it is to be used and the advantage to State finances or lack of disadvantage to the economic situation flowing from the grant. The Premiers can speak for themselves, and they did speak for themselves as being totally satisfied, including the 2 Labor Premiers, with one of whom the honourable member claims to have a close friendship and from whom he claims close support. I refer to the Premier of South Australia, Mr Dunstan. The Leader of the Opposition has made no such claims in relation to the Premier of Western Australia but I take it he has some nodding acquaintance with him. If he has asked them for their opinions he would have got the result and would not have spoken as he has done in this debate. I can believe only that the honourable member is anxious to see economic difficulties in Australia. Indeed the Opposition quite clearly wants to see economic problems because it feels that the only chance it has of obtaining power is to ride into office on economic difficulties. That is why the Opposition constantly does nothing to restrain its colleagues in the labor movement from staging irresponsible strikes, whether they be for industrial or political purposes. The Opposition does not try to achieve productivity in the community because it is hoping for economic problems to arise, but they will not eventuate. If that is the Opposition’s idea of sneaking into office it is doomed to failure.
The next point made by the Leader of the Opposition was a most extraordinary one. He said that yesterday there was no concern for instrumentalities or local government. He is apparently unaware that yesterday the major item for discussion was in the Premiers Conference. There was a meeting of the Australian Loan Council but it dealt with formal matters and did not deal with the 1971-72 loan programme. The major item for discussion was the States’ revenue deficits for 1970- 71. That was the matter about which we spoke yesterday. The honourable member has tried to make some capital out of his allegation that there was no discussion of local governments and instrumentalities but all he has done is disclose his complete lack of any, even fundamental, knowledge of what the business of finance is all about. I notice he has even left the chamber, like the well known butcher bird a former Treasurer, Sir Arthur Fadden, used to talk about - with the same results. It would be most desirable for the Leader of the Opposition to spend some time with the honourable member for Melbourne Ports (Mr Crean) in an endeavour to ascertain the elementary facts about Commonwealth and State financial relations so that he would not make such a fool of himself by making in this House statements such as that there was no concern yesterday for instrumentalities or local government.
He used that argument as a springboard from which to go to his next point. He said that in the event of the Australian Labor Party coming into office it would construct a new financial agreement with direct representation on the Loan Council. The Loan Council was set up as a result of an agreement with the States. It required an amendment to the Constitution. The Loan Council was set up for the purpose of maintaining the best possible terms of works and services through loan programmes at reasonable rates, in reasonable raisings, and the interests of local government bodies and semi-government bodies are taken into account by the States when the States put forward their proposals for loan programmes. But the honourable member has put forward this impracticable and unreal proposition in order to store his political attitude that there should be centralism in government. Get rid of the State governments is implicit in everything he says. He argued that we should set up regional administrative units, and it is presumably the regional administrative units which would be represented on the Loan Council. He would put the States into a position of total immobility and would deny them reason for existence.
The Leader of the Opposition went on to speak about resurrecting the interstate commission. It would be a rather busy body. Perhaps that is in accordance with his wishes. It will solve all Commonwealth and State financial relationships, all railway problems, all hospital problems, all fuel problems and, he would have us believe, it will bring much sense into the arrangement of these things. Results will be published for everybody. It will be a very busy body. If any single body can undertake a job of this kind and succeed it will be only because the parliaments of Australia have been prepared to subside their own interests, their own elected duties and loyalties, to serve the political whim of the Labor Party.
The Leader of the Opposition concluded with a ringing peroration that the public is disillusioned and demoralised. I do not know to which particular group of the community he speaks, but I certainly do not find in the Australian community disillusion and demoralisation. On the contrary I find that in the community there is a great belief in the future of Australia and tremendous confidence in the way it will develop. As I propose to show, there is a highly developed community attitude of social conscience which, at some points, runs almost to a sort of guilt sense that we, such an affluent country, are not doing enough to satisfy the social conscience of the people. If that can be rendered as disillusion and demoralisation 1 can only say no wonder the Labor Party cannot win elections if it so misunderstands the Australian people.
In terms of Commonwealth and State financial relationships it must be remembered that economic and social policies in Australia today have growing complexity, but what is more important perhaps than complexity is the constant overlapping of function between Commonwealth and State responsibilities. In that circumstance to have a formalised process of communication would, of course, be a council of destruction. What we need in our relations between the States and the Commonwealth are flexible, informal arrangements so that there can be a frank, friendly and free cooperative interchange of views whereby the attitudes, objectives and policies of the States can be disclosed to the Commonwealth and vice versa. Then there can be free and open discussion about how revenues are to be raised which match expenditure. The Leader of the Opposition said that there was no matching of public functions with resources to match the discharge of those public functions. He seems to forget what the Loan Council, Premiers’ Conferences and the formula for the distribution of Commonwealth revenues are all about. This is precisely the purpose. This arrangement does things which the Leader of the Opposition would not do in the priorities that he would ascribe. He alleges that it does not exist, but it does exist and nobody should know better than he that it does exist because he put a question on the notice paper which was answered on 12t.h June 1970. Having asked an earlier question he asked the Prime Minister:
What conferences of Commonwealth and State Ministers and officials have taken place since those listed in his answer of 25th March 1969?
The answer occupied 10 closely printed pages of Hansard detailing meetings between Commonwealth and State Ministers and officials so nobody would know better than the Leader of the Opposition the situation, but he chose to ignore this. We have made progress in respect of Commonwealth and State financial relations and I need refer back only to last year. The review of the financial assistance grants arrangements last June has done much to improve these relationships. The $200m interest free grant which is now included in the financing of the State works and housing programmes is helping the States with their debt situation. The agreement by the Commonwealth Government to take over debt charges of £ 1,000m of State debt over 5 years beginning this year will also help them significantly.
It is a mirage to think that there is some perfect solution to the problems of allocating resources between the Commonwealth and State governments or between governments and the public. There is no perfect solution; it is a mirage to believe there is. Demands for increased expenditure will always outrun governments’ abilities to finance them. Earlier I mentioned highly developed community attitudes towards environment, pollution, quality of life and people who are less privileged and less able to work. There are highly developed community attitudes towards external aid for other countries. Demand by the community for money to be spent will always run in advance of government’s ability to finance them. When the demands are carried to excess it can exceed the physical resources available to meeting the demands. When this situation arises there is a demand inflation. Broadly speaking citizens can enjoy only the level of government services which they are prepared, through the machinery of taxation, to finance. If the demand exceeds the resources and the money is raised only to send it competing for the demands, that is bad economics and bad for the welfare of the people of Australia. Recognition of this fundamental fact by all governments in Australia led to cutbacks since February in expenditure by both the Commonwealth and all State governments.
If one wants to point to one single factor more than any other which has unhinged State Budgets - and the Commonwealth Budget to a lesser degree - during the past year it is the extraordinarily large increases in wages and salaries which have been awarded by arbitral tribunals, particularly to State government employees such as nurses, teachers and so forth. Another factor are the increases in amounts which are negotiated - and I put negotiated in inverted commas - with private employers who, under the threat of direct action, have had to concede to demands. It is a pity that employers have done this, but it is a major cause for the unhinging of Budgets. I conclude by asking: When will the Leader of the Opposi tion and his Party recognise the fundamental truths of all these things and do what they can to forestall or cure them? When will the Opposition be, in fact, Her Majesty’s loyal Opposition devoted to the interests of the people of Australia and not merely devoted to trying to make political capital, to win votes and to seek office?
– I am sorry that I cannot congratulate the Treasurer (Mr Snedden) on his first speech in that position. I am usually charitable. I should like to refer him to the subject matter of this discussion, namely:
The lack of machinery for government consultation and public information on Commonwealth, State and regional finances and functions.
The Opposition chose to raise this matter of public importance the day following the Premiers’ assembly in Canberra. One would have thought that there might have been some gratification on the part of the Government and all the Premiers about what had been done, but it is our view that, as usual, it was a palliative only and did not represent any grappling with what are the significant problems involved. It is true that what was given yesterday will put the State Budgets in a position of less deficit than previously but if the current deficit is to be of the magnitude of $70m still, surely the sort of question that should be asked is: Does anybody believe that there are suitable fields where State and local expenditures should be reduced? Most people would take the opposite view and in a moment I want to give one or two examples. The Leader of the Opposition (Mr Whitlam) quoted the experience of the Victorian Railways. I should like to quote a small extract from an official publication, the ‘Victorian Railways Newsletter’ of March 1971. I refer to the part of the article dealing with the antique rollingstock which provides a service for internal passengers. The article states:
Victoria’s old metropolitan carriages carry less passengers and weigh more than their modern counterparts.
The extra electrical energy required to drive them represented wasted money each year, as most of the power is used to move the weight of the train, not the passengers.
I submit that this is the kind of situation we have in Australia at the moment. This state of affairs shows an inability to plan. I contrast this with the kind of attitude which is shown in an article in a publication from West Germany entitled ‘International Seals’, which I receive regularly. This article was written under the heading of The great train renaissance’. There is no great train renaissance in Australia, least of all in Victoria. 1 think most honourable members were given a copy of the report of the Committee of Inquiry into .Education in South Australia. In paragraph 15.17 of this report Professor Karmel, the Chairman of the Committee, and his associates pointed out:
Australia as a whole devoted 4.2 per cent of gross national product to education in 1969-70. The above argument suggests that this figure would have lo rise to about 6.7 per cent by 1981, if a programme of educational expansion similar to that suggested by the Committee was adopted throughout Australia.
In case honourable members are not quite aware of what a rise in expenditure on education from 4.2 per cent to 6.7 per cent by 1981 would mean, I point out that given constant prices the annual expenditure on education would have to increase by about S750m within the next 10-year period, ls that the sort of vision that was revealed yesterday at the meeting of the Premiers? I submit that it is not. If the Treasurer says complacently that there is no discussion of these problems I think he is living in a veritable ivory tower.
In Australia at the moment inevitably we have, rightly or wrongly, a concentration of population in the capital cities. If we were to draw a circle with a radius of 50 miles around Sydney and another circle the same distance around Melbourne we would encompass in the 2 areas half the population of Australia. Surely the Government ought to be concerned about the problems of where people are. It is at this third level - the neglected level or the poor level of local government responsibility - that new kinds of mechanisms have to be evolved. This will not be an easy problem to solve. I do not think it will be easy to solve because in one respect the local government authorities as we find them are devolved authorities or creatures of Stale -legislation. Part of the breaking of the nexus lies with the States themselves. Nevertheless, some additional mechanisms have to be evolved. The Leader of the Opposition laid out some of these mechanisms fairly clearly. We have plenty of patterns. If we look at the document
Commonwealth Payments to or for the States’ which is published annually and if we consider the variety of heads under which grants in one form or another are paid to the States - conditionally, unconditionally, for a special purpose and so on - we begin to realise that the situation has reached an intolerable position and that some new kinds of mechanism still have to be evolved.
J commend to those who are interested in this sort of matter the series of Reith Lectures which was delivered by Ronald Schon over the BBC in the latter part of 1970. I would like to quote part of what he said because I think it will highlight the sort of situation and paralysis that we have in Australia. Ronald Schon said:
One negative, but not entirely inappropriate way of looking at government is as a series of memorials lo old problems.
We do not want memorials to old problems; we want a creative approach to new problems, to existing problems and to problems which will become crises if we do not do something about grappling with them. The other passage which I wish to quote is as follows:
Our organisational map is perpetually mismatched to the problems that we think are worth solving.
Surely this is the situation that faces the Government starkly in Australian federation at the moment. If the Government wants to preserve the federal system, as honourable members on the other side of the House claim they want to preserve - a situation which constitutionally I believe at the moment there is no prospect of departing from - the Government should make all of the elements in that arrangement or compact powerful as far as its responsibilities are concerned, resourceful as far as its capacity to carry out those responsibilities are concerned and above all responsive to the needs of the people.
I have heard it predicted - and I believe that this is not altogether wrong - that there is so much stirring going on within the inner areas of the great cities in particular - and I presume to some extent this also applies to Adelaide and Brisbane - because of the inadequacy of the pattern that very serious problems will be posed in the future. Part of the difficulties are in the inequities of the financial resources available to local authorities. The inequity of resources and the inadequacy of these resources make for great inefficiency in the implementation of functions. 1 believe this to be one of the most critical problems facing the Australian community at the moment. Nothing was done at the Premiers Conference yesterday to resolve this problem in any sense. The Treasurer rather blithely seems to think that yesterday was another famous victory for democracy, the rights of the States and so on. Indeed, 1 think he is whistling in the dark. Above all he is lamentably ignorant of what are the really persuasive problems that are disturbing the Australian community at the moment. I hope that at least the matter of public importance we have raised will persuade the Treasurer to do something between now, the Loan Council meeting and the framing of the next Federal Budget. What we need to do is to realise that there are not only short term problems but above all long term problems which involve a fair amount of social analysis in order to encompass any sort of successful social solution to them.
– In opening this debate for the Government side of the House the Treasurer (Mr Snedden) dealt very thoroughly with CommonwealthSlate financial arrangements which are, of course, at the core of this matter of public importance, f must also say that I cannot understand the timing or purpose of this discussion. Only yesterday a new high in Commonwealth-State relationships was reached and this discussion really flies in the face of national public opinion and reaction. 1 have no hesitation in saying that this matter has no substance in fact. Indeed, I. am pleased to have the opportunity to present indisputable evidence of co-ordinated activity at many levels without which it would be impossible for either the State or Federal governments to function efficiently.
National development, for example, provides one of the best examples in the whole spectrum of co-operation. Development is a national aim and as economic and social developments have increased the range and variety of government activity, so has the Commonwealth become an active participant with the States in national expansion. The Commonwealth assists development generally by helping to create a climate for investment, by making available grants and loans, by establishing special financial channels to assist private enterprise, and by investment in such responsibilities as civil aviation, telecommunications, health, social welfare, basic research and exploration programmes, in none of these things does the Government act unilaterally.
Real strength is gained only through integration with State activities at all levels and on all occasions. The range and extent of the measures involved, whether they be in the fields of finance, tariffs, health or development, emphasise the co-operative nature of the relationships both between the Commonwealth and State governments and between public and private enterprise. My Department could not possibly function without the backing and support of the States. How could we possibly carry out our prime responsibilities of geological and geophysical surveys, mapping, the search for petroleum, studies of energy demand and output, forestry research, expansion of forest planting, assessment of water resources, and developmental schemes such as beef roads and irrigation projects - to mention but a few - without complete trust and willingness to combine for the national good?
Out of this very basic recognition of need have sprung such bodies as the Australian Water Resources Council, the Australian Forestry Council, the Australian Minerals Council, the River Murray Commission, the Snowy Mountains Council and the National Coal Research Advisory Council, to mention merely a few. All these bodies are representative of the States and the Commonwealth. In addition, regular meetings of Ministers concerned with northern development are held. Currently being arranged is another regular meeting of the Australian Minerals Council, and meetings between Commonwealth and State liaison officers are commonplace. Through these special channels of cooperation between the Commonwealth and the States all governments get on with the job of seeking out, assessing, planning and encouraging the development of Australia.
I stress once again that I have concentrated only on the relationship between my Department and the States. On them alone the Opposition stands indicted on a charge of wasting the time of this House.
Honourable members opposite also referred to the problem of local authorities. The honourable member for Melbourne Ports (Mr Crean) referred to the fact that local authorities are State instrumentalities yet the Leader of the Opposition (Mr Whitlam) just prior to that had been referring not only to local authorities but also to proposals for regional planning, obviously stemming from the Opposition’s policy of centralism. I have not the time to deal with that particular matter now, but I understand that my colleague the honourable member for Bennelong (Sir John Cramer) will deal with it.
Let me touch briefly on other examples of co-operation, such as the CommonwealthState Housing Agreement which is shortly to be renegotiated at a conference between Commonwealth and State Housing Ministers and the regular meetings of the State Ministers for Transport, of AttorneysGeneral, of Health Ministers, of Ministers for Primary Industry and, as we saw yesterday, of Premiers with the Prime Minister (Mr McMahon) and the Treasurer (Mr Snedden). The whole range of national advance and outlook is completely dependent on this structure of CommonwealthState relationships in all their various forms. In 1969-70 Australia had a gross national product of $30,162m won by a nation of fewer than 13 million people. It had over 5 million people in its work force and one of the lowest unemployment rates in the world. Australia ranks ninth in the world as a trading nation and is recognised as having one of the most stable economies in the world. But perhaps more than anything else, it is recognised by the governments and financiers of the world as a nation with the best prospects for advancement. This does not come about by accident. It is the sum of the cooperative efforts of all governments and the community.
There ls no lack of public information on what is happening, as the Opposition has claimed, because there is really no need for it. Australia as a nation is one of the greatest news stories of the modern era. Before I conclude I would like to quote from statements made by the Premiers after their meeting in Canberra yesterday with the Prime Minister and the Treasurer and after the formal meeting of the Loan Council which followed briefly afterwards. Mr Dunstan, the Labor Premier of South Australia, said:
There was no sign of discrimination against the ALP Premiers, lt was evident the Commonwealth was concerned to see the States are able to carry on effectively.
I should mention that at previous Premiers Conferences Mr Dunstan had complained that South Australia was being discriminated against because it had a Labor government. Mr Tonkin, the Labor Premier of Western Australia, said:
This is an entirely new attitude. The Prime Minister has made a definite gesture to improve CommonwealthState relations.
Mr Askin, the Liberal Premier of New
South Wales, had this to say:
Mr McMahon is ‘fair dinkum’ in his search tor a realistic growth tax for the States.
Sir Henry Bolte, the Liberal Premier of Victoria, said this today:
I feel that Mr McMahon took a very realistic view. 1 doubt whether he could have done better.
Mr Bjelke-Petersen, the Country Party Premier of Queensland, said this:
I personally compliment the Prime Minister and the Commonwealth on its attitude today to the problems of the States.
Mr Bethune, the Liberal Premier of Tasmania, said:
Mr McMahon and Mr Snedden showed a sympathetic understanding of the States’ positions.
Honourable members will note that there was not one word of criticism of CommonwealthState relationships in those statements made and published by the Premiers today, not even from the Labor Premiers. To the contrary, as honourable members will gather from the statements I have quoted, there has been some praise. I am sure that this makes the Opposition’s motion today, in the wording in which it has been submitted to the House, a very hollow one indeed. I am sure that the House will reject it. I was very interested to hear the comments of the honourable member for Melbourne Ports when he referred to the action which was taken yesterday by the Commonwealth to assist the States as being only a palliative. This is refuted entirely by what the Premiers have said, because it is major assistance for this financial year and it substantially improves the States’ positions not only for this financial year but also in relation to the preparation for their Budgets next year. I am sure that when all these matters are carefully considered by the House the Opposition’s motion will be rejected entirely.
– The Government contribution to this debate has taken the inevitable line of conservatives. The Gorton Government lived by the Press and died by the Press. In spite of this, the McMahon Government - the same crew who have merely done a double shuffle - is trying to continue to exist by the Press. Honourable members opposite have been mesmerised by a few headlines in this morning’s paper and by a few temporary comments from State Premiers, as we heard from the Minister for National Development (Mr Swartz) just now. But this is all nonsense. Forty-eight and a half million dollars of public funds may have bought this morning’s headlines but it certainly has not brought about any cure for the situation which has already been outlined very ably by the Leader of the Opposition (Mr Whitlam) and the honourable member for Melbourne Ports (Mr Crean). We have merely been spectators at another tragic episode in the drama that is known as Commonwealth-State financial relations. We have merely seen another skid in the continual ricochet from one ad hoc decision to another, from one Premiers’ Conference at one part of the year to another Premiers’ Conference, sometimes accompanied by a Loan Council Meeting, at another time of the year.
I would like to analyse this latest episode in greater detail. It is only 2 days more than 2 calendar months ago - namely, on 4th February last - that the Premiers of the States met in this Parliament House and, despite recommendations to the contrary from the Treasury, received precisely nothing. Let me read (from a statement by the Premier and Treasurer of South Australia, the honourable Donald Dunstan, which he made in the South Australian Parliament on 23rd February last. This will give some idea of what his thinking was just 6 weeks ago on this matter of his own State’s finances. He said:
Despite this gloomy and worrying picture with its serious implications for the future standards of State services, the Commonwealth has refused to make available any additional financial assistance, even though it was pointed out at the recent conference that expenditures this yeal” were already committed, and that any special assistance would not increase the current outlay on goods and services. It would merely reduce the order of deficits and run down of cash resources and would thus have no inflationary effect. While the Prime Minister has agreed to meet the Premiers again in April it seems clear at this point of time that each State will have no alternative but to look for ways of increasing ils own revenues, of controlling its current expenditures even to the stage of holding standards below desirable levels, and of deferring capital programmes so that loan funds may be available to finance unavoidable revenue deficits. The recent conference has offered us no hope whatever of relief. Let me make it quite clear. There has been some loose talk in the Press that the State will get some assistance from the Commonwealth in April. There has been no such indication from the Commonwealth - the indications were in fact clearly to the contrary. What is more, we could obtain no undertaking that next year there would be an increase in loan monies - or even that they would be maintained at this year’s level. In my view the Commonwealth’s attitude requires far too great an effort on the part of the public sector in the overall plan to avoid problems of inflation and too little effort on the part of large areas of private enterprise. II calls for a further distortion of the real priorities in the use of physical resources.
I repeat that that statement was made on 23rd February, just 6 weeks ago. arising out of the Premiers Conference which took place just over 2 calendar months ago. The result of the South Australian Premier’s interpretation of the situation was the necessary imposition of taxes and other charges totalling $6m in a full year. Anybody who knows anything about State taxes will realise just how unfortunate such an imposition is because of the regressive nature of such taxes, to mention no other point, and the cost-push inflationary nature of those taxes must also be taken into consideration. That was the result of the Commonwealth’s attitude 2 months ago. Let me bring the saga a little closer to today. On Monday, 15th March, just 3 weeks ago yesterday, the new Prime Minister (Mr McMahon) had this to say in the censure debate in this House:
A real problem arises more in the area of Commonwealth and State public works. 1 want to point out for purposes of comparison that our gross national product in money terms is rising at the rate of about 9 per cent per annum. If we let one sector of the economy get out of step or substantially out of step with that 9 per cent, we will strike inflationary pressures and we can expect that prices in that sector of the economy will rise substantially. We will undoubtedly create inbalance in the economy. To amplify the point I am putting, in 1970-71 there was a total increase of Commonwealth and State expenditures of 12.8 per cent and the increase in capital expenditures included in that was about 15.5 per cent. In the recent economic and financial change we were laying the foundations so that at the time of the next Budget we would have prepared the way to take both monetary and fiscal action which would permit us to reduce the inflationary pressures and, over a period of months, to bring inflation under control.
That was said just 3 weeks ago. Can anyone, by any stretch of the imagination, come to the conclusion that that statement was a lead to the States relating to their forward planning? Can anyone come to the conclusion that the States were likely to be helped 3 weeks later by a handout of $48im? In fact, of course, a progressive State leader such as Don Dunstan was forced to go ahead and impose his regressive taxes whilst conservative leaders such as Sir Henry Bolte announced cuts in essential State public expenditure. I believe that included in the announcement in Victoria was the shameful news that expenditure on new schools was to be cut even more than it has been cut. So to yesterday and the $48im drawn like a bunny out of the hat. The result is that State policies are sent on another skid. There just is not the necessary consultation far enough ahead for proper planning in our community when we have examples such as this.
That brings me to the terms of the motion. So far, by using only the example of yesterday’s Premiers Conference as one episode, I trust I have been able to show the chaos which exists today - the wellnigh insurmountable difficulties being faced by State treasurers and under-treasurers. I could well have read out the headlines from newspapers at least twice a year for the last 10 years or even 20 years of this Liberal-Country Party Government to illustrate the same sort of sorry story of a lack of planning, consultation and machinery. But the Labor Party does not intend to be merely critical in this debate, in spite of the fact that there is so much to be critical about. The terms of the matter of public importance give a clue to what should be done. We refer to a lack of machinery for Government consultation and public information on Commonwealth, State and regional finances and functions. We are not asking for something which does not exist to some extent in another comparable economy, namely, that of Canada. Canada has a valuable committee of provincial and federal treasury and taxation officials, so that there is at least greater communication at this important level. The new Treasurer (Mr Snedden) in this debate talked glibly about unofficial communication. I assert that this is not nearly as effective as some formality in these arrangements. Busy men otherwise neglect the necessary communication. Is there anyone who will suggest that the head of the Commonwealth-States section of the Treasury and the State undertreasurers are not busy men?
But it is not only at this level that the machinery should be created. My colleagues have already pointed out other areas of great need - housing, urban renewal, social services at the Federal level as compared with social welfare at the State level, the Matrimonial Causes Act and the legal aid that surrounds that Act, public transport and so on. We could spend all our time just pointing out the great needs of the community. We are not advocating something which we are not prepared to put into practice ourselves. In the time that Labor leader Chifley was the Prime Minister we had constituted the Commonwealth and States Roads Agreement and the Commonwealth and States Housing Agreement. We provided Federal money for hospitals, agricultural extension services and research programmes, forestry grants and so on. Most of that machinery described by the Minister for National Development was set up under a Labor government. But since 1949 we have had very little relating to the great needs there are in the community. We have had a little Commonwealth cooperation in the area of the Austraiian Universities Commission, but there is very little else to which we can turn. I have pointed out the chaos that is existing at the present time in this relationship between the Commonwealth and the States when trying to deal with great areas of need.
Order! The honourable member’s time has expired.
– The Commonwealth Government must exercise its constitutional responsibility to manage the financial affairs of the nation. It is critically important that this responsibility be examined in a debate on CommonwealthState financial relations. However it is equally important that the Government in office, through its announced policies and continuing pronouncements in the light of circumstances and events, take into account not only day to day events but also the requests of State Governments and semi-State government instrumentalities. This, I believe, is done faithfully and well by this Government.
The field of financial management and financial operations is wide and cumbersome. What has been proposed this afternoon as the subject of debate by the Leader of the Opposition (Mr Whitlam) has offered nothing new and certainly nothing constructive or progressive. We have had merely a rehash of statements made from time to time by the Leader of the Opposition and other members of his Party on the very complex questions which arise. But I believe that the real purpose of the Opposition’s move this afternoon was to try to draw a red herring across the trail when a very responsible approach to economic mailers was evidenced yesterday at a meeting between the State Premiers and the Prime Minister (Mr McMahon). The announcements Sowing from yesterday’s meeting showed a very proper approach in a situation of over-inflation. These included a decision to assist the States to the extent of $46. Sm in reducing the deficits which they face, and at the same time taking into account the States’ conscious decision to reduce their expenditure by S60m as a contribution towards the curbing of inflation. This, of course, accords with this Government’s decision a few weeks ago to cut Commonwealth expenditure by S”5m. This, I believe, highlights the effectiveness of the courageous approach by the Commonwealth towards its financial relations with the States at this time. Of course, nothing has been said of this by members of the Opposition. On the other hand, they have been critical without recognition of where the responsibility to deal with inflationary tendencies lies.
I want to draw particular attention to the success of the management of the economy since the indications of November-December last of inflationary tendencies that were dangerous. I believe that the results already evident show clearly that a proper approach is being made in a manner that is not prejudicing progress and development and that takes into account the responsibilities that all governments face because of the plight of the rural industries and of many of our underprivileged citizens. I refer, of course, to those who depend on social service benefits. In all of these fields emphasis has not been placed on priority of need. That is practical and yet not one word has been said about this by members of the Opposition this afternoon. In fact, although the Leader of the Opposition (Mr Whitlam) used the words ‘The lack of machinery for Government consultation and public information on Commonwealth, State and regional finances and functions,’ he did not really deal with any of the machinery matters that are involved. He failed to recognise the way in which, in the last 2 or 3 years, there has been a considerable stepping up of consultation. There have been more meetings of the Premiers. There have, of course, been the traditional regular meetings but there have been additional meetings. This was not mentioned. Surely this is evidence of the Government’s approach to what is required at this time.
Then the Leader of the Opposition went on to talk of the problems of local government, education and national development He even advocated the creation of an Australian hospitals commission. He made all sorts of centralist proposals that would really rob the States of their sovereign rights, but at the same time he failed to acknowledge that there is currently, and has been for a considerable time, very extensive consultation between the States and the Commonwealth. Let me refer lo a dozen or so instrumentalities that do a fine job in this regard. There are the Australian Forestry Council, the Australian Minerals Council, the Australian Water Resources Council, the Australian Fisheries Council, the Australian Agricultural Council, the Australian Council for Aboriginal Affairs, the Australian Transport Advisory Council, child and social welfare committees, the Standing Committee of Attorneys-General and the Australian Education Council. The appropriate Federal Minister attends the meetings of that Council only on the invitation of the States. There is also the Health Ministers Conference. There are other ad hoc committees of various kinds. Whenever these Councils meet the States have (he privilege of expressing their views uninhibitedly, and they do so. There are useful and proper discussions. Surely this is evidence that the machinery between the States and the Commonwealth is really working.
The honourable member for Adelaide (Mr Hurford) claimed that the last meeting of the Premiers had resulted in a rejection of a Treasury recommendation. I challenge the honourable member for Adelaide to prove his claim in this House. Certainly he failed to acknowledge that the official statements following that meeting indicated that a further meeting would be held at which firm decisions would be made. This meeting took place yesterday and those firm decisions were made and announced.
– What happened in the meantime?
– The honourable member for Adelaide asks: What happened in the meantime?’ What happened was exactly what it was intended would happen. All of the facts were properly studied, proper time was taken to analyse the financial position as it was developing for the remainder of this financial year and proper decisions were made based upon the facts so assembled and analysed.
– What happened in the States?
– The States, of course, were able to proceed with what they had indicated they would do, to seek ways to halt inflation and curb inflationary tendencies. In this short debate there is limited time to cover all the matters one would like to cover but I do want to refer very hurriedly to what has been done for primary industry in this financial year. The wheat industry has been assisted with loan funds to the tune of $178m. Not all of it has been used because of the way in which the payments were made. The wool industry received assistance to the value of $30m and $100m was allocated for rural reconstruction. A total of $100m is being spent on water resources. All of this was done with proper regard to State interests and their relationship to national expenditure so that it would not intrude too heavily upon the cost pressures of this nation at a time when those cost pressures represent the real enemy of the economy. I believe the Government’s approach has been responsible and that there is no basis for the claims that have been advanced by the Leader of the Opposition.
– The matter of public importance proposed for discussion by the Leader of the Opposition (Mr Whitlam), supported by the honourable member for Melbourne Ports (Mr Crean) and the honourable member for Adelaide (Mr Hurford), is one of great importance to this nation. As we could have expected, the 2 Ministers who have spoken, the Treasurer (Mr Snedden) and the Minister for National Development (Mr Swartz), and the honourable member for Cowper (Mr Robinson), of course ridiculed this motion and treated it with some shallowness. But it is very obvious when one listened - and I listened very carefully to the 2 Ministers who spoke - where they must spend most of their time. One could liken them to the proverbial ostrich. When they tried to tell this House that there are no serious problems in Commonwealth-State finances and in local government finances I just wondered where they do spend most of their time.
The speech of the new Treasurer was, to me, a speech of ignorance, because if he can get up and believe the things he said he is obviously quite ignorant of what is going on around him in this nation in terms of Commonwealth-State finances and local government finances. I will not spend all my time quoting examples to disprove the statements made by the 2 Ministers, but let the Treasurer go to western Queensland, for example, and make the same type of speech he has just made here. Has he ever heard of the survival group of graziers out there? One of the most important efforts they are making at present is in trying to obtain relief from local government rates, which are a basic element of local government financing. The Minister for National Development speaks with great eloquence about the trust that the people have in this Government because of the work of the Department of National Development. I will give him an example of an area where this trust is non-existent. Let him go up to the Burdekin area of Queensland and make the same speech there that he made here today. The people of that area remember the words spoken by Sir Arthur Fadden 22 years ago and supported by Sir Robert Menzies. Sir Arthur Fadden said: ‘We will build the great Burdekin Dam project and not let it be pigeonholed in the future.’ That was in 1949. In 22 years nothing has been done towards actual construction of that great project. All we have is a history of broken promises. This is the trust which the Minister for National Development says the Australian people have in this Government. As I said, let him and the Treasurer go to the areas I have mentioned. Let the Treasurer go to western Queensland and let the Minister for National Development go to the Burdekin area, and repeat the statements they have made. If they did they would be ridiculed by the people, who would have every right to do so.
The Minister for National Development said that a great deal of information is given to the Parliament and to the people about national development projects. The people of Australia, this Parliament and 1 are still waiting to hear progress reports on the Ord River project, the beef roads scheme, the Nogoa scheme, the development in areas 1, 2 and 3 of the Brigalow scheme, the Burnett-Kolan scheme and the central Queensland power station project. Hundreds and hundreds of millions of dollars of the people’s money are involved in these schemes, but we in this Parliament have heard nothing in the way of progress reports on them. I believe that the Australian people are entitled to receive information. They are entitled to know whether their money is being spent wisely. This is the Government which says that the Australian people have great trust in it. What utter nonsense. However, f want to deal specifically with the problems surrounding local government financing. The area of local government and semi-government financing is grossly neglected by the Government, despite the serious and mounting problems concerning the basic development and the provision of services for the immediate and urgent needs of the Australian people. This is an important area for local government authorities, but it is a neglected area. It is the principal subject of the discussion of public importance which has been raised in the Parliament today.
I want to deal particularly with the deteriorating financial position of local government authorities in the provincial cities and country towns as distinct from the major cities whose case was dealt with so well by my colleagues the Leader of the Opposition, the honourable member for Melbourne Ports, and the honourable member for Adelaide. I should have thought that the honourable member for Cowper (Mr Robinson) would have spent most of his time dealing with the position of local authorities in Australia Apparently his local government area has no problems with finance, and there are no problems at all in local government areas in northern New South Wales. Not much! The great mystery of modern times is: Why do people in fact serve on local authorities and shire councils? Surely the position on a local authority or shire council must bo the worst paid and most thankless job of all. It is open at all times to continuous sniping by the people. Local authorities receive no sympathy at all from State governments and of course they have received no sympathy with respect to Commonwealth financial assistance at any time in the history of this Government.
The worst feature of local government financing is the absence of effective machinery which can guarantee a continuity of finance to enable councils effectively to administer essential works approved by State governments. Under present conditions shire councils work out their projects. They approach the State governments for approval of those projects, then they have to enter the loan market to try to raise the funds. They are faced with utter frustration. Often their attempts to secure funds at reasonable rates of interest in order to carry out effective work for the local people are met with barriers of resistance. If shire councils cannot obtain funds, important work is nol done or, alternatively, they have to increase rates in order to try to obtain the necessary finance until in some areas - and I have mentioned one area in western Queensland - rating of the people reaches saturation point. The local authorities have no other alternative to raise revenue to carry out basic work.
The Commonwealth Superannuation Fund lends money to foreign owned companies but in some instances it refuses to lend money to local authorities for the good of Australians. Is that right? This Government says: ‘The people have great trust in us.’ When local authorities cannot find sufficient money with which to carry out work they have no alternative but to increase rates in order to obtain the funds. Often they have to raise loan funds at high rates of interest. This again results in an increase in the rating structure. In the rural areas of Australia invariably this causes an increase in the cost of production. It is a case of the dog chasing its tail.
Often when local authorities cannot raise funds it leads to an alteration of priorities in their budgets. Shire councils formulate budgets, but their planning is shot to pieces when they are unable to find sufficient funds. What else can they do? They either increase rates or try to get special funds at high rates of interest.
The Commonwealth is shirking its responsibility. Local authorities should not be the Cinderellas of government. As far as the practical application of policy and nearness to the people are concerned, local authorities are far nearer to the Australian people than either State or Commonwealth governments. As the Leader of the Opposition has said, we need a tripartite type of government, with the Commonwealth, the States and local authorities all working together. The Commonwealth’s responsibility in this field is a national one. It has to maximise the welfare of the people. It has a direct responsibility in this field. Under the policy of the Commonwealth and State governments, local authority areas are being robbed of their finances. For example, some of the most prosperous areas in Australia, in terms of natural resources, are in northern Australia, yet most of the royalties from coal and bauxite mined in these areas are going out of these areas into other areas of Australia. Certainly there is a case for this, but surely these areas, which are some of the poorer areas of Australia, are entitled to retain some of the royalties for the basic development of roads, power, education and health.
Order! The honourable member’s time has expired.
– I have listened to the speeches from both sides of the chamber. We have heard 4 speakers from the Australian Labor Party, led by the Leader of the Opposition (Mr Whitlam). It is quite clear to anyone who has been listening to the debate that the whole purpose behind the Labor Party’s proposal is to indicate that Labor favours a system under which a central government has complete power over the whole of Australia. Obviously this is what the Labor Party wants, because the Leader of the Opposition made the point that if Labor were elected to power it would negotiate a new financial agreement directly with local government, that is, from central government to local government. The honourable member for Melbourne Ports (Mr Crean) also referred to the isolation of local government from State government so that local government bodies could deal directly with the central government. The honourable member for Adelaide (Mr Hurford) also in his speech indicated that he favoured the idea of central financial control. The whole of the speech of the honourable member for Dawson (Dr Patterson) dealt with the problem surrounding local government financing.
The matter of public importance refers to the ‘lack of machinery for government consultation’. The honourable member for Cowper (Mr Robinson) referred to a long list of organisations which are presently conferring with the States on certain matters. So we can only conclude - of course it is well known - that Labor favours a centralist system of government and that it does not favour a federal system under which the States have their rights. Of course, centralism means the vesting of all power in the central government and the reduction of the State governments to puppets of the central power. This, in the end, is Labor’s policy of Socialism. Indeed, it is socialism under a kind of dictatorship. I cannot see the people of Australia having anything to do with this kind of system.
This Government stands for the Federal system which is in fact a decentralisation of nationhood. This means a spread of power. Power is not centralised in one body but is spread throughout the Federal system on a national basis. This again calls for co-operation, co-ordination of activity between the State governments and the Federal Government, and a tolerance and an understanding of the problems of each. We had plenty of evidence only yesterday - I presume in this chamber - of an understanding by this Government of the difficulties from which the States are suffering. I give great credit to our new Prime Minister (Mr McMahon) for taking action to relieve the States of the financial pressure with which they have been involved so deeply recently.
We must remember that under our Constitution the States have sovereign rights and are responsible for certain functions.
We cannot take from them the direct constitutional responsibility for local government, notwithstanding what the honourable member for Dawson may say. It would be quite improper for this Government or for any government in the Commonwealth to attempt a direct financial agreement with local government. I know the problems of local government. I have served in it for 20 or 30 years. I know what it is. It is an instrument of the State. Local government cannot be isolated from the State. Our States are responsible for promoting development within Australia. Some of the important matters which the States administer include housing, decentralisation, urban development, education, health, social welfare and transport.
I emphasise that the States deal with people. The Commonwealth may deal with policies and principles, but the States deal with people. They deal with human relationships on a much more domestic basis than a central government possibly could do. This is the Federal system. It is a system of co-operation. The Commonwealth has an overriding responsibility. I am glad to see that the Treasurer (Mr Snedden) is present because very often this responsibility is forgotten. The overall stability of the economy is a direct responsibility and function of the Commonwealth, laying a base for development to be carried out by the States. This is a system of cooperation. We need to develop the closest possible collaboration with the States if we are to get the best results and are to use effectively the capacity of the Commonwealth in proper orders of priority. The Commonwealth is responsible for the important functions of defence and immigration.
Great need undoubtedly exists for closer understanding between the States and the Commonwealth. This problem is not easy to solve as, I think, the Treasurer properly pointed out. The Commonwealth must understand in more detail than perhaps it does now the problems of the States. We must keep working towards this understanding of the problems of the States. We are moving towards it. The States always must be conscious of the overall economy of the nation and must act accordingly. After all, if we consider this issue in the broad, we must ask: What are we doing? We are developing a nation. We are developing it under a system in which our
States have certain constitutional powers and rights. We must make this system work. We must live with it. It is not something with which people play. This is the meaning of the Commonwealth Constitution. The States agreed to the establishment of the Commonwealth Parliament. The Commonwealth and the States must be clear in their minds that we are one nation, one people. This is the important thing for both sides to think about. To bring about proper co-operation between the Commonwealth and the States will be a tremendous job. This is the most important objective towards which the States or the Federal Government can work.
I do not think that the Australian Labor Party can handle this problem. I say that because I am conscious of the fact - this thought occurred to me while I was speaking - that the Australian Labor Party has its own problems as between its Federal and State bodies. The Labor Party is trying to create a central control in its various branches and is not having much success. The States are kicking over the traces in this respect and they do not seem to be able to be satisfied. It seems to be difficult to bring about an harmonious relationship between the central Federal authority of the Labor Party and the State authorities of the Party. So, who are members of the Labor Party to talk on this subject!
This problem is a big one. It is one which must occupy the constant attention of the national Government and the State governments. I regard the events at yesterday’s meeting between the Premiers and the Prime Minister as the commencement of a new era in the relations between the Commonwealth and the States. This new era in Commonwealth and State relations is to the eternal credit of our new Prime Minister and our new Treasurer whom I congratulate. The achievement of improved Commonwealth and State relations is the only way in which we can develop this great nation and the only way that we can bring about the efficient application of our capacity to develop into one of the great nations of the future.
- Mr Deputy Speaker, I desire to enter this debate to deal with, firstly, some of the statements made by the honourable member for Bennelong (Sir John Cramer). It seems to me that he stood here-
Motion (by Mr Swartz) agreed to: That the business of the day be called on.
– You do not want to hear a rebuttal of all the rubbish that you allowed them io talk this afternoon, Mr Deputy Speaker.
Mr DEPUTY SPEAKER (Mr Drury)Order! The debate is concluded.
– They are speculators and God knows what!
-Order! I am on my feet. It is not in order for any honourable member to interrupt the occupant of the Chair when he is on his feet.
Message from the Governor-General recommending appropriation announced.
Bill presented by Mr Snedden, and read a first time.
– I move:
That the Bill be now read a second time. The purpose of this Bill is to obtain parliamentary authority for expenditure in the current financial year for which provision was not made in the Appropriation Act (No. 1) 1970-71. The total appropriations sought in this Bill amount to $120,968,000. Although additional appropriations are being sought, actual expenditure will not exceed the amounts included in Appropriation Act (No. I) 1970-71 by $120,968,000. As a result of measures taken to reduce Commonwealth expenditure this year, and for other reasons, it is expected that savings of about $50m will be available in existing appropriations to offset the additional appropriations now proposed. lt is not possible, for reasons associated wilh parliamentary control over the appropriation of moneys for specified purposes, to utilise these savings as an offset in the sense that the total new appropriations sought can be reduced to a net figure in this Appropriation Bill. Thus I am seeking parliamentary- authority for additional expenditure in the divisions, sub-divisions and items set out in the Schedule to the Bill. To the extent that an item of any annual appropriation is unexpended the appropriation lapses al 30th June in accordance with section 36 of the Audit Act 190M969.
I think that honourable members should recognise the fact that, when the then Prime Minister announced on 16th February the Government’s intention to reduce expenditures in 1970-71 by $75m in the remainder of the financial year the revised estimates as at December 1970 indicated a net increase of $242m in expenditure since the Budget was prepared. This is the primary reason why, despite the cut back in government spending, it is necessary to ask the Parliament for additional appropriations. This Bill, and the companion Bill, deal only with annual appropriations of the Consolidated Revenue Fund. This Bill does not deal with special, or standing appropriations, nor does it involve the Loan Fund. The reductions announced by the Prime Minister (Mr McMahon). on the other hand, relate to Commonwealth spending as a whole.
In referring to the intended reduction of $75m in total Commonwealth spending, I should make it clear that at the time it was recognised that further commitments would arise and would need to be considered against the background of the Government’s decision. Since then, the Government has approved further commitments but, for the most part, these are special appropriations and are thus not included in the Appropriation Bills Nos 3 and 4. The various items included in this Bill can be considered in detail in Committee and I propose at this stage to refer only to some of the major provisions.
The additional requirement for departmental salaries is $32. 3m and provides for increases in salaries arising from the national wage case, increases in salaries for the Third Division of the Commonwealth Public Service and increases arising from other arbitration determinations, reclassification of offices and additional staff positions approved earlier in the financial year. Further appropriations totalling SI 3.6m are required for departmental administrative expenses, including $2.1m for overseas representations; $1.5m for rents; SO. 5m consultants’ and architects’ fees: and S2.3m for increased allowances and other benefits for overseas officers of the Papua and New Guinea Public Service as a result of the flow-on of recent salary increases in the Commonwealth Public Service. The balance is made up of a considerable number of appropriations, each of which is less than $500,000.
Additional appropriations amounting to $20m for departmental other services include Si. 7m for the Commonwealth Scientific and Industrial Research Organisation; Si. 3m for Commonwealth scholarships; Si. 9m for educational purposes in the Australian Capital Territory and the Northern Territory, mainly for increases in teachers’ salaries; Sim for aid to Pakistan and the Khmer Republic; Si. 2m for embarkation and passage costs for migrants; $2.5m for broadcasting and television services; $1.2m for war and Service pensions and allowances; $1.3m for other repatriation benefits; and $2. 8m for grants under the Aged Persons Homes Act. The balance is made up of a number of appropriations, each of which is less than $500,000. Additional appropriations from the Consolidated Revenue Fund totalling $55m are sought for defence services, including about S35m for increases in Services pay and allowances and increases in salaries of civilian staff, arising mainly from the national wage case and other determinations. However, it is expected that there will be savings of $26m in other defence appropriations and $17m in the Loan Fund. In part these arise from a lower than expected rate of expenditure under the United States Defence Credit Agreement and as a result of rephasing of and lags in both orders and deliveries of defence goods, and to agreed reductions in Commonwealth expenditure in response to the request of February 1971. It is expected that total expenditure from the Consolidated Revenue Fund and Loan Fund on defence services in 1970-71 will exceed the Budget estimate by about $12m. I commend the Bill to the House.
Debate (on motion by Mr Crean) adjourned.
Message from the Governor-General recommending appropriation announced.
Bill presented by Mr Snedden, and read a first time.
– I move:
That the Bill be now read a second time.
The purpose of this Bill is to obtain parliamentary authority for additional expenditure in 1970-71 amounting to $32.7m on various items relating to capital works and services, payments to or for the States and certain other services. Although additional appropriations of $25.6m are sought for capital works and services it is expected that, because of savings of about $17. 3m in other similar appropriations in Appropriation Act (No. 2) 1970-71, the cash requirement over the Budget estimate for capital works and services will be about $8. 3m. As I explained in relation to the Appropriation Bill (No. 3) it is not possible to utilise savings under an appropriation to offset additional expenditure in another. Unexpended appropriations, of course, lapse at 30th June. Although an additional $25, 6m is being sought, it is clear that this will not mean an additional cash outgoing of that magnitude.
The major requirements are $0.6m for buildings, works, plant and equipment at overseas establishments; $1.3m for acquisition of sites and buildings; Sim for loans for housing including loans to co-operative building societies in the Australian Capital Territory; $0.4m for loans to church organisations for erection of residential accommodation in the Northern Territory; $0.6m as an advance to the Northern Territory Port Authority; Sim for war service homes; $12m for payment to the Post Office Trust Account; S;.Sm for buildings and works; and $0.6m for plant and equipment. Additional appropriations of $7.1 m are sought for payments to or for the States, the main requirements being S2.4m additional for drought assistance to Queensland; and S3m for flood relief in New South Wales. It is expected that there will be savings of about S0.3m in other similar appropriations in Appropriation Act (No. 2) 1970-71.
As I have said, this Bill seeks additional appropriations of $32.7m. However because of savings of up to $17. 6m in expenditure under other appropriations in Appropriation Act (No. 2) 1970-71, it is expected that the total expenditure will exceed the amount appropriated in Appropriation Act (No. 2) 1970-71 by about $15.1m. I commend the Bill to the House.
Debate (on motion by Mr Crean) adjourned.
Discharge of Motion Mr SWARTZ (Darling Downs- Minister for National Development) - by leave - I move:
The reason for seeking the discharge of this Order of the Day is that a new Bill has been drafted. 1 expect it to be introduced into the House by the Treasurer (Mr Snedden) tomorrow.
– I wonder whether the Minister for National Development (Mr Swartz) would tell the House what has been taken out of the present Bill and what is proposed to be inserted in the new Bill, and whether there will be any marked changes from the Bill that was presented to Parliament and which was nol. proceeded with because the Government fell that it would not pass the House. I think the Opposition is entitled to know what changes are contemplated at this stage, as the Bill is a particularly interesting one. lt is evident that the original Bit.1 was drafted without very much thought on the part of the Government and there is more than a passing interest in the terms of the new Bill. Without predicting anything, unless the new Bill is a big improvement on the old, I do not envisage much belter prospects for it than for the one that is being withdrawn.
Question resolved in the affirmative.
Motion (by Mr Swartz) proposed:
That the House take note of the following paper presented on 31st March 1971:
Commonwealth Advisory Committee on the Teaching of Asian Languages and Cultures in Australia.
Debate (on motion by Mr Uren) adjourned.
Motion (by Mr Swartz) - by leave - agreed to:
That so much of the Standing Orders be suspended to enable notice No. 4, General Business, to be proceeded with forthwith.
– I move:
The Commonwealth Parliament is, by virtue of the Seat of Government (Administration) Act, the chief administrative authority for the Australian Capital Territory. Under the provisions of that Act Territory ordinances, which come into effect from the date of their promulgation, may be debated and disallowed if either House of Parliament so chooses at any time during the first 15 days of sittings in a session. The motion I have moved, notice of which was given within the statutory limit of 15 days, is that this House should disallow the City Area Leases Ordinance 1970 (No. 45 of 1970) and the Leases (Special Purposes) Ordinance 1970 (No. 46 of 1970). There are 3 other ordinances - No. 47, No. 49 and No. 50 - which are machinery ordinances. I am not seeking the disallowance of these ordinances but in the event of the House supporting my motion of disallowance of Ordinance No. 45 and Ordinance No. 46 I will seek to have those ordinances examined. I will also move at a later hour a motion standing in my name:
That this House is of the opinion that the matter of land tenure and land administration, planning and development in the Australian Capital Territory should be referred by the Minister for the Interior to the Joint Committee on the Australian Capital Territory for examination and report.
I remind honourable members that all land within the city area of the Territory is Commonwealth owned land. The city area is, of course, Civic Centre and all the suburbs. Land within that area is disposed of under one or other of the leasing ordinances. I caution honourable members and seek them to give thoughtful consideration - I stress the words ‘thoughtful consideration’ - before they decide how to vote on this motion. The decision of the Government to alter by way of ordinance the Canberra leasehold system was made without inquiry or public investigation. It arose out of a cheap political gimmick. The former Prime Minister, now the
Minister for Defence (Mr Gorton), spoke on 13th May 1970 in support of the Liberal Party candidate in the Australian Capital Territory by-election. The report in the ‘Canberra Times’ of 14th May 1970 reads:
Land rents and reappraisements of land values in Canberra would be eliminated at the end of this year, but higher rates would have to be paid.
Mr Gorton also announced that a reserve price, which would cover the cost of subdividing land and providing services, would be introduced at auctions.
I ask the Minister for the Interior (Mr Hunt), the Government and honourable members opposite, to examine this matter more closely, to set politics apart and divorce them from their thoughts on this question. If they examine the early discussions on land tenure in the Australian Capital Territory they will find that in the beginning there was unanimity on all sides of politics on this question. In the beginning there was complete unanimity in support of a leasehold system. I want to quote some extracts from a very thoughtful contribution by Frank Brennan in his book Canberra in Crisis’. At pages 203 and 204 he quotes Dr Max Neutze, head of the Australian National University Urban Research Unit, Research School of Social Sciences, who, having discussed these proposals, concluded:
It seems that only a lack of understanding can explain the fact that State politicians, who claim they are short of resources to service their own urban areas, are not protesting a proposal to hand over an equity worth over $100m to the lessees in Canberra.
Increased levels of property rates on the unimproved value of sites will not adequately replace land rents, as a rate is usually ‘struck’ to cover the cost of community services.
We seem to have forgotten what the rents are for - a strange situation when we consider the attention it was given in the early years of the Commonwealth Parliament.
The Commonwealth as ground landlord and a» land developer seems to be entitled to expect that the value of ils equity will rise in proportion to the market value of the sites it owns, which has nothing to do with the cost of municipal-type services.
Mr Brennan went on to say in support of his argument:
The Canberra leasehold system may survive as a fiction, but it will be meaningless. There would be no difficulty in devising legislation which converted this fictional leasehold into freehold and retaining all the useful planning controls. Future generations will demand the freehold - they will certainly have paid for it - but whether they get it or not is really of little consequence. For they will already have freehold in fact, if not in law.
Under these proposals the Government surrenders, forfeits, abandons and gives away its right and duty to . . . secure for the Commonwealth the growing and permanent source of revenue from the State earned increment in the value of land which comes silently from the mere accretion of population and from the exercise of the power of government.
As King O’Malley, a great Labor Party member of long ago, saw it:
Every dollar spent by the people of Australia in the erection of that (federal) capital will create an unearned increment in the property for miles around. . . . The question now 13, are the people of Australia prepared to spend thousands and thousands, yea, millions and then lose the benefit of their expenditure? I say the unearned increment created by the expenditure of the people’s money belongs to the people.
The decision was made as one fires from the hip - without thinking it through. How often has that been done by the previous Prime Minister. The Opposition seeks time to examine this proposition. It seeks time to have a full inquiry. Let me quote further a distinguished public servant. Sir Ronald East, in an article in the Melbourne ‘Age’ of 6th March 1971 which in part reads:
No layman or even top level business administrator could rend the ordinances through several times and understand their whole effect.
One clause, however, would stop him in his tracks - it would shock anyone. It is on page 15 of the City Area Ordinance No. 45 of !970, dated 15th December 1970. It reads:
The rent under a lease . . . shall be 5 cents per annum to be paid if and when demanded by the Minister.’
This is a renewal of the peppercorn rental of medieval English law, often used to make legal the transfer of property. 1 have in my possession just such a document giving possession of a farm in England to a beneficiary under a will, the consideration being the payment of ‘one peppercorn’, if the same shall be lawfully demanded. The letter went on to say:
The tricky use of ordinances to circumvent the declared intention of Parliament in regard to payment for the occupation of Crown land at Canberra shows that the Government holds Parliament in contempt. It certainly makes a farce of democracy.
The Commonwealth has spent thousands of millions of dollars of taxpayers’ money in transforming Canberra from an open prairie land into the national capital. Every one of us is proud of the capital which has been developed. This expenditure has given to Canberra lands a new value, an assured value, an ever-increasing value. The bureaucracy has decreed that the Commonwealth return from its own land is to be 5c a year if and when demanded. What a gross insult to the Australian taxpayers who have, financed the building of Canberra.
We would fail in our trust if we did not disallow these ordinances. Let us examine arguments which have been used to explain these changes. One argument is that, by abolishing land rent and instituting a reserve price to be paid upon sale of a block the Commonwealth is assured ot receiving an immediate return of its development costs. This argument lends weight to the charge that all is not well with the administration of Canberra’s leasehold system. The mere idea that the Commonwealth should receive an immediate repayment of its development costs is absurd. The services attached to the land remain forever the property of the Commonwealth - assets of the Commonwealth - which give extra value to the land and which produce dividends for the Commonwealth in the form of land rent, lt was the development costs on land in the proposed Federal Territory which Edmund Barton, our first Prime Minister, referred to as a ‘gilt edged investment’ which would produce for the Commonwealth in the form of land rent a fund which would never be disturbed’. We are now being asked to distribute this fund - or rather we are being asked to abolish it.
All political parties supported the idea that the Commonwealth should own all land in the Federal Territory and establish a system of leasehold tenure. It was a universal demand. The practical effect of the scheme of which these ordinances are part is that the Canberra leasehold system is turned upside down. Land rent is to be abolished and the only remaining land charges are rates payable for municipal services. The abolition of land rent destroys the concept of tenancy and the prerogative of the Commonwealth to collect revenue by right of ownership. A central aim behind these fundamental changes to Canberra’s leasehold system is that socalled rationalised municipal accounts can be prepared and thus remove the need for land rent. What stupidity. The Opposition does not dispute that rationalised municipal accounts may be necessary but it denies that their preparation can justify the abolition of land rent. The Commonwealththat means you and me, the people of the Commonwealth - owns this land and it should not surrender its right to collect rents related to the value of the land. May 1 quote what economist Colin Clark said in the ‘Canberra News’ of 26th March. He said:
While it is undoubtedly desirable that the municipal accounts for Canberra should be placed on a rational basis, and costs covered by rates, this certainly does not justify what is in effect a wholesale gift of public money at the expense of every taxpayer in Australia.
The Opposition’s purpose in inviting the House to disallow these ordinances - legislation by bureaucracy; and I ask honourable members to think not as Party hacks but as individuals - is to enable the House to assert its rightful role and refer the whole question to the Parliamentary Joint Committee on the Australian Capital Territory for a full and thorough investigation. I ask the Government why it is using the bureaucracy? Why is it using these ordinances without a full and thorough investigation? We want to know the weaknesses of the ordinances.
The Opposition is aware that problems and difficulties have arisen in the operation and administration of the Canberra leasehold system. We do not deny that anomalies in rent payment have developed between leases largely because of reappraisal of values at 20-year intervals. We seek an inquiry to rectify the weaknesses in the system. There has been wide discussion within Canberra. An editorial in the Canberra Times’ of 1 1th March 1971 said:
The charge can be fairly made that the administration of the Australian Capital Territory has lost sight, in the pursuance of administrative and accounting simplification, of the very notion upon which the revolutionary experiment of leasehold urban development was undertaken in Canberra early this century. The changes in land charges introduced on 1st January were made in inexcusable ignorance of the profound social and economic implications of the concept of leasehold as opposed to freehold.
The editorial continued:
The ultimate tragedy is that this can be achieved through the inept tampering of a shortsighted bureaucracy and with hardly a word said in Parliament.
I commend that editorial in the Canberra Times’. It is a thoughtful editorial. There has been wide discussion in Canberra on this subject. We must keep in mind that this land belongs not only to the people of Canberra but also to the people throughout the length and breadth of Australia. We hope that Canberra can be used as a blueprint for the building of other cities throughout Australia. We hope that similar opportunities can be given to people elsewhere in Australia. The tampering with the present system without full and proper investigation is not in the best interests of this House, not in the best interests of democracy and not in the best interests of the nation. The Opposition seeks the disallowance of the ordinance, which will turn back the clock in Canberra.
Let us have an inquiry. Let us cease playing power politics. A national capital’s future is at stake. 1 emphasise that we are all proud of Canberra. At present it belongs to us all. We are all shareholders. If these ordinances remain we are handing over, giving away, much of this Territory. In many ways we will be handing it over to big industrial concerns and big financial concerns which do not even reside here. They are the absentee landlords, particularly of valuable sites in Civic Centre. Canberra is our investment. Let us share in Canberra’s future prosperity. I do not want to sound a sour note but I give an undertaking as Labor’s spokesman in respect of land tenure that one of the first acts of a Federal Labor administration after the next Federal elections will be to have a thorough investigation into all aspects of land tenure in the Australian Capital Territory. But let us not wait: Let us have the investigation now. I ask honourable members to disallow these ordinances by supporting my motion.
– Is the motion seconded?
– I second the motion and reserve my right to speak.
– The ordinances before the House provide that leases in Canberra will be sold at auction on the basis of reserve prices which will recoup to the Commonwealth the cost of development of land offered for leasing. Merely nominal rents are introduced for old and new leases, and rates are substantially increased to return for the present no less than the same revenue that would have been received from land rent and rates had the land charging system not been changed. Details of these changes were made known to members of this Parliament last October and have been widely convassed since. The simple, but effective changes offer answers to the grumbling uncertainty about whether Canberra can pay its way like other cities. The change retains all the advantages of the leasehold system, but puts Canberra’s financing on a simple explainable basis.
The change emanates from an inquiry into the rent and rates system by a departmental committee following the recommendation of the Parliamentary Joint Committee on the Australian Capital Territory as far back as 1965. There was strong criticism of the old system from such diverse bodies as the Australian Capital Territory Advisory Council, the Canberra Chamber of Commerce and other groups. The change has been welcomed in Canberra as clarifying a previously confused picture and introducing certainty into Canberra’s urban affairs. This is not a shooting from the hip act as the honourable member for Reid (Mr Uren) has just suggested. It is not a measure which has come into this House suddenly; it has been introduced after a lot of consideration and thought. There is no interference with the leasehold system of land tenure. The adoption of peppercorn rents in no way weakens lease contracts. It does not imply a drift towards the grant of freehold. There is absolutely no weakening of planning and development controls built into the National Capital Development Commission Act, the leasehold arrangements developed under the City Area Leases Ordinance, the lease documents themselves and the administrative processes. Indeed, the system has been strengthened under these ordinances.
The Government will continue to use the simple and secure control over the development, use and redevelopment of land, which the Canberra leasehold system confers. It is acquiring all the remaining rural freehold in the Australian Capital Territory in order to bring it into use under the leasehold system. The ordinances went through the normal Canberra referrals. Improvements were suggested, such as the need to protect sub-lessees whose contracts contain rise and fall clauses for rates but not for rents, and will be introduced shortly by ordinance. The Seat of Government (Administration) Act, Section 9, provides that no Crown land shall be sold or disposed of as freehold. Urban land has been leased since the first sale in 1924 and will go on being leased under these ordinances. Land made available to the public for business, residential or other purposes as leasehold has specified land use written into the lease. Construction must be to specified standards and value. Covenants ensure that land leased is developed for the desired purpose within a specified time. Town planning requirements are achieved through the simple and economic mechanism of this system. Resale before meeting the building covenant and in some cases before elapse of a defined period, is denied. AH this continues under these ordinances. Leases have been subject to land rent at 5 per cent per annum of the unimproved value of the land at the time it was leased. Leased blocks were revalued during every 20th year of the lease. Land rent was then adjusted to the new valuation again at 5 per cent per annum. This has now been changed.
Cash premiums from leases have been high. Currently there are about 27,000 leases in Canberra. Since the early sixties, a period covering growth from about 7.000 to 27.000 leases, people generally offered competitive premiums to the Commonwealth for land even at times of ample land supply. As well, many people purchased developed leases from earlier lessees at full market value. People have offered, at auction, premiums low in some cases hut in others as high as $21,000 for residential blocks. And there has been a rapid increase in premiums offered for business sites. Having paid cash premiums, leaseholders had other outgoings in the form of land rent, general rates, water rates and sewerage rates. Public discussion in the Australian Capital Territory Advisory Council, the ‘Canberra Times’ and elsewhere had long drawn attention to confusion about the respective purposes of land rent and rates, and stressed the need to remove the uncertainty about land rent commitments after the 20 years reappraisements. and iron out the gross anomalies. At the end of 20 years the value of each lease was reappraised. If, in addition to higher realistic rates, land rent of 5 per cent of the new higher unimproved value was charged, the burden would have become intolerable. Residential blocks could - and did - on reappraisement, increase in value for rental purposes as much as 16-fold. Values for business leases increased up to 2,500-fold.
Grave inequalities in the old lease arrangements occurred because leases were necessarily - and still are - offered at different times. This has happened progressively over the years. Residential lessees in the same street having the same quality land and the same amenities had outgoings varying one from the other by as much as 100 per cent. Local suburban shops paid higher land rents than some large city stores. Businesses, both big and small, successful and marginal, running towards the end of the 20 year period were uncertain about the demands to be made on them, with every reason to expect that they would be very substantial. Who would defend such a system or disallow these ordinances which have corrected it? Who seeks to extract political advantage out or. a complex issue by creating such confusion?
Are members of the Australian Labor Party, with typical, cynical misinformed politicking and disregard for the people of Canberra, once more trying to seek some advantage out of the confusion? The reappraisal system when applied to residential leases very often meant that the new values were made at the time many people were retiring on fixed incomes. The position with rates was not so crippling for lessees. Rates charged bore no direct relationship to municipal expenditure and were therefore neither definable nor defensible. A credible pattern of rating was essential to any responsible community participation in Ideal affairs. And there was real merit in seeking an arrangement which, while continuing to offer sensibly priced land, speedily recovered the full cost of providing such leases.
Land is now disposed of under leasehold by auction as before. Reserve prices reflect the quality of the land and share out equitably the costs of new land acquisition and development between new lease-holders. This capacity to offer land for sale over the counter, having first offered it through the competitive auction system, is very much to Canberra’s advantage. At the second auction in March, 417 residential leases were sold and the average price paid was $3,074. So much for the fear that the new system would lead to inflated prices. A gross sum of $2. 5m was realised at the March sale, which represents a profit to the Crown and the taxpayer - available immediately for re-investment - of at least Si. 5m. There has been no change in Mie basic conditions of leases being offered under the new arrangements. The old system of offering some residential land at restricted auctions continues. This enables genuine home seekers to obtain leases, on terms, without entering into competition with professional developers and builders. Business sites are auctioned to the highest bidder. The opening bid required is 75 per cent of the current value of the land for rating as assessed at the time of offer. Special provisions are made for the treatment of applications for leases for schools, churches, clubs, charitable institutions and so on.
The Government is the sole supplier of land. Speculative ‘buying of unserviced land is not possible. Control of the usage of leased land remains unimpaired. Lessees may apply to the Supreme Court to change the use, and, unless the Court is prevented from dealing with the matter by Ministerial veto, objectors can state their objections to the Court. If the Court orders a change, then the lessee pays to the Commonwealth 50 per cent of any value added to the land less $1,500. This arrangement provides incentive for necessary redevelopment, but gives the Commonwealth half the gain in value. The virtual removal of land rent has enabled the striking of a general rate at a realistic level based upon updated valuations. Thus equity has been achieved in the distribution of the burden over ail land holders.
Land holders who are dissatisfied with their rating valuations have 3 successive avenues of appeal, first to the Minister for reconsideration, then if dissatisfied to an independent appeal board, and then to the Supreme Court. Because their land values are higher, businessmen, representing 3 per cent of leaseholders, will pay 42 per cent of the total rate revenue, whereas they used to pay 35 per cent of the combined income from rent and rates. There has been an ill informed campaign of opposition to the new arrangements by 3 small organisations seemingly devoted to the single tax theory propounded during the 19th century by Henry George, out of context with the situation which prevails in this country today. Their philosophies were summarily rejected by the New South
Wales royal commission in 1961. which was set up to inquire into rating, land valuation and local government finance.
There is no change in leasehold tenure or control. Let us be perfectly clear about what the agents of disallowance are suggesting. They are saying disallow these ordinances and create a situation where most of the people of Canberra will be required to pay the old land rent plus the new general rates and water and sewerage rates. They must know the Minister is not empowered to reduce the general rate for the year once having determined it. This would suit the critics who assert Canberra people should be milked dry both through realistic rates and so-called full economic land rent. Let us look seriously at the consequences of the action proposed by the Opposition. Disallowance of these ordinances would leave land bidders at the next auctions without any idea about future financial commitments. These auctions cannot be deferred or cancelled without affecting the building industry and without creating artificial land shortages with effect on prices.
Considerable confusion would arise in this city between businessmen, residential lessees and persons seeking to transfer leases, all of which might be welcomed by a minority in the legal fraternity but which most would reject as being totally unjust. The time to have objected was last year when the changes were announced within the context of the interim land rents ordinance, and not now after 747 leases have been sold under the new system.
To sum up the changes are not complex. In future, residential leases will be offered for sale at auction on the basis of reserve prices which will overall recoup to the Commonwealth the cost of development of the land offered for leasing. Business leases will be offered at a reserve price representing 75 per cent of the current value. Special leases will continue to be made available under especially favourable conditions for church and charitable institutions. Nominal rents are to be introduced both for old and new leases. All leases have been revalued, a process which will be repeated every 3 years, and general rates have been substantially increased to provide for more realistic municipal revenues. Municipal accounts have been introduced and progressively these will be refined.
These changes will put the costs and the returns from Canberra’s development and its municipal management on a realistic basis, setting the stage for future growth yet still offering the cheapest fully serviced residential land now available in any capital city and fully protecting all the purposes - planning and financial - of leasehold. I strongly recommend these sensible, appropriate changes to the House.
Mr DEPUTY SPEAKER (Mr Drury)Order! The Minister’s time has expired.
– I note that these proceedings are being broadcast and I hope that the people of the Australian Capital Territory have heard the speech of the Minister for the Interior (Mr Hunt). He puts himself forward as a man who knows what is best for the people of the A.C.T. There is a certain amount of gall in this, because it seems to me - and I think it is a widely held view throughout Canberra - that the Australian Country Party seems to regard Canberra as a sort of kingdom which it inherits from time to time. How Country Party members can come in here with serious faces and say that they know what is best for the people of Canberra must defy all commonsense and reason. Let me single out one point to indicate the confusion in the Minister’s line of thought. He said that the critics of the proposed ordinance want to milk the people of Canberra dry and that they want to charge people more here in Canberra. Yet the Minister cites the whole basis of the criticism as coming from the Henry George League people.
If he had read the Henry George criticism he would know that that criticism is that the people of Australia are being milked dry and that the people of Canberra are being given a gift - an unwarranted enrichment. That is what the Henry George people say. They have been flooding the country with the suggestion that the people of Australia are being milked; not the people of the ACT. So the Minister has got his argument completely upside down. I came to Canberra at the end of 1962, and it was part of my job at the time to try to familiarise myself with the leasehold system as it worked in Canberra then. The Henry George criticism has not come into this debate except from the Minister. The honourable mem ber for Reid (Mr Uren) did not mention it. I rapidly learnt that the system, as it worked and as it was allowed to work before it was ruined - and it worked well - was this: Land was released on a leasehold system. A person did not pay for his lease. If one thinks back to fundamentals one realises that one does not sell leases in land. One goes to a landlord, takes it and pays a reasonable rent based upon what the landlord thinks it is worth to him - in other words, what the value of the land is to the landlord.
The return to the landlord is a rental return, and the rates find a place in it. Anyone who has lived in Canberra for many years will say that in the old days when the system worked well, before it was ruined, it worked that way. If one goes back to the early parliamentary debates one will find that the system was intended to work that way. Two arguments principally were put forward by the founders of this Commonwealth when they talked about the leasehold system in Canberra. One was that the unearned increment would belong to the people of Australia. That is the Henry George argument. The other was that people would get land here cheaper. They would get it virtually free because they were not dealing in freehold land and would pay for it by means of paying rent over a period of time. That would enable young couples with limited resources to be in the same position as a rich man. They could come along and build with their limited resources whether or not they needed the assistance of a mortgagee. In those days they did not use- 2 or 3 mortgagees as we do now. It is not uncommon in Canberra to have third mortgages, as a result of the way this system has been ruined.
These young people could compete with the rich man by getting the land virtually free. The only reason for the introducttion of the auction system into the ACT was to allocate preferences. For years it worked very well. If one goes back through the 1930s and 1940s right up through the 1950s one will find that- young couples with limited resources were able to get their land for $10, $50, $100 or $200. Honourable members might say that that is giving an advantage to the people of Canberra. If it means that they are getting the benefit of a better system, so be it. But they were paying, or should have been paying, the value of the land based upon a proper rental if the proper rental had been struck. What went wrong - the Minister has touched on this although he did not give the real reasons for it - was that during the 1950s, starting in about 1958, the demand exceeded the supply. There is a lot of serious allegation made in this city that it was done deliberately. Anyone who listens to the auctioneers at those auctions - presumably they act on instructions from government - knows that they do their utmost to put the prices as high as they possibly can. The last indication of this took place a little while ago when some blocks were returned because there was some filling on them. The auctioneer was exhorting the people and telling them that if this land had been at Jindabyne they would have been paying more for it. The whole attitude has been:. Get away from the leasehold system of paying for land by means of a rent without a premium and adopt the notion of a premium.
At one time I was the tenant of a house owned by the Australian National University. The University had got this land free, as indeed everyone did in those days. That is the way the system should have worked, and that is the way it is working in the Rocks re-development in Sydney. It is intended that the developers will come in and that the shopkeepers and other people will get the land without the payment of a premium. That is the way the leasehold system is intended to work. This has been spelt out in the ‘Financial Times’ and the Australian Financial Review’. What went wrong in Canberra was that supply did not match demand. Whether this was brought about deliberately no-one knows, but people began to realise that land here was being sold as though it were freehold. We can find corroborative evidence for this wherever we look. In fact, the most recent example is to be found in one of the papers put out by the Department of the Interior on the renewal of leases, lt talks about the system in the context of another problem, namely, what will happen at the end of 99 years. It states:
Some lessees have paid virtually freehold prices in premiums offered for leases.
The Government has rationalised the system all right. It has destroyed the old system or allowed it to be destroyed so that now we have virtually a freehold system. People now have to pay for land whereas before they did not. Government supporters contend that they have put the system along the road and have pointed out that in New South Wales a person could pay $12,000 for a very ordinary block of land at, say, Fairfield. They say: ‘Good. That is what we want. Let us push it a bit further. It does not matter whether we call it a leasehold system or not. We will graft it on to what we have allowed to develop already, namely, a reserve price system.’
An honourable member interjected earlier that no-one has ever said that there was not a lot wrong with the old system. There was a lot wrong with it. That is one of the reasons that the second matter standing in the name of the honourable member for Reid demands a full scale inquiry, leaving aside this reserve price that has been grafted on to the system in the place of ground rent. On the face of it, it seems to argue against a leasehold system, but I am happy to note that the Government does not argue against a leasehold system, and presumably no-one in this House does. Let me outline some of the problems that honourable members on this side of the House are concerned about in this whole question, lt is a civil liberties issue, if you like. It arises from the fact that Canberra is a company town and it makes no difference that it is a government town. The landlord here is the builder; the landlord here is the developer; the landlord here is the tax gatherer; the landlord here is the planner; the landlord here decides whether or not building plans are approved; the landlord is often the banker; the landlord is the valuer. He decides what value to put on the land for which he will then charge you rent.
Problems of conflict arise, and it is these problems to which editorials in the Canberra Times’ - long since gone now - once drew attention, not to the fact that ground rent should ever be abolished. I have never read any editorial in the Canberra Times’ stating that ground rent should be abolished. In fact, the latest editorial on this subject in the ‘Canberra Times’ which appeared on 2nd April this year, sets out a determined, full scale and reasoned argument supporting two things. Without mentioning the Australian Labor Party, it stated that the ordinances should be disallowed and that the problems to which 1 have adverted - the problems of the landlord being everything else, including the valuer, the banker, the planner, the developer, the builder and approver of plans, should also be referred to a full scale top level inquiry. If there is any voice in the city that speaks for the people of Canberra - perhaps I like to think it is myself occasionally - it is the ‘Canberra Times’. It speaks out and demands that these ordinances be disallowed and that there be a full scale inquiry.
The Government in its arrogance says, through the Minister for the Interior: ‘We know what is best for the people of Canberra.’ It does not matter what the Canberra. Times’ says. The Australian Capital Territory Advisory Council, with all its faults and weaknesses, has not said one thing or another about the abolition of ground rent, as far as I am aware; but it has demanded, and has gone on record as being very strongly in support of, a- full scale public inquiry conducted by the Joint Parliamentary Committee on the Australian Capital Territory. Both the Advisory Council and the ‘Canberra Times’ demand a public inquiry. Many prominent citizens have written letters on the subject to the ‘Canberra Times’. I do not know whether honourable members read the Canberra Times’ in which these things are thrashed out in the correspondence pages. We have a very literate, informed community in Canberra, and the correspondence pages of the ‘Canberra Times’ are full of letters demanding this sort of thing. I do not suggest that they are all in favour of disallowance of the ordinances. There are letters the other way, too. I have never counted them to establish whether the majority are against disallowance or for disallowance, but these letters show what a live issue this matter is in Canberra.
Yet this Government presumably says: We know best. We argue against disallowance’. It is wrong - in fact it is sheer hypocrisy - to say that you can find out what goes on in this city. You cannot. There is no way in the world you can find out what goes on. I will give one simple example. The Department of the Interior decided to have a seminar on land tenure problems, lt was referred to in the paper on 9th March. lt was said to be top level and confidential. The very word ‘confidential’ belies what the Minister said about the Government’s attitude to land tenure in the Australian Capital Territory. Why should it be confidential? Why should it not be public? Why should the people not be told what is going on? What is wrong with members of Parliament who want to know the facts and who want to benefit from such a seminar also being entitled to participate? The Department of the Interior invited outside representatives, lt invited the Chairman of the Australian Capital Territory Advisory Council, Mr Jim Pead, and it invited Mr Webster, President of the Chamber of Commerce, who at that level is one of the few spokesmen in favour of these ordinances. Yet when I rang up and sent a telegram saying: ‘Please may I come along?* I was told a matter of hours later that the thing had been either cancelled or deferred.
It is all very well to say that the cancellation or deferment had nothing to do with my wanting to get into the act, but why should I not have been allowed to attend? Why should the seminar have been deferred merely because the matter was the subject of a debate that was to come before the Parliament? When I asked for copies of papers that’ had been circulated I got no reply. I had to ask again in a second telegram. I asked for all the papers, that is, not only the papers distributed by the departmental officers but the critical papers that had been circulated by others who had been invited to1 attend, including a well known publicist and a well known academic. I did not get those. I had to get them by going to the authors of the papers. How can the Minister honestly say in this House: ‘We do the right thing. We let the people know what is going on’. The opposite is in fact the truth. Every possible barrier is put in the way of our finding out the truth about what is going on.
In Che limited time left to me let me summarise what is wrong with the present system. Firstly, it imposes a reserve price on leases sold at auction, which is unnecessary. Whatever the other effects, people in Canberra will be paying $3,000 - if that is the reserve price on the land - more than they would have paid before. If the new system works perfectly, as it is intended to, it will cost the lessee the reserve price more than it would have cost under the old system if it had worked perfectly, and that is a bad thing. We have heard talk about the 20-year reappraisal. Even if this were bad. there is now talk of having a reappraisal at the end of 99 years. We can read about this in the newspapers and in the ministerial papers that are available to any honourable member prepared to go to the trouble to which I went to get them. There is talk of a 50 per cent reappraisal premium at the end of 99 years. Is that not exactly the same thing, called by a different name, as the 20-year reappraisal of ground rent? Twenty years was considered too long but now the Government is saying: ‘We will up the ante at the end of every 99 years.’ The reappraisal will be an unknown factor. The Government has said this as an ex post facto recognition of the argument that the unearned increment should go to the people of Australia. But it belies the Government’s argument that there was something wrong with the 20- year appraisal. There was something wrong with this system, but the Government intends to make the position worse. Those are the two principal faults in the system.
Finally I give 2 examples of what has happened since the Government introduced these ordinances. I have said that in Canberra the landlord is the valuer. There has been an enormous amount of criticism of the valuations of residential blocks here. I have in front of me a copy of a letter sent by the honourable secretary of the Ringston-Narrabundah Returned Services Club in Canberra protesting at its rates. This is a new valuation. I have the permission of the Club to use the information contained in the letter. The land in question is in an old part of Canberra that has not developed in recent years. The rates were $4,608 in 1966 and $11,900 in 1967. The new rate notice for 1971 is for an amount of $44,000. If that does not call for an inquiry I would like to know what does.
I will give one final example to show that this introduction of a reserve price is putting land prices out of the reach of ordinary people. But the example I give is not of ordinary people. It is a reference to a radio broadcast on the Australian Broadcasting Commission’s programme on 19th March. It was said that a ecumenical centre planned originally for the Woden Valley could not now go ahead because of the high price placed on the land by the
Department of the Interior. The centre had been planned as a joint venture but the Department told the people concerned that the premium on the lease would be $280,000. Previously it had been thought to be something of the order of $30,000. The project cannot go ahead. That is a church situation and if this sort of thing is happening with churches it will happen with others.
– Order! The honourable member’s time has expired.
– I have to say at the outset that I do not really believe that either the honourable member for Reid (Mr Uren) or the honourable member for the Australian Capital Territory (Mr Enderby) has any basic understanding of what is involved in these ordinances. I am sure that if they did and if they had the good of the Australian taxpayer and the Canberra community at heart they would not have raised this matter. It is true that there has been a mild controversy carried on in the letters-to-the-editor columns of the Canberra newspapers between some very worthy organisations and people who have been engaged in a pro and con crossfire with each other. Despite some misunderstandings, it has been a constructive debate, and I think it fair to say that as time has passed there has been acceptance of the Government’s actions as a rational course. But the Opposition’s attitude largely reflects the misconceptions and uninformed criticism spread by opponents of the legislation who do not live in Canberra, and who are bound by outdated or impractical philosophies. Those changes which have occurred are essentially simple. The point which opponents of the legislation tend to ignore is that there has been no change in the Government’s adherence to a leasehold system. Its integrity remains intact. Planning and land use will still be controlled by the planning covenants which are in use at present. So the leasehold system remains. Only the method has been changed, to protect the people of Canberra from inequalities, to ensure that the development of the national capital proceeds in a financially viable manner, and by so doing to protect the Australian taxpayer. I am amazed that there could be any objection to these aims from the Opposition. 1 was the Minister for the Interior when the changes now being debated were drafted and put into practice. In early 1968, shortly after 1 came into the portfolio, I began to form an opinion that there were gross inequities and problems in the old system, and that action must be taken to seek solutions. The old system, simply, was that blocks of leasehold land were auctioned without any reserve premium to cover the cost of providing services to the land, and leaseholders were obliged to pay land rent at the rate of 5 per cent per annum on the unimproved value of their lease. It was only every 20 years that reappraisals of the unimproved value were made. Even to the most naive, it was obvious that in a city developing at the rate of Canberra that reappraisal of unimproved value after such a long period must result in dramatic increases in the value and the land rent thereby due. A classic example occurred in July 1968. Esmonds Motors Pty Ltd in the city had for 20 years been paying land rent of SI 55 on unimproved value of $3,100. Reappraised in July 1968, their unimproved value was put at $400,000, which meant that their land rent bill would be $20,000 a year.
There are many examples of unrealistic increases in land rent on dwelling sites. One block leased in 1948 was assessed then at an unimproved value of $750 which meant the lessee paid land rent of $37 a year for the next 20 years. In 1968 the block was reappraised to an unimproved value of $3,980 which meant the land rent increased 500 per cent to $199 a year. Another house block acquired in 1950 had a land rent of $38 on an unimproved value of $750. The block was reappraised in 1970 at the end of the 20 year period, resulting in a new annual land rent charge of $300, an 800 per cent increase. Such increases were bad enough for wage and salary earners, but there were examples involving pensioners and retired people.
Apart from my own inclinations, we came under strong pressure during my period as Minister to do something about the unfair situation which permitted examples such as I have just outlined. The Advisory Council of the Australian Capital Territory wanted something done. Despite what was said by the honourable member for the Australian Capital Territory the fact is that the Chairman of the Advisory Council, Mr Pead, has gone on record as asking for the abolition of land rent. The Chamber of Commerce wanted something done and many other thinking people wanted something done. We looked through all the alternatives to land rent, including the reduction of the 20 year reappraisal period, and the reduction of the 5 per cent land rent figure, but it became obvious that each of these alternatives would be only an expedient. To lessen the time and percentage factors would lessen the cost and shocks suffered by leaseholders on reap.praisement but it would also retain the problem, by pushing the crunch further into the future, by perpetrating the anomalies, and by delaying justice to leaseholders and the Australian taxpayer.
What was needed was a cure, a cure that could be promptly and fairly instituted. So we looked at the whole- system. It was a leasehold system which provided fully serviced blocks by auction, so that people could acquire the lease of a block of their own choice, with only the intensity of freely competitive bidding dictating what a leaseholder should pay in premium for his lease. There were, and are, of course, those who argue that under a pure leasehold system there should be no premium paid by the leaseholder for his block and that land rent should be the only charge. But that argument depends on the arbitrary distribution of blocks by a- central authority, with little or no choice on location available to leaseholders. Such a system, of course, would go against the grain of every Australian who wants to build his family home on a block of land of his own choice, in a suburb of his own choice.
Obviously, the old system of paying a premium for a block was, and under the new system still is, preferable to the argument advanced by the purists. But there was a problem in this. While a number of leaseholders were acquiring their blocks a: premiums which returned, to the Government the cost of providing the road and services for that block, there were people acquiring leases of blocks for as little as $1. Because of this, in many instances the Government was not recovering in premiums the cost of servicing the block. Obviously if a person could acquire a lease for $1, and the cost of providing services to that block was, say, $2,000, then the difference had to come from revenue. Although some rents were becoming unbearably high the general income from rent and premiums was not formally planned to provide a guananteed return on land investment. In good periods premiums helped, but in bad periods of very low premiums the return from land rente was not enough to pay the interest on the land development investment.
In short, the Government was unsure at any given time that premiums and land rent would meet the land development charges which had been financed by the Australian taxpayer.
A rent of 5 per cent of unimproved value may sound fair enough, but the fact is that it does not pay interest on original outgoings, let alone repay capital and provide a payment for land use. Some may argue that after 20 years, land values rise and the quantum of rent increases. That is so, but by then the loss of the first 20 years has been aggravated by accruing interest and higher cost investment, and repayments are chasing each others tails. And just at that point in the future when the leases shed a stream of money the system would run into trouble because very, very few people could afford land rent after re-appraisment. That is a point that is totally and completely ignored by the honourable member for Reid.
In looking at the overall scene there was yet another problem. Land rent had been a dominant part of the total outgoings of a leaseholder and general rates had been held at artificially low levels because land rent had to be recognised as part of the family budget. I ask leave to continue my remarks at a later hour.
Leave granted; debate adjourned. Sitting suspended from 6 to 8 p.m.
– by leave - Mr Speaker, it has been the practice, and I think a good practice, for the Minister for Foreign Affairs to make from time to time in addition to statements on particular overseas events and developments a statement on the international situation as a whole. I propose to continue that practice, so that the House may have a comprehensive account of Australia s foreign relations. Such a review was in course of preparation by my predecessor and I feel that it would be of interest to honourable members. In order to save the time of the House, however, I shall at the end of my speech table a document incorporating information of a detailed character on the global situation. I shall then move that the document be printed. I shall therefore confine my statement to four questions of particular current interest and importance to Australia - Indo-China, China, the Middle East and Pakistan.
The primary objective of Australian policy in Indo-China has been to help the peoples of South Vietnam, Laos, and the Khmer Republic to maintain their right to determine their own future free of external aggression or interference. This remains the continuing purpose of our policies in the area. We have sought to promote this objective, wherever possible, through peaceful means. We have maintained a consistent policy in favour of a peaceful settlement in all three countries. In Vietnam, we have stressed repeatedly that we do not seek a military solution and we have given full support to allied efforts to achieve a negotiated settlement. In Laos, we have given full support to the 1962 Geneva Agreements and to the efforts of Prince Souvanna Phouma to preserve the independent and neutral status which those Agreements sought to guarantee. As to Cambodia, we took an active part in the Djakarta Conference of Foreign Ministers, which sought to secure by peaceful means the continuing independence and neutrality of the Khmer Republic. We are continuing to explore ways and means of working towards peaceful solutions.
But it takes two sides to negotiate and the North Vietnamese have so far refused to enter into a genuine negotiating process. It is they who have sought, and continue to seek, military victory. It is nearly 3 years since Hanoi sent a delegation to Paris. Yet throughout that time the North Vietnamese have refused to engage in substantive talks, insisting that the United States must first undertake to withdraw all its forces from Vietnam unilaterally and unconditionally, and to dismantle the elected government of the Republic of Vietnam. They have also rejected offers by the Republic of Vietnam of direct talks - public or private - about a political settlement. In Laos, North Vietnamese forces have been violating the 1962 Accords, and attacking the neutral government of Prince Souvanna Phouma, since the Accords were first signed. In Cambodia, it was again the North Vietnamese who rejected the Lon Nol Government’s request to withdraw from Cambodian territory and who then launched direct attacks against Cambodian centres and Cambodian forces, weeks before the cross-border operations by the United States and South Vietnam.
Because the North Vietnamese have refused to negotiate and have persisted in their aggression, the countries of IndoChina have had to defend themselves and to seek assistance from outside. Australia has responded to these requests for help. During the past year, as a result of the Republic of Vietnam’s increasing selfreliance in all fields, it has been possible for allied forces to withdraw progressively from South Vietnam. One Australian battalion was withdrawn last November and a further 1.000 men from all Services will be withdrawn in the coming months. The fact that such withdrawals can be undertaken without detriment to the security of South Vietnam or of our own forces is a tribute both to the assistance which Australia and allied forces have given, and to the advances made by the Government, the people and the armed forces of South Vietnam.
Australia is now engaged in an intensified programme of training assistance to help the South Vietnamese to develop further their own ability to defend their country. In the field of economic aid, thanks to the improved security situation, it has been possible to proceed with important new infrastructure and development projects. Although the declaration on the neutrality of Laos permits it to receive assistance for self-defence, Laos has never sought military aid from Australia. Australia has, however, given economic, technical and financial aid to Laos as well as diplomatic support for its independence, integrity and neutrality. The Government of the Khmer Republic has stated repeatedly that it wants outside assistance only so long as it is faced with foreign invasion. It has not asked Australia for combat troops and there is no question of our sending any. But in response to its requests, Australia has made two special aid grants to the Khmer Republic bringing our total aid this financial year to $2m.
The Australian Government continues to hope and will continue to work for a just and peaceful settlement of the present conflicts in South Vietnam, Laos and the Khmer Republic. If the other side maintains its refusal to enter substantive negotiations, we shall continue to give appropriate assistance to the Governments of these countries in their resistance to aggression. But we also hope that as security improves and the level of fighting declines, it will be possible to consider ways and means of launching a wider and longer term international reconstruction effort to help the peoples of these unhappy countries to improve their living conditions and build a better future.
A major factor in the ultimate resolution of the problems of indo-China will of course be the policies of the People’s Republic of China. This in turn will be influenced by its relationship with the international community. The Government has never ignored the immense fact of life which the People’s Republic of China represents. It comprises about one quarter of the population of the globe. Though it has problems of under-development it has made much progress industrially and agriculturally over the past 20 years and it has great economic potential. It has a strong influence in a number of communist countries and some others. It has extended its support to insurgent movements in several countries both in and beyond the South East Asia region, lt is developing an arsenal of nuclear weapons together with missiles. We accept that, perhaps more than any other government, that of China has great domestic difficulties. But it is necessary to point ou! that the isolation of China from the international community has been largely the result of its own international attitudes.
Over the last 12 months there have been relevant developments and our own policies must be sensitive to change. Peking has made some progress with internal reconstruction following the turbulence and anarchy of the cultural revolution, lt has adopted a more active foreign policy. Peking has been recognised by Canada,
Italy, Chile, Ethiopa, Equatorial Guinea, Kuwait and Cameroun, and is exchanging ambassadors with Nigeria. It has shown and continues to show signs of renewed interest in membership of the United Nations. At the most recent Assembly there was a shift in its favour and a number of other countries including the United States of America and Japan have their policies towards China under review. This Government, for its part, certainly is studying the changes in Peking’s international standing, the likely pattern of voting in the United Nations and the constants in the problem. We live in the same region as China and in our consideration we must attach considerable weight to the interests and rights of our neighbours, including the Republic of China on Taiwan. The Australian Government considers that the Republic of China is as much a fact of international life as is the People’s Republic on the mainland. There are more than 14 million people in Taiwan, more than in most member countries of the United Nations. The status and rights of Taiwan as a member of the international community must be protected.
The Middle East
The Middle East which has long been important to our communications with Europe is an area of growing commercial significance to Australia both as a market and a source of raw materials. But the area is bedevilled by the so far intractable problem of Arab-Israeli relations. That problem is complicated by the competing interests crf the great powers in the region and the presence of Soviet military personnel there in support of one of the parties to the conflict. We welcomed the acceptance by Israel, the United Arab Republic and Jordan of the United States initiative which led to the resumption of the mission of Dr Jarring, the special representative of the SecretaryGeneral of the United Nations, to assist in implementing the principles for a just and lasting peace in the Middle East as outlined in Security Council resolution 242. It is a matter for regret that Dr Jarring’s mission has been temporarily suspended but we can at least be thankful that currently the military restraint for which the Secretary-General appealed on 5th March is being substantially exercised.
Australia’s position is quite clear. We enjoy friendly relations with both Israel and the Arab countries. We are committed to neither side. This does not preclude us from expressing our views on specific issues. Our basic position is that there must be a settlement ensuring the sovereignty, independence and territorial integrity of all states in the area, including Israel, within agreed borders. It should also provide for a just settlement of the refugee problem, guarantee freedom of navigation through the international waterways of the region and protect areas of deep concern to three of the world’s great religions. Meanwhile the build up of weapons and war material goes on. Continuation of a conflict which carries such grave risks of escalation is against the interests of all. It is not the exclusive concern of the adversaries. This conflict has continued for a generation - through the failure of the two sides to come together in a solution which the rest of the world holds to be long overdue. It is essentia] that the parties continue to keep the peace and to search in sincerity for a just and permanent settlement.
I feel, Mr Speaker, that I should not address the House, even briefly, without some reference to events in Pakistan, a country with which we have, for 23 years, enjoyed close relations. Pakistan has been under martial law for 2 years under the presidency of General Yahya Khan. It had been the President’s prime objective to arrange for a constituent assembly to be elected and for that assembly to draft a new constitution. He proposed then to hand political power back to the elected representatives of the people of Pakistan. Elections for the constituent assembly, which were held last November, produced an unexpected polarisation: The Awami League, a party limited almost solely to the east wing, won a majority of seats; the only other party to win a substantial number of seats was the Pakistan People’s Party, based in the west wing. The Awami League’s platform gave political expression to a sense of grievance among its supporters in East Pakistan, which contains the majority of Pakistan’s population, about their share of power and wealth in the nation. Its political programme, in brief, envisaged virtual autonomy for East Pakistan within a loose federal framework. This programme was not acceptable in its entirety to the Government of Pakistan.
For some 3 months President Yahya attempted to work towards a compromise. His task was complicated by the positions taken up by the two main political leaders, Sheikh Mujibur Rehman of the Awami League and Mr Bhutto of the People’s Party. The first meeting of the Constituent Assembly had to be postponed. In midMarch, President Yahya and subsequently Mr Bhutto went to Dacca and it was hoped that the talks that were held there with Sheikh Mujib would lead to some generally acceptable constitutional arrangements. Unfortunately, the talks failed to produce agreement and on 25th March President Yahya decided to put an end to the virtual autonomy which Sheikh Mujib had claimed for his party, and to attempt by force to re-establish the authority of the central government. At the same time, President Yahya charged Sheikh Mujib with treason and banned the Awami League. I cannot yet give honourable members a detailed account of the military action that was instituted on the night of 25th/ 26th March, or of the tragic events that have ensued. Until a sufficient picture of the facts has been authoritatively established, I am able to speak only in the most general terms.
There have been reports of widespread conflict and loss of life, lt appears that in parts of East Pakistan the authority of the martial law administration has not been re-established, and that fighting and disorder are continuing. Pakistan is an old friend of Australia’s and it saddens us to read these reports of bloodshed and destruction, following as they do so closely on the hurricane disaster of last November in the same area. I have been deeply concerned about the safety of the sixty Austraiian citizens in East Pakistan. Some of those whose presence there was not essential have been evacuated. On 2nd April 9 adults and 9 children from the Dacca area were flown out to Singapore. Others may be evacuated by internal nights of Pakistan International Airlines as opportunities arise, but the bulk of the 42 Australians still in East Pakistan are upcountry in areas which are considered safe, or from which they could not, without unjustifiable risk in present conditions, journey to the evacuation points.
Mr Speaker, I have touched upon the rightful concerns of the Australian Government in these matters. The situation that has arisen in East Pakistan is, of course, an internal matter and the responsibility for resolving it is Pakistan’s alone. From a humanitarian viewpoint, however, I must record our concern at the reported scale of the loss of life and suffering. We have noted President Yahya’s statement on 26th March that his objective remains the same, to transfer power to the elected representatives of the people as soon as the situation permits. It is the Australian Government’s hope, therefore, that conditions of peace, order and security will be restored in East Pakistan as soon as possible.
Forthcoming Overseas Visits
Like my predecessors, my induction as Foreign Minister is to be a rapid one. In a few days 1 am leaving for London to participate in the five power meeting on defence arrangements for Malaysia and Singapore. I shall be attending a meeting in Geneva of our heads of missions at European posts before proceeding to Washington for the Ministerial meeting of troop contributing countries in Vietnam. I return to London for the meeting of the South East Asia Treaty Organisation Council of Ministers on 30th April. My business during 3 of these meetings will be concerned essentially with South East Asian affairs. It would have been my wish, normally, to visit countries of the region as Foreign Minister before entering detailed discussions with our allies in this way. This has not been possible. I shall, of course, be reporting to the House on the business involved in these meetings after my return. I look forward to visiting Indonesia at an early opportunity.
I make one final point, Mr Speaker. The objectives or means of achieving our foreign policy need to be widely understood and supported. We hope that the studies of the Foreign Affairs Committee and the debates in the Parliament will be accompanied by serious research and informed debate both within and outside the Parliament by the Australian people. Foreign policy will be stimulated and fortified by this democratic process. I hope this speech and the statement which I am tabling with it will make some contribution to this process. Mr Speaker, I present the following papers:
That the papers be printed.
Motion (by Mr Swartz) proposed:
That the House take note of the papers.
Debate (on motion by Mr Barnard) adjourned.
Motion to Disallow Ordinances
Debate resumed (vide page 1493).
– Prior to the suspension of the sitting I was discussing a motion for disallowance of the City Area Leases Ordinance and Leases (Special Purposes) Ordinance moved by the Opposition. I had been pointing out to the Opposition and to Parliament the difficulties faced by the Government in looking at this question. The continued rise in land values was recognised by the decision to peg valuations, for reappraisement purposes, at the 1962 levels. Even so, in term of individual home-owners, who make up the vast majority of leaseholders, land rents continued to reach alarming levels. Canberra home-owners have no special sources of treasure, and obviously they could not be thrashed for fully economic general rates as well as high land rent charges. So it was impossible to establish a proper rate for municipal services and charges and, therefore, it was impossible to arrive at sound municipal practices. In simple terms, there was no way of balancing the books.
Another possibility canvassed in seeking a solution to the problem was that of removing the 1962 valuation peg. But this would have meant to a home-owner an annual cost increase of perhaps several hundred dollars. Obviously, this would be more than the average man could bear. And, like all the other alternatives, it would do nothing to remove the anomaly of two householders in the same street, with no physical difference in their blocks, paying amounts of land rent differing by as much as $100. Anomalies like those I have mentioned in the last few minutes abounded under the old system. There were obvious inequalities for leaseholders in Canberra, and the Australian taxpayer was never sure what municipal costs amounted to nor how much the taxpayer was subsidising municipal services. So several decisions were taken and simple changes made in the method of the system.
The first decision, which removed the inequalities besetting leaseholders - and which perversely has most aroused the ire of out-of-town critics - was to virtually abolish land rent. Then we protected the taxpayer of Australia by instituting on land at auctions reserve prices sufficient to cover the costs of providing the roads and the services to the blocks for auction. We have struck a rate which will return no less than the same revenue that would have been received from land rent and rates had the charging system not been changed. In fact, under the new charges only one-third of leaseholders can expect to pay more and two-thirds can expect to pay less.
The big question is whether the leasehold system has been impaired by these changes. I say categorically: No, it has not been impaired. The integrity of the system remains, protected by lease covenants and these and other ordinances. Further, the interest of the Government in retaining leasehold is evidenced in the announcement of plans to resume the remaining freehold land in the A.C.T. There has been some emotional confusion about these changes and about the Commonwealth’s role as landlord in the A.C.T. The lack of understanding and knowledge of this subject was demonstrated by the honourable member for the Australian Capital Territory (Mr Enderby) who made the claim that the Kingston-Narrabundah RSL Club may have to pay $44,000 as a result of the change in the rating system. This is a typical example of the lack of study made on this whole question. The simple fact is that the Club will have to pay an increase of 50c a week in rates.
– Fifty cents! ;
– Fifty cents a week, not $44,000 as the honourable member for the Australian Capital Territory said. The Government does not see its role as that of a rackrenting landlord set up to maximise the profits from the Canberra land system. The essential quality of the Canberra land system is that it can now be used to provide good quality land at very reasonable prices without cost to the taxpayer, and it can be used to create a national capital which, through the wise application of planning and development controls which remain intact, will stand as a monument to advanced thinking about urban development.
The decisions I have outlined were not taken lightly or expeditiously, but only after 3 years of continuous study of the system and problems by the Department of the Interior and with advice from the Attorney-General’s Department and the Department of the Treasury. I am proud to have been the ministerial instrument responsible for these changes. I believe that justice has not only been done but also is palpably seen to have been done.
– I listened with great interest to the Minister for Shipping and Transport (Mr Nixon), particularly to his disclosure that the Government was not quite sure of the internal economics of the cost of Canberra considered as a municipality. That is one of the matters which we seek to probe in the terms of the motion for disallowance of certain ordinances, which was moved by the honourable member for Reid (Mr Uren). It is worth reminding the House that there are 4 systems of land tenure in Canberra at the present time. There is the special purposes leases ordinance which affects 180 leaseholders: the church leases ordinance which affects 20; the general leases ordinance which affects 10,000 and the city area leases ordinance which is the major one and affects 23,000 leaseholders. Canberra land tenures today are in a mess. Empiricism is triumphant and bureaucracy rampant.
It is this Government which has presided over the major growth of Canberra from 1950 with a population of about 15,000 to 1971 with a population of about 135,000 which is responsible for the mess because this Government has during the major period of development tinkered and tampered with the concept of a system of land tenure by leasehold. Confusion will be worse confounded as a result of the operation of these new ordinances. There are no statistics available to the House in justification of these new ordinances nor is the Government capable of giving any. A full inquiry is the only way in which any light can be thrown on the true cost of Canberra, its development, its administration and the severance of that portion of those costs which should fairly be borne by the home owners and business and commercial interests. The impact of these new ordinances will vary it considerably. Some will gain but I believe more will lose. Only an inquiry will finally determine the facts. In Canberra land rent has been transmuted into a hybrid form of municipal rates which, if we can take the experience of other major cities, will probably be 2i per cent of its true value. For that reason [ think there will be considerable rejoicing on the part of the major commercial interests. If there is to be a change in usage the Government, of course, will want to be cut in on the loot to the tune of some 50 per cent.
Another matter which has not been touched on and which ought to be answered by the Government through its remaining speakers in this debate is the fact that for many years the people of Canberra have been denied the right to deduct for purposes of income tax their rental as being the equivalent of municipal rates. But, of course, in the interim it has been possible for business interests and commercial interests to write off over the period of the lease the cost of their respective enterprises. What will be the comparative position of - we have yet to hear anything on this - home owners in such differing areas of development and social status as Forrest, Deakin and Red Hill with newcomers to areas such as Belconnen and the Woden Valley? Are these newcomers to be mulcted for higher premiums than would have operated under the terms of the former leases ordinance? I say they will be. Again the final determinant in the cost of land will be the Government itself and the artificial scarcity which it has chosen to create and which is responsible for the present degree of exploitation.
– Compare it with Sydney.
– I will in a moment. If the Minister cares to listen he may learn. Need I remind the House that the first leases were granted in about 1924, a matter of 47 years ago, and the unexpired portion of the term is 52 years. What is to be the principles on which those valuations are to be determined? The Government has never considered this. What is to be the impact on probate duty in respect of the same field? The Government will deal with it step by step and make the punishment fit the crime in any particular case. The people of Canberra are entitled to the opportunity to examine the impact of these ordinances, to voice their protests and, for the first time, not to be forced to accept that Big Brother knows best.
Of the 2 Ministers who have spoken in support of the Government’s action in this matter at least one comes from New South Wales and if he were in the House I would put this question to him: Would he recommend this proposed leasehold system to his wheat and wool growers, who are operating mainly under the Crown lands system of leaseholds in New South Wales? I say definitely that he would not. What is being offered as the perpetuation of a leasehold system is in fact only a pseudo leasehold. A practised conveyancer would call it an inchoate fee simple because it has some of the worst and best features of both. The best feature of course is in terms of future capital gain. The worst is in terms of the incidents which are normally associated with leasehold. To judge by the attitude of the Government and its spokesmen, particularly the 2 Ministers who spoke in this debate, one could draw a comparison with Warren Hastings who stood amazed at his own moderation, because from now on land speculation will be rampant in the Australian Capital Territory. The whole history of Australia from the arrival of the First Fleet has been one of speculation, peculation and manipulation. Alienation of the public domain is to continue under this Government and its auspices.
Let us examine the period in which this undertaking was given. It was an election gimmick chosen as a sop to be thrown to the people of Canberra to win a by-election. What a price to pay for the abandonment of a system which was worked out in 1910 and was based on very sound principles, because the founding fathers of federation well knew what had happened in New South Wales, of which originally this area formed a part, and the scandals associated with Sir John Robinson and everything that followed in that period. True land management ends and land speculation will become rampant.
This set of ordinances introduces a freehold in everything but name and it is a free-booting Government which is doing it. Allegedly it is a simplification of bureaucratic procedures. Of course, in Canberra bureaucracy is triumphant. As my colleague the honourable member for the Australian Capital Territory (Mr Enderby) pointed out, it decides everything from go to whoa. In legal theory all land is owned by the Crown which grants an estate. The very name ‘real estate’ .is a derivation of a word meaning ‘royal’. Today we have in Canberra a gradual reversion to the fee simple and it is a fee simple in everything but name. The only characteristic in which it differs from fee simple is that there are covenants which can be invoked to cancel a lease in the event of non-payment of the rental or in the event of non-compliance with the limitations imposed on the usage of the land. The Government and the bureaucrats, of course, want to retain it. They want the best of both worlds and to give the people of Canberra the worst. The main characteristic of freehold is - and I quote words from the ‘Canberra Times’:
A quick, total and maximum return to the vendor for the transfer of the land.
In other words, he wants the hard cash in his sweaty little hand, and to hell with all the rest. Irreconciliably opposed to that is the principle laid down in the Seat of Government Administration Act of 1910, section 9 of which states:
No Crown lands in the Territory shall be sold or disposed of for any estate of freehold.
In leasehold the ownership of the land remains with the Crown and the land is leased for a rental that rises, and should rise, proportionate to the increase in its unimproved capital value. - There is direct control, of course, by government and with the Crown exercising the right of eminent domain. As a corollary the lease of land does not require an outlay of cash by a lessee. Rich and poor have equal opportunities, or at least they did under the system as originally conceived; but now that goes well and truly into the discard. Freehold land is the most expensive of all commodities, and so it will be in Canberra. Pre-war in Sydney, Newcastle and Wollongong the cost of a building allotment represented less than 10 per cent of the total cost of the home. Today it represents around 30 per cent to 40 per cent and it is worth noting that in respect of the home savings grant of $500 within 1 year, according to statistics prepared by the War Service Homes Division, that was very neatly wholly absorbed by the land speculators. The following year, of course, the Government removed that particular item from the annual report of the War Service Homes Division.
Leasehold rental is an annual levy payable to the Crown forever and it is - and this is the essence of the leasehold system - an inextinguishable source of revenue for the people of Australia. Land is the basis of all wealth and it is the trustee security par excellence. Since the granting of the first lease in 1924 the whole history of leasehold land tenure in Canberra has been one of progressive erosion. In point of fact unfortunately purchasers in more recent years of a leasehold have been paying the full cost of a freehold and in addition they have had the impact of the land rental. The Government has only itself to blame for nol progressively year by year, or at least in triennial periods, revising the value of the land. The people of Canberra do not know where they stand. They are entitled to know. They are entitled to an inquiry.
The major defects of the present system of land tenure in this city as I see them are as follows: The destruction of the leasehold system and its conversion to a virtual freehold. The 5c a year which is imposed as a rental if and when demanded is the equivalent of a quit rent under fee simple. Another essential element of leasehold tenure is that the residual ground rent goes to the Government as public trustee while tinder freehold it goes to the private landlord. The private owner receives the ground rent which rightly should go to public consolidated revenue. The periods of the revision of valuation - 20 years - are a disgrace. The new ordinances confirm that the prior situation of paying virtually full freehold prices at auction is now the legal norm. There has been a gross breach of faith with the people of Canberra by the grafting of rates onto land rentals. In other words there should be only one charge if leasehold is to prevail and that charge, as a component, should include both rent and whatever rate contribution is needed.
Today the system of land tenure in Canberra, speaking in legal terms, is a jungle into which any person ventures at his or her peril. The smarties in business are throwing their hats up into the air for the opportunity that they see for land speculation. There have been inadequate releases of land and even here - and Liberals cannot avoid being Liberals - it is remarkable how the size of allotments has dwindled. When Canberra was first subdivided into building allotments the norm was 3 allotments to the acre; now it is 5. Wherever there is a profit to be made, the Government will go for it. The Government has failed to prove its case. The people of Canberra are entitled to a full inquiry.
– I have followed the continuing drama of the Canberra land ordinance with some interest and it is lo maintain interest that I rise to contribute to the debate. The essential problem is that the fixation of land rent at 5 per cent of unimproved land values, reappraised every 20 years, did not relate to development costs and created varying discrepancy between comparable blocks at different stages of lease. The dramatis personae, or at least a select list of them, who have entered the field of the drama of the Canberra land ordinance includes the following: The opposition to the ordinance is currently led by the Opposition in this chamber. On its side, as it were, is the Land Values Research Group, and notably Sir Ronald East. Then there is the Henry George League, which appears to be relevant, even though I think one or two members opposite decline to think so. Then there is J. H. Morris, ex-Mayor of Coburg, and also the ‘Canberra Times’. On the other side, currently defending the ordinance are the Ministers for the Interior past and present - in particular, the Minister’s statement of 24th February of this year. There is also Alan R. Marr who circulated a letter to members of Parliament in very subdued and, I thought, wellreasoned terms. In the position of adjudicator, as it were, is Professor H. W. Arndt who was published in the ‘Canberra Times’ thereby showing the open-minded approach of that newspaper. Despite that, however, I do not share the view of the honourable member for the Australian Capital Territory (Mr Enderby) who believes that we should have government by the ‘Canberra Times’. The central feature in this cast is not any of those whom I have just mentioned but is, in fact, the land itself.
Land, as I think the honourable member for Cunningham (Mr Connor) suggested, is a finite quantity. It is more or less incapable of extension except by some marginal reclamation works here and there. It is as good an example as one could find of supply and demand, or of a stimulus to supply and demand. It is hardly surprising that as the population of this or any other territory grows, the demand for land in a given area will increase. I stand constantly surprised at the Opposition’s surprise that such a condition should be so. Nevertheless there are ways and means of controlling, in some reasonably equitable way, the distribution of that land among various people who want to settle on it. The proposal of this ordinance in essence, as I see it, is the replacement of an annual land rent by an increase in rates - that is to say, a change in the system of taxation on land.
Among the various non-proposals which are included in this discussion are proposals to do away with the leasehold system. The ordinance is not ‘in effect misappropriation of public property’ - Mr Morris. Nor is it ‘giving away the public lands in Canberra? - the Henry George League. Nor is it ‘the Canberra lease scandal’ - Sir Ronald East. Nor is it various other quotations of the same ilk which have been put forward and which indicate the emotionalism which has come into this argument which, at base, is a fairly simple one. It is true to say that it is not really capable of very simple solution.
– Answer the criticisms. Answer what Sir Ronald East said.
– Some of the effects of the ordinance should be well known to the honourable member for Reid (Mr Uren). They are as follows: Firstly, and probably foremostly, the leasehold system remains and the land is in Commonwealth ownership. Nothing that the honourable member for Reid, the honourable member for Cunningham or anybody else will say can show that the situation is or will be otherwise. Secondly, siting, design and planning controls are to be fully maintained. Thirdly, leases cannot be transferred unless a building covenant is complied with.
Fourthly, anomalies created by the old system of land release and re-appraisal of rents are removed. Fifthly, a tax on land will reflect the development cost of the land in keeping with general practice. Sixthly, where value is added by a change of function - that is to say, a change of use of land - the Commonwealth receives a capital payment - 50 per cent in fact of that increased value. Just by the way, that provision achieves much of the Henry George League’s objective of taxing away unearned increment on land.
There are many facets of the problem as already adduced by the Minister for the Interior and the former Minister for the Interior who is now the Minister for Shipping and Transport (Mr Nixon) and other speakers in this debate. I think some of them at least should be taken up and even re-taken up and assessed. Firstly, among these objectives and suggestions is the question of a change to a shorter lease. It is, in theory at least, possible to effect a shorter term of lease than the 20-year period which it will be apparent to anyone is somewhat excessively long given the increasing demand for land and therefore the inclination of people to want to pay more for it. But it would appear to be extremely difficult - and I have no doubt that my colleague the honourable member for Diamond Valley (Mr Brown) will be able to say more on that issue - to change the situation in mid-stream, as it were, involving the 27,000 or 28,000 lessees without breach of agreement! If in fact that were done the Crown would face substantial financial claims through that change in mid-stream.
It may well be argued, of course, that it may in those terms never be possible to change the 20-year cycle. However this is of genuine concern to people including residents in Canberra and I .think it is something which should be looked at; it has been considered by the .Department of the Interior. Shorter term re-appraisals could be made in theory, and could be made in practice with considerable difficulty and cost, but they would not. totally obviate some problems which we find to be of a more complex kind if we analyse them further. But just in brief, a shorter term system of re-appraisals would still leave one or two central problems unresolved. That is to say, the level of rent would still have to be fixed. By what means would this be done? Who would do it? Would it be based on unimproved or improved values? Do we take into consideration development costs and so on? The possibilities would appear to be just the same for inequities as they are at least in kind, if not in degree, at the present time.
I turn now to the question of speculation in unimproved land. It is not possible under a leasehold system with the Crown as the only owner and subdivider. and a Crown which denies resale before development covenants are met. The problem and the worry that in fact this opens up a wholesale speculative land system of the worst kind, I do not believe, with the best will in the world, are well founded. The Government offers residential land at cost on, 1 believe, a current average of about $2,700. None ought to be able to buy cheaper than that. It can be argued that anything less than the basic current average cost of the land - the basic cost - would in fact represent a subsidy to those people possessing it by all the other taxpayers. As has been mentioned many times in this place, I think there is a fairly general opinion that people in Canberra are not very badly off in the Australian context.
Another point among the objections and suggestions that have been made is the question of unearned increments. Clearly, under the conditions we have talked about - and everyone can observe - there will be an increasing valuation put on the land. Because one is not necessarily doing anything with it it is therefore called an unearned increment. This is something which is central to the thesis and the problem of the Henry George League. The unearned increment on land value should in their terms accrue to the community and not to individuals.
At this stage I must fall back on Professor Arndt who gets into an area of economics which is just a little bit beyond my normal capacity for the field. The Professor suggests that land rent of 5 per cent per annum on unimproved valuation would capture at most one-third of the unearned increment assuming a return of the order of 10 per cent on the land in the Australian Capital Territory. In practice, in fact, it would be a lesser return on unearned increment because of a lag in revaluation, particularly at the 20 years cycle interval. Therefore, taxing away all the unearned increment would in fact need a tax of the order of 100 per cent on accrued or realised capital gains in the matter of land, and that of course obviously becomes “ somewhat nonfunctional. So the plot thickens, as it were.
On further examination, most of these objections appear to ‘ be not very easy of resolution, or they appear to be not nearly as formidable and detrimental to the public interest as some people would suggest. Most of all - or often enough in the whole debate on this matter inside and outside of the House - it has been argued that leases should not be charged for. The honourable member for the Australian Capital Territory earlier in the day said flatly that one does not sell leases. I must correct the honourable gentleman by saying that one does sell leases. Leases are sold in many parts of the world. I need not bore the House by trying to develop a list of countries in which leases are sold. It is just not true that a charge for leases is against the rules. There is nothing in fact in the leasehold concept which requires that the leases be free. The crucial matter is retention of Crown ownership. Therefore, any speculation, or would-be speculation, depends on that point - on the fact that the Crown does not relinquish its base stake in the land.
If the auction system is not used how then do we dispose of land? This point has already been raised in correspondence. Some form of what will undoubtedly be called bureaucratic allocation will certainly have to operate if in fact the auction system and the price factor do not come into the act. In fact, the auctioning of land provides revenue for the Commonwealth to finance development and thereby, I thought, would be seen to be quite a good thing by honourable members opposite as well as honourable members on this side of the House.
A premium is paid for auctioned leases. This includes, as does most land which is purchased, an anticipated appreciation. Anyone who is buying land and wanting to use it for his own purposes - not just for the purpose of just buying and selling - does tend to think in terms of an appreciating value of that land. I would again like to quote Professor Arndt and say that some of the unearned increment is taxed away in advance. Probably more effective than land rent is the system of doing that. The drawback, of course, of the auction system - and I do not think that anyone can deny this - is that those with smaller means are disadvantaged as in any system which require* the use of money in any shape or form. In the competition for the finite quantity of land, the people who do not have as much as some others clearly are not as well placed to compete for that land. At the same time there are not too many people in Canberra who cannot afford the price asked, which is so much less than in other places of comparable size and function. This can also be seen as a capital tax. Because this system tends to fall more heavily on the relatively affluent element I would have thought that the Opposition would consider that this was a good thing. Further, against the argument that none of the capital gains should go to private leaseholders but all should go to the community as a whole is the fact that the possibility of gain provides an incentive to use the land economically. That, I think, is a fairly simple and observable operation.
There are finally, rather penultimately, other matters about which I think I have less conviction and against which I would probably place some question marks. The deductibility of rates for income tax as against land rents which are not deductible causes me some slight concern. That, I think, needs to be administered in an appropriate way. We should take account of the fact that it is a benefit to the leaseholders by virtue of the simple fact that they can deduct their rates from gross taxation submissions. I believe that people are genuinely concerned about the question of rent versus rates. They believe that the charge should be called what it is. They are unhappy that what in effect could be said to be a land rent is called a rate. It is imperative that in this system the appropriate level of rates be charged. If the rates are charged on a lesser level we would have a situation where we would be subsidising the people of Canberra to the detriment of those who are subsidising. I believe that that would not be just.
It seems to me that, so far as I can find figures, it is not true that this change in system is subsidising business people as against the residential people. I understand that business holds about 3 per cent of the leases and is paying about 42 per cent of the rates under this system. That compares with about a 35 per cent contribution under the previous system. So I believe that there is no case to answer. At least the Opposition has not proved its case of’ some urgency concerning this matter. Clearly there are one or two matters which need to be properly handled and, as with most systems of administration - whether it concerns land or anything else - the operation of the system is just as important as the system itself.
– I would like to say first of all that the Opposition is not suggesting that the primary evil is the ordinances themselves. The main point is that we have reached, an untidy and unsatisfactory mess in regard to Canberra leaseholds, and these ordinances are not the satisfactory answer to the problem. This problem is not the doing of the present Minister for the Interior (Mr Hunt). It is a mess which he inherited from previous administrations. But the Opposition is critical of the way the Government has gone about trying to get itself out of the mess. Everybody agrees that the situation has become impossible and that something has to be done. But the Government has gone about it in the wrong way. The trouble over recent years has arisen because the spirit of the original Act, the Seat of Government (Administration) Act, has become weakened. The Opposition’s view is that we must return to the spirit of the Act as it was intended by Canberra’s farsighted founding fathers.
We do :not suggest disallowance of the ordinances just so that we can go back to the situation n operating until last year. We want the whole matter referred to the Joint Committee on the Australian Capital Territory so that ways can be devised to return to the administration of the Act as was originally intended. The present measure should be rejected by the House, not because it fails to rectify the anomalies but because it is entrenching the situation which has arisen over recent years. It is true that there are certain improvements associated with the ordinances. There will be a 3-yearly reassessment as opposed to 20 years before. There is to be a 50 per cent betterment levy in respect of change of purpose of land use. The Minister seems to be content to hide behind these 2 improvements of the situation and say: ‘This is the best we can do The Opposition rejects this. We say that an overall reform can be and must be carried out.
What the Opposition desires is a return to the original intentions of the Act, which are that all land should be the property of all the people, that the Government should receive an annual rental for the use of this land, that no unearned increment should accrue to any private individual and that a man building a house or any other premises should not be required to make any capital outlay on his land, so that all his savings and borrowings can be invested in improvements. This ideal had disappeared. The Minister has defended the Government’s action by saying that the leasehold principle is retained. But it is only leasehold in name, because unearned increment has accrued and will continue to accrue to the individual land holder. This is really the only important distinction between leasehold and freehold. What we have really got is a de facto freehold system.
Unearned increment has accrued to private individuals because of the infrequent reassessment of land values. Because reassessment has taken place only at 20-year intervals individuals have been able to capitalise on the rent that they have not paid. But even if land values had been reassessed more frequently it is still highly likely that some capitalisation would be possible. This is because an annual rental of 5 per cent of the unimproved capital value is insufficient, being less than the true site rental. For this reason the system of reserve prices, which is being entrenched under these measures, will still allow capitalisation to accrue. This is because the reserve prices currently being set for land auctions are roughly of the same order as 20 years annual rental under the old system. It is likely, as the Minister suggests, that in some instances there will be a substantial profit to the Crown. But surely this is a very haphazard way of doing things.
Some proponents of this measure, including Professor Arndt who was referred to by the honourable member for Denison (Dr Solomon), applaud this system of reserve prices as they say it exacts the annual rental in advance. But the reserve price takes only about 20 years annual rental. The lease itself is for 99 years. So from year 21 to year 99 the Commonwealth receives exactly nothing for the use of the land. The Commonwealth is prepared to incur a long term loss in return for a short term gain. That long term loss to the Commonwealth means a long term gain to someone else. In other words, unearned increment will accrue to the so-called leaseholder. What this means is that the Government has betrayed its trusteeship of the people’s land. It will entrench the system which has arisen in recent years of the paying of premiums for leases sold at auction, a system which should never have developed.
What the Opposition desires is a return lenge the Government to say how the premiums on the reserve prices can be reconciled with the original Act. The only defence I have read of key money, whether it be called a premium or reserve price, is by Professor Arndt who suggests that the only satisfactory method of apportioning land is by use of the price mechanism because, he says, the only alternative is rationing of land and that would bring about bureaucratic methods. However, there is an alternative and that is to release more land. I will say more about that in a moment. What does the price mechanism mean, if we are going to have a price mechanism? It means that the little man is squeezed out. The Government is not prepared to say this. Perhaps this philosophy is acceptable in Liberal anil Country Party circles but it is not acceptable in Opposition circles. If the Government thinks the position is as I say it ought to. have the courage to come out and say so.
What the Opposition seeks is the payment of a true site rental - in other words, the amount of annual rental which is necessary to prevent any capitalisation from accruing. What we seek is the auction of land not for a capital sum but for so much rental per week, at a level of the true site rental and payable in perpetuity. Reassessment of land values should take place at frequent intervals. I come now to the question of the availability of land, because this is the fundamental matter behind the current mess in which the Government finds itself. The actual value of the land is not really a function of the type of tenure or rating at ail. It is really a question of supply and demand. It has been suggested that, with the rapid development of Canberra, if there is not to be rationing the only way of allocating land is through the price mechanism. But there is an alternative, and that is to make adequate land available.
The obnoxious system of premiums came in in the first place only because insufficient land was released to cope with the demand. This is precisely the same reason as that which caused land prices to escalate in Perth under the previous State Liberal administration. 1 cannot see why such a situation should have been allowed to develop in Canberra. There must be an adequate supply of land, otherwise even a true site rental could be an imposition on the little man. The Minister claims that a true site rental would reduce incentive to invest in Canberra. This would not be so if adequate land were released. It might be argued that releasing this land would put an inflationary demand upon the building industry. I believe that any such inflationary stimulus would be less than in any other capital city. This is because in the A.C.T. there is an abundance of available land, whereas in Sydney, for example, good land is scarce.
So in Canberra there might be an inflationary demand on the building industry whereas in Sydney there would be not only a corresponding demand on the building industry but also an inflationary demand for good land. The Government should not hesitate to release adequate land in the A.C.T. for building, because Canberra’s orderly development is such that it can go on expanding without creating the urban maldevelopment of other capital cities. With the network of urban entities connected by adequate transport corridors, expansion of Canberra can do no harm. It is better to have more Woden Valleys, more Tuggeranongs and more Belconnens than to have more Green Valleys.
Adequate land must be made available, and lots must be auctioned for a true site rental. This still leaves the problems of the existing leaseholders, and this is where the Minister for the Interior claims that he cannot do anything about it because of the contractual arrangements under the existing leases. This is a complicated problem, but it does not justify the Government’s action of taking the easy way out. The Govern ment’s action, which was really taken out of expediency, must be rejected, not to revert to the status quo ante, but to refer the matter to the Joint Committee on the Australian Capital Territory. It is possible that the Minister feels that the Joint Committee would be unable to resolve the impasse other than by the way he has chosen, but I would not agree. lt is not my job to come up with the answers, but to show that a better solution is possible I would like to throw in a few thoughts of my own. In the case of leases more recently acquired, the leaseholder mayhave paid a high premium to the Crown in expectation of there being no reassessment for 20 years. I know that the Minister feels that if the true site rental were imposed on these people the Government would be in a legally untenable position. If this were so, these leaseholders could be indemnified against any reasonable penalty they have paid by way of a premium. Assume, for example, that a lease was obtained in 1965 by a premium payment. This leasholder would have benefited for 6 years by the fixed land value. The value of the 6 years true site rental could be subtracted from the premium paid, and the balance would be the capital expectation of the low rent for the next 14 years. He then is indemnified against the 14 years true site rental according to how much the premium would offset the 14 years rent. In other words, a differential rate could be struck by a fairly simple formula. In addition, a betterment levy could be imposed on capital gain for the sale of land. This ordinance in fact does provide for a 50 per cent betterment levy where there is a change of purpose. Why not have a betterment levy for any capital gain, whether the purpose of land use is changed or not?
I have mentioned indemnifying the leaseholder when the Crown has received a premium. What about the case when the lease has already been transferred, to the profit of the original lessee? Here the Crown has lost the unearned increment. In such a case it would be hard to justify the concession to the new lessee, but perhaps some compromise might be necessary here. Another measure which might be considered is that leases can be saleable only to the Crown. This would at least speed up the tidying up process that needed to be done.
I put forward these proposals as practical alternatives. I do not know whether the Minister and his Department have thought of alternatives, but it appears to me that the Government has no sense of obligation towards the great ideals embodied in the 1910 Act. We should not be seeking to bring Canberra down to the level of the other capital cities; we should be restoring the principle of community-owned land in Canberra and trying to bring the other capitals into line with that. One of the major problems in our cities is the fact that land is privately owned; that the increased value of land is being siphoned off to the speculator instead of going to the whole community, to whom it rightly belongs. Reform in Canberra should be only the beginning. We should then look at the State capitals. The Commonwealth and the States should set up funds to acquire land to promote proper urban development and to provide cheap land to the individual home builder. Let us reject this measure and review the whole broad issue.
in the course of his speech invited all honourable members to analyse for themselves and to consider properly whether, taking into account all the issues in this matter, to support the motion for the disallowance of the ordinances. Doing that and readily subscribing to that invitation from the honourable member for Reid, I ask myself what is the principle that a member of this House should operate upon in determining for himself whether he should vote for the disallowance of these ordinances, and I should have thought it was fairly clear in view of the fact that the motion came from the Opposition. The onus is on the Opposition, which moved the motion, to substantiate it. The only obligation on any member on this side of the House is to concern himself with those matters that have been raised by the Opposition in support of the motion for disallowance. I have listened to this entire debate and to the arguments that have been put forward by the honourable member for Reid. I have read widely of the epiphanies of the Land Value Research Group and the Henry George League. I have read the Canberra Times’ until, frankly, I am inclined to turn to some other journal for entertainment. I have examined the matter as closely as I can, and I have no hesitation in saying that I will be voting against the disallowance of these ordinances.
There is an obligation on us only to analyse and reject, if it is. appropriate, the arguments that were raised by the Opposition in support of the motion. The first and, 1 would have thought, the only substantive point that the honourable member for Reid made was the basic proposition that the land belongs to the people of Australia; that the benefits of the land are to be given across the board to the people of Australia and not solely to the people of Canberra; that the benefits are to be determined by the Commonwealth and that the benefits are to be distributed over the entire nation. There are 2 false propositions involved in what has been put forward by the honourable member for Reid. The lie is given to what he said by these simple facts: Firstly, the land has not been given away to anyone, and secondly, it cannot be said, when one looks fairly at what has happened under the administration of this system, that benefits of substantial proportions have been given to commercial leaseholders.
This is the gravamen, of the argument that was put forward . by the honourable member for Reid and the argument that was repeated by subsequent Opposition speakers, that the Government is in some way lining the pockets of the rich leaseholders in Canberra. That is not so. I suggest that this is supported if one looks at particular blocks of land and sees what has happened to them under the new system that is introduced by these ordinances. One could look at one block of land which is referred to as block 1 in section 51 in the city and one can see that under the old system, the system that previously prevailed, the leaseholder paid S2.L643 per annum as land rent and rates. That was the combined sum that he paid under the old system whereby he paid both rent and rates. Under the new system, however, he pays $46,731 per annum, an increase of over $25,000. It escapes me how it can be said that the effect of this ordinance is that it lines the pocket of the rich leaseholder when here is at least one whose payments out to the Commonwealth as a result of the change of the ordnance have doubled. We can look at another block which is described as block 2 section 15 in the city. Here, under the old system the leaseholder paid some $3,360 a year, again payments which were both land and rates. He now pays under the new ordinance $14,684, an increase of $1 1,000. He also paid a premium of over $17,000 when he acquired the lease.
I fail to see. when one looks at particular cases like that, how it can be said that there is an undue balance of benefit being given to commercial leaseholders in this city as a result of the new ordinance. One could cite many other cases. In fairness, one should say that there are cases where the opposite exists, where there is a benefit given, where the new rates levied on the particular piece of land are in fact lower than the amount previously paid as a combination of land and rates. But I make the proposition, and I submit it can be supported cm the figures - indeed is - that when one looks at particular cases one cannot fairly say that the effect of the ordinance is to give this tremendous benefit to the big industrialists, as the honourable member for Reid referred to them. So there are the 2 points: Firstly, a basic simple legal and factual proposition that the land is not given to anyone under the new ordinance, and secondly, this substantial benefit that has been alleged does not exist.
One can look at it the other way, and again I want to confine myself to particular cases. One can look at a comparison between, for instance, 2 commercial properties, compare what was paid under the old system with what will be paid under the new system and see exactly where the profiteering occurred under the old system. I take 2 blocks of land which have a comparable value. There is a difference of only $4,000 between them. One is valued at $47,000 and the other at $43,000. Under the old system, a combination of rents and rates, the outgoing on one block was $1,722. On the other block - and I emphasise again that it was of almost identical value - the outgoings were not $1,722 but $494.
Now, it is said that the profiteering, the opportunity for the fast buck, comes under the new ordinance but I suggest that there was plenty of opportunity to make a fast buck - plenty of opportunity for profiteering - under the system that this Government is changing. I would like to know, for instance, whether the shopkeeper who rented that property which paid out in rates and rents only $494 decreased his prices to make up for the tremendous bonus he was getting in his reduced outgoings. I would like to know whether he made some concession to the good people of Canberra because he was paying only $494 and his neighbour was paying over $1,700. I venture to suggest, not because I am necessarily cynical but mainly because I believe it would not happen as a matter of business practice, that that gentleman who paid the lower amount was not making the concession. It is this sort of inconsistency between 2 blocks of land where the values are almost identical and where the outgoings are so discrepant that these ordinances change. This is a system under which comparable outgoings are paid where blocks of land have comparable values. It is the sort of inequity that previously existed which is remedied and removed by the present ordinances.
The honourable member for Reid again raised this canard of the 5c per annum rent if and when demanded as if he believed, in some deluded way, that this destroyed the leasehold system. The honourable member for Reid was not the only one who raised this argument. The fact is that any first year law student could tell the honourable member for Reid that the amount of the rent is quite irrelevant. Indeed, the requirement of payment of rent of any sort or of any amount is quite irrelevant. One can read in any basic legal textbook that it does not matter at all whether rent is paid or not when one is trying to determine whether there is a lease or not. The land is still leasehold. It belongs to the Crown. It cannot be alienated, at least without an amendment to the Seat of Government (Administration) Act. ft is clear that no such amendment has been made. No matter what the Government tried to do with these ordinances it could not, in view of the existence of the Seat of Government (Administration) Act, destroy the leasehold system and establish the freehold system that it is alleged has been established here.
Then it is said by the honourable member for Reid and some other speakers that the Government is surrendering the right that it had- to recover rent from the land. This is a canard which was exposed quite adequately by the 2 Ministers who have previously taken part in the debate. The Government cannot take away that right from itself, as I said, without a change in the substantive law that has been on the statute book for a considerable period. It has been said, again as one of the very few arguments that in all honesty deserve to be replied to, that there should be an inquiry. It seems to me, in the limited time that I have been in this place, that the plea for an inquiry or a royal commission is made either when something is embarrassing and there is no answer to it in logic, when the Opposition cannot understand it. If it is complicated and involved then the Opposition wants to refer it to a royal commission. There have been inquiries on this matter in this Territory for many years. There have been examinations and analyses made by the Department of the Interior and I would have thought that if there were anything to be discerned by any inquiry about this matter it would have been discerned already.
I can see no advantage in an inquiry when there is a pressing need for reform at this time and not some 12 months or 2 years off when a royal commission or inquiry might bring in its decision. The time for reform is now. Let members of the Opposition who speak in support of the disallowance of these ordinances not forget that the rates have been changed. The rates have been increased and if the ordinances are disallowed the rates remain the same. They cannot be changed. But the rent, of course, is the old rent that was paid under the previous ordinances. I wonder whether that point has been seriously considered by the Opposition. I wonder whether they realise the embarrassment it would cause to the ordinary people of Canberra on behalf of whom they speak. It would be a situation which would penalise those people and which I hope this House would not countenance. There are many other matters that could be referred to but, in all frankness, the only points of substance made have been those raised by the honourable member for Reid. J think that I have replied to them and I would reject without any hesitation at all this rather pretentious motion for disallowance of the ordinances.
– Mr Deputy Speaker-
Motion (by Mr Swartz) proposed:
That the question be now put.
– Does this mean that as the mover of the motion I am not going to have a right to reply?
– The honourable member for Reid was given the opportunity to have a right of reply as the last speaker in the debate.
– I was not.
– However, he did not accept.
That the question be now put.
The House divided. (Mr Speaker - Hon. Sir William Aston)
Question so resolved in the affirmative.
– No. The question has been put and the House has made its decision. Therefore, there is no right of reply.
– Do you mean to tell me that Government members can gag a man and deny him his right of reply-
-Order! The honourable member shall not debate the question. He asked me for my guidance and I gave it to him.
That the motion (Mr Uren’s) be agreed to.
The House divided. (Mr Speaker - Hon. Sir William Aston) Ayes . . . . . . 48
Question so resolved in the negative.
– I present the seventh report of the Publications Committee.
Report - by leave - adopted.
Motion (by Mr Swartz) proposed:
That Orders of the Day Nos 1 to 4, Government Business, be postponed.
- Mr Speaker, I do not see any reason why the House should agree to any proposition from the Leader of the House (Mr Swartz). A few moments ago we saw a classical example of ministerial arrogance. The honourable member for Reid (Mr Uren) led for the Opposition in the debate on a motion in relation to land ordinances in the Australian Capital Territory. The time honoured tradition is that an honourable member who initiates a debate should have the right of reply in that debate. In this instance the Leader of the House gagged the debate. The honourable member for Reid was denied his right to speak. This Parliament can operate only if each of us understands that every honourable member has rights even if that honourable member is not a member of the Government Parties. We have just heard the honourable member-
-Order! The motion before the House seeks the postponement of orders of the day Nos 1 to 4, Government business. The honourable member is not entitled to canvass a matter on which the House has made a decision by a vote.
– But surely I can canvass the point that the House ought not to agree to co-operate with the Leader of the House when he treats this House in such a cavalier way?
-Order! If the honourable member for Wills can do so by relating his remarks to orders of the day Nos 1 to 4, Government business, he will be in order.
– I have made my point.
Question resolved in the affirmative.
Debate resumed from 1 April (vide page 1352). on the following paper presented by Mr Snedden:
Productivity and the Community - Ministerial Statement, 23 February 1971 - and on the motion by Mr Killen:
That the House take note of the paper.
-Mr Speaker, we all have heard many definitions of the term ‘productivity’ and essentially I would agree with the proposition that productivity embraces the concept of the most efficient use of all national resources, be they land, labour, capital or any other input necessary for production. What is most important, though, is that everyone should have understanding of the term, and the essential and clear differences which exist between the words ‘production’ and ‘productivity’. There is a common feeling that the 2 words mean the same thing and, while almost three-quarters of all the people in a survey conducted for the Productivity Promotion Council of Australia last year said that they had heard of the word ‘productivity’, only one in 10 could give an acceptable definition of the meaning of productivity.
Even the honourable member for Corio (Mr Scholes) in the debate on this ministerial statement on Thursday of last week showed that he obviously is not clear as to the meaning of the word, for he said:
No honourable member in this place suggests - I hope that no honourable member opposite would suggest it - that it is necessarily in the best interests of the nation to increase productivity.
I suggest that every member in the Parliament should deem it in the best interests of the nation to increase productivity. I believe a genera! understanding of what the concept implies to be of significant importance before any major advances can be made towards increasing the productivity of the nation. I have assumed that people generally, apart from the honourable member for Corio, would want increased productivity, and I believe that most would, when and if they understood the term. Unfortunately, though, as I have said-
– Are you sure that he said that?
– I am sure.
– How can you be sure that he said it?
– It is in Hansard. Unfortunately though, as I have said, we find that 9 out of 10 people have a confused understanding and therefore have difficulty often in placing sufficient personal emphasis on efforts to achieve increased productivity. As honourable members on both sides of the House have pointed out, there are difficulties associated with measurement of productivity. To me, this is not the only point at issue. I am more concerned about the attitudes of mind which should be present in the total population with respect to the term ‘productivity’.
The benefits of increased productivity affect everyone in the community and bring benefits to everyone, not only because of lowered production costs and lower prices but also because inflationary trends can be dampened down, higher wages and salaries paid, and improved working conditions and increased leisure time can result. Conversely, if productivity does not increase, these things are much more difficult of achievement.
These then, very sketchily, are some of the individual benefits which do occur. But there is much more to it than this because we are not an isolated nation. If we are to maintain our sound economic position in the world and if we are to achieve a reputation as a strong, sound, progressive country to be taken as an example by less developed countries, we can achieve these things only if we use all our resources, which as we all know are extremely limited in certain cases, in the most efficient possible way and use them not only to maintain and to build the nation both internally and in our relationships with other countries but also to achieve that type and quality of life style sought after by every one of us.
Productivity aims at the elimination of waste, and waste whether it is in terms of human or material resources should not be tolerated. These things impose great responsibilities on us all, individually and collectively. There is no one section of the population that can afford to say that its contribution is not important. There is no one person who should say that he has no part to play. Whether one is a labourer, a managing director, a shop steward, a personnel consultant, a tradesman or a technologist, one has an interlocking role which together makes the whole. The achievement of higher productivity often results in individual strain. Industries whose operations are no longer economic must compete with other industries and Other sectors of the economy for scarce resources. Individuals will need to develop fully their own talents. Technological change to an increasing extent will result in more and more of the jobs at present being done by people being taken over by machines. Contrary to the opinions of a number of scaremongers this does not mean that there will be fewer jobs. It means that the jobs, will be different, in many cases requiring individual qualifications of a particular type. People must be aware of and accept the need for constant review, revision and in many cases retraining in their work situation. This in itself requires that the educational training of individuals must be of the highest possible standards, aimed at producing individuals attuned to and capable of adjustment to a rapidly changing situation.
I think that the Government has shown a full realisation of what I have just said because at the post-school level its concern and activity in this important matter can be seen in the 12 months following the publication of what is called the Tregillis mission report. A tripartite mission led by a Department of Labour and National Service official, having examined training programmes overseas, suggested there were serious deficiencies in Australia. The then Minister for Labour and National Service, the present Treasurer (Mr Snedden)1, immediately launched a programme of reviewing the adequacy of our own training in industry, from the shop floor to the executive suite. All appropriate bodies - employers, employees, educationalists - were asked to give careful consideration to the matter. That was done. The Minister asked State ministers to discuss the matter with him. They achieved a close joint commitment to the aims of improving our training throughout the nation. The Commonwealth has called a national conference next month of all parties, and this conference is expected to give new direction to this area, so important to our national productivity achievements.
The previous Minister in a statement to the House said:
We should take action Lo improve tha range and quality of training facilities and training methods.
He went on to say:
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.
These statements by members of the Ministry show the Government’s full awareness of the problems which will confront the Australian nation in the future as technological change becomes more and more rapid. There is no doubt at all that the rapid social, economic and technological changes sweeping the world have placed and will continue to place an increasing strain on the individual. Opting out is a temporary and ineffectual answer. The only answer is to be found in the development of individual skills and individual attitudes capable of controlling, harnessing and directing change so that the individual is not overwhelmed by forces which he cannot understand and, therefore, does not feel part of. This then gets us back to what productivity is all about, that is, the best possible use of resources. We must all be aware and conscious of the fact that this does not necessarily mean increased production for production’s sake. It means simply that each person must be aware of his own responsibilities, whether in relation to strike action or monopolistic profits, and that his individual actions determine to a great extent whether or not scarce resources are to be put to their best possible use. He must be aware that by his actions situations may arise which could in the short term benefit him personally but in the long term bring about a misallocation of resources through loss of production or insufficient flexibility in resource change.
In an industrialised society with full or nearly full employment the maintenance of open lines of communication between management and labour is obviously of paramount importance. In addition, actions by both groups resulting in loss of productivity should only be taken after very careful consideration of the possible results of such action. It is fruitless for one group to seek to dominate the other because not only are the groups virtually interdependent but also both groups have a real responsibility to the rest of the community to provide essential goods and services. However, I am mostly concerned with the individual. In the world today there seems to be an increasing feeling amongst individuals that they no longer have a personal relevance, that they are part of some great impersonal amorphous machine, the control of which is beyond them. I can understand this feeling but I totally reject the concept. Everyone should understand that the whole is composed of the individual units and that the shape his society takes depends primarily on his own efforts. This is a rejection of the something for nothing attitude which unfortunately seems so prevalent today. This is a call for the development within the individual of a positive attitude towards individual and community responsibility.
To sum up, the economic welfare on which social and cultural welfare depend will be advanced or retarded according to how we utilise our resources. These resources, as I have said, are capital, labour and natural resources but they require also the right attitude on the part of national leadership and the community generally for their successful utilisation. Productivity is largely dependent on individual attitudes, and our national welfare and success in the broadest possible terms depend on the continued development of a positive approach to the manifold problems of using our limited resources in the most efficient way possible.
– Many allegations have been made, by direct statement and by implication, on the inability of the public and the workers to understand the many views that have been expressed on productivity, and in fact the lack of understanding of the meaning of the word ‘productivity’. After reading the diverse opinions expressed by varying economists, both professionals and political amateurs, I looked at the definitions provided by dictionaries, the only reference work readily available to the average person. I shall set out some of the definitions given. Webster’s New International Dictionary, Third Edition, in its definition of productivity’ says:
The ability or capacity to produce, the physical output per unit of productive effort, the ability of land to produce a given yield of a particular crop, the degree of effectiveness of industrial management in utilising the facilities for production: the effectiveness in utilising labour and equipment.
This definition places a responsibility or. management to give effect to the word productivity’. There is no hint that the responsibility of placing into effect efficiency and management skills requires anything but direction from the top. No wonder the population of Australia is suspicious of the tub thumping pronouncements of the establishment represented by their parliamentary spokesmen. There are workers who have memories of efficiency experts and time and motion study experts, call them what you may, who were all trying to make them work more consistently and to produce more for industry which is already making substantial profits without any comparative reward to the workers concerned. They have seen the situation of machinery replacing functions of work which they have done themselves, thus reducing the value of their skills. Yet the output of the product of their firm has increased beyond what they had thought possible, and the profits of their employers have increased beyond belief without reward to the workers. No wonder they resist this double talk of productivity, this smokescreen of words which attempts to hide from the public the real reason behind it, an attempt to suppress wages and to suppress living standards whilst preserving the profits of the industries in which they work.
The responsibility to maintain competition, to preserve rational prices, lies with the employers in increasing their efficiency, maintaining a better standard of management, looking at advertising budgets and functions, maintaining a more economic presentation and packaging of their products in restricting excessive profits. Even in their relationship with the so-called small businessman do major companies need to look at their administration. We all know of the problem facing the corner service stations. How many of the proprietors remain there for any length of time? As soon as their so called productivity increases, due to their hard work and long hours, so the cost of the leasehold of the property belonging to their employer, the oil company, increases, in many instances up to 80 per cent. Therefore, the long hours of service to the public are wasted and the increasing confidence of the public in them for supplying a reasonable service is destroyed, and the rewards go to the major profit takers, the oil companies, who are already receiving huge profits from the sale of petrol and oil. No wonder people are suspicious of the intentions of these companies when they issue their call to produce more in order to reduce prices or to maintain prices. It is an area that cries out for controls by government in the interests of the public. But what happens? No inquiry into the cost to the public is ever made, no protection is offered to the lessees, no extension of industrial legislation is offered to the lessees for their protection, bers of the public, cynics on the matter of productivity.
I mention these aspects because I have taken the trouble to question the public as to their views on the subject and on this sudden apparent propaganda barrage on a matter which tries to hide the real causes of inflation, the mismanagement of finance by government, the iniquitous drain-off of workers’ wages in high rents brought on largely by government-initiated high interest rates, and land and home prices inflated by uncontrolled speculation. Repayments on vehicles are made heavier by unrealistic interest rates. Repayments on home furnishings are made impossible by unrealistic prices and profits and, again, unrealistically high interest rates. So the average person is caught up in the vicious circle of unrealistically high prices, which have no relation to actual production costs or the value of the article provided, which put the products beyond the reach of the average man unless hire purchase with its usurious interest rates is utilised. There is no help from the Government, which can think only of increasing taxes on the articles not needed to make the population’s life equal to that of other highly developed countries.
Let this Parliament stop allowing this difficult to prove or to understand argument, about what is productivity, to develop. It further lessens the understanding and conciliatory spirit which is being desperately sought by trade unions, reasonable employers and those conciliation bodies working so hard to find a solution to the adjustment of wages to meet soaring living costs. The political amateurs who propounded these arguments are far removed from what is actually happening by their very way of life and the protection from the general public atmosphere which is created for them by living and working apart “from the public. I say this as a person who has spent some time as a trade union official. My advice to them is to speak to the people without letting them know who you are. The people have had enough of political interference with their earning power without any attempt to control costs, not only in the retail field but in the basic item so dear to every Australian heart - a home. They have had enough of trying to purchase a home only to find that an escalation clause in the mortgage coupled with Government interference has increased the interest charges, resulting in an increase in the cost of their home. The term of the mortgage may be from 25 years up to 39 years without any guarantee that there will not be further increases in interest rates in future years. They fear that they may never be able to pay off their home because of high interest rates.
After having done this to them honourable members stand in this Parliament and say that they will see that productivity is enforced. How does this sound to a worker who has suddenly had his effective wages reduced by several dollars a month because of a sudden increase in repayments on his home but with no increase in the value of his home? His only answer is to get more wages from his employer for he is already fully committed in respect of hire purchase, school fees and all the other things which go to make the Australian way of life. Perhaps he is lucky if he does not already have a working wife - she would cease to be a proud housewife and would be off to work to maintain the home. We should not say to these people that they must work harder to produce more so as to maintain the profits of a company. What hypocrisy.
On what are we to base our productivity figures? Where in fact is the index to use as a base? As yet it does not exist but when it is produced what year will become the base year? Will it go back to 1900? Will it take into account individual industries which have become heavily mechanised so as to give the workers in those industries the true benefits of increased productivity?
For example, will airline pilots receive the full benefits of increased tonnage and passenger loads carried by the jumbo jets? Will seamen be granted their share of productivity arising from increased tonnage, reduction of crews and quicker turnaround? Will bus drivers receive an immediate doubling of wages for a doubling of passenger loads and the reduction of a bus crew by half? Will the worker in an automated brickworks receive the full benefits of savings in costs arising from labour redundancy and increased productivity? Will postal workers receive an immediate increase equal to the productivity increase due to the introduction of letter sorting machines and the approximate saving of 20 workers in some instances with a reduction to 2 people to do the work which was previously done by 22? Will the wages saved be shared amongst those remaining and the increased productivity be taken into account for an immediate increase in wages?
Will the truck driver on iron ore sites driving vehicles in excess of 100 tons be paid on productivity in relation to the 10-ton truck driver so computed and multiplied that he will receive at least 10 times as much for his productivity which must be 10 times greater? Of course this is not the intention of the Government which speaks for the employers of labour. It has no intention of allowing this to happen. It has carefully designed a smokescreen to hide the effects of technological changes on our work force. Insecurity is faced by many workers in the work force who fear that they may be replaced by machines in the near future. Profits are being taken by avaricious companies which wish to preserve these profits in a country with a low growth rate in hourly earnings.
Between 1961 and 1969 Australia’s growth rate of earnings was lower than that of Japan with 12 per cent, Italy with 8i per cent, France with 8 per cent, Germany with 7i per cent and the United Kingdom with 6i per cent. Australia was a low 5i per cent. Since then other countries have had a higher growth rate in earnings ranging up to 11 per cent in France and 17 per cent in Japan, whilst labour productivity in Australia between 1961 and 1969 in the manufacturing industries rose by 4 per cent per annum, which was much better than that country we so slavishly follow in most things, the United States of America, which had an increases of 2.9 per cent and equal to the United Kingdom with 4 per cent and Canada with 3.9 per cent. However, as these are employers’ figures I will not unconditionally vouch for them.
Further to this, it is interesting to note that generally productivity rose most in countries where wages rose in keeping with rises in productivity. In the European area of France, Italy, Germany productivity rose by an approximate average from 1961 to 1969 of 5.8 per cent, and Japan which had a percentage increase in wages of 17 per cent achieved an 11.2 per cent increase in productivity over the same period. Again these are employers’ figures on manufacturing but perhaps this shows that there is a happier and more productive work force where they can see that they are getting their fair share of what they produce and they can see some tangible gain for their efforts. But these are employers’ figures and no doubt they would be subject to strong suspicion by other people on both the employer and employee sides. I challenge this Government to give some real encouragement to the Australian work force to convince them that this productivity debate is not some gigantic smokescreen to hide governmental and employer desire to destroy the existing arbitration system; to convince the workers that this is not a counter offensive to the Australian Council of Trade Unions campaign for a shorter working week; to convince them that it is not a campaign to hide the effects of changing technology, computerisation and automation generally. I challenge the Government to investigate the French legislation of 1967 which allows worker participation in profit sharing and to legislate on these lines with particular regard to overseas companies. The French legislation was first mooted in 1959 but enforced in August 1967 and the then President of France said:
It is essentia! that employees and wage and salary earners, who together further the development of firms, should share the reward of their joint efforts.
Progress, which is achieved by all, must be a source of greater wealth for all which means that all should take a share -,n the increase of capital produced.
With those sentiments 1 heartily agree as must all fair minded people. Worker participation in the fruits of expansion are recognised as a right and certain tax concessions and social concessions are available to the companies for their participation which does not interfere in the rights of management in the decisions of development of the company involved. For that matter it does not interfere with the usual base wage structure of the worker. If this Government is sincere in wanting workermanagement co-operation in increasing productivity, which in the final analysis will lead to increased methods of automation, computerisation and mechanisation, let us ensure that both worker and management gain from this concept of automated industry, which is not of tomorrow but is with us today. In fact this debate should encompass the future and it should cover the problems of future automation and it should not look as it does with the word ‘productivity’ to the past. The debate has continued on past standards, past concepts and attempts to preserve today’s relationships of worker, capital and profits. One cannot say that the concept of profit sharing can be readily accepted by employers or by trade unions, but the time for imaginative rethinking is here for governments, and instead of debates in Parliament on these matters, round table conferences between those responsible are overdue.
When one views Australian and world opinions one finds highly critical comments of government and business effort in the promotion of productivity. Let us look at comment by Professor Fritz Machlup of Princeton University who said that many Australians have recently come to suspect that their living standards, relative to those in other advanced countries, have been declining’. In broad terms Professor Machlup laid the blame for this state of affairs on a poor Tate of increase in Australian productivity and while he cited the alleged Australian preference for taking life easy as one of the reasons for this productivity lag the real burden of his criticism quite clearly fell on a misallocation of resources by the Government. He further cited a lethargic banking system as a contributory factor. This comment is by a man who is currently Walker Professor of Economics and International Finance at Princeton University, United States of America. He has lectured at the University of Melbourne, the Australian National University and according to Australian Broadcasting Commission reports he has acted as a consultant to the Reserve Bank of Australia. He had this to say about banks:
There is also the field of money and banking and here again I may say something which you may not like to hear - that there is very little competition among your banks.
There is no competition concerning the interest rates that they pay, concerning commissions, concerning the difference in the price of foreign exchange bought and sold and so on. and all this, of course, lowers the increase in productivity.
Professor Machlup said that one thing which was probably holding back an increase in Australian productivity was: . . the fact that the degree of competition in this country seems to be very much lower than in many other countries. Here you like to protect the most inefficient people and it may be that is a sign of a good heart, but of course, it costs you something. If you have several firms in an industry and you want to protect the least efficient one so that the others can survive it means that they will produce at a relatively high cost and it mean; that your standard of living will fall behind that of other countries.
Mr DEPUTY SPEAKER (Mr Cope)Order! The honourable member’s time has expired.
– We live in an era of rising expectations. Standards of living, standards of education, standards of health and standards of leisure which would have seemed Utopian a few generations ago are now within our reach, but these goals will not be reached by a mere redistribution of a static national wealth. In fact. 1 hope it will be obvious to members of the Opposition that the attempts of militant unions to redistribute wealth in favour of their members have been counterproductive for the work force as a whole. The apparent gains have been more than counter-balanced by the loss of national production through strikes and restrictive practices. There are, of course, strong arguments against uncontrolled growth, and in any debate on increased productivity we must consider possible objections, for increased productivity inevitably results in increased total production. More and more people are arguing that growth is too high a priority already and are warning of its cost in terms of threats to the environment. Prince Philip remarked scathingly that gross national product is rapidly assuming the religious significance of a graven image. Anti-growth economists on both right and left, like Professors Mishan and Galbraith, are amongst the most revered pundits of the day and scaremonger journalists have had a fine time in the last 12 months.
We must treat any argument based on the environment with sympathy and seriousness. There are very real costs in economic growth. Higher production means more pollution of every kind - more smoke, more noise, more pesticides, more effluent and more garbage. Higher living standards, particularly the demand for more space and more mobility, must mean more encroachment on the countryside. Urban clearance will threaten historic buildings. Urban roads will ruin existing homes. Redevelopment will destroy traditional patterns of living. It follows that we must not become growth extremists, our eyes fixed on index numbers of production and seizing on any technical innovation regardless of social cost. Japan is an example of a country which, having single-mindedly pursued a goal of quantitative growth, is now counting the environmental cost and finding it extremely heavy. Our task is to ensure that growth really does lead to an increase in welfare, remembering that welfare consists not only of the quantity of goods and services which we produce but also of the quality of the environment in which we consume them. We must always bring the environmental argument into the balance sheet, and we must devote part of our growth to dealing with its costs. It can be done, given the will and the right priorities.
The technical answers to most forms of pollution are known. We can, in the long run, produce quieter aircraft engines, pollution free cars, clean rivers, safe pesticides and effective waste disposal. Sensible planning can conserve the countryside even in the face of more people, with more cars and with more leisure. Urban planning can, in theory at least, protect the urban environment. But it will require high public expenditure, more rigorous and imaginative planning and a determination to impose on both industry and consumer the full costs of the pollution which they create. In other words, it will involve an allocation of resources which is determined not by market forces but which reflects our social priorities. But none of this is an argument against the growth we desperately need; it is an argument for discriminating growth and for applying its fruits intelligently.
How then can we achieve growth? The main element must be increased productivity. Too many people regard an increase in productivity in secondary industry as merely a matter of the work force working harder. This, of course, has an important influence on productivity, particularly the avoidance of zero production through strikes, but there are many other reasons why output per worker is lower than it should be - excessive job changing, poor training, work restrictions and inter-union demarcation absurdities. Improvement in some of these, such as apprentice training, can and should be initiated by the Government. Others are beyond the effective control of the Government. They depend on the attitudes of the work force and, in particular, of their leaders. I hope that the de facto Leader of the Opposition, Mr Hawke, will now devote his attention to the elimination of restrictive practices in the trade unions. If he can achieve something here, he will raise the prosperity of the community as a whole, including, of course, his union members.
As I said earlier, many people including, I regret to say, the Productivity Promotion Council of Australia, seem to think that increased productivity is merely a matter of the work force working harder. This is not so. Increased productivity depends on 4 supports, each of which is important. Apart from a well-trained, hard working and efficient labour force, the other supports on which increased productivity must be based are more efficient management, technical innovation and wise investment in plant and equipment. In all of these fields Australia is lagging. Our management training has not kept pace with our industrial development. Although most larger firms realise the importance of management training - much of our management is still in the horse and buggy stage - too many firms still believe that management is learned through the seat of the pants, and brief sandwich courses are a substitute for sustained formal study. I confess I do not know what more the Government can do to improve management training, but I believe that any constructive proposals put forward should be examined seriously, for the problem is urgent. Although I think that the Government has done all it reasonably can to improve management training the same is not true of the last 2 factors - technological innovation and investment in equipment.
Technological innovation should be aimed at new products or at more efficient use of labour or capital in the manufacture of existing products. A survey completed by the Australian Industrial Research Group in 1968 showed that as a proportion of the gross national product Japan spent 6 times as much as Australia on research and development, Britain 10 times as much and America 1.5 times as much. Our claim to fame seems to be that we are spending more than Greece and Spain. It is inevitable that we will have to borrow some techniques from overseas, but we must reduce the extent of this dependence because there are serious drawbacks in such a policy. Licence and royalty fees are growing every year. Last year they amounted to $70m, and this figure is likely to double every 5 years. If we rely on skill and knowledge acquired by licences and royalties we will inevitably lag behind our competitors in design and manufacturing techniques. In other words, our productivity will be poor. Moreover, with licence and royalty agreements there are frequently franchise restrictions which deny us the right to sell overseas in competition with the company which made the original design. Because technical innovation can be so important, I was disappointed by the decision last year to cut back the general Government grants for research and development from 50 per cent to 35 per cent. In my opinion this decision can only slow the rise in productivity.
Increased investment in plant and equipment is the other key to increased productivity in manufacturing industries. International comparisons are notoriously difficult, but it does seem that Australian manufacturing investment is low by developed world standards. How are we to increase investment? The first answer is profits - a word that seems to set off Opposition members slavering like Pavlov’s bitches. What does happen to profits? Firstly, nearly half goes to the Commonwealth Treasury for use on all the many purposes of government, including such things as social services and education. From the remainder of their profits the companies have to finance their new investments and return enough to their shareholders to encourage new capital formation. I would say that at the moment manufacturing industry is barely achieving this last aim, and if manufacturing profits fall it will be investment in plant and equipment, and consequently productivity, which will suffer. 1 raised the question of tax allowan.es for investment with the then Treasurer in an earlier debate, but he did not answer the question in his winding up speech, so 1 shall ask it again.
A year or so ago the Treasurer was reasonably happy with the balance of the economy. What surely we should be restraining in our present inflationary situation are activities which have continued to rise since then, or more particularly those which are rising at an increasing rate. Neither of these is true for investment in manufacturing plant and equipment. On the figures that I have seen, the seasonally adjusted figures for investment in plant and equipment, that is, excluding buildings, have shown a slow but steady decline since March 1970. When the inflationary curbs were put on, ail the Treasury’s economic indices were pointing upward except investment in plant and equipment, which was - or should have been - pointing downwards. I was rather disturbed by an answer given today by the Treasurer in reply to the honourable member for Balaclava (Mr Whittorn) when he suggested that the Government had identified investment in manufacturing plant and equipment as an area of excessive growth, and had taken action to curb it. In fact between the last quarter of 1969 and the last quarter of 1970, mining investment rose by 51 per cent, non-manufacturing industry rose by 20 per cent, and manufacturing investment by only 10 per cent. Yet manufacturing industry investment was the only one curbed. And if we eliminate investment in mineral processing - which ail agree to be desirable - the investment in plant and equipment for the remainder of manufacturing industry actually fell during the year. To remove a taxation incentive to investment in manufacturing equipment at a time when such investment is actually falling seems to me to be dangerous and not desirable in the long term interests of Australian industry.
If we can maintain an adequately competitive economy, we can rely on management to ensure that expenditures on research and development, and on plant and equipment, are normally aimed at increased productivity, not merely increased production. This maintenance of competition is why it is so important to enforce effective measures against restrictive trade practices, and to reduce any tariffs found to be unnecessarily high.
I am delighted, Mr Deputy Speaker, that this debate has taken place, with the opportunity to discuss all the factors which lead to increased productivity. Two recent Government decisionsreduction of research and dev elopmcnt grants, and suspension of the taxation investment allowances for manufacturing plant and equipment can only slow the rise in productivity, and I should like an assurance from the Minister that these decisions will be reviewed - and
I hope reversed - as soon as the economic situation permits.
We have no chance of achieving the huge sums we require for all the needs of our community from a near static gross national product - the funds we need for health, for education or for pollution control or for any of our other goals. Growth is the essential pre-condition and productivity is the key to growth.
- Mr Deputy Speaker, we have just heard another swan song. My heart bleeds for the honourable member for Isaacs (Mr Hamer), who has just resumed his seat. The theme of his swan song is an area in which he, as a supporter of the Government, is vitally interested. 1 refer to the area of investment. The honourable member was concerned about what investment produces for those manufacturers who, as he put it tonight, are the poor in the community. The honourable member should have a look at the profit sheets of some of the firms which no doubt he had in mind when he was on his feet. I will not mention the Broken Hill Pty Co. Ltd or Mount Isa Mines. However, if the honourable member considers what is happening in manufacturing industries and the food industries he will find that he was only telling one side of the story.
In his contribution the honourable member talked about what the Government has done and the economic measures that it undertook in the last Budget. All I want to say to the honourable member is that he voted for these measures. He fell for them hook, line and sinker. He supported them right down the line. Now we hear his voice raised in protest against those measures. Did you vote in protest against them, Sir? He sat humbly on the Government benches and said and did nothing to defeat them. He can say now that he is opposed to these measures. But a time must come when an honourable member has to stand in this House and be counted. The honourable member for Isaacs most certainly was counted as he voted in favour of each and every one of the economic proposals of the Government. Those proposals were conceived by Ministers attending Cabinet meetings when they locked themselves in concrete vaults, without the honourable member’s knowledge, to work out what would be done. I do not know what went on at those meetings; that is best known to bis own Party meetings or like system,
I am waiting anxiously for a Country Party member to make some contribution to this debate. Country Party members are supposed to be the people who are looking after the rural industries. I will not dwell too long on them because they have had more than their fair share of the available currency of this country to sustain themselves. However. 1 am not objecting to this assistance at this point of time. But what would happen if a body of workers were thrown out of employment because of increased mechanisation or some technological change? Would we see Government members bending over backwards to help them and saying to Bob Hawke of the Australian Council of Trade Unions that they would get the workers’ rents paid, their interest rates reduced, the rates on their homes lowered, the interest indebtedness in respect of their motor cars reduced, their hire purchase commitments eased?
We have reached the stage in this place where we ought to be thinking about these things. What is good for the goose is good for the gander. The Government pours millions of dollars into industry. Some honourable members sitting in a group on the other side of the House at the moment - and the previous Minister well knows this - irrespective of possible private objections, have in fact brought a system about in this country that bad for its purpose the reduction of productivity in rural industry. When a wage rise of 6 per cent is granted-
– That is not true.
– Yes, it is perfectly true, and 1 will take issue publicly with the honourable member on this at any time. He can talk about meat or anything else he likes to mention. He can talk, if he wishes, about lamb production, wheat production or grain production. I agree that wool productivity has not been decreased. The plight of the growers is measured by the extent that the Government has decreased the return from growing wool. Nothing has been said about the ever widening gap between the grower and the consumer. At the same time the Government is spending millions of dollars of the taxpayers money in the forlorn hope that the dealings of the Australian Wool Commission will give a better return to the grower. Mark my words - they will not.
The Government has been reducing production. I want to make a comparison for the benefit of the honourable member for Hume (Mr Pettitt) who sits back in his seat and natters inaudibly to you, Mr Deputy Speaker, day and night in this chamber. Although he gets away with murder, when I say something I get whipped into line by the Chair.
Immediately rises are given by arbitration courts what docs the Government do? The Government attacks the courts for listening to the arguments put to a judicial bench by the representatives of the employees. The Commonwealth Conciliation and Arbitration Commission heard valid and proper arguments and granted a rise of 6 per cent in spite of the voice of the Government in this chamber which said: We oppose it’. Who does the Government think the public is? Does it think the public is made up of shareholders and company directors who attend board meetings? To honourable members on this side of the House, the public is made up of people who are producing. They are the people whom we represent and for whom representations are made to obtain increases of wages. Hypocritical questions are asked and answered - or an attempt is made to answer them in this House. The Government says that as a responsible government it will oppose in the public interest claims submitted to the court for wage increases. This is just so much rubbish. The Government probably will continue to adopt this kind of thinking until it is swept from the treasury bench in 1972. that is, if Billy McMahon lasts that long as Prime Minister.
I would now like to come to the subject of productivity and refute some of the arguments that have been put by honourable members opposite. The honourable member for Isaacs said that if we increase productivity, everyone will be better off. Everybody gets on the bandwagon and thinks they are much belter off for it. There is twice as much coal being produced in this country today as previously when more than twice the number of men worked in the industry. Are honourable members opposite who sit in this House representing mining electorates going to tell me that everything is rosy for the people left in the industry? What does this Government do? It mechanises the industry. Nobody has any quarrel with that. Machines ought to be doing the arduous work in industry generally. The difference between Government thinking and Opposition thinking is that the Opposition thinks that mcn should benefit from the machines, and not big business interests. Men should profit from the machines. They should not be used to increase the shareholders’ interests. It is people that are important in this concept, not machines and the few people who sit on the boards.
What does the Government do? It sees that this coal is exported and sold on the world market at a much lower figure than if it were being mined in a much less developed country where the price that that country would be getting for the coal would be twice as much. The Government knows this and doss absolutely nothing about it. The honourable member for Isaacs (Mr Hamer) had the temerity to speak of pollution, of all things. State Liberal governments have allowed industries to be created within their States having no regard whatsoever for the problem of pollution. It is absolutely and utterly criminal that the previous Liberal Government in South Australia allowed the paper industry to be established in the south eastern sector of the State and kill a natural lake, Lake Bonney, in a few short years because the State Government gave the industry the unfettered right, and in fact went out of its way to encourage it, to channel the dangerous waste of the 2 establishments associated with the paper industry into that lake.
Only a couple of weeks ago I. read in the Press of the deal that is going on south of Sydney with the Clutha development. If the Askin Government allows this particular company to move one step further in this type of production in this area, allows this huge American company - 1 understand it is American at this stage anyway - to put down its own railway, do as it likes, where it likes, when it likes and how it likes, and says to it that it stands completely apart from any State law, that is nothing less than criminal, and the Askin Government ought to be taken to account for it.
Let me refer now to the 35-hour week. Every representative in cockie’s corner, the Country Party members who sit to my left, has been screaming: ‘Bob Hawke - the 35-hour week. It is calamitous.’ Are those honourable members aware that the first workers’ compensation Act that was brought down in the United Kingdom almost 100 years ago caused a wave of almost terror throughout the entire country because the workers in those days were led to believe that they would be out of jobs through the bringing down of an Act whose purpose was to protect the wage earner should he become injured on the job? We have moved a fair way since that time. The first workers’ compensation Act was introduced in Germany in 1889. The feeling engendered in the British workers is the type of feeling that the Government is endeavouring to engender in the public mind.
– When was that?
– About 1889. At the same time they spoke about introducing a national superannuation scheme for social welfare benefits. 1 thank . the honourable member for the interjection,
– What has that to do with productivity?
Mr DEPUTY SPEAKER (Mr Cope)Order! I would ask the honourable member for Sturt id address the Chair and ignore interjections.
– Mr Deputy Speaker, I thought you would have’ called the honourable member for Angas to order. However, that was not to be so. Honourable members opposite attack the 35-hour week and say that it will be ruinous; the worker will suffer, the farmers cost structure will go up and all sorts of frightful things will happen. But not one honourable member opposite has endeavoured to inform the House of the percentages of workers in this country who work in excess of 40 hours a week, of those who work from 35 to 39 hours a week and those who work only a 35-hour week. Let me inform, those honourable members of some of the facts that are available, if they are prepared to listen to them. In August 1966 the number of people who worked from 35 to 39 hours a week was 426,000. By August 1970 it had risen to 632,400, an increase of about 206,000. The number who worked 40 hours or more was 2,262.000 in 1966. ByAugust 1970 it had dropped to 2,092,900: a decrease of about 169,000. The percentage of workers on a 35-hour week is far greater, and the trend is increasing. What is wrong, from a democratic point of view, with the trade union slogan of ‘Let them all enjoy the same benefits’? Honourable members opposite should not be hypocritical when they speak about a 35-hour week.
There will be available in the Library shortly a book written in America, and I hope that honourable members opposite will avail themselves of the opportunity of reading it. They will find that trade unions in America prevailing upon employer organisations and industry to introduce a shorter working week. They want a 4-day week. What is significant in regard to this matter - if I can penetrate those thick skulls over there - is that in America production has increased and the economy has improved considerably to the extent that interest rules have been brought down in the last few weeks. I want to repeat that to honourable members opposite because the silly grins are at last leaving their faces. Production has increased as a 4-day week and fewer hours are being worked. Greater hours are being worked perhaps on a daily basis, with overtime rates. While production has increased absenteeism has reduced lo almost nothing. Some types of accidents have decreased considerably. The workers generally have-more leisure time.
Honourable members should not get the idea that because a 4-day week is being worked factories are closing down for :t portion of the week. That is not the case in many industries, lt is worked on the basis of shift work and with alternate long weekends for the workers.
Time has caught up with me and I have only a minute left. I have to use my last minute to criticise those people on the other side of this chamber who represent nothing but big business and who stand in here and cackle as previous speakers have done tonight. I said in the House the other night, and I repeat tonight, that this Government has not even glanced at what is liable to happen to the Australian community as a result of displacement of the work force because of technological change and because of computers. It is time that the Government gave some thought to discussing this matter with representatives of the trade union movement on a completely broad basis. The trade union movement does not mind if it sits down with employers and company directors to discuss matters of vital concern to its membership. lt is time this Government stopped treating the trade unions of this country as an alien’ force.
– Mr Speaker, normally at this stage of the debate I would deal in detail with points raised by honourable members, but because this is the first opportunity since my appointment as Minister for Labour and National Service lo speak on productivity, and in view of the importance of the subject, I intend basically lo utilise the time available to me in developing the Government’s view of what is involved and its implications for the Australian people. Let me first of all say to the honourable member for Sturt (Mr Foster) who, as I recall his comments, was complaining bitterly that technological change had not been the subject of adequate discussions between the Government, the unions and the employers, that this topic has been dealt with in some detail by the National Labour Advisory Council. The Council held its first public function in Sydney on 23rd March on the question Adjusting to Technological Change’ and advance details of the Government’s employment training scheme for persons displaced by technological change were outlined at that forum.
I emphasise at the outset the importance of this debute which has examined the implications of national productivity for the Australian community, lt has assisted in making clear the difference between the concepts of productivity and production. Productivity is the volume of goods and services measured in relation to the resources employed. Production is the total output of goods and services, not related to resources employed. Production can be seen in absolute figures of weights or measures ‘which can be converted to money values at constant prices, from which trends over a period of time can be assessed. Productivity, on the other hand, is a ratio of production to units of man hours used or units of man years or units of capital or any other unit of input. Inputs are resources. Obviously, the more efficient the utilisation of our resources, that is, units of input, the higher the level of productivity will be for a given volume of production. The type of ratio calculated at any one time will depend on the purpose which it is intended to serve.
The development of productivity measures to meet all possible statistical requirements is particularly complex: It is quite true, for example, that because of problems of consistency and comparability between input and output data there are no official estimates of productivity trends in individual industries. However, when considering overall economic capacity for purposes of national wage fixation, it is not the trend in individual industries that is important but the trend in average national productivity. And we do have broad estimates of the trend in average national productivity. In its submissions in recent national wage cases, the Commonwealth has provided estimates of the changes in gross national product at constant prices per person at work. These estimates have been derived from national accounts and employment statistics published by the Commonwealth Bureau of Census and Statistics. Similar estimates are provided by employers and unions at national wage cases and the three sets of estimates do not differ very greatly from each other.
The honourable member for Dawson (Dr Patterson), in accepting that there are reasonably adequate measures of national productivity growth in aggregate terms, pointed to other complexities of measurement. As he indicated, there are no official estimates of the quantitative contribution made by different input factors of production to the increase in national productivity. To my knowledge, official estimates of this type are not available anywhere in the world. The fact is that conceptually and statistically it is impossible to measure with any accuracy the relative productivity of different factors of production. Nevertheless, the living standards of wage and salary earners and of owners of capital can and do move broadly in line with the overall growth in national productivity. Official national income statistics show that over the last 15 years, taken as a whole, the proportion of wages, salaries and supplements to the gross national product at factor cost has not fallen; in fact there has been a small upward trend.
Let me express this in another way. The official statistics tell us that the volume of goods and services produced in Australia per employed worker has been rising on average by about 24 per cent per annum in round terms. The official statistics also tell us that the purchasing power of the average wage and salary earner, that is his effective command over goods and services, has been rising by about 2i per cent to 3 per cent over the long term and by something closer to 4 per cent in recent years, again in round terms.
These figures, I believe, show beyond doubt that the growth in national productivity has generated improved living standards for wage and salary earners and not just for owners of capital, as members of he Opposition would want us to believe.
Productivity growth is the ultimate determinant of the quality of fife we can lead. Quite apart from the wages and earnings argument, it determines what the community can afford by way of urban amenities, our education facilities, the amount of leisure we have, the extent to which we conserve and protect our environment, and other critical aspects of our standard of living. Our capacity to assist the needy sections of our community and to strengthen our defence capability hinges on our productivity performance. Another aspect of this is that if we could achieve higher productivity growth, we would be able to deal more effectively with current inflationary pressures in the community, by narrowing the gap between minimum money wage expectations and economic capacity and by easing the labour shortages that inevitably exist in a full employment economy. Each person in the community tends to assess his individual share of national productivity by his money earnings. What he should use. however, is not his money earnings but what his earnings enable him to buy in real terms. It is the purchasing power which in fact really counts. Granted that the community as a whole should be vitally interested in stimulating productivity growth, the questions which then arise are: Who can affect the level of productivity? What can affect it? Where and how can it be affected? The who, what, where and how could be answered separately, but detail of that type is not necessary today.
While there may be some significant disagreement about the precise quantitative significance of the various elements which generate productivity growth there is no problem in identifying what these elements are. These elements are the rate of investment, the rate of improvement in the quality of the labour force, the rate of technological progress, including improvements in managerial technique, and changes in the allocation of productive resources. There is, I believe, no doubt that Australia’s rate of investment has been high by world standards, even if we exclude investment of a social character, for example, houses, schools and hospitals. Of course, the economic environment generated by this Government has been very favourable to capital accumulation. The growth in domestic demand and employment has been strong, stable and sustained, and it has been due essentially to the Government’s unwavering commitment to full employment, its pursuit of wide-ranging manpower policies, including immigration, and an effective national employment service.
And yet Australia’s productivity growth is inadequate by world standards. The cause of this adverse comparison must lie in one of the three other factors which I mentioned, that is, relative slow improvements in the quality of labour, or in technology or in the allocution of resources. These basic factors concern me as Minister for Labour and National Service because they are inseparable influences on the effective and efficient use of the nation’s work force.
Australia’s expenditure on education and training has been increasing at a very rapid rate. We must ensure, however, that we are producing professional, technical and trade qualifications of the types most needed in the economy. We need also to ensure that our methods of training in Australia are suited to a dynamic economy in which rapid changes in technology place a high premium on human adaptability. The suitability of our training arrangements to current needs is, of course, receiving urgent attention and is the subject of a national conference in Canberra in May. The conference will be attended by a very wide cross-section of industry and commerce and, I am pleased to say, has the full support of my colleagues the State Ministers for Labour and the State Ministers for Education.
The next question that needs to be asked is whether technological progress is as fast in Australia as it ought to be. Technological advance depends on three factors: The rate at which new discoveries are being made: the rate at which these new discoveries are being converted into commercial use; and the rate at which new products and new techniques are being adopted generally in the production of goods and services.
The evidence suggests that the third factor is the most crucial of the three. Differences in productivity growth between countries have not been found to be due to any significant differences in the amount spent on research and development, or in the number of innovations introduced. Rather they have been attributed mainly to differences in the speed of diffusion of technological change. Research studies have demonstrated that at any one time there are substantial differences in output per head between the most efficient and least efficient firms within individual industries. Another interesting fact revealed by research studies is that the marked differences which exist in average levels of productivity as between countries are due not to differences in productivity attainment of the most advanced establishments but rather to differences in the proportion of backward to advanced establishments. This suggests strongly that countries with unsatisfactory productivity records should be looking closely at ways of narrowing the productivity gap between best practice firms and average firms.
The context of this evidence underlines the need for rapid dissemination of technical knowledge and provides the basic rationale for the productivity group movement in Australia. Equally it points up the importance of management education. It points also to the need to examine whether a productivity advisory service might be valuable in encouraging the adoption of new technologies and innovations within industry. The Productivity Promotion Council of Australia should undertake this examination as soon as practicable.
The Government has encouraged industry to find means of promoting productivity improvement in the individual enterprise, which is the starting point for higher national productivity. This is exemplified by reference to several examples. My Department is providing the essential services for the continued expansion of the productivity group movement which at present consists of 3,700 individual undertakings working in 183 groups throughout the Commonwealth. Similar staff support is also being provided for the further development of the Productivity Promotion Council of Australia, which at present has 550 member organisations and member companies and which the Opposition apparently also accepts as an essential body with considerable potential. The results of the Department’s research into personnel practices, industrial training and industrial welfare are widely disseminated. The list can be further extended to cover the work of the Commonwealth Employment Service, but sufficient has been outlined to support the point.
I want to emphasise tonight the role of management. Inter-firm differences in productivity are not explicable solely in terms of mechanisation, production techniques, or size of firms. They are due at least as much, to ‘organisational’ factors. The progressive enterprise is using not only the most advanced production systems but also the most advanced management techniques, including method study, work measurement, value analysis, production and manpower planning and control, standard costing and budgetary control, lt is in fact largely through management decisions that the efforts of workers combined with capital equipment to exert an influence over productivity. In fact, because almost every activity of an enterprise is under the control of management, the quality of management ranks high in national resources. (Extension of time granted).
Unlike Shakespeare’s mercy, however, the quality of management in Australia is strained, and it droppeth not as the rain from heaven upon industry and commerce below. This is not a recrimination against managers but a statement of fact that the quality of management in this country is a variable resource. There is no natural law that endows it with greatness. High quality is the result of clarity of purpose and skill in the development of people with a Hair for managing. Management sometimes means the people responsible for managing, and at other times the process of managing. The process of management involves direction and day-to-day operation. Direction provides the leadership and the philosophy. Having emphasised the role of management, 1 should add that all efforts to accelerate technological progress would be in vain unless the environment was sufficiently competitive to provide a maximum incentive to innovation. The Government has indicated its desire to sharpen up competitive forces in the economy.
The speedy application of the best available practices and techniques may also be hindered by the small size of the local market, but this can be partially overcome by increased export orientation. The Government is helping here in many ways - through the Australian Trade Commissioner Service and the Export Payments Insurance Corporation. In some cases technological progress is being hindered by human resistance to change. This needs to be overcome and calls for close cooperation between employers and trade unions as the recent National Labour Advisory Council Forum on Technological Change clearly showed. It is important that the guidelines published by the National Labour Advisory Council to cushion the impact of technological change be adopted and applied by all levels of management and the trade unions.
While the Government is doing what it can to influence the level of training and skills, and the rate of technological and managerial progress, it is also conscious of the important effect which the allocation- of resources can have on average productivity levels in Australia. The encouragement of major investments from home and overseas into economic and efficient new industries, the rationalisation of the dairying, wheat, and wool industry, continuous tariff reviews and better transcontinental transport all help to generate manpower movement away from declining or inefficient industries and towards new and more efficient endeavours. Overall national productivity has certainly gained as a result of the growth in mineral production. Mineral production is highly capital intensive and the value added per employed worker is comparatively high. Certainly, governments have a responsibility for developing and pursuing the types of policy objectives and policy measures that channel and facilitate productivity effort. The Government has achieved this in wideranging ways such as I have already mentioned. Most importantly, through its monetary anc! fiscal policies it has created the atmosphere for economic growth and development in a climate of political stability and social progress, and this may be its most important contribution of all.
Finally. I want to emphasise the sensitive part the attitudes of the community play in developing a climate of productivity consciousness. People form attitudes on their understanding of a subject. The more complex the subject, the more difficult it is to develop a coincidence of attitudes among the millions of people who make up our society. From this debate, agreement has emerged from both sides of the House that productivity promotion is important. It is also evident that more extensive factual information concerning the techniques of productivity promotion needs to be available so that the community can form its own value judgments about the types of attitudes to work and social living that produce a favourable productivity climate. The task of producing this information is not one for Government alone. It requires more efforts also from the Productivity Promotion Council, professional institutes, employer organisations and the trade unions.
Debate (on motion by Mr Les Johnson) adjourned.
House adjourned at 10.59 p.m.
The following answers to questions upon
asked the Minister for Shipping and Transport, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for External Territories, upon notice:
How many leases were granted in 1970 for
How many leases were granted in each case to
– The answer to the honourable member’s question is as follows:
The matter referred to is one which falls within the authority of the Assistant Ministerial Member for Lands in the House of Assembly for Papua and New Guinea. The Administrator on the advice of the Assistant Ministerial Member for Lands has provided the following information.
Cite as: Australia, House of Representatives, Debates, 6 April 1971, viewed 22 October 2017, <http://historichansard.net/hofreps/1971/19710406_reps_27_hor72/>.