28th Parliament · 1st Session
Mr SPEAKER (Hon. 3. F. Cope) took the chair at 11 a.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourablethe Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned citizens of Australia respectfully showeth:
That the undersigned men and women of Australia believe in a Christian way of life; and that no democracy can thrive unless its citizens are responsible and law abiding.
Your petitioners therefore humbly pray that the members in Parliament assembled will see that the powerful communicator, television, is used to build into the nation those qualities of character which make a democracy work - integrity, teamwork and a sense of purpose by serving, and that television be used to bring faith in Cod to the heart of the family and national life.
And your petitioners, as in duty bound, will ever pray. by Sir John Cramer, Mr Graham, Mr Kerin, Mr Lloyd, Mr MacKellar, Mr Morris, Mr Olley, Mr Ruddock, and Mr Turner.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned citizens of Australia respectfully showeth:
That they oppose the Australian Health Insurance Program and any National Health Scheme; That they wish to retain the right to choose their own medical care by selecting a General Practitioner, Specialist or any other medical classification of their own choice under the present conditions in private consulting rooms and also the right to choose an intermediate ward or private hospital of their own choice.
Your petitioners therefore humbly pray that the Government will take no measure to interfere with the existing health scheme.
And your petitioners, as in duty bound, will ever pray. by Mr Hayden, Mr Donald Cameron, and Mr Cooke.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.
The humble petition of undersigned citizens of Australia respectfully showeth:
That the proposed ‘free’ national health scheme is not free at all and will cost four out of five Australians more than the present scheme. That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.
That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.
Your petitioners therefore humbly, pray that the Government will take no measures to interfere with the basic principles of the existing health scheme which functions efficiently and economically.
And your petitioners, as in duty bound will ever pray. by Mr Davies, Mr Drury and Mr Killen.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of undersigned citizens of Australia respectfully showeth:
That the proposed ‘free’ National Health Scheme is not free at all and will cost four out of five Australians more than the present scheme.
That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.
That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.
Your petitioners therefore humbly pray that the Government will take no measures to interfere with the existing health scheme which functions efficiently and economically.
And your petitioners, as in duty bound, will ever pray- by Mr Wilson.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned citizens of Australia respectfully showeth:
Your petitioners therefore humbly pray that the members in Parliament assembled will move to make available to the Tasmanian Government a special grant for the purpose of securing Lake Pedder in its natural state.
And your petitioners as in duty bound will ever pray. by Mr Coates.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned citizens of Tasmania respectfully showeth:
That the original Lake Pedder was set wholly within a National Park, declared in 1955 for the sole purpose of protecting this natural wonder.
That the original Lake Pedder represents a national asset of the calibre of such masterpieces of nature as Ayers Rock.
That such places are truly a part of the heritage of our land and should never be divorced from the people for short term considerations.
That the principle of inviolability of national parks should be recognised by our Parliaments, and that the coming winter rains will destroy the last chance for Australians to avert the ecological tragedy of the utter obliteration of Lake Pedder by hydro-electric development.
Your petitioners therefore humbly pray that the Federal Parliament, free from partisan considerations move swiftly to stop this final flooding until the Australian Government Committee of Inquiry can bring its report and recommendations.
And your petitioners, as in duty bound will ever pray. by Mr Coates.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.
The humble petition of the undersigned citizens of Australia respectfully showeth:
Your petitioners therefore humbly pray that the members in Parliament assembled will move to immediately revoke all whaling licenses issued by the Australian Government and to reimpose a total ban on the importation of all whale produce.
And your petitioners, as in duty bound, will ever pray. by Mr Garrick.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.
The petition of the undersigned citizens of Australia respectfully showeth:
Further, they believe that this economic support should be in the form of per capita grants which are directly related to the cost of educating an Australian child in a government school.
Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should acknowledge the right of every Australian child to equal per capita grants of government money spent on education.
And your petitioners, as in duty bound, will ever pray. by Mr Oldmeadow.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled: The petition of the undersigned respectively showeth that your petitioners oppose the proposed reduction of Commonwealth per capita grants to independent schools on the following grounds:
Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should acknowledge the right of every Australian child to equal per capita grants of government money spent on education.
And your petitioners, as in duty bound, will ever pray. by Mr Wilson.
– Is the Prime Minister aware of the unanimous decision of the executive of the Australian Council of Trade Unions to campaign for a ‘no’ vote on incomes in the proposed referendum? In view of the decision of the ACTU, does the Prime Minister agree that the referendum now becomes a farce and a massive waste of taxpayers’ funds? Would he give serious consideration to, or inform the House whether he has considered, the idea of scrapping the whole business?
– I can assure the honourable gentleman that the Government has no intention of bypassing the will of the Aus tralian Parliament. The Australian Parliament decided that there should be a referendum of the people in all the States to say whether this Parliament should be able to pass laws with respect to prices and also to pass laws with respect to incomes. A majority in each House of the Australian Parliament thought that the people should be able to express their view on that. The Government subsequently decided, and I reported to the House, that each referendum would be put to the people on 8 December. I read that the Australian Council of Trade Unions will be supporting one of the referendums and opposing the other referendum. I believe that the people will express their view, taking that into account, but not being deterred by that decision of the ACTU. A very great number of trade unionists and their wives believe that the Australian Parliament should have the some power as every other national Parliament in a comparable country already has - the power to pass laws on both those subjects. We should not allow the position to be obscured because we are a federal system. The Federal Government in West Germany, the Federal Congress in the United States and the Federal Parliament in Canada all can pass such laws. It is a shortcoming in Australia that the national Parliament cannot pass such laws. I am satisfied that a very great number of trade unionists and their wives will support the Australian Government in its efforts to update the Australian Constitution.
– My question is directed to the Minister for Transport. It relates to the vessel ‘Blythe Star’ under charter to the Tasmanian Transport Commission. Is the Minister aware that ‘Blythe Star’ left Hobart for King Island on Friday and that the vessel has been out of radio contact since then? If Blythe Star’ is travelling by way of the west coast of Tasmania it should have reached King Island on Sunday; if via the east coast it should have arrived on Monday. The master could be delaying, knowing that the ‘Straitsman’ would be using the King Island berth today. However, in view of the concern now being felt, I ask the Minister whether the Government will take all possible steps to locate the vessel, particularly in view of the long period of absence of radio communication.
– The ‘Blythe Star’ did leave Hobart on Friday at 1800 hours for King Island and was due there this morning. The information which I have is that the ship is sailing in a westward direction. In fact the nav-aid keeper at Maatsuyker Island reported sighting the vessel at 5 a.m. on Sunday. The Mary Holyman’, which at the present time is about halfway up the west coast of Tasmania, where it is reported that the weather is fine - there are no weather problems - is keeping a lookout for the ‘Blythe Star’. The Tasmanian Transport Commission was concerned yesterday. It chartered an aircraft to look for the vessel. The aircraft was unable to locate it. This morning the Royal Australian Air Force sent out a search plane to look for it, and it is anticipated that plane will have completed a total search of the island area by noon today to ascertain whether there is any sign of the vessel. The weather reports while the ‘Blythe Star’ has been at sea have been favourable, so there is no reason why it should have foundered in weather. There is no explanation at this point for the delay, but we are endeavouring to find out where the vessel is. Ships have been trying to contact it and will continue to do so.
– My question also is directed to the Minister for Transport. I refer to the marine operations centre which was opened in April last year by the honourable member for Gippsland in his capacity as Minister for Shipping and Transport at that time. I ask: Is the centre providing a 24-hour surveillance of the Australian coast as planned and is the surveillance operating effectively on a CommonwealthStates basis?
– My understanding of the position is that the search and rescue centre in Canberra is operating on a 24-hour basis and is providing a service as was planned by the former Minister. I am satisfied with the way it is operating.
– Has the Minister for Labour seen an advertisement by W. C. Wentworth published in today’s ‘Sydney Morning Herald’ which is designed to cast a reflection upon the veracity of the Prime Minister by publishing a set of statistics which purport to show that labour’s share of the gross domestic product has increased since 1948-1949? Has he examined the figures contained in the advertisement and, if so, has he any comment to make upon them?
– I did see the advertisement this morning. I thought that it was a despicable twisting of statistics to try to cast aspersions on a man whose integrity in this place is without parallel. I consequently had some inquiries made about this important matter. My Department informs me that a Mr John Tilling of the Department has been working on these statistics for some time now for a master’s thesis. This work has now reached the point where we are able to make some observations. I would like the House to bear with me while I make them. Mr Tilling worked through a wide range of possible methods, some more acceptable than others, to show how labour’s share of the national product has tended in the 20 years from 1948-49 to 1969-70. Despite the different methods of analysis that are adopted in the study the results produced are generally consistent and statistically significant. The choice of different bases to the statistical series does not affect the nature of the results of the study. That is an important observation which I make. To overcome this problem of aggregation Mr Tilling adopts a technique developed by Phelps-Brown - which the honourable gentleman would know all about, I hope - the effect of which compensates for the changing structure of the economy. In total Mr Tilling adopts 6 different approaches to the data available.
Opposition members - Ha, ha!
– Honourable members will not laugh when they find me getting near the end of my reply. There is considerable difference of opinion as to how national accounting data should be used in a study of this kind. Again, however, Mr Tilling covers the field by adopting 4 different uses of national accounts. They are: (i) gross national product, all industries and sectors; (ii) gross national product at factor cost, less agriculture, mining and quarrying; (iii) gross national product, less the last mentioned item and less goods and services produced by government authorities, as distinct from public enterprises such as government railways, and ownership of private dwellings; (iv) national product, less the items mentioned in (ii) and (iii) and, in addition, electricity generation, public utilities generally, transport sector as a whole, both government and private. In 21 of 24 regression equations Mr Tilling found that the share of national product going to labour had declined in the 20 years from 1948-49 to 1969-70. These findings were statistically significant at the 95 per cent level. That is, the investigator can be 95 per cent sure that the equation he has calculated is a true indication of the movement in the series and is not the product of chance.
– Ask for your money back, Bill!
– I am obliged to the honourable gentleman for that interjection. I think that since the honourable member for Mackellar is so friendly with Sir Warwick Fairfax, Sir Warwick ought to demonstrate his friendship by refunding the whole of the cost of the advertisement - if, in fact, the honourable member ever paid for it. I continue. The 3 cases that indicated a positive trend in the wage share were equations using an inter-dependent base outlined in the last section 1(c) (i). I will explain to honourable members what that means if they are interested.
– I rise on a point of order, Mr Speaker. I am sure that the House is most entertained by the Minister but this clearly is a total abuse of question time. 1 ask the Minister, through the Chair, to make a statement on this matter at another time. I specifically ask the Minister whether he will provide the total text of that document which I happen personally to recall, although 1 do not recall making the same judgment as he has done.
-Order! The point of order is well taken with regard to the length of the answer. Time and time again I have made the appeal that questions and answers to them should be brief. Question time affords an opportunity for back bench members to get a fair go in the Parliament. I ask the Minister to be as brief as possible.
– In that case. Mr Speaker, I will not read the last page of the document.
– I rise to order, Mr Speaker. Can I ask that the Minister tabic the paper from which he is reading?
– That is the silliest thing you have ever asked. Of course you can ask me to table it. I was hoping someone would ask me to table it. I will be delighted to do so. However, I should like to have it incorporated in Hansard. I ask leave to incorporate it.
-Order! One request at a time. Will the Minister table the paper?
– I would prefer to ask leave to incorporate the whole paper in Hansard.
-Is leave granted?
– No, table the paper.
-Order! I ask the Minister to hand the paper to the Clerk.
– I want to read from it.
– Mr Speaker, I take a point of order. Is the Leader of the Opposition in order in asking that a paper be tabled while the Minister is quoting from it? The relevant standing order provides that a paper quoted from may be tabled. I submit, Mr Speaker, that if the Minister is required to table the paper while he is quoting from it he is deprived of the use of that paper during his reply. I think that would be contrary to the meaning of the standing order.
-Order! I think the request to table the paper was made on the assumption that the Minister had finished answering the question.
– I will table the paper. I hope that the Press comes down and asks to look at it, because it is worth seeing.
– Get copies made and distribute them to the Press. Put your signature on the document. You are the comedian.
-Order! The Minister will answer the rest of the question.
– The Leader of the Opposition has the same expression on his face now as he had in his photograph on the front page of the ‘Bulletin’. It seems as though he is sitting on the toilet. Out of 24 studies only three could produce the kind of results that the honourable member for Mackellar published. The other 21 support the Prime Minister’s assertion that the share going to labour has decreased. It so happens that it was those three which produced different results from the 21 which the previous Government chose to use in the national wage cases. I have much pleasure now in producing the remainder of the document for tabling.
– Mr Speaker, may I have the indulgence of the House to make a statement not exceeding 2 minutes?
– Order! I have not given the call to the honourable member. This is question time. If the honourable member has been misrepresented he can seek to make a personal explanation after question time.
– I ask a question of the Minister for Defence about his concepts of open government. Is it true that the naval officer - I understand a lieutenant-commander in the Navy Reserve - who is the editor of Navy News’ is to be reprimanded for views expressed by him in the last edition of ‘Navy News’ concerning the Labor Government’s defence policy? Has the Minister for Defence checked to see whether the Prime Minister is going to reprimand his, the Prime Minister’s, principal economic adviser, Dr Coombs, over some statements that Dr Coombs made at the weekend concerning the budgetary tactics of the Government? If no reprimand is to be issued to Dr Coombs and a reprimand is to be issued against the editor of ‘Navy News’, is it because the editor of ‘Navy News’ is too close to the truth or is it just because he is seen as a little man and a man over whom the Minister feels he can exercise his authority whereas Dr Coombs is seen to be somebody above the law?
– The last part of the honourable gentleman’s question will be dealt with by the Prime Minister. In reply to the part of the question relating to the editor of Navy News’, I want to say quite unequivocally that there is no suggestion that the editor is to be reprimanded. The last authority concerning Press statements or references to Press statements by members of the Armed Forces is contained in a directive that was issued by the honourable member for Wannon in 1970. I have not changed that directive, it has not been altered and it is still in force. It would appear that in some circumstances the directive has been contravened.
There is what is known as a management committee which is responsible for the direction of the paper referred to by the honourable gentleman. From my inquiries I understand that the committee has not met regularly. This is one of the matters that I want to discuss with the editor. This Govern ment has no intention of directing an editor of this or any other Defence paper to report merely the policy of the Government. At the same time I would not expect the editor of any such journal to use that journal as a means of pursuing his own policy lines. So there are a number of matters that one would want to discuss with the editor since the staff producing the paper is paid for largely by the Department of the Navy. It would be a matter of concern to this Government if the management committee has not met and if the paper is not under the control that was originally intended when the management committee was established. However, there is no suggestion that the editor is to be reprimanded in any way.
– My question is directed to the Minister for Supply. I refer to a report in the Adelaide ‘Advertiser’ last week concerning the scrapping of the former National Aeronautics and Space Administration tracking station at Island Lagoon near Woomera. Were investigations carried out by the Department of Supply to see whether the facility could be used for scientific research in Australia? If so, what was the result of those investigations? Has the Department been approached by Australian scientific bodies seeking to have the facility retained for research? If so, what was the reply by the Department of Supply to those approaches?
– The developments at Island Lagoon are probably well known and have been referred to in the newspaper article mentioned by the honourable gentleman. The decision about the use of the facility flows from the decision of the National Aeronautics and Space Administration, our American friends, to close down the Island Lagoon facility, or at least no longer to finance it, because of the decision it has taken to consolidate its enterprises in other parts of the world and Australia as part of a general economy drive, I understand. That leaves the facility in the situation now where it does not serve the purposes for which it was set up. A study has been undertaken and is continuing. The Americans have taken away most of the electronic equipment which they were entitled to do pursuant to the agreement. The fixtures, the big disc and that sort of thing, have been left there. The problem now is to find an alternative and proper use to which they can be put.
There has been consultation between the various Defence departments, the Department of Supply, the Postmaster-General’s Department, the Department of Science and the Department of Minerals and Energy, and some of the universities also have been consulted. Interest is being expressed in the facility and the possible uses to which it can be put. One of the difficulties, of course, is that is located in a very remote part of Australia, 14 miles south of the Woomera township. The universities have expressed interest, but the amount of work that they can offer the facility is of necessity rather limited. However, the studies and inquiries are proceeding. I should tell the honourable member and the House that it is not thought that the lack of development at the moment will have any significant effect on the township of Woomera. Some 60 or 70 families were thought to be involved but the township of Woomera has other functions and it has been designed specifically for fluctuations of this sort.
– I direct my question to the Minister for Defence and refer to the establishment of the Western Australian naval support facility HMAS Stirling at Cockburn Sound and the Minister’s statement on 22 August that certain works will be deferred for later decisions. Can the Minister now state what those decisions are? Does the Government intend to proceed with the project? If so, when? Or has the Government torpedoed the project port side?
– The answer to the last part of the honourable gentleman’s question is no. In my statement to this House about defence matters generally I referred to Cockburn Sound and indicated that the Government had decided that it would extend the period over which this facility would be completed. That decision still remains. The honourable gentleman raised a number of other matters relating to the naval facility in Western Australia. I am not able to give him a detailed reply at this stage. However, I will look at the question and reply as soon as possible.
– I ask the Minister for Labour: Is it a fact that the percentage of unemployment in Tasmania is still as high as 2.2 per cent which is twice as high as the much improved national average, and that the number out of work is high in Hobart as well as in country areas? Is it also a fact that the relatively small increase in the number of unfilled vacancies in Tasmania is not encouraging? Is the Minister as concerned as 1 am about the situation? Will he assure me that he will do all he can to help to correct this specifically Tasmanian problem? Would he agree that urgent assistance in Tasmania, such as a retraining scheme, is essential straight away?
– I know that the honourable gentleman is deeply concerned about the employment level in Tasmania. The honourable gentleman will be glad to know - and it will be some comfort to him - that the Deputy Prime Minister has very forcibly put the position of Tasmania to me as indeed have the honourable members for Wilmot, Franklin and Braddon. I expect to be meeting the Tasmanian members on the matter again later in the week .when I will discuss with them the problems which the honourable member has now raised. The Government is deeply concerned about the position in Tasmania. The honourable gentleman is correct in saying that the level of unemployment there is 2.2 per cent against 1.09 per cent and 1.1 per cent in Victoria.
– You have a good memory.
– Yes, I have. One needs a good memory. The employment position in Tasmania distresses the Government. I have proposals for a retraining program now before the Government which I hope will be listed for consideration very soon. The proposals will, of course, direct primary attention to areas in greatest need, and Tasmania is certainly that kind of State. I can tell the honourable gentleman that his concern and my concern are shared by the Prime Minister, the Deputy Prime Minister and the Cabinet. He can be certain that we will not ignore the problems of Tasmania.
– I ask the Deputy Prime Minister: Is he aware of the very serious concern by the Department of the Army as to the number of resignations now before the Military Board by senior officers with the rank of half-colonel and above? Will he make available to the Parliament the figures as to the number of resignations which have occurred since the last issue of the ‘Australian Government Gazette’ and those which are before the Board at the present time? What action does the Minister intend to take to stem the alarming number of applications for resignation by senior officers? Is this a further indication of a serious decline in the morale of the Australian Army because of the policies of this Government?
– It is true that the number of resignations of male officers in the Australian Regular Army has increased in the first 9 months of this year compared with the figures for the corresponding period during previous years. Most of the officers who have resigned were 43 years of age or more. They were mainly captains and majors. The changes made by the Government to the defence forces retirement benefits scheme were intended to provide retirement benefits to older officers which were equitable and which would allow a reasonable level of turnover in order to provide promotional opportunities for younger officers. At this time there is no significant increase in the number of officers tendering their resignations for reasons of discontent with Service life. The resignation of officers in the older and more senior categories is beneficial in many ways, as the honourable member would know. For instance, it does tend to produce more career prospects for the younger officers and thereby maintain a younger and fitter army for coping with emergencies. Since the Deputy Leader of the Opposition has raised this question I would be happy to table the document relating to the number of resignations.
– My question is directed to the Minister for Services and Property. Will he inform me of the purpose for which the Department transferred Commonwealth land adjacent to the Ashfield Boys High School recently to the New South Wales State Government? Was it done to provide additional recreational facilities for the Ashfield Boys High School or to enable the New South Wales Department of Main Roads to widen Liverpool Road? Is it not a fact that negotiations for the transfer were initiated as a result of repeated representation from the pupils, teachers and others interested in the welfare of the school children in this district?
– The matter raised by the honourable member for Evans ‘is important. I anticipated that it might be raised and I have some information on it which I will give to the honourable member. For some years past parents and teachers campaigned vigorously for the Army drill hall site at Ashfield to be made available to provide extra much-needed space for the Ashfield Boys High School. The honourable member for Evans will recall that following his urgent representations to me earlier this year I made arrangements for the earliest possible occupation of the property by the school. It was because of the urgent need for expansion of the school facilities and because of the persistent requests made by parents and teachers that the Australian Government vacated the property and arranged to transfer it to the New South Wales Department of Education. The Government’s decision to transfer the land was taken to provide additional educational facilities for the Ashfield Boys High School. It was not for the purpose of widening Liverpool Road.
I have had referred to me a letter expressing the deep concern of the 1500 pupils of the Ashfield Boys High School who have been told that the State Liberal Government proposes to use most of the site for road widening. The New South Wales Teachers Federation has written to me about the dismay caused by news of a Department of Main Roads proposal to take a substantial strip of land from this small site in order to widen Liverpool Road. The decision to transfer it to the State education authorities was made by the Australian Government in good faith on the understanding that it would be used for purposes of the school. The decision was taken in the light of strong representations made by the parents and teachers, and by the honourable member for Evans in his excellent representation of that electorate as well as in the belief that the State educaion authorities really wished to provide much; needed relief to the cramped school conditions. I find it most difficult to believe now that the State Government would use this land in any way which would frustrate these good intentions unless, of course, the Askin LiberalCountry Party Government is more concerned about expressways and the widening of roads than about improving school facilities in New South Wales.
– Is the Minister for the Capital Territory aware of recent reports that some servicemen who have let their houses whilst on transfer from Canberra are being required to discharge their Commissioner for Housing mortgages within a period of 28 days? Are those reports correct? Has there been a change of policy on this matter? If so, what is the policy and does it affect only servicemen or all Commonwealth public servants on transfer from Canberra?
– Several years ago the Department of Defence and the Department of the Interior agreed upon the terms upon which servicmen could leave houses in Canberra when posted elsewhere. The terms were that for 2 years they were permitted to own their houses financed with Commissioner for Housing loans, but after 2 years they were allowed to continue to own them with Commissioner for Housing loans provided they gave definite evidence of an intention to return to live in Canberra. The only occasion so far on which people have been asked to renegotiate their loans are those where they have not given satisfactory evidence that they propose to live in Canberra. The attitude I will pursue in relation to this matter is, of course, that we are here to change situations of hardship and not to administer them. I will discuss the matter with the Minister for Defence to see that servicemen are not disadvantaged. But we are certainly not going to permit a system whereby people are able to take a double advantage of any particular benefits that flow in any situation.
– My question is addressed to the Minister for Immigration. Has the Minister taken any action on the recommendation of the Victorian Migrant Task Force that steps should be taken to warn newly arrived migrants of dangers associated with the use and abuse of hire purchase? If not, when will action be taken? If something has been done, will the Minister report on it without delay?
– Concern was expressed in the reports of the Task Forces about migrants being exploited because they are not totally aware of how best to use hire purchase. 1 should say that reports have been made to me from time to time about peddling contracts that some new arrivals were not able to meet. I have arranged, following the work and recommendations of the Task Forces, for the preparation of a guide to hire purchase, which has been already published in 18 languages, lt will be followed by further guidance on pyramid selling and on a number of other social problems and matters which it is pretty obvious need to be clearly spelt out to new arrivals if we are to avoid their being placed in the position of being exploited. I can assure the honourable member that this first effort on hire purchase advice in 18 languages will be followed up in all the other areas in just as many languages so long and so far as the need exists.
– My question is addressed to the Minister representing the Minister for Primary Industry. I ask: Is the Minister yet in a position to answer my question of 13 September last concerning the suspension of wheat quotas in Western Australia this year in order that all wheat for marketing in Western Australia may be delivered to the Australian Wheat Board and a first advance payment received? Is the Minister aware that, whether or not Western Australia as a State exceeds the State delivery quota, there will be many individual growers who will produce quantities of wheat vastly in excess of their individual quotas? Finally, is the Minister yet in a position to answer my question as to the actual cost of the quota delivery plan, and how many people are presently engaged in administering this abortive and redundant plan? Is its cost being met from grower’s proceeds as part of the administration costs of the Australian Wheat Board and is this the major reason why these costs have now increased by approximately Sim a year since the inception of the quota delivery plan?
– I’ do recall the question asked previously by the honourable member. He asked what would be the fate of wheat grown in Western Australia if the State produced above its State quota. He asked: Would it be taken in, and would the first advance bc paid on it? He was very concerned about those aspects. He also, I recall, raised the matter whether the quota system would continue in this year. I did refer the question to the
Minister for Primary Industry. Unfortunately, as far as the quotas for this current season are concerned, it is a matter for the various State Governments, lt has not been possible, with the authority of the Minister for Primary Industry or the Australian Government, to suspend those quotas. But 1 agree entirely with the honourable member that to suggest that there should be any form of rationing in this year of shortage would be absurd. We have said that.
In relation to the position in Western Australia, if Western Australia exceeds its State quota, all wheat certainly will be taken in by the Australian Wheat Board because the Australian Government has provided the funds and the mechanism to enable the Board to pay the first advance on a special pool of 20 million bushels. This special pool of 20 million bushels is an Australia-wide pool and it operates for this year. I might say in passing that this is something about which I have been most enthusiastic because it leads to a position where we can see the beginning of national storages of wheat and some national earmarking of grain for special purposes. This year it is being done. The special pool will enable any State with excess-quota wheat to deliver it and the growers to be paid for it. The Minister for Primary Industry assures me that the special pooling arrangements will be adequate to enable all wheat to be accepted and the first advance to be paid on all deliveries to licensed receivers in Western Australia. I think that was the matter about which the honourable member was concerned. The Government of Western Australia, I understand, will issue special quotas if necessary.
The honourable member raised a further matter in his question. I have not had an opportunity to discuss that matter with the Minister for Primary Industry. The honourable member indicated that there had been an additional cost of perhaps Sim because of the introduction of the Australia-wide rationing or quota system. This is a very important question. It is a very serious one. What is more, I think it should be probed and the exact facts ascertained. I give this clear undertaking: I will confer again with the Minister for Primary Industry to see exactly what the cost of the quota system is. I undertake to give the honourable member and the House the full facts of a system which, incidentally, was introduced in previous years with my entire opposition at that time - and now.
– Has the attention of the Minister for Transport been drawn to statements by the Victorian Minister for Transport that in offering the Victorian Government $9. 6m for upgrading public transport in that State the Australian Government asked the Victorian Government for representation on transport instrumentalities such as the Railways Board, the Transport Regulation Board and the Tramways Board? Is there any truth in these allegations? What is his reaction to the suggestion by the Victorian Leader of the Opposition, Mr Holding, that co-operation between the 2 Governments would be improved by Australian Government representation on the Melbourne and Metropolitan Transportation Committee?
– In my opinion, the Victorian Minister for Transport has completely misrepresented the position. In February, when I, on behalf of the Government, made the offer to meet two-thirds of the cost of upgrading urban public transport, the then Minister for Transport in Victoria, Mr Wilcox, seemed to be quite enthusiastic about the proposal and raised no opposition whatsoever to the proposition that we would want a say in and would want to know what was happening with respect to public transport in Victoria. I was surprised and disappointed to receive recently correspondence from Mr Meagher, on behalf of the Victorian Government, stating that it was not prepared to agree to our proposal. I now refer to the claim that we are trying to dominate the affairs of the Victorian transport system and that we were going to veto the Victorian Government decisions.
This is not true. All we want to know is what is happening. We want to know how our money is being spent After all, we are responsible for collecting the money and our offer of $9. 66m was what the Victorian Government could spend this year. As far as a final discussion on this matter is concerned, there was to have been a meeting of the Australian Transport Advisory Council in Sydney last Friday week. But due to the trouble at the airports the Council was unable to meet. There will be a meeting at an early date. In fact, we are trying to arrange a meeting for 26 October. Although one Minister has indicated that he cannot attend the meeting on that date we hope to be able to iron out this matter at the meeting. But as the honourable member suggests, we will be quite happy to accept representation on the Melbourne and Metropolitan Transportation Committee because that is where the planning of transport in Victoria is taking place. That is what we are interested in, not in vetoing the Victorian Government financial affairs.
– I draw the attention of the Minister for Health to the Budget proposal to phase out the issue of free milk to primary school children. Can the Minister inform the House of the health and medical reasons behind the decision, the views of State Health Ministers on the proposal from a health and medical point of view, what criteria will be used for a continuation of the scheme in some areas and whether the decision was in any way prompted by waste of milk involved in the scheme?
– There are 3 aspects of the question that has been asked by the honourable member for Macarthur. The first concerns the health aspects associated with the phasing out of the provision of milk to school children. The sort of evidence that was brought forward at a recent conference that I had with State Ministers on this question has been generally available for some time. In fact, New Zealand discontinued its scheme in 1967 and Britain discontinued its scheme for all children over the age of 7 years in 1970. A Cabinet welfare committee report came before my predecessors in 1970 suggesting that it be phased out in Australia. There were various reasons, mainly political, advanced by my advisers as to why it was not done then.
– That is not fair. It was rejected.
– There were various reasons given.
– Who can make a political judgment? What public servant can say?
– In deference to the sensitivities of the Leader of the Australian Country Party I will withdraw the point that I made’ about political decisions. 1 will say that the reasons given were mainly concerning the dairy industry.
The nutritional position is roughly this: When the scheme came in over 20 years ago there was some evidence that there were areas in Australia where children were deprived of protein and calcium. Evidence has been sought to confirm whether this is still the case and all the evidence indicates that this is not so. It is true that there are odd families in financial crisis - largely families that have been left in this crisis because of the failure of Commonwealth Governments in the past to cope with this crisis. They have left it to the States. In those families there is positive starvation. It is not a question of calcium and protein deficiency; it is a question of those families not having enough money to buy food. The Coombs Task Force and the Cabinet have agreed that it is far better to save this Si 2m - the cost has grown in 20 years from $3m to $12m - and make some provision for families in need than to try to force milk down the throats of those who do not want it. Of course, the schools that have have r st benefited by this have been those schools that have been able to put in refrigeration and make the milk attractive to the children; they have a good percentage of consumption. But there are some poor schools, and in some States it is left entirely to the parent organisations to provide refrigeration. Some of them cannot do this, and they would receive only 50 per cent of the funding for this under the Commonwealth scheme. So, a lot of milk has been wasted in areas where the best case could be made for continuing to provide it. The State Health Ministers have been told that we will consider the needs of special schools and classes on their merits and they have agreed to report to me along these lines by the end of this month.
-Order! Is leave granted?
– Leave is not granted.
Suspension of Standing Orders
– In that case I move:
That so much of the Standing Orders be suspended as would preclude me from making a statement for a time not exceeding 5 minutes on the matters raised by the Minister for Labour.
I am no going to detain the House for long in this regard. Without discussing the substance of this matter, I want to put the point that in all fairness a member in these circumstances should be allowed by the House to reply. During question time today a question was asked of the Minister by a member of his own side. I would not accuse the Minister of having prearranged that question -
– I raise a point of order, Mr Speaker.
– Order! I know what the point of order is all about. The honourable member for Mackellar now is debating the subject matter. He is entitled only to make a case for the suspension of standing orders; he is not permitted to debate the substance of the question.
– Yes, Sir, and I propose to do exactly that.
– Mr Speaker, on a point of order, I think that in making his remarks, irrespective of what they are, the honourable member for Mackellar is not entitled to refer to a member of this House as a member of the Prime Minister’s staff, as he did of the honourable member for Casey. The honourable member for Mackellar referred to a question that was asked in this House by a member of the Prime Minister’s staff, and that is not in order.
– Order! As all honourable members will be aware, they must refer to members of the House by their electorates.
– A Government supporter raised a question. I did not say that the Minister had arranged this; all I can say is that he seemed to be remarkably well prepared and expecting it. No doubt it was intelligent anticipation. I think it is only fair that in view of the innuendoes and statements which the Minister made, some of which 1 believe to be untrue and which I think I can show to be untrue, the House should give me an opportunity now to reply. It is not enough to say this matter can be allowed to wait and that we can reply in the adjournment debate or at some other time. The statements have been made by the Minister under the circumstances which I have named and I simply appeal to the sense of fair play of the Government, if the Government has any, to allow me to answer now and in a timely fashion the matters which members opposite themselves raised. I am entitled to do this; when a member is named - and I was named - when he is the subject of an attack and innuendo as I was, surely the House has enough sense of fair play to allow him to reply.
I have not asked for a long time in which to reply. 1 have asked for 5 minutes which, I would imagine, is less than the Minister for Labour used in making his statement. I do not want to trespass on the time of the House. I do nothing else at this present moment than simply appeal to the House’s sense of fair play and to the Government’s respect for the procedures and justice in this House, if it has any respect for these things, to allow the House to suspend Standing Orders so that I might have just 5 minutes - I ask no more - to reply to the aspersions cast by the Minister and to expose the falsity of some of the things he said.
– Is the motion seconded?
– I second the motion.
– Are you speaking now or do you reserve your right to speak?
– I reserve my right to speak.
Motion (by Mr Daly) agreed to:
That the question be now put.
That the motion (Mr Wentworth’s) be agreed to.
The House divided. (Mr Speaker - Hon. J. F. Cope)
Question so resolved in the negative.
– I wish to make a personal explanation.
– Does the honourable member claim to have been misrepresented?
– Yes. I claim to have been misrepresented in relation to actions taken last year in my capacity as Minister for the Army. Reference was made today to the transfer of a drill hall from Ashfield. I might explain that this action was the subject of very profound investigation and a decision taken between the then Minister for the Interior, and more particularly the then Minister for the Navy, and myself. It culminated in a very large scale discussion and conference at the Ashfield High School where I was able to announce a decision taken to transfer a drill hall from Ashfield High School area without delay. I think that the whole situation has been misrepresented here today by the Minister for Services and Property (Mr Daly) in the particularly distorted account he gave of the occurence.
– I wish to make a personal explanation.
-Does the Minister claim to have been misrepresented?
– Yes. The situation with reference to the question asked of me and about which the honourable member for Kennedy (Mr Katter) has now made a personal explanation, is this: The drill hall was transferred officially in the time after this Government came to office. But the question at issue, as the honourable member for Kennedy knows full well, is that it was transferred for the purpose of providing additional facilities for the Ashfield High School. The Liberal PartyCountry Party Government in New South Wales had used it for road widening. The point I was making, amongst others, was that it was not given to widen roads; the drill hall was provided in order to increase the facilities of the school. Consequently, it was transferred in good faith by this Government, and no doubt with the same intention as that of the honourable member for Kennedy. In my reply I was just placing on record my complete dissatisfaction with the attitude taken by the New South Wales State Government and its misuse of the land which was transferred with the approval of the honourable member for Kennedy and myself, for the purposes mentioned earlier.
– I wish to make a personal explanation.
– Does the honourable member claim to have been misrepresented?
– Yes. During question time the honourable member for Moreton (Mr Killen) made a friendly interjection which was, of course, of a sarcastic nature, to say that I had surrendered in regard to the matter of the statistics then before the House. I am sure that my friend the honourable member for Moreton said this to indicate exactly the opposite. The Minister for Labour (Mr Cameron) who was at the table, chose to take up the interjection at its face value. I make it quite clear that on this matter I have not surrendered and further, I have only just started to fight.
– Pursuant to section 24 of the National Capital Development Commission Act 1957-1960, I present the sixteenth annual report of the National Capital Development Commission for the year ended 30 June 1973 together with financial statements and the Auditor-General’s report on those statements.
– For the information of honourable members I present the final report by the Immigration Advisory Council on its inquiry into the departure of settlers from Australia. The progress report was presented to the House on 14 March 1973.
– For the information of honourable members I present a report by the Bureau of Transport Economics on tenders to be let by the Commonwealth Railways for the resleepering of the Trans-Australian Railway.
– For the information of honourable members I present the record of decisions of the fifteenth annual conference of the Tourist Ministers Council held at Norfolk Island on 9 and 10 July 1973.
– I have received a letter from the honourable member for Barker (Dr Forbes) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the Government to provide more adequately for the defence of the Australian nation.
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) - 1
– The Opposition brings forward this matter of public importance because it is gravely and genuinely disturbed by the rapidity of the decline in Australia’s defence capability since this Government took office. It has been said by some that there are no votes in defence these days. The Australian Labor Party obviously thinks so. But that does not detract from the overriding responsibility of this Parliament to ensure that the nation is adequately defended. That there have been substantial cuts in our defence capability, both in manpower and in equipment in being and proposed to be acquired, is not in question. We were told as much by the Minister for Defence (Mr Barnard) in his statement on 22 August. He has admitted, in answer to a question in this House, that he deliberately dishonoured an election undertaking to keep defence spending above 3.3 per cent of the gross national product. He has told us that the proportion of the defence vote to be spent on new equipment has fallen to the lowest level in history.
There are many things which he has not told us. They include: The consequences of the decision to slash expenditure which are dribbling out bit by bit as servicemen, stung by a sense of outrage, reveal the facts; the disbanding of units; the reduction in flying and sailing hours which are so essential to the high standards of the Australian Services; the voluntary resignation of highly trained people both in defence industries and the Services - there is a report only this morning of the imminent retirement, on the grounds of dissatisfaction and concern over morale, by no less a person than a major-general - and the compulsory retirement of valuable people to meet manpower ceilings, despite the Minister’s assurances that this would not happen. Time will not allow me to detail the whole dreary catalogue, but what is certain is that the whole sorry business has had a catastrophic effect on the morale of the Services.
Honourable members do not have to take my word for it. When senior serving officers speak out so bitterly, as a number have done, something is wrong. When a journalist as balanced, knowledgeable and experienced as. Denis Warner feels it necessary to write the articles which he did, and when the Minister for Defence feels it necessary to traduce Mr Warner under parliamentary privilege, something is wrong. When such a committed ALP supporter and apologist as Major Peter Young says that if morale in the Services has not reached rock bottom it is only 2 inches from it, and when he describes the Governments actions as ‘the worst body blow ever dealt to Australia’s defences’, something is gravely wrong.
Morale is that indefinable quality which has made the Australian Services, although small by comparison with the forces of other countries, such formidable opponents. That is why it is so important. The Minister does not even begin to understand what it is about. Whenever he is tackled about it, he bleats in an injured way about how much he has done for the material welfare of the servicemen - most of it, I might add in passing, initiated by the Liberal-Country Party Government. He believes that morale can be bought with pay and conditions of service. He has not even begun to understand that although these things are important, without a clearly defined sense of purpose, without a conviction that the Government believes that the Services have a meaningful role to play and without a readiness on the Government’s part to provide money for the equipment and training necessary to do this job, there will be no morale.
What is the Minister’s justificaton for all this damage he has done to our defence capability? He, masterful man that he is, commissioned a strategic appreciation looking 15 years ahead. This concluded - surprise, surprise - ‘that no significant requirement is likely to arise for the operational commitment of our forces’ during the period concerned. All this damage that the Minister has done - the reduction of the Army to what someone has described, rightly I believe, as a ‘corporal’s guard* and so on - has been done in the name of this bald assertion. There is no evidence, no supporting documentation. I have seen enough of defence appreciations to know that they can be subject to widely differing interpretations. In the absence of specific evidence I must conclude that the Minister has put an interpretation on the defence appreciation to suit the ideological proclivities of himself and his left wing colleagues.
What I am asserting is that I do not believe him, and I do not believe the Australian people believe him when he says these things. I do not believe that we have suddenly drifted into a safer and more tranquil world which justifies the Government’s drawing the conclusion that threats or situations will not arise in the foreseeable future which will require Australia to have a significant defence capability. To believe this, as so many people have pointed out, would be to defy all the lessons of history. I shall quote to the
House one example of what I mean. A revered Labor Prime Minister, John Curtin, when Leader of the Opposition, on 6 November 1938 in this House said:
Defence expenditure must depend entirely on the conditions which prevail in the world from time to time. Obviously that must be the position. I say that any increase of defence expenditure after the Munich pact as far as Australia is concerned appears to me to be an entirely unjustifiable and hysterical piece of panic propaganda.
Mir Edwards - What year was that?
– -That was 1938. In the postwar period there was no warning very far ahead of our commitment in Korea, of our commitment to the Malaysian insurgency, confrontation or the war in Vietnam. As I say, to accept the Minister’s argument defies the lessons of history. To do so also, if I may say so, is to set our judgment apart from all our near neighbours and significant allies. I have just visited most of these countries. None of them shares the Minister’s sanguine view about the future security of the South East Asian region. There is widespread suspicion of the communist powers, both Russia and China, and deep concern at the prospect of withdrawal of United States influence. There is no doubt in their minds - and I spoke to the same persons to whom the Minister has spoken in those countries - based on previous and current experience that Russia will move into any vacuum created by a Western withdrawal, and that if this happened China would be bound to follow. Indeed, there is no doubt that the biggest single external threat to the region is the possible projection of Sino-Soviet antagonism into the region.
There also is no doubt that Australia’s reputation, built up over many years, as a reliable but unobtrusive partner and friend in the region, has been almost totally destroyed by the actions and attitudes of this Government. The countries in the region believe that this Government is isolationist and unwilling to play a role as a partner in preserving the security of the region. I found when I was visiting those countries that in every one of them the defence cuts by this Government have been carefully noted and have received wide publicity. They have been universally interpreted as further evidence - if it were needed - that Australia has opted . out of the region. In my judgment and in the judgment of my Party, this interpretation is correct.
Does anyone really believe that the Minister’s belief that we can base our defence planning on a trouble free period for the years ahead stands up when we contemplate the current Arab-Israeli conflict - a conflict in which great power rivalries are deeply involved? If great power rivalries can take place in the Middle East and involve warfare of the severity which is now taking place, why is it impossible to contemplate them spilling over into South East Asia, the Pacific or the Indian Ocean? The whole concept on which the Government’s so-called defence planning is based defies the most elementary tenets of common sense. Finally, when will the Minister match his words with deeds, his admirable sentiments with actions? Let me quote some of them. He said:
I wish to stress … the extent to which Australia nowadays and in the future must accept the primary and independent responsibility for safeguarding our security and strategic interests.
Great stuff. He also said:
We must maintain a defence capability that accords with our foreign policy.
Admirable stuff. He further said:
The modern situation requires Australia to be more self-reliant than in the past . . .
I remind the House that that is the very objective which we as a government embraced in our later years in office, and we announced our plans to achieve it. In essence, what these words which the Minister has used mean is that we should develop a capability which makes us less dependent on allies in a lower level situation. Yet almost every defence cut the Government has made makes us less, not more, self reliant.
The cuts include the virtual scrapping of the DDLs; the phasing out of HMAS Sydney’ with nothing to take its place; the deferring of a decision on a replacement for the Neptunes; the go-slow policy at Cockburn Sound; no decision on the replacement of the Centurion tanks, the failure to make a decision on the aircraft industry; the dismantling of large sections of defence industry in general; and the scrapping of a Mirage squadron. The list is practically endless, but all the items I have mentioned have one thing in common; they achieve exactly the opposite to the brave words proclaimed by the Minister. There is not a shadow of a doubt that Labor cannot be trusted with the defence of this country.
– The first comment that ‘I make - and I may have the opportunity to come back to this later - is that when the honourable member for Barker (Dr Forbes) was talking about procurement one would have thought that we on this side of the House had been in Government for 23 years and honourable members opposite had been in Opposition and also that the honourable member was indicating that in the 10 months we have been in Government we should have been able to correct all the deficiencies of the previous Government over 23 years. The list that the honourable member read out will be referred to by other speakers. It seems to me that the most creative thing the Opposition is doing is delaying the business of this House by taking up its time with frivolous debates of this sort. Last week we had the charade of a motion directed against one of my colleagues. A further motion was to be moved against that Minister but the Opposition suffered so badly at his hands that it abandoned that motion and threatened a censure motion against the Government as a whole. Honourable members opposite lost their nerve on that one, but apparently they believe that they are obliged to do something to waste our time and to delay the passage of important legislation.
The honourable member for Barker has suddenly discovered with a sense of urgency that Australia’s defence is such as to warrant the debate which we are now engaged upon. I made a statement to this House on the defence of the Australian nation on 22 August. Honourable members opposite had an opportunity to debate this matter then. That was 55 days ago. It has taken the honourable member for Barker and his Party 55 days to find that Australia is in such danger as to require this House to set aside its really important business, presumably because this matter is regarded by the Opposition as one of some urgency. Fifty-five days ago - how urgent can you get? The motion itself bears testimony to the fact that it was conceived in haste. It was not prepared in the leisurely manner that such a time span should have allowed.
The honourable member talked about the failure of the Government to provide more adequately for the defence of the Australian nation. More adequately than what? More adequately than we are now providing? In that case it is a tautology. It is a perfect way to waste time. Does it mean more adequately than was the case under the previous Government? If that is the intention and if not providing more adequately than the previous Government did is failure, then obviously the previous Government failed. Is that what the honourable member for Barker is saying? If he is ever to have a hand in the planning of Australia’s defence he will need to speak in terms of concepts which have some real meaning. The honourable member talked about the defence of the Australian nation. It is odd that the Liberal and Country Parties have the temerity to raise the question of the adequacy of this Government’s defence of the Australian nation. They know that its policy is to base the structure of our forces on the requirements of the defence of this continent and that the Government expects from within such forces to have a modest but adequate capability for the unlikely contingency of such overseas deployments as would be in the interests of this nation. The task of organising our defence force structure on the basis of the requirements of the defence of Australia itself is very difficult. The reason why it is so difficult is that in all the years that they were in office the Liberal and Country Parties never studied the requirements for the defence of Australia. That is almost unbelievable, but I regret to say it is true.
Again one must ask: Defence of the nation against what? It seems that our opponents lament that we are, as the Chairman of the Chiefs of Staff Committee said, one of the more secure nations in the world. The Opposition longs for the days when elections could be won on the phantoms of the ‘Red Threat’ and the ‘Yellow Peril’. Those days are gone and honourable members opposite know it. They cannot pretend that they do not know it because I have made available to the honourable member for Barker access to all relevant intelligence information. That was never done by the previous Government for the Opposition. No member of the former Opposition was given the opportunity that the honourable member for Barker and the Leader of the Opposition (Mr Snedden) have been given for access to matters that concern the defence of this country. The honourable member for Barker has the temerity to say now that the Government should be censured because of its lack of appreciation of these matters.
Using the information available to the Joint Intelligence Organisation, the Defence Committee at my request prepared a strategic assessment. The Defence Committee consists of the Secretary of the Defence Department, the Secretary of the Prime Minister’s Department, the Secretary of the Treasury, the Secretary of the Department of Foreign Affairs, the Chairman of the Chiefs of Staff, and the Chiefs of Staff of the Army, Navy . and Air Force. Their assessment is the basis of our defence planning. Nobody would suggest that it should be otherwise.
We did not say, as the Opposition alleges, that there is certainty of peace for the next IS years. That is an obvious oversimplification. What I said in my statement, made on 22 August, was that at the present time it can be said that Australia’s situation is favourable and that the various important factors and trends in the international situation support Australia’s security into the longer term. We and our advisers at the present time do not foresee any deterioration in our strategic environment that would involve consideration of the commitment of our forces to military operations to protect Australia’s security or strategic interests. I pointed out that this view of Australia’s long term security was the view accepted by the previous Government in recent years.
In the 1969 elections the right honourable member for Higgins (Mr Gorton) asserted that there was no threat to Australia for 10 years. Again he was quoted in ‘The Sydney Morning Herald’ of 21 June 1971 as saying:
I do not believe that there is any prospect of an attack on the mainland of Australia within the next decade. Nor, subject to completely unforeseen developments, is any attack on New Guinea at all likely within that time-scale. And should that change, we would have ample advance warning.
It was not a member of the present Government who made that statement. It was the then Prime Minister of Australia, the right honourable member for Higgins. He said that there would be no threat to this country for a period of 10 years. How much does the honourable member for Barker know about these things? No wonder he feels sore about defence. He was Minister for the Army for a very short time but was ignominiously removed from the position.
The ‘Australian Defence Review’ published by the Defence Department in March 1972 said this:
Contingencies under which a major combat burden would occur seem at present to be remote and the full capabilities that would be required for this extreme contingency are not required to be in existence today.
Honourable members are aware that the strategic situation has improved since those statements made by the previous Government. The process of detente between the great powers has proceeded further and made the prospect of Australia’s involvement in combat even more remote. Nevertheless, I acknowledged in my statment in August that there are bound to be uncertainties about the future particularly about the latter part of such a long period as the 15 years covered by the strategic assessment.
It is a complete misrepresentation of our position or our attitude to suggest that we foresee a period of peace and therefore are content to allow our forces to run down. The strategic situation will be kept under constant monitoring and will be regularly reviewed. Strategic policy will be adopted to take account of any changes that develop in our strategic situation. The defence management system is designed to give effect to those policies in terms of a physical program sufficiently flexible to enable our force size and force structure to be changed well within the warning time of the development of any threat. So the forces must at any time be capable of expansion to meet any threat to our security within the time that it would take for such a threat to develop. Our judgement of the time it would take for threats to develop is not based merely on our evaluation of the intentions of other countries. It is based on a hard nosed look at their present military capability, their resources and their state of technology.
The Oppositon are deluding themselves and attempting to delude the Australian people if they suggest that we do not already have very capable forces in being in relation to our own part of the world. I am not going to waste the time of the House recounting again all the details of that capability contained in my Defence statement. However, it is patently obvious that one must go many thousands of miles from this continent to find and air force in any way comparable to the Royal Australian Air Force. It is equipped with F-111s which, though far too expensive, provide a very potent strike force. Our Mirage fighters are far better than any fighters in South East Asia except perhaps those operated by the United States. The Navy is equipped with missile-armed destroyers as well as other destroyers whose primary capability is antisubmarine warfare, and most of which arc about to be refitted and modernised. The Government has announced its intention to acquire more destroyers for the Royal Australian Navy though we declined to take part in the so-called DDL program, which is ridiculously expensive and unduly fraught with technological risk. The Navy has 4 submarines with 2 more under construction. Submarines of course require any would-be opponent to deploy very substantial naval forces indeed. The Royal Australian Navy is also equipped with Skyhawk ground-attack aircraft, which are still very effective. For the first time in peace-time Australia has a regular Army organised as a division - an all-volunteer Army. It is made up of 3 task forces of 2 battalions each manned to an operational training strength. I have ordered a major inquiry into Citizen Military Forces. Again that is something that had not been done at all by our predecessors. The interim report of that committee was delivered to my office this morning.
These are powerful forces for this region. They will continue to be developed by this Government so that they will continue to be a perfectly adequate basis for such expansion as any changes from strategic situation may demand. December 2nd of 1972 was a date on which the Australian people decided it was time to review our defence policies. I found since taking office that it is time to clear away the debris of a decade of inefficiency. As I have said before, we are not prepared to tolerate a situation in which production of ammunition continues to increase our stocks when we already have 25 years supply of some items. We are not prepared to tolerate a wasteful teeth-to-tail ratio in our Army. We are increasing the strength of the field force by 2,000 and reducing the strength of the support elements by the same amount. We have also reduced the number of civilians employed in defence support tasks because these numbers had grown at a ridiculous rate over the last 10 years. The extent to which resources had been wasted by the previous Government can best be illustrated by the continued existence until May 1973 of the post and telegraph censorship organisation,
This organisation had been maintained since the 1950s to keep alive by training a number of civilians on a part-time basis the techniques involved in wartime censorship of information passed overseas by postal and telecommunication means. There were 150 members of this organisation training for 120 hours a year at a cost of about $50,000 per year. As soon as I learnt of the existence of this organisation I disbanded it. I believe that any responsible government and any responsible Minister for Defence would have taken the same attitude.
In summary, our forces provide a capable force in being and a perfectly adequate basis for expansion. Within the context of our region, the force structure will be developed as the strategic situation changes and as military technology changes. Our forces are manned by volunteers - professionals - whose conditions of service have never been better. The military skills of our servicemen will be maintained and developed by opportunities of exercising with other countries on a larger scale than ever before in Australia’s peacetime history. No Australian government and certainly no Minister for Defence has been responsible since Federation in this country for providing so many opportunities in terms of professional service, and this has been done in the brief space of 10 months.
– Order! The Minister’s time has expired.
– Mr Deputy Speaker, I wish to make a personal explanation.
-Does the right honourable member claim to have been misrepresented?
– Yes. I claim to have been misrepresented by the Minister for Defence (Mr Barnard), who has just resumed his seat and who stated to the House that I had said there was no threat to Australia for 10 years, with the implication that I accepted that and therefore thought there was not any need to order new equipment. Mr Deputy Speaker, this is a travesty of what in fact I said to this House and in public. In fact I said that the advice given to the Government was that there was no foreseeable threat for some 10 years ahead but. that this was no excuse for not ordering new equipment for the Army, Navy and Air Force because the lead time required - the time between order and delivery - was 6, 7, 8 or more years and that therefore we must not waste the time available to us. This is an entirely different impression from the one which was sought to be given by the Minister for Defence. It is because he is now wasting this time and putting our country in jeopardy that this motion has been moved.
– I think that over the last 10 months all of us have become more and more concerned about the degree to which there has been in Australia a marked run down in our defence capacity. This is something which is perhaps hard to identify in short form other than by an examination of the equipment availability, the morale of the personnel and the numbers of personnel in the forces. However, it is important that this House be given an opportunity to consider just what this Minister for Defence (Mr Barnard) has done for the defence of this country. He has claimed that this is a frivolous motion and that we are depriving this Parliament of an opportunity to debate adequately matters of importance. Is he suggesting that defence is not a matter of importance? This I believe marks one of the tragedies of this man’s appointment to this portfolio. Throughout his administration he has not just accepted that in circumstances it is necessary to utilise to the maximum degree financial resources and to allocate those financial resources wisely, and that therefore, perhaps, there is some reason to look at the level of the re-equipment program for the armed services and to contain it in relation to genuinely expressed and overtly explained financial purposes. On the other hand the Minister has said that there is a meaningful reason for us to run down our defence capacity because there is no foreseeable threat in the next 15 years. But I wish to goodness that he would make up his mind about just what he does mean. He told us this morning that he has over the last 10 months looked at the debris of a decade of inefficiency of administration by the preceding Government. Yet as recently as 22 August 1973 he commended in very strong words the action taken by the preceding administration. He stated:
But the favourable strategic prospect allows us an opportunity to review and rationalise, to promote more efficient and economical defence capabilities. After the more or less continuous defence expansion of the last 10 years, it is a time for taking stock, for pruning back activities whose original purpose has changed and for eliminating redundancies that have crept into our force structure. lt is quite obvious that this man does not really know where he is going in the administration of Australia’s defence forces. I believe that he has set into his own particular responsibility a desire to run down our defence capacity in a way which does not coincide with the expression of foreign policy that his Prime Minister (Mr Whitlam) is asserting. That is one of the tragedies of the administration of the Defence portfolio. The Prime Minister is asserting Australia as a middle ranking, thrusting power. He has advocated to this House the degree to which, through resource diplomacy, it is necessary for us to assert ourselves in the international arena. Yet in the alienation of our relations with the United States, in the marked withdrawal from Singapore and Malaysia, in the withdrawal from our ANZUK commitments and in the presentation of a strategic assessment that comes down as there being no defence threat for 15 years, the Minister for Defence is denying Australia the capacity to meet the foreign policy stance which the Prime Minister is asserting. On the economic basis we find that there will be an even greater run down than the people were led to believe prior to the election. My colleague, the honourable member for Barker (Dr Forbes), already has referred to the 3.5 per cent promised by the Australian Labor Party in its policy speech as the percentage of gross national product that would be allocated to defence expenditure by its regime yet here in its first Budget allocation we have a 2.6 per cent expenditure - a marked reduction on the 3.5 per cent promised. It is interesting to note the expenditure of a number of other countries with a low defence expenditure. Ethiopia expends 1.4 per cent, Colombia 1.2 per cent and Tunisia 1.5 per cent of their gross national product on defence. This is the sort of arena into which the Minister for Defence seeks to put Australia in terms of the defence financial allocation.
Another real problem that must be recognised within the administration of the Defence portfolio is the rampant inflation that this Government is inciting. This means that although there has been a reduction in actual allocation of percentage funds for the defence forces, the amount to be gained from the expenditure of the money allocated is likely to be further reduced because of the inflationary spiral which the Government is inciting by the level of government expenditure in other domestic areas. So in the field of finan cial allocation the defence forces are to be seriously threatened. But that is not the core of our concern. Our concern lies in 3 areas - in the equipment availability for the armed services, in the manpower components of the armed Services and in the resultant impact that there is on the morale of those in the Services.
For a few moments I advert to the position with regard to equipment. The right honourable member for Higgins (Mr Gorton), in making a personal explanation a few moments ago, adverted to the program of preceding administrations, stating the necessity for taking into account the extraordinarily long lead times needed in equipping adequately a highly technical defence corps which is necessary in terms of the sort of military engagement to which Australia might be committed in the future. In respect of the Navy the Government has already taken a series of significant decisions which materially reduce not only the present capacity of the Navy but also are likely to mean that our Navy will be unable to fulfil its allocated task if a defence threat were to emerge not tomorrow but in five or even ten years time. The DDL program has been cancelled. The Sydney’ has been withdrawn from service without any replacement being envisaged and. indeed, without having made adequate alternative provision for the withdrawal of the forces from Singapore or for the ferrying of helicopters that would have been brought by that vessel from the United States either later this year or early next year. In terms of the naval capacity to build vessels in a short period or even to repair them, the dockyard activity itself is already seriously affected. I understand that during the last 8 months there has been something like a 60 per cent increase in industrial disputes affecting the dockyards that are used by the Australian Navy, so there is not only a reduction in the equipment that is being ordered by the Government but also a lack of ability to repair the equipment that is currently available. Nothing is being done to rectify that position.
Regarding the Army, the sort of defence effort that is considered necessary has seen the equipment available in terms of defence and army personnel, carriers and helicopters all denied from the viewpoint of long term planning. There has been a cut back in the number of helicopters provided for the Army. There has been no forward provision for the re-equipment of the Army in order to meet a task it may have to meet at some future time. With respect to the Air Force there has been a cannibalising of the Mirage squadrons which has seen the number of serviceable Mirage aircraft cut down since the Labor Party assumed office from 99 to, 1 understand, about 87 aircraft. In terms of equipment there has been a significant reduction in the present and future capacity of the armed forces to meet any task placed on them.
In terms of manpower we have seen and heard of the conflict between those who are the responsible executive officers of the Army particularly and who have stated their manpower requirements and the Minister for Defence and the Government who have applied marked reductions. The result has been that the morale of members of the armed forces is seriously impaired. Numbers of senior officers have tendered their resignations and the whole of the confidence of this nation in a defence corps which has enjoyed such a high and outstanding reputation has been prejudiced. The Minister has made some laudable statements in this House. He said, as the honourable member for Barker expressed earlier, that he would see our defence forces designed to ensure our security and independence. Yet he has denied the capacity of our armed forces to do just that. He has opted out of the region. He has ensured that the Australian foreign policy role will henceforth be prejudiced by our inability to match on the ground the demands that any future conflagration might impose.
Mr DEPUTY SPEAKER (Mr Luchetti)Order! The honourable member’s time has expired.
– I would like at the commencement of the discussion on this matter to take up the point that the honourable member for New England (Mr Sinclair) just made when he spoke about the need for an Australian defence role commensurate with the new initiative that the Government is taking in foreign policy. I am not altogether sure whether that means that he is endorsing the foreign policy of the Government but I am happy to see that he appreciates that the Labor Government has a more dynamic and forward looking foreign policy.
– I did not say that.
– If the honourable member did not say that it was certainly implied when he suggested that the defence policies of the Government were not keeping pace with its foreign policy. In the Budget for the current year an appropriation of SI, 345m is sought as compared with $ 1,285m last year. The fact that this fairly modest increase is not of the level of increase that has been made in some previous budgets recognises, of course, a change in the defence commitment which Australia had to the war in Indo-China and which happily no longer exists. It also takes into account the fact that the Minister for Defence (Mr Barnard) is trying to get in his Department a complete assessment of the future defence needs of Australia, something which was not made for many years under the previous Government. It would have been difficult to make before given the commitment of the previous Government to the Vietnam war.
I would like to give the lie very clearly and distinctly to any suggestion that there is any complacency on the part of either the Minister or the Australian Labor Party Government in this vital area of defence. Some of the matters that have been so far cast into this debate today show that honourable members have distorted what the Minister said in his defence statement on 22 August last, and I point out that it has taken the Opposition 2 months to bring this matter before the Parliament. The Minister then said:
This assessment of the situation Australia is likely to face in the next decade does not, of course, mean that Australia can dispense with defence strength. I have already referred to uncertainties in the longer term. In matters affecting the nation’s security it is necessary to move with prudence. I wish to stress also the extent to which Australia nowadays and in the future must accept the primary and independent responsibility for safeguarding our security and strategic interests. We are no longer simply a junior partner who-e activities are largely shaped by the strategic and military policies of more powerful friends. We shall maintain our co-operative relations with them, which we greatly value.
He went on to say:
The modern situation requires Australia to be more self-reliant than in the past, and this is very much in accord with this Government’s view of our independent national status. We must have forces in being for the surveillance and patrol of the environs of this continent. We must maintain our ability to be a source of military advice, technology and training which are helpful in the development of the defence capabilities of other countries in our region with whom we maintain defence co-operation and aid programs.
Is that the attitude of a Minister who is selling out the Australian defence program? Is that the attitude of a Minister who feels that no attention should be devoted to defence because there is no immediate implied threat to Australia? It has been suggested that the present developments in the Middle East invalidate the assessments on which the Australian Government is basing its defence policy. It seems that 2 arguments are put forward. The first argument is that if Israel was taken by surprise, presuming that is how that conflict began, Australia also may be taken by surprise. But there is no parallel between the position in the Middle East and Australia’s position. In the Middle East the Arabs and the Israelis have been locked in a situation of strategic tension for years. Each poses a palpable military threat to the other. The risk of attack is inherent in the situation. This is not how Australia is placed. Which nation is it that the Opposition considers is threatening Australia? Which nation is it that the Opposition considers likely to threaten us?
This Government is not saying that no threat is possible. But merely to say that a threat is possible is not enough. A responsible government must take the matter further and assess which, if any, of a range of possibilities are likely. It is necessary closely to consider capabilities, motives, opportunities, the way the international situation is developing and so forth. It is obvious that, unlike the nations of the Middle East, no nation threatens Australia at present. Clearly any threat is going to take time to develop. At present there are no signs of such a development taking place. This could change. But it would not happen overnight or tomorrow. The second argument by the Opposition is that the war in the Middle East will affect Australia’s security because it will disturb the global balance between the United States and the Union of Soviet Socialist Republics, on which our security basically rests. The honourable member for Barker (Dr Forbes) declared that it was a matter of commonsense that the Middle East hostilities would lead to serious instability in the Indian Ocean and the South East Asian area. Of course, a deterioration in relations between the US and the Soviet Union could be a consequence of the Middle East fighting. But each of the super powers has major interests in ensuing that relations are preserved. Present indications strongly support the expectation that the stability of relations between the US and the Soviet Union will not be seriously affected by the Middle East hostilities.
I now refer, in some passing way because my time is running out, to some of the statements made by members on the other side of the House. The honourable member for Barker referred to his reception in South East Asia. The principal Chinese language newspaper in Singapore, for example reported, in comment on the Minister’s speech in response to Mr Denis Warner, that Australia had decided to stop urging Asians to fight Asians. That statement by the Minister was favourably commented on by the Singapore Press in general and also throughout South East Asia. At the time the honourable member for Barker was in Singapore his visit was not reported in the Singapore Press at all. A number of issues are being thrown down to us and we are being asked why we have not done anything about them. The previous Government had the DDL program on the stocks for years and it never fired the starting pistol because the expense was so great. Let members of the Opposition state when the decision was made to proceed with the DDL program. No such decision was ever made or announced to the House. Plenty of suggestions were made that it would happen.
When my Party came into office we found that the Williamstown dockyard would not be ready to service the DDL program. In point of fact the money has been committed to develop such facilities at the Williamstown dockyard as will enable an Australian destroyer program to ‘be set under way in the future. Both’ the honourable members for Barker (Dr Forbes) and the honourable member for New England who preceded me in this debate talked about HMAS Sydney being taken out of service without any replacement. Do they think that we could have replaced HMAS Sydney in 10 months? The fact of the matter is that the previous Government had made no decision’ on the future of the Fleet Air Arm over the mote than 10 years in which its future was in question. The very fine men who are stationed at HMAS Albatross are living in Second World War accommodation. The accommodation is a complete disgrace and is very much worse than the accommodation at Kapooka, Amberley or many other defence establishments around Australia. The morale of the Fleet Air Arm over many years has been poor because the previous Government made no decision to continue the Fleet Air Arm. A study has been set under way and the results of that study will be known to the Minister later in the year. The assessment of the future of the destroyer program can be determined only when the needs of the Fleet Air Arm of the future can be placed on the table. These are among the problems which we have inherited from the previous Government.
I went with the Labor Party’s defence committee to Garden Island more than 5 years ago. I was amazed, when the committee went there recently, to find that the master plan for Garden Island, which had been shown to us at that time, has never been approved. The long standing request of the Navy to build a finger wharf on the eastern side of Garden Island in order that vessels might be moored there and not at the entrance to the dockyard where they have to be shifted when the dockyard is being used, has never been met and the commitment has never been made. The Navy is still asking for a decision on the master plan for Garden Island. I found a similar situation in Brisbane with HMAS Moreton. A decision was made to expand the landing ship squadron, and I commend the previous Government for that decision. The present Government has made a decision to improve the accommodation in order that the crews might have decent living conditions.
We have inherited from the previous Government a defence situation which, instead of being the rosy picture that has been painted here this morning, is nothing less than a disgrace. I commend the Minister for the energy and the determination with which he is looking at the Australian defence program and the problems that face this country in the near future. I am sure that the results of the planning which has been done to very much improve the structure of the Australian defence forces, and the good relations which the Minister has with senior members of the defence forces will become apparent in the immediate future and will show how this Government has moved forward. I deplore that the Opposition should raise this matter in the House at this time and also make statements elsewhere in an attempt to destroy the morale of the Australian defence forces.
Mr DEPUTY SPEAKER (Mr Luchetti)Order! The honourable member’s time ‘has expired.
Sitting suspended from 1 to 2.15 p.m.
– The matter of public importance proposed for discussion by the House is one of great significance because it goes to the central role, of the Government and its responsibility for the security of the community. The remarks that we have heard from the 2 Government speakers, the Minister for Defence (Mr Barnard) and the honourable member for Brisbane (Mr Cross), have been of mind-bending superficiality. It is worth noting that the matter of public importance proposed for discussion is:
The failure of the Government to provide more adequately for the defence of the Australian nation.
The Minister for Defence described this proposal as frivolous. I would think that he was frivolous were his attitude not so tragic.
The Minister made a statement on defence to this House on 22 August last. Since then, the Government has buried this item at the bottom of the notice paper.
– It is No. 43 under ‘Government Business’ on the notice paper.
– As my friend from Petrie tells me, this ministerial statement is listed as No. 43 on the notice paper. It is buried because the Government is frightened to have the subject of defence discussed.
What charges are there against the Government for lack of defence preparations and what answers if any has the Government made? The first charge is that the Government was guilty of a clear deception of the community in its promise as to what proportion of our resources it would allocate to defence. On 28 November 1973, 4 days before the election for the House of Representatives, the present Minister for Defence said:
Mr Whitlam and I have stressed repeatedly that a Labor Government would maintain defence spending at the levels of the past few years- that is, about 3.3 to 3.5 per cent of the GNP.
The honourable member for Mackellar (Mr Wentworth) has doubts about the reliability of the Prime Minister (Mr Whitlam). So, it is fortunate that we do not need to rely on that statement alone.
I refer next to the ‘It’s Time’ pamphlet which, on the subject of defence, states:
An Australian Labor Government would allocate not less than 3.5 per cent of Australia’s gross national product for defence in each annual Budget.
This year it has allocated 2.9 per cent of the gross national product to defence. This is a clear breach of a clear election promise. The Minister for Defence seemed faintly surprised that anyone should believe Labor Party policy. It is quite clear that they will not again.
The second criticism of the Australian Labor Party’s defence policy is that its whole strategic basis is fallacious. It is based on an assumption that there will be no threat for 15 years. This has often been said in the past, and it has nearly always been wrong. I take one example. In Australia, in 1931, in the depths of the depression who could possibly have foreseen that in 10 years time Australia would be at war with Germany, Italy and Japan? Certainly not the Leader of the Opposition just before the Second World War. Mr Curtin had this to say in a speech on 2 November 1938:
The threatened danger is no longer as great as it was for it must be apparent to everyone that the Munich Pact has lessened the probability of a European war.
That was said 9 months before the outbreak of the Second World War. The important thing about this aspect is that Mr Curtin was a quite perceptive defence critic, certainly much more perceptive than the present Minister for Defence. If Mr Curtin could not predict a war 9 months before it broke out, how can the present Minister for Defence say that there will be no war for 15 years. This is the whole rotten basis of our present defence strategy. It is unsound in its foundations.
Let us turn to equipment. The ‘It’s Time’ document states:
A Labor Government will equip these forces with the most effective and modern weapons.
That promise did not last long. Two months after that promise was made, the present Minister for Defence had this to say at the Industrial Mobilisation Course in February of this year: the Services may have to accept weapons systems they regard as less than satisfactory, this shortcoming can be accepted now because of the low probability of major hostilities.
By August, he had gone even further; the Services will get no new equipment at all. The only equipment that is still coming is that which the Government could not cancel. All the new equipment - the equipment to arm our Services in the 1980s - has been postponed or cancelled. This I believe is a gross dereliction of duty by the Government.
If in fact the threat were low, surely this is the time we should be thinking of buying our capital equipment - at a time when our overseas reserves are so buoyant that the Government says they are embarrassing. Instead of that, for doctrinaire reasons, the Government cuts back on defence.
I agree with some of the remarks made by the Minister for Defence, though his actions never match his words. At the same industrial mobilisation course, the Minister for Defence said: . . it is the ability of a nation’s industry to provide, or modify equipment as it is needed to meet new threats, which is the only satisfactory test of increased ‘self-reliance’ in defence.
But all the measures the Minister for Defence has taken have been to decrease our selfreliance. He is dismantling all our defence industries, cutting back on our dockyard effort and destroying our aviation industry. Honourable members will remember that last May the present Minister for Defence said he would very shortly announce a plan for the rationalisation of our aircraft industry. Where is that rationalisation? Our munitions have been cut back. Our whole capacity to defend ourselves, to create our own weapons systems is being eroded by this Government and we are more and more dependent on overseas support for this vital function.
Now I must turn to training. The ability of our forces to train realistically in peacetime is central to their efficiency. Our forces, unit for unit, ship for ship and aircraft for aircraft are second to none in the world. But the reason for this is that in the past they have been properly provided with the training equipment, resources and fuel they need to maintain a high degree of efficiency. This the Government is destroying. The flying hours of aircraft are being cut back; the ships are going less frequently to sea; and ammunition resources are being reduced. The Minister says that all this is under review. I suppose everything in this Government is under review - under review by a 27-man Cabinet and by a 93-man supervising Cabinet, the Caucus. The point is that nothing useful ever comes out of this system of review.
Finally I turn to the question of morale. There is an enormous reservoir of devotion to duty in the armed Services and it is very alarming, remembering this devotion to duty, how many evidences of a sharp drop in morale are becoming obvious. Senior officers are resigning. These are the people who would have been the key figures in our forces in the 1980s but they, because of the policies of the present Government, are leaving the Services.
In Townsville 2 weeks ago the Minister for Defence, in a rather embarrassing parody of Winston Churchill, said that he had not accepted his portfolio in order to oversee the dismantling of Australia’s defences. If he means that, and in view of what this Government has done to the defence forces, he should resign his portfolio now.
– Debates on defence in this House are rarely centred on the defence of Australia or national security. In fact, prior to this Government taking office, no study had ever been carried out on the defence of Australia. Emotion and precedent, the lessons of history, no matter how erroneous, rule and any analytical rigorous thought on what forces we should have and their disposition was always lacking. Every time a shaking up has taken place in the defence establishment there have been loud wails about morale, without any definition or analysis. I refer to the ‘Australian Financial Review’ of Friday, 5 March 1971. In an editorial headed ‘A Neurotic Shambles in Defence’ it states:
Partly through an unusual concatenation of circumstances and partly as a by-product of the almost unstoppable force meeting the almost immovable object, the state of morale in Australia’s defence establishment at the moment can only be described as a shambles:
The historical factors for this range all the way from the inflexibility of the rather simple military tradition in the face of modern social and technological change to the discontent of military men over pay and conditions. The clash between military and political realities is most vividly seen in Vietnam where nervous political direction from Canberra is putting Australian soldiers in the field in a situation which not only offends against all military precepts but is also (in a military sense) shameful.
This appraisal was of course followed by the 1972 Budget when the honourable member for Higgins (Mr Gorton) was Minister for Defence. He had his estimates reduced by S50m, to an allocation of 2.9 per cent of gross national product. The defence chiefs fought the Budget. Fifty million dollars was cut from defence expenditure. This was when we had our forces committed to Vietnam. It had followed the dramatic times of the resignation of the then Minister for Defence, the honourable member for Wannon (Mr Malcolm Fraser). The Army had been in uproar and generals’ names were being bandied about in the Press. The moves the right honourable member for Higgins tried to implement within the defence establishment - I agree with much that he said at the time about pay and conditions^ - were unsuccessful. It is for this reason and others that we inherited a shambles, with many decisions having been put off. If the assessment of the honourable member for
Higgins that there will be ‘no threat for 10 years’ is accepted, I want to know why we inherited a situation in which nearly every major procurement decision had to be made immediately. As a recent detailed publication has outlined, we are virtually designing our future defence on a blank canvas. When we look at the shocking position that the Defence Department has been put into we see that we are faced with a situation where we need to double capital expenditure in the budget for the mid-1970s and early 1980s. Some rationalisation is necessary. We are looking at ways and means whereby we can use our reserves to buy equipment overseas. Given the time factor, why did the honourable member for Wannon not go ahead with the Mirage replacement program? The fact is that the Liberals had painted themselves into a corner on the DDL project. The Minister for Defence (Mr Barnard) has said that we will get destroyers, and we will.
Foreign affairs forms a major part of our defence policies. In big power terms and stating the position baldly, I expect the next few years to be marked by a fairly stable equilibrium between the 3 major nuclear powers - the United States of America, the Soviet Union and China. The small states of Asia and the Pacific will be handled rather gingerly by those 3 powers. Such a situation would not preclude the existence of informal spheres of influence operated by the major powers, though these would be much less rigid and exclusive than those to which we have been accustomed.
In general I think we shall see a more stable world political system involving something of a downgrading of military considerations. This will mean that while nuclear arsenals continue to mount and most states continue to preserve and sometimes enlarge conventional forces, the equilibrium between the great powers will produce less emphasis on strategy and leave more room for international economic negotiations. Even if that is right, the defence situation can never be certain. So in this situation we need a capability to meet the range of situations possible. The important fact not realised by the Opposition is that in the early 1970s we are a watershed. The United Kingdom and the United States of America have pulled out of South East Asia and we now have to support what we put in the field. The United States itself is cutting back on defence. In its’ latest budget it cut $3.5 billion from defence expenditure, shut down or nearly shut down 274 bases, of which 40 were major bases, and sacked 40,000 people in the Services and the civilian elements in its defence forces.
The Government has decided to rationalise its defence structure administratively and to review critically all procurement programs. We now have a 5-year weapon buying program being drawn up. When it is presented it will represent the Government’s and its defence advisers’ priorities in terms of the defence of Australia and not outmoded myths that haunt honourable members opposite.
In foreign policy and defence policy in the 1970s and 1980s Australia must satisfy at least 3 criteria. Firstly, it must satisfy national security. Secondly, it must allow Australia to satisfy other national objectives such as welfare and quantitative advancement of our national life. Thirdly, it should allow us to contribute to humane purposes beyond Australia. But let us look at national security. I want to make the point very clearly that we are not necessarily better defended if we buy equipment immediately without any thought for the future. We have bought so much equipment already that has been made measurably obsolete - for example, the Red Eye missiles. Other countries such as Canada and Sweden, which do think their defence situations through, are not thinking of making the mistakes that the Opposition would have us make.
There have been a lot of words about morale. Admiral V. A. T. Smith said in relation to morale that the answer lies in providing sophisticated techniques and in some broadening of military activity into the community help field. I do not think there is any difference between this peacetime role and that of any other peacetime period. I believe that we can accept the passive role over a long period, and there would be nothing new in this. Admiral Smith went on to state that even in the Vietnam commitment we had only a small proportion of our forces committed to the field. We do face a morale situation in the Army, mainly because this high level of skill and expertise developed in Vietnam cannot be preserved for any great length of time. I do not think we should apologise for not having the Army at. present committed to war. What we have done in our first defence budget is spend more on salaries and on housing, and this was long overdue. The previous Government would not even bring in the Defence Forces retirement benefits scheme.
Let us look at the defence situation apart from as it is as stated in the motion. As I said, no study on the defence of Australia has ever been done. Unless we intend to establish all our equipment overseas it is clear that we could handle any attacker of Australia at present and into the near future. I have had figures taken out and these show that no country in Asia, including China, today has a capability to invade our continent, nor is any of these countries likely to have the capacity to do so in under 5 to 10 years. If any of them did we would know about it. No country in history has ever invaded a continent over water with any skerrick of success. Sweden, which does think its defence policies through, is a model for much of what we should do. Sweden has 500 to 610 planes available at any one time and it has an air force of 11,700 men, which is about half the number that we have. We have one aircraft to 75 men, but the Swedes are 3 times as efficient. They also have 1,000 tanks because they have used their heads in thinking out defence policy. Just as we necessarily are no better defended by buying all equipment now, our defence is not necessarily guaranteed by having large numbers of soldiers just for the sake of having large numbers. Soldiers in my electorate grizzle because of the dullness of their duties.
Let us look at our defence situation. I am not stating that we will not order in this term of Parliament a replacement for the Mirage, but let us look at the capability of the Mirage aircraft. Critics argue that it is dangerous to delay the decision to replace the Mirage fighter by one year because the aircraft is becoming obsolete. The reply to this argument can be in 2 areas. Firstly, is the aircraft now seriously outperformed by potential enemies, and secondly will the aircraft be able to remain airworthy until a replacement comes into service? In relation to the first point, in order to maintain the charge that the Mirage is obsolete critics must be able to establish the context in which they see the aircraft operating. In other words, against which air forces and which types of aircraft is the Mirage likely to be committed? Secondly, they must defend what parameters of aircraft performance they see as now making the Mirage obsolete. In the period up to 1980, where is the Mirage likely to meet a superior fighter aircraft? In our area of immediate strategic interest Indonesia is operating Avon Sabres which the Australian
Government provided that country’s Air Force and which were phased out in this country to make way for the Mirage.
Singapore has no air superiority fighters in the usual sense of the definition. Her most usual fighter type is the Hawker Hunter which was manufactured in the 1960s. These aircraft have a performance equivalent to that of the Sabres and are nowadays employed in the ground attack role, as are the refurbished United States Navy A4 Skyhawk fighter bombers which Singapore is also buying. The A4 aircraft has little air to air fighter capability - this being mainly for self defence - because it lacks the avionics and weaponry as well as the performance for offensive counter air operations. To find technologically comparable fighter aircraft one would have to go as far abroad as either North Vietnam, China or Japan. The 2 former countries operate variants of the Mig 21, whilst the latter country operates F-4 Phantoms. Both of these aircraft have been shown in combat, either between the Israelis and Arab countries, India and Pakistan, or the United States and North Vietnam, to be roughly comparable. The outcome of any fight between them usually depends on the skill and dedication of the pilots involved. When one speaks of Australian Mirages having to go as far abroad to meet a technologically equivalent threat, this is a quite literal statement since fighter aircraft are characteristically short ranged and have to operate from bases only a few hundred miles apart.
-Order! The honourable member’s time has expired. The discussion is now concluded.
– by leave - In tabling the report of the Australian Tourist Commission I would like to make some observations about the role and activities of the Commission. Some quarters of the private sector view its very being, let alone its recent expansion into domestic travel, with jaundiced eyes. While they themselves are often on the brink of fractricide, many representatives of the multifaced private tourist industry have developed the amusing pastime of using the Commission as the scapegoat for all the ills of tourism. Even in official circles one can see evidence of scepticism, if not outright doubt, about the Commission’s value. These sentiments must stem from the over-pragmatised view that the Commission’s activities are either too abstract or too esoteric, that its direct and immediate contribution to the tourist industry cannot accurately be measured. This is almost true. The Australian Tourist Commission is not a marketing agency; its overseas offices merely promote overseas tourism, they do not sell it over the counter. And neither the Government nor the airlines wants them to do this.
However, their presence in 5 overseas countries is just as vital as the activities of our trade commissions around the globe. These experts are not selling directly, but their value is inestimable to private industry, whose efforts they are supplementing. Critics who can only think with dollar signs behind their retina must understand that national promotions - whether tourism, political ideas or frozen lamb carcasses - cost money. Quite often it is impossible to calculate the exact benefits a country derives from these promotions. The Australian Tourist Commission is such a case. The Commission’s overseas offices are Australia’s overseas arms in promoting a fairly difficult product - tourism. Difficult, I said, because it is fragmented, because it is underdeveloped, and because it is handicapped through our geography.
The report I have tabled, apart from its presentational excellence, reveals the professionalism and foresight with which the Commission has tackled many diverse and challenging tasks since ils establishment in 1967. Until last December, when my portfolio was created, the Australian Tourist Commission represented virtually the only source of expertise on tourism and related matters at the national level. While its basic mandate was one of international promotion, it was required to venture into a number of other areas because of the void which had existed in terms of data, product evaluation, industry education and, in many areas, leadership and coordination. It is to the Commission’s great credit that despite limited financial resources it has been able to achieve significant breakthroughs in many of these areas. Throught its composition and close links with the tourist industry, it has operated with vigour and good sense to make both the public and private sectors increasingly aware of tourism and travel as a force of major national socio-economic importance. It has been aided in these efforts by a staff demonstrating a high level of professionalism in many specific areas. For example, in the research area the Commission has undertaken, initiated or co-ordinated a number of important projects which have reduced the information gap in Australian tourism and led to informed decision making in both the public and private sectors. Some of these research projects have represented major breakthroughs in tourism.
I refer, in particular, to the Commission’s survey of international visitors to Australia, to the part it has played in the development of a major survey of the travel patterns of Australians themselves, to specific surveys of the tourism needs and potential of such areas as the Great Barrier Reef and central Australia and to market and economic research in relation to particular segments of the industry. In its continuing efforts aimed at improving the efficiency of the Australian travel industry, the Commission has also assisted in the development of new industry training courses at the tertiary and operational levels and, in consultation with the industry and the Department of Labour, in the completion of a survey of the manpower problems and requirements in the accommodation and catering industries. Through seminars, workshops and residential courses, Commission management has itself played a direct role in providing the kind of expert guidance and information so central to the development of the industry, infrastructure, facilities and services in order to cater for the needs of our increasingly mobile and discerning travellers. Growing affluence and leisure time, more educational possibilities and a new public preoccupation with all that is becoming known as the ‘quality of life’ have put greater demands on the planners and administrators in the area of tourism and recreation. We are indebted to the Commission that it has had the vision and enthusiasm to anticipate the accelerating pace of these developments by moving, with limited resources, to fill the massive gaps which have existed in these various areas.
In relation to its basic promotional mandate, The Commission’s status and professionalism both at home and abroad are at an all time high. Quite properly, it devoted its earlier years to the education of the key motivators and sellers of travel in our major source markets for international visitors. That it performed this role with distinction is reflected in the number of international awards which the Commission won with its promotional aids in the publications, film and related areas. The international travel trade, now knows more about Australia and is generally better equipped to portray Australia to its clients as a result of the balanced and technically proficient nature of the Commission’s promotional activities. Recently, in recognition of changing political, economic and social circumstances both in Australia and abroad, the Commission has become increasingly selective in its marketing approach.
In co-operation with State governments and industry partners, the Commission is now moving into a phase of promotional activity which will focus attention on those areas of travel activity from which we as Australians have most to gain and most to show the world, to the advantage of Australians and our international guests alike. I refer to such areas as special interest touring, the conventions and meeting business, social tourism in the area of group travel by young people and cultural, scientific and sporting exchanges. Internal reorganisation within the head office of the Commission in Melbourne as well as strategic re-deployment of key personnel in some overseas bureaus indicates that the Commission is not only keen but determined to prove its critics wrong. New, strong emphasis will be put on the Asian market while the American operations will have greater concentration through the fact that the number of offices will be reduced from three to two. These moves are all aimed at increasing the efficiency of the Commission and attracting more overseas tourists to Australia. This picture, by the way, is not nearly as gloomy as some people may think. In April, Australia had 26 per cent more overseas visitors than in the same month last year. We hope that later figures will confirm this upward trend.
As revealed in the 1973-74 Budget, the Commission will in future play a key role in the administration of the Government’s policy to encourage Australians to see more of their own country. The Commission will perform this role in close consultation with the State tourist authorities and the travel industry. I have been most impressed by the manner in which the Commission, in developing its program for domestic international promotional policies has approached the task with enthusiasm, initiative and a determination to ensure that its policies are closely allied with our policy objectives in other fields such as education and regional development. A tremendous amount of work is still to be done in the exciting and challenging areas of tourism and recreation. In achieving our policy objectives - the details of which I have already tabled in a separate document - I will be looking to the Commission for its continuing support and advice. I commend the 1972-73 Annual Report of the Australian Tourist Commission to honourable members.
– Mr Speaker, I seek leave to make a statement on the same subject.
-Is leave granted? There being no objection, leave is granted.
– I have a particular interest in this matter because the Australian Tourist Commission was created when I was the nation’s first Minister in charge of tourist activities. Therefore I have some empathy with the Minister for Tourism and Recreation (Mr Stewart). I also have some sympathy for him because I know the difficulties under which he labours in Cabinet in advocating the retention and extension of the Australian Tourist Commission. I will refer to that a little later. One wonders why the Minister made a statement, because there is nothing interesting in the statement except perhaps 2 things, and they are the confusion and the amusement he has caused me, the Clerks and Hansard reporters who will seek the meaning of that fascinating word ‘fracticide’. It does not happen to be in the Oxford Dictionary; it does not happen to be in Webster’s Dictionary. One wonders where the Minister happened to pluck it from. It makes a very fascinating sentence, because his prepared speech states:
While they themselves- the private sector- are often on the brink of fracticide, many representatives of the multi-faced-
– Do you not know what that means?
– Would the genius from Bowman like to enlighten me on what the word means? I am sure I would have your indulgence, Mr Speaker, if that great scholar from Bowman told me what it means, If it is missspelt and is meant to be ‘fratricide’ - killing one’s brother - I would disagree with the Minister’s paragraph, because as far as I am concerned the private sector has supported the Australian Tourist Commission and is grateful for its continuance and retention. We are interested in reading the notorious report of
Dr Coombs and his raiders in which he recommended the abolition of the Australian Tourist Commission. I compliment the Minister on what I imagine must have been a battle in Cabinet with some of his more predatory colleagues. I congratulate him on winning the battle and keeping the Australian Tourist Commission. There is one thing that concerns me about boffins like Dr Coombs and those in the Treasury who peddle the more simplistic line that Australia’s overseas reserves today are higher than they have ever been and therefore it does not make economic sense for subsidies to be granted to industries to assist them in their exports or, as in tourism, the export of sunshine.
Tourism is one of those industries which attract overseas reserves in the most painless, pleasant way - a way which has considerable side benefits such as the promotion of international goodwill and a host of others. But what irritates me is the shortsighted policy of some Treasury officials and Dr Coombs in assuming that simply because our overseas reserves are now very high there is no need to attract further foreign exchange. These men must have short memories, because economic history indicates that overseas reserves can dwindle very rapidly. It is not very long ago that speakers on both sides of this House were talking about the intractable balance of payments situation from which Australia suffered and the intransigent balance of trade which we had. Admittedly our overseas reserves are high now, and that is essentially due to the boom of that glamour industry, the minerals industry. One would query the view that this bonanza will continue.
In the middle of last year I was privy to the taking out and computerising of some extraordinary figures in London about the future of Australia’s minerals industry. Figures were fed into a computer, and with genius-like quality it threw out a result. It was fed information on the predicted wage rises in Australia over the next 5 and 1 0 years and it then translated that in terms of the unit cost of our minerals in 5 years and 10 years. The computer was also fed information which allowed it to feed back data on the supply of minerals on the world market in 5 years and 10 years. It showed that with many of those minerals which Australia has successfully exported at great profit and in a way in which to bump up our overseas reserves 2 things would happen.
It showed, firstly, that unit costs of the production of Australian minerals would rise considerably if the then increase in wage rates were maintained and, secondly, that the oversupply of minerals on the world market would depress prices and so, in 5 or 10 years, Australia could face a situation of increased costs and decreased prices, which must necessarily result in a decrease in sales and, therefore, in export income. What will the boffins do if we have cut off income from overseas exchange in the form of tourism or if our export industries are destroyed, which seems to be the long term aim of the present Government?
I have been referring to increased costs as of 1972. Every member of this House is aware of the astronomical increase in wages and other costs which have occurred since 2 December 1972. Without trying to make political capital as to whose fault it is, the fact is that these costs have increased. If the figures on minerals were pertinent in 1972 they are even more pertinent and even more worrying today. Therefore, I would imagine, apart from international goodwill considerations or anything else, that the Australian Tourist Commission’s activities in promoting tourism and of attracting people to Australia are more important today than they have ever been, yet one sees, and is dismayed by, the report of a boffin and his men who recommend total abolition of the grant to the Australian Tourist Commission.
I commend the Minister for Tourism and Recreation on his victory in Cabinet. I take, the comment in the last page of his statement to be an assurance that he will look to the Commission in the future for advice. I take that as an assurance from the Minister that Cabinet has not given the Australian Tourist Commission a one-year reprieve. If it has, and if Cabinet has given the Minister the authority to continue the grant to the Australian Tourist Commission for only one year, then the Minister is misleading the House. I am not suggesting for a moment that the Minister, whom I am honoured to count as a personal friend, would deliberately mislead the House but I point out to him that if there is only to be a one-year reprieve for the Australian Tourist Commission then he has made a most misleading statement.
I am disappointed also that the Australian Tourist Commission has the same budget as it had last year. It has been given no increase but because of the costs of inflation, not only in Australia but also overseas, and because most of the Commission’s budget is spent overseas, the Minister will know that the amount allocated this year will buy far less advertising space, in public relations activities and in overseas salaries than its budget did last year. So the budget of the Commission in real money terms this year is, in fact, a reduction on last year.
The other aspect to which I refer concerns various reports which have been submitted by the Commission to the Government this year and in several years past when my Party was in power. I am not playing Party politics now because my government was as much to blame, if not more to blame, than the present Government but that does not exclude the present Government from blame. The point I make is that for years the Commission, backed up by reports of the highest authorities in tourism - Harris, Kerr and Forster, and by many others who were commissioned - has been stating that it is useless attracting to Australia tourists from the first class market if we do not have the accommodation in which to accommodate them. That type of tourist at the top of the bracket - I am not talking now about the student or the middle class tourist - will not stay in second-rate motels. He wants and demands de luxe accommodation, as is being provided in other world tourist centres. We do not have that kind of accommodation. It is ridiculous to spend millions of dollars on trying to attract that type of person when it is uneconomic to build competitive first class hotels in Australia without Government subsidies. I am sure that the Minister would have taken to Cabinet a brief asking for some subsidies for the building of first class accommodation so as to look after these people and I am sure that he was refused by Cabinet. I am sure that he was refused by Cabinet on the inevitable advice of Treasury, which has this shortsighted view that while we have an excess in our balance of payments we should not subsidise overseas people in our hotels.
This is a vicious circle because if we keep on attracting people to Australia and cannot accommodate them in the way in which they wish to be accommodated they just will not come and the fastest publicity in this business of tourism spreads by word of mouth. If we attract people to the Great Barrier Reef or to Cairns or to Ayers Rock or the other 5 wonders that the report listed as the great tourist attractions in Australia, and if they have to put up with the primitive kind of accommodation which was at Ayers Rock this is what will happen. I have not been to Ayers Rock lately but I have not been informed that it has markedly improved. I think the table d’hote is a hot pie and sauce and one is lucky if the pie is hot. This kind of treatment is something that Americans and wealthy overseas people generally will not stand. But there is something even more serious. We have in Australia one of the greatest tourist attracions in the world and that is the Great Barrier Reef.
– What about the Opera House?
– The Great Barrier Reef did not cost quite as much as your Opera House, Mr Speaker, and with all due respect and as a person coming from Melbourne I think it is probably more permanent than the Opera House which has not yet stood the test of a great wind. The Great Barrier Reef is a place where a great deal of investment has occurred but because of the economics of the situation it has not been able to attract that kind of investment which would provide deluxe accommodation of the Hilton Hotel style. It is adequate and good accommodation but the kind of accommodation and facilities that overseas tourists want is not provided. We have one of the world’s greatest attractions but there is only second class accommodation, and I make no reflection on the people who are providing it. Yet Qantas Airways Ltd and other airlines are conducting tours to South East Asia, and it is cheaper now for an Australian family to spend, I think, 10 days on a tour of the exotic East - Malaysia, Indonesia, Singapore-
– And Bali.
Mir CHIPP - And Bali, than it is to go to our own Great Barrier Reef. Surely this situation is out of balance and I hope that the Minister when he next confronts Cabinet with the proposition that support should be given to the provision of accommodation might receive a more sympathetic ear than he has received so far and a more sympathetic ear than his predecessors on our side of the House received. The Minister for Overseas Trade (Dr J. F. Cairns) might use his undoubted wisdom and foresight in international economics and try to stifle the boffins in Treasury who always seem to kill every good idea that comes to Cabinet in this direction.
Debate resumed from 30 August (vide page 658), on motion by Dr J. F. Cairns:
That the Bill be now read a second time.
– Mr Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House to have a general debate on this Bill and the National Investment Fund Bill 1973 as they are associated measures. Separate questions may, of course, be put on each Bill at the conclusion of the debate. I suggest, therefore, that you permit the subject matter of both Bills to be discussed in this debate.
-Is it the wish of the House to have a general debate covering both measures? There being no objection, I will allow that course to be followed.
Suspension of Standing Orders
Motion (by Mr Daly) - by leave - agreed to:
That so much of the Standing Orders be suspended as would prevent the Deputy Leader of the Opposition speaking for a period without limitation of time.
- Mr Speaker, the present Prime Minister (Mr Whitlam), during his Address-in-Reply speech to the Parliament in 1970, referred to the Australian Industry Development Corporation in these terms:
In short, under a Labor government the Industry Development Corporation will be used for the democratic socialist purposes I outlined in my policy speech and the Act which establishes this Corporation will be amended by us to secure those purposes.
The Australian Industry Development Corporation Bill and the National Investment Fund Bill propose immense new powers designed to achieve the socialist purposes clearly outlined by the Prime Minister. The purposes are to be achieved by a form of state-controlled ‘corporate socialism’. The Opposition Parties reject both Bills.
The former Government legislated to establish the Australian Industry Development Corporation in 1970. The functions of the Corporation were designed to preserve Australian control over the mining and manufacturing industries, to provide development finance in situations where existing financial institutions had not been able to meet the financial and investment needs of Australian companies, and to provide a stimulus for exports and import replacements. Under its present charter the Corporation has certain important restrictions. It is bound to avoid becoming or remaining in a position in which it is to control or manage the affairs of a company to which it provides assistance, lt must divest itself of its equity holdings in a company as soon as practicable, lt is not subject to Government direction. It cannot initiate action regarding an investment proposal. It is not subject to preferential treatment in respect of State and Federal taxation. It can only provide assistance when requested to do so by a company or with the consent of a company. It is restricted to assisting the manufacturing and minerals industries. It must borrow principally overseas and any supplemental borrowings inside Australia are subject to limitation by the Reserve Bank. The Bill, by a wide variety of provisions, removes all these constraints. Not only does the Government propose to remove all these barriers; it proposes to allow the Corporation access to vastly increased funds. No longer will the AIDC be principally an overseas borrower. It will now be free to make a massive assault on Australia’s private sector funds.
The AIDC would be able to obtain domestic equity finance. In addition, it is proposed that the Corporation, through the National Investment Fund, will raise funds through the establishment of savings schemes, superannuation or retirement schemes, including schemes that include provision for the payment of moneys in the event of death. There is little doubt that the Government sees the proposed AIDC as a mechanism to achieve its socialist objectives. In an official statement on 3 March, the Minister for Overseas Trade (Dr J. F. Cairns) said:
In cases where the Government believes it is desirable for Australian capital to be provided, the Government will be able to direct the AIDC to provide appropriate assistance to small producers whose successful future is in the national interest, to the largest economic operations, such as the provision of a national gas pipeline system.
It is clear that the Corporation will be the vehicle for the establishment of the national pipeline grid. Not only that, the Minister for Minerals and Energy (Mr Connor), in a statement on 10 August, admitted that all foreign investment in Australia’s natural resources will be required to be directed through the AIDC. That is, no foreign company will be allowed a direct equity in an Australian project. Major foreign companies in West Germany and Japan have already made it clear that this proposal is unacceptable and are now seeking alternative investments in other countries. The Opposition believes that the proposed extension of the powers and functions of the AIDC is unwarranted and, in its impact on the Australian community, positively harmful. It is unwarranted because of the capabilities of the AIDC as presently constituted and because there are alternative means by which problems in the Australian capital market can be solved. It is positively harmful because the new powers to be granted to the AIDC will cause a massive diversion of funds away from existing private institutions, increase the control of industry by a statutory corporation, and provide a vehicle for the socialisation of Australian industry.
Government policies should be designed to ensure that Australia’s economic development is undertaken in such a way that our resources provide maximum benefits. Balanced economic growth and development require now and will continue to require substantial overseas investment. Government policy must ensure the continuation of that level of foreign investment which is needed to enable Australia to achieve its social and economic goals, by adding to our capital resources and supplementing our technical knowledge and management skills. We are, however, conscious that overseas control and ownership of Australian resources can have adverse effects. Overseas ownership entails an entitlement to share in the profit of an Australian enterprise and overseas control carries with it the additional ability to determine the policies of that enterprise - its marketing, its investment, its purchasing and income distribution policies, its labour relations policies and so on. I make it quite clear that the Opposition recognises the inherent problems associated with overseas investment as well as its direct benefits. But Australia is too mature and self-confident a society to treat foreign influence as simply a sinister threat.
It must be recognised that foreign investment involves mutual trust. Foreign companies give a hostage to the borrowing nation in the shape of their plant and equipment and the technical and management skills they embody. And this kind of direct investment is not something that will continue to flow in the face of governmental hostility; nor is it a tap that can readily be turned on again once the flow has been interrupted. We believe that overseas investment should represent a significant contribution to Australia’s long-term economic capabilities at minimum cost. Equally, we recognise that the independence of our national economy should be maintained. It is the constructive role of government to create a legislative and ‘fiscal framework within which foreign investment may operate to the mutual advantage of borrower and lender. In government we would use economic policy instruments including tariffs and excise duties and government purchases to ensure that foreign owned subsidiaries followed practices which were not inconsistent with our general social and political aims.
This debate does not provide an opportunity to give a detailed outline of the Opposition’s policy on overseas investment, except to indicate a number of broad principles in conformity with the aims to which I have already adverted. These are: -Firstly, the right of all Australian enterprises to obtain funds in the most efficient manner having regard to associated technological, marketing, financial and other benefits; secondly, the right of individual investors of any nationality to buy or sell shares freely, thus ensuring the widest possible scope and flexibility for the Australian capital market; thirdly, the right of Australians to invest funds abroad in order to avoid insulation of our equity markets from world trends; and fourthly the establishment of guidelines for all multi-national companies domiciled in Australia, embodying Australians to comprise a majority of the senior management and the board of directors; the encouragement of all such companies of a major size to list publicly on the Australian stock exchanges, restrictive export franchises to be discouraged, and the policies of such companies not to be detrimental to Australia’s national goals.
The Minister for Overseas Trade in his second reading speech stated that the Government’s primary policy objective for the AIDC was to obtain majority ownership and control over existing and future enterprises. In other words, the AIDC is to be the Government’s vehicle in a campaign to extend Government enterprise and to ‘buy-back’ Australia from overseas ownership. The Opposition believes that Australian ownership and control of our resources is important. Insofar as our capital resources permit, Australian ownership should be maximised. However, we are opposed to the modus operandi outlined by the Labor Government. The use of the AIDC in the manner proposed is economically misguided. It will, in fact, place a net economic burden on the Australian community. The ‘Australian’, in an editorial on 29 August, said:
It must immediately be said that the Government’s proposal has a distinctive ring of Benito Mussolini economics about it.
The ‘Australian’ commented further:
But in essence it is precisely the same attempt to build a kind of half-way house to socialism, in which private resources are directed to national purposes within the context of the private capital market.
The Corporation, since its inception, has played a useful role in enabling Australians to obtain greater control over Australian assets.
The Corporation has obtained most of its finance from overseas borrowings and these funds have been used, in many cases, to strengthen Australian control over domestic assets.
Under the new provisions the Government proposes to exploit the greater fund raising powers of the AIDC. The AIDC could raise increased funds within Australia on its own account, through the National Investment Fund, and from the Australian Government. There would be a shift in emphasis from external to internal fund raising. These additional sources of investable funds will eventuate in a minimal net addition to the community’s savings since Australia has already achieved a very high savings rate by international standards. The main effect will be a diversion of savings away from other financial institutions and towards the AIDC. Under these circumstances the overall proportion of assets owned by Australians will only increase if the buyback operation causes displaced overseas capital to move out of Australia. Any increase in Australian ownership in the buy-back areas will be directly offset by reduced Australian investment in other areas. Moreover, any increased Australian control that does occur will be in the hands of the AIDC.
The Treasury paper published in May 1972 made the following comment:
Although the question of local equity participation in foreign owned subsidiaries, like that of foreign takeovers, raises important non-economic considerations, it needs to be recognised, nevertheless, that such participation cannot, in general, add to Australia’s total capital resources and extend Australian ownership of domestic assets unless it occurs via an increase in the rate of domestic savings or is financed by overseas borrowing. It can, in fact, reduce these resources - though not Australian ownership - if Australian equity participation (financed by a given level of domestic savings) in new enterprises displaces overseas capital that would otherwise have come in for those enterprises or if overseas capital released by Australian equity investment in existing foreign subsidiaries moves out of the country. In other words, Australian equity participation may (in the absence of an increase in Australian savings) involve an opportunity cost represented by the forgoing of investment which would have otherwise been financed from overseas.
In short, there seem 2 possible outcomes of the Government’s legislative proposals. Firstly, if foreign investment remains at its previous level there will be: A minimal impact on the proportion of Australian assets owned by foreign interests; a significant increase in Australian assets owned by a statutory corporation; and a significant reduction in Australian assets owned by Australian shareholders or private institutions.
Secondly, and far more likely if foreign investment is reduced, there will be: Some increase in the proportion of Australian assets owned by Australians; but a tightening in the availability of finance in such areas as housing because Australian funds are diverted to AIDC; a decline in the rate of growth of living standards because of the decline in the growth of capital resources and technical know-how; and, an increase in the control of Australian assets by a statutory corporation rather than by private risk takers.
Quite clearly, an analysis of this type must comprehend the effect of other government policies on investment. While public investment will extend strongly in the near future, the removal of the investment allowance for primary and manufacturing industries can be expected, in the long run, to reduce private investment by at least $200m per annum. In addition, private investment will be further depressed by the Government’s announced intention to implement a prices policy, without taking complementary action to restrain costs. The net impact of government initiatives will cause a massive diversion of investment funds away from the private sector and towards the public sector.
A buy-back scheme financed by diverting Australian savings from other uses will impose a net economic burden on the Australian community. Increased equity in foreign owned subsidiaries will be obtained )at the expense of decreased investment in Australian owned enterprises. It must be recognised that we already gain substantial advantages from the operation of foreign owned subsidiaries in this country since such enterprises pay income tax to the Government. These gains arise in the main from the higher output per head which comes from the use of more capital, better technology and additional management skills. They flow in 3 ways to the Australian community: Firstly, through the considerable taxes that are paid on. the profits of overseas corporations; secondly, through higher real wages to Australian workers, and the higher taxes paid from those, and of course the important recognition of the employment opportunities which such corporations provide; and, thirdly, by providing goods and services to the community as a whole at prices that are lower than would otherwise be the case. Even if we limit ourselves to the first and probably the smallest of these gains the advantages are considerable.
The present taxation rate on gross profits, allowing for company income tax and the dividend withholding tax is 55.37 per cent where the investment comes from Britain or the United States, and 63.25 per cent for other overseas investment, the difference deriving from the operation of double tax agreements. Insofar as the displaced overseas capital moves out of Australia after the buyback operation, we gain control of this investment and lose opportunities, to expand owned enterprises.
The buy-back theme has developed a somewhat emotive ring about it. The real problem is to achieve a greater and more efficient use of our resources under the overall direction of the Australian Government. The Government’s true role in the national development is to act as the leader, guiding free enterprise into areas in which it has not been sufficiently active in terms of our present and future needs, to develop the necessary infrastructure and to supplement efforts of private capital when and as required. If, instead of this, the Government takes over through AIDC those functions which free enterprise can more effectively perform, and has performed satisfactorily, it will lead to duplication of effort, discouragement of private investment, and a direct increase in overall costs to the nation.
Buying back is not the real problem facing Australia today. The real problem is ensuring that there is sufficient investment capital available at a reasonable cost for the Australian economy to maintain an adequate growth rate and to develop in the right direction. Reallocating available investment capital resources from free enterprise to the public sector will not increase the amount of investment capital available. In fact, more likely than not, it would merely make existing capital resources available for investment more expensive by bringing AIDC into the domestic capital market as an additional competitor. This would raise the cost of borrowings both to the private and public sector.
An enterprise will not become more efficient simply because all, or most of it, will be owned by Australian capital rather than foreign capital. In fact, there could be many cases in which such an enterprise could well become less efficient, not only because its access to new investment capital previously provided by the foreign parent could dry up, but also because the foreign parent may be expected to be less willing to provide technical knowledge and therefore access to research facilities to its former subsidiary which has been bought back. In more general terms, an over-zealous buy-back scheme may be expected to scare off foreign investment capital and thus have a detrimental effect on the national economy as a whole.
One of the major arguments for an extended buy-back plan is that such a scheme is supposed to reduce the costs associated with foreign control of Australian assets. However, most of the costs associated with such control are hypothetical, while burdens imposed on the community by diverting Australian savings towards a buy-back program are certain to constitute a large proportion of the average rate of return on investment.
The Government cannot legitimately claim that the proposed powers are necessary for the AIDC to expedite its role as a development financier. The AIDC as it is now constituted performs a useful function in helping to fill gaps in the Australian capital market. It is generally recognised that development financiers can assist in the mobilisation of large blocks of finance for highly capitalised ventures, and in the provision of venture capital for higher risk areas. However, the additional powers provided in these Bills are not only simply unnecessary and unwarranted, they would be positively harmful in their impact on the Australian capital market.
Sir Alan Westerman, the Executive Chairman of the Australian Industry Development Corporation, adverted to the AIDC’s presently constituted capabilities in his evidence to the
Senate Select Committee on Foreign Ownership and Control on 13 July 1972 when he said:
From AIDC’s relatively short experience to date an interesting point which has emerged is that, in a number of instances, the Corporation has been able to make a contribution to development and Australian ownership considerably greater than the scale of its own financial participation would signify . . . Already in a few instances, AIDC’s contribution, by putting up the last of the equity and/or loan capital requirements for a venture and so closing a gap in the financing, has made all the difference between whether the project would go ahead or founder - or at best go ahead under foreign domination after foreign companies in the wings had picked up the pieces. Even more significantly, the fact of AIDC’s willingness to support or participate in certain ventures has been instrumental in interesting other Australian companies to participate - bringing equity and sometimes also loan capital with them, as well as operational skills and experience which have contributed to forming a strong management group and so enhancing the prospects of the venture.
The crucial role of the development financier is that of bringing the right investors together rather than providing the finance itself. The AIDC is at present well equipped to perform this task. Furthermore, it should be recognised that there are other development financiers operating in the Australian capital market. The Commonwealth Development Bank and the trading banks’ term loan fund provide longterm finance for small businesses. The Australian Resources Development Bank and the private merchant banks arrange long-term finance for larger ventures. All these bodies have acquired considerable expertise in their fields of operation. It is clear that their activities would be severely impeded by the creation of a giant new AIDC with preferential status in the Australian capital market.
It is also erroneous to assume that the problems of the capital market can best be met by the investment of a statutory corporation. If there is a social need to encourage additional investment in certain areas and, conversely, to discourage investment in other areas, the flexible use of special subsidies and taxes will generally be a more appropriate policy. Such an approach leaves the private sector free to choose the actual projects that should be initiated, whilst providing a general indication of the overall needs of the Australian community. The additional powers to be given to this corporation with newly enlarged powers will, in fact, be positively harmful in their economic impact. The new Bills provide the Corporation with power to take control of Australian companies and to form new companies. These powers would enable the AIDC to operate, manage and control Australian companies. Control would revert from the private sector to the hands of a statutory corporation. The Government, in effect, proposes that the Corporation will be both financier and entrepreneur. The likely result is that it will perform poorly in both roles.
The additional powers will increase the likelihood that the AIDC might pursue an unwise investment policy. At present, the AIDC cannot take a controlling position in an Australian company. It can provide a considerable amount of finance for a venture, but it needs to attract other investors if the project is a large one. In other words, the outcome of an AIDC backed project is dependent upon the judgment of a number of investors. Under the new provisions the AIDC alone can initiate a project and it will have access to a much greater supply of funds. The possibility of imprudent investment is thereby greatly increased.
I have outlined the general basis on which the Opposition rejects both Bills. In doing so I have been careful to outline, in a constructive and positive manner, a number of alternative policies to deal effectively with the problems of overseas ownership and control. However, I believe a number of provisions require comment prior to the Committee stages of the Bills. I turn to clause 5 of the Bill which seeks powers within the ambit of similar powers formerly rejected in respect of the Australian Airlines Commission. More importantly, this provision indicates the real objectives of this legislation. If the Government proposes to utilise the AIDC to secure Australian ownership and control there can be little justification for the inclusion of transportation and distribution within the Corporation’s functions.
Air transport is already 100 per cent Australian owned - half by the Government and half by Australian shareholders. Road passenger transportation is already 100 per cent owned by Australian companies. Road freighting organisations have their 5 to 6 largest national operators all Australian owned. Furthermore, the capital markets both in. Australia and overseas have provided and will continue to provide adequate finance for the future development of the transport industry in the private sector. Clearly this Government is intent on the extension of public control of the transport industry of Australia. The Opposition rejects that proposition as entirely un justified on economic or social grounds. This Bill is a device to achieve objectives formerly sought in previous legislative proposals. We reject it now as we did then.
Secondly, by means of clause 7 of the Australian Industry Development Corporation Bill, the Government proposes the establishment of a national interest division. This division would permit the Government to undertake major projects, which could not be judged as economically viable, through the AIDC. An assessment of various statements made by both the Minister for Overseas Trade and the Minister for Minerals and Energy indicates that the provisions of clause 7 will be used in the following principal areas - oil and natural gas development, uranium mining and enrichment, the national pipeline grid, and the manufacture of government cars by the Government Aircraft Factories. It is through the AIDC that the Government will pursue its nationalisation objectives in all of these basic areas.
The Minister for Overseas Trade will be able to direct the Corporation without restraint. The National Interest Committee is to consist entirely of the Minister’s own nominees including one to be appointed by the Minister for Minerals and Energy. Such powers will enable this Government to engage in the forced acquisition of foreign owned assets in Australia and to invest in areas hitherto left to the private sector. The proposed powers are clearly open to abuse. In particular, there are insufficient safeguards to prevent rash and precipitate action by the Government. The AIDC would be a vehicle for the socialisation of large sections of the Australian economy and a mechanism for the avoidance of proper parliamentary control of public funds.
Not only are the provisions relating to the national interest division open to abuse; they are also unnecessary. The Government can foster the development of national interest industries by a flexible use of the fiscal system. If it wishes to restrain investment in certain areas, for example in central business district office buildings, additional taxes can be levied. If it wishes to boost investment in other areas, for example in decentralised development, subsidies can be applied. Direct government intervention in particular investments in these areas carries intervention a step further. Involvement in particular projects is bound to be a more expensive proposition both in terms of the absorption of government funds and in the demands on the time of senior public servants. Government investment in industry would therefore be unnecessary in normal circumstances. And even if a case could be made for government intervention in a particular situation, it should be done explicitly, through a specific Act of Parliament rather than by stealth, as is inherent in the proposals before this House.
In short, the proposed National Interest Division of the AIDC is both undesirable and unnecessary. It is undesirable because it may become the vehicle for the socialisation of large sections of the Australian economy. It is unnecessary because ‘national interest’ investments can be encouraged by tax remissions or subsidies.
The National Investment Fund Bill 1973 raises fundamental questions of very real concern to this Parliament and this country. The Minister’s explanation of how the scheme will operate is wholly inadequate. There is extensive competition in Australia for local and overseas funds by a variety of institutions, including banks, life insurance companies, building societies, hire purchase companies, merchant banks and other financial institutions. The Government has not advanced detailed arguments to explain why it is necessary to establish the fund or to outline its likely impact on the Australian institutional framework. The Minister makes emotive reference to enabling ‘ordinary people to share in the ownership - the profits and the capital growth - of great industrial enterprises’, but no reference to risks or losses. The fact is that no evidence exists to show that the Fund will satisfy a need or demand by private and public lenders which at present remains unsatisfied. The Government seems to have conveniently overlooked the fact that the bulk of the money handled by banks, hire purchase companies, life companies and superannuation funds belong to individuals. The Government’s proposals will not generate additional savings; all they will do is switch funds from private io Government ownership and control.
The establishment of the Fund would involve a major change in Australia’s structure of investment. This is a very sensitive area, requiring careful supervision and delicate handling. It is subject to fluctuation arising from a variety of causes originating at home
Dr overseas and it is the basis of the longterm growth and development of the Australian nation. Research work in the field of savings institutions suggests that the creation of this additional facility will make only a very small net addition to the community’s savings. The possibilities of Australia obtaining any very significant net increase in personal savings as a result of proliferation of savings mechanisms is remote because Australia has already achieved one of the very highest capital-investment ratios in the world. It already has probably one of the most comprehensive networks for the collection of personal savings that can be found anywhere.
In part, at least, the accumulation of savings through the National Investment Fund would represent a diversion of savings from other savings channels. These other savings channels include, of course, not only life offices and pension funds, but, in addition, a number of savings channels in which the investment earnings are not tax deductible and which currently serve valuable social purposes. They also include deposits with savings banks, whose funds go to the public sector and housing; deposits with building societies, whose, funds go exclusively into housing; and personal holdings of government and semi-government bonds.
Any benefits to the financing of public sector requirements which may be expected to flow through the creating of the National Investment Fund and the encouragement of it by extending the eligibility of the $1,200 deduction will be offset by the diversion of funds from other channels already serving the public sector, such as savings banks and private holdings of government bonds, and including importantly the life offices and pension funds which are ‘captive holders’ of public sector securities; the lost taxation revenue which must occur where funds diverted to the National Investment Fund come out of savings channels which do not enjoy tax deductibility; any slowing down in the rate of growth of life offices and pension funds as a result of diversion of savings to new investment opportunities being offered by the AIDC. This would not only reduce the flow of funds from life offices and pension funds into the public sector but also would constrict the availability of their funds for private sector purposes. Such funds of the life offices represent the most flexible pool of long term savings available for the general needs of industry and commerce.
I have outlined the nature of the Opposition’s objections to this legislation. In conclusion 1 would like to refer to the operations of a similar organisation - the Canada Development Corporation. This Corporation was established in similar circumstances to the AIDC. Section 6 of the Canadian legislation refers to the objects of the Corporation in these terms: To assist in the creating or development of businesses, resources, properties and industries of Canada; to expand, widen and develop opportunities for .Canadians to participate in the economic development of Canada through the application of their skills and capital; to invest in the shares or securities of any corporation owning property or carrying on business related to the economics interests of Canada; and to invest in ventures or enterprises, including the acquisition of property, likely to benefit Canada; and these activities ‘shall be carried out in anticipation of profit and in the best interests of share’ holders as a whole’.
Section 2 of the Act summarises these objectives by saying that the Corporation ‘will help develop and maintain strong Canadiancontrolled and managed corporations in the private sector of the economy and will give Canadians greater opportunities to invest and participate in the economic development of Canada’. The Chairman of the Corporation outlined its operating philosophy with these words:
I believe that our distinctiveness lies in four features: Our independence from government interference, our mandate to conduct our operations in anticipation of profit, our potential size and the fact that a mechanism exists for Government participation in the Corporation to be scaled down by the Directors to not more than 10 per cent at any time.’
This is a significant contrast to the Australian Labor Government’s proposal. It highlights the difference between one Government’s genuine desire to promote private sector growth and the present Australian Government’s clear intent to extend public sector control. The present proposals are typical of a socialist government’s liking for grandiose state symbols, for inefficient steam hammers rather than efficient nut crackers. If adopted, this proposal would sacrifice the economic and social development of the entire Australian community to the misguided socialism and vanity of the Ministers concerned. The Opposition parties reject both Bills.
– I rise to support the Bill. The first point I want to make is that my speech, unlike the one delivered by the Deputy Leader of the Opposition (Mr Lynch), will not be read. I suspect that the speech of the Deputy Leader of the Opposition was drafted somewhat by the merchant bankers of Melbourne. Mine will be a speech delivered by a member of the Australian Labor Party in support of legislation that was approved by the Australian people at the time of the last election. We have heard much whingeing from the Deputy Leader of the Opposition about the attempts by the Labor Party to socialise the economy. In my view his was a treacherous speech in terms of the national economy of Australia. The original Australian Industry Development Corporation Bill introduced a couple of years ago by a government of which he was a member would in normal circumstances have gone a long way towards being comparable with this Bill in its content. But the founding father of the Corporation, the Right Honourable Sir John McEwen, the then Leader of the Australian Country Party, was constrained by the big business interests associated with the Liberal Party as to the content of the Bill, and it was passed in the emasculated form in which it stands today.
The Deputy Leader of the Opposition talks about the right of all enterprise to raise funds freely. No constraint will be placed on the way in which funds may be raised. Admittedly the Australian Industry Development Corporation will be in the ring competing with others, but what is wrong with that? Did we hear any mention from Country Party or Liberal Party supporters that private enterprise raised large slabs of money on the Australian capital market for the Esso-BHP investment or the other investments on the north-west continental shelf? Not a word was said about this. There was no talk by honourable members opposite about foreign companies raising money locally in competition with Australian enterprise. But when a Government institution wants to do this they say that we are socialising the national economy.
The Deputy Leader of the Opposition talked also about tax concessions and subsidies. Let us consider the volume of money that went into exploration in the mining industry. A total of S800m has been spent on this activity in the last 20 years, and $400m of this was returned to the exploration companies by way of taxation concessions and subsidies. Yet this nation got not one per cent of equity from that S400m. We have had enough of this talk from the Opposition about the availability of tax concessions and subsidies. They were lurks for the Opposition’s big business friends, but that sort of thing is over and they are a thing of the past.
I would like to get on to the detail of the Bill. In our election policy speech we said that we would expand the functions of the AIDC to enable it to join with Australian and foreign companies in the exploration, development and processing of Australian resources. The Corporation would be given power to initiate investment activities itself and would no longer have to wait for an approach from companies and then have to divest itself of shareholdings that it acquires for the companies it assists in their enterprises. We also said that the Corporation would be able to raise money locally and would no longer have to borrow principally from overseas. The constraints that were placed upon the AIDC, as it existed before the introduction of this legislation, are best explained by the second reading speech of the Minister for Overseas Trade (Dr J. F. Cairns). I will just read briefly from that speech because I could not put the position into better words. The Minister said:
Moreover, AIDC has had to operate under restrictions which limited it to Investing at the invitation of the company concerned, and to temporary, minority holdings. It could not, for example, act itself as the Australian partner in a joint venture with foreign companies. It has had to decline requests for it to act in this way when other Australian partners could not be found. AIDC has had to decline offers to purchase substantial holdings, including SO pet cent holdings, in companies in’ Australia at present 100 per cent foreign owned,
And that is nothing short of scandalous. The speech continues:
Under its charter it could only acquire shares when providing finance for a development or in investing its limited capital funds. And, when it did take shares in a development enterprise it had to try to sell them as soon as it could. One cannot help feeling that these limitations upon AIDC were the result of pressures by business interests which objected to the competition of AIDC and similarly now much of the opposition to an enlarged and expanded AIDC is derived from those whose interests are served by leaving the field alone to the financial giants who increasingly dominate the capitalist world. But it is not In the interests of the Australian people that we should do nothing or limit our own powers in trying to hold our own a little more effectively.
That is to say, we want to hold our own a little more effectively against the interests of big business. That quotation demonstrates the limitations and restraints which were placed upon AIDC by the Liberals when the Bill was introduced a couple of years ago. We are seeking to remove those constraints. This Bill does not introduce a colossus. The new Cor poration is limited basically by the support which the Australian community is prepared to give it financially. It has 4 new sections. They include the National Investment Fund, a national interest division, a National Interest Committee and also a supervisory council which will supervise the National Investment Fund. They are the additional sections which the Bill provides. The basic organisation of the AIDC and the Board are retained. There is no increase in or lessening of the powers of the Board or the people who sit upon it, barring a few additions to it. AIDC was set up by the previous Government in the days of Prime Minister Gorton for what he called ‘a great national need to strengthen Australia’s enterprise*. Consistent with that aim we are introducing this amending Bill.
This Bill gives AIDC power to ask people to support it with their savings. It never had that power before. The scope of the AIDC organisation is therefore widened under this Bill by the provision to allow for the acquisition of funds on the domestic capital market of Australia. The function of the Corporation is also widened in the extent to which it can participate in Australian industry and in Australian development. The word ‘development’ will now mean much more than it did under the original Bill and as was intended by the previous Government. Development will now mean the ownership of Australian enterprises, large scale consortia, major development projects, buy-back operations and mineral and oil exploration. For instance, we could find AIDC entering into the processing operation of raw material that may be exported to our major trading partners like Japan. That country has energy problems and it has pollution problems. It now suits Japan to have a lot of the processing done in Australia.
AIDC will now be able to invest in that sort of project where previously it would have had to wait for an invitation from perhaps some multi-national corporation. That was a ludicrous position for it to be in. As I said, the Board of the Corporation is unchanged. The autonomy is just the same as before. The decisions of the Board are based on the commercial prospects of each venture which is proposed to it. Therefore it will not. be in a position to be influenced by the Government or the Minister in the normal course of its business. The provisions of the Bill are so worded that the Board does retain that autonomy. A specific change in the Bill is the establishment of the National Interest Committee. That Committee will advise the Minister on projects which could be deemed to be in the national interest. Those projects will be funded by the National Investment Fund.
– Do you really believe it will be left intact?
Order! The honourable member for Griffith will remain silent.
– The honourable member is not answering my question.
-The honourable member is breaking the rules by interjecting. It is disorderly, as the honourable gentleman should know.
– If the AIDC is not prepared to undertake a national interest project backed by a government guarantee which is provided for in this Bill, the Corporation can refer the matter to the Government and the Government can go ahead itself in consultation with the National Interest Committee. The money for such a project will not come from AIDC itself. Such a project will be funded from other sources. So in that respect the Government is not putting its heavy hand on the organisation by requiring AIDC to put the funds it raises into anything other than things that it wants to invest in itself. As far as national interest projects are concerned, the Minister has to report to the Parliament and the Parliament can take any action that it sees fit upon such a proposal. All of the financial dealings in respect of those projects are subject to the normal audit arrangements, which would mean that the Commonwealth Auditor-General would look at the financial transactions. So in every sense it is very much a public matter, totally open to scrutiny by the public and Parliament. Anything that comes within the ambit of a national interest project can be looked at by the Parliament in its entirety. The AIDC also has to report, as it was required under the previous legislation, to Parliament annually on its activities. The Parliament can debate the activities of AIDC even in its expanded form. It could call officers of the Corporation before the Bar of the House if it saw fit. So it has total scrutiny over the widened ambit of the expanded operations of AIDC.
I have talked a great deal about national interest projects. It is the one thing in this legislation that the Government sees as having particular consequences. I will give to the House some idea of what we consider to be national interest projects. For instance, such a project could be the operation of nuclear reactors in Australia. It may involve the enrichment of uranium. We have enormous uranium deposits. If we wanted to sell them in an enriched form we would need to set up an enrichment plant. The cost of such a proposal would be about $2,000m. Therefore it would be in the national interest for these projects to be set up. AIDC would come into the field when the flow of exports could not otherwise be received. For instance, the Corporation could break up international consortiums by investment in national interest projects. It could also by way of national interest projects back up cooperatives. If a co-operative consisting of producers of vegetables wanted to set up a processing plant the National Investment Fund could fund the project.
Similarly if in the timber industry it was found that there were a number of operators in competition with what would probably be a multi-national corporation the co-operative could be supported by the National Investment Fund. I have already talked about a uranium enrichment plant. Japan would be interested in investing in an enrichment plant in Australia. Rather than investing the funds by way of equity capital and taking a percentage of the control and equity of such a plant it could invest an equivalent amount in the National Investment Fund. Those funds would be retained and would go directly into that plant. A return would be paid on the investment in the National Investment Fund and Japan would be given the right to obtain the produce from that plant. Naturally, the right to the export produce of the plant would be a much greater consideration for them than would be the equity in the plant. So by the marshalling of their capital through the National Investment Fund we pay them a fair interest on their investment and they get the right to the produce of the plant. That applies not only to uranium but also to a number of other national development projects. This would be consistent with what the Government would like to see the Fund take on. The Australian Industry Development Corporation is being given an expanded role.
The National Investment Fund can raise money in a number of ways - by straight company subscriptions to the Fund or by life and pension fund subscriptions. Here the Government would amend the requirements of the 30/20 rule to allow funds to be deposited by the life assurance companies in Commonwealth securities. The AIDC would rank as a Commonwealth security for the investment of those funds. We anticipate a lot of funding of the AIDC through the life and pension funds. The other method is by private investors. That can be done in 2 separate and distinct ways. The first is by a savings plan in which the small investor can invest up to $1,200 per annum with a tax deductibility in much the same way as there is a tax deductibility on endowment and life assurance policies to the value of SI, 200 a year. To that extent investments in the Fund would be treated in much the same way as life assurance investments. The other way that money could be invested is in investment bonds. If a person invested $100 the Government would then supplement that $100 with an additional $10 to add buoyancy to the bond.
In his second reading speech the Minister said:
Because an investment bond is not a fixed interest security providing for repayment of a stated amount at a given time but a contractual interest in the value of a given collection of assets and in the income earned by them, it is possible to finance projects with little or no return in the early years but high growth and income at’ a later stage. Such projects cannot be financed with loan money.
He went on to say:
The extra income and capital growth accruing from this Government contribution-
That is, the extra $10 that the Government would put in for each $100 invested - will flow to the individual investor and when the bonds are redeemed the Government’s contribution will be returned to it.
So the Government is not giving the investor an additional $10 for his $100. What it is doing is keeping the Fund at that bouyancy with the $10 until the bond is redeemed. The $10 reverts to the Commonwealth and the bond goes back to its original value at the time of redemption.
The normal capital raising techniques of the AIDC, as it presently exists, still apply. It can primarily call on overseas funds for capital raising; institutional or public borrowings in Australia, foreign company equity participation which is still available under the old Bill; domestic borrowings on the Australian money market; and also debentures. The normal avenues of capital raising are available to the AIDC, as it presently exists, as distinct from the National Investment Fund. The Fund is treated in much the same way as insurance companies are treated. The same tax concessions apply. The Fund is not competing generally in a high profit area. For instance, it is not dealing in speculative land or building. It is there to give a service. There is a reason why that tax deductibility ought to apply as it does to life assurance companies, which also give a service. As with life assurance companies, the Government will give the investors in the Fund the same privileges of deduction.
I have already said that a contribution of $10 will be made for every $100 taken out by way of a bond. It would be a very poor government that did not look after its own corporation as well as it looks after private insurance companies. If we do these things for private insurance companies we should be prepared to do them for the AIDC. The Corporation must be placed in a similar position to that of other public borrowers. The Australian Industry Development Corporation Bill in its expanded form will provide the Australian people with a much greater capacity to acquire equity and participation in Australian projects whether they be in the secondary, mining or tertiary areas. This is something that is long overdue. It would have been done in the days of Sir John McEwen but for the fact that the Liberals, through the pressure of their friends, emasculated the Bill. The Australian Labor Party at the time of the election said that it would expand AIDC in this way. That was one of the key planks of its platform in 1972. This matter had the support of the Australian people in an election and it is impertinent of the Opposition to suggest that it will vote against both Bills.
Surely the allegiance of honourable members opposite to the national interest ought to transcend their allegiance to investment capital and the people they represent. It is time they thought about the national interest and the need of the people of Australia to see that our major extractive industries, our secondary industries and our tertiary industries are not dominated by foreign corporations. The Government is not just concerned about the return on equity that those corporations receive or about the tax dodges that a lot of them are able to set up and operate; it is concerned about Australian control of Australian resources. That ought to be paramount in the mind of every member of this Parliament. If AIDC is a useful vehicle for that purpose and is not cutting across private industry in any drastic fashion it ought to be supported by the Opposition, particularly as it was an election plank of the Labor Party at the last election. The Bill deserves the support of every member of this Parliament. I commend the Bill to the House and reject any amendments.
– I do not think the honourable member for Blaxland (Mr Keating) would mind if I referred to him as a young socialist.
– He is proud of it.
– People are entitled to their political points of view. That is one of the distinctions between Government members and the Opposition. Government members believe in greater government involvement and control in the private sector. From listening to the honourable member for Blaxland it is quite obvious that he is somewhat obsessed by the degree of private involvement in resources and services of this country and is very concerned about the degree of foreign involvement in overseas companies, as if all foreign involvement is bad and against the national interest. It is fairly normal and typical for a socialist to talk that way. It appeals to a patriotic feeling within the community. But to apply these things to the total situation of government involvement and control does not utilise the resources of the nation to the best possible extent. There needs to be a very healthy involvement of the private sector, with government involvement only where government involvement is desperately necessary. Much can be done by a government by issuing directions and guidelines without being totally involved in the processes of production.
This is potentially one of the most important pieces of legislation to be presented to this Parliament. I refer to the amendments to the Australian Industry Development Corporation Bill and the National Investment Fund Bill which are being debated together. Its fundamental premise is that increasing government and public participation is warranted, and indeed necessitated, by the degree of ownership of Australian resources. I agree - I think we all do - that it is basically desirable that the Australian people retain as much control as possible over the country’s resources. However, whether the control should be extended to ownership depends very much on the penalties involved in pursuing this objective, not to mention the question of basic philosophy that is involved. The present degree of over seas ownership exists because Austraiian resources of management and finance were employed and needed in other areas of the economy. Given very limited availability of those Australian resources, their application to industries at present owned by overseas interests would have involved the neglect of other fields such as Australia’s economic infrastructure. If it is believed desirable that we buy back the farm, we need to ask why we require a large bureaucratic organisation of awesome power to achieve this objective. It is even more pertinent to ask whether it is overseas ownership which is the object of Government disfavour or overseas control. If it is control, then the Minister for Minerals and Energy, for example, is doing a good job in demonstrating very forcibly the power of the Government to exercise control, however capricious, over the operation of business in Australia. If it is ownership we need to know the exact disadvantages to Australia of foreign ownership, the need for direct government intervention to counter it, and the areas of the economy in which it is most undesirable. It seems quite clear to me that, before farreaching legislation of this nature is considered, such questions should be clearly thought through and answered. It is not good enough to talk in meaningless generalities about the dangers of overseas ownership and the need to have greater control over our own resources. Such rhetoric may have some appeal to a blind nationalist, but it is very inadequate in relation to legislation involving huge amounts of taxpayers’ money.
This legislation expands the function of the AIDC to the extent that the scope of its activities and the extent of its financial resources are almost unlimited. It will now look for propositions, at the possibilities of establishing new companies and for opportunities where it can take or hold major, or indeed, majority shareholdings, in companies. It will serve as a huge, freely-moving, highly-mobile and politically-capricious source of investment money which can exercise a de-stabilising influence in the loan markets, the money market and the stock market. With the capacity to raise finance on the international loan market and through other avenues it will be a major factor in the operations of the loan and money markets. Perhaps most significant of all is the national interest division, which will serve as a backdoor method of allocating taxpayers’ money for the purpose of furthering the undefined national interest as visualised by the Government. The taxpayers’ money will be allocated on such terms and conditions as the Government thinks fit. Moreover, this gigantic roving empire, while using taxpayers’ money both through the national interest division and through advances to the national investment fund, is answerable to the Ministers more than the Parliament, whose control extends only to the signing of blank cheques and the receipt of an annual report. The expanded AIDC will serve as a direct competitor of life insurance companies and superannuation funds, and will enjoy the advantage of tax concessions. The overall policy guidelines of the Corporation are unclear. Is it to serve as a means of redirecting our trade flow? Is it to be the sole avenue for overseas investment? Is it to serve as a means of directing domestic savings to the development of our resources, or is it to serve as an instrument of policy? Its functions are broad to the extent that it may become involved to any degree in virtually any industry for any purpose, utilising any amount of money.
I oppose this Bill in its entirety for reasons I will explain. The present Act limits the scope and functions of the AIDC while enabling it to perform a useful role in the economy. The existing function of the AIDC is to assist in the provision of financial resources required by Australian companies engaged or proposing to engage in key -industries. Its main source of finance is the overseas loan market, but section 7 (5) of the 1970 Act allows the Corporation to supplement its borrowings outside Australia by borrowing money within Australia subject to Reserve Bank supervision. The existing law also requires that the co-operation of a company must exist before the AIDC becomes actively involved in that company and also requires its co-operation to liquidate its holdings in the company as soon as the Corporation management thinks the original purpose of its involvement has been served. But what happens under this new legislation? The Reserve Bank authority to supervise AIDC’s domestic borrowings will be removed. The AIDC will no longer be legally required to emphasise loan financing or to ensure that its holdings of shares is only temporary. Instead, it can go on the offensive, buying shares openly or secretly, making takeover bids or doing deals with management for positions on the board of directors. It is clearly envis aged that it will serve as a vehicle for increased government participation in, and control of, Australian industry. I believe that if there is genuine government concern over the operations of free enterprise in Australia, including its multi-national side, the Government already has ample scope, and has demonstrated that scope, to exercise firm control. If it is only control that the Government is seeking, then this legislation is a most costly and indirect method of achieving what can be achieved much more simply and directly under the Government’s existing powers.
I have broad objections to this type of legislation, and this piece of legislation. The Government has major responsibilities demanding its attention in the traditional areas of social welfare, education, defence, and so on. Active involvement in the manufacturing nd mining and associated capital markets i .st reduce the Government’s capacity to apply its skills and resources in those traditional areas. Further, by actively involving itself in ownership of the means of production, the Government will set in train a significant transfer of resources From the private sector to the public sector. What is in fact being proposed in this legislation is a giant step towards socialism. What we are talking about here is public ownership. This legislation is designed to facilitate and increase public ownership of industry. That is what socialism is - public ownership and government control. And this Bill is only one of a string of initiatives by this Government to implement its socialist philosophy.
The AIDC is to be transformed from a government-sponsored tool for the mobilisation of capital to help build and develop and strengthen industry under Australian free enterprise ownership and direction, into a mechanism designed to advance the socialist objective of public ownership, control and management of industry. Let there be no mistake about it. Further, through the provisions in the legislation for the Government to channel finance through the AIDC, the way has been opened for increases in government expenditure of a quite unpredictable magnitude. Perhaps more importantly, such provisions involve a compulsory mobilisation of the Australian people’s money for objectives which are very much at the discretion of the Government - not parliament - and in which the people providing the money, the taxpayers, will have no say.
Once again we are to see yet further proliferation of statutory organisations, each having vast individual economic powers, and able to exercise very substantial influences in the operations of the economy, its direction and nature. I refer to such bodies as the proposed Minerals and Energy Authority, the National Pipeline Authority, the Industries Assistance Commission, the Social Welfare Commission and the Australian Industries Development Corporation. The ultimate effect of this bureaucratisation must be a dispersal of power away from the elected representatives of the people to organisations whose links may be very direct with the Government but very tenuous with the Parliament and therefore with the people. Indeed the situation could be reached where Ministers may exercise a general supervision over the operations of these bodies, but real power will rest with statutory corporation not directly or even largely responsible to the Parliament or to the Government. The real centres of economic power will become dispersed away from government and legislators. With a body of the scope proposed for the AIDC, the only authority exercised by Parliament will be the general approval of _ government finance on unspecified terms and conditions and the receipt of an annual report after the money has already been spent.
The Government has drawn a parallel between the AIDC and the Industrial Reconstruction Institute of Italy the IRI. In the industries in which IRI is involved there is a component of private enterprise, but it is IRI which, in most instances, has the controlling interest and the final say. Where IRI is unable to assist an industry or concern, the Italian Government underwrites its participation - in the national interest. Today this scheme includes something like 130 companies, integrated and operated under a unified guide. The IRI accounts for 95 per cent and 60 per cent respectively of the country’s pig iron and steel assets; it is present to varying degrees in several engineering branches; its shipbuilding sector covers 80 per cent of the nation’s shipyard capacity. On IRI depends the whole urban telephone network as well as the Italian Radio and Broadcasting Company. If the Australian Government intends to use the IRI as a model for the AIDC, this Parliament is entitled to a full explanation as to the intentions of the Government for certain industries and areas of the economy. There have been some indications that the minerals and energy industry is one in which the Corporation will be particularly active. The Minister for Minerals and Energy has said that the AIDC may have more than a sporting interest in the industrial development of the Pilbara region of Western Australia. Under these circumstances it must be assumed that the Government believes that while some ventures will not be attractive to private enterprise, they may be attractive to the AIDC. If so, one must ask why.
It is a frightening thought that public money can be committed in large amounts, not on the basis of any rigorous cost/ benefit analysis, but for the furtherance of what the Government sees as the national interest. To advise the Government as to what constitutes the national interest, a national interest committee is proposed, with ministerial appointees whose fees, allowances and tenure of office will be prescribed. But it is not only the national interest section of the legislation that is open to various interpretations. Under the AIDC Bill, the Corporation is permitted to issue securities which are apparently under the National Investment Funds Bill. It is not stated in either Bill what the status of these assets will be between AIDC or the National Investment Fund. In fact, the Bill dealing with the fund does not even mention these securities except where it gives a supervisory council the power to get information on the fund from the Corporation.
The previous Leader of the Australian Country Party, Sir John McEwen, was very much involved with the establishment of AIDC. Its purpose was to raise funds to help Australian industries participate in the development of resources. It had a limited charter but its charter was useful and served a worthwhile purpose. I believe today with the amendments and the extended powers now being given to AIDC it will mean undue bureaucratic involvement in the private sector of the community and is a major tool towards socialisation of many of the productive areas of the Australian economy.
– It is interesting indeed to hear the Leader of the Australian Country Party (Mr Anthony) refer to the Australian Industry Development Corporation Bill 1973 as being a giant step towards socialism. One might ask who took the first step. The. Corporation was, of course, introduced by the previous Government in 1970. If this is a giant step towards socialism, who will direct this giant step? If one examines the Director’s report of the Corporation for the year ended June 1972 one finds on the Board of Directors such people as Sir Colin York Syme, the previous Chairman of the Board of Broken Hill Pty Co. Ltd; Sir Charles McGrath of Repco Ltd; Mr W. M. Leonard of Ampol Petroleum Ltd, and others of equal stature in the business world. These are the people who the Leader of the Australian Country Party says will lead Australia in a giant step towards socialism. This Bill has many advantages for the people of Australia but it is certainly a wild-eyed kind of accusation for the Leader of the Country Party to say that this Bill is a giant step towards socialism.
The Bill certainly will have benefits in that it will encourage the development of industry in Australia in a desirable way and it will certainly assist in the attainment of a greater proportion of Australian ownership of our means of production. The previous Government was in favour of both of those aims when it introduced the Australian Industry Development Corporation Bill in 1970 establishing that organisation. I should like to spend a couple of moments discussing the way in which the Corporation came into being. As I said, it was established in 1970. The idea was first floated, I understand, as early as 1963 by Sir John McEwen, then Leader of the Australian Country Party. He put a proposal to Cabinet concerning the AIDC in 1966. At that stage he could not convince the then Treasurer, the right honourable member for Lowe (Mr McMahon), that it was a worthwhile project. The right honourable member for Lowe, in his capacity as Treasurer at that time, then set about establishing a rival body which became the Australian Resources Development Bank. The Bank was eventually established in 1967. It was much narrower in concept than was the AIDC. Later in 1970, Sir John McEwen again floated the idea of the establishment of the AIDC and, at that stage, he had a receptive Prime Minister, the right honourable member for Higgins (Mr Gorton), who was enthusiastic about the idea. Together they convinced the then Government that this should be gone ahead with and the Australian Industries Development Corporation was established even though the ARDB existed and had been operating for 3 years. There was a difference in concept between the ARDB and the AIDC. When the AIDC was established it was said by many people to be simply duplicating the role of the ARDB. An article in Weekend Business Review’ on 29 May 1970 by Dr Mark Doctoroff, a lecturer in economics at Monash University, pointed out the difference. It read:
It appears that the prime purpose underlying Mr McEwen’s bill is to provide an additional source of financing and supplement the services offered by the banks. This is clearly an attempt to cater to the changing needs and requirements of expanding enterprises. The critics probably feel that existing financial institutions adequately and competently serve their market. If this is so then the AIDC - if it becomes a reality - will not be approached by enterprises wanting funds. Hence the banks and the ARDB will have little to worry about! If the AIDC is approached by many enterprises then it will contribute to the expansion of the economy which surely is in the interests of the banks and the ARDB.
The AIDC was established in 1970. It is an organisation which has assisted many enterprises which have found that other institutions did not cater for their needs. Many businesses have been grateful for assistance from the AIDC. One such organisation to which I shall quickly refer is Bursill Engineering Pty Ltd. On 14 December 1972 in an article in the Australian’ the managing director pointed out that the AIDC had greatly assisted his company to become a successful exporter. The article stated:
Mr Don Bursill, Managing Director of the company, believes AIDC involvement with his firm has advantages beyond the simple provision of capital.
We find that potential buyers overseas are increasingly recognising an IADC company’ as a sound operation; one with which they can do business confidently’. . . .
The AIDC’s reputation on world capital markets is good. At the end of last year it had raised 50m Deutsche marks, or $13m, in its first public bond issues overseas. Another indication of AIDC’s reputation in Australia is that an advertisement for 3 project officers earlier this year brought 250 applications. So the AIDC has a good reputation overseas and within Australian business areas and the community generally. Although the AIDC was established and has been successful there was great contention within the then Government about the introduction of the Bill in 1970. I am grateful to the honourable member for Moreton (Mr Killen) for the information contained in an article in the ‘Australian’ a few days ago. He said that when the Bill was introduced in 1970 the 2 members of the Liberal Party who wanted to speak against it were struck off the list of speakers by Sir John McEwen. Nevertheless, the establishment of the AIDC has been very beneficial although the Opposition, then the Government was so divided on it when it was established.
Our proposal is to expand AIDC’s role to enable it to carry out its function on a much wider scale. If the Opposition is in favour of industrial development and a greater measure of Australian ownership of industry it should certainly support this Bill. The Bill establishes 3 separate but inter-related compartments. There is, firstly, the existing AIDC which will continue to finance industrial development projects. Secondly, there is the National Interest Division which will finance activities which the Government wishes to sponsor in the national interest. Thirdly, there is the National Investment Fund which will be a general investment fund through which the ordinary people of Australia will be able to invest in Australian industry. The latter 2 parts are new creations of this Bill. The National Interest Division will assist the development of industry in ways which are not possible at present. These projects could be vast development schemes such as enriching uranium, or relatively minor matters such as assisting farmers to develop a processing co-operative. The National Interest Division will be financed by Government money or by AIDC, money which will be guaranteed by the Government. It is appropriate that in this section of its activities the AIDC should not use its own general funds without Government guarantee. This is because these’ projects will be either vast projects requiring funds on a scale that the AIDC could not cope with from its own resources or projects which are risky commercial propositions but nevertheless of considerable national interest.
Of course, it is not a simple matter to determine what should or should not be supported, so accordingly there is provision for a national interest committee to be established to advise the Government on decisions to give support in such cases. This committee will not have an easy task and it could be said that there is a danger that the Government will be squandering money on hairy projects. However, in practice it is quite unlikely that this will happen. The procedure will be that where a matter of national interest is brought to the Government’s attention, the Government can ask the AIDC to look at it and evaluate its commercial prospects. If it approves the project as one it would normally take on, it will go ahead with it. If, however, the AIDC decides it is too risky, the Government can call for a detailed report on it, have it evaluated by the national interest committee and, if the committee approves of it, either the AIDC will take it on with a Government guarantee on the funds employed or the Government will provide the funds. Thus any losses on national interest projects will be carried by the Government and not by the AIDC.
It is important, of course, that this division does not become a vast sinking hole for taxpayers’ money. The evaluation procedures of the AIDC, with its considerable commercial experience, and the national interest committee should certainly ensure that projects entered into have been properly evaluated and their potential benefit to the nation weighed along with the prospects of commercial success. It is worthy of note that the national interest fund will be subject to audit by the AuditorGeneral. The AIDC when established by the previous Government was not subject to this. It could be argued that it is right and appropriate that it should not be subject to audit by the Auditor-General, but the National Interest Fund which will be operating on Government funds or Government guaranteed funds will be subject to audit by the Auditor-General. The National Investment Fund will be an assembly of separate funds called divisions. It will be financed solely by private funds. Those who contribute to a division will receive the benefits of ownership in the industry investments of that division. They will share the incomes, profits and capital gains. At present the AIDC gathers funds from overseas for investment in Australia. It can also on a limited basis raise funds in Australia with Reserve Bank approval. This will now be expanded to enable the AIDC to raise funds from overseas, as now, and also from local equity raisings from companies, life and pension funds and private investors. Those private investors could be ordinary people who want a convenient means of keeping their savings in a way that will keep pace with inflation, or they could be workers who want to contribute small amounts regularly out of their wages, retired persons looking mainly for the best income from their savings, younger people wanting capital growth, or private investors who currently buy stocks and shares.
There will also be a special kind of division of the Fund which will cater for participation by foreign-owned companies in the beneficial ownership but not control of Australian enterprises. The advantage of this arrangement will be particularly evident in resource development where foreign companies are interested in investing funds in order to have a connection with the sources of supply of raw materials. They could have such an arrangement through the Fund but they would have no say in the voting control of the project. To encourage domestic investment in the National Investment Fund there will be divisions containing savings plans similar to superannuataion and development insurance schemes and contributions to those divisions will be tax deductible within the $1,200 deduction now allowed for payment to superannuation and insurance. This should help to generate additional savings in the community and put them to a use which will be in the national interest.
Savings should be encouraged also by investment bonds. Subscriptions to them will not be tax deductible, but the Government will contribute $10 to the fund for every $100 invested in the bonds by individual residents of Australia. The extra income and capital growth from this Government contribution will flow to the individual investor and the Government’s contribution will be returned to it when the bonds are redeemed. In addition, the 30/20 rule will be altered. As it stands now, life insurance companies receive special concessions by investing 30 per cent of their money in government securities. At least 20 per cent of it is in Commonwealth securities. This provision will now be altered to a 40 per cent requirement and the AIDC will qualify as a government agency which will be eligible for investment under that rule.
Whether this scheme is a success or not will depend on how the Australian people receive it. They have shown in public opinion polls that they are worried by the lack of Australian ownership of our industries. Various public opinion polls have pointed to the substantia] desire of people to have more say in the ownership of Australian industries. This Bill enables the Australian people to have a means of investment in Australian industries. This means of investment is not open to them at the moment. We hope therefore that they will be greatly encouraged by the passage of this Bill and by the widening of the powers of the AIDC. We hope also that they will invest their money in it and so ensure the success of the operation. I have referred already to those who say that this is a giant step towards socialism. This giant step will depend on what the people say. It will be a giant step, yes, if the people of Australia support this proposal. I say it will be a giant step towards the development of industry in an appropriate way and also towards greater Australian ownership. But this will be so only if the people of Australia support our action.
In opposing this Bill, the Opposition is denying to the Australian people a means not available to them at the moment to have a greater say in the ownership of Australian industry and also to enable the small investor to obtain capital growth and to share in the capital gains of our society. At the moment most of the shares held by people in this country are owned by a relatively small proportion of the population. The ordinary wage and salary earner does not own shares to any great extent and most of them own no shares at all. So, these people are denied this means of sharing in capital growth and the capita] gains which flow to a small proportion of the population. As a result of the widening of the powers of the Corporation, the Australian people will be able to obtain such capital growth and, at the same time, help to develop secondary industry in this country. They will be able to invest their money knowing that the development of industry in Australia will be carried out in a way which will bear in mind the national interest.
It does not follow that the more profitable investment is the one which is most in the national interest. One cannot deny the relevance of the efficiency and the profitability of various enterprises. But it does not necessarily follow that because these enterprises are the more profitable, therefore these are the ones which are most in the national interest. It may be that, in some cases, other capital should be diverted to projects which, although not so profitable, are greatly in the national interest. This Bill enables that process to be carried out by the AIDC. I commend the Bill to the House. I hope that the Australian people will support it when it is enacted. If they do, Australia will be a better country.
- Mr Deputy Speaker, for us, it is fortunate that we live in a community which cherishes its freedom of action, a country peopled by men and women who want to do their own thing in their own way and in their own time. It is not a society that will tolerate for long the dictates of others or a government economically and socially illiterate that seeks to rule not by persuasion and common sense but to impose its gut reactions and primitive economic ideologies on a temporarily captive electorate. After 10 months the mood of the Australian public has changed. It wants a degree of certainty and predictability in political life within which the greatest personal freedom can be freely exercised and a society in which they can make their own economic, financial and social decisions freed from the smothering concept that ‘mother knows best’. In short I believe that instinctively the Australian people want a liberal society and form of government and the system of free enterprise as the creative element in the production and exchange of goods.
– Why did the Australian people toss you out last December?
– The Australian people will bung you out; give them another chance now - even you who live on your political life. It is well to remember on occasions such as this that the fundamental economic element in a liberal society - in fact, its basic motivating force - is the system of free enterprise. Let me quote from one of the great political analysts of this century. Harold Laski, a socialist intellectual and a considerable critic of liberalism and free enterprise, had this to say about the system:
As a rule liberalism has . . . been tender to the claims of minorities and to the rights of free association. It has been suspicious of the control of thought and indeed of any effort by government authority to impede the free action of the individual.
He said further:
I do not mean that the triumph of liberalism did not represent real and profound progress. The productive relations it made possible immensely improved the general standard of material conditions. The advance of science was only achieved through the mental climate it created. All in all its advent was one of the most beneficient revolutions in history.
In his words, a socialist’s words, but of my own preface:
No one can compare the constitutional and social changes brought about by the liberal revolution and its peaceful triumph after centuries of feudalism and clerical government.
Here follow the words of the author:
Without the sense of wider and more creative horizons of recognition that there is a greater regard for the inherent worth of human personality, a sensitiveness to the infliction of unnecessary pain, a zeal of truth for its own sake, a willingness to experiment in its service, which are all parts of a social heritage which would have been infinitely poorer without them. These were the gains involved in the triumph of the liberal creed.
I am not arguing that liberalism per se has been perfect. Unreformed liberalism suffered the defect that its growing production was not automatically matched by the effective fair and equitable distribution of the wealth that it produced. This was a clear function and responsibility of government - a responsibility and a problem that successive Liberal governments throughout history have attempted, with success, to solve.
I am sure the Australian people want the institution of free enterprise to survive and continue its contribution to national greatness. After less than a year of this Government, the Australian people are sick of ministerial arrogance and contempt of public opinion and the illicit attempts to nationalise large elements of Australian industry.
This Government preaches in the guise of the public good; it practises the art of early 20th century socialism. The people themselves have shown their feelings at the two most recent by-elections in New South Wales and Victoria. They should soon be given the chance to express it again at a Federal election.
There is a second consideration against which this Bill must be judged - the maxim once bitten twice shy*. Speaking to the second reading of the Seas and Submerged Lands Bill 1973, I said of the Government’s decision to establish a natural gas pipeline grid throughout Australia:
Honourable members . . . will see that the National Pipe Line Authority has been given the power to intrude very nearly onto the factory floor and into practically every avenue of production.
And of the new charter given to the Australian Airlines Commission, I said that its powers extend, to put it shortly, from ‘casinos to contraception’. I was not mistaken. Under the National Pipe Line Bill the Minister for Minerals and Energy has decided to try to nationalise the distribution and processing of! all oil, natural gas and other hydrocarbons] produced in the Woodside-Burmah area of the north-west fields. This, I believe, is beyond constitutional and legal power.
Just as bad, the Government without any technical knowledge of the problems associated with the production, processing and distribution of hydrocarbons has decided that the crudes will be ‘acquired’ at well head and that all ‘down stream’ operations will be nationalised under the relevant minister - Mr Connor of all people. To put it in Mr Dunstan’s words in a similar context - Mr Dunstan is of course the Labor Premier of South Australia:
Mr Connor seemed to be under the impression that the project near Port Augusta could be established by Australian companies. I cannot agree that there is any possibility of this . . . they do not have the expertise, the technology or the markets . . .
But confiscation and nationalisation have been attempted after the relevant private enterprise companies have successfully carried out explorations and development work at a cost to the companies’ shareholders of well over $150m and in an industry that is now operating on the margins of technical skill and knowledge. This is nationalisation of an Australian company with control in Australian hands and with an assurance given to my Government by Burmah Oil that if desired by the Australian Government the articles of association of Burmah-Woodside would be altered to ensure that this assurance was carried into effect.
Let me now make some observations about the existing Australian Industry Development Corporation Act and the changes sought to be achieved in the Bills now before the House. In the Act of June 1970 the AIDC was given the job of tapping overseas capital markets for loan funds, in order to put them at the disposal of predominantly Australian companies so that they could undertake, or participate in, new development or expansion. It was restricted in this way by the father of the scheme, Sir John McEwen, in order to prevent competition for the relatively limited pool of savings in Australia becoming so severe that it would, firstly, drive up interest rates; distort the effective allocation of resources in Australia; and, draw loan funds away from the Australian Government, semigovernment and local government authorities and from the private sector of the economy into projects favoured by the AIDC; and secondly, to reduce the pressure of demand in Australia for goods and services produced here. This was to be achieved by means of command over the money borrowed overseas which was given by the international resources. In short, it was designed to ensure that the Corporation acted in a way that was consistent with responsible overall economic management by the Government.
The new powers which the Government wants to confer would destroy this concept. The Corporation was not given power unilaterally to interfere in the operations of Australian companies. It could invest only at the invitation of the company concerned and it was under the obligation to dispose of ils assets to Australians whenever it was reasonably practicable to do so. Australians themselves - not the Government, or a government agency - were to be put in the position of buying back, to use a favourite phrase of Sir John McEwen, a ‘bit of the farm’. Each of these basic features on which the McEwen bank was wisely constructed will be destroyed if this Bill becomes law. I hope and expect that the Bill be defeated in the Parliament.
Next, let us turn to the new powers and functions the Government wishes to confer on the Corporation. The range of government interference in business is extended to cover nearly every aspect of our economic and social lives and of the employment of the Australian work force. The Bill attempts to provide the means by which nationalisation of any Australian industry or business can be carried out without the precise approval of the Australian Parliament and without the knowledge or informed opinion of the Australian people, but at their expense through taxation and the temptation of subsidies. It is to be a carnivorous and undiscriminating institution and will attempt to achieve by deception changes in the processes of production, distribution and exchange which could not be obtained by parliamentary means.
Let me be specific. Clause 5, which seeks to amend section 6(1) of the Act, states:
The functions of the Corporation are -
to facilitate and encourage the establishment, development and advancement of Australian industries concerned with the manufacture, processing, treatment, transportation or distribution of goods, or the development or use of natural resources (including the recovery of minerals), .
These functions cover a very wide range, are well-nigh comprehensive and now include the natural gas and oil industries and transport. But to make certain that the functions and powers of the organisation are enlarged in a comprehensive way, the Bill provides for other changes to the Act which I shall now mention. Clause 5 of the Bill, amending section 6(1) of the Act, puts in 2 dragnet clauses which provide that the functions of the organisation shall include power to provide finance to any industry or activity connected in any way with other functions of the Corporation and, in paragraph (a) (ii), to engage in any activity that has any relation to any activity or industry in which the Corporation is interested.
While there are many words involved in these clauses, they are unnecessary because proposed new paragraph (ca) of section 7 (2) of the principal Act confers power to carry on any business or activity whatsover. ‘Business’, according to the legendary Oxford Dictionary means: That with which one is concerned at the time’ and, even, ‘a matter with which one has the right to meddle’. As I have indicated, this is an omnibus power which could make legal interference with virtually every aspect of our lives. I have said that the Labor Government has no mandate arbitrarily and perfunctorily to nationalise industry at the whim of a Minister or the Government. But in this Bill Labor seeks such power.
Let us turn now to another clause of the Australian Industry Development Corporation Bill and see how it will work if it becomes law. This is the comprehensive and compulsory power of nationalisation contained in proposed new section 8 (b). Under this clause, if the Minister considers that:
the provision of finance by the Corporation in relation to the enterprise or project . . . would be in accordance with the policy of the Australian Government . . - that is, the Australian Labor Party, for the time being -
Under sub-section (4), where the Minister has received a report in relation to the enterprise and is of the opinion that: . . it is in the national interest that the Australian Government should -
Under sub-section (6) (c) these moneys are not to be taken into account for the purposes of sub-section (3) of section 7 of the Act - that is, the limitation on the power of the Cor poration to borrow money shall not apply to action taken under this section.
This power, associated with other provisions in the Bill, relating as it does to any type of business, provides the legislative framework within which the Government can nationalise any industry or business without reference to or debate in this Parliament, subject only to advice from a national interest committee of such people as the Minister appoints, including one person nominated by the Minister for Minerals and Energy. What a dim prospect for the people of this country. A power of this kind should be exercised only with the authority of a specific Act of the Parliament which has been freely debated in this House and in the media and which obviously has the approval of the Australian people. Taken together with the Seas and Submerged Lands Bill, the Pipeline Authority Bill and the Australian National Airlines Bill, it is a clear indication of the gut reaction and primitive ideology of the Labor Cabinet and its members. The Australian public has already been bitten by these Bills and should shy off passing the Australian Industry Development Corporation Bill and the National Investment Fund Bill now before the House.
The Industries Assistance Commission Bill is to come before the House. It will add yet another commission to the 40 committees and commissions already established. This is bureaucracy gone beserk and will do incalcuable harm to the Australian economy. No reasons are given as to why these powers are needed. There is no protection to shareholders of companies whose assets are compulsorily acquired as to a just and fair price being paid for them other than that contained in the Australian Constitution. As we all know a government can destroy the value of assets overnight, as was done by the Minister for Minerals and Energy as a consequence of the proposed Woodside-Burmah acquisition. I wish to make another point. In his second reading speech the Minister for Overseas Trade said:
We will work towards more ownership in the hands of individual Australians.
But he did not mean what he said. He was not telling the truth. The Bill does not work towards more ownership in the hands of individual Australians. Australians will have the right, as he said - even be compelled in some cases - to contribute to national investment funds. Individual Australians will not be the owners of assets and property in the way they would if they invested in a private unit trust. In the case of the AIDC, ownership will belong to the Corporation. In the case of a unit trust it will belong with the people of Australia.
Finally, I refer to another power which has received little attention. Spattered about in the 2 Bills and the Act - the Australian Industries Development Corporation Bill and Act and the National Investment Fund Bill - are clauses and sections dealing with the capital of the AIDC, its borrowing powers and command over finance. The Minister has also forecast amendments to the taxation laws. A close examination of these powers will clearly show the manner in which the Australian taxpayer and investor may be exploited by the Government. I give but 2 illustrations. The life assurance offices, which are trustees for the savings of large numbers of policy holders for life assurance, superannuation and death cover, will be directed to invest part of their funds in the AIDC. This will be done by a change in the 30/20 rule under which the life offices will be virtually directed to invest contributors’ funds in the AIDC, not in the investments the legal trustees would otherwise choose in the interests of their policy holders. Whilst the AIDC may borrow up to 5 times the capital and reserves of the Corporation there is no limit on the amount the AIDC may use through the issue of national investment bonds - no limit whatsoever. This must have serious and adverse effects on the Australian money market and on Australian industry and commerce.
As honourable members will see, the legislation proposes to give the AIDC and its associated organisation enormous financial power and an extensive range of functions and powers - far too many to be entrusted to a government, let alone a statutory corporation. It is certainly not a power which should be entrusted to a government of the Whitlam kind. I have said that the Australian people are understandably sceptical about government intrusion into private enterprise and business, particularly when that business or enterprise is already being effectively conducted. The Australian people are opposed to legislation by deceit. They do not want nationalisation or socialisation by stealth. They want open government. They want to know what the Government is doing and why. The 2 Bills before the House and others I have mentioned will empower nationalisation intrusion and interference on a grand and arbitrary scale at the whim of an individual Minister or the government. The people do not want this either. I will vote against both Bills and I hope that the Parliament will reject both of them.
– I support both Bills. The Australian Industry Development Corporation Bill, as set up in 1970, was an attempt to buy back the farm. It was emasculated by the Liberal Party at that time. Frankly it was a puerile attempt. Now that the Government wants to give teeth to the AIDC the Opposition’s attitude is to be expected. It is proposed that the scope of the AIDC be extended so that assistance is available to companies engaged in distribution, transportation and other activities related to such industrial development projects. The Corporation will also have a second major function, namely, that of securing the greatest practical Australian participation in the ownership and control of companies engaging in these enterprises. The Corporation will be given the power to initiate particular investment proposals rather than having to wait for approaches from companies. Further, the Corporation will no longer be required to divest itself of shareholdings it acquires in companies it assists.
The creation of the National Investment Fund gives the Corporation the means to raise funds, apart from government grants and funds assigned for projects deemed to be in the national interest, to enable it to finance Australian ownership as an equal primary objective along with development. In regard to foreign ownership, the 1972 Treasury White Paper on foreign investment in Australia reports that approximately 89 per cent of this country’s capital requirements are met by internal Australian savings with the residual 11 per cent being overseas capital which has been directed to the most lucrative and most crucial sectors of the economy, namely, minerals, petroleum, automobile production,” electronics, chemicals and pharmaceuticals.
I am extremely interested in the crucial areas of mining and petroleum. The Commonwealth Bureau of Census and Statistics report on overseas participation in the Australian mining industry for 1968 stated that overseas ownership of the mining industry was 44 per cent and overseas control was 58.1 per cent, as determined by value of production for 1968. The mining industry is made up of 3 major groups - metal mining, fuel mining and non-metal mining excluding fuel mining. This excludes clay mining. If one breaks the mining industry down into its component parts these components yield from the 1968 value of production the figures as given in Table I, which I seek leave to incorporate into Hansard. Its incorporation has been approved by the Opposition.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– I thank the House. The table indicates that in terms of metal mining overseas ownership was 51 per cent and control 68.7 per cent. The annual inflow of direct private investment in companies in Australia is given in Table II, which I seek leave to incorporate in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– I thank the House. Investment in the mining industry over the 3 financials years 1968-71 was almost double that in the preceding 5 financial years. The rise in overseas investment clearly indicates the increasing degree of foreign control in the 2 sectors under consideration. The 1968 figures given are the most recent official figures available. I seek leave to incorporate Table III which gives the estimates of foreign control of metal mining in Australia for 1971-1972.
-I leave granted? There being no objection, leave is granted. (The document read as follows) -
– I thank the House. This Table has been prepared from the annual reports for 1972 of the relevant major mineral companies or from information supplied by the companies direct - and I can assure honourable members that that information took some ascertaining. In the table the figures for each mineral are given separately and the production total so obtained is compared with the total production given by the Bureau of Mineral Resources in the Australian Mining Industry Quarterly Review, Vol. 25, No. 2, of December last year.
At this stage I want to make some assessments of these figures. They are based on production figures and are extremely revealing of the depth of overseas control in the Australian mining industry. A few of the figures for overseas control are: Bauxite, 100 per cent; copper, 83.6 per cent; ilmenite, 64 per cent; iron ore, 49 per cent; lead, 74.7 per cent - and believe it or not the one mineral on the entire list that has total Australian equity is manganese - rutile, 85 per cent; tin 75 per cent; zinc, 71.59 per cent; zircon, 78.5 per cent. The figure for black coal for New South Wales fortunately is 23.8 per cent. But in the Country Party State of Queensland the figure for coal is 88.2 per cent. If after 23 years the Liberal Party considers that to be a national achievement, the people of this country and the Government consider it to be a national scandal and a national sell-out. The figures quoted are on the basis of a company being defined as foreign controlled if at least 50 per cent of its shares are owned by a foreign owned company. To compare these figures with those for total overseas control as derived by Treasury it is necessary to determine the value of each mineral. This has not been possible as the 1971-72 mineral prices are not available at present. As a check of the validity of the Treasury figures as a measure of foreign control, the production figures for the period 1968 to 1972 were collected. These figures are included in table IV. I seek leave to have that table incorporated in Hansard.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– Using the overseas control percentages for 1972 as given in table III, in relation to 1968 prices and productions it was found that 63.9 per cent of the listed minerals production value was overseas controlled. The Treasury reports that for the same period overseas control of a slightly extended list of minerals was 68.7 per cent. In relation to 1971 production and prices, the 1972 overseas control percentages give the overseas control on production value as 58.51 per cent. This exercise shows that as a statistic the figure for overseas control is of small validity. On the other hand, it does indicate the proportion of profit leaving the country. So it is a useful economic indicator and one of the measures of overseas control which it is possible to determine.
Table III shows that about three-quarters, of the metal mining industry is dominated by overseas controlled companies. Of the Australian subsidiaries, only some have Australian participation. This is so, for example, of Conzinc Riotinto of Australia Limited, which is the Australian subsidiary of the parent Rio Tinto Zinc Corporation. The parent company is based in England and it holds 80 per cent of the shares with the remaining 20 per cent being issued in Australia. Under existing conditions, no matter what proportion of the Australian shares issue of the subsidiary the Corporation obtains, control will still remain in the hands of the multi-national parent company. One ought to compare the measures that have been taken throughout the world to control multi-national corporations.
Since the start of the Second World War governments around the world have become aware of the degree of exploitation of their country’s resources by foreign owned and controlled companies, and especially the multinational companies. Although the multinational company is not a recent phenomenon, it is only since the end of the Second World War that these conglomerates have been involved in international politics in their own interests rather than those of the nation in which the parent company is based. Needless to say, the nations concerned have taken various steps to ensure that such constraints are implemented as are needed to protect their interests against multi-national activity. In several cases constraints have taken the form of direct governmental intervention in the affairs of the multinational company. This appears to be the case in the oil industry where, irrespective of the socialistic inclinations of the governments concerned, they have either nationalised the industry wholly or forced the multi-nationals to accept 51 per cent participation by the government in the company’s subsidiaries. For example, Iran nationalised its oil industry in 1951. This move was modified in 1954. Since then the National Iranian Oil Company has purchased all oil from the operating companies at the well head. Indonesia obtained complete ownership of that country’s entire oil industry by 1968. Since then the government oil company - Pertamina - has been the major shareholder of any company undertaking offshore oil exploration.
It is a remarkable thing that in the United States multi-national corporations control 84 per cent of oil refining. Let us have a look, after 23 years of Liberal government, at the level of density of foreign control in Australia. The level of control stands at approximately 32 per cent less than 90 per cent. In effect, foreign owned companies control 90 per cent of the oil refining in this country. I was interested in the remarks made by the Leader of the Australian Country Party (Mr Anthony). If my memory serves me correctly he challenged the Government by saying that he would like to know what adverse effects this country could suffer by foreign ownership in certain areas. An article in the ‘Australian’ of 2 October this year carried the heading ‘A long, hungry winter for U.S. families’. The article went on to say:
Americans, who have long treated energy like yesterday’s newspaper, are being warned they face a long, icy winter.
Further on the article states:
Because emergency services, such as hospitals, ambulances, police, and fire departments would have priority over the common man in getting petrol, oil gas and electricity, whole families would suffer.
Further on the article states:
The Government has made it clear that unless Americans voluntarily stop wasting their energy, mandatory controls and rationing are aa close as the next petrol pump.
The United States in fact is being forced to import 200,000 barrels of fuel oil a day. Why is this so? We ought to take a little time to analyse this situation. It is a pity that the motion of censure was called off this morning because I would have relished taking part in the debate on it. What is the situation in the United States? Why has it been put in this position? Firstly, a recent study undertaken in the United States shows that there are some 44 Federal agencies which directly administer energy problems and 20 more which indirectly influence energy matters. The 64 agencies are scattered throughout 9 Cabinet departments, 40 independent agencies and the Executive Office of the President. Secondly, congressmen and small businessmen throughout the United States are charging that the major oil companies have manufactured the fuel shortage in the United States in order to raise prices.
The Federal Trade Commission has for some time been investigating gas industry figures on the basis, it claims, that they are far too meagre. If the issue becomes heated at all in the United States pressure will be put on the Government to break up once again the multi-national corporations. Why will this be necessary? The answer is because they control in effect 84 per cent of all refining capacity in the United States, 72 per cent of natural gas resources, 20 per cent of coal and 50 per cent of uranium. The method they use in the United States is to eliminate competition among themselves, to co-operate rather than compete, to weaken if they do not dominate, and to reduce the independent companies in the marketing sector. That is the result in the United States of permitting the resource sector to be controlled other than through governmental regulation.
– It is a theory.
– It is not a theory; it is a fact. If the Opposition had brought on the censure motion for debate this morning I would have relished taking part in it. Let us get into this question and look at the problems. On numerous occasions the Prime Minister (Mr Whitlam) has made reference to South West Africa. We ought to ask why it is that South Africa and Great Britain refused to acknowledge the right of the international courts to make a mandatory provision that South West Africa ought to have independence. The reason is its resources of fuel, uranium, industrial diamonds and gemstones. Any country that loses control of its resources loses a high proportion of its inheritance and its integrity.
Let us look at the situation in the United States. What method does it use to control foreign ownership of companies in this sector? In the United States control is exercised by the Securities and Exchange Commission which is part of the ‘Department of Commerce.
Mir McMahon - It does not own them though.
– No. Exploitation of the country’s national resources is controlled by the Mines Department and the Department of the Interior. Might I inform the right honourable member for Lowe (Mr McMahon) that multinational control in these proportions is one of the tragedies in the United States. This has occurred because the Government refused to intervene and to conserve the resources constructively in the interests of the nation as a whole. The United States has been exploited by the multi-national corporations to the extent that the United States is being faced with the situation with which Japan was faced in 1941. The honourable member should cast his mind back to 1941. At that time the Japanese had 2 choices, regrettable as they were. Japan either had to knuckle under United States policy or be forced to go to war, because the Americans put an embargo on Japanese oil imports. No nation can stand that situation. This is precisely how the United States has boxed itself in today, because it has allowed private enterprise to manipulate the one commodity that is required to sustain a community today, and that is energy.
– Oh! What should the United States have done? Just be a little practical about this.
– The whole of the fuel resources of the United States ought to be rationalised and not left to private combines. This country will suffer the same fate.
– What would that do?
Ms- JACOBI- If you take the Canadian situation-
– That is what they cannot do- control life, control everything. That is what you want.
– Who is controlling it now, you idiot?
– The honourable member would not understand the position. I will now deal with the Canadian situation. External control of the Canadian mineral industry had reached 65 per cent for the petroleum and natural gas industry it is 74 per cent. Canada established the Canadian Development Corporation with a view to breaking that nexus. In 1940 South Africa established the Industrial Development Corporation of South Africa Limited. That organisation was either the first or one of the first government corporations in the world. The objectives of IDC are: With the approval of the State President to establish and conduct any industrial undertaking and to facilitate, promote, guide and assist in the financing of new industries and industrial undertakings. The activities of IDC have no geographical limitation and the Corporation may perform any act ‘whether within the Republic or elsewhere which may be necessary for, or incidental or conducive to, the attainment of its objectives. That is the position in South Africa.
The Leader of the Australian Country Party (Mr Anthony) referred to the position in Italy and talked about the Institute of Industrial Redevelopment. I just want to make a brief reference to this matter. Obviously he forgot to mention that in Italy there are 3 sections which are involved in the control of foreign investment. The honourable member did not mention Ente Nazionale Idrocarburi. I will briefly refer to the role of ENI. As Italy is very poor in natural resources it was open to extortion by the multinational corporations who controlled the supply of those resources. The Italian Government set up ENI as a government company to regain control of fuel and energy supplies for the country. ENI was successful in obtaining oil supplies from the Union of Soviet Socialist Republics thereby breaking the American consortiums’ hold over Italy. Since then ENI has participated in exploration for oil and gas in areas such as Nigeria and the Congo with marked success. ENI was able to negotiate natural gas supplies from Russia and Holland and it is having a transmission pipeline built to both countries. ENI is also prospecting in various areas around the world for uranium. Apart from the fuel and energy areas ENI has diversified into the chemical, textile and engineering industries. This government company is now competing profitably with a range of private industry. At least the Italians had some sense of responsibility in realising that their natural resources ought to be protected.
AIDC is one instrument by which this country can preserve its natural resources and ensure that they are exploited constructively in the best interests of the nation as a whole. From the survey I mentioned it is apparent that the avenues for the AIDC and the Government to control the future investment of the multinational corporations in Australia are numerous. Unfortunately, control of the operation of future companies does not give the Government any say in the operation of existing overseas controlled companies. It does not do that. If the Government is to control the exploitation of this country’s resources, especially if it intends to use the resources for diplomatic .negotiations, it is necessary for the AIDC to be able actively to control a significant sector of the mining industry. Let me conclude on this note: After 23 years of benign neglect in this country honourable members who are now in Opposition are responsible for the sell-out of this country’s heritage for a mess of pottage. At the moment the Government has an uphill task to reverse that situation. It is my sincere belief that both these Bills will receive the support of the Australian public. I commend them to the House.
– When our courts look at an Act of Parliament and seek to interpret it for any reason they take no notice of the parliamentary debate connected with the Act of Parliament. There is a very simple and very sound reason for that. It is to be found, among other things, in this: In order to find out what is in an Act of Parliament it would be an exercise in futility to consider the debate linked with it. Without wishing to be abrasive to the honourable member for Hawker (Mr Jacobi), I say that that was approximately the position in which he left us this afternoon. Our courts turn to the Act itself, unlike the French courts which indulge in the luxury of looking at what they call the traveaux preparatoire-the work that has been associated with the Act of Parliament in order to determine what it means.
I must say that the Minister for Overseas Trade (Dr J. F. Cairns) has singled himself out and has given a quite dashing perform ance as far as this Bill is concerned. The honourable gentleman brings to political life a great number of skills, not the least of them being a massive sense of urbanity. The Minister was at his urbane best when he delivered the second reading speech on this Bill. He never at any time gave to the House the central purpose of the Bill and it is to no avail the honourable member for Hawker’s going off and looking with an intense sense of anxiety at the diminution in Australia’s control with respect to some companies. My honourable friend would act to better purpose to tell the House what are the possibilities of this Bill. It is to those possibilities that I want to turn.
This ““Bill, whether honourable members agree with it or not, will enable certain things to be done. We will come to a consideration of my views later on. I know that I may have some difficulty in insinuating them into the minds of some of my friends on the Government side of the House, but at least I will attempt to do just that. This Bill will enable the Government to enter into business. Does anybody argue against that? It will enable the Government to enter into business on a massive scale. This Bill will enable the Government, through the Australian Industry Development Corporation, to take over any business. Does anybody argue that? Our Constitution, of course, presents formidable obstacles to the socialist who is attracted to the idea of socialising an industry - say, the steel industry. Simply because of the decisions of our courts he cannot get to them in the direct manner that a government working under a unitary system such as that of Great Britain would be able to get to them. There cannot be the one stroke to annihilate an industry and to put it under government control. I must admire the ingenuity of my friends opposite. This is one of the most ingenious devices ever used by any Government anywhere in the world in order to get government control, and to get it through a corporation. This Bill represents the most far-reaching savage attack on free enterprise that we have known in the 73 years of our Federation.
– More than bank nationalisation in 1947?
– I will justify every syllable to the Minister before I sit down. By contrast the bank nationalisation proposals fade into insignificance compared with the potentialities of this Bill. It is possible under the Bill for the Corporation to reach out and to control any industry and to ensure that the industry in the ultimate does the bidding and the beckoning of the Government. Some spokesmen on the Government side have said: ‘Oh, this is just a bit of tidying up of the AIDC. It is just a bit of tidying up. Nothing very radical about it, old chap; do not get fussed up. It is not worth getting prickly about at all’. That is the proposal they have sought to press upon us. The truth of the matter is that this is a street away from the present AIDC.
– Just a street?
– I am thinking of a very long street - one that runs across the Nullarbor Plains. This is a substantial and radical alteration to the present Australian Industry Development Corporation Act. Look at what is proposed. We are to have an enlarged board. We are to have the National Interest Committee. What a vibrant connotation of words - the National Interest Committee. Who on earth would be opposed to the national interest? One can almost hear the Minister for Overseas Trade, having appointed members to the National Interest Committee, saying: ‘Oh, look at him. He is a member of the National Interest Committee.’ One can almost detect now a strong odour of sanctity about the National Interest Committee. And we are to have a National investment Fund. There is something quite robust about the word National’. Those people who are puzzled and worried a little as to what precisely will take place are to be sedated by means of a supervisory council. It brings one a great sense of comfort to have all of these bodies - the National Investment Fund and the National Interest Committee. ‘Daddy, what does that man do?’ ‘Ob, sonny, he is a member of the National Interest Committee.’ The supervisory council brings such splendid comforts. These bodies are the paraphernalia of respectability that the Minister for Overseas Trade seeks to confer.
The fact is that these bodies represent collectively a desperate sham on the part of the Minister for Overseas Trade. Make no mistake about that. Let no person say later on that he did not know the gun was loaded. The real power in this Bill rests with the Minister for Overseas Trade. That is clear if one turns to proposed section 8 of the Act or clause 7 of the Bill. The most important part is proposed section 8B. It says that the Minister will from time to time write to the Corporation. We have the Corporation. It is there - founded on the corporation’s power which has been considerably emancipated in recent times and goodness only knows precisely what limitations may be placed upon it. The Minister may write to the Corporation informing it of the policy of the Australian Government in relation to the establishment, development and advancement of an industry. That is the first action. I think that the Minister will be indulging in a lot of correspondence, from what I heard from some honourable gentlemen opposite.
Then if the Corporation will not take any action - and it appears that it is within the functions of the Corporation - if the Board decides not to provide the finance, it reports back to the Minister. What does the Minister do then? The Minister, if he is of the opinion that it is in the national interest that the Australian Government should - there are the provisions - facilitate the provision of finance, or assist the Corporation to engage or participate in the enterprise or project, may go and have a chat with the Treasurer. Then hands will come out into the pocket of the taxpayer to provide it. What is the key to this ‘In the opinion of the Minister’? That is the great enduring cry of all political conflict; - ‘the Minister’s opinion’ - as though that is beyond any form of attack. I must confess for myself that I have the greatest of intellectual difficulty and understanding in appreciating various doctrines of infallibility, but let me say this to the Minister: I find it an annihilating experience to say that he should have in his hands the power to determine what is in the nation’s interest. If that is the approach of the Minister I am grateful that at least in the first 12 months of Labor government we have found out exactly in what direction it is treading.
The great cry is: ‘Trust the Minister. The Minister cannot do any wrong.’ I will give an illustration of how far Ministers can go wrong. Some time ago in the United Kingdom the mood of the socialist government of the day - Mr Attlee’s Government - was to plan for the mechanised production of groundnuts in East and Central Africa. This was the great scheme. They started off with the same clarion call - the same strong, powerful, overwhelming, persuasive arguments about nationalism and assisting people - the hands of compassion stretching out to the hungry throughout the world. His Majesty’s Government had therefore decided - that is to say, the Ministers - to proceed immediately with the development of approximately 3i million acres of land in Tanganyika, Northern Rhodesia and Kenya on the general lines recommended by the mission. Having declared that, the Minister for Food, Mr Strachey, like all good Ministers keeping the House informed of what was going on, said:
The House will wish to be informed-
The same pretentious line that has not changed from one generation to another - of the steps which are being taken to ensure continuity of direction of the project for the large scale mechanised production of groundnuts and other agricultural produce in Africa. Clearance of the bush-
The Minister said proudly - and other work on the project has already begun. As originally arranged the managing agents who are at present in charge wish to terminate their agency . . Legislation necessary to set up a public corporation which will then take over will, as already announced, be introduced in due course.
They, too, went for a corporation but the power remained always with the Minister.
In the White Paper which was produced on the subject for those who pulled away from the idea of getting the groundnuts scheme under way in Africa there was this:
If this large scale experiment succeeds, it may well prove to be an important step-
One can almost hear the man reciting it - towards the Food and Agriculture Organisation’s goal of a world free from want.
That was a great socialist scheme. So we go along this road. Apparently things did not go too well, so they produced another paper to indicate exactly what was happening. Of course, it was in the lovely, subdued language of all the bureaucrats who would have the greatest of difficulty in even running a pie stall into bankruptcy. The paper said:
Any estimate at this stage of the probable cost of the new scheme must be subject to a wide margin of error.
That is lovely language - ‘a wide margin of error’. In other words they were well off the track. It continued:
But on the best information available-
It is always the best information; it is not merely information - at present to His Majesty’s Government, the amount required over the 7-year period will be of the order of £6m without allowing for contingencies for any bush clearing after 1954.
They persisted. One must admire their sense of persistence. Then, alas, something happened. They ran into bad weather. They sent our large consignments of tractors and heavy machinery to East Africa to be unloaded from ships, and there they found out that there were no wharf handling facilities to unload the tractors.
– That was only bad luck.
– Bad luck, of course. I am indebted to my friend the honourable member for Wakefield for the manifestation of simple charity which deserts me. The scheme was wound up. It cost the British taxpayers £36m which was just written off. That is about all we found out. The Minister for Overseas Trade says: ‘Trust me. We know best.’ I want to ask the honourable gentleman what inbuilt safeguard there is in his approach to business life when he says: ‘Ah, I will never make an error of the proportion of groundnuts. If you can trust me, I will be the one. My judgment will be superb in all manner of things.’ Let me take a specific case. Proposed section 8 of the Act is the powerhouse of the Bill. The rest is persiflage. Already the Minister has put down 30 or 40 amendments to this proposal. But proposed section 8 is the powerhouse. Let us assume that the Minister writes to the Corporation, in courteous terms, as one would expect from him, and says: ‘I inform you that it is the policy of the Australian Government to do something about increasing steel output in Australia’. This could well call for a large injection of funds into the steel industry in Australia. The Corporation comes back and says to the Minister: ‘My Dear Minister’ - with an appropriate touch of genuflexion - ‘We do not think that it is really proper at this time to expand the steel industry. We think there are more urgent areas to be developed’. The Minister could then say: ‘I have received that report from the Corporation’. The next step takes place. The Minister forms the opinion that it is in the national interest for him to move into Broken Hill Pty Co. Ltd. Under the terms of this Bill it is quite possible for the Minister to go onto the open stock market and buy up literally every share available in BHP. I understand that there are of the order of 156.2 million BHP shares. The Minister can say: ‘Buy them up, boys. It is only money’. If he got sufficient control of the shares he could get the honourable member for Hunter (Mr James) on the board of BHP. Even the honourable member for Robertson (Mr Cohen) could go on the board. I suppose that would be preferable to joining the Court of St James. Does the Minister confute that?
The Minister could turn round and say, as has been pointed out, in what is a declaration of political faith in clause 5 of this Bill: ‘We want to get into the transport industry; R.M. needs stirring up. It is in the national interest.’ So the Minister goes and buys up all the available shares in Ansett Transport Industries Ltd round the country, gradually inveigles his way in and gets control of the company. Then the Corporation can run where - along the lines of the groundnuts scheme? That is always the peril at the end of any socialist plan, any socialist program, and that is the central issue of this Bill. It is to no avail the Minister for Overseas Trade rising and saying ‘Oh, but no, those fears are quite groundless; we are so reasonable’, the urbanity of the honourable gentleman creaking even to the joints, the honourable gentleman posing as the man of great reason and of great understanding and so gentle. I have always admired the frankness of my honourable friend and the fact that he has never disguised for one moment that he is a deeply committed socialist but I must confess that he has brought a measure of chagrin to my miserable frame in that frankness seems to be deserting him. Under this Bill he has not sought to tell us all the facts. Why does my honourable friend not now recant and be frank and candid and tell us that under this Bill we can get into any business at all. The Minister can say: ‘Buy out Mount Isa mines. The Corporation will take over. It is in the national interest to get things really cracking in the Mount Isa-Cloncurry district and stir things up there.’
– What about Peak Downs?
– Somebody else could take over from Peak Downs in Queensland - another calamitous performance of a socialist government. I hope that members of this Parliament will understand what is involved. This is a clear and clever attempt by the Australian Government, committed by dint of its policy to an objective which I excuse myself from supporting in any shape or form, to do as I have said, and it is up to the people of this country to realise that this is what is in mind. If they realise what is in mind I do not think that the Australian Government will be in socialist hands for much longer.
– I always enjoy the speeches my friend the hon ourable member for Moreton (Mr Killen), because he injects a great deal of wit into the chamber which this place can often do with. He talked about all the possibilities of the Government going into business. He said that under these Bills we would take over; that they would lead to socialism; that they were ingenious measures. Then the honourable member for Moreton entertained us with the story about groundnuts. Of course government enterprises can fail in the way that private enterprise can fail, and we have seen many of them fail over the years. The whole situation is that the National Investment Fund, when established, will be used to invest in a wide variety of enterprises for the benefit of the Australian people.
What are we discussing? We are discussing a plan for the future development of Australia by Australians. In his second reading speech on the Australian Industry Development Corporation Bill the Minister for Overseas Trade (Dr J. F. Cairns) had this to say concerning the establishment of the original Australian Industry Development Corporation:
So the AIDC was given the job of tapping overseas capital markets for loan funds, and putting these moneys at the disposal of predominantly Australian companies - to help them to undertake, or participate in, new development or expansion.
Within its terms of reference, this has been a great success. As the honourable member for Gellibrand (Mr Willis) pointed out, there are people who are prepared to give off their skill and capacity to assist the AIDC in this end. The Minister also said:
The processing industries are the kind of industrial development we want in Australia - and I think some other countries want it in Australia too- but we also want Australians to share to the greatest extent practicable in the ownership and control, and the rewards of that ownership and control of those operations. We want a fair deal for Australians, and we include Australian capitalists in that desire.
We live in the sort of society where we have a balance between government and private ownership, and there is no intent whatsoever in either of the Bills before the House to alter that situation. We want to see that ownership in this country, whether it be government or private, is under the control of Australians. The Minister also referred to the way in which projects are to be financed. He said:
In other words he said that we want to use the amount of money which is available in the community in the way in which private enterprise uses it. If a person buys shares in a newly developed company he does not expect a great return in the early stages, and we hope that this legislation will work in precisely the same way. The Minister also said:
These arrangements will give every Australian an opportunity to gain a stake in his country’s future development by making weekly contributions in a convenient manner, from his pay to a savings plan, or by buying investment bonds.
This is an appeal to the feeling of nationalism - the feeling of national pride - which I believe that the vast majority of Australians have. They ought to be in a position to invest in their own country, and they are not able to do it at the moment - not to the extent to which this Government believes they should be able to. Perhaps I ought to say a little about the National Investment Fund itself and how it will work. The Fund will be operated by the AIDC and an independent supervisory council established under Part IV of the Bill, comprising persons with appropriate investment skills. I underline that because it is important, and I would agree with speakers on the other side who have said that this is important, but who also suggested of course that we would not get it. I believe that we can. These people will be appointed to look after the interests of the subscribers. The AIDC will manage the Fund and select and evaluate suitable investments within the AIDC’s charter. The Council will be responsible for the general investment policy of the Fund and no investments will go into the Fund without the council’s approval.
Just imagine if we discover additional oil and gas resources off the coast. Instead of having to rely on foreign investment, what a marvellous thing it will be for all Australians who wish to do so to participate in this sort of development. As I see it, the future will be a time when we will have effective Australian control over our resources. We have often seen in the past that the control of our resources has fallen to a large extent into foreign hands. I will not quote all the percentages and so on that the honourable member for Hawker (Mr Jacobi) quoted. They have already been included in Hansard. I invite honourable members to look at those percentages because I believe that anyone with a feeling for his own country would agree that the situation which has developed over a number of years ought to be reversed. I suppose many of us have played the game of Monopoly. It has been a very popular parlour game for a long while and we know that as assets are obtained by the players in the game how much more difficult it becomes for the other players to stay in the game. Eventually they have to resign. I do not want to see that sort of thing happen with our resources where more and more control and, therefore, more and more power fall into hands over which the people of Australia do not have the control. Let us remember that we live in a democratic society. Governments are elected and governments are broken, but the government is only the vehicle by which people express their point of view. This happens at election time and I hope that that situation never changes. The people of Australia entrust to their governments the way in which this country is to operate. When we talk about government control in a democratic society we are not talking about something remote from ordinary people. We are talking about a government, freely and properly elected by the people, having control of the assets of the coutnry for the benefit of all. That is the way in which the Government envisages this legislation working. That is the way we want to see it operate.
I point out to the House that the past Government became concerned about the situation that was developing. It took some steps to see that the situation did not accelerate too quickly, but it was either unable or disinclined to take the sort of steps which we on this side of the House believe are necessary. We cannot allow to continue the present situation in which our resources are sold overseas at bargain prices. Only the other day it was pointed out to the House that the potential resources of gas and petroleum which Australia has at its disposal is far in excess of the amount of capital which would need to be invested by foreign companies. I add that in the sort of world in which we are living at the moment - a world where there is an energy crisis - it is plain to people who look at the problem that it is quite possible, in the near future, that Australia will not be able to import the fuel that it needs. We must expand the resources which we have at our disposal. We do not want to see a situation where the car owners of Australia have to lock their vehicles in their garages or leave them in the streets because they are not able to run them. This is a definite possibility unless we make sure, as I believe all good governments should, that the interests of the people that they represent are properly preserved.
Another matter to which I draw attention is that the investment bonds, which are mentioned in the Bill, become the personal property of the individual investors. It gives them a personal stake in enterprises in Australia. So, Mr Deputy Speaker, you, I and every member of the House will be able to invest in those funds in the same way as one invests in stocks and shares. Many people in Australia who would be unable to find the money needed to buy a parcel of shares will be prepared, if we make it easy and the Bill proposes to do so, to put aside some money each week. This, of course, will mean that under direction the liquid capital which at the moment is contributing to inflation can thereby be channelled into resources which are less inflationary and which, in the long run, will contribute to the national good.
I point out to honourable members that any country is as rich as the goods and services it produces. We must make sure that Australia’s goods and services are useful and contribute to the overall good and prosperity of the people who live here. Why are members of the Opposition not supporting this legislation? I am at a loss to understand their position. They have talked for years about private enterprise, the need for the individual to be able to contribute to such enterprise and for the individual to be able to retain control. This proposed organisation is not some bureaucratic octopus. It is a way by which ordinary persons, the men and women down the street, will be able to put their money into something from which they will be able to get a reasonable return and, at the same time, feel that they are making a real contribution to the development of Australia.
Why are the members of the Liberal and Country Parties against this legislation? For years they have talked about private enterprise. Is their concept of private enterprise the private enterprise of foreign owned companies - of multinational corporations? To me that is not private enterprise, it is foreign capitalism which is a completely different sort of thing. This Government stands, as I said before, for a balance between private and public ownership. It stands for free enterprise, but where is the freedom if we do not have the power to invest? If the companies available to the public to invest in close their doors and will not accept their capital, where is the free enterprise in that?
Australia commenced its development largely from the money it obtained from gold mining. This provided the initial resources to build cities like Sydney and Melbourne. In Melbourne, for instance, the number of buildings and the tremendous growth that went on in the decades following the discovery of gold, is one of the really remarkable things about our history. In the last decade huge mineral resources have been discovered in Australia. The question facing us is: Are we to use these resources for the good and benefit of the vast majority of Australians or are we, through our neglect - I underline that word because we have the opportunity through these Bills to do something about it - to let a second golden opportunity for Australia slip from our grasp? I suggest that this Parliament will be failing in its obligations to the people of Australia if it allows that sort of situation to occur.
A country can become economically subservient in much the same way as it can become subservient to military or political pressure. We must make sure that we retain control. In all honesty, I concede that some members of the Opposition have expressed concern from time to time. I think the right honourable member for Higgins (Mr Gorton) on one occasion said that we do not want to be like a puppy dog who turns over and asks for his tummy to be scratched. This Bill will make sure that we do not act like that puppy dog but that we utilise the resources we have at our disposal. This Bill proposes a national responsibility. We need to take up the challenge of that national responsibility. We need to put the national good before private and private-foreign gain. I ask the House to give very serious consideration to the measure before it. I believe it should do so and I hope that when these Bills go to another place there will be a re-thinking of some of the attitudes expressed this afternoon in this chamber because the Australian people will not thank any Opposition which does not take the opportunity to protect their vital interests. The people of Australia will know whether those members on the other side of the House and in opposite parties in this Parliament are really concerned about whether we keep national control here or not. I ask honourable members in this House to give serious consideration to it. I hope that when these Bills go to another place they will be passed for the greater good and benefit of Australia.
– The Australian Industry Development Corporation Bill before the House is perhaps the most sinister and dangerous piece of legislation so far introduced by the Whitlam Government. This afternoon we have listened to a debate which has clearly demonstrated the real significance of this measure. The honourable member for Diamond Valley (Mr McKenzie) spoke with many platitudes. With his lack of experience in this House perhaps he was sincere and genuine but he really did not understand the fundamental import of this measure. If he had he surely could not have claimed as he did that this was the kind of legislation which we in this Australian democracy require for the future good and wellbeing of this country. I want to recall the introduction of the original Bill in 1970. On that occasion I gave it my full support. Many other honourable members on this side of the House did likewise. We were nevertheless conscious of and concerned at the possibility of a future Labor Government picking up this piece of legislation and drastically altering it. At that time I expressed the view that we could not afford either to reduce the content of the Bill because of that risk or to throw it out for that same reason, because if the Bill had not existed the very fact that this new Government could introduce a Bill would not be altered. This would, of course, then have been an originating Bill. We are dealing now with amendments to an existing Bill or, if I can put it another way, we are seeing the full colour and import of the comments made at that time by the then spokesman for the Opposition, now the Minister for Overseas Trade (Dr J. F. Cairns) and, until recently, also the Minister for Secondary Industry.
We can recall well that his expressions on that occasion were extreme indeed. Of course, he supported the Bill. He supported it to the full and saw in it the opportunity of having an instrument upon which he could apply his own approach if he ever had that opportunity. Unfortunately he now has it. These are the real issues in this debate: The direction in which we find this legislation leading; the attitude of the Australian Government and, of course, in its wake, the official attitude of Australia as a nation to the total concept of trade and commerce and development and the future of industry. I am talking of industry as a whole because the Government’s sweeping powers bring into question the future of all forms of industry at all levels. As a result of the action taken by the previous Government in the original Bill in 1970 and the policy of that Government in relation to overseas investment, we had a situation in Australia where a very proper approach was being made to development and the content of overseas interest in Australian development, and at the same time the necessity to try to ensure that where possible and to the greatest extent possible Australia took its rightful place in developmental projects.
It is obvious that this Government has looked at this problem in depth and has found that it is not easy for it to move from the ground upon which it found itself as a new government into a completely new area smoothly and easily. The reason is twofold. First of all it finds that there is a limit to Australia’s economic capacity. That limit has undoubtedly disturbed this new Government. Obviously it would rather have taken action on the spur of the moment in many directions to offer massive funds to do this and that and take over in many directions. We have, of course, a classic example in the pipeline. This was a decision made no doubt on the spur of the moment by the Minister for Minerals and Energy (Mr Connor). Now the Government obviously realises what this means in terms of financial commitment. This no doubt was realised when this Bill was being drafted. So the Government has set about the task of introducing a wide range of propositions aimed at gathering in funds which it could then direct and spend on the pretext that this was to achieve Australian equity and Australian ownership and all the other high sounding and - to those who have no opportunity of seeing into the detail and background - attractive approaches to dealing with great national problems.
The other problem which arises from this is that the Government already has frightened off overseas investment. Already it has scared away enterprises of the kind that are necessary to bring technology, capacity, knowhow and experience into the field of major development in Australia. So it now wants to correct its early error by saying that we will do these things ourselves and offer incentives to the Australian people to invest in a governmentcontrolled corporation. But what do we find? We find a massive raid being planned on Australia’s own capital resources. I would not mind, and I am sure other Australians would not mind, if there was a balance and some evidence of reasoning and an attitude of common sense, but there is certainly no evidence of them. We can see straightaway all of the indications of a socialist approach. We can see straightaway an attitude of takeover, an attitude of ‘deal on our terms or else’, an attitude of ‘we can do no wrong; our decisions will be the right ones and you can put up with the consequences.’ I just want to remind the Australian community that the last Labor Gov.ernment engaged to a limited extent in this sort of thing. There was the great shale oil project which was going to revolutionise fuel supplies for Australia. Of course, funds were poured into it but the oil did not flow. It was a dismal failure. During the war maybe it was justified to attempt to build up some supplies from that source but it was seen in the postwar era by the Chifley Government as an opportunity to go out and do some great job of development. It failed.
– Does private enterprise ever fail?
– The honourable member who has just interjected has really hit the nail on the head. Private enterprise has failed many times. The risk capital that goes into development - thus far in Australia and certainly in the older countries of the world - has been the real means of achieving development. This has not been taxpayers’ money administered by a public servant who is not answerable in the same way as are those who are prepared to take a risk through private enterprise. As the honourable member for Calare (Mr England) so rightly says: This is the point of the matter.
Private enterprise will take risks and those who are responsible must take the rap. But a public corporation is quite different from a government body. No public servant will have his head lopped off because he has made mistakes. It may well be said that in private enterprise those who happen to make a wrong decision are not completely destroyed. But, there at least the situation is that answers must be given as to why a decision was wrong. At least in private enterprise success or failure is measured to determine whether more funds will be poured down the drain or a cut off point determined before such action is too late. If we look at the examples of what has occurred in the kind of administration that was set up for a great public corporation in the United Kingdom - this was certainly well described earlier in the debate - a clear warning is spelt out to the Australian nation not to allow this sort of thing to happen.
The honourable member for Diamond Valley made an appeal for the House to agree to the passage of this Bill and for the Senate to support it also. I am sure that he will be disappointed - and rightly so. Australia cannot afford at this time in its history and at this stage of its development the luxury of this kind of massive socialist experiment. I think that it was the honourable member for Blaxland (Mr Keating) who said that $4,000m had flowed out of this country. He used that figure in an attempt to prove a point. But he failed to recognise and to tell the rest of the story. If he was prepared at the same time to introduce in this debate clear figures as to Australia’s development in that same period we would see the relationship of his assertion to what in truth are the real facts of the matter.
In my short lifetime, I can remember when the Australian population was fewer than 7 million. Today the population is double that figure. If we consider also the growth of the economic capacity of this nation, the development of industry and the tremendous efforts of the previous Liberal-Country Party Government to give Australia some basic industry, to give Australia’s work force opportunities and to give Australian consumers the chance to buy Australian first and to develop the nation, the record is a pretty good one. It certainly is misleading to sell that record down the drain by saying that we have allowed $4,000m of our wealth to flow out of this country. What complete hypocrisy it is to criticise the Australian community in this way. That claim’ simply is not true. If the facts are assessed as they ought to be assessed it will be seen that those economists and others who support the socialist assertion in this matter are doing a great disservice to their fellow Australians. They should tell the whole truth in this matter. Then, a measure of this kind might be more properly assessed, debated and understood by the Australian community.
Australia has a proud record of development. We have had until now a record second to none in terms of stability of economy, government, administration, opportunities, ways and means and progress. ‘Is this record to be sold down the drain by the socialist concepts of this Labor Government, which is bent on redistributing wealth, as has been said so often recently in this session? In the course of redistributing wealth, will the opportunity be taken from the small man to share in that wealth? Will that wealth be put into some great pool so that everyone may dip in regardless of whether they have made a contribution or whether they are prepared by dint of hard work and persistency in their particular calling to make a contribution? Is this what redistribution of wealth means? Of course it does. The Labor Government wishes to put all available financial resources into one great pool regardless of how it does so.
Let me refer specifically to the proposition on the creation of finance for the proposed operations of the AIDC. It is clearly indicated that, in order to make a massive raid on Australia’s available capital resources, pressure will be put first on life assurance companies. I think that the Minister for Overseas Trade might have nodded his head partly in agreement. I think that he is keen to do this. Of course he is keen to do it. He knows that this is just one avenue in which pressure can be applied because the resources are there, the cash is there. They exist because the Australian community - not the wealthy people - has built up really worthwhile resources in terms of finance. I refer to the ordinary policy holder in any of the recognised life assurance companies. These people have invested in order to provide some security for their families.
What do we find today? A very clear picture is presented of reductions in bonuses this financial year because of the impost of increased taxation in excess of $40m. We are informed in this measure that the Government proposes to alter the present rules so that a greater proportion of those funds might be directed into the Corporation. Incentive for investment in a special form of bonds is to be offered to try to attract money into this pool. In addition, a taxation concession is to be granted. What will be the consequence of this action? Any benefit gained on the one hand will be lost on the other. It is a case of the money being taken out of one pocket and put into the other. In the process opportunities for the proper growth of these organisations, particularly the life assurance offices which have been so important in the development of Australia, will be reduced. Something will be taken away from them to enable this socialist experiment to proceed on its merry way. If that is good government, I have a lot to learn. It would be the worst form of double crossing of the Australian community that one could possibly produce. Yet, here is this Government obviously proud of its action.
We should look at many other features of the Bill and particularly the extent to which the AIDC can become all-embracing in terms of the Government’s attitude and policy to industry. I think in terms of primary industry specifically. I am certainly concerned, as I know others in this House are concerned, about this aspect. People outside as they begin to understand what this all means are becoming concerned also. We will find developing very quickly a situation in which those with no expertise at all will begin to apply themselves through this instrumentality to direct and to set the rules in terms of what ought to happen in industry.
Let us take primary industry. Two years ago any proposition for assistance to primary industry would have been measured against the then ruling world prices of wool, wheat, meat and all the other commodities and the answer would have been: ‘No, you cannot do it; it is not a viable proposition’. It would also have been said: ‘No, you should not assist these industries because the best thing to do for them in the light of their prospects in the immediate period ahead is to get rid of them, pay them out, sack them and get rid of the lot’. Here we are, 24 months later, with an entirely different situation. Of course, the Minister for Overseas Trade professes to be so skilled in these matters-
– Order! The honourable member’s time has expired.
Debate (on motion by Mr Morris) adjourned.
Sitting suspended from 6.11 to 8 p.m.
– Mr Speaker, I seek leave to make a statement.
-Order! Is leave granted? There being no objection, leave is granted. (Quorum formed.)
– Australia’s greatest single national energy asset is the natural gas and associated resources of the north-west ocean shelf of Western Australia. The Pipeline Authority Act clearly provides that the Pipeline Authority shall construct pipelines for pet- roleum and natural gas to centres of population, and points of export, in a nationally integrated system of pipelines. It can buy and sell petroleum, whether in Australia or elsewhere, to ensure that natural gas is available at uniform prices throughout Australia. Condensate, liquid petroleum gas, and like substances are to be retained and processed in Australia in order that they may be available to augment supplies of motor spirit and similar fuels obtained from indigenous sources. The Pipeline Authority must secure, control and retain reserves of petroleum adequate to meet the long-term needs of the Australian people. This is precisely what the acquisition of natural gas at the well-head means.
Australia has 36-40 trillion cubic feet of natural gas. This is a high-premium fuel. At least half of it is on the north-west shelf. The Woodside-Burmah consortium is still holding exploration permits in respect of 142,000 square miles of the continental shelf. Under the terms of the Petroleum (Submerged Lands) Act, Woodside-Burmah and its consortium partners must surrender, between November 1974 and September 1975, 71,000 square miles. After surrender it is entitled, under current legislation, to apply for production licences. Its planning does not provide for production of natural gas before early 1978.
The Woodside-Burmah consortium has the following interests: The Burmah Oil Company of the United Kingdom controls 50 per cent, the Shell Development Australia Pty Ltd controls 16) per cent and smaller percentages go to British Petroleum Development Australia Pty Ltd and California Asiatic Oil Co.
I stress that only 15 per cent of the total interest In the permit area are held by Australian investors. Eighty-five per cent are owned overseas. The major shareholder in WoodsideBurmah is Burmah Oil Company (UK) Limited which has a 54 per cent holding in that company. The consortium, despite an expenditure of between SI 10m and $120m in exploration, has been unable to fully explore more than onethird of the total area. Most of this has been at the southern end of its exploration area, within strategic reach of Dampier. Most of its expenditure will be recoverable, under current taxation concessions. The drillings of the consortium have been remarkably successful. Of 29 ‘wildcat’ wells drilled, nine have been successful, being a success ratio of one in 3.2. The world offshore drilling average is one in ten. Its drilling costs have been reduced from between $300 to $400 per foot in 1967 to between $100 to $125 per foot last year.
With the approach of the surrender period, Woodside-Burmah has resorted to farm-in agreements with other companies. Under these, the new company pays all expenses of search, and Woodside-Burmah takes at least 50 per cent of any gas and oil produced. In racecourse parlance, farms-ins of this type give the odds to nothing’ to Woodside-Burmah. I have deferred approval for such farm-ins on the principle that the area belongs to the Australian people, and if Woodside-Burmah is unable to fully explore it, it should surrender the area to the national Government, which can then either grant an exploration permit itself with an appropriate interest or itself undertake the exploration.
Under section 39 of the Pipeline Authority Act, we have broken new constitutional ground, having legislated without obtaining mirror legislation, under the arrangement on which the Petroleum (Submerged Lands) Act is based. The Pipeline Authority can build a pipeline on the shelf to the wellhead where the production is taking place. I invite the Opposition to attack the constitutional validity of this section. They will be very ‘reluctant dragons’. As they and those who were responsible for the recent pilgrimage to the Privy Council are well aware, the High Court will find in favour of the Australian Government.
Australia is notably deficient in crude oil. We only have 8 years supply, allowing for projected expansion of consumption. One third of our oil refineries throughout consists of imported crude, which is escalating rapidly in price. A situation will be rapidly reached where the price of these imports will be excessive. Libyan crude is at the moment SUS4.90 per barrel, and Bass Strait crude is SA2.08. Australian crude oil is of a light gravity and lacking in the residuals from which comes furnace fuel. The oil-fired boilers of Australia are largely at the mercy of the Organisation of Petroleum Exporting Countries. It is the natural gas, from the northwest shelf, which will provide a simple and easily adaptable replacement fuel for such imported furnace oil. Australian natural gas is also very ‘wet’ and the liquids derived from natural gas on the north-west shelf are about 40 barrels per million cubic feet. They arc close chemical cousins convertible to motor spirit. The motor spirit so derived will at least double our reserves, and give Australia reasonable time in which to successfully explore for more crude oil. For these reasons, it is vital that full acquisition of natural gas and associated liquids be made by the Australian Government.
We plan a major refinery at Dampier to strip the liquids from natural gas and in turn, from the liquids, to strip ethane, as a feedstock for a major petro-chemical plant which will be world-ranking in capacity. There are wholly-owned Australian firms which have the necessary technology and ability to establish such a refinery. I plan also for the petrochemical plant to utilise the salt harvests of the Dampier area to convert into caustic soda, which in turn is the basic chemical in the conversion of bauxite into alumina. There are very substantial deposits of bauxite in Western Australia. - Another immediate application will be the use of natural gas for pelletising iron ore. There is an urgent need to augment the limited gas reserves of Dongara in Western Australia. Historically, Western Australia has been seriously deficient in indigenous fuel resources. We plan to correct this situation. My predecessor in office, Sir Reginald Swartz, found it necessary to write to Woodside-Burmah in October of last year expressing his concern at its failure to disclose its discoveries and the extent to which overseas interests, who were fully informed, would buy up Australianowned shares, and further diminish an already alarmingly low percentage of Australian ownership. When the disclosures were made early in our advent to office of a possible 20 trillion cubic feet of natural gas, they were based on a highly conservative recovery factor of 55 per cent. The general recovery factor is 70 per cent. I have experienced the greatest difficulty in obtaining information from this consortium, not only in respect of its discoveries, but also because of its failure to comply with obligations under the Mining Code drawn up by our predecessors.
I interviewed Messrs Donaldson and Wilson of Woodside-Burmah in February 1973 and indicated to them then that it was the intention of the Government to legislate to establish a pipeline authority, to construct a transcontinental pipeline and to be ready to take delivery of all natural gas at the end of 1977, which was then their target date. I also told them that I deprecated the constant propaganda suggesting that it was only by exporting natural gas overseas that the allegedly huge sums for development of this field could be obtained. Nonetheless, the propaganda has continued. Under the terms of the Petroleum (Submerged Lands) Act a production licence is given for a period of 21 years. Without export- controls this company, to secure the maximum cash return, planned within this period to rip out the natural gas and other resources of the north-west shelf. Its primary responsibilities are to the 85 per cent overseas interests of the consortium. Our primary responsibility is to the Australian people. These resources are their birthright. Our primary objective is to measure and to space the development of the resources so that they will be available for generations to promote the industrial development of this nation. For these reasons, I took the initiative to discuss with Burmah Oil Company (UK) Limited a basis for proper relations. At my request Mr Dewhurst and Mr Williams came from London recently to meet me here in Canberra. I would like to quote from a letter which was written on 2 October by Mr Williams. I might add that that letter was written on the same day on which there was such a fuss about the announcement that was made by Mr Donaldson with regard to our proposal to take over and purchase the whole of the company’s output. Mr Williams said:
I greatly appreciated our talk in Canberra last Tuesday and I hope this may be the beginning of a better relationship between Government and WoodsideBurmah than was previously achieved.
I am not too concerned at the immediate reaction to the news that Government intend to buy all the gas from the North-West Shelf. It is far better to let the market get it out of its system in these circumstances so that we can settle down to our discussions without a lot of speculation.
In other words, we had established quite good rapport. It has gone further than that. Last Friday I received a further telex cable from them giving the details of their proposed float of shares. I will come to that in a moment.
The point I want to make is that instead of these people being steamrollered, as has been suggested, and being given unfair treatment, they realise that they are dealing with a national government. They are an international firm. They are used to dealing with governments which are capable of standing up to their people, and that is precisely what the Labor Government will do in Australia. They understand that henceforth their function will be to drill, to explore and then to co-ordinate their planning with ours. That is precisely the arrangement that will be followed. My main reason for contacting the United Kingdom principals was to ensure that Australian investors in the proposed float of some $70m would not be misled by the constant propaganda of the last 9 months to the effect that there was a bonanza from export prices. There will be a very fair and substantial return to those shareholders. I strongly urge everyone who holds those shares to keep them. By the same token, it will be a tidy return and a reasonable return but not the return that local propaganda would have expected. Of course, Opposition members sensing some political advantage rushed in for the kill and made fools of themselves in the process.
The proven and probable recoverable reserves of the Gidgealpa Basin do not fully meet the commitments under the contract between the Australian Gas Light Company and the Gidgealpa Consortium, and similar contracts with the South Australian Government which is heavily dependent on amplification of the dedicated reserves of natural gas to 1991, which are to be used for electric power generation in South Australia. We have already given an undertaking to South Australia that we will continue the pipeline to Palm Valley to provide a ‘back-up’ for a short fall of supplies from Gidgealpa. I will be giving details at a later stage being in notable company - no less a personage than Sir William Pettingell. The Australian Gas Light Company had precisely the same plan - not merely to go to Gidgealpa and thence to Palm Valley, but to go right across the continent to the North West Shelf. In due course I will give those details.
We have already commenced a feasibility study with the Western Australian Government for links between the North West Shelf, Palm Valley, and the Western Australian market comprising Perth, Pilbara and Kalgoorlie. It is logical, therefore, that the extension from Palm Valley of a natural gas main trunk line to Dampier should continue. The question of the price to be paid for natural gas at the well-head on the North West Shelf is completely premature, in a situation where the exploration consortium has not yet identified the areas which it proposes to retain, and those to be relinquished. It is interesting to note that in almost all Gidgealpa consortium companies, Woodside-Burmah have substantial interests. Their recent contract with AGL should be examined. On the AGL basis, the admitted reserves of the North West Shelf natural gas and liquids would have a gross value of almost $6 billion at current well-head values in Australia. My recent conference with Burmah Oil Company (UK) Limited was to ensure that it confined itself to exploration and did not prejudice itself by financial commitments associated with export.
For these reasons I consider it criminal that stock exchange panic is being spread by Opposition calamity howlers amongst the holders of shares that are an extremely sound investment. The recent statement by Mr Donaldson in his annual report to shareholders flowed directly from my initiative. It will ensure that Australian investors in the proposed new capital issue should clearly understand that exports would not be permitted until full reserves were established. We have yet to learn the full extent of Woodside-Burmah’s reserves. I intend to do so. Figures have been bandied around suggesting that astronomical sums will be required for development. I deprecate the persistent guesswork. I have been beseiged by major overseas companies prepared to take delivery onshore of natural gas and to provide their own cryogenic gas tanker ships and compression units. There is a similar foreign lineup anxious to build the Dampier refinery. I repeat that this will go to Australian companies with the necessary technology. The Australian Government will also take a major interest in it through the Australian Industry Development Corporation. I will be in the closest collaboration with my colleagues the Ministers for Secondary Industry (Mr Enderby) and Overseas Trade (Dr J. F. Cairns) in this project. I also wish to stress the very high success ratio which has been a feature of off-shore oil drilling on the Australian continental shelf.
The cost of the first sector of the pipeline from Sydney to Gidgealpa should be less than $200m. The extension from Gidgealpa to Palm Valley with both natural gas and liquid lines should be approximately $190m. Tenders for the excavation and laying of the SydneyGidgealpa sector close on 29th instant. Over half of the Japanese pipe has been delivered in Australia and acquired by the Pipeline Authority. The statements which were made on television tonight that the pipe is the property of the Australian Gas Light Co. or its subsidiary are incorrect. It is being bought and paid for with Commonwealth funds. The needs of Australia will come first and WoodsideBurmah shareholders will get a most handsome return on their investment. They will not, however, get the astronomical returns which would flow from unrestricted sale by export without regard to Australia’s internal needs. Almost every major industrial nation faces the current stringent shortage of oil supply. Australia will have an abundance and a dominant economic position in the future industrial world. I present the following paper:
Motion (by Mr Morrison) proposed:
That the House take note of the statement.
– A request has been made to table a paper. The Minister has now passed it to the Clerk.
– The statement by the Minister for Minerals and Energy (Mr Connor) is quite a remarkable document. In fact one could say it is incredible. It consists of threats, vague assertions and abuse. It is not backed up in any way. It reasserts assertions which have already been proved false by the mining industry and all that it will do is make the uncertainties even greater uncertainties and therefore disturb even more industry which has contributed well to the Australian nation and which would continue to do so if only the Minister would get off its back, provide stable Government policy and try to encourage these people to search more. He has rushed in at short notice. No one knows what for. My theory is that this was some material he had ready, thinking we would move a motion of no confidence in him, and when we did not he said: ‘Oh, well, I will give it to the Parliament anyway.’ One of the incredible things about this statement is that here we have 2 parties which are absolutely poles apart in their thinking. At the present moment the Minister knows very well that legal advice has been given that the pipelines legislation under which he is proposing to operate is invalid. He has received information from Sir William Pettingel to this effect, and yet he goes ahead when he knows quite well that he cannot go ahead until such time as the case against the Pipelines Authority Act comes to the High Court.
– We will go right ahead.
– The Minister has great legal knowledge. I understand that he had a long practice in law and no doubt he would know what the situation is. But if the Act is held to be invalid then of course it must be tried out. As I say, these 2 parties are poles apart. The Opposition believes in private enterprise under proper supervision. This is, of course, the system under which virtually every democracy in the world has undertaken the search for oil and has produced it once it has been discovered. We believe in private enterprise under proper supervision in which the Government has a major responsibility to set the conditions and to receive a great percentage of the return. Do not let us forget that more than 50 per cent of the profits returned from this goes to government. We believe a fair share should go to government. What happens at present is a company tax of 47) per cent on any profits goes to government. Government also gains from royalties which are set according to world standards, from a withholding tax of 15 per cent, from payroll tax and from a tax on dividends when they are distributed. The Government gets a great take, but we believe that it is private enterprise basically which should undertake this work and not socialism or nationalism.
The Opposition believes also in co-operation with the States. It is interesting to note that the Minister never at any stage mentioned whether he would co-operate with or seek advice from his State colleagues. Yet a lot of the work that has to be done in respect of this project must be done by the States and of course, must be done under the Petroleum (Submerged Lands) Act in which the State Minister is the designated authority. But the Australian Labor Party believes in nationalisation. It believes in taking over at the wellhead or perhaps even before, if it starts to go into the search for oil itself. Where are the cost-benefit analyses for this? The Opposition would have liked to have had time to study this most illuminating document. We would have liked to have had time to go into it deeply but we know quite well that the debate, if adjourned, would never be brought on again and therefore we have to debate it straight away. On the other hand the Minister has had plenty of time to prepare his statement
– He did it over the dinner hour.
– Yes, and we are given just a few short minutes in which to prepare our reply. Let me refer to some of the points involved.
– The Minister wrote it at afternoon tea time.
– Yes, it looks like it. First, the Minister says that the pipeline authority must secure control of and retain reserves of petroleum adequate to meet the long-term needs of the Australian people. But the Government can do this now. What is new in this petroleum authority doing what the Government can do now? Not one barrel of oil, no gas or anything can leave Australia without the authority of the Minister. That situation applies now. So what is so different in this new system that the Minister seeks to implement? The Minister referred to the Woodside-Burmah consortium as still holding exploration permits and said that they are very large. The extraordinary thing is that he says it is not doing enough and yet he is preventing it from doing any more. Whenever the company has tried to get farmouts and by this arrangement to get more drilling done so as to see that that area is covered, he refuses the permit. We know quite well that Mount Isa Mines and other bodies like that have applied for these farm.outs and the Minister sits there smugly, smirking, and refuses to give them anything and says that it must be handed back to the Australian Government. What happens if it is handed back to the Australian Government? The Australian Government cannot do anything with it so it has to hand it out to another company.
– We will get the money.
– The Government gets the money now and gets a very large percentage - well over 50 per cent of profits. If, of course, what the Minister intends is that everyone in Australia should cease to look for oil except the Government - this is the way that he is heading because no one would want to go on under the conditions he is setting - he has to realise that the Government must provide vast sums. The Minister said that Woodside-Burmah is unable to fully explore the area and it should surrender the area to the national Government but, as I have already pointed out, it is not the national Government that will allocate this area because this position is covered by legislation passed by this Parliament and by every other Parliament in Australia - the Petroleum (Submerged Lands) Act. That is a joint arrangement between Commonwealth and State. So it is not the national Government which makes this allocation.
– It will not stand the test of law in the High Court and you well know it.
– The Minister has done nothing to bring that on and does not intend to because if the present Bill is passed it will not affect petroleum legislation. Here we have the extraordinary situation where he is preventing people from searching for oil and at the same time saying that they are not doing enough. He goes on to say that under section 39 of the Pipeline Authority Act we have broken new constitutional ground. My word, they certainly have. The Australian Gas Light Company intends to challenge this Pipeline Authority Act but the Minister said tonight that the Government intended to proceed with the building of the pipeline. He said that litigation could seriously delay construction of the pipeline and that the Government is going to press ahead irrespective of whether we have the legal authority or not. He said with that great knowledge of his that the High Court will find in favour of the Australian Government. He then went on to say:
For these reasons, it is vital that full acquisition of natural gas and associated liquids be made by the Australian Government.
This is blatant nationalisation or socialism, call it what you like. He continued:
We plan a major refinery at Dampier.
Is this to be built by the Government? How does the Minister know that he has the authority to do it? He said nothing about getting in touch with Tonkin and the State Government who are in charge of Dampier. Is he intending just to acquire and, if so, under what section will he acquire land for this I take it, Commonwealth-owned refinery at Dampier? He went on to say:
There are wholly-owned Australian firms who have the necessary technology and ability to establish such a refinery.
I hope they have and that under private enterprise they will do so. However, the Minister’s colleague in South Australia, Mr Dunstan, says that no Australian consortium has the expertise, technology and marketing knowledge to build the $300m petro-chemical complex at Redcliffs.
Here we find a State Premier disagreeing with what the Minister for Minerals and Energy says. The Premier says that these companies have not the expertise and it is unlikely that they would be able to get in their bids in time. The Minister says that there are plenty of Australian companies which could do it.
– And will.
– He mentions again in his statement this failure by the Woodside-Burmah consortium to disclose discoveries. It is an extraordinary thing how Woodside-Burmah Oil N.L. seems to get the bucket all the dme. Woodside-Burmah is only one of a number of companies in the consortium. There is the Shell Co. of Australia Ltd, BP Australia Ltd, and California Asiatic Oil Co. Yet everything is thrown at Woodside-Burmah which has Australian management and Australian equity. I thought we had disposed of this matter a long time ago. Mr Donaldson said to Mr May, the State Minister for Mines, in the presence of the Minister for Minerals and Energy: ‘Is there anything you want that you have not got?’ Mr May said: ‘No, I have received everything I have asked for’. Now the Minister throws up this old shibboleth again. For goodness sake if there is anything he wants from these companies he should be man enough to tell them and they will provide it. But he should not sit here sniping and trying to undermine their confidence as he has already succeeded in doing. He said: ‘We have experienced the greatest difficulty in obtaining this information’. What utter rot and the Minister knows it is. He proceeds then to talk about allegedly huge costs. It is interesting that the Minister tabled a document yesterday in the House which completely confirmed the figures which I brought forward. He said that I believed in fairy tales, yet the documents he tabled showed that to bring one well into production, including the pipeline and a production platform -
– A major well - North Rankin.
– Of course. I said ‘one well’. I listened to the Minister in silence and I hope he will listen to me in silence. I gave the figures for the development of 5 wells. The Minister said that it will cost $2 10m for one well. I said that it would cost $ 1,000m for 5 wells. I think that, if anything, I was perhaps a little under the estimate. That cost is only to bring the production on shore. One then must have the liquefied natural gas plant at a cost of $250m. Ten tankers will be required. The Minister says that we can hire those tankers. Of course we can do that if we are prepared to pay the cost of hiring them. The charge for those tankers would be another $ 1,000m. There would be the further cost of the pipeline to Perth, if necessary. There is no doubt whatsoever that approximately $2,500m will be required to develop these 5 fields which have been discovered. Is the Minister suggesting that the Government is to do all this?
– Well, I have asked the Minister before to show where it is fantasy and he cannot do so because he knows quite well that it is-
– They will come here with their own cryogenic tankers. You know that. Do not mislead the House.
– As I have said already, if they come here we will pay the cost of transporting this fuel.
– Order! The Minister will cease interjecting.
– The Minister repeats another one of these complete inaccuracies - it has already been shown up - about the proven and probable recoverable reserves of the Gidgealpa basin not fully meeting the commitment under the contract between the Australian Gaslight Co. and the Gidgealpa organisation. Again, this is utter rot. We know perfectly well that the well known Texas firm of Degolyer and MacNaughton, probably the most outstanding people in the world in this field, has given a certificate to the Australian Gaslight Co. that there are in the Cooper Basin dedicated to Sydney, Wollongong and Newcastle sufficient gas reserves for 30 years. Yet, the Minister says that there are reserves for 10 years to 12 years only. We know that, after that certificate was given by this most reliable company, further discoveries have been made, particularly by the Western Mining Company in the south-west corner of Queensland. So, more gas has been discovered since that time when there were dedicated reserves for 30 years to Sydney. The Minister goes on to say:
Without export controls this company planned within this period of 21 years to rip out and rape the natural gas.
What an incredible statement. The Minister apparently believes that although he has these export controls now, he is incapable of administering them so as to prevent what he calls ripping and raping. He knows, as I have said again and again, that not one barrel of oil can be exported from Australia without the authority of the responsible Minister. Yet, he says that they will be ripping and raping it. What utter nonsense! He states further:
We will continue the pipeline to Palm Valley to provide a back-up for the short fall of supplies at Gidgealpa.
We know that these are not shortfalls at all. Why does the Minister not show us any feasibility study as to what the costs and benefits will be, when it will be necessary to produce this and what size the pipeline will be. (Extension off time granted.) I thank the House. I will not detain it very much longer. It is interesting to go through some of the points made in this statement because it is the most incredible statement I have ever seen in my 24 years in this House. The Minister also stated:
My recent conference with Burmah Oil Co. (UK) Limited was to ensure that it confined itself to exploration and did not prejudice itself by financial commitments associated with export.
In other words, the Minister says to the company: ‘You go ahead and find it for us and we will take it from you as soon as you find it.’ That is nationalisation. What is the Government to pay for this resource when there will be one bidder only. We have heard the Minister say already that the price’ for Bass Strait oil was too high and that the price somewhere else was too high. We know quite well that he will be the only bidder. He will be the only person who can take this resource. Therefore, he will pay any price which he chooses to set. The company has to accept that and like it.
– Do you find the Bass Strait situation satisfactory?
– These are Australia’s assets that you are selling out.
– The Minister says that he will work in the closest collaboration with his colleagues, the Minister for Secondary Industry (Mr Enderby) and the Minister for Overseas Trade (Dr J. F. Cairns). Again, as I say, he mentions nothing about the State Ministers. A great deal of the back-up work has to be undertaken by the States. A great deal of the expertise and knowledge of the technology in this field resides with the State departments, and the licences and permits are allotted by the appropriate State Ministers.
Honourable members know that the action of allocating licences and permits must be undertaken by the designated authority who is the Minister for Mines in the relevant State, in collaboration with the Federal Minister. Yet the Minister for Minerals and Energy says nothing about this. He then goes on to say that the Australian average in off-shore drilling has been good. The figure relating to off-shore wells, of course, has been good; we have been fortunate. But the figure relating to exploration for oil and gas in Australia has been that one well in 40 has been a commercial proposition. If we take an average cost of $2m per well and we attain the Australian average this means that for every $80m expended we get one commercial well. Of course, we know that private enterprise is more skilled in this than public enterprise is likely to be and that, therefore, public enterprise would not achieve this figure; the expenditure of S80m might not result in one commercial well. We believe that if governments have that amount of the taxpayers money to spend they should spend the money not on this risk exploration but on housing, schools, roads and hospitals - the sorts of things which governments have to provide - and leave private enterprise, under suitable conditions, to search for oil and gas.
Finally the Minister for Minerals and Energy states:
Almost every major industrial nation faces the stringent shortage of oil supply. Australia will have an abundance, and a dominant economic position In the future industrial world. ls the Minister going to adopt a dog in the manger attitude? Is he going to say: ‘We are the haves and we are not going to let the have nots have anything at all’? Is he going to set up a cartel as he tried to do and as his Prime Minister (Mr Whitlam) tried to float when he was overseas in Mexico, though he did not get very far with it?. Is he going to seek to restrict supplies? We in the Liberal Party believe, of course, that we must know what our reserves are and that we must have adequate reserves for the foreseeable future. However, once those reserves are provided for, we believe we have a duty to sell overseas over and above our requirements which, of course, also brings us enormous benefits by the gains which come to our exchange as a result of this.
I conclude by saying that the Liberal Party believes that co-operation between private enterprise and government is the only way to ensure the orderly and progressive development of Australia’s natural resources and energy. Since coming into office the Labor Government has actively attacked the petroleum and mineral exploration industry in Australia. This attack on free enterprise has been carried out under a plan which has been systematically devised for the purpose of eliminating individual Australian companies. For example, firstly the principal incentive for risk capital, namely the right to deduct capital contributions for tax purposes, was removed. Then, of course, there was the 25 per cent freeze on anyone bringing funds in from overseas. We are not against overseas funds. We believe that there should be adequate Australian equity and management. But if, over and above that, further capital is required we believe there is no reason why it should not come in under suitable terms and conditions. Petroleum and mineral exploration companies now realise that they are the first on the list for nationalisation by the Labor Government. So when we come back to office again, which I hope will be very shortly, we will re-establish the close relationship and co-operation between governments and industry which is paramount in our policy and we will ensure that taxpayers money will not be used on exploration which involves high costs and a major amount of funds.
– One would believe that the honourable member for Farrer (Mr Fairbairn) thought that he had a policy in the days of the last Government. The Minister for Minerals and Energy (Mr Connor) did not inherit even a shambles because there was no shambles to inherit. There was nothing. There was no policy. We had to start from the beginning to develop a resources policy. The honourable member for Farrer might not realise it but in the last days of his Government oil search in Australia was at its lowest ebb since the middle 1960s. He might also not have heard that there is an energy crisis in the world, that President Nixon this week has put an embargo on the use of heating oil in the United States of America, that the war in the Middle East is threatening oil supplies for Europe and that we are in the hands of the Organisation of Petroleum Exporting Countries, King Faisal and Colonel Kadhafi. It has not dawned on him yet.
If the Australian people fall for the policies of the Liberals they will have no fuel in their cars and no heating in their houses within the next 5 years. Those are the facts. So this Government feels obliged to step up seismic search in Australia in a useful way and at the same time to develop a complete resources policy. I think it is an affront to the Parliament that the honourable member for Farrer should be getting up and talking about how we should develop a policy when he was the principal opponent of giving this Parliament power over the offshore of Australia, prepared to destroy his own Prime Minister and prepared to allow these matters to be taken to the Privy Council in London for decision and to see the High Court’s nose rubbed in the dirt. That is the position of the honourable member for Farrer, who is at the table and was telling us that we had the wrong policy.
– Your Minister does not believe in ordinary justice.
-Order! The honourable member for Blaxland will resume his seat. I intend to take appropriate action if there are persistent interjections. I warn the honourable member for Cowper.
– Not only did the honourable member for Farrer do that, but he also destroyed the graticular system whereby fourninths of an area, after exploration, would have reverted to the Commonwealth. He gave that system away for a miserable 10 per cent increase in royalties on possible production. This is the policy with which we are dealing.
Australian oil has a very light gravity and after cracking only about 5 per cent to 10 per cent of residuals are left, whereas, with Middle East oils there is about 25 per cent left. In that 5 per cent or 10 per cent is every fuel commodity other than petrol. So for heating oil, furnace fuel and lubricants we are in the hands of the suppliers of heavy crude oil, and that is the Middle East. We are trying to see that our other alternative sources of heating energy - natural gas - is at least conserved to the point where we have adequate domestic reserves. It is shameful that the former Minister, who has just spoken, and his successor, went cap in hand to Woodside-Burmah asking it please to supply details of electric logs and core samples which it was obliged to give to the Bureau of Mineral Resources under the Petroleum (Submerged Lands) Act, and which it failed to give for 3 years. It was not until the present Minister for Minerals and Energy assumed office that he obliged the companies to supply the Commonwealth with that material so that at least we could make some intelligent assessment of the state of our reserves. Some of those electric logs were 3 years old. The former Government completely neglected its obligations under the Petroleum (Submerged Lands) Act to govern this area of exploration in Australia.
I should like to deal for a moment with another aspect of the Woodside-Burmah question. The former Minister said that the holding is not owned completely by WoodsideBurmah. These are the facts of the matter: Woodside-Burmah Oil has 50 per cent of it, the Shell Company of Holland has 16) per cent of it - a huge multi-national company - British Petroleum has 16) per cent and the California Asiatic Oil Co has 16) per cent of it. In that enormous area of 140,000 square miles, one of the richest gas deposits in the world, there is 15 per cent Australian equity. Yet the honourable member for Farrer is talking about the national interest. The Minister for Minerals and Energy has said all along that the Commonwealth would acquire this gas through the Pipeline Authority. Honourable members recall that when the Pipeline Authority Bill was before the House the Opposition objected to it. It used its numbers in the Senate to defeat the Bill. The Bill was returned to this House and there was a big debate over whether the Authority ought to be just a common carrier or should have acquisition powers. When the acquisition clauses of the Bill were debated the honourable member for Farrer knew then that it was the intention of the Government that the Pipeline Authority should acquire gas at the well head. But he used the Woodside-Burmah statement to fan the fires for the people who send money to his own slush funds.
The Leader of the Australian Country Party (Mr Anthony) gave details of the WoodsideBurmah statement to the Melbourne newspapers the day before the report was released.
– Mr Speaker, I take exception to that because it is completely dishonest.
– Wait till I am finished speaking. Sit down.
Mb Anthony - I will take the matter before the Privileges Committee if the honourable member makes statements like that.
-Order! If the right honourable gentleman claims to have been misrepresented he may make a personal explanation at the completion of this speech.
– Thank you Mr Speaker. Of over 140,000 square miles we have 15 per cent Australian equity. In the lower part of that 140,000 square miles there are about 92 locations in which it is worth drilling. The Woodside-Burmah consortium has explored only one-third of those locations. But instead of putting down a decent drilling pattern of about one hole in every 80 acres - which if there are good sediments should show oil - it has not done that. It has not explored the area properly as it is obliged to do under the Petroleum (Submerged Lands) Act. It put the holes down over a large area so that it could stretch its net as far as it possibly could and say that it has explored the area so that the land does not revert to the Commonwealth when the lease expires in 1975. So the company is not complying with the spirit and terms of the Petroleum (Submerged Lands) Act. It is trying to get away from them.
The Opposition roasts the Minister for Minerals and Energy because he will not agree to allow farm-ins to multi-national corporations which are to go into the area and explore it with a 50-50 proposition - they put up the cost of the exploration and Woodside-Burmah would get half of what they find. In the really juicy areas Woodside-Burmah is to get 75 per cent of what they find and they keep 25 per cent. If Woodside-Burmah cannot explore the area adequately it should revert to the Commonwealth and the Commonwealth will be quite able to find any number of multinational corporations which will go to the expense of exploring the area. The 50 per cent or 75 per cent would then come back to the people of Australia. But that is not good enough for the Opposition. It wants all that money to go back to its friends, to the multinational corporations it sees fit to represent.
There would not be one conservative political group in any comparable country in the world that is so slavishly tied to the needs of the multi-national corporations as is the Opposition. One can look at Great Britain or any of the conservative parties in the West. All the other conservative groups have stood their ground against multi-national corporations. The members of the Opposition have enslaved themselves to the point of being ludicrous.
I should like now to deal with the question of what has already been spent by WoodsideBurmah on exploration. About $180m has been spent so far. In the long term probably about $ 1,200m will be spent by the time they produce but half of that will come back to the consortium by way of taxation concessions at the time of production. So the total cost to the consortium will be of the order of $600m. The Minister has said that on the present estimated reserves Woodside-Burmah has claimed for the north west shelf and on the price which the Australian Gas Light Company has agreed to pay Delhi-Santos in Gidgealpa, there is $6,000m worth of produce - for an outlay of $600m. In round terms that is a return of 1,000 per cent on investment - and that is acquiring the gas at the well-head. And the Opposition does not think that we are being fair by suggesting 1,000 per cent on investment. A guilt edged security returns 11 per cent or 12 per cent. A return of 1,000 per cent is more than the company deserves. What the company wants - and what all the conflict is about - is access to the export market. The Pacific Light and Power Corporation has had a representative sleuthing around this Parliament for months. The Japanese are here all the time trying to get natural gas for Japan. As the Minister said, we can export gas without cryogenic tankers. The Pacific Light and Power Corporation, through AGL, offered a price of 90c f.o.b. per 1,000 cubic feet at Sydney. The same would apply to Dampier and that is without any expense to the Government. There is $6,000m worth of natural gas at the 20c per 1,000 cubic feet Tate; that means that there is about a 5,000 per cent profit on export at a 90c rate. That money will come back to this Parliament thanks to one man and one man alone; and that is the Minister for Minerals and Energy.
The situation is that the Opposition believes that it has to secure that export right for the Woodside-Burmah consortium so that the enormous return on investment will go to a stock of multi-national corporations and not to the Commonwealth of Australia. That is really what is at issue. Now the Opposition says that there is no viability in running a pipeline down from Dampier to Palm Valley in central Western Australia. Let us have a look at that situation. As the Minister said, there is about 8 to 12 years supply of natural gas at Gidgealpa. As things stand, Sydney will have a demand consumption over that period of 2.8 trillion cubic feet, Adelaide in South Australia will have a demand of 1 trillion cubic feet, and the petro-chemical plants to be established on the north west shelf will have a demand of 0.4 trillion cubic feet. So the total demand will be 4.2 trillion cubic feet. The total reserves of the area amount to only 3.3 trillion cubic feet. The short fall in supply from Gidgealpa within that 8-year period will be 0.9 trillion cubic feet. What are we to do? Are we to wait for 8 years before we build a pipeline or should we build it now? Obviously the only thing to do is to build it now. That is why the Government sees the value of constructing this grid system linking the north west shelf to Sydney via Gidgealpa, the Pilbara and those great industrial complexes in the west.
Industries in the west also need to be considered. We are giving consideration not only to decentralisation but also to the industries in the west. Fifty per cent of the iron ore in Western Australia is in the form of dust, and when it goes into the blast furnace there is a loss of approximately 15 per cent. This iron ore dust needs to be pelletised before it can be blasted, and heat is required to pelletise it. There are no indigenous coals and there is no fuel in the Pilbara. There is no fuel around Kalgoorlie. There is no fuel in Perth. The fuel used has to be natural gas, and the only place it can be obtained is on the north west shelf. So this makes a mockery of any criticism that there is no need to build a grid. There has to be a grid and we are prepared to build it. The price of the gas will more than pay for its construction, and there will be a handsome return to the Commonwealth. The Minister for Minerals and Energy has said that when this project really comes on line in a few years time it will bring in such enormous profits to the Commonwealth that it may be possible to cut out some of the indirect taxes which are presently levied under our taxation system. If this is the case the grid will be one enormous national development project singlehandedly carried on by the Minister for Minerals and Energy who had to fight the Australian Gas Light Company for the right to build the start of this pipeline from Sydney to Gidgealpa.
What the Minister said tonight about the pipes is perfectly true. The Commonwealth has paid for those pipes and has deeds of title for them. They were imported by the
Australian Gas Light Company but the documents were transferred over to the Commonwealth when the pipes were delivered in Newcastle. So the fact of the matter is that we will build the pipeline and we will acquire the gas at the well head. People who have shares in Woodside-Burmah will get handsome returns on their investment. The Commonwealth will get a handsome return on its investment, but that return will go to all the people in Australia ad infinitum- or for as long as we have natural gas supplies. We have about a 5-year supply of indigenous crude oil in Australia. In a energy hungry world we are sitting in a good position, but as the national Government we are obliged to ensure that our domestic reserves are maintained. We are not prepared to say to any company that it can export until it is prepared to tell us what its reserves are. If these companies want to play the waiting game we will play it with them. If they want to be honest we will be honest with them. The position is as simple as that. Be that as it may, the Minister has said to these companies that as far as possible we will give them a fair price for the gas we buy. We can be no fairer than that. I compliment the Minister on his statement. It is a forthright statement. It advises the nation on the Government’s energy policy, and I think it deserves the complete support of the House.
– Firstly, I want to correct a statement made by the honourable member for Blaxland (Mr Keating). He accused me of notifying some Melbourne newspaper of the statement issued by Woodside-Burmah Oil NL the day before it was released. Let me assure this House that I received the statement put out by WoodsideBurmah in its half-yearly report at the same time as the Press. If the honourable member for Blaxland wants to rely on this sort of scurrilous argument to try to defend his position and the case of the Government then I believe he falls into complete disrespect and so does the Government of which he is a supporter. If he expects to stay in this House telling lies such as this nobody will treat him seriously or with any regard whatsoever.
The Minister for Minerals and Energy (Mr Connor) has made a statement regarding the north west shelf. Apparently the statement was circulated just as we all went to dinner tonight. Unfortunately some of us had engagements and did not have time to examine it. On an issue which has been of such tremendous concern to the nation, which has caused the stock exchanges of the nation to rock and in relation to which accusations have been made against the Minister and the Government, I would have thought that the Government might have shown some decency by giving members of the Opposition time to analyse this statement and come back with a considered reply.
But no, the cunning of the Minister-
– You could have adjourned the debate.
– Do we have to listen to such interjections as: ‘You could have adjourned the debate’? If one looks at the notice paper one finds that it is littered with adjourned debates. When is the Government ever going to bring them back on for debate in this House? We have to make the most of the opportunity to have any say in these matters when they are presented. It takes all the efforts of the Opposition to get any statement or comment out of the Minister for Minerals and Energy. When we do get comments from him, half the time they are misleading and distorted and do not give the full facts. This was the situation relating to the Snowy Mountains Authority incident. But tonight the Minister has delivered a statement which I have been able to read only briefly while the i lister was speaking. It is full of all sorts of innuendoes as to the wickedness and the badness of private enterprise and overseas companies which in this country are involved in the exploration and the development of minerals, fuel and gas. It is quite obvious that the Minister has a sort of xenophobia. He is paranoiac about private enterprise. He blusters and knocks private enterprise right and left, shattering industry, creating uncertainty and a complete loss of confidence. Stock exchanges rumble every time he makes a statement because they do not know which way to turn. But one thing is quite obvious, and that is that ti; is Minister is going to get his way and industry is going to bow to whatever he says. He talks about these hillbillies, these people with ineptitude. He seems to be able to sling insults and thinks it does not matter that he is doing so as a Minister of the Crown. But, of course, it does. It has a tremendous impact on the confidence and the goodwill of companies which want to come and develop the resources of this country.
The honourable member for Farrer (Mr Fairbairn) replied to the Minister’s statement. I thought he made an excellent reply in the circumstances of the limited amount of time he had to be able to rally his facts. But he showed that he had a full understanding of the situation, and he was able to expose many of the extravagant remarks made in this statement concerning Woodside-Burmah. As the honourable member for Farrer said, it seems that Woodside-Burmah is in the spotlight for attack. I wonder why? No doubt it is because this consortium of companies has been the most successful in uncovering reserves of gas in this country. It offers enormous industrial potential for Western Australia and, of course, for Australia as a whole. But the Minister has decided that nothing will be done in this area until the Government has worked out exactly how it can infiltrate and have complete control, if not ownership, over these resources. On page 2 of the statement the Minister stated how lucky Woodside-Burmah was in having had a success ratio of 1:3.2 whereas the average around the rest of the world is 1:10. From the way the Minister speaks it seems that it is almost a penalty for this company to have been so successful. It is a bit like a person who bets on an outsider at the race track. When the horse comes home at 100 to 1 all of a sudden somebody says: ‘We had better have a re-run of the race. That is too much success for any one person. You just cannot have it.’
What Australia needs is people who are prepared to come into this country to search for oil and gas and to undertake the development of our resources. If there is anything that the world as a whole needs today it is the discovery of more sources of energy to be brought into production until other forms of energy are devised. There is a world energy shortage today. A crisis is being developed. A potential crisis is facing this country for the near future unless we find more reserves. At present our reserves consist of about 2 million barrels. We know that within the next 20 years we will need reserves of 9 million barrels to meet our own demands. How are we ever going to find that quantity in this country when we have this Minister frightening away people who want to invest money in this field? What overseas companies will come to Australia if they know that this Minister can dictate to them on terms which make it nearly impossible for them to operate? It certainly does not give them any confidence to invest risk capital in what is one of the most risky ventures one can get into in the commercial world.
Reference has been made to the half-yearly statement of Mr Donaldson in which he said that the Government had informed WoodsideBurmah that it would take over ownership of the gas. He says that he was responsible for this statement becoming public. Why do we have to hear through a company what is Government policy? Why does the Minister not have the courage and the decency to get up in this Parliament and tell us what is Government policy, or was he trying to keep it secret in the hope that it would never be found out? It is little wonder that there was a collapse on the stock exchanges the next day when this sort of dynamic statement was revealed to the Australian public. This disclosure was not included in the statement which was made tonight. The Minister had to table a letter which was apparently written by the Chairman of Woodside-Burmah (UK). I took down- some of the quotes the Minister made from that letter. He said: ‘We appreciate the opportunity for meeting and talking with you’. I will bet he did! According to the reports I received the Minister would not see the Australian representatives of WoodsideBurmah. He demanded that the Chairman of Woodside-Burmah (UK) fly from England to consult personally with him because it was below his dignity to see anybody else. When a Minister goes on in this sort of arrogant manner-
– Order! Now the right honourable gentleman is courting interjections.
– When a Minister goes on in this sort of arrogant manner it is little wonder that companies get concerned and worried. We were waiting to hear in this statement tonight the terms and conditions that the Minister offered to Woodside-Burmah. Was there any price condition? Was there an assurance in regard to quantity? When was the fuel going to be available? Obviously WoodsideBurmah and the other members of the consortium will have to make very quickly some decisions on the spending of something like S300m to $500m - a colossal amount of money anyway - just to develop the well-head. But the Government has said in vague terms to this company: ‘You will get a good price. It will not be an extravagant price but it will not be a bad return on your money.’ I suppose it is like the first time that Broken Hill Pty Co. Ltd went to the Prices Justification Tribunal. It got a return. It was an increase of 3 per cent and it meant that BHP automatically had to shelve development projects worth $ 1,300m. What confidence can anyone have in a Minister who makes vague statements like the one he has made tonight?
All we know is that the Minister has said - puffing out his chest - that Australian companies have all the know-how and all the capital which is necessary to expand the downstream developments.
He has said that an Australian company will put in a refinery. A company will put in a petro-chemical industry and no doubt a costly plant will be installed. Undoubtedly stemming from that an aluminium refinery will be established and so on. They are to be all-Australian in Western Australia. Foreign capital - and certainly Japanese capital - is not wanted. He has told us that Japanese capital is not needed, nor is it wanted. I presume that applies to all other countries. I suppose that the same thing applies in respect of South Australia and the big petro-chemical industry to be developed in that State. The Minister is getting involved in that matter and this is causing very great concern. I have just received information that in the South Australian Parliament a motion was passed today - a Labor government is in office in that State - expressing deep concern at the involvement of the Minister for Minerals and Energy in the Redcliffe petro-chemical project. That motion was moved by the State Deputy Leader of the Opposition and was supported by members of the Labor Party including the Premier, Mr Dunstan. This is a case of a Labor government getting concerned about what is happening in South Australia.
I ask honourable members: What can we believe of this man? Earlier this year he started criticising Woodside-Burmah and said that it was not providing him with the necessary information. He came forward in April and tabled documents in the House in an effort to justify the allegations that he had made. What was the outcome of the tabling of those papers? They did not prove that the company was not providing information. What they did prove was that there was misunderstanding between the Department and the company concerned. When we hear these snide remarks being made - as he so cleverly does in this statement - about WoodsideBurmah not providing all the information to the Government it is strange because the Western Australian Minister for Mines, Mr Don May, has said that there has been complete co-operation with Woodside-Burmah and that it has provided all the information. Where do we stand? The Government says that reserves have not been accurately assessed and the correct information has not been given to the Government. But the consortium brought in a private company to evaluate the situation and to make a report. It has said that all this information is with the Bureau of Mineral Resources. Who are we to believe in this matter? It is quite obvious that the Minister is distorting the situation and is painting a picture of hatred against international companies who are trying to develop the area.
I am as keen as anybody else in this country in regard to Australia’s resources and I would like to see them remain in Australian hands. I would like to see Australians get the maximum benefit out of them. But there are limitations in our know-how, our capital and our capacity to develop these things. We need a sensible policy. We should not be putting complete embargoes on the export of gas. We should have a policy to maintain control over our resources. We should not put a blanket embargo on them. Possibly in the early stages we should allow a small quantity to be exported in order at least to cover some of the developing company’s capital. But at all times we should retain the right for Australia to have the first claim on these resources when it is deemed necessary. That is not the Labor Party’s policy. Labor’s policy is towards the socialisation of this resource as it is in regard to other resources. All I can say is that it was an unfortunate day for Western Australia when this Government came into power.
Debate (on motion by Mr Jacobi) adjourned.
Clause 1 (Short title and citation).
– Clause 1 refers to the short title of this Bill. Among other things it says: . . Broadcasting Stations Licence Fees Act 1973. The increase in licence fees for commercial broadcasting stations is yet another Budget impost introduced by the Whitlam Government. It shows once again the double standards of the Government.
– Order! The honourable gentleman will be out of order in debating the subject matter of clause 3 under clause 1.
- Mr Chairman, I have referred to the title of the Bill.
– The honourable gentleman has also referred to a Budget statement and to amounts of money which are not mentioned in that clause. I have given the honourable gentleman the direction that he may not debate the subject matter of clause 3 under clause 1. If the Bill is taken as a whole he may say what he wishes about the Bill. If he wants to take it clause by clause he may talk only about each clause individually.
– Mr Chairman, clause 1 refers to fees - 1973. Of course, fees have been quite clearly indicated in the Budget-
– The Budget is not before the Committee.
– I believe that I am perfectly in order, therefore, in referring to fees.
– Well, I do not. I have ruled that the honourable gentleman is out of order and that is all there is to it.
– Of course, Mr Chairman, I can draw your attention to the full wording of clause 1. It reads as follows: 1. (1) This Act may be cited as the Broadcasting Stations Licence Fees Act 1973.
– That is correct.
- Mr Chairman, I believe that it is quite appropriate to make reference to the origin of this title, and the origin of it was in fact an announcement made in the Budget.
– That is not correct and it is not relevant.
– Well, I will bow to your ruling but I dispute the fact that it is incorrect for it to be referred to at this stage of the proceedings. Accordingly I will now merely indicate that this title reflects a situation in which we find the Government taking a precise action. That action is to set fees. Of course, the fees are the salient point.
– If the honourable gentleman refers to the fees again under this clause I will ask him to resume his seat. I will not make the ruling again. The honourable gentleman may debate clause 3 when we come to clause 3. He may not debate clause 3 when we are debating clause 1.
– I move:
That the question be now put.
The Committee divided. (The Chairman - Mr G. G. D. Scholes)
Majority . . 6
Question so resolved in the affirmative.
Clause agreed to.
Remainder of Bill - by leave - taken as a whole.
The remainder of the Bill, comprising clauses 2 and 3, refers to the coming into operation on 22 August 1973 of increased charges. It shows once again the double standards of the Government in matters closely affecting community services. Previously the licence fee was $50. It is now proposed by the Government to raise this 300 per cent to $200. For the grant or renewal of a licence for a commercial broadcasting station the fee under this legislation will henceforth be $200. While this may seem a comparatively small licence fee, the principle underlying it is an increase of 300 per cent.
I believe that this is very significant for the reason that on the one hand the Government is claiming credit for establishing the new Department of the Media. Many policy statements have been issued, all of them wordy and full of grandiose proposals to improve the service provided by the media of this country to the community in many fields. Great play has been made of this so-called liberal approach to the quality of service and the scope of the media under Labor. Standards are under challenge for the reason that so many changes are envisaged or have been foreshadowed. Now this new look is to be foisted on the nation. Whilst the Australian Broadcasting Commission seems to have the green light to spend on program expansion, particularly on current affairs and a wide range of new concepts, commercial broadcasting stations are faced with a restrictive approach, and the very provisions under the clauses being dealt with by the Committee indicate that.
Many stations in Australia face financial difficulties, particularly in country areas. Yet this legislation proposes a 300 per cent increase in licence fees for commercial stations and introduces a scale of additional charges on gross earnings from advertising receipts. Revenue from broadcasting station licence fees in 1972-73 was $491,000. The additional overall revenue estimated as a result of this legislation will increase this income by $ 120,000. Admittedly it is a small amount but it takes the contribution of commercial stations to a total of $611,000. At the same time the Government has announced a government advertising proposal to cost, if my memory serves me correctly, $3. 5m in the present Budget. In other words, it is taking funds out of one pocket within the media and putting them into another.
In the second reading speech of the Minister for Science and Minister for External Territories (Mr Morrison) the statement has been made that the new fees have been calculated so as to ensure that stations are only marginally profitable and will only pay a small increase of about SI 50. Those words may appeal to those who have not studied the details and the background of the operation of commercial television stations in this country. If the Government is genuine and sincere in its approach to encourage the media as a community service, why increase the fees at all? It is a sleight of hand approach which has been commonplace since this Government took office. What is proposed in this legislation cannot be considered in isolation. In the Budget the Government hit commercial radio stations and their contribution to development of services as an integral part of the media of this country in a harsh and damaging way. Land line charges, concessional telephone charges and the like were increased, but of course the increases have since been temporarily withdrawn. It is to be hoped that the negotiations that have been proposed will ensure that some common sense will return to the Government’s attitude to this section of the media. I believe that the action of the Australian Country Party was the real reason for the second thought that was applied to this matter, and I would hope that when this matter is under serious consideration the action under this legislation will also be considered.
Briefly I make the point that the larger stations, particularly those in the metropolitan area, have a greater field in which to seek a revenue income, and of course their advertising results are very much higher than those of the single station operator serving a country community or, for that matter, a provincial centre, where there is an existing city or large centre of population but only one commercial station for the very reason that that is all that can be viable. Increased charges in these circumstances and the limitations on the field open to such a station for revenue mean that there is a contraction of resources available to that station to provide the highest possible standard of program. The use of the land line to bring programs of greater import to stations of that kind has become a feature of the operation of commercial broadcasting.
It is vital that the Government recognises the importance of the media in respect of the single station operation for communities which are too far distant to have the advantage of the metropolitan service where there are a number of stations and a greater field of opportunity and greater economic strength for the purpose of providing that service. I believe it is in this field that the Government’s action is quite contradictory - on the one hand establishing a Department of the Media, on the other hand imposing savage charges. What ought to be happening, of course, is that there should be provisions in these clauses of the legislation to assist the single station operator so that he might keep pace with developments of the sort that are happening with the Australian Broadcasting Commission, where a greater access to national and international events in the field of current affairs and the like brings right into the homes of listeners the day-to-day affairs of the world and of course a higher grade of entertainment as well for the very same reason. So there is a need not to impose increased charges but to give greater opportunities to commercial broadcasting stations so that they can play their part as they have done in the past half century or so to give the public a satisfactory service. It is for this reason that I say that the Government has acted in a very strange way indeed, on the one hand setting as its policy a new approach to the media, on the other hand imposing a restrictive approach. We know that the broadcasting stations operate under the jurisdiction, so to speak, of the Australian Broadcasting Control Board. Standards are set by the Board, and the action of imposing increased charges must surely cut at the very basis of complying with standards as required by the Australian Broadcasting Control Board. The Government cannot have it both ways.
I believe that the Country Party is being realistic when it takes the view that the Government’s approach is indeed a wrong approach. The charge it proposes is not a charge that ought to be made at all. In fact what should happen is that the Government should take an entirely different view and look not at the capacity of stations on the score of gross income but look at the net result and take into account the actual results of programs in terms of service given. If this were done there would be a much more satisfactory result in the interests of the community and of the general public. After all it is the duty of this Parliament to see that the public at large is given a benefit and not robbed of it.
– It is always delightful to have to follow the honourable member for Cowper (Mr Ian Robinson) when he speaks about the media. He so enlightens this Parliament that sometimes I am quite devastated by what he says. I just want to recapitulate on a couple of points he made. First of all, he could not resist the temptation of referring to the Australian Broadcasting Commission, as all Australian Country Party members and Liberal Party members invariably do when a debate on the media comes before this Parliament. He said the that ABC has been given the green light to proceed with current affairs programs. There is nothing to stop commercial stations from also receiving the green light to interest themselves in current affairs but they do not consider this a profitable enterprise. The Government never deters commercial stations from indulging in current affairs programs. ‘It does not deter them in any way, as is well known by the honourable member for Lyne (Mr Lucock) who is attempting to interject. The honourable member is a classic example of the old adage that empty vessels make the most sound. He will get his chance to talk later. The honourable member for Cowper raised the old furphy about telephone charges. What we are discussing tonight is the Broadcasting Stations Licence Fees Bill, which has nothing to do with telephone charges, so let us attack the problem as it should be attacked.
The honourable member for Cowper as the vanguard and spokesman for the Australian Country Party on this issue said that it is unfair and is a great impost to impose an increase in the licence fee from S50 to $200. I remind Government supporters that the $50 fee was struck in 1964-9 years ago. Let us examine the revenue of the commercial broadcasting stations to see whether they are being dealt with devastatingly. The licence fee for the privilege of transmitting programs has risen by SI 50 over a period of 9 years. The revenue of commercial stations in 1967-68 totalled $31,441,292 and they each paid a $50 fee. The latest figures available are in the 25th Annual Report of the Australian Broadcasting Control Board for 1971-72 and they show that the revenue of the commercial stations was $45,770,912 - almost $46m. Is the Opposition seriously suggesting to this Parliament and to the people of this nation that a licence fee of $200 in 1973 is unreasonable, illogical, and bad economics? Do not be so absurd!
Objection to the Bill predictably was raised oy members of the Country Party. The
Minister for External Territories (Mr Morrison) has indicated that any station which is experiencing economic difficulty will be treated gently. We cannot do better than that. Nine years ago, in 1964, the fee was set. In Australia at the moment 118 commercial stations are in operation and 99 of them are making a profit. I dare say that the 19 that are showing a loss are very possibly - I have not looked at the statistics - situated in country areas.
– They are probably run by the Country Party.
– They may well be run by the Country Party and if they are that is why they are making a loss. The honourable member for Cowper suggested that the Country Party stations are being treated badly. Most of these stations are on network hookups anyway and are controlled by the Macquarie network or by other major networks.
– That shows you know nothing about it at all.
– My dear fellow, I know a little more about it than you do - in fact a lot more. It can be demonstrated from the figures I have quoted on the earnings of the 118 stations that there simply is no case to answer if honourable members opposite are going to object to the licence fee being raised from $50 to $200. The honourable member for Lyne takes great delight in interjecting madly. He does not listen to argument at all and that is why he is so uninformed. If country stations are efficient they will make a profit but if they are not efficient obviously they will not make a profit. Why are these 19 stations not making a profit? Why are they finding it difficult? It is because they are unresponsive to the public that they serve. If one wishes to remain in commercial broadcasting it is a fundamental criterion that one ignores the requirements of the public at one’s peril.
One of the extraordinary features of the Country Party is that it is never reluctant to make an application for any licence, whether it be for broadcasting or television. It is always first in the queue to apply for a licence. When it cannot run the station through its own inability and lack of professional expertise, it has the gall to come into this Parliament and say: ‘My goodness, what a savage impost this is. The licence fee was $50 in 1964 and the Government is asking that the fee be increased to $200 in 1973. This is a savage Budget impost.’ What nonsense and what humbug!
Is it seriously proposed by members opposite that this licence fee is exorbitant? I ask you, Mr Chairman: Is this fee exorbitant? I put it to everybody in this chamber and to the people outside that in no circumstances could it be considered to be exorbitant. What the Opposition fails to realise, of course, is that the total amount that will be paid will amount to only $491,204 out of a total revenue of almost $46m.
The Broadcasting Control Board is charged with great and serious responsibility for the technical inspection of these stations and for the supervision of the program and the administrative procedures of the stations. It is also responsible with regard to the licensees of the stations. To suggest that the fee of $50, which as I said before was struck in 1964, is relevant or acceptable now, in 1973, is just being politically unreal. It is an extraordinary thing that the Country Party, particularly, with great regularity and predictability, in this chamber claims that anything that touches its sacrosanct area has to go on being protected. It cannot survive without protection. If Opposition members contend that this increase is unjustified and is a shattering blow to the stations in Australia, I respectfully suggest that they study the annual reports of such companies. I invite the honourable member for Cowper and the honourable member for Lyne to look at page 170 of the 25th Annual Report of the Australian Broadcasting Control Board. I think that the information appearing there will fortify honourable members. It reveals that all of these stations throughout Australia are not approaching the abyss of oblivion, either financially or from a program point of view. This Bill is equitable, it is reasonable, it is essential, it is concessional, it is rational and it deserves the support of this Committee.
– I was amazed to hear the way in which the honourable member for Franklin (Mr Sherry) spoke. It is obvious that he has little interest in commercial radio stations. There are a number of issues which the Country Party would like to put forward in answer to the honourable member for Franklin. I refer to the rates to which the honourable member referred a few moments ago. He spoke about the licence fee increasing from $50 to $200. He made no reference to the other costs that have been mentioned in this Bill. I refer to the percentage of gross earnings from the returns on advertising because, after all, this is the important issue. I congratulate my colleague, the honourable member for Cowper (Mr Ian Robinson), because I believe that in the short time available to him he did an excellent job in pointing out to the Government the anomalies that are being introduced in this Bill. Let us examine the proposed rates which will apply when this Bill is passed - I repeat the words ‘proposed rates’ because, after all, the Bill has not been passed yet. It still has to go through the Senate and we do not know what will happen there - no one knows. It is up to them to decide. These rates are backdated to 22 August 1973 as was stated in the last paragraph of the Minister’s second reading speech in which he said:
The Bill proposes that the new scale of fees will operate from 22 August 1973 and therefore the licence fees in respect of the renewal of licences falling due after that date will be assessed on the new scale of fees.
Mr Chairman, you will excuse me for making this comparison, but is the position in regard to these fees to be similar to that when the Post Office issued accounts to holders of postal boxes? Those people paid their fees in advance for the period which expires in March next year. Now a second bill has been sent out to them and unless they pay an extra 75c for the small box, $2, I think, for the next size and I have forgotten the extra amount for the third size, their boxes will be taken away from them. Is this the same situation? When it comes to comparative rates - this appeared to be in the mind of the honourable member for Franklin - this is a simple matter. He said that it does not mean very much and that not much revenue will be gained. For those stations in receipt of $500,000 plus from advertising, the existing rate is one per cent but the proposed increase is to H per cent. Only a 50 per cent increase, that is all! For those in receipt of Sim plus the charge remains at 2 per cent. There is no change at all. I cannot see the reason why one group has to pay an extra 50 per cent while the other does not pay any increase at all.
Let us go a little further. The rate for those in receipt of $1.5m plus increases from 2 per cent to 2i per cent. This is another discriminatory figure because that is a 25 per cent rise. For those in receipt of $2m plus there is no change. Those in receipt of $2.5m plus will have their rates increased from 3 per cent to 3.5 per cent. In round figures that is a 17 per cent rise. There is no uniformity at all. For those in receipt of $3m plus the rate is increased from 3 per cent to 4 per cent, a 33 per cent rise. The rate for those in receipt of $3. 5m plus is increased from 3 per cent to 4i per cent, a 50 per cent rise. There is no rhythm in this pattern at all. For the lowest group earning $500,000 plus and for those earning $3.5m plus there is a 50 per cent increase but in respect of some groups in between there is no change at all. I would certainly like the Minister to give the House some explanation of this. For those in receipt of $4m plus the rate increases from 4 per cent to 4.5 per cent, a 12.5 per cent rise.
There is no doubt in my mind that this Bill is similar to a lot of other Budget Bills that have been introduced into this House. They are hell bent on killing or hampering any kind of success. As the honourable member for Moreton (Mr Killen) interjected a little while ago, they are hell bent on interfering with success. The Government’s attitude seems to be: ‘If anybody is making a little progress let us stop him straightaway’. That appears to be the whole policy of the Government. When I look at the other legislation being introduced there is no doubt in my mind that this is the Government’s aim. In a debate in this House a little over an hour ago we heard the Minister for Minerals and Energy (Mr Connor) belting into another successful issue. The honourable member for Cowper this evening referred to land line charges. My friend from Tasmania did not make any reference to this. He accused the honourable member for Cowper of talking about telephones but the land line charges are one of the things which will affect many radio stations. Maybe these stations are in country areas and maybe they are in electorates held by Australian Country Party members but that is no reason why we should sit down and say nothing about these increases.
When we talk of radio stations in the outback I immediately think of the radio station at Alice Springs. As a result of decisions made by this Government - I have checked these figures through the ‘Department and can confirm them - there will be an increase of about 5,000 per cent on some of the land line charges to the radio station at Alice Springs. Where does the honourable member for Franklin come in now. He is silent. He forgets that some of the stations will be adversely affected. A little while ago he made reference to the big percentage of stations showing a profit. I am not concerned about the ones showing a profit. I am concerned about the ones on the border line and the ones which are likely to show a loss as a result of this legislation and decisions being made by this Government. This is why the Country Party and Opposition members generally are so hostile to some of the measures that are being introduced in this House. It is the reason why I want to support the line taken earlier this evening by my colleague, the honourable member for Cowper. I am terribly disappointed in the Leader of the House (Mr Daly) for trying to avoid giving the Opposition an opportunity of speaking-
– Order! The honourable gentleman will not refer in the Committee stage to events which took place in the House.
– I was not referring to the Committee stage.
– The honourable gentleman was referring to the putting of the question last night.
– I was referring to the decision of the Leader of the House yesterday in refusing to allow honourable members on this side of the House to voice their opinions on this Bill.
– Order! The honourable gentleman will not reflect upon a decision of the House. The House decided that the Bill be read a second time. That is not a subject for debate in the Committee stage of the Bill. If the honourable gentleman wishes to continue his remarks he should confine them to the Bill and not refer to something that took place earlier in the House.
– I will change my tactics by saying that I am grateful to the Minister for External Territories (Mr Morrison) who is at the table and is responsible for this Bill for the opportunity given to some members of the Opposition to speak in the Committee stage of the Bill.
– If people cannot see through what I am trying to say–
– Order! I point out to the honourable gentleman that his remarks are very close to being a reflection on the House. He is speaking in this debate under the Standing Orders of the House and not by the graciousness of the Minister or anyone else.
– Well, I am sorry that I cannot compliment the Minister. However, I see that my time has expired and I conclude by saying that if I cannot compliment the Minister I will certainly compliment the honourable member for Cowper.
– The honourable member for Wimmera (Mr King) dealt at great length with that part of the Bill which refers to the gross earnings of the various commercial radio stations. I can assume only that the honourable member, who is a member of the Australian Country Party, would be advancing the cause of country radio stations. I would be delighted if he would indicate to me the number of country radio stations within the framework of the 118 commercial stations in this country which have a revenue in excess of $500,000, because this is the nub of his argument. He went on to talk about a 1) per cent increase for stations with gross earnings of from $500,000 to $lm. What country station in Australia has a revenue of Sim? Name them. He cannot because there are not any. The honourable member and other members of the Country Party referred to land line charges. This is an impost brought about by the Postmaster-General (Mr Lionel Bowen) and I would suggest to the honourable member and his colleagues that they reflect that it was the previous Postmaster-General and the coalition government which made the decision to increase postal charges last year. Do not blame us for a decision made by the former Government. We are merely being economically responsible where the former Government and its members were political cowards.
– Be truthful and stick to what is in this Budget.
– It is not a matter of my being truthful. The honourable member knows perfectly well that it was only the influence of the Country Party that last year decimated the entire Bill relating to cigarette advertising. Country Party members talk about humbug. All they are interested in is protecting their own interests. They still cannot answer this question: How will country stations be affected by this legislation? The honourable member for Cowper, who is seeking to interrupt me again, is a classic interjector but he is a man of very little knowledge on this subject.
– While listening to this debate I have been wondering where the Country Party comes in on a consideration of the remaining clauses of the Bill. In the contribution made by the honourable member for Franklin (Mr Sherry), who has just resumed his seat, I heard very little other than what the attitude of the Country Party is to this Bill. The remaining clauses of this Bill deal with the fees and charges to be imposed on commercial broadcasting stations. I emphasise that these stations form a most important part of the life of the community throughout the whole of Australia. I inform the honourable member for Franklin that we are concerned not only with country broadcasting stations. But if a disadvantage is applied to a country broadcasting station, in spite of anything that he or the Government might say, we will defend their position and we will endeavour to see that all country broadcasting stations are permitted to provide the services that they have been providing down the years. If the increased fees have any effect on the services provided, we will raise our objections here. It is on that basis that we oppose the charges proposed by this Bill. The honourable member for Franklin said that these charges are to be raised from $50 to $200. I point out that this is the basic charge but that other charges are involved. The honourable member referred to the fact that there are not many country broadcasting stations with a revenue of more than $500,000. That is perfectly true. At the same time, we look at the whole concept of the increased charges on commercial broadcasting stations. I refer now to the part played by those stations which are facing difficulty in continuing operations in present circumstances. These commercial stations do play an extremely important part in those areas, particularly where television is not available and where telephone services sometimes are non-existent or are often very unreliable. In such areas, commercial broadcasting stations are an invaluable medium for advertising. They provide information as to the sudden postponement of any function. They broadcast local news and descriptions of sporting activities in these areas. Unless these stations can continue to operate profitably, they cannot provide these services indefinitely.
The financial position of many of these broadcasting stations is precarious. That would not worry the honourable member for Franklin. He would not be concerned about that fact. That is typical. I might tell the honourable member that it is predictable, too. Rising costs have created a great problem for many of these stations. The phasing out of cigarette advertising has reduced their revenue to a considerable degree so that profits have been .adversely affected from the aspects of income and expenditure. The rising costs which must be faced continually by many of these stations are highlighted in an article in the Australian’ of yesterday’s date. It is headed: Threat to State’s radio, TV, phone services’. I must read the full heading although I relate my remarks, for the purposes of this debate, to the radio aspect only. The news report states:
It states further:
The technicians will decide whether to accept wage increases of between 8 and 10.8 per cent offered by the Public Service Board.
The offer represents increases of S300 to $1,000 a year for technicians, and follows increases of 12 to 16 per cent to clerks in the Federal Public Service.
It is against this background that we should view the increased charges that are to be imposed.
I remind the honourable member for Franklin of one part of the report which he seems to have studied very carefully. He did not mention that, in the 5 years covered by the report, with regard to revenue or profitability for 1971-72, the last financial year quoted, more commercial broadcasting stations showed a loss than for the whole of the 5-year period mentioned. As a consequence, fewer stations showed a profit. If the honourable member for Franklin is the expert in this field that he pretends to be he will know that the indications are that the figure for the next financial year when made available to us will demonstrate that a considerably greater number of commercial broadcasting stations will show a loss. It is this point that concerns us. The disturbing factor is that many of these broadcasting stations were not formed with a view to making a profit. They were put there by dedicated-
– Were they formed in these areas for the good of the community?
– Look, Government members just show their ignorance. The stations were put in these areas to provide a service.
– Yes, Jim.
– Government members do not know anything about this matter. These country broadcasting stations were provided by local companies to provide a service to the community. Profitability was a secondary consideration.
– These are the stations which are showing a profit now. We hear hyena laughs from honourable members opposite. These only demonstrate the lack of understanding of the problem that we face. They show also the attitude of this Government. My claim is perfectly true. There are stations which have great difficulty in carrying on because they must meet difficulties resulting from decreases in revenue in addition to the problem of increased costs. They are small stations. They will find these new charges difficult to bear. The point raised by the honourable member for Wimmera (Mr King) was well taken. He pointed to the increased charges for broadcasting stations. The amount equal to one per cent of gross earnings is limited now to stations earning $500,000 or more. Studying the scale set out on page 53 of the report, one sees that a considerable amount of revenue is being raised from these stations.
Perhaps there are some stations which will be able to meet the increased charges, but there are others which will not be able to do so. I hope that the Government will show interest in the next point that I mention because I do put this argument pretty seriously to the Minister for Science (Mr Morrison). I hope that he will not join in the laughter which has occurred while I have been speaking quite seriously and quite factually. I know what I say to be true. I hope that some consideration will be given to a broadening of the national advertising program to take into consideration the problems that these stations face so that perhaps the national advertising program may be spread much more widely among the stations which now face serious profitability difficulties.
I return to the subject that caused all the laughter earlier. I was told by the manager of one station that it would not be able to pay the increased landline costs and that it would need to discontinue some of the news services that it was providing. The company forming the broadcasting station was established in a country town; none of its shareholders was from outside that town or that district. So, when I say that nobody has ever been associated with a commercial broadcasting station for reasons connected only with the profit that might be made, I throw back into the teeth of Government supporters their laughter at my remarks earlier. These stations undoubtedly are the ones that will feel the extra charges to the greatest degree. I ask the Government: Is it prepared to see these stations go to the wall? Will it base every law that it introduces in this Parliament on economics entirely? Or is it prepared to provide some sort of service for those in that vast area of the Commonwealth which is already handicapped very greatly as a result of-
– That is socialism.
– You would not even know what socialism is, and socialism is a subject that you ought to know something about. These stations which are scattered around the Commonwealth provide a service and some sort of entertainment for the section of the community that is responsible for a large portion of the export income that is being earned. Yet in every instance the Government looks at whether or not these stations are making a profit in their own right. Surely there are other considerations apart from simply deciding that a service that is provided to the community must stand fairly and squarely on its own feet, irrespective of the part it plays in the national development of this country and in providing a service to people who deserve well of the rest of the community and of the honourable members on the other side of this chamber. Honourable members opposite would be paying a good deal more for the steaks they are grumbling about paying for now if it were not for the people living in that part of the country.
Mr DEPUTY SPEAKER (Mr Scholes)The honourable member’s time has expired.
– I suppose we have heard some strange speeches in this Parliament but rarely have we heard one in which a member of the Australian Country Party said that people running these broadcasting stations were not in business for profit. This statement comes from one of the disciples of private enterprise who say that they must make a profit and are entitled to make it. Yet tonight the honourable member for Maranoa (Mr Corbett) has asked this Parliament to believe that one of the commercial broadcasting stations affected by this legislation, by a very minimal amount, went into business for the good of the community. I say to the honourable member for Maranoa that that is a lot of rot. I have never heard anything so silly in my life. If that is the case it is a funny thing that no licence has ever been surrendered. No station has ever given its licence away.
Does the honourable member seriously suggest to this Parliament that those stations that support the Country Party in season and out stupidly and unobjectively, are not in the game for profit? Of course they are. Amongst other things, they are in business to destroy the Australian Labor Party. This is just a fantasy. Fancy these commercial broadcasting stations not being in business for profit. I wonder whether Sir Frank Packer has ever heard of the honourable member. I wonder whether Sir Frank Packer is ‘in the business for fun and does not want to make a profit. Does the honourable member for Maranoa seriously suggest that? Does he suggest that all these companies throughout the country districts that own the chains of broadcasing stations are not in business for profit? Does he really think they are there to make the people of Orange, Hughenden or somewhere else happy?
– I did not say that.
– That is precisely what you said. The honourable member for Maranoa tells us that these companies are in it for the good of the community, that they are there not to make a profit but entirely to spread goodwill and harmony right throughout the length and breadth of the country districts. And every so often they have to say in the course of spreading that harmony ‘Vote No. 1 Country Party’. That was the only reason that the honourable member for Maranoa rose to speak tonight. It was not because these stations were such goodwill organisations but that in season and out they not only make a profit but also advocate voting for the Country Party.
The Bill we are discussing proposes a miserable increase in fees paid by the broadcasting stations. As far as we are concerned, they amount to next to nothing. From memory it will amount to about $60,000 a year. The significant part about this-
– Why not tell the truth? The second reading speech of the Minister referred to double that figure. Why did you not read the Minister’s second reading speech before you commenced to speak?
– Order! The honourable member for Cowper has spoken in the debate.
– The interesting part of this debate is that not one member of the Liberal Party has spoken; for once, they have dis played remarkable intelligence because they know that these companies are not in it for fun. They are in it for profit and all that goes with it. It is years since any increase has been made. There has been no increase since 1964. What would honourable members opposite say if their salaries had not gone up since 1964? They would be screaming to high heaven for an increase, and so they were, but when we introduced a measure to increase our salaries honourable members opposite would not vote for it because they are phoneys.
Costs have risen since 1964. Does the honourable member for Maranoa suggest that these charges should remain stationary forever? Does he honestly suggest that there should never be any increase or that these stations should not bear some of the costs that are associated with increasing prices? When all is said and done, honourable members opposite are continually talking about inflation and the cost of living, but now they are opposed to a miserable increase by this amount. As a matter of fact, 1 wondered whether the Bill was worth bringing in, so little was the amount of increase proposed. It is such a small amount it is a wonder that the Bill was introduced. But, of course, I am horrified to think that we are doing something to the people who are in business for goodwill. I wish that David Jones Ltd thought the same way; we would get cheaper goods. I wish that big industry would take the same approach as the people referred to by the honourable member for Maranoa. I am a person who does not believe they are in it for the good of the country. I think they are in it for what they can get out of it, on a profit basis. If they are free enterprise organisations, that is the very basis of their being in business.
Just because these broadcasting stations support the Country Party is no reason why they should not meet their obligations. Therefore I excuse members of the Country Party for defending these stations. Why would they not defend them? The stations support the Country Party in season and out. They give the Country Party free time on the radio and all that goes with the benefits that we will cover in the Bill we are bringing down. Now, in this Parliament, members of the Country Party act in effect as the paid agents of these stations, trying to stop an increase of a small amount. That is why I rose tonight.
– Why do you not read what some of the stations have had to say?
– The honourable member who interjects reminds me of an artificially inseminated cow - there is something wonderful happening inside him and he does not know what it is all about. All I say to the honourable member is that he does not know what it is all about when he says that these stations are in business for fun, because they are not. They are in it for profit and they ought to pay their way. That is all that this Bill does and if honourable members opposite think we are going to believe the fantasy that they are in broadcasting for fun, they can pull their own legs but they will not pull ours. All we are asking them to do is to pay a proportion of the increased costs. The increases proposed by this Bill are reasonable. Honourable members can judge for themselves what the stations give to their Country Party when honourable members opposite kick up such a stink about $60,000. No wonder they are fighting to protect the oil and minerals industries and the others who are putting in millions more than that. I just mention these matters tonight in order that the Parliament will know that the arguments of honourable members opposite are phoney and should be dismissed.
Mr CORBETT (Maranoa) - Mr Chairman, I wish to make a personal explanation.
– Order! Does the honourable member claim to have been misrepresented?
– Yes, by the Minister for Services and Property (Mr Daly). He misrepresented what I said. He claimed that I referred to all broadcasting stations, but I said there were some stations in that position. It was a complete misrepresentation. I had hoped that the Minister as a Minister would try to stick to the truth. In support of my contention that I have been misrepresented I should like to refer to figures relating to the period from 1967-68 to 197’l-72. There were from 9 to 19 stations showing a loss in that period. There were 19 stations in this position in 1971-72 and it is those 19 stations to which I referred, not to David Jones Ltd and all the other companies and stations the Minister mentioned when misrepresenting what I said. I believe that he should be ashamed of himself by resorting to that type of debate; it characterises the Minister for Services and Property.
– At the start, I merely reiterate the sentiments of the honourable member for Maranoa (Mr Corbett) and suggest to the Leader of the
House (Mr Daly) that when he next speaks he should make sure that his mind is engaged before he puts his tongue into gear. The clauses of the Bill under discussion are indicative once again of the purposeful desire of the Labor Administration to undermine private enterprise as distinct from public enterprise. This Bill seeks not only to increase the flat rate of a licence fee but also to vary the percentage of gross revenue. For the information of the Leader of the House and the honourable member for Franklin (Mr Sherry) I refer to the second reading speech given by the Minister for Supply and Development on 4 June 1942. He stated that the fee in 1942 was £25 or $50, yet the Labor administration in eight or nine short months in one fell swoop increased by 300 per cent a fee which has stood the test of time for 30-odd years. Commercial radio in Australia is keenly competitive and is based on traditional Australian traits of friendly rivalry, ready co-operation, with quality of programs - those very essential characteristics that were mentioned by the honourable member for Maranoa (Mr Corbett) and the honourable member for Wimmera (Mr King). There has been healthy competition between the national broadcasting network and Australian commercial radio, both from the points of view of programs and technical developments.
In the dual system, which the Australian Country Party supports, commercial stations have of necessity tended to emphasise light entertainment while the Australian Broadcasting Commission has been free to develop the more serious side of radio. We submit that this has given the Australian listener a wider variety of choice than either the American commercial enterprise or the British national system could provide. It is pertinent to point out that British radio only recently has gone commercial. Surely that is an action which those who sit opposite should appreciate. They should realise that it is absolutely essential to retain both systems of radio for the use of generations to come in Australia. It is true to say that since the commencement of commercial radio approximately 50 years ago commercial radio has ensured a faithful and responsible handling of its important medium of communication, particularly for people who live in rural areas and sparsely populated areas in the different parts of the Australian continent. For the information of my colleagues who represent electorates near Brisbane I point out that the first commercial radio licence in Queensland was granted to 4GR in Toowoomba. That was 50 years ago. It was not until 5 years later that the people of Brisbane saw fit to follow the magnificent example of the late Edward Gold in Toowoomba and sought a commercial radio licence for Brisbane.
Like the honourable member for Maranoa, who gave a great amount of praise to those people, it is pertinent for me to point out that in times of great emergency such as bush fires, floods and accidents, commercial radio stations become the centre of assistance organisations. Messages are sent out to advise people of the state of roads, of accidents, of bush fire menaces and so on,
– They save governments millions of dollars in communications.
– I appreciate the interjection by the honourable member for Paterson that these radio stations provide these services absolutely free of charge and they save the Commonwealth Government many millions of dollars. It is also appropriate to point out that commercial radio, not national radio, also contribute largely to projects such as Legacy appeals, Father’s Day appeals for spastic or sub-normal children. In fact they are becoming places where the local communities can contribute to local charity organisations.
A study of the new licence fees will show that compared to 1964 figures there will be an increase of 2.97 per cent for stations with gross profit of $500,000 a year but there will be a staggering increase of 51.24 per cent for stations with a gross profit of $lm. As the honourable member for Wimmera pointed out there will be an increase for stations on the next grade of the scale of only 0.5 per cent. For stations with a yearly gross profit of $2m there will be an increase of 25.34 per cent. I wonder why there are different variations in scale. Why do we not have a steady graduation so that each increase in gross revenue will attract a corresponding increase in licence fee charges. The Government has sought to differentiate. I should like to know from the Minister why there has been this gross distortion of licence fees compared with those which existed in 1964. More ranges in scale have been included in the new Bill compared with the rates applying in 1964.
I subscribe to the viewpoint that it is grossly unfair to base the charges on gross profits. Surely it would have been more just to base these costs on net profit as was the case in the early days of wireless telegraphy in Australia - way back in 1908.
– Come up to date.
– I suggest that the honouable member was born with a silver spoon in his mouth but he certainly has not cut his wisdom teeth as yet. This may alarm some people, but there is often a need to give financial encouragement to an enterprise for it to stay in business. Country radio stations often are hard-pressed to attract advertising, yet they must maintain an interest in community affairs. It is healthy that they contribute to public awareness of national and local issues and social and educational trends. Figures would indicate that they have been remarkably successful in this area. Statistics indicate that 87 per cent of people over 10 years of age - I often doubt whether some of those who sit opposite are over 10 years of age mentally - listen to radio at least once a week and 98 per cent of homes have at least one radio receiver. These are remarkable figures and indicate the acceptance of the dual system of radio in Australia. There is sufficient scope for different emphasis of presentation to attract all ages and all tastes. We on this side of the chamber are astonished at the moves which seek to place insurmountable burdens in some instances on commercial radio with the savage increases of up to 300 per cent, plus, increased land line charges and abolition of telephone concessions as was indicated in the recent Budget.
Australian broadcasting conditions demand more than the mere application of experience gained overseas as this country presents many special problems in the development of an efficient home service. The huge area and the relatively scanty population, the wide divergence of climatic conditions between tropical Cape York and cold Hobart, the populous cities as compared with the broad and sparsely populated rural areas, present special problems. These increases before us appear to take no cognisance of the very special contribution rural commercial radio makes in the outback at no charge whatsoever in disseminating warnings in times of emergency. Commercial radio has been in existence for 50 years and its contribution to Australian life has been as Australian as gum trees and koala bears. It has ferretted out the need and developed a technique to service that need. It has developed a style of its own, unique in concept and design. For the future development of radio it is absolutely essential that licence fee charges, particularly those related to a percentage of gross profit, be kept at an absolute minimum.
– The Australian Country Party tonight has made a valiant effort to make a mountain out of a molehill. Tonight we are considering a very simple Bill which has been described by the honourable member for Cowper (Mr Ian Robinson) as a savage impost. The savage impost amounts to raising the licence fee from $50 to $200. A little later in his remarks he admitted that it was only a very small amount. So one wonders what the charade this evening has been all about. When one thinks of it, a broadcasting station has to pay only $200 for the right to transmit; broadcast listeners have to pay $26 for the operation of a transistor radio. Let us start getting these things in perspective. A licence fee of $200 being paid by a station which operates in a monopoly situation represents $200 being paid for the right to make a profit. This to my mind is a really absurd situation. But in the interests of the country radio stations which the Labor Party has very much in mind we have kept the licence fee payable to only $200.
One of the interesting features of this whole debate, apart from the contributions made by Country Party supporters, is that both the Minister for the Media (Senator Douglas McClelland) and I as the Minister representing the Minister for the Media have not received one protest about this increase from the Federation of Australian Broadcasting Stations and we have not received one protest from any broadcasting station throughout Australia. One of the reasons for this is that radio broadcasting is a very profitable enterprise. There are some 19 stations which, according to the report of the Broadcasting Control Board, are not making a profit, but 5 of these radio stations are relay stations, the parent companies of which are making handsome profits. Of the others most are new radio stations, and I am sure that our colleagues opposite would realise that in the initial years of operation it is expected that they will make a loss and that they look to three or four years hence when they will make a profit. I can assure members of the Country Party - this is very much in the mind of the Australian Labor Party because’ we hold as many country seats as the Country Party - that no increase is proposed in the scale of rates applying to all the country stations. The provision for one per cent of gross earnings up to $500,000 is exactly the same as that contained in the previous legislation, and it covers all the country stations. So we can give the assurance to all country stations that the scale of rates that they have to pay will not change whatsoever.
The honourable member for Wimmera (Mr King) referred to the land lines. On the second occasion that this matter came before the House I cannot recall the Country Party Party opposing the increase in land line charges. 1 think it ought to be recognised that there was no opposition from the Country Party on the increase in land line charges. So this evening we have had this charade on a Bill which is very modest in its provisions. It provides for the raising of an additional $120,000, $60,000 of which would be paid as a normal accretion from the increase in the profits of the broadcasting stations. In view of the lightness of the arguments that have been put against this proposal, I move:
Question resolved in the affirmative.
Remainder of Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Mr Morrison) - by leave - read a third time.
Consideration resumed from 10 October (vide page 1894).
– I suggest that the order for the consideration of the proposed expenditures agreed to by the Committee on 12 September be varied by postponing consideration of the proposed expenditures for the Department of Customs and Excise, the Department of Primary Industry, the Department of Overseas Trade and the Department of Secondary Industry.
– Is the suggestion of the Minister agreed to? There being no objection, that course will be followed.
Department of Education
Proposed expenditure, $145,351,000.
– In a mere matter of 10 minutes obviously it is possible for me to deal with only one point. The point that I wish to deal with is the effect of the Government’s policy in certain independent schools whose per capita subsidy has been reduced or abolished.
– You mean you think they will be. Nobody’s subsidy has been reduced this year.
– Surely the intention is to reduce or abolish the subsidy. In this connection I wish to quote from a circular sent to the parents of boys attending the Sydney Grammar School. The circular was written by Sir Norman Cowper, Chairman of the School Council. Because he is a very distinguished citizen who speaks with special knowledge and who puts this case with a force and eloquence that I would be unable to command, I shall read what Sir Norman Cowper has to say. The circular states:
That is, the trustees of the Sydney Grammar School - have decided - I need not say with the greatest reluctance - that fees must be raised from the beginning of first term 1974 . . .
The increases have become necessary, partly in order to meet rises in costs which have already occurred or are forecast for the next year, but principally because of the withdrawal by the Commonwealth Government as from the end of this year of the annual grant of $104 for each secondary pupil and $62 for each primary pupil.
The Trustees heartily welcomed the Government’s decision to provide vastly greater funds for the support of both government and non-government schools, and its intention to allocate those funds generally in accordance with the needs of schools. But a criterion of need which results in all support being withdrawn from a school such as this is manifestly absurd. The criterion is said to be ‘usage of recurrent resources’. This School has no endowments or investments (except those modest sums which are held in trust to provide scholarships and prizes) or other ‘recurrent resources’ and relies wholly (apart from such aid as may come from the State Government) upon fees paid by, parents. To say that its command of recurrent resources is such as to disentitle it to any support is to use words with a frivolous disregard for their meaning. In truth the criterion applied by the Karmel Committee and the Government is degree of excellence. When a school by the anxious use of the most meagre means and with the self-sacrificing contributions of parents achieves a degree of excellence not matched by the generality of schools, it is penalised by having all aid withdrawn; and further heavy burdens are necessarily laid upon the parents.
A possible alternative to the increases now announced would be to increase class sizes, reduce the number and quality of the staff, and generally lower the standards of the School. This would be a disastrous course and the School would not long survive its adoption, for there would be no inducement for parents to send their boys to the School if the education offered were of a second-class character.
The Government talks about affluent schools. The fact is that what the Government will do by means of implementing its policy is to ensure that only the affluent go to such schools. I remember talking some years ago with a headmaster of another school comparable with the Sydney Grammar School. He said that the best boys he had were those who were by no means the sons of affluent parents but the sons of parents with quite small resources who made enormous sacrifices to send their boys to that school. By implementing its policy in this regard the Government will turn these schools into schools purely for the affluent and for those who are least worthy to receive the kind of education that these schools provide. This is a penalty, as Sir Norman Cowper puts it, on excellence. I believe fundamentally and deeply that excellence is a thing always to be preserved. Excellence is rare. It is uncommon. It is precious. When one sets, about to destroy excellence what one is doing is to act as a barbarian.
– You should be constructive and seek to build up excellence instead of opposing it.
– I am all for the building up of excellence but what I deplore is the destruction of excellence. It is easy enough to destroy. When the barbarians came in on the Roman Empire they destroyed much that they could not rebuild. Honourable members opposite, as barbarians, are destroying the excellent schools that have excellent facilities. The honourable member talks about building up excellence.
– In 23 years your Government built up no excellence at all.
– The honourable gentleman is entitled to his opinion and no doubt if he can get the call he will be able to express it in this chamber. But I am expressing my opinion at this moment and I will not have any interjections from the honourable gentleman. If he has something to say, let him get on his feet and say it, but he should not continue interjecting while I am speaking. All of us are agreeable that measures should be taken to assist those who are handicapped in one way or another - for example, mentally or physically handicapped, migrant children, children with specific learning difficulties and children in slums. Of course we all agree with this. But does the Government have to reduce the small amount that it has been providing to the independent schools in order to do so? This is a program that costs tens of millions of dollars. This Government would take away a trivial amount on the pretext that it was necessary to assist it in doing those other things. Promises were given before the election by the Prime Minister (Mr Whitlam) and by the Minister for Education (Mr Beazley) who is seated at the table that this would not be done, and those promises were broken. But I am not making political points. I am concerned that as barbarians the supporters of this Government are destroying excellence - a rare and precious thing. I believe that this is a wicked thing to do.
Most debates in this chamber on education, most debates in this community, in State parliaments and everywhere revolve around questions on classrooms, equipment, teacher pupil ratio and all those material things. Nobody ever seems to think about the values that are instilled into the minds of children. Yet surely this is the objective of any education. The places in which these values are instilled are in homes, in schools and by television. The things that are going into the minds of children through television are quite deplorable, yet we do nothing about it. In many cases, unfortunately because it is not the fault of the parents, the homes are not able to supply what is best for the values of the children. It is only in the schools that this can be done. So this Government has set out to destroy schools which seek to develop rounded personalities.
The real objectives of education were established in the days of the Renaissance in Italy by that greatest of all humanist educators, Vittorino da Feltre. about whom the Minister would know very well. Vittorino da Feltre realised that it was a question not only of the intellectual development of children but also of the development of their characters, the development of their bodies and rounded personalities. The schools such as the one to which I have referred have sought to instil these particular values. Of course it should be done generally. I agree with my friend opposite, the honourable member for Scullin (Dr
Jenkins), that they should be built up. For heaven’s sake build them up and do not seek to destroy them because this is what this Government is doing and it is doing it in a miserable fashion. I believe it is doing it out of envy, hatred and malice and all uncharitableness and not as honourable members opposite say to provide a few extra dollars for the people who really need assistance. It is not for that purpose at all. It is because of envy, hatred and malice. I believe this to be true. I deplore it. I am not seeking to make political points here but I simply deplore a policy that I believe to be absolutely and utterly miserable.
– I welcome the opportunity to take part in this debate on the portion of the Appropriation Bill dealing with education because I feel it is essential that the people of Australia recognise the tremendous impetus that is being given to education by this Government in both government and non-government schools. I believe that the focus of the national debates on this subject is disturbing and I think it was reflected tonight in the remarks that were made by the honourable member for Bradfield (Mr Turner) in the concentration on 2 per cent of students in our schools who attend the exclusive non-government schools and the passing over of the other 98 per cent of students in complete disregard of what is going on. The honourable member accuses the Government’s supporters of acting as barbarians who want to destroy excellence. I note that he is about to leave the chamber apparently because he does not want to hear what we have to say. He is now returning to his seat.
– I have returned to my seat. 1 have indeed returned.
– I am pleased that the honourable member has returned.
– I want to listen to envy, hatred and malice from the honourable gentleman.
– Yes, envy, hatred and malice from one who spent 25 years as a teacher in government schools.
– And one who went on strike often, I suppose?
– If one could better conditions and strike was the right thing to do, yes I would, and I have done so. But I remind the honourable member that one of the reasons probably why I am in this place at the present time is the utter frustration that I experienced as a result of 23 of those years when Liberal-Country Party governments were in power and the paucity of funds that came through to government schools. I believe that irrespective of what school it is, whether it is a government or non-government school, we should allow aid to pass through to where the need is. We talk of excellence. Surely we want to attempt excellence in every aspect of education and not for just the 2 per cent who seem to be the concern of the honourable member. I was very impressed to hear him talk of values. I wondered whether he had read the report of the Karmel Committee. If he had read that report he would have seen the type of values on which rest the whole of our policy and the funds that we are now talking about. When this Government took office we were faced with the gross neglect of schools by the previous Government and a backlog of urgently needed work. We needed desperately an imaginative plan and a greatly increased flow of funds into the education sector. This had been promised by the Prime Minister (Mr Whitlam) in his policy speech.
In the amazingly short time of 6 months an imaginative plan was forthcoming in the report from the Interim Committee of the Australian Schools Commission. This document is without doubt the most important document in relation to secondary and primary schools that has been tabled in this place. The manner in which the Government has acted in this plan, I believe, is reflected in the estimates of expenditure which we are now considering. There has been an unprecedented increase in the flow of money into our schools, both government and non-government schools. I believe that this is reflected in comparison with expenditure on education. If we look at grants that were made to Australian Government schools we find that under the previous Government there was a grant of $40.5m for 1971-72. We anticipate the spending of $495m on Government schools in the next 2 years.
– Order! It being 15 minutes to 11 o’clock in accordance with the order of the House of 1 March I shall report progress.
– I propose the question:
That the House do now adjourn.
I call the honourable member for Mackellar.
– I have differed so often from the Prime Minister-
– Order! It seems as though the honourable member for Balaclava thinks his name is on the list but I do not have it here.
– I am sorry, Mr Speaker, but you advised me that you would put it down yourself.
– That was my mistake; I wrote down ‘Mackellar’ instead.
- Mr Speaker, I have arranged with the honourable member for Perth (Mr Berinson) to cease speaking at 10.50 p.m., as he has a particular matter to raise.
– This was my fault. I inadvertently wrote down ‘Mackellar’. I am so used to seeing and hearing from the honourable gentleman. I call the honourable member for Balaclava.
– It is on but rare occasions that I speak in an adjournment debate and that is why I decided not to yield to the honourable member for Mackellar (Mr Wentworth). I wish to speak on a subject about which all of us have a deep feeling. I refer to the crisis in the Middle East. For the last 2 days I have endeavoured to ask the Prime Minister (Mr Whitlam) a question. Those who observe honourable members rising in this House would have seen that I have been doing this. To make sure that the question is on record I propose to read what I was wanting to ask the Prime Minister. This is the question:
I ask the Prime Minister why he stood up before a Jewish audience earlier this year and told them that the sovereignty of Israel was not negotiable and he now says that he will follow a neutral, an evenhanded policy in the Middle East? Is this the best we can do as an Australian Government when United Nations observers have said who the aggressors are in the Middle East? Or does he not remember that it was an Australian, Dr Evatt, who presided over the United Nations when it voted to create a separate state of Israel? If he believes that Israel’s sovereignty is not negotiable, a few words of sympathy and understanding would help.
My purpose tonight is to endeavour to ensure that the Prime Minister, or the Government, is forthcoming so far as this real problem is concerned. I am making a belated plea as a Christian to ensure that we in Australia do a little more than we have done in the past so far as this crisis is concerned.
There is not any doubt in my mind that the Jewish people and the Arab nations have taken a battering over a number of years because of the crisis in the Middle East, but I make this plea on 3 grounds. The first is that in the United Nations in 1947 the countries of the world decided to create this separate state of Israel. Coincidentally, this forum was presided over by a sound Australian, Dr Evatt. All member countries of the United Nations except the Arab nations and, 1 believe, some of the communist countries, supported the proposal. The second point I want to make - it was mentioned in the question I read earlier - is that the United Nations observers have reported to the United Nations that the recent war was initiated by the Arab countries. I do not want to incite the minds of people in this House or of the people of Australia. All I want is to get some assurance that the present crisis was incited by the Arab countries. Then we ought to be able to say something positive about it. I am neutral so far as the decision is concerned but I believe that we in Australia should find out what the problems are, and if the present conflagration was initiated by Arab countries I think we ought to say so. I believe that this small country of 3 million Jewish people with a territory of 35,000 square miles ought to be supported by people in Australia which is so far away from their country. We helped to create the state of Israel and therefore I believe that we ought to support it in some form or other. The third point I want to raise relates to the report that we ali read in the newspapers yesterday that Israel’s Prime Minister, Mrs Golda Meir, stated:
When we get an invitation to the ceasefire table we will go there without any pre-conditions.
To me this seems to be a clarion call to the peace loving nations of the world either to get the Israeli nation to the peace table as well as the Arab countries or to at least give support to the country which obviously wants to go to the peace table. It is my impression from the news reports that if the Israeli people cannot get the other 8 Arab nations to the peace table they will fight like mad when they are attacked. I guess that we cannot blame them as individuals for that. As I said earlier, it is not my purpose to take sides. I am not sure of the cause of the present trouble except that there has been a problem between the Arab nations and Israel since 1947 when the new Israeli state was created by the United Nations in New York. As I understand it some 3 million Jewish people are working hard in an endeavour to make the country fertile. I am told that they are very successful. Not having been there I cannot confirm this information but it is my belief that they have done a wonderful job. They should be used as an illustration of what sound working people can do when they set their hearts to it. They have rehabilitated deserts. They have made the country fertile. It is my understanding that they have resettled at least 600,000 refugees from various countries in Europe and from Arab nations. For this alone they ought to get support from peace loving countries throughout the world.
As I have said, the United Nations observers reported that the Arab countries initiated the present war. Of course there have been wars in the Middle East area for too long. If there is initiation of war by a group of countries or by one country I think that the Australian people deserve to be told the facts. The recent war was started on the most holy day of the Jewish people of the 365 days of the year. All business in Jerusalem had stopped. There was no business activity whatever. No work at all was being done because it was their holy day. All the schools were closed and I am told that unfortunately so were the radio stations so that the people of Israel were unable to hear that fighting was taking place on their borders. That is why I ask the Prime Minister and the Australian Government to be a little more forthcoming to show that the Australian Government and people have some sympathy and understanding for this problem. I did not want to take the time of the honourable member for Mackellar and the honourable member for Perth (Mr Berinson) but I felt that as I had seen you, Mr Speaker, earlier this morning I should not yield to them.
-For the last 10 days we have been witness to a new chapter in the tragic modern history of the Middle East. For the fourth time in its short 25 years of life Israel has been forced to fight for its very survival. For the third time it fights alone with hardly so much as a friendly voice to be heard in its support. For the second time it is the victim of the combined aggression of Arab States, now 9 in number, unprovoked by any act by Israel but simply by the fact that it continues to exist.
It is a tragedy of awful dimensions already and seemingly limitless potential. The loss of life must certainly be greater than at any time since the 1948 war of independence itself and as in 1948, while there is the remotest prospect of Israeli defeat the world, with the single exception of the United States stands by mute and paralytic. The cost of this war is borne in the first place by the Israeli victims of it - their dead and wounded and bereaved. In human terms, the cost on the Arab side is just as awful. But there have been political costs as well which extend far from the area of combat. In the first place we have learnt that the high sounding declarations of developing detente between the great powers are not to be regarded with optimism or hope but with the utmost cynicism. James Reston of the New York Times News Service is worth quoting at length. I seek leave to incorporate an extract of his column of 10 October.
-Is leave granted? There being no objection, leave is granted. (The document read as follows) -
The latest Middle East crisis between Israel and the Arab States has produced an even more important crisis between the United States and the Soviet Union, and between the United States and the Communist Government of China.
In those big televised meetings between Nixon, Brezhnev, Mao Tse-tung and Chou En-lai in Moscow and Peking, the leaders of the major powers agreed to support universal principles, which would lead to a new order in the world, but when they all gathered around here at the United Nations on the East River during the latest Middle East crisis, they sang a different tune.
You have to go back to all those reassuring communiques out of the Kremlin and Shanghai in order to understand what the Soviet and Chinese representatives said here at the United Nations about the Middle East crisis.
At the end of May 1972, after the Nixon-Brezhnev meeting in the Kremlin, they said they were ‘guided by their obligations under the charter of the United
Nations, that they were aware of the need to make every effort to remove the threat of war and to create conditions which promote the reduction of tensions. >
The United States of America and the Union of Soviet Socialist Republics’, they said, ‘have a special responsibility to do everything in their power so that conflicts on situations will not arise which would increase international tensions. . ‘. .’
This was big news when President Nixon went to Moscow. It was also big news when Nixon and Premier Chou En-Lai of China signed the Shanghai declaration of February 27 1972, declaring that ‘both wish to reduce the danger of international conflict . . neither is prepared to negotiate on behalf of any third party. . . .’
Yet when the latest crisis developed in the Middle East, all these noble promises and intentions seem to have been forgotten. Though President Nixon appealed to Chairman Brezhnev to co-operate in getting a cease-fire along the Suez, and Secretary of State Kissinger urged Huang Hua of China here to co-operate in a big-power effort to stop the fighting, the plain fact is that Washington got no co-operation.
Huang Hua said it was ‘perfectly just’ for the Arab countries to ‘rise in resistance to the invading enemies of their own sacred territories’. Yakob Malik of the Soviet Union not only supported the military activities of Egypt and Syria against Israel, but criticsed the United Nations Security Council for even raising the question at the United Nations.
And this is the main point - the information coming here to the United Nations was that the Soviet Union, while committed to reduce tensions under the Nixon-Brezhnev agreement, was actually urging Algeria, Lebanon and particularly the King of Jordan to get into the war against Israel.
This is not a casual or frivolous report.’
– But the new detente is not the only political casualty of this war; the other is the United Nations itself which by its impotence in this crucial situation has set the final seal on its own irrelevance. Of course, the virtual uselessness of the United Nations in the absence of big power agreement has been obvious for years, but it was always possible to find a reason for its inactivity in a particular case which left room for hope that it might yet find a peace-keeping role at least on the periphery. For example, if it did nothing about Hungary or Czechoslovakia that was because Russia was a principal party in those events and would have inevitably and invariably used its veto to block any attempted action. In Vietnam a similar excuse could be made on the grounds of America’s involvement and there were all sorts of juridical arguments possible as well. All sorts of issues were available for dispute and if they did not justify United Nations inactivity they could at least help some people, so inclined, to try to explain it.
But what can- possibly be said in justification or explanation of United Nations paralysis in the present Middle East war. For all the obscurity of the present military position this much at least must be clear to all: Firstly, Israel is an internationally recognised sovereign State and a member of the United Nations. Secondly, according to the undisputed reports of United Nations observers Israel has been the victim of a massive co-ordinated attack by Egyptian and Syrian forces in violation of a ceasefire and of ceasefire lines established under United Nations auspices. Thirdly, Egypt and Syria have now been joined by forces of Iraq, Jordan, Libya, Morocco, Algeria, Saudi Arabia and Kuwait - all United Nations members themselves. Finally the Security Council has so far met 4 times, but so abortively to this point that it has not yet reached the stage of considering, let alone adopting, any resolution at all. And this same United Nations was to be the hope of the world. Who will ever believe it.
Now what is the Australian position? So far as the general Middle East problem is concerned the Government view as enunciated by the Prime Minister (Mr Whitlam) might be summarised by the following set of principles; all of them reasonable and proper: Recognition by the Arab States of Israel’s sovereignty and right to exist; settlement of disputes by direct negotiations and not by imposed third-party solutions; withdrawal from occupied territories to recognised and secure, which is to say defensible, boundaries; and settlement of the refugee problem. In respect of the war itself, the Prime Minister has stated that the first priority of the Government through its membership and chairmanship of the Security Council is to attempt to secure a ceasefire. He adds, however, that he sees no advantage in seeking to apportion blame for the ceasefire violation nor, apparently, would he link his efforts with a call to restore the original ceasefire lines. In the realms of high diplomacy, about which I admittedly know nothing, that may well be the best and most constructive approach and I respect it on that basis. I trust, however, that I will be excused for doubting it and for preferring the approach of this statement which has the support of a majority of Government back benchers, and which I seek leave to incorporate.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
Recognising that the chairmanship of the Security Council by the Australian Ambassador, Sir Lawrence Mclntyre, could make it desirable for Australia to remain as uncommitted as possible in public discussions on the Middle East war, the undersigned nonetheless feel obliged to express the following view:
United Nations observers have reported that the war was precipitated by a co-ordinated breach of the ceasefire lines by Egyptian and Syrian forces. No independent evidence is available to suggest any prior crossing or violation of the ceasefire lines by Israel.
The Security Council should immediately call for the restoration of the ceasefire and of the ceasefire lines.
This further tragic war again indicates the need for all possible action to achieve peace in the Middle East by means of direct negotiations, safeguarding the integrity and sovereignty of Israel and all the nations in the Middle East within secure and defensible borders.
Australia, as an unaligned party in the Middle East dispute, should take every initiative open to it to promote these aims.
– Although time is so limited in the adjournment debate I must make one other comment. It has been suggested by some observers that if Israel is now suffering heavy and painful losses this ‘serves her right’ to put it crudely for not co-operating earlier on the return of occupied territories and the re-establishment of the pre-1967 boundaries. To that, 2 things should be said. In the first place a ferocious surprise attack as launched last week, if sprung from the pre-1967 borders, would by now have had Egyptian and Syrian troops fighting in Tei Aviv rather than still on their own soil. To that extent unless this war is followed by a real and genuine peace its only result will be to confirm Israeli determination to hold onto every single inch of land they can. More than that, given the general absence of support for Israel when faced as she now is with the staggering odds of men and material against her, who will be left in a position to moralise about it? Until today, no one; on the basis of today’s news, the United States alone. Mr Speaker, my time is approaching expiry. I seek leave to have the short balance of my prepared speech incorporated in Hansard.
– This is a most unusual practice, but the honourable member for Perth has given me the rest of his speech, which I have read. It does not infringe Standing Orders. Is leave granted for the rest of the speech to be incorporated? There being no objection, leave is granted. (The remainder of the speech read as follows) -
But secondly and more important, what on earth can lead anyone to believe that a return to the pre-1967 borders would be an end of the matter. Can memories be so short that it is already forgotten that the 6-day war broke out because the Arab States did not accept the 1967 borders? Many of us will have seen an advertisement by a group called the Friends of Palestine in yesterday’s ‘Australian’ and heard its spokesman interviewed on radio later.
In response to the direct question: ‘Doesn’t your program simply amount to the dismemberment of Israel’, the spokesman was at least honest enough to say ‘Yes’.
The Arab States are now proclaiming a more limited goal for the war they have launched but their earlier statements and actions indicate clearly enough that their real goal is precisely in line with the views of the Friends of Palestine, that is, the utter elimination of a sovereign State. This leaves Israel in the greatest peril and explains her monumental efforts and sacrifice in self defence. It also explains her readiness, repeatedly stated but continually spurned, to enter into direct negotiations for peace, without preconditions and at any time or place. It is a time for her friends to declare themselves if only to put a brake on the ambitions of the countries attacking her - to declare support when it is warranted; to apportion responsibility where it lies. Even if the rituals of diplomacy are bruised in the process that would seem to be a small price indeed to pay.
– Order! It being 11 o’clock, the House stands adjourned until 11.30 a.m. tomorrow.
House adjourned at 11 p.m.
The following answers to questions upon notice were circulated:
asked the Minister for Education upon notice:
Will he bring up to date the information on degree courses at colleges of advanced education which his predecessor gave on 9 March 1972 (Hansard, page 869).
– The answer to the honourable member’s question is as follows:
Degree Courses in Colleges of Advanced Education
The information which follows is based on material supplied to me by the Australian Council on Awards in Advanced Education. The Council, which is a national body, maintains a register in which are entered those awards offered in colleges of advanced education throughout Australia which have met the Council's requirements for national registration. There may be other degree courses at present being offered in the colleges which are not included in the following list because the associated awards have not yet been registered by the Council.
asked the Minister for Health, upon notice:
Who will bear the cost of the extra precaution placed on quarantine inspection and ofthe lengthy supervision required prior to the processing and during the destruction of peelings as a result of the recent approval for the importation of raw potatoes from New Zealand.
– The answer to the honourable member’s question is as follows:
All costs involved will be covered by normal plant quarantine inspection arrangements including, where appropriate, charging importers fees determined in accordance with the provisions of the Quarantine Act and Regulations.
asked the Treasurer, upon notice:
When may I expect an answer to question No. 707 which I asked on 31 May 1973.
– The answer to the right honourable member’s question is as follows:
My answer to the right honourable member’s question No. 707 was incorporated in Hansard on 25 September 1973.
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
The staffing establishment of the Australian Department of Health includes positions of:
and (3) (a) Vacancies for Chief Dental Officer (Dentist, Class 3), A.C.T. Health Services; Dentist, Class 3, Dental Services Branch; and
Dentist, Class 2, Dental Services Branch, were advertised in the Press but appointments to the positions have not yet been made.
The position of Assistant Director-General, Dental Services Branch, was not publicly advertised but was filled by the promotion of an officer with suitable experience and qualifications from within the Australian Public Service.
Chief Dental Officer, A.C.T. Health Services-
Assistant Director-General, Dental Services Branch -
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
I must stress, however, that action in this regard is a matter for the patient’s doctor to initiate at his own discretion.
Applications for Political Asylum in Australia (Question No. 1030)
asked the Minister for Foreign Affairs, upon notice:
– The answer to the honourable member’s question is as follows:
Cite as: Australia, House of Representatives, Debates, 16 October 1973, viewed 22 October 2017, <http://historichansard.net/hofreps/1973/19731016_reps_28_hor86/>.