House of Representatives
23 July 1974

29th Parliament · 1st Session

Mr SPEAKER (Hon. J. F. Cope) took the chair at 2.15 p.m., and read prayers.

page 463


Censure of Whitlam Government

Leader of the House · Grayndler · ALP

– I wish to inform the House that I accept the notice of motion given on 18 July by the Leader of the Australian Country Party (Mr Anthony) as a censure motion for the purposes of standing order 110. I take it, Mr Speaker, that the notice of motion will .now be called on.

page 463


Motion of Censure

Leader of the Australian Country Party · Richmond

– I move:

That the Government be censured:

for its failure to observe proper parliamentary procedures which would require the honourable member for Eden-Monaro to substantiate serious allegations he has made inside and outside the Parliament reflecting on the integrity of the members and staff of the Australian Wool Corporation and the Leader and Deputy Leader of the Australian Country Party,

for its tacit support of the allegations made by the honourable member for Eden-Monaro of a conspiracy between the Leader and Deputy Leader of the Australian Country Party and three unnamed members of the Australian Wool Corporation and involving senior staff of the Corporation to support the price of wool at excessively high levels in order to embarrass the Government,

for its refusal to support proposals intended t.i require the honourable member for EdenMonaro to produce the written evidence he claims to possess in relation to his charge, and

for prejudicing the future marketing of the Australian wool clip through permitting uncertainty to exist as to the integrity of the Australian Wool Corporation thereby creating doubt as to its future commercial operations.

This is indeed a serious charge to level against the Government. It is not a censure motion that is taken lightly. The allegations and accusations that have been made are indeed serious. They involve 2 senior members of this House. They involve the members of the Board of the Australian Wool Corporation and the senior staff of that Corporation and, of course, these charges have very serious implications as to the operations of that body in trying to realise the best possible price for

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the Australian wool industry and in the best interests of the nation. One might have thought that the acts of the honourable member for Eden-Monaro (Mr Whan) were unwise, silly comments made on the spur of the moment, but they appear now to be part of a campaign - almost a plot - to try to discredit the Corporation in its operations and in its capacity to be able to make commercial judgments on what price ought to be paid for Australian wool.

If this is an operation to try to discredit my Deputy, the honourable member for New England (Mr Sinclair) and myself, it has rudely backfired. All it has done has been to throw tremendous doubt on the Australian Wool Corporation and the whole Australian wool industry. Such allegations and inferences could not have come at a worse time for the Australian wool industry. The wool industry at the moment is under very great pressure of declining prices and uncertainty as to the future. When we hear reports of actions and counter-actions being taken by countries overseas, what we need is strong support for the Corporation and confidence that the actions it is taking are right and proper. But what is the level of intent of the honourable member? What is this sinister plot that he is trying to play with? Is he trying to discredit the Corporation in order to have it reconstructed or is he endeavouring to have certain members of the Corporation dismissed and replaced with boobs who will be nothing more than lackeys for the present Government? What is the idea? The members of the Corporation are men of great standing, with a great reputation and of enormous experience. Of all the organisations in Australia none has a prouder record in the short period it has been in operation than the Australian Wool Corporation which has done a mammoth job through a most difficult period of time in trying to stabilise and to bring about orderly marketing of wool in this country. Its whole record is one to be commended - a very laudable one indeed.

If the honourable member does not substantiate his evidence by presenting it to this House, then he must stand discredited in the eyes of this Parliament and he must stand discredited as a disgrace to the Australian wool industry, as a man who has been long involved with the industry and as a man who has contributed to it. I give him due regard.

During his period in the Bureau of Agricultural Economics he earned a reputation for some of his activities concerning the objective measurement of wool. So the statements that have been made were not made by a man who knows nothing about the industry or the seriousness of the situation in which it . is placed. He is a very senior member of the Government. He is a senior member of the Government’s rural committee. He is a member who has professional training in this area and I know that he understands just what this is doing. So unless the evidence is presented to this Parliament all we can say is that he is acting with evil intent to try to discredit members of Parliament and members of the Corporation.

His statements, of course, run in conflict with the attitude of the Government. The honourable member for Dawson (Dr Patterson) has stated that the Government will support the Corporation in its commercial judgment for the rest of the wool selling season. We applauded that. We thought that was a sensible statement to make at a time when people were getting very nervous about the action of the Government in backing up the Corporation. But last week we saw a series of statements, emanating from the honourable member for Eden-Monaro, which have thrown utter confusion into the standing and the reputation of the Corporation. The honourable member has made the very serious allegation that there is collusion - indeed, a conspiracy - to try to manipulate the market. These things cannot be taken lightly. These statements would have been cabled to countries all over the world which are interested in buying Australian wool. I have had experience in negotiating with other countries and in the course of those negotiations and discussions they have brought forward series of quotes of statements by prominent Australians and members of Parliament which might have supported those countries in their particular line of argument. So it is without doubt that all the statements that have been made by the honourable member for Eden-Monaro and the general controversy that has built up around this question in the last few days would be cabled overseas. The point now has arrived where I think it is so serious that the Government should make a statement alleviating the fears, suspicions and the concern of these foreign countries which are so interested in buying Australian wool. What must they think of the accusation that there is a conspiracy to build up a false price in the market? The record of events during last week shows a deliberate program by the honourable member to try to discredit the Corporation, and, of course, my deputy and me. This has gone on unabated and without any genuine apology for what he has been doing or saying. In this House last Tuesday, 16 July, the honourable member for Eden-Monaro alleged that there was a conspiracy between the Australian Wool Corporation and the Australian Country Party to support the price of wool at excessively high levels so as to embarrass the Government. In a speech during the debate on the Address-in-Reply the honourable member said, and this was his first comment:

It is no secret that there have been discussions between the Wool Corporation and the leaders of the Country Party to devise this mehod of embarrassing the Government.

That could have passed as nothing more than political jargon in the course of a debate in this House and one would have let it go by. But the next night, last Wednesday, on the Australian Broadcasting Commission program ‘Country Hour’, the. honourable member for Eden-Monaro made the following statement in relation to the activities of the Australian Wool Corporation in the week’s sales:

We’ve got written comments that the members of the Wool Corporation have identified themselves with the Country Parly and, not only that, but they have colluded wih the Country Party to establish an embarrassing position for the Government

Then at 7 o’clock that night in the ABC news bulletin the honourable member for EdenMonaro said:

In this last week I’ve received another account of conversations by 3 members of the Wool Corporation in which they said that they had discussions with the Leader and Deputy Leader of the Country Party along the lines that they would support the market at an excessively high level in order to embarrass the present Government.

Honourable members will recall that in the House last Wednesday night both the Deputy Leader of the Country Party and I made personal explanations to point out that what the honourable member for Eden-Monaro had said was completely false and that we had had no association with the Corporation and its members in any way relating to the price fixing of the market. In fact, I have not had any association for a considerable period of time with any of those members. The honourable member for Eden-Monaro replied that he accepted our statements but he continued to claim that he had evidence to support his allegations. It did not matter that we disavowed his claims. He went on rampantly making the allegations without presenting the evidence.

In the House last Thursday morning the Minister for Northern Development and Minister for the Northern Territory, representing the Minister for Agriculture (Senator Wriedt), said that he was quite sure that anything said by the honourable member for EdenMonaro would be backed by facts. There is a senior member of the Government saying: ‘Right. He can make those statements because he knows they will be backed by facts’. We want to see those facts and we believe that the Government has a responsibility to produce them for the whole nation to see because the matter needs to be examined closely. To give the honourable member for Eden-Monaro an opportunity to produce the evidence I have spoken of, I moved after question time last Thursday for the suspension of so much of the Standing Orders as would prevent the honourable member from substantiating his allegations with the evidence that he claims to have in his possession. The Leader of the House (Mr Daly) replied in his usual manner, but I think this time he disgraced even many of his colleagues sitting behind him. They know that the honourable member for EdenMonaro has caused great damage to the Australian Wool Corporation and to the wool industry as a whole - damage that cannot be measured but which is unquestionably very serious.

Unfortunately no honourable members opposite had the courage to support the motion for the suspension of Standing Orders so that this matter could be cleared up and I would think that today they will use their numbers again to try to win this motion, as they undoubtedly will. But unless this matter is resolved a very serious cloud will remain over the whole of the operations of the Corporation and the industry. Members of the Government Party knew that the honourable member for Eden-Monaro had lost his political pants last week; so when we moved for the suspension of Standing Orders they crowded around to protect him and to save him from having to back up the charges which he made. No doubt they will try to do the same thing today. One would have thought that last week’s episode would end the whole affair. But in the Australian Broadcasting Commission program ‘Country Hour’ last Friday the honourable member repeated his allegations and again claimed that he had evidence to support them. He said:

Members of the Corporation claimed that they have spoken to the Leader and Deputy Leader of the Country Party in order to organise a reserve price well above commercial limits and thereby embarrassing the Government. 1 would certainly like to know who are these members of the Corporation who are supposed to have spoken to me and to my deputy because, as we have said, we have had no such discussions with any members of the Corporation. This allegation is nothing more than a furphy for some political motive which we have not been able to understand, except that we know the consequences of what is happening. On this program the honourable member said that he accepted the statements made by my deputy and me and said that he apologised for any embarrassment that he had caused us. But he went on to say:

But the fact remains that we do have evidence that 3 members- of the Wool Corporation made this claim.

Asked to name the 3 members, the honourable member said:

I would not like to name them.

How weak can one get? There are 9 members of the Corporation under suspicion; three of them are being accused. To which three of that nine is the honourable member referring? This is what we would like to know. He said that he had a verbatim account of conversation in which 3 Corporation members made the claim, reinforced by other evidence. I take this to mean that the honourable member has a verbatim transcript from a recording or from shorthand notes taken at the time. Asked whether he was prepared to produce the evidence, the honourable member said on this program:

No, I am not, because I have given the . . .

He hesitated at that point, and then went on to say:

I know that the evidence that is available is in the hands of the people who can make the appropriate decisions.

Asked whether he had handed the evidence to the Minister for Agriculture the honourable member said:

The Minister has access to exactly the same material.

Today the honourable member is reported in the Melbourne ‘Sun-News-Pictorial’ as pressing for a judicial inquiry into the activities of the Australian Wool Corporation. So you will see,

Mr Speaker, that the honourable member’s allegations still hang over the heads of the members of the Corporation. It is no use calling for an examination of the activities of the Corporation unless one has some bona fide evidence to verify these very serious charges which the honourable member has made.

In the same ABC program last Friday, the Chairman of the Australian Wool Corporation, Mr Maiden, was asked about the honourable member’s allegations. Mr Maiden is a man of great distinction with a great administrative record and an impeccable reputation -

Dr Klugman:

– A member of the Country Party?


– What a frightful thing to say. Mr Maiden has been a senior public servant. This is the sort of character assassination which seems to be going on at the moment. People throw accusations at anybody, particularly a person who has not a chance to refute them in this House. On this ABC program last Friday, on which several people were being interviewed, Mr Maiden said:

They are completely untrue and I welcome this opportunity to refute the allegations that have been made.

Asked if the Corporation’s actions were based on commercial or political judgment, MiMaiden said:

It is a completely commercial judgment where senior members of the Corporation or the Corporation staff have not discussed with anybody outside the Corporalion what our action in the market-place should be.

Asked why he thought the charges had been made by the honourable member for EdenMonaro, Mr Maiden replied:

I wouldn’t have a clue.

Asked if allegations of the honourable member for Eden-Monaro had damaged the Corporation’s public standing, Mr Maiden, with great restraint and with his usual politeness and courteousness, replied:

I don’t think it helps.

What an understatement! He does not think it helps. Goodness me, ask anybody in the Australian wool industry today just what they think of the implications of what has happened.

Then we come to the Minister for Agriculture, Senator Wriedt. He was interviewed in the same program and when he was asked to comment on the accusations of the honourable member for Eden-Monaro, he replied: If the person who made them feels that they can be substantiated, it is up to him to do so.

Mr Speaker, I would agree with the Minister on that point. Surely anybody with any decency would at least publicly substantiate his charges in this House. We certainly gave the Government the opportunity to do that last week but no, it sheltered and ran away from doing so. Why? Why has the Government deferred this matter? Are we going to hear the substantiation by the honourable member for Eden-Monaro in this House today? I certainly hope we will, so that the matter can be taken further if these accusations have any substance in them.

The honourable member for Eden-Monaro should substantiate the allegations he has made, which have placed the Corporation in a very difficult position. The situation now, Mr Speaker, is that the honourable member says he is very sorry about the accusations he has made against myself and the Deputy Leader of the Country Party, and has accepted our statements. But he keeps on making and compounding his allegations, which is exacerbating the whole circumstances of the Corporation in its operation.

Every member of the Corporation is under a cloud of suspicion, and there are nine members. Senior members of the Corporation’s staff are under suspicion. The Corporation’s role in the wool market is suspect because of the honourable member’s charges. It is impossible for the Corporation to carry out its functions properly and effectively, and to win and hold the trust, confidence and respect of the world’s wool trade, with these unsubstantiated allegations hanging over its head. If the Corporation is to be accepted as an operator in the wool market then it must be above suspicion and above reproach. How can the wool buyers from various countries around the world bid with confidence in our wool market if they hear from the honourable member for Eden-Monaro - a senior member of the Government Party on rural affairs - that the Corporation is not acting in a fair dinkum way, that it is making false, inflated bids as part of some politically inspired plot to rig the wool market? That is precisely what the honourable member has claimed - that the Australian wool market is rigged, that it is faked.

The implications for Australia are very disturbing indeed. It must be difficult for anybody who does not know accurately its operations, its functions and the people on it to trust the Corporation. They must be very concerned as to what is the real price to which Australia is prepared to back the wool market. The wool industry cannot remain under this cloud of suspicion. The honourable member’s allegations, as far as I am concerned and as far as the Deputy Leader of my Party is concerned, are completely false. They have been denied. They have been denied by both of us. They have been denied by the Chairman of the Australian Wool Corporation. It is time that the honourable member’s claims were exposed and it is time that this Government, or members of the Government who make these wild, extravagant charges, were pulled into line. The Government, in the form of the Leader of the House, has acted shamefully in this matter. The Leader of the House last week prevented the matter from being discussed and cleared up. As a result, the only course of action we had to take was to level a censure motion against the Government, and I hope that the Government will see the seriousness of what has happened.

The wool industry people all around the world are entitled to think that claims made by a Government member with special interest in the wool industry do carry some weight. If the wool industry is not to suffer further as prices become depressed and the situation becomes more difficult, and if the Wool Corporation is to have its reputation and its credibility and integrity restored, the Government must take action now to clear the Corporation of the charges made by the honourable member for Eden-Monaro. If the Government fails to do this, it will deserve to be censured in the terms of my motion, and the honourable member for Eden-Monaro will remain permanently discredited because of the irresponsible and dishonest allegations which he has made.


– Order! Is the motion seconded?

Mr Sinclair:

– I second the motion and reserve my right to speak at a later stage.

Minister for Northern Development and Minister for the Northern Territory · Dawson · ALP

– The Government rejects the censure motion, in that it is nothing more than a grandstanding stunt by the Leader of the Australian Country Party (Mr Anthony) and the Deputy Leader of the Australian Country Party (Mr Sinclair). It is a desperate grandstanding effort with the sole objective of attempting to divert the focus of attention which is being dramatically directed at the activities of the Australian Wool Corporation over what has been described by a growing number of authoritative sources as last week’s wool selling fiasco - a fiasco which has resulted in the expenditure of SI 6m of public funds, taxpayers’ funds, by the Wool Corporation, by actions which must now be seriously questioned by the Australian Government. There is no doubt that the responsibility for the farce of last week’s wool sales must be completely borne by the Corporation.

Mr Nixon:

– You are a cheap trickster.


– Order! The honourable member will withdraw that remark.

Mr Nixon:

– Well, he is a cheap trickster.


– Order! The honourable member will withdraw or I will name him.


– I withdraw.


– Last week’s sales have caused serious damage to the reputation of the wool industry, and they could have a significant effect on the future level of wool prices. When I answered questions by the Country Party members early last week as to the Government’s attitude to the Australian Wool Corporation’s policy of allowing sales of approximately 130,000 bales of wool last week, and buying it at a rate of around 60 per cent of total offerings, the answers I gave were given in good faith, because I was unaware - unaware - at that time of the odium which was to be later exposed by the honourable member for Eden-Monaro (Mr Whan). 1 stated that the Government would back the commercial judgment of the Australian Wool Corporation, because I believed that the Corporation had been acting within guidelines agreed to between the Government and the Corporation. I also believed at the time that the Minister for Agriculture (Senator Wriedt) had been consulted. I found that both of these assumptions were incorrect. I also believed at the time that members of the Corporation solidly supported to a man the decision to hold the wool sales in the best interests of the wool industry. I found this assumption to be incorrect.

Personally, I found it incredible that wool sales were being held in Australia in July at a time when wool buyers were never active. They are known to be openly and traditionally opposed to July sales. The sales were also being held at a time which coincided with the holiday period on the Continent, which of course has a significant effect on wool selling activities.. But as I believed the Wool Corporation to be completely above board in its deliberations and that it had operated within the guidelines of Government policy and in the best interests of the wool industry and the nation, 1 had no alternative but to give the Government’s support to the Corporation, ;ind this I did. Subsequently I listened to the exposure by the honourable member for EdenMonaro of the evidence which he has received. The more one delves into this sordid business the more highly suspicious become the circumstances and the motives of last week’s wool sales conducted by the Wool Corporation. 1 regret also to say that the more highly suspicious become the activities and motives of some members of the Australian Wool Corporation who are in a position to influence and even to determine the policies and decisions of the Wool Corporation. There is a very bad smell developing around the activities of the Corporation. I am afraid this smell is going to get worse.

Let me refresh honourab’e members’ minds with the history of the appointment of members of the Australian Wool Corporation. Just prior to the 1972 federal elections, when it became obvious that the Liberal-Country Party coalition would fall, the Deputy Leader of the Country Party, the honourable member for New England, in his capacity as Minister for Primary Industry, performed an act which was completely inexcusable. It. was politically dishonest. Just prior lo this vital election, which saw the annihilation of the Liberal-Country Party Government, this Minister appointed the members of the Wool Corporation, which is the most powerful industry executive in Australia, be it primary or secondary industry. It was a shocking act of political dishonesty. The appointment as Chairman of the Corporation of Mr A. C. B. Maiden was not unexpected. As far as I know, he has been a public servant without any political bias whatsoever. I have, known him for 25 years and 1 respect him. But he is the Chairman only. The appointment by the then Deputy Leader of the Country Parly of Mr S. S. Nevile as Deputy Chairman was also made just prior to the federal election. Mr Nevile is known to be anti the Australian Labor Party. He is, of course, entitled to his views. He has opposed for years the technical marketing innovations and reforms frequently put forward by the honourable member for Eden-Monaro. Just prior to that, federal election, Mr D. J. Asimus was appointed by the Deputy Leader of the Country Party. He was and probably still is a member of the Country Party. I am informed that he stood for the Country Party against the Labor Party for the State seat of Burrinjuck and he carried out a most vicious campaign.

Mr Nixon:

– I take a point of order. The Minister is defaming people by making political allegations. The fact is that Mr Asimus was a grower nominee. He was nominated by a growers’ organisation. This has no relevance whatsoever.


– Order! The honourable member will resume his seat.

Mr Nixon:

– The Minister ought to be as’hamed of himself.


– Order!

Mr Nixon:

– He ought to be ashamed of himself.


– Order! The honourable member will resume his seat.

Mr Nixon:

– It is a disgraceful performance.


– Order! The honourable member for Gippsland will resume his seat. No point of order is involved.

Mr Nixon:

– It is a disgraceful performance.


– Order! I call the Minister.


– I am informed that he stood for the Country Party against the Labor Party for the seat of Burrinjuck-

Mr Nixon:

– He showed good sense.


– … and he carried out a most vicious campaign against the Labor Party. (Opposition supporters interjecting) -


– No wonder leaders of the Country Party–

Mr Sinclair:

– Rot.


– Order! The Minister will resume his seat.

Mr Katter:

– What about Normie Foster?


– Order! The House will come to order. Interjections are out of order. I intend to take appropriate action if this continues.

Mr Nixon:

– You ought to be ashamed of yourself, Rex. You are not a man’s bootlace.


– Order! The honourable member for Gippsland will remain silent.

Mr Nixon:

– And put up with him!


– Order! I name the honourable member for Gippsland.

Mr Daly:

– I suggest that the honourable member for Gippsland might care to apologise to the Chair before I move the motion.

Mr Nixon:

– No way.

Motion (by Mr Daly) put:

That the honourable member for Gippsland be suspended from the service of the House.

The House divided. (Mr Speaker - Hon. J. F. Cope)

AYES: 62

NOES: 56

Majority . . . . 6



Question so resolved in the affirmative.

It is against this background that we witnessed last week’s events - the infamous meeting of 3 members of the Australian Wool Corporation at the Australian Club, the Country Party Club. I have spoken at length with the honourable member for Eden-Monaro and I am convinced thathe has done this Parliament a great service.

When any offensive or disorderly words are used, whether by a member who is addressing the Chair or by a member who is present, the Speaker shall intervene.

The deputy leader of the Australian National Party said in Mackay this morning that the Labor Government if re-elected would immediately cancel the nitrogenous fertiliser bounty.

That statement by the Deputy Leader of the Country Party was a deliberate untruth. (Extension of time granted) This statement by the Deputy Leader of the Country Party was maliciously untrue. I replied immediately in writing through a Press statement.

Monaro he said, in answer to an interjection from the honourable member for Prospect (Dr Klugman), that if there were any truth whatsoever in the allegations made by the honourable member for Eden-Monaro he would resign. In other words, he holds himself up in this Parliament as a person who is prepared to resign if he tells a lie. Yet I have completely and utterly exposed, in writing, what he said about the nitrogenous fertiliser bounty as a deliberate and utter untruth. I have given the House the facts concerning that fertiliser bounty. They are in writing and cannot be denied.

The Government completely rejects the grandstanding of the leaders of the Country Party in proposing this censure motion. It has the utmost confidence in and respect fo; the honourable member for Eden-Monaro. He has exposed to this House the motives of certain members of the Australian Wool Corporation who are bitterly opposed to this Government and who will leave no stone unturned to undermine this Government. I hope that the Government will carry out a full investigation of the activities of the Australian Wool Corporation. In the meantime, the particular members of the Australian Wool Corporation, whose names have been given to the Deputy Leader of the Country Party, should resign from the Australian Wool Corporation immediately. Further, if the leaders of the Country Party have been involved in any way in this plot they should resign from this Parliament. On behalf of the Government I utterly reject this motion.


– Yes. As one who has spoken to Mr Claude Renshaw. who has bee,i named -


– Order! The honourable member will resume his seat. He cannot make a personal explanation for anybody except himself.

Mr Hunt:

– I am one who has spoken to him, Mr Speaker.


– Order! That is no basis for a personal explanation. The honourable member will resume his seat.

New England

– Some years ago in the United States of America there was a gentleman called Senator McCarthy. He brought a great deal of disrepute on the whole of the United States democratic process. I am interested to note that members of the Cabinet have just walked from the chamber. The reason Senator McCarthy brought disrepute on the Parliament of the United States was that in completely unjustified and unsubstantiated character allegations he insisted on laying charges outside of the courts, in the forum of the Parliament under the sanctity of the rules which ensure parliamentary privilege against any charges made against a person outside Parliament, in such a way that a number of individuals were severely and critically maligned.

In this Parliament this afternoon, going quite beyond the terms of the censure motion which I heartily support, the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) has carried character allegations beyond any precedent that has been established in this Parliament. He has listed a number of individuals whom he has condemned by innuendo and implication in such a way that these men must be seen to have their status and standing in the community maligned. At the beginning let me say that I know each one of these men - not well, but I know them. I know them in such a way as to believe that anything that is said by the Minister for the Northern Territory, the honourable member for Eden-Monaro (Mr Whan) or any other member of the Australian Labor Party in the vein we have heard this afternoon is completely unjustified. They are honourable men, which is more than the actions of members of the Government Party this afternoon have displayed them to be.

Before I get on to the substance of the allegation, the second point I wish to make is that this afternoon we have seen compounded a direct attack on the Australian wool industry - Australia’s principal export industry - which, again, has never before been undertaken by an Australian government. This Government henceforth must itself take the responsibility for any falls in the wool market. Members of the Government Party not only have made charges against the individuals within the Australian Wool Corporation but also have suggested that the actions of the Wool Corporation - this has been repeated by the Minister for the Northern Territory in this House this afternoon - have been directly contrary to the interests of the Australian wool industry and the Australian people. The Minister, in a statement reported in the ‘Age’ on Saturday, said that he believed the Corporation was outside the guidelines that the Government laid down. So this Government is setting itself in a position where it is intentionally reducing the price received in the wool market by growers and paid in the wool market by buyers. One of the Japanese companies, Mitsui, a major wool buyer in Australia, at the weekend stated that henceforth it will be doubtful as to the activities of the Australian Wool Corporation because it now seems that prices offered and paid by the Corporation have been propped up for political reasons.

These are not light charges. This Government is putting itself in the position where it is directly eroding the returns received by Australia’s major export industry. It is prejudicing the very survival of the family farmer that some of the Government members purport to represent. It is directly prejudicing the receipts received by way of external payments in the money received for sale of wool overseas. It is acting in an incredible fashion, in such a way as to lead one to doubt - if one ever had any reason to believe before - that it has any capacity at all to govern. In addition, I think it needs to be said that this afternoon in this House the Minister for the Northern Territory has stated directly that he does not support appointments, from the wool industry or from wool producers, on marketing boards and on primary producer boards. The Minister categorised and listed people, with the exception of the Chairman to whom he gave half hearted support but damned later. The Minister directly queried the actions of the Wool Corporation and by innuendo, therefore, suggested that the Chairman of the Wool Corporation was not acting in accordance with directions given. The Minister has made the same charge.

He is including the Chairman and every member of the Corporation in the charges that have been made.

What has happened is that specifically, with the exception of Mr Nevile and the Chairman, the persons referred to were the nominees of the 2 principal wool growing organisation in Australia. Their appointment to the Corporation was in accordance with the legislation which, in that respect, the Minister, who was then the principal spokesman for the Opposition on matters affecting primary, industry, supported. That legislation states that the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation should each appoint 2 representatives. The Minister now gets up in this Parliament and says that he does not agree with ‘the two they appointed’ - not the Liberal PartyCountry Party Government, but the AWGC and the AWMPF. He now finds their appointment objectionable. There is a law of this Parliament which prescribed the. conditions for the election of the members to whom he referred. It was under the terms of that part of that legislation that these men were appointed. Any innuendo or inference made in this Parliament is completely against legislation which the Minister supported. I suggest that the man himself needs to be a little more constant in the way he demonstrates his attitudes in this place.

Before I return to the substance of the allegations, I point out that the Minister also persisted in a charge which has been made by him and by other members of the Government about the timing of the appointment of members of the Wool Corporation. I point out, even if the Minister does not know, that the timing of the appointment of the Chairman of the Corporation was conditional on his being able to make suitable arrangements with the International Wool Secretariat of which, at the time of his appointment to the chairmanship of the Australian Wool Corporation, he was managing director. Approaches were made to him quite a time before the time when final ratification came through, but it was not until there had been a meeting of the Board of the International Wool Secretariat that Mr Maiden was able to advise the then Government of his availability. Immediately after that meeting took place the Chairman and all members of the Corporation were appointed and the announcement was made. Unlike the Australian Labor Party, on this side of politics we believe in men being appointed to these positions not because of their political background -

Mr Reynolds:

– Wait till I give you a list.


– You are suggesting that the 4 industry representatives were political appointments? The 4 industry representatives were appointed in accordance with the legislation supported by the Labor Party, of which you were then a member in this House, in accordance with procedures defined in that legislation. Their names were sent to the Minister, who at that time happened to be myself, and in accordance with those recommendations those men were appointed. Unlike members of the Labor Party, we made those appointments without any political prejudice. They were made in accordance with the legislation.

There is one other thing on which I must also pin the Minister for Northern Development. This afternoon there has been a suggestion that when I was in Mackay I suggested that the Government might have second thoughts about the payment of the nitrogenous fertiliser bounty. That I believed at that time, and that I am quite sure it might well have taken place - that is, the Government’s cancelling of the nitrogenous fertiliser bounty - if I had not made that statement. It was only at that stage of the campaign that the Prime Minister (Mr Whitlam) decided that he was worried about inflation. Indeed, it might be interesting, if we are worried about credibility, if we were to hear the Prime Minister’s view on the statement that the Minister for the Northern Territory made this afternoon. On 16 May 1974 an advertisement appeared in the Press. I will be happy to table it or incorporate it in Hansard if members of the Government would like. It is an interesting document when one considers the consumer price index figures released last Friday. It states:

Only Whitlam has reduced inflation by one-third. Whitlam did not just talk about inflation. He acted. Tariff cuts and two revaluations of the Australian dollar have now started to work. In the last quarter inflation in Australia was down by a third to 2.4 per cent. . . .

I wonder whether the Minister read Friday’s newspaper or saw Friday’s announcement. The advertisement went on: … the fourth lowest of the 24 countries for which official international figures arc available. Last year before Whitlam’s measures had taken effect Australia’s inflation rate was sixth highest. We can beat inflation and we will with Whitlam.

What a joke! The whole of the substance of the Labor Party campaign in the federal election was how it had succeeded in containing inflation. What farcical nonsense! This has now been demonstrated to be completely untrue. If the Minister for the Northern Territory believes that the Prime Minister was false at that stage let him now take up with the Prime Minister the question of the resignations which the Leader of the Country Party (Mr Anthony; and I myself have said we would be prepared to tender if there were any substance in the allegation of involvement by the Leader of the Country Party and myself in any duplicity related to the Australian Wool Corporation.

This censure motion is not moved with any light thoughts. It is a very serious matter when the Opposition proposes a censure motion against the Government. We do it because we are concerned with a number of the aspects of the charges made by the honourable member for Eden-Monaro (Mr Whan). One of the first of them is that, acting in accordance with the legislative authority which this Parliament has placed on them, are a number of men who are members of statutory corporations. Let me just refer to a few - the Reserve Bank of Australia, the Commonwealth Bank, the Australian Coastal Shipping Commission, the Australian Airlines Commission and Qantas Airways Limited. All of these are very important bodies, as is the Australian Wool Corporation. By the honourable member for EdenMonaro initiating allegations on 16 July in his Address-in-Reply speech, by the Minister for the Northern Territory taking the matter up in his reply to a question last Thursday and by the Minister for Agriculture (Senator Wriedt) pursuing it here and outside the Parliament, this Government is throwing doubt on the credibility of every man appointed to any statutory corporation. This Government is taking a position where any right thinking citizen desiring to do his duty according to the general precepts that apply to an invitation to act on any one of these bodies must seriously doubt whether the members of this Government are prepared to stand by him when he takes decisions and acts in accordance with the charges that have been placed upon him. This is not just one corporation; this is part of a range of functions exercised by government through statutory agencies designed to undertake specific responsibilities. The Wool Corporation is but one of those statutory responsibilities. This despicable attack by the honourable member for Eden-Monaro and the Minister for Northern Development must place serious doubt on the integrity of the Australian Wool Corporation and, from it cast doubt on the reasons for any right thinking citizen being prepared to assume the responsibility that would be his if he were to be a commissioner or to exercise some role within a corporation or some other statutory body. Mr Speaker, that of itself is a damning indictment of the ability of this Government to govern.

I will go further: The honourable member for Eden-Monaro has followed what seems to be a personal vendetta against this Corporation. If one has a look at the succession of statements that the honourable member has made inside and outside the Parliament and at the implication in his speech in the AddressinReply debate that there had been discussions between the Wool Corporation, my Leader and me, which was repeated on radio on the ‘Country Hour’ and then on the ‘ABC News’ in ‘PM one. sees that all these are statements which are designed to suggest that the Australian Wool Corporation in some way is a body which is deliberately manipulating the price of wool for some hidden purpose.

Since these charges were first laid and the denials were made by Mr Anthony and me, there have been in this Parliament under the provisions of the Standing Orders repeated opportunities for the honourable member for Eden-Monaro to table the evidence and to announce the names of the men against whom the charges are made. In each instance, the honourable member has welshed the opportunity to do so. He has not been prepared to do so on any of the prior occasions. There are a good many opportunities under the provisions of the Standing Orders. The opportunity is there to make a personal explanation. There are opportunities in an adjournment debate. Indeed, the name of the honourable member for Eden-Monaro was even listed, I understand, last week to participate in an adjournment debate and he was not here.

There have been opportunities in the form of a motion for the suspension of Standing Orders which was used by the Leader of the Country Party last week. There have been opportunities for the Government, which has the numbers in this place, to initiate a debate. But instead the honourable member for Eden-Monaro is proceeding with his accusations which are now supported in an alarming way by the Minister for Northern Development, for whom I previously had some respect, and in another place by the Minister for Agriculture. He is proceeding by innuendo to damn the Corporation and its members. He has still refrained from identifying the members of the Corporation against whom the charges are made. He has refrained from producing the written substantiation of the alleged conspiracy which he says existed. The honourable member for Eden-Monaro says: ‘But here in the chamber I told the Deputy Leader of the Country Party who those people were’.

Let me repeat: Neither my Leader nor I have in any way been associated with these men in the way that the honourable member suggests. I believe there is absolutely no truth in the allegations. Shame on a government to suggest that the normal processes of law in Australia should be reversed, because that, Mr Speaker, is the ultimate conclusion of the charge made by the honourable member for Eden-Monaro and the Minister for Northern Development. Let me underline the way in which this would happen. In Australia there is a presumption of innocence - but not for the Labor Party, not for the Labor Government. There is no presumption of innocence. There is a presumption of guilt. The honourable member for Eden-Monaro has stated: T, the honourable member for Eden-Monaro, have made a charge. Therefore you have to answer it.’ This is the way in which the law might be operated in banana republics and dictatorships -around the world, and in some of those Communist countries for which members on the other side seem to have a marked affection.

Mr Mathews:

– What is that about McCarthy?


– Precisely. I am glad the honourable member for Casey referred to that gentleman. The Minister for Northern Development will henceforth be condemned. By the manner in which he has made specific charges, which are unsubstantiated, against individuals he has followed a procedure and a practice which have been universally condemned and he has claimed that there is a basis on which the charges should be made. The whole of the basis by which an innocent man is presumed to be innocent has been sought to be reversed by the charges made by the Minister for the Northern Territory and the honourable member for Eden-Monaro. If there is any substance in those charges, the honourable member has responsibility to pro duce the evidence, to name the men concerned and to substantiate the charges made against them. To operate the law in any other way is completely contrary to the Australian Constitution and to the practice of the British common law which we have inherited. Shame on the honourable member for Eden-Monaro and the Minister for the Northern Territory for speaking in that vein.

To my mind, the charges made by those men go to the very fundamental basis on which we expect men outside the Parliament to exercise responsibility. I believe, and I had thought before that this was a bipartisan view, that responsible men in the community can be asked - indeed, called on - to act in the way that the members of the Australian Wool Corporation have been acting in serving the industry and the country, in accordance with the charge laid upon them. But that the Government today has denied and that the Government today has thrown into question. It has placed serious charges against a number of individuals but it has failed to substantiate them. There has been a continued repetition of charges. There has been an allegation about the possession of written evidence. The written evidence has not been produced. The Government stands condemned for the 4 reasons that are outlined in the motion now before the House; the Government stands condemned because it has failed to uphold the principles by which parliamentary democracy should work; and the Government stands condemned because henceforth any fall in the Australian wool market will be not the fault of the Australian Wool Corporation and not the fault of the market forces that previous spokesmen have tended to support but the fault of Labor machination in order to assert and abuse the power which, fortunately, will not be Labor’s for long.


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

Monaro · Eden

– The Opposition is seeking to censure the Government for reflecting upon the integrity of the Australian Wool Corporation. In my view the integrity of the Australian Wool Corporation was compromised by the previous LiberalCountry Party Government. The events of last week are just an extension of the weaknesses inherent in the Wool Corporation. They hail their foundations in the previous Australian Wool Board. In presenting the following evidence to the House I hope to establish a prima facie case for an independent investigation of the structure and activities of the Wool Corporation and its predecessor, the Australian Wool Board.

My evidence is drawn from a long professional association with the wool industry. The results of my own research into wool marketing have been published in over 60 articles and papers. A general summary of those results and those of other research workers in the field is available in the report of the Wool Board’s Objective Measurement Committee and in a paper entitled ‘Wool Marketing’, which I published in a journal entitled ‘Wool Technology’ in December 1973. In that paper and also as a member of the Crawford Committee which suggested the establishment of the Wool Commission, as well as prior to that time, I advocated a price insurance mechanism that contained both a flexible reserve price and a floor price. It was the previous Government, under an Australian Country Party Minister for Primary Industry, that prepared the present Act, which only makes allowance for a flexible reserve price. That should be remembered in the light of a Press statement yesterday by the honourable member for Gippsland (Mr Nixon) in which he castigated the Government for not instructing the Corporation to establish a fixed reserve price.

In essence, the reforms outlined in recent wool marketing research could save wool growers over $100m a year. The major barrier to the introduction of such innovations lies in the attitudes and affiliations of the present members of the Wool Corporation. Nobody on the Corporation has a wool technology background and is equipped to grasp the implications of the new developments. An examination of the qualifications of the present membership has been given to this House already by the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson). It is instructive to draw the attention of honourable members, as he has done, to the fact that in this House - the House of Representatives - no one can hold an office of profit under the Crown. The situation is clearly different in the New South Wales Upper House.

Two other members of the Corporation have been directly responsible for the long succession of wool marketing failures perpetuated by the Wool Board and the Wool Commission. I have already set out a detailed criticism of these events in a booklet entitled ‘Proposals for Wool Marketing in Australia’ published in 1969. None of the charges made in that booklet has ever been answered even though they involve members of the Country Party, 2 members of the Corporation and a senior staff member. Perhaps this booklet would be of some assistance to Sir Harry Budd, the editor of the Country Party newspaper ‘The Land’ who, I understand, has been instructed to bucket me and the Australian Government. Most of the failures in wool marketing were due to the fact that the members of the Wool Board tended to protect the narrow interests of the groups which put them on to the Board rather than the interests of wool growers as a whole.

Mr Sinclair:

– I take a point of order, Mr Deputy Speaker. Is the honourable member entitled in this place to malign a member of another Parliament?


Under the Standing Orders an honourable member is entitled to refer to what he wishes in this House.

Mr Sinclair:

– Is he entitled to malign the member of another Parliament?


– I know of no instance in which he has maligned a member of another Parliament.

Mr Sinclair:

Mr Deputy Speaker-


– Order! The honourable gentleman will not argue with me. There is no point of order.

Mr Sinclair:

Sir Harry Budd is a member of the Legislative Council of New South Wales. It has been suggested that he has been instructed to act other than in accordance with his normal discretions.


– I have ruled that there is no point of order.


– I have already provided 2 examples of the tendency of the Wool Board to protect the narrow interest groups that put them on to the Board. In one case, at page 1354 of Hansard of 11 April 1973, I discussed the circumstances that led to the creation of the Yennora wool selling complex in Sydney. In another case at page 654 of Hansard of 20 March 1974, I set out the details of the failure of the Wool Corporation to publish the results of an experiment which set out to demonstrate factors in favour of a traditional position in the processing and handling of wool. At that time I indicated to the House that this was conceived by a Mr S. S. Nevile. The experiment was commissioned to be carried out in the Port Phillip Mills, of which Mr Nevile is the managing director. The sum of $16,432 was paid to Port Phillip Mills to conduct the experiment. The results were never published because they did not confirm the original expectations of Mr Nevile.

I have here the account sales and I shall table the document. It demonstrates clearly what I have said. It is addressed to the Australian Wool Board, AOMP Group, 578 Bourke Street, Melbourne. It shows: To costs of Experiment’ and itemises those costs. It shows: ‘Estimated result: Costs as above $24,150. Estimated value of yarn $22,929’. This evidence demonstrates quite clearly that $16,432 was paid to Port Phillip Mills Pty Ltd or its associates to conduct the experiment. That experiment has never been documented. I raised this matter, as shown in Hansard, on 20 March 1974. None of the statements I made in those 2 expositions has ever been challenged by the people concerned.

A further example of the tendency to protect the narrow interest groups of the industry is found in the justification provided for the price averaging scheme. This scheme was prepared to save money for selling brokers at the expense of wool growers. If brokers had not been protected they would have lost business to private buyers. Selected tables were quoted from my own work to arrive at the conclusion that a price discount occurred for all small lots of wool sold in the market. The very research papers from which those tables were selected demonstrated that the discount operated for wool grown in some regions and not in others. One group of wool growers who lost money because of the intellectually dishonest approach adopted by the Wool Commission at the time were those in the New England area. At that time the honourable member for New England (Mr Sinclair) was the Minister for Primary Industry, and he did nothing. The authors of the price averaging plan are respectively a member of the current Wool Corporation and a senior member of the staff. If the private enterprise companies which they serve so well had made a similar series of miscalculations those companies would have been bankrupt long ago.

I now turn to the extraordinary events which led to the reappointment of the present members of the Wool Corporation. Unlike the impeccable behaviour of the present Prime Minister (Mr Whitlam) in the 1974 election and against all the conventions and decencies of politics, the Deputy Leader of the Australian Country Party who, I repeat, was then the Minister for Primary Industry, renominated the members of the Corporation 8 days before election day in 1972. At the time there were complaints from members of the Australian Wool Industry Conference that they had not been consulted and those complaints were aired quite vocally at that stage.

The circumstances surrounding these reappointments certainly are worthy of investigation. As we have heard, subsequently the Chairman, Mr Maiden, who was more sensitive to the impropriety to the appointments, offered to resign. The only member of the present Corporation who has a clear mandate of support from the present Government is Mrs Hilda Rolfe,- our own choice. In regard to this selection, it should be observed that the following resolution was passed by the annual conference of the New South Wales Graziers’ Association this year:

That the Association object to the manner which a member of the Australian Wool Corporation was appointed; that in any future appointments to the AWC, the Minister adequately consult the AWIC.

In fact, the Minister did discuss the appointment with the AWIC and could not accept its nominee because that man had told many people that he could not work with the Chairman of the Australian Wool Corporation, Mr Maiden.

I have had reports that a member of the Wool Corporation is promoting the view that objective measurement and sale by description can apply only to a narrow range of wool types. These developments form the basis of the $10Om savings I have already mentioned. In the light of the evidence presented to the Objective Measurement Committee this claim cannot be supported. If as I suspect this represents the view of the entire Wool Corporation, either it does not have a grasp of this subject or it is again speaking for the vested interests of those who for their own profit are opposed to progress.

Two weeks ago I received a letter from a person well known to me and whose integrity I respect. The letter contained statements attributed to 2 senior staff members of the Corporation. The first statement was:

The Corporation was working in such a way as to insulate it from any possible interference by the ALP Government. The board of the Corporation was sufficiently powerful to resist any Labor pressure.

The second statement made by another senior staff member at another meeting was:

As I am in a gathering which is obviously nut sympathetic to the Labor Party, I think it fair to say that none of the senior staff would support the ALP. We will attempt to minimise any attempt at ALP interference or control. We will strongly oppose any further appointments which weaken the strength of the existing Board.

This week I was contacted by telephone and given a detailed account of a conversation that was attributed to 3 members of the Australian Wool Corporation and a farm industry leader. The subject of this conversation was that the AWC had agreed with the Leader of the Australian Country Party and the Deputy Leader of the. Country Party that it would support the wool market at an excessively high level to embarrass the Government. During question time on 16 July, the Deputy Leader of the Country Party provided credibility to the view that the Government was being deliberately embarrassed. His question appears at page i 89 of Hansard and, in part, states:

Will he also assure the House that there will be no wilful political interference by the Government in the commercial judgment by the Australian Wool Corporation as to what level and to what degree wool will be acquired by the Corporation in the operation of this reserve price scheme?

On the same day, during the Address-in-Reply debate, I placed the details of these charges before the House. This was followed by a speech by the honourable member for Gwydir (Mr Hunt) during which he reinforced the line of argument implicit in the question of the Deputy Leader of the Country Party that morning. The following day I repeated the statement on the Australian Broadcasting Commission program ‘Country Hour’ and later on the ABC news. As a result of the personal explanations given to the House on 17 July toy the Leader and Deputy Leader of the Country Party, I accept by their word that neither of these members was associated with a scheme to embarrass the Government through the AWC. I acknowledged this in a personal explanation to the House on 17 July. Subsequently, the Chairman of the Australian Wool Corporation said that the Corporation had not attempted to embarrass the Government. I accept his statement, but this still leaves in doubt the fact that 3 members have indicated that they would not be adverse to such action. If the integrity of the Corporation is at issue, the most recent doubt has been raised by these 3 members.

These events have taken place in an atmophere of stress in the wool market. Many commentators believe that the Wool Corporation is partly to blame for the stress. I have seen the Country Party pre-empt Government decisions before. There will be many Liberal members who would privately testify to this. The Leader of the Country Party attempted to do this over the meat tax issue. It was his baseless, mischievous comments which whipped up fear in the farmer electorates. On his own admission a campaign started without any evidence and months before the Government was in a position to make a decision on the matter. For confirmation 1 invite anybody who doubts this to refer to Hansard of 20 September 1973, especially at page 1349, and also Hansard of 28 November 1973 at page 4065.

In the present case we see a repeat of the Country Party tactics to pre-empt the Government’s position and make the decision for it. There is a pattern. The pattern is there in the question on 16 July asked by the Deputy Leader of the Country Party, in the speech by the honourable member for Gwydir on the evening of 16 July, and in the Press statement yesterday by the honourable member for Gippsland in which he followed the particular line enunciated by the 2 Country Party spokesmen in the House. We have heard today that the charge against the Government is that it pre-empts the commercial judgment of the Wool Corporation. How can the Country Party rationalise the Press statement of the honourable member for Gippsland in which he insists, presumably without any commercial evidence whatsoever, that the reserves should be held at a particular level? If this is not pre-emption, what is? The evidence associated with these developments is in the hands of those people who are in a position to protect the wool market from political manipulation.

I have given the Deputy Leader of the Country Party enough facts to allow him to check the validity of these claims. No useful purpose can be achieved by broadening the evidence available to the public. If such evidence were produced it would compromise the discretion of the Minister in his instructions and relationships to the Corporation. Mr Deputy Speaker, I table a document to demonstrate the validity of a claim which I previously made - a claim which was never challenged nor was it justified by the people involved.


– Is the honourable member seeking leave to table the document?


– I seek leave.


– Is leave granted?

Mr Gorton:

– Leave is not granted until we know what is in it.


– Leave is not granted.


– It is an invoice number 22071 headed ‘Port Phillip Mills Pty Ltd’. It is addressed as I previously indicated. I have already indicated the substance of the detailed cost of such an experiment. The Chairman and Managing Director is Mr S. S. Nevile.

In concluding this speech today 1 point out to the House that we see in the Country Party’s action a deliberate campaign to put the Government in a position where it has no option hut to support the wool market at a level selected by the Country Party. T remind the House that on 15 November 1970 the then Minister for Primary Industry who was then the present Leader of the Country Party said:

The reserve price mechanism is not designed to force prices up but to moderate or level out the instability of auction prices.

Also: 1 repeat what I have said. The scheme is not intended to force or defy the wool market hut io test it and to get the best and most realistic price the market can pay.

Those are virtually the same guidelines as arc laid down today by the Minister for Agriculture (Senator Wriedt). The Leader of the Country Party went on to say:

T am afraid those growers who believe wool users can be forced - in this day of ready availability of cheaper though perhaps inferior textile substitutes - lo pay a certain price for wool arc not facing up to the realities at the situation.

The honourable member for Gippsland, who issued a Press statement yesterday in an attempt to pre-empt decisions of this Government, said in a Press statement dated 19 November 1971:

All connected with the industry will hope for recovery in the market. At the same time plans must be made against the eventuality that this may not occur. Those plans will clearly have to be based on the necessity for any Government assistance to the industry in 1972-73 to have a fixed limit lo the financial commitment involved.

I remind the House of those comments by those members of the Country Party because these are the sorts of justification they made to withdraw the support of the Government from the Wool Commission in their day.

Motion (by Mr Nicholls) proposed:

That the question be now put.

Mr Garland:

– I raise a point of order. Is it within the Standing Orders for the Government to prevent the Liberal Party from associating itself with the motion?


– No point of order is involved. The question is: That the question be now put.

The House divided. (Mr Speaker- Hon. J. F. Cope)

AYES: 62

NOES: 55

Majority . . 7



Question so resolved in the affirmative.

Original question put:

That the motion (Mr Anthony’s) be agreed to.

The House divided. (Mr Speaker - Hon. J. F. Cope)

AYES: 55

NOES: 62

Majority 7



Question so resolved in the negative.

page 481


The Clerk:

– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:

Palace Hotel, Perth

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

We the undersigned citzens of Australia do humbly petition the Parliament of the Commonwealth of Australia that it might take such steps as may be necessary either to direct the Commonwealth Banking Corporation to preserve and restore The Palace Hotel or itself acquire the said Palace Hotel, St George’s Terrace, Perth on its present site so as to preserve and restore it in perpetuity.

Further we do humbly petition this honourable Parliament to make such funds as may be necessary available to purchase the entire contents of (he said Hotel from the owners thereof.

And your petitioners as in duly bound will ever Pray. by Mr Beazley, Mr Bennett, Mr Berinson, Mr Dawkins and Mr Garland.

Petitions received.

Television: Pornographic Material

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 we strongly oppose the easing of restrictions on the importation, production in Australia, sale or distribution of pornographic material whether in films, printed matter or any other format.

That any alterations to the Television Programme Standards of the Australian Broadcasting Control Board which permits the exploitation of sex or violence is unacceptable to us.

Your petitioners therefore humbly pray that the Government will take no measures to interfere with the existing Television Programme Standards or to permit easier entry into Australia, or production in Australia, of pornographic material.

And your petitioners, as in duty bound, will ever pray. by Mr Whitlam, Mr Connor and Mr Street.

Petitions received.

National Health Scheme

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 ofthe civilliberties 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 Drury, Mr McLeay and Mr Wilson.

Petitions received.

Human Rights Bill

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:

  1. that for the exercise of complete religious freedom and for the promotion of a liberal and egalitarian society, Church and State need to be kept separate.
  2. that this principle is recognised in Section 116 of the Australian Constitution.
  3. that the taxing of any citizens to propagate or support any religion is contrary to this principle and a violation of human rights.

Your petitioners humbly pray that Part 11, Section 3, of the proposed Bill of Human Rights, which now reads :

No one shall be subject to coercion which will impair his freedom to have or to adopt a belief or religion of his choice, be amended to read further: and no revenue derived in any way from any Australian citizen shall be appropriated by the Australian Government, or by a State Government, or by a Municipal Government, for the propagation or support of any religion.

And your petitioners, as in duty bound, will ever pray. by Mr Coates and Mr Graham.

Petitions received.

Brisbane Bus Service: Children’s Concession Fares

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 the decision of the Brisbane City Council to charge school children full fares on Council buses inbound to the city in the morning peak hours is an undue burden and is against the principles of democracy and justice.

Your Petitioners therefore humbly pray that the House of Representatives will request the Australian Government to make funds available for the Brisbane City Council to assist in the operation of its bus services and provide an immediate restoration of children’s concession rates, or free travel for children on such buses.

And your Petitioners, as in duty bound, will ever pray. by Mr Kevin Cairns.

Petition received.

Petroleum Freight Subsidies

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 the removal of the petroleum freight subsidies will unnecessarily increase the already high cost of living for inland areas of Australia.

Your petitioners therefore humbly pray that the Government will reconsider the proposal to remove the petroleum freight subsidies. And your petitioners, as in duty bound, will ever pray. by Mr Calder.

Petition received.

Human Rights Bill

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 the Human Rights Bill:

  1. Insofar as it attempts to legislate regarding the exercise of religion and religious observances, is in contravention of Section 116 of the Constitution of the Commonwealth of Australia,
  2. Will tend to deprive free Australian citizens of religious liberty and freedom of worship, and parents and guardians of the right to choose the moral and religious education of their children in that:

    1. The Government could introduce regulations as to the time, place and manner in which people may manifest their religion and beliefs.
    2. The Bill excludes the recognition of the family as the natural and fundamental group unit of society, and its right to protection by society and the State,
    3. The Bill docs not explicitly recognise the liberty of parents, and when applicable, legal guardians, to ensure the religious and moral education of their children.

Your petitioners therefore humbly pray that the House not proceed with the Human Rights Bill.

And your petitioners, as in duly bound, will ever pray. by Mr Hodges.

Petition received.

Social Security

To the Honourable the Speaker and Members of the Mouse of Representatives in Parliament assembled the petition of the undersigned citizens of Australia respectfully showeth:

That inflation which now besets so many countries today and in Australia is now at the rate of 14.4 per cent per annum is most seriously affecting and making life intolerable for those least able to take corrective action to maintain their position, namely, pensioners and those now retired living on fixed incomes.

Whilst the Australian Government is giving effect to its election policy of making $1.50 per week pension increases each Autumn and Spring such actions have been completely nullified by the stated rate of inflation.

This fact of life impels your petitioners to call on the Australian Government as a matter of urgency to:

Make a cash loading of $5 per week to those pensioners who have little means other than the present inadequate pension eroded by inflation.

That each Autumn and Spring the increase in social security pension payments be not less than$3 per week to ensure that within a reasonable period the Government’s policy pledge to affix all pensions at 25 per cent of the average weekly earnings be achieved.

In order that money may go to areas of greater need the Tapered Means Test ceilings of income and assets be frozen.

To allay the concern of social security recipients as to their future when in 1975 the means lest has been abolished and replaced by a National Superannuation Act that there be an assurance by the Australian Government that the said Act will provide a guaranteed minimum income to social security recipients based on the policy of the Australian Commonwealth Pensioners’ Federation and that of the Australian Council of Trade Unions, namely, the payment of 30 per cent of average weekly earnings adjusted from time to time in accordance with figures issued by the Commonwealth Statistician and published quarterly.

And your petitioners in duty bound will ever pray. by Mr James.

Petition received.


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:

  1. Your petitioners believe in the principle that every Australian child, irrespective of the school he attends, is entitled to economic support for his basic educational needs from the funds placed at the disposal of the Australian Government through taxation. Further, they believe that this economic support should be in the form of per pupil grants which are directly related to the cost of educating an Australian child in the government school.
  2. Your petitioners believe that in addition to this basic per pupil grant additional assistance should be provided in cases of educational disadvantage, but they believe that the appropriate instruments for reducing economic inequalities are taxation and social welfare systems which deal with individuals and families and not with schools.

Your petitioners therefore humbly pray that, as an interim measure, the Government will immediately increase the current grants being made to children in non-government schools to at least50 per cent of the cost of educating children in government schools, thus enabling the non-government schools to continue to exist and fulfill their function of educating Australian children.

And your petitioners as in duty bound will ever pray. by Mr Jarman.

Petition received.

Universal Health Scheme

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 Universal Health Scheme is essential to the well being of all Australians, in so far as it will:

  1. Provide that all Australians irrespective of their means will have access to a high standard of health care.
  2. Every Australian will be automatically covered for doctors’ and hospital bills thus ensuring that citizens will no longer be burdened with additional psychological strains because of inability to meet the high cost of medical treatment.
  3. It is committed, in principle, towards the ideal that an individual’s contribution to the cost of health services should be based on his or her capacity to pay - that people who derive the most financial benefit from our society should give the most for its support.
  4. It guarantees freedom of choice so that every Australian will be able to attend the doctor or hospital or his or her own choice.
  5. In the long term it will take the politics out of medical care and will thereby allow dedicated members of the medical profession to return to the occupation of their choice - The care of the ill and the prevention of disease.

Your petitioners therefore humbly pray that the Government will hasten to introduce this much needed scheme so that health care services in Australia can begin the function efficiently and economically.

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

Petition received.


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 whale is an endangered species and should be protected by international agreement; that whalemeat and all other whale products should be excluded from all Australian manufactured goods: that no whale products should be imported into Australia.

Your petitioners humbly pray, therefore, that the Government will form legislation to protect the whale from commercial exploitation.

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

Petition received.

Repatriation Department

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 proposals have been made aimed at dismembering the Repatriation System and transferring some of its facilities and services to other Authorities and Departments.

Your petitioners therefore humbly pray that the Australian Government docs not allow dismemberment of the Repatriation System nor the transfer of any of its functions to other authorities and/or Departments.

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

Petition received.

page 484




– I call on questions without notice.

Mr Whitlam:

– I ask that questions be placed on notice.

page 484


Prime Minister · Werriwa · ALP

– For the information of honourable members 1 present the report by the Foreign Minister on his visit to Latin America from 16 June to 3 July and the text of his statement on 2 July to the Conference on the Law of the Sea held at Caracas.

page 484


Prime Minister · Werriwa · ALP

– For the information of honourable members I present the report of the Prices Justification Tribunal dated 19 July on the price increases for certain breakfast foods prepared by Kellogg (Aust) Pty Ltd.

page 484


KingsfordSmithSpecial Minister of State · ALP

– For the information of honourable members I present the report of the Commission of Inquiry into the Australian Post Office. I am pleased to announce that one of the Royal Commissioners, Mr J. J. Kennedy, has agreed to act as the chairman of an interim board for the Postal Commission, and Mr A. G. Gibbs, the Chairman of the Victorian Railways Board, to act as chairman of an interim board for the Telecommunications Commission.

page 484


Minister for Transport · Newcastle · ALP

– For the information of honourable members I present the report entitled ‘Consumer Preferences in Urban Rail Carriage Design - Results of a Survey conducted in Brisbane during May and June 1973’ which is dated March 1974.

page 484


Minister for the Environment and Conservation · Maribyrnong · ALP

– For the information of honourable members I present the final report of the Lake Pedder Committee of Inquiry on the flooding of Lake Pedder.

page 484


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

That, in accordance with the provisions of the Parliamentary Retiring Allowances Act 1948-1973, the honourable member for Curtin be appointed a trustee to serve on the Parliamentary Retiring Allowances Trust.

page 484


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

That, in accordance with the provisions of the Australian Institute of Aboriginal Studies Act 1964- 1966, this House appoints the honourable members for Cook and Mackellar to be members of the Council of the Australian Institute of Aboriginal Studies, and to continue as members until the dissolution of the 29th Parliament.

page 484


Discussion of Matter of Public Importance


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

The man hours and time lost through industrial unrest and the growing acceptance that this is a natural state of affairs.

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.)

Motion (by Mr Daly) put:

That the business of the day be called on.

The House divided. (Mr Speaker - Hon. J. F. Cope)

AYES: 61

NOES: 55

Majority . . 6



Question so resolved in the affirmative.

page 485


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

Second Reading

Prime Minister · Werriwa · ALP

– I move:

That the Bill be now read a second time.

The purpose of the Bill is to establish a statutory authority to administer Australian Gov ernment assistance to the arts. The authority will be known as the Australia Council. J regard this Bill as an historic development in the promotion of the arts in Australia. It fulfils a long-standing commitment to the arts which I proclaimed in the Australian Labor Party’s policy speech in 1972 and which the Government has pursued since coming to office. I believe that the formation of an independent Australia Council will inaugurate a new era of vitality and progress in the arts, that creative artists of all kinds will enjoy a new measure of security and status in the community and that the Australian people as a whole will have new and wider opportunities to participate in the arts and enjoy the emotional, spiritual and intellectual rewards which the arts alone can provide. The creation of an independent authority for the arts follows the approach adopted in other countries including Britain, Canada, the United States of America and New Zealand. It takes into account the need for specialised skills and knowledge in the promotion of the arts. At the same time it recognises that a measure of freedom is needed to optimise opportunities for artistic achievement. I believe our proposals strike a realistic balance between these 2 requirements.

I can best describe the Government’s broad objectives for the arts by outlining the policies that we intend the new council to follow. These are defined and set out in the Bill. They are consistent with numerous statements on the Government’s policy towards the arts which I made last year. It will be the first task of the Council to promote excellence in the arts. Next, we want it to provide opportunities for people to practise the arts and for the public to appreciate and enjoy them. We want to promote the general application of the arts in the community and foster the expression of a national identity by means of the arts. We want to uphold the right of everyone to freedom of artistic expression. We want to promote a knowledge and appreciation of Australian arts in other countries. We want to promote incentives for, and recognition of, achievement in the arts. Finally, we want the new Council to encourage the support of the arts by the States, local governing bodies and other persons and organisations.

The Government believes there has long been a need to restructure and improve government machinery for assistance to the arts if they are to keep pace with the needs and aspirations of a growing population and rising levels of education. Government support for the arts has developed fitfully over the years. The Commonwealth Literary Fund began providing pensions for writers in 1908, but no programs of assistance for practising writers were developed until the beginning of the Second World War. The Commonwealth Art Advisory Board existed from 1912 but there was little assistance for living Australian artists before the 1970s. It was not until 1967 that the needs of Australian composers were recognised by the Australian Government. All of these bodies were established by administrative decision, and in an ad hoc fashion. All were limited in the assistance they could provide, although the Commonwealth Literary Fund, for example, had developed a number of programs for the assistance of writers and writing, and the other bodies had begun to initiate or to develop new activities.

It was only in 1968 that the Australian Council for the Arts was established to help, primarily, ballet drama and opera. The prime motivator in this development was Dr H. C. Coombs. Dr Coombs had been actively associated with the Australian Elizabethan Theatre Trust in the 1950s and was a man deeply committed to the encouragement of Australian cultural life and to the recognition of her cultural identity. He was thus very well fitted to undertake the chairmanship of the Council. Again in 1972 he advised my Government and took responsibility for setting up an extended, more rational and more democratic system for the funding and development of the arts than had ever been attempted previously. Australia is deeply indebted to him for his outstanding service. Among bankers Dr Coombs is the greatest promoter of the arts since the Medici.

We are particularly fortunate that, at the time of Dr Coombs’ retirement, Professor Peter Karmel was willing to assume the chairmanship of the Council. His wide experience as a distinguished economist and university and public administrator and his long association with programs and enquiries relating to government policy and expenditure will be most valuable in providing sound guidelines for government expenditure in the arts.

Within weeks of the election of the Government I announced interim arrangements to replace the old ad hoc bodies so that support for the arts could be continued, commitments honoured, and the planning of new programs begun. Although there was some public comment about the speed with which these steps were taken, they were in fact dramatically effective. The past year was one of considerable achievement. Government assistance to the arts in 1973-74 was twice that of 1972-73. New and important initiatives were taken in almost all areas. A reconstituted Australian Council for The Arts consulted with arts bodies and individuals involved in the arts with a view to developing proposals to put to the Government for a structure better able to administer government support for the arts. As honourable members will recall, I kept the House informed of the measures being considered and the deliberations that were taking place. On 24 May 1973 I tabled the interim report of the Australian Council for The Arts on the proposed statutory authority, and on 8 November 1973 I tabled the Council’s final report.

The broad areas of the arts that the new Council will encompass are set out in the Bill. So too are the functions the Council will have to meet, the Government’s objectives for the arts and the powers the Government believes are necessary to achieve those objectives. The Council will be a body corporate consisting of not fewer than 1 8 and not more than 24 members drawn from a broad range of artistic, community and related government interests. The Council will be responsible to the Minister and to the Parliament for the conduct of its affairs.

In matters of staff and finance it will have the widest freedom of operation compatible with considerations of public accountability. It will engage its own staff and determine their terms and conditions subject to the approval of the Public Service Board. It will administer its own financial affairs and operate its own bank accounts subject to normal requirements of financial accountability and the presentation of reports to Parliament. The bulk of the day to day work, however, will be carried out by a number of specialised boards which will be responsible for decisions relating to expenditure within their own budgets and for developing professional services geared to their needs. Subject to the directions of the Minister, the Council will be required to delegate functions and powers to the boards, and each board will be responsible for developing policies in its own area of the arts. Membership of the boards will be broadly based. They will include a wide range of appropriate interests and a majority of artists or others closely involved in the arts.

It is our intention that government support for the arts should not become the province of entrenched interests and that it should serve, in the widest possible way, the artistic needs and aspirations of the Australian community. Provision has been made, therefore, to rotate the membership of the Council and the boards. This procedure has already been followed with respect to the necessary appointments made to replace those members whose terms of appointment expired on 30 June 1974 .

In response to public advertisement a great many names were put forward for consideration and from these a selection was made for appointment for terms of 1, 2 or 3 years. In making this selection particular weight was given to the object of encouraging community involvement in the arts, and the composition of the Council and boards now strongly reflects their role in this crucial process as well as in direct support for those practising the arts concerned. The terms of appointment of members of the Council - other than government members - and of the boards is not to exceed a total of 4 years of continuous service, and at least one year must elapse thereafter before a person is eligible for a further term of membership.

Too often before 1973 the same people tendered advice over many years - sometimes for ten and even up to 20 years. Terms of appointment were indefinite or were renewed several times over. Whatever their qualities and without diminishing the valuable services they performed this circumstance seriously inhibited the infusion of new ideas and fresh stimulus. I emphasise that in all areas practitioners and others involved in the arts will make up a majority of those called on to decide and give effect to arts procedures. We hope also to sustain wide public interest and involvement in the work of the boards by periodically repeating the invitation to all who are interested to nominate persons who might be considered for appointment. It is proposed that lists of names of those nominated will be maintained at all times and the Minister will be required to consider them when considering new appointments.

Artists have an essential role to play in society. No one can imagine a mature civilisation without their contribution. Australia has a rich and distinctive artistic tradition. We have produced many renowned and gifted artists - both creators and performers. The Government believes they should be able to work in their own country secure in the knowledge that the community and the Government place a high value on their contribution to our way of life. Unfortunately this has not always been possible. Too many of our finest talents have been lost to overseas. We want to ensure that our greatest artists remain in Australia and prosper in Australia, and that the whole Australian community is the richer for their presence. Already this is happening. A number of our internationally recognised artists and performers are returning to pursue their careers in Australia and others, who would once have gone overseas to find opportunities are now finding those opportunities here. I believe that, through the measures in this Bill, we will create greater artistic opportunities for all talented Australians. We shall be offering to all who by birth or choice have made this country their home the prospect of enriching their lives through participation in or appreciation of the arts. I commend the Bill to the House.

Debate (on motion by Mr Katter) adjourned.

page 487


Second Reading

Debate resumed from 11 July (vide page 160), on motion by Mr Connor:

That the Bill be now read a second time.

Leader of the House · Grayndler · ALP

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 should like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Minerals (Submerged Lands) (Royalty) Bill 1974 as they are related measures. Separate questions may, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Speaker, 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.


– May 1 says first of all that we totally oppose the Minerals (Submerged Lands) Bill 1974 for the same reasons as we opposed almost everything contained in the propositions that have previously been put to the House and to this nation in regard to the bureaucratic regimentation and the control of the mining industry generally. The Minister for Minerals and Energy (Mr Connor) has reintroduced the mining code section of the original Seas and Submerged Lands Bill which was deleted by the Senate on 27 November last year. The Seas and Submerged Lands Act in its truncated form asserts the Commonwealth sovereignty over the continental shelf of Australia and the Territorial sea. The 2 Bills before the House seek to establish an administrative framework to implement this legal claim.. The Seas and Submerged Lands Act 1973 is the subject of challenge in the High Court and if the Commonwealth’s position is upheld it would be a natural and logical consequence to provide the means to carry out this new responsibility effectively. I will have some comment to make a little later on the matter should the Commonwealth’s position not be sustained.

The Minerals (Submerged Lands) Bill 1974 relates to minerals other than petroleum in off-shore areas. Obviously as such it would have little immediate applicability to resources in the off-shore areas which in the Australian circumstances are largely confined to natural gas and petroleum. However, a wider application could be envisaged as technology and geological knowledge improve, presuming, of course, that we have any technology or geological knowledge available to us. In view of the way it is pouring overseas that is very doubtful. The Opposition’s decision in the Senate last year to delete this mining code was based on the almost unlimited discretion contained in this legislation. Senator Greenwood last year spelled out our objections in some detail and I do not propose to repeat those objections in excessive detail except to point out a few of the more obvious defects. A power of delegation by the Minister to any public servant is unlimited under clause 10.(1) and clause 10.(2), which state: 10.(1) The Minister may, by instrument in writing, delegate to an officer of the Australian Public Service, either generally or otherwise as provided in the instrument of delegation, all or any of his powers or functions under this Act, the Royalty Act or the regulations, except this power of delegation.

  1. A power or function delegated under this section may be exercised or performed by the delegate in accordance with the instrument of delegation.

Obviously these are very wide powers permitting the Minister to grant or refuse; to impose conditions or cancel authorities, licences and permits. Under clause 14 the Minister may grant or refuse a reconnaissance authority, a term which will cause some interest out in the rugged mining country, after examining confidential information which has been supplied. Quite apart from that particular aspect of the powers delegated or seized because of the numbers game by the Minister, I would anticipate an even further reaction of hopelessness among those who are interested in developing smaller mining projects. It might be remembered that we presented our mining policy in great detail only after tremendous prolonged consultation with the industry at all levels. I would think that perhaps our discussions with those interested in the industrial side of mining, more particularly the smaller mining operators, were much more prolonged than they were with the major companies, as we are so often accused.

As one who has lived his lifetime in mining areas and in a mining environment I derived great joy from the fact that we were at long last to have an independent commission. After all I do not think anyone in his heart of hearts, either on this side or the other side of the House, really appreciates tremendous and absolutely unfettered authority being in the hands of any Minister. I reiterate that the establishment of this commission would have given everyone associated with the mining industry great hope and would have seen this industry develop as it had prior to the disaster which occurred in this nation on 2 December 1972. Let me develop this theme. One of my particular personal joys with the final proposals that we placed before the Australian public was a proposal that a special section of the commission should be established to deal with small producers - the almost forgotten group of people who are involved. I speak not so much of the individual gouger, although he would have been very much involved in the responsibilities of this small miners commission, but more particularly of the people who have pioneered the industry, who are perhaps the last of the frontier men in my part of the world and who have mines that are capable of development and capable of producing for them a moderately prosperous income, but who have never been able to get their undertakings off the ground. They have never had anywhere to go. They have never had anyone to whom they could put their case and they have been just a forgotten group. Our coalition decided to create a special’ tribunal or commission to which these people could come for assistance. Special funds would have been provided- for this. However, we will have to wait for another 2 years and 10 months to put that proposal into operation.

I was talking about clause 22 which provides that the Minister may grant or refuse an exploration permit on similar bases to those provided in clause 13. Before I leave that point I think we should have a closer look at the Bill, particularly clause 13, and spell out just how far the Minister’s authority extends in relation to these reconnaissance permits or authorities as they are called in the legislation. Clause 13 states:

A person may make an application to the Minister for the grant of a reconnaissance authority in respect of a block or blocks.

This means that there will be regimentation and a bureaucratic approach. I think that if the Government’s approach were made sufficiently clear to the Australian people there would be comparatively few members of the Australian Labor Party in the Parliament. I get a little tired of the constant harping on socialism. I much prefer to look upon it as bureaucratic regimentation. Anyone associated with the horse racing game would know that this approach applies with the Totalisator Agency Board. I am not going to knock the totalisators. They serve a purpose in providing funds for the improvement of racing and so on. But they also bring with them a cold, soulless type of regimentation as is contained in this Bill applied to mining. At TAB agencies one goes along, has one’s bet and does one’s dough. One does not even have the opportunity of listening to a broadcast of the race. This is the type of bureaucratic control and regimentation that is provided in this Bill. If this message got through to the Australian people we would be swept back into office.

It is all right to talk about horse racing, but the matter is much more serious when it involves those whose hopes and aspirations are implemented in an industry of the mammoth proportions of the Australian mining industry. I turn back to clause 13 which further provides:

An application under this section -

shall be in accordance with an approved form;

My God, there will be some forms to be filled in around this country -

  1. shall be made in an approved manner;
  2. shall be accompanied by particulars- of -
  3. the block or blocks in respect of which the application is made and the operations that the applicant proposes to carry on in that block or those blocks;

I can just imagine some of the old gougers and small mining operators with whom I come in contact almost every day of my life in the Northern Territory and in my part of north-western Queensland, even being able to afford to provide this information! This sort of requirement immediately eliminates the little man. Clause 13 continues:

  1. the technical qualifications of the applicant and of his employees;

That would produce some terribly interesting information. Would one have to be a geologist or geophysicist to come within the orbit of the ministerial approach? The clause continues:

  1. the technical advice available lo the applicant; and
  2. the financial resources available to the applicant;

Once again this would squeeze out the little bloke. This is required by the great so-called Labor Government. The clause continues:

  1. shall be accompanied by a fee of S100.

The small miner might rake that up, I suppose. So much for clause 13.

This Bill provides the power to take away all rights to continue with work regardless of previous expenditure or undertakings. This discretion, of course, again is left to the Minister and not to the Parliament. I imagine that in the course of time the voice of this Parliament - this fairly empty Parliament at the moment - will be stifled to such an extent that Australia will be controlled by a group of bureaucratic committees. I see this shift of power. It is not even subtle. Under the Coombs approach the people of Australia will not be represented in this chamber; the voice of their representatives will not be worth a tinker’s damn. We will be controlled by bureaucrats and academics. Unless one has some sort of professional degree one will have little standing in this nation. That is the way the shift of power is going. So let us look at this provision. There is power to take away all rights to continue with work regardless of previous expenditure or undertakings and this discretion is left to the Minister and not to the Parliament.

Under clause 57 any permit, licence or authority may be granted on ‘such conditions as the Minister thinks fit and specifies in the reconnaissance authority, permit, licence or access authority’. This access authority is interesting. You may have to go to a justice of the peace to obtain an access authority. There may be only one justice of the peace in the area. If you own the local butcher shop and he has started up in opposition to you, he may not give you a permit for access to the area in which you are interested and which you wish to mine. I do not wish to proceed through the whole list of objections the Opposition has to this legislation, but it is sufficiently long and important for us to object to the Minerals (Submerged Lands) Bill in total.

It is true that the Bill is drawn in part from the code of the Petroleum (Submerged Lands) Act, but there are some important differences which ought to be pointed out. Under the 1967 legislation applicants for a licence were required to accompany licence applications with details of the work proposed to be undertaken and the expenditure involved. In addition, the applicant could set out any other matters for the Designated Authority to consider. Under this mining code that we are considering, work and expenditure proposals are to be included as well as the technical qualifications and financial resources of the applicant, as I just read out. However, a major difference is that the applicant is to provide details of the extent of Australian participation in the venture. The weight that would be attached to that criterion is not known, but we do not oppose that criterion on principle. I think we have always made that approach clear, although we have been misrepresented time and again in that respect. However, it illustrates the difficulty of considering this mining code in the absence of a comprehensive White Paper setting out the Minister’s intentions.

I do not know what are the plans of the Labor Party, but I sometimes think that, if the present Minister for Minerals and Energy got around to the point of retiring and his obvious successor the honourable member for Blaxland (Mr Keating) took over, a breath of fresh air would come into the House. I feel that we would get some information and some signposts as to where we are going. I would say to the Minister that he should appreciate what is left to him. It is very sad to see a man leave retirement too late. I think you will agree, Mr Deputy Speaker. There is nothing sadder than to see a man grow old in this House and have few years left to him. Would you not agree, Sir?


– I hope the honourable member is not looking at the Chair.


– The Minister has indicated that in future off-shore leases he will insist on a 51 per cent Australian participation. Obviously that will be a minimum requirement for a licence application. Yet it is not known whether there are particular requirements in that area for particular mineral resources. If there is one thing that people who are associated with the mining industry recognise, it is the great diversity of pressures and opportunities, even getting away from the technical side of it where one might have a dozen different types of copper ore to treat. There, is a great diversity of conditions under which mineral resources are developed. I would be one of those who would particularly like the Minister to clear up the matter.

The fate of the Petroleum and Minerals Authority is not certain at this stage, and the relationship of its position to a minerals code has not been established. I might ask: What has been established in relation to the mining industry? The Petroleum (Submerged Lands) Act 1967-1968 contains, in effect, a code for the exploitation of petroleum resources in offshore areas and is, in the broad, a collective agreement between the States and the Commonwealth for a uniform system of administration. I think those words were probably written when we had federalism. If one tried to get this sort of approach these days the miracle of the loaves and the fishes would be kindergarten stuff by comparison. This legislation is still applicable and presumably will remain applicable until the Minister introduces a code to supplement the Commonwealth’s claim to offshore sovereignty in respect of petroleum resources in the same way as this code relates to mineral resources. I will come back to that in a moment.

We have the situation where the Parliament is asked to approve a code for the development in offshore areas of all mineral resources. Its validity is ultimately dependent upon a High Court challenge while a code for the development of petroleum resources is the subject of a Commonwealth-State agreement. It would seem logical that a combined code for mineral and petroleum development should be introduced at the appropriate time instead of this sort of strip tease process of the Minister’s legislative thinking. I suppose I will be accused now of being permissive but I think there is no better way of describing that particular process than as a strip tease process - little by little. But the excitement does not mount as the strip tease process develops because there is too much gloom in this industry and the future is so insecure.

This mining code indicates that the Minister intends to operate, in respect of minerals, on a basis fairly similar to the previous lease basis and has rejected, for example, an option system of application. Yet, what are the Minister’s intentions in respect of petroleum resources? How do they relate to this legislation? We do not know and no one can ever get near enough to the Minister even to ask him the time of day. Similarly, the associated Minerals (Submerged Lands) (Royalty) Bill provides for royalty payments of between 1 per cent and 10 per cent of the specified value of the minerals. Yet again we have no policy statement from the Minister of his intentions in respect of royalties on petroleum resources. So, the vague, nebulous situation becomes more and more accentuated.

The Opposition has called for a White Paper on the Minister’s portfolio. This call is directly related to our attitude to this legislation. If the Minister proposes that the Petroleum and Minerals Authority, or, indeed, the Australian Industry Development Corporation is to hold a privileged position in the allocation of offshore leases, this should be publicly stated, as should his requirements for the acceptable level of Australian equity or control in these offshore leases.

I make the point here that I have attained one of my life’s ambitions, even though it is in a shadowy way. I am the Opposition spokesman - the shadow Minister - on northern development and the Northern Territory. Just about every significant mineral resource in Australia, with the exception of some resources in the southern parts of the nation, is within this area. I have made it my business over a period of perhaps a quarter of a century to learn the thinking of the mining industry at all levels. One matter is bugging it at all levels and is stifling and breaking the small producers who have invested in equipment in the hope that they might know which way this industry is heading. They are trying to see some sort of shadowy indication of the guidelines which the Minister and his Government have in mind for the future of the mining industry. The general opinion is that the Gov.erenment has injected the serum of nationalisation and that this will continue to grow.

Of course honourable members are aware of what has happened in many countries. We agree with participation to a point. Who would argue against it? But ‘what of regimentation of the industry - a tap on the shoulder and a direction to appear before the court tomorrow because a lease is to be taken away? We would never agree to this. I would say that on that basis alone the results of the recently held elections were not surprising because I am not aware of any mining centre where the so-called Labor Party did not sustain dramatic losses. I instance my electorate which is absolutely riddled with mining operations and mining development. The people at all levels, in these areas showed their non-acceptance of the regimentation of the mining industry.

If the Minister, as he has implied, insists on a majority Australian participation as a prerequisite under Commonwealth administration, the criteria for the granting of exploration permits and licences are much more specific than indicated in the Bill. Again, this is a nebulous airy-fairy type of approach. Similarly, the associated legislation dealing with royalty payments contains reference to a wide range of possible royalty levels and gives no indication of possible policy to take account of, for example, differing cost situations. Again we come to a diversity of situations. For instance, there can be a mining operation adjacent to the coast - for example, some of the coal mining operations in the Bowen Basin in my own electorate. But in the heart of Australia at Tennant Creek freight costs - I make the point here that freight costs will be a damn sight higher when the freight subsidies are removed - are high and there are obvious disadvantages in being thousands of miles from the centre of activity. How on earth can we have uniform legislation or uniform controls to apply to these various areas? We have no statement from the Minister as to how this mining code differs from his intentions in respect of the all important petroleum code. He has given no indication whatsoever. If, as we suspect, there is to be a substantially different code dealing with petroleum products, this Parliament should be told and the industry generally should be told.

A few moments ago I mentioned the differing cost situation and royalties. I wonder whether the Minister would be tolerant enough - I ask the honourable member for Blaxland perhaps to discuss this matter with him - and big enough to come to Queensland to have discussions with Gordon Chalk, the Queensland Treasurer, who has recently returned from overseas having secured a 1900 per cent increase on the royalties which currently are being paid on our coal exports. This is an absolute triumph for the so-called people who swing hands with the multi-national organisations. I repeat that if, as we suspect, there is to be a substantially different code dealing with petroleum products, this Parliament should be told and the industry at all levels should be told.

We have no statement as to Government intentions in respect of assisting State governments which have benefited from royalty receipts if the Commonwealth’s position in the High Court is upheld. Where will they finish up? The Opposition believes that with respect to minerals and petroleum there should be a comprehensive code which is unified and consistent. We believe that it should be accompanied by a comprehensive White Paper on the Minister’s policy intentions in his portfolio so that we are not debating suppositions. I repeat that: We believe that it should be accompanied by a comprehensive White Paper on the Minister’s policy intentions in his portfolio so that we are not debating suppositions. I think in the whole of this terrible drama of disaster for the mining industry we. in this House, have constantly debated nothing but suppositions.

Apart from these reasons we reject this legislation as the minerals code it contains is at variance with the conclusions of the report of the Senate Select Committee on Offshore Petroleum Resources. Let the people of Australia understand that this Senate Committee went into great detail and sat over a period of many months. This report pointed out the dangers of unlimited ministerial discretions which this legislation contains in abundance.

I referred a little while ago to decisions to be made by the High Court. The Commonwealth Government has repeatedly asserted that the only proper way of resolving the present disagreement over off-shore sovereignty is to take the matter to the High Court. This the States have now done. Here is the extraordinary situation. Nevertheless the Commonwealth insists on introducing legislation which, if passed by the Parliament, could well come into effect before the High Court has given its decision. In this connection we all know that both of the present Bills are designed to come into effect on the day of royal assent. There will be no time wasted there. The whole exercise is an invitation to even further confusion in the area of off-shore mining, to even further confusion in the whole mining industry of this nation. We on this side of the House totally oppose this Bill.


– The speech by the honourable member for Kennedy (Mr Katter) was motivated by the muddled thinking of the Australian Country Party. One of the disasters of this national Parliament is that for many years important areas like the extractive industries in Australia have been governed by this agrarian pressure group, this team of backwoods hillbillies, the Country Party. It has been involved, right down to the grass roots, in all the previous decisions affecting the mining industry, because that is where its election campaign funds have come from. This Government has called a halt to that.

To decipher the speech that was made a few moments ago, for those who are interested, I will give some history of the matters involved. On 16 April 1970 the Gorton Government introduced the Territorial Sea and Continental Shelf Bill. The primary role of the Bill was to assert the sovereignty of the Commonwealth of Australia over the off-shore areas of Australia from the 3-mile mark to the limit of the territorial sea. That Bill arose from a decision of the High Court of Australia in the now famous Bonser v. La Macchia case. In the judgment of the High Court the Chief Justice, Sir Garfield Barwick, said:

The States never had sovereignty over off-shore waters to the 3-mile limit either as colonies or as states.

In other words, in his view, it was within the Commonwealth’s domain to have control of the off-shore areas of Australia. Before the Gorton Government decided to introduce that Bill, a joint Commonwealth-State Act called the Petroleum (Submerged Lands) Act covered exploration in Australia’s off-shore areas. But it was a botch-up right from the start, and all that we have seen are abuses of what ought to have been a reasonable exploration policy developed by the State governments and the Commonwealth governments under that Act. The Gorton Government, to give it credit, said: ‘We will not have any more of this. The Commonwealth of Australia does have constitutional power to legislate in respect of the off-shore, and we will assert that power through the Territorial Sea and Contitnental Shelf Bill’. The then Minister for National Development, the honourable member for Farrer (Mr Fairbairn), said in a letter to the Australian Mining Industry Council in March of 1970:

As to off-shore minerals other than petroleum, the Commonwealth is of the view that it should proceed on the footing that it enjoys total rights outside the 3-mile limit. It proposes to legislate in pursuance of this position.

Honourable members will recall that at that time the rotten borough administrations of the Liberal and Country Parties in the States said: This is no good. We don’t want control of the off-shore going to Canberra’. How could Bjelke-Petersen rort the off-shore of Queensland if control of it was in Canberra? How could Sir Charles Court rort the Western Australian situation if control was in Canberra? How could any of these little State governments - and a lot of them city State governments - rort the off-shore of the extractive industries if the off-shore areas were controlled by Canberra? So they put on a blue. The result was that the Liberal Party had a crisis of confidence within its own ranks and nearly brought its own Prime Minister down on a no confidence motion in this House. That was Prime Minister Gorton. Five months later he fell as Prime Minister. The reason he was deposed was that his government wanted to pursue this question of sovereignty for the Australian Parliament.

The Bill died then. When the Labor Government came to office we resurrected it and revamped it into what is now called the Seas and Submerged Lands Bill. It was in 2 parts. The first part declared that the Commonwealth of Australia had power off-shore and the second part was a mining code which would allow for the physical mining of the area after the declaration of sovereignty. That Bill has been through the Parliament 3 times. It has been carried by the House of Representatives on 3 occasions. It has been rejected in the Senate twice, but on the third occasion it was passed with an amendment, the amendment being the deletion of the mining code. The Minerals (Submerged Lands) Bill which we have before us today under its separate title was originally part of the Seas and Submerged Lands Bill. The Senate destroyed that Bill by agreeing to that amendment, because it realised that without the mining code the declaratory Part I of the Seas and Submerged Lands Bill was powerless. Even though the Bill was passed into legislation in its emasculated form it has allowed the matter to be tested in the High Court so that once and for all a decision on jurisdiction can be made. But in the meantime mining cannot be controlled because there is no mining code.

What we are introducing here today is a mining code. It was criticised by the honourable member for Kennedy in the most vague of terms. He referred to some of the provisions in this Bill. Similar provisions exist in any Bill. Of course you have to have a bureaucracy to administer the massive offshore area of Australia. Unless there was a bureaucratic arrangement to administer this legislation, how else would the honourable member propose to grant exploration leases and finally production leases across the whole length and breadth of the boundaries of the coastline of Australia? Of course we have to have these things. We can see similar provisions in the Petroleum (Submerged Lands) Act.

We will carry this Bill in this House because the Government has the numbers in this House, and I am confident that it will be carried in the Senate also. It will then allow the mining industry of which the honourable member for Kennedy spoke to get into some of the areas that it should have been allowed to explore many years ago. This Bill provides for the setting up of a graticular system, something which the Opposition gave away years ago, something which it abandoned under the stewardship of the former Minister for National Development, the honourable member for Farrer. Clause 11 of this Bill provides that the surface of the earth shall be deemed to be divided up by what is known as a graticular system into areas each one minute of arc of latitude by one minute of arc of longitude, which gives each block an area of approximately 1.15 square miles. If we have those blocks it is possible to administer the Act so that some can be pushed out for exploration, some can go to production, while others can revert back to the Commonwealth at the appropriate time. We have a basic unit of area to work with. That is something which the former Government abandoned. Under the old graticular system four-ninths were to revert to the Commonwealth. The former Government abandoned the four-ninths which the Commonwealth would have retrieved from leasing agreements in return for a miserable 14- per cent increase in royalty. That was another give-away in the days of the Liberal-Country Party administration.

The honourable member for Kennedy also referred in hazy terms to the reconnaissance authority. I will tell the House something about that. The general scheme of the legislation contemplates a 2-stage system of title. The first stage of the scheme may be preceded by a reconnaissance authority which, when granted, will, subject to other existing titles, confer upon the holder a non-exclusive right for a period not exceeding 12 months to search for all minerals in the block specified by methods set out in the authority. This will allow for basic exploration. The actual first stage then is an exploration permit which will confer an exclusive right on the permitee to explore for minerals specified in the permit and carry on approved operations and execute approved works in the permit area. The second stage is a production licence which is broadly the equivalent of a mining lease on land and covers further exploration for specified minerals and their recovery.

What is the big hassle about this concept of a reconnaissance authority? The honourable member for Kennedy suggests that there is something improper about it. There is nothing improper about it. It is a perfectly sensible, reasonable piece of legislation. But the Opposition, for miserable political advantage, wishes to try to kill it again. The honourable member talked about what Sir Gordon Chalk has obtained for the mining industry in Queensland and what the Opposition has done for the coal industry. It has done nothing. That is the truth. This Government has obtained increases in the price of coal. The present Minister for Minerals and Energy is the first Minister in this Parliament ever to say to the major purchasing nations of minerals and energy from this country ‘We will meet you on a collective basis.’ This Government has obtained massive increases in the price of coal since it became the Government. It has obtained massive increases in the price of iron ore. But for the success of the Minister for Minerals and Energy not half of the iron ore projects in Western Australia would have been continued, as the devaluation of the American dollar by 22 per cent rendered the industry uneconomic.

The mining industry was foolish enough to write all its contracts in terms of United States dollars, thus effectively downgrading its in come by 22 per cent. The Minister for Minerals and Energy got that income back. He renegotiated clauses of the contracts. It was the Minister for Minerals and Energy who achieved that, not the mining industry. The mining industry came on the scene after the hard work had been done. Certainly the hillbillies on the other side of the House could not be capable of such negotiations. Can honourable members imagine the honourable member for Kennedy doing that? Can they imagine the honourable member for Kennedy facing up to the Nippon iron and steel organisation and trying to secure a price increase? It would eat him for breakfast.

The honourable member for Kennedy cannot speak in derogatory terms about the Minister for Minerals and Energy. He has brought to this nation an awareness of the might of Australia’s extractive industries. The Government said: Australia intends to be an honest trading partner. We are willing sellers and we expect people to be willing buyers. We expect to sell on reasonable terms. We have achieved those terms. The former Government did not do so. It never achieved anything. All it ever did was to sell Australia’s resources overseas at well below world parity prices across the board.

The activities of corrupt rotten borough State governments which we have under Liberal-Country Party administrations - a classic example is the State Government of Queensland at the moment - will cease if the control of Australia’s offshore mineral resources is under the Federal Parliament and, if honourable members like, a federal bureaucracy. I do not move away from the word. Honourable members opposite talk about bureaucratic machinations. What is wrong with the Australian Parliament asserting itself to get for Australia what it can from our mineral and energy resources? The problem seems to be the frightening word ‘bureaucracy’. Because honourable members opposite mention bureaucracy, we are supposed to run away. But who runs these affairs in the States? It is a pity that the bureaucracy did not run them there. The trouble is that they are run by the multi-national companies, the State Premiers and the State Ministers. They can be bought almost for the price of a meal. That is the reality of the situation. We will not tolerate this second class situation. We are here to legislate on behalf of the Australian people. No amount of party political prejudice on the part of honourable members opposite will stop us.

The declaratory provisions of the Seas and Submerged Lands Act have been carried by the Parliament. The Act will come before the High Court and honourable members know what the High Court will say. I believe the High Court will approve the legislation. It will say that the Federal Parliament does have power to introduce this legislation.

Mr Garland:

– How do you know?


– How do I know? Does the honourable member wish to read these judgments here? Why do you not do a bit of work instead of talking off the cuff? Why do you not read a few judgments?

Mr DEPUTY SPEAKER (Mr Giles)Order! The honourable member has enjoyed a little licence - I do not mind that - but I would appreciate it if, every now and again, he would address his remarks to the Chair.


– Well, you deal with the interjections.


– That will be enough from the honourable member.


– The situation is that an honourable member opposite interjected and I replied to him. I repeat: The High Court will approve, I believe, the provisions of the Seas and Submerged Lands Act and say that the legislation is valid. I invite the honourable member to read the judgment in the case of Bonser v. La Macchia.

Mr Katter:

– I rise to take a point of order. I consider those remarks to be a reflection on the judiciary. The honourable member stands in this House and says that he believes that the High Court will give a certain decision. The honourable member should clarify his remarks immediately.


– I do not think any point of order arises from the remarks of the honourable member for Blaxland.


– Thank you, Mr Deputy Speaker. I believe that the High Court will uphold the legislation if it takes the view that, in the legal sense, it is constitutionally valid. I refer honourable members to the views of Sir Percy Spender. What did honourable members opposite, who are trying to interject, think I meant, other than constitutionally valid? Do they think that I would believe that the High Court would uphold something that was not constitutionally valid? How ridiculous can they get? Sir Percy Spender was a former member of this Parliament and a Minister in a former government of the Liberal-Country Party coalition. He was later President of the International Court of Justice in The Hague. Have honourable members opposite ever read what he said about Australia’s offshore areas and what he believes with respect to the law on offshore areas? Honourable members will know that the World Court has been involved in demarcation disputes between nations as to the control of continental shelves and continental margins between and around countries. What did Sir Percy Spender say? He said that the Australian Parliament has power to legislate. This Government agrees with that view.

It introduced legislation which now has been passed by the Senate, although in amended form. The amendment which rendered that legislation inoperative in the sense of providing a mining code is being dealt with today in the consideration of this Bill. When this legislation is passed through both Houses and is enacted, there will be a mining code for the exploration and production of the minerals that lie offshore from this country; that means under water. I heard the impassioned plea made by the honourable member for Kennedy about 15 minutes ago concerning the small fellows. He asked whether they could raise $100 to put in an application for a licence. Small fellows do not explore offshore. Any company that starts to mine in deep water offshore must have money. Gone is this notion of the prospector with a pan over his back, a pick over his shoulder, trudging through the countryside, digging holes, looking at the minerals, and saying: ‘I have come across a bonanza’.

To engage in offshore operations big money is required. We expect any companies which search offshore to be able to produce the goods and to undertake a reasonable exploration program. These must be companies of substance. Such companies are not scared by the simple provisions of this Bill, even though the honourable member for Kennedy may be. He is scared because he cannot understand it. The Bill is a simple piece of legislation. We will not be deterred by the machinations of the Country Party. The Leader of the Australian Country Party gets his election funds from the mining industry which does not want control of-

Mr Katter:

– I take a point of order. That remark is a reflection on my Leader. The honourable member knows that a substantial cheque was received by the Australian Prime

Minister from one of the major mining companies. He will constantly harp on this type of thing.


– Order! I do not think there is substance in the point of order. The honourable member for Blaxland did not name any specific person. The ruling of this House for some time has been that if people are not named a point of order in that respect is without substance.

Mr Katter:

– With respect, Mr Deputy Speaker, he did say ‘the Leader of the Country Party’.


– I suggest that the honourable member should not name anyone. If he does, I will need to ask for a withdrawal. I suggest that he get on with his speech.


– It is known by everyone that the 2 sources of income for the Country Party are the elite rural interests and the mining industry. Those are the facts.

We will not put this Parliament in the situation where the mining industry is foreign controlled. A great many of our mining companies are foreign controlled. This Bill makes provision to ensure that a 51 per cent Australian equity is maintained in any mining venture. We insist upon that. The Canadian Government now is demanding a 51 per cent equity in this industry. This legislation insists upon it. We will not be fooled around by a mining industry which is foreign controlled. We require control of the offshore resources, both mineral and petroleum, to be vested in the Federal Parliament. The position in the States is not like that. It is very easy for these pukka sahib executives to duchess these State Ministers and to con them at large. That is what happens. They will not be conning the Australian Minister for Minerals and Energy or the parliamentary Labor Party.

We believe that the proper right of this Parliament is to exercise jurisdiction over Australia’s offshore assets - in respect of this legislation, minerals, and ultimately petroleum. We believe that the Australian Parliament through the Australian Constitution has that power. The end result for future generations of Australians will be found in the form of the legacy from this Labor Government. Our actions will come to be appreciated in perhaps the next 10 years, 15 years or 20 years - not directly at the moment but in future years. They will come to appreciate that all of the vast extractive industries that are mining the massive. minerals and energy resources of this country have been required to do so in a manner that is to the benefit of all Australians, to be enjoyed by all Australians, that the resources have not been allowed to be given away at bargain basement prices, below world parity prices,, by an agrarian rump - a pressure group - such, as the Country Party. That is not on. That is why I believe that this legislation will be carried by this House. I ask all honourable members to support it. I believe that it will be carried by the Senate. I also believe that the legislation to which I have referred will be upheld in the High Court. 1 commend the Bills to the House.


– I do not know whether the sort of speech that we have just heard from the honourable member for Blaxland (Mr Keating) passes as logic or oratory at branch meetings of the Australian Labor Party, but I can assure him that it will not cut any ice here. The honourable member’s speech Was a hotch-potch of contradictions and nonsense, as I will spend a moment or two pointing out. His speeches are always full of abuse. Indeed, it would be clear to anyone watching him speak that he is so emotionally involved in the subject of his legislation that he really cannot separate the factual and objective aspects of it. Interlaced throughout all of his speeches on this subject is a hymn of hate against the State Premiers, particularly those of Western Australia and Queensland, that is filled with intemperate references. I will not go into them any further as I do nol want to give emphasis to them, but I will point out to the honourable member that it hardly helps his case to talk in that way.

Another notable aspect of the honourable member’s behaviour is, as is well known in this place, that he is a protege of the Minister for Minerals and Energy (Mr Connor). The honourable member helps the Minister a great deal in this House and in the Labor Party. Naturally the Minister is the only person whom the honourable member singles out for any sort of praise - and what gushing praise it is. The Minister receives all the thanks for everything that the honourable member regards as being progressive in the mining industry in this country.

According to the honourable member, it is the Minister who saved all of the iron ore companies in Western Australia. According to him, the vast projects in which so much private money has been invested would not have survived but for the actions of the Minister. What a laugh! The Minister did not have one hand in the setting up of those industries. He did not do one thing to help them. As a matter of fact, no one criticised them more than he did years ago when he sat- on the Opposition benches. He criticised all the projects that were set up in the 1960s. Naturally, as a member of a government which has brought about a currency devaluation that has had a damaging effect on all the export industries of this country the Minister had to try to get better prices from the importers of our iron ore and other minerals. I noticed that the honourable member for Blaxland is walking towards the door of the chamber. He knows that all of the things I have said are true and that he has misrepresented the position.

The honourable member brought up the old chestnut about how the mining companies should not have tied their contract prices to the United States dollar. What was the alternative? I challenge honourable members opposite to find for me one banker who is engaged in raising international finance or one stockbroker who has engaged in raising money for mammoth projects which have turned around the balance of payments strength of this country who will say that he could have done other than tie the currency to the United States dollar rate. Most countries of the world are still following the same practice. The reason why they are still doing so is that the United States currency is still the strongest currency and the only currency to which one can look for major stability. Honourable members opposite may not like thai, but it remains a fact of international finance.

I point out also that this legislation, which the Government says is so important, is being represented -at 5.30 p.m. on this Tuesday by one Minister - the Minister for Defence (Mr Barnard) - and that not one other member of the Labor Party is present in the House. It is supposed to be an important piece of legislation to the Australian Labor Party; yet its supporters have walked out on it. No doubt they have gone to an early dinner or to something of that kind and have left the Minister for Defence here as their sole representative. Well, all praise to him. Perhaps he has been rostered to be in attendance; I do not know. Be that as it may, no interest is being shown by the Labor Party in this matter.

The honourable member for Blaxland also referred to some legal opinion on this matter. I might add that he also gave a lot of his own opinions, which are far less qualified. Of course, the fundamental point that has to be made about this Bill before one even starts to talk about its detail is that its introduction is completely premature. This legislation represents Part III of a Bill which was presented to this House by the Government last year and which was deleted by the Senate for the reasons set out in the debate on that Bill. I will not go into those reasons now. The remainder of the Bill that was passed asserted Commonwealth sovereignty over off-shore areas. That sovereignty has been questioned by several States. Proceedings have been initiated in the High Court in relation to that assertion. At one stage of his speech the honourable member for Blaxland tried to imply that the right honourable member for Higgins (Mr Gorton), who is a former Prime Minister, would be, because he saw much in favour of this sort of legislation, behind this legislation today. I point out that what the right honourable gentleman has said for many years - I have heard him say it many times - is that the Commonwealth should assert that it has sovereignty and the High Court should be left to decide who has sovereignty. The High Court is in the midst of determining the sovereignty issue. It has not yet determined it.

To bring in this legislation at this stage - I know that in the weeks to come the Government is going to say how urgent many Bills are and how it can allow only 10 minutes for them to be debated because there is insufficient time - is to make a mockery of the Parliament because it is not urgent. Although the sovereignty issue is not, strictly speaking, sub judice it certainly needs to be resolved before anybody will know what the true position is as to who has the rights and whether the Commonwealth law can be said to be legal. The Minister will not say what his attitude is to the petroleum aspect of off-shore exploration because this Bill specifically excludes that. There is no reference to that subject beyond, of course, the specific provision in the Bill that it should not be covered.

I summarise my remarks by saying that the major Bill - 2 Bills are being debated concurrently - represents Part III of the Seas and Submerged Lands Bill 1973 and that the provisions of Part III of that Bill were not passed when they came before the Senate last year; only Part I and Part II of that Bill were passed on that occasion. Part I and Part II of that enactment include a claim by the Commonwealth to sovereignty and to sovereign rights in respect of the territorial sea and internal waters excluding those that were subject to State sovereignty in 1900 and including not only internal waters but also the continental shelf. That enactment is at present the subject of a High Court challenge by several States which are seeking a declaration that it is unconstitutional.

The Minerals (Submerged Lands) Bill 1974 provides a code for the exploration and mining of minerals in the area over which the Commonwealth claims sovereignty and in relation to which the honourable member for Blaxland says the High Court is going to give the Commonwealth sovereignty. Of course, it will be recalled that immediately he made that assertion I interjected and that he then retreated and said that the High Court will be deciding whether it is constitutional. The honourable member changed his ground somewhat. The fact of the matter is that the High Court will be determining the issue and, at this point, nobody, not even the High Court, knows what that determination will be. Because the Bill that we now have before us relies on the very existence of sovereignty the constitutional validity of which the present High Court challenge will determine, its introduction is premature. The determination by the High Court is basic to the whole matter. It is obvious that this legislation will be of no consequence until the legal doubt is removed.

Let me mention one or two salient aspects of the legislation. Firstly, it applies only to minerals and, as I said, specifically excludes petroleum. So the legislation relating to petroleum is not affected. Let me comment on that point. The Minister refuses to say what his attitude is. The Opposition’s shadow Minister for Minerals and Energy, the honourable member for Kennedy (Mr Katter) who preceded me in the debate, rightly demanded that the Government put down a White Paper to explain its general policy, as an indication of policy to people who want to find minerals and petroleum, which can be of such value to this country, and which after all increase the standard of living of everyone in the country. If we leave them there undiscovered, if large scale projects are not launched in order to find them we will be all the poorer, and so will the world be poorer. The Prime Minister (Mr Whitlam) is always anxious to say that Australia has responsibility for the provision of resources to other countries and particularly to the less developed countries. I ask: What about this major aspect - one that is probably much more important than any amount of foreign aid which this country can direct, because the sum is so much larger?

Secondly, the Bill will come into operation on the day on which it receives royal assent, as is covered by clause 2. So there is no delay in its provisions while its validity is tested. Obviously that will result in extreme uncertainty by any company or group seeking to explore in the off-shore area. Thirdly, the Minister may require information and documents relating to minerals in off-shore zones from anybody capable of providing them, including, of course, State governments. I think we are aware of the attack which the Government is making on the States in those areas in which the States have been exercising power. Are we to say that the States should have no powers? Certainly we will not say that they should have all power.

What is necessary is some sort of balance. We have had a balance in this country since 1901. It has existed under the federal system. I for one am not going to say that that balance should always remain the same. I believe that from time to time it needs to be changed. But I certainly do not believe that every aspect of government is best controlled from Canberra. On the contrary, I believe that many matters are handled inefficiently from here, let alone unwisely. That is the experience of all large administration around the world. It is being discovered that much more local involvement is necessary for greater effectiveness. But this Government does not believe in that fact. We know that the Prime Minister does not want the States; he does not want a Senate; he wants to change the whole Constitution and he believes that he has the ability to decide best all the questions facing the country. That object comes out in this legislation because this information is to ‘be taken from the States, if necessary by coercion and used for purposes which will diminish the powers that the State governments can exercise. One can give many examples of that.

It will be an offence to explore for minerals or to carry on operations for the recovery of minerals in the off-shore zone except in accordance with the provisions laid down in this Bill, and they are indeed stringent. Apparently the Government is moving towards a stage of wishing to take unto its own authority all exploration - indeed we know that that has started in the fields of oil and gas exploration and minerals as well. The transitional provision in Division 8 provides for the continued operation of exploration under State laws until a decision has been given on the application for a licence under the Commonwealth Bill. The State laws, so far as they relate to exploration for or operations for the recovery of minerals in any part of the off-shore area, are specifically excluded.

We are debating an associated Bill providing for a royalty to the Commonwealth on minerals taken as allowed by the major Bill - the Minerals (Submerged Lands) Bill. If enacted, these Bills will conflict with the State Acts. Many of the State Acts - in my own State of Western Australia it is known as the Mining Act 1904-73 - apply below the low water mark. I am not aware of any extensive exploration taking place but obviously, as technology improves, there will be a great deal of exploration. So the validity of this legislation depends on the result of the present challenge to the Seas and Submerged Lands Act 1973. Meanwhile anybody who wishes to explore will not know what to do. There will be complete uncertainty, and uncertainty involving huge sums of money means no exploration at all. Since this Government was elected in December 1972 we have seen a tremendous reduction in the exploration for oil, gas and minerals. It is of no use talking about the principles involved if the result is that one finds nothing. That helps nobody. This is just another Bill which will increase the uncertainty. That position is exacerbated by the Government’s refusal to state its general policy.

In conclusion let me mention that Senator Greenwood, who is the Deputy Leader of the Liberal Party in the Senate and a former distinguished Attorney-General, made a speech on the legislation of last year to which I referred. In that speech he set out in some detail all the reasons why the Opposition is opposed to that legislation and, in particular, to the over-wide discretion which it contains. I pre dict that we will see from this Government, the longer it stays here, more and more attempts to take unto itself more and more power. I think that power, as well as economic development, is what these Bills are all about. I say: ‘Thank God for the Senate and what it did last year, and thank God for the efforts of the State governments in most of the attempts they have made to inhibit this legislation.’ The essence of democracy is not unitary rule by Whitlam but divided power. The essence of democracy is divided power - divided between the chambers, divided between the Commonwealth and the States. I say: ‘Let us by all means preserve that because there is no single person, despite what the Prime Minister might think, who embodies all wisdom necessary to make the great decisions that are necessary in this country’.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 499


Second Reading

Consideration resumed from 11 July (vide page 160), on motion by Mr Connor:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading


Is it the wish of the House to proceed to the third reading forthwith?

Motion (by Mr Daly) proposed:

That the Bill be now read a third time.


– The question is that the Bill be now read a third time. All those of that opinion say ‘Aye’, to the contrary No’.

Mr Garland:

– No.

Mr Daly:

– Do you want a division? The Opposition spokesman told me that he did not.


– The honourable gentleman can have his name recorded as voting against the Bill.

Mr Lynch:

– In that case, we will call for a division.


– The House will divide. Ring the bells.

The House divided. (Mr Speaker - Hon. J. F. Cope.)

AYES: 61

NOES: 51

Majority . . 10



Question so resolved in the affirmative.

Bill read a third time.

page 500


Second Reading

Debate resumed from 16 July (vide page 221), on motion by Mr Crean:

That the Bill be now read a second time.

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 not exceeding 40 minutes.


– The Bill before the House seeks to provide the Government with authority to examine and regulate the activities of institutions in the nonbank financial sector of the economy. The powers sought by the Government are broadly similar to those now held in respect of the Australian banking system. Constistent with the banking legislation the powers proposed by this legislation relate to asset ratios, directions regarding volume and direction of lending, interest rates and the provision of information. The Opposition does not oppose the general provisions of the Bill. We will, however, seek a number of amendments to improve certain aspects of the legislation and to provide additional safeguards for the institutions involved.

In recent years there has been a marked decline in the importance of trading banks and a corresponding growth of the non-bank financial sector of the economy. The Treasurer (Mr Crean) estimated that there are now operating in Australia around 1,000 finance company groups, 400 insurance companies, 200 permanent building societies, 750 credit unions and between 50 and 80 corporations in the area of merchant banking. Between 1953 and 1972 the assets of banks declined from 58 per cent of the total assets of the financial sector to around 42 per cent and, during the same period, the assets of the non-bank financial sector increased from 8 per cent to 23 per cent of the financial sector. In many respects the growth of the non-bank financial sector can be attributed to the statutory limitations which have been imposed on the financial operations of banks.

However, the growth of the non-bank financial sector can also be ascribed to the increasing requirement for flexible and specialised forms of financing. There is no doubt that each of these financial institutions is highly specialised and their emergence is, in many respects, a reflection of an increasingly complex and mature financial and economic structure in Australia. The Opposition does not believe that direct controls over the non-bank financial institutions can be a substitute for general monetary measures. Indeed, any government that tries to use such controls as a substitute will find that its policies fail to influence the macro-economic variables to which they are directed and will, at the same time, cause substantial distortions and inefficiencies in the capital market. The misuse of powers granted under this legislation would have serious economic consequences.

We believe, however, that it is desirable for a government to possess the broad powers contained in this Bill. Controls over the behaviour of financial institutions can be a desirable supplement to market measures for the purpose of monetary policy and they can be used to protect investors where the financial security of their investments might be jeopardised. The imposition of direct controls over a wider segment of the financial sector than the banks will increase the proportion of financing subject to control and may speed the impact of policy changes. At present the banking sector is subject to a significant degree of control. The trading banks are subject to interest rate controls and the statutory reserve deposit provisions. They also abide by the voluntary LGS convention and are subject to direction by the Reserve Bank over their lending activities. Savings banks are subject to interest rate controls, and their quantity and direction of lending is regulated. If a case can be made for subjecting the banking system to these controls, I believe that as a matter of equity the Government ought also have the power to impose direct controls over the non-bank sector.

However, it must be emphasised again that, if such powers are used in a heavy handed way and are allowed to become a substitute for market-oriented measures, they will in fact be counter productive. No better example of that could be given than the Government’s misguided attempt, during 1973, to hold down housing interest rates while at the same time pushing the long-term bond rate and thus all other competing rates to record levels. The market, of course, reacted in a predictable fashion. Investors became loath to commit their funds to the building societies who were unable to offer competitive rates of interest on their deposit. The resultant fall in building society lending, and the eventual collapse of the policy, is now a matter of history.

The whole history of Labor’s monetary policies is, of course, a very unhappy one. Had monetary growth been cut earlier in 1973, when the Government’s advisers and independent commentators first warned of excess demand in the economy, both inflation and interest rates would have been much lower than they are at present. Instead, the Government went ahead with a massive expansion of Government spending and even the increase in bond rates from 6 per cent to 8i per cent was quite ineffectual in offsetting the results of fiscal expansion during 1973.

The Opposition Parties believe that monetary expansion should be operated to regulate the economy in conjuction with a responsible fiscal policy. The Opposition rejects the use of high interest rates to transfer resources to the public sector. Indeed, we reject the expansion of. the public sector which is this Government’s specific policy intention and which the Treasurer has admitted will be achieved through a combination of high interest rates, inflation and higher taxation. The Opposition believes, also, that while the powers embodied in this Bill will be useful for relative application or to be kept in reserve, that the general direction in which the application of monetary policy in Australia has been heading - that is, away from direct controls and towards market-oriented measures - should be continued. This view, and the need for the powers given under this Bill to be used responsibly and in conjunction with market measures, is supported by the Reserve Bank in its 1972 annual report at page 38. I quote:

The recent extension of greater flexibility to banks reflects the view that it is important, both on grounds of equity and for implementing policy, that intermediaries which are subject to direct controls should foe freed whenever possible of restraint applied through those controls to preserve to the extent practicable their market share as financial intermediaries. Experience has shown that direct controls, although perhaps useful tools of policy over short period, can diminish in effectiveness when applied continuously over long periods. Although a broadening of the range of financial intermediaries is no doubt largely a consequence of natural development, the exercise of direct control over some part of the financial system obviously encourages, after a time, a shift towards areas not subject to direct control. A widening of the area subject to controls might not substantially reduce this problem because markets develop means for by-passing restraints even if elaborate administrative machinery is established. In the process, there is some diversion of business away from the more efficient means for channelling savings to potential spenders.

A Liberal-Country Party government would use monetary controls responsibly. Our domestic economic policies would be based on responsible fiscal policies and market-oriented monetary policies - supplemented where necessary by the direct controls this legislation will give to the Commonwealth Government. We believe that a competitive capital market is the background of Australia’s development potential. The non-bank financial sector would not be disadvantaged by responsible use of these powers.

We must accept that a general monetary policy, either of expansion or of restraint, will operate more rapidly or to a greater extent on some particular sectors of the economy than on some others. This so-called sectoral imbalance which can arise through changes in monetary policy can, of course, have undesirable social consequences. Where this sectoral imbalance arises from the operation of normal market forces it should, from an economic point of view, be subject to general acceptance. I believe the sound and responsible course of action to redress the conflict between the goals of monetary and social policies is to use fiscal policies. Where severe sectoral imbalance arises from artificial rigidities within the capital market, then those rigidities and constraints which have historically been associated with the monetary policies of successive Australian governments cannot simply be eradicated overnight. Therefore, I believe that there is no case for the outright rejection of quantitative monetary controls. Equally, I believe that the non-bank and the banking sectors of the economy ought to operate under a similar framework of Government supervision.

Thus the Opposition views legislation affecting non-bank financial intermediaries as a useful supplement to the broad range of monetary policy options but as an option that can and should only be used in a limited and specialised manner. The former Governor of the Reserve Bank, and now the Prime Minister’s special economic adviser referred to the problems associated with Government interference with non-bank financial institutions in the following terms:

There would be great difficulties in any attempt to supervise the activities of commercial borrowers, particularly financial intermediaries, in the same way as those of banks. The business undertaken by these intermediaries is definitely diverse and the policing of the legislation would be more complex and possibly ineffective. Furthermore, there is a good deal to be said for avoiding legislation which could prove unnecessarily restrictive if this can be done without harm to the economy and injustice to the investing public. The price of freedom here as elsewhere may be the voluntary acceptance of responsibility. Our experience during the last year has demonstrated the dangers both to businesses which rely upon other people’s money and to the investors themselves when such responsibility is ignored.

Dr Coombs’ successor, Sir John Phillips, referred in the following terms to the problems of controls over banks in his R. C. Mills Memorial Lecture in 1971 when he said:

However, as with other institutions, their growth in the long run depends upon their ability to offer services that others do not or cannot offer as efficiently. Use of direct controls usually hinders this process of having the community’s financing done by the most efficient means.

In the same lecture he stated:

Shifts . . . induced by direct controls do not necessarily promote the efficiency of the financial system, where the optimum position from an economic point of view is an institutional structure determined by the relative efficiency of the various intermediaries in providing financial services.

The views of both a former Governor of the Australian Reserve Bank and the present Governor clearly support the Opposition’s position that the powers contained in the Bill before the House have the capacity to be counter productive if used without regard for their economic consequences. Equally, they support our contention that the current restrictions applying to the banking system should continue to be eased.

Controls, similar to those proposed in the Bills, have been in use for a significant period in European countries. For example, West Germany applies asset ratio controls to all ‘deposit-taking institutions’ which includes banks, credit co-operatives and mortgage lenders.

Similar measures embracing banks and the equivalent of Australian ‘fringe banks’ have also been adopted in South Africa and New Zealand. The United Kingdom has, since September 1971, moved in the same direction by applying minimum reserve assets ratio requirements and’ special deposit requirements, similar to statutory reserve deposit requirements in Australia, with the Bank of England to all major ‘deposit-taking institutions’, a term which embraces commercial banks, merchant banks, discount houses and the larger finance houses. The minimum reserve assets ratio for the latter, for instance, is 10 per cent, compared with 12) per cent for banks, and the Bank of England has indicated that calls to special deposits will ‘normally be at the same rate as calls on the banks’. It should be recalled, in this regard, that the Treasurer indicated in his second reading speech that statutory reserve deposits would not be applied to non-bank financial institutions in Australia.

The United States has not applied asset ratios to financial intermediaries generally but, at times, monetary policy has included the use of consumer credit controls and interest rate ceilings on deposits. In January legislation was submitted to Congress seeking the application of cash reserve requirements to all deposit taking institutions.

Thus the type of controls which may be involved under the legislation before the House are by no means unique in international terms. In the same way they are not, of course, unique in Australia as a result of the Banking Act enacted by this Parliament.

The Treasurer, in his speech to the Economic Society of Australia and New Zealand referred to the Financial Corporations Bill in the following terms:

The rationale for the introduction of the legislation and the related policy stance are well documented in the major theoretical works and the empirical studies which the rapid growth of the non-bank financial institutions produced in the 1950’s and 1960’s . . . there is no disagreement that such intermediaries have significant potential to undertake activities which are inimical to an effective monetary policy.

The Opposition parties believe that statement to be an over-simplication which does not accurately reflect the findings of monetary theorists or of empirical studies. It is true, however, that monetary theorists and major public inquiries, such as the United Kingdom Committee on the Working of the Monetary System and the United States Commission on Financial Structure and Regulation, have all adverted to the capacity of financial institutions to create disintermediation. The Radcliffe Commission rejected any attempts to substitute for the traditional control of the money supply a complex of controls over a wide range of financial institutions. It stated:

Such a prospect would be unwelcome except as a last resort, not mainly because of its administrative burdens, but because the further growth of new financial institutions would allow the situation continually to slip from under the grip of the authorities.

The Radcliffe Commission has, of course, been widely criticised by economists for its overstatement of the potential threat to stability arising from the growth of non-bank financial intermediaries. In the United Kingdom Professor Clayton’s work, while recognising the capacity of British financial intermediaries to be de-stabilising, has taken a more balanced view. That report stated:

It is an important feature of our analysis that, while in the long period the tendency for non-bank intermediaries to usurp some of the payments functions of the commercial bank may reduce the latter’s relative importance, it is not a significant factor from the angle of short-period contra-cyclical policy. The non-bank intermediaries are a potential threat to stability in so far as they succeed in commandeering money balances to supplement the current inflow of savings either by a switch by the public out of currency and bank deposits into non-bank intermediary deposits or through sales of bonds out of their portfolios. We have shown that, although there is evidence that the size of idle balances is considerable, there are considerable imperfections in the mechanism for transferring funds to defecit units to enable them to increase monetary demand.

In the absence of adequate flow of funds data and knowledge of the public’s relative preferences for money and near-money assets, we have to try to analyse the facts we have about the growth of the non-bank intermediaries. We have argued that the rapidity of their growth in the ‘fifties can be explained by the increase in personal savings and is not of itself evidence of destabilising behaviour. It is changes in the rate of growth when interest rates are rising, that are significant from the point of view of short-term cyclical policy. We find little evidence of an acceleration in the rates of growth of three important intermediaries when interest rates were rising during the ‘fifties. The presumption is that the non-bank financial intermediaries were doing little more than fulfilling an intermediary role between savers and borrowers.

In the United States, monetary studies, such as ‘Money in a Theory of Finance’ by Gurley and Shaw, have tended to place a further discount on the capacity for financial intermediaries to create de-stabilising effects. Gurley and Shaw did, however, make the following observation:

But when the monetary system comprises private commercial banks seeking profits, a system of controls over the activities, especially when banks are subject to rigorous competition from uncontrolled intermediaries, may in time create problems for the monetary authority.

A number of Australian economists have likewise adverted to the capacity of financial intermediaries to create problems for the administration of monetary policy and have advocated new measures for their control. For example, Professor Warren Hogan, in the ‘Economic Record’ in 1960 referred to the conclusions of the debate in the United States in the following terms:

First, the impact of monetary policy has been weakened by the faster growth of those financial institutions not subject to central banking controls. Secondly, new types of controls are needed to combat the decline in effectiveness of the central bank’s present array of weapons. These amount to proposals for enforcing minimum reserve requirements on nonbanking financial intermediaries.

Commenting on the Australian situation, Professor Hogan had this to say:

The rise of the non-banking intermediaries gives cause for alarm as it seems to have hampered monetary policy at the very points where its usefulness is most strongly upheld.

In his conclusion he noted that:

The effect of the growth of the non-banking financial intermediaries is to thrust the burden of adjustment to their activities upon the banking system. The trading banks suffer losses of reserves as a result of lending activities outside their control; they are therefore forced to limit the amount of credit provided by the banking system. By itself such action may only swell the fringe of unsatisfied borrowers who will turn in greater numbers to other financial intermediaries. An effective control of the financial system is not possible when monetary policy is directed solely towards controlling the liquidity of the banking system. It is necessary to devise techniques affecting the liquidity of the entire financial structure. Otherwise, financial assets can always be transferred between intermediaries to circumvent the authority of the central bank.

Sitting suspended from 6.15 to 8 p.m.


– Before the suspension of the sitting for dinner I quoted the views of Professor Hogan as outlined in the economic survey of the ‘Economic Record (I960)’. I said that, although Professor Hogan concluded that there was no alternative to a revision of policies towards financial intermediaries, he was constrained in reaching his conclusions in this regard by the constitutional difficulties which limited the Commonwealth prior to the Concrete Pipes case. In short, there is a consensus among economists that an uncontrolled non-bank financial sector has a capacity to create disintermediation. Mr Speaker, I seek leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 504



Ministerial Statement

Treasurer · Melbourne Ports · ALP

– by leave - During the period ahead the Government and the Australian community will face critical decisions in the economic field. These decisions must be made in the context of renewed momentum in our inflationary spiral. It is appropriate, therefore, that I should outline tonight the Government’s assessment of the task it faces and indicate the manner in which it will approach that task. The Government’s hopes that the rate of price increase was slackening have proved illusory. (Opposition members interjecting)


– I thought the Opposition might have taken the statement seriously. The announcement last Friday that the consumer price index in the June quarter had risen by no less than 4.1 per cent not merely dispelled those hopes but reflected the influence of new and powerful influences at work in the formation of prices. I have no illusions about the magnitude, or the intractability, of the task we face. It must be obvious to all of us that, with prices and costs now rising at these rates, and with inflationary expectations now so entrenched, inflation cannot now be beaten without severe costs. It must be equally obvious that we would have preferred to avoid those costs. The plain fact is that we no longer have any real choice.

The Background

When it came to office the Government inherited an economy flooded with funds fed by the inflow of capital from abroad and by an undervalued currency. Too much money was chasing too few goods. Our approach to this situation was simple and logical. Through our exchange rate and tariff policies, we proceeded to increase to the maximum the flow of goods on to the market. Equally forceful was the Government’s attack on the excessive liquidity and too easy access to borrowed money which was feeding the already excessive demand. Restraints were applied to the flow of funds from abroad and a tighter credit policy was gradually made effective.

This first stage in our approach has been a long slow haul. In the process interest rates have risen to. unprecedented heights. Given our abhorrence of high interest rates, that has been a measure of our resolution. Let us, however, be quite clear. We would all like to see interest rates coming down, not going up. But although nominal interest rates are now very high, they are still negative in real terms; that is, when compared with the erosion of capital by inflation. I must therefore warn that, unless we can sharply reduce the rate of inflation over the next 12 months or so, we shall not see interest rates come down; we may even see them rise further. It is because we are determined to bring down interest rates from their present unconscionable levels that inflation must be decisively beaten. The monetary situation is now very tight. (Opposition members interjecting)–


– Order! The Opposition front bench will remain quiet, and that includes the honourable member for Barker.


– I repeat: The monetary situation is now very tight, and is still tight despite the laughing. We shall certainly keep it that way as long as is necessary. At the same time we shall maintain a proper flexibility. I inform the House that this afternoon the Governor of the Reserve Bank announced a further release of SDRs.

Mr Snedden:

– You mean SRDs.


– I have to be an expert in both SDRs and SRDs. The ones to which I refer are the SRDs, the statutory reserve deposits - not the special drawing rights, no matter how much some people might like to have special drawing rights. For a number of reasons monetary policy has had to carry an undue share of the burden during recent months. As fiscal policy takes on a greater role it will be appropriate to amend the policy mix’ so as to reduce that undue burden.

Stage two of our approach was unveiled at the Premiers Conference recently. The Prime Minister (Mr Whitlam) then announced a policy for 1974-75 of restraint in government spending throughout the nation. He foreshadowed that the Australian Government would be deferring or rephasing much of its own (planned spending in 1974-75 and he announced financial provisions to the States which, in totality, were designed to ensure a similar policy of restraint on their part. One of the problems in dealing with inflation is that everyone wants it beaten but everyone also wants his own activities to remain quite unaffected. Everyone favours general restraint but still wants particular expenditure. There is no way - I repeat, no way - in which inflation can be beaten which will not involve discomfort for a while for the community as a whole.

That is the background against which, tonight, I am announcing some further developments in our approach. In the normal course the steps I shall announce tonight would have been comprehended in a Budget in mid-August. However, with the Budget timetable now so delayed by the election, we have decided to take certain steps immediately. Some will no doubt question the need for the further measures; but after all, it does seem that in the last month or so the rate of increase in demand has eased somewhat. The boom, perhaps, is already on the wane. Further measures now, it will be said, will be too much, too late. Let me therefore say a little about the economic situation.

page 505



Throughout 1973-74 the economy was overstretched. There were shortages of labour and of many goods, despite a huge rise in imports. Aided by strongly rising incomes, consumer spending rose very strongly. The rise was particularly marked in the second half of the year although it may have slackened off a little in the last month or two. Spending on private housing construction also rose strongly in 1973-74. New finance for housing has been falling from the exceedingly high levels reached a year ago. Even so, private dwelling commencements in the March quarter, the latest period for which we have figures, were still running in seasonally adjusted terms ahead of the industry’s capacity to complete dwellings. At the end of March dwellings under construction were 30 per cent higher in number than their already swollen level of a year earlier. When the figures for the June quarter are published next month we would expect to find that overstrain considerably reduced. Even so, data on new private dwelling approvals for the 3 months to May show an annual rate of over 150,000 being sustained - a high rate by any but the false standards of 1973.

There is no doubt that the pressures on the industry are now easing, and easing fast. I shall say more about that in a moment. But what some are now complaining about are the prices at which they may have to sell houses as they complete them. For the first time for years speculative developers face some uncertainty about the prices at which they can sell. The Government has been aiming to achieve that. We set out to break the inflationary expectations which have been creating an artificially high level of demand for land and private housing. We are beginning to succeed. We are certainly not going to throw away that success just as it is coming within our grasp. In this and other respects

I remind the House of what the Prime Minister said in his statement to the Premiers recently.

When, as we will, we hear of some such ventures going badly wrong in the period ahead, we will know that the risk element has been reintroduced into such forms of investment.

I know that the lower levels of lending for housing, and the higher interest rates, are hurting would-be home buyers. It is with one aspect of that problem in mind that I will be introducing legislation in the Budget session to allow, subject to certain conditions, housing mortgage interest payments as a concessional deduction for income tax purposes as from 1 July last.

We shall also have regard to the other aspect - the availability of finance for housing. Up to now more money for housing would only have meant a bidding-up of housing prices, not an increased output of houses. However, that situation will change and is already beginning to do so. As it does, we shall be vigilant to ensure that our policies are geared appropriately to the developing situation. For example, at the Premiers Conference one area of spending in which the States were told they were not being restrained was welfare housing. As the Prime Minister said at that time, the Government is determined to ensure that less privileged families in our society are not denied the chance to live in adequate homes, and that many low-income families are given the opportunity to buy homes of their own. Yet the number of nouses completed in the public sector in the year to March 1974 was the lowest for 15 years. All the resources were being drained off into the private sector.

We have no intention of bringing the private housing industry to its knees. Our policies will be designed to avoid any such outcome. But at the same time we are determined to achieve some easing in that sector along with others. That must occur if the public sector is to be able to build many more houses for the needy, which is our desire. Although such data as are available for private fixed investment present a somewhat mixed picture, the figures for the March quarter were well up on a year earlier. Public sector spending rose strongly during 1973-74. Overall, then, the demand situation in 1973-74 was one of excessive strength. That was in part reflected in a great rise in imports. In the 3 months to June imports were no less than 69 per cent greater than a year earlier.

Despite increased supplies and the progressive tightening of credit through 1973-74, manufacturers in June were still seeing the main constraints on their activity as physical. In the ACM A/ Bank of New South Wales survey 71 per cent of manufacturers nominated shortages of either labour, materials or plant capacity as the main constraint on their activity. Towards the end of the financial year, however, some signs of an easing in demand pressures did begin to emerge. Although unemployment remained low - at the end of June persons registered represented only 1.34 per cent of the work force - unfilled vacancies fell sharply in the June quarter, presaging an easing in the demand for labour in the coming months. Meanwhile, the effects on industry of tight credit and of sharply increased import competition have been becoming evident, in a sporadic way. On all the evidence the pace of demand does appear to be slowing and should ease further in the months ahead. The extreme overstrain from which we have been suffering will thus be dissipated and some slack in demand for resources could develop as 1974-75 goes by.

The Inflationary Outlook

It will be said that this is enough - that more measures taken when the boom is on the wane is overkill. From the standpoint of dealing with inflation the reality is otherwise. The upward thrust of cost and price pressures will not be turned back by our decisions up to this time. What we have done so far has stopped inflation from accelerating even faster. If that is all we can achieve, however, we shall have merely set the stage for the next round of inflation to take off from this higher base. I say without exaggeration that the Australian economy now faces a highly dangerous situation. Let me focus on 2 key elements. First, costs are now rising very fast. In 1973-74 average weekly earnings rose by 16 per cent. They are now rising at over 20 per cent. But such figures have nothing to do with the real purchasing power of those wages. I do not prolong the point. We have a wages explosion which is damaging everyone, and wage-earners as well. The second key element in our situation derives from the rest of the world. In the first half of 1974, output in the OECD countries overall appears to have actually fallen. It is plain that, if deflationary policies are resolutely pursued by some of the major countries, those policies are going to have pervasive effects on world economic activity and world trade. Australia will not be immune from those effects.

This is not an occasion to analyse the world economic outlook but for Australia there are certain implications. Australia has ample international reserves. Not only can we afford a further period of sizeable deficit in our balance of payments but also we need such an outcome for a time both in order to keep up the total supply of goods to the economy and from the monetary policy aspect. However, if our inflation goes on unabated or accelerates while key countries overseas are reining in theirs, we will find our position becoming untenable in two or three years’ time. In those circumstances - and I emphasise that we are not going to allow them to happen - we would have to take external economic policy measures for balance of payments reasons which would make our domestic inflationary problem much harder to deal with. Just as one can have a vicious wage-price spiral, so one can have a vicious inflationary-balance of payments interaction. There are only too many overseas examples to attest to that.

Inflation and Our Society

I have referred to the familiar economic case for curbing inflation. But the case goes far beyond economics. Inflation is utterly inequitable in its effects. Let me illustrate that by way of a mundane example. The new taxes and charges I shall be announcing tonight have an annual revenue yield in the order of $270m. I have no illusions about what the newspaper headlines will say about that tomorrow. Yet in the last 12 months inflation has ripped off well over $ 1,000m from the real value of savings bank deposits - deposits owned for the most part by the little people, the ordinary people of this country. That hidden and insidious tax, which of course falls also on all other savings through financial assets, goes largely unremarked. It is not the stuff of headlines.

We have a choice. We can either let inflation run along or we can act to curb it. The easy course for any Government is to drift along and hope, Micawber-like, for something to turn up. That way spells disaster when inflation is running as fast as it is and when inflationary expectations still remain as firmly entrenched as they are in Australia today. The instruments for the control of the causes of inflation in the form we are now experiencing are difficult to apply in a private enterprise economy. They bear unevenly on different sec tions of the community and involve relative hardships for some. It is important, therefore, that the Government should, simultaneously with their use, take action to set limits to their impact on the economy, on businesses and in individuals and to ensure that the burdens imposed are borne primarily by those best able to carry them.

The Control of Demand

First let me say that the foundation for any ‘anti-inflationary policy must be in the control of demand. We have pushed supplies to their maximum and little can be added on that side. Furthermore, until employers become to some degree uncertain about their capacity to pass on cost increases, their interest in resisting such increases and in countering their effect by greater efficiency or by accepting lower profits returns is likely to be minimised. Let me say also that, until those on both sides who negotiate about wages become more concerned about the effect of rapidly increasing wage costs on future employment of workers in their own and other industries or occupations, and the long-term effects of such cost increases on the international competitiveness of our industries, they are unlikely to enter wage negotiations in an appropriate frame of mind.

This, then, is the first strand in the Government’s policies - to strengthen the measures it has already taken to contain demand. Given the timing of events, we shall be looking chiefly to our forthcoming Budget for that purpose. We have, however, decided upon a number of budgetary steps which can now be taken immediately. At the Premiers’ Conference the Prime Minister indicated our firm view that, in general, services provided by government authorities should be paid for by their users rather than by the general taxpayer. In that connection, and as part of the more general policy of expenditure restraint, he said that the financial allocation for the Post ‘ Office in 1974-75 would be held at its 1973-74 level. It follows from those 2 propositions that the Post Office must now raise substantial additional revenue by way of increased charges. Specifically, the Government has decided to increase postal and telecommunications charges from 1 August 1974 by amounts sufficient to yield $146m during 1974-75.

The Minister representing the PostmasterGeneral will be announcing details, but the main increases are as follows: The basic letter rate is to rise from 7c to 9c; the telephone connection fee is to rise from $60 to $80; business telephone rentals are to rise by $20 per annum to $75; residential telephone rentals are to rise by $10 per annum to $65; and the local call fee is to rise from 4.75c to 6c.

To make some further contribution towards restraining the growth of private demand, the Government now proposes to increase certain customs and excise duties. The consumption of tobacco and spirits involves the community in high social costs and the Government has for some time had increases in the duties on those products under consideration. We now propose an increase in the duties on potable spirits equivalent to 3c a nip, effective immediately, to yield an estimated $39m in 1974-75 and $43m in a full year; and an increase in the duties on cigarettes and other tobacco products, equivalent to 4c on a packet of 20, effective immediately also, to yield an estimated $61m in 1974-75 and $67m in a full year. The Minister for Overseas Trade (Dr J. F. Cairns) representing the Minister for Customs and Excise (Senator Murphy) will be giving details shortly.

Before leaving the taxation area I also foreshadow one tax measure which we shall introduce in the 1974-75 Budget but in respect of which I am not in a position to announce details tonight. I refer to a proposal for a capital gains tax. Work has been proceeding on the many complexities involved for some months now. The tax as finally devised will be a carefully considered and fair one.

Restraint of Expenditure

Apart from tax and other measures to restrain private expenditure, the Government acknowledges that public expenditure must also be restrained. As the Prime Minister said at the Premiers’ Conference, we are anxious to see that there is continued substantial progress with the programs we have been implementing, especially in such vitally important fields as education and health.


– Order! The honourable member for Barker will remain silent. I will not warn him again.


– At the same time he recognised that it would not be feasible, in the circumstances, to achieve in 1974-75 the rates of progress with all our programs to which earlier planning and expectations have been pitched. I reiterate that tonight - with a number of them we will have to accept a slower rate of implementation than we had been hoping for. Let me be clear.

Mr Snedden:

– Please do.


– I hope I will be able to set an example for you next week. The Government does not deviate from its determination to proceed steadily and soberly with its plans to build an Australia in which life will be richer- (Honourable members interjecting)-


– Order!

Mr Peacock:

– I think your speech writer is setting you up.


– Order! The Minister will resume his seat. If honourable members wish to hear the speech, they will have to remain silent. I will not ask the honourable member for Kooyong to cease interjecting; I warn him now. I call the Treasurer.


– I repeat: The Government does not deviate from its determination to proceed steadily and soberly with its plans to build an Australia in which life will be richer and opportunity more freely and equitably available. But the Government accepts that its plans must be realised with a timing consistent with the needs of sound economic management. These matters will be examined more fully in the context of the 1974-75 Budget but I now announce decisions which are an earnest of our resolution. The expenditure restraints we have required of the States will be fully matched by our own, including some in areas which we regard as vital to our long-term social objectives.

First, we propose to reduce the immigration program for 1974-75. Subject to existing commitments, we shall be aiming for a total intake of not more than 80,000, of which assisted immigration would be not more than 40,000 - that is, approximately 10,000 less than last year. Secondly, in the policy speech last April reference was made to our plans to embark on a major pre-school and child care program at a cost then estimated at $130m in this financial year. This initiative reflected the high priority that we have consistently attached to the meeting of needs in this area - needs, I might say, which had been neglected almost entirely before. The Social Welfare Commission’s report on the matter will be tabled in due course and we would expect a good deal of public discussion thereafter. Questions of resources, including staff, for such a program, have also been arising. Given these delays, as well as the now extreme need to restrain the further growth of government spending, the Government has reluctantly decided to postpone until 1975-76 the commencement of the full-scale program. We will, of course, fully honour the commitments that we have already entered into under the interim pre-school and child care schemes, and which alone could call for an outlay of about $34m in this financial year. Investigations currently in train may lead to the provision of further funds during the year.

I come lastly to the question of the means test. When this Government came to office, we undertook to abolish the means test on age pensions in the life of the Parliament and wc took the first step last year to give effect to this undertaking. We planned to take a further step this spring.

Mr MacKellar:

– You promised to take a first step.


– If the honourable member will listen patiently we will get to the result quicker.


– Order! The honourable member for Warringah will remain silent. I will not speak to him again. What is this - a cross examination?

Mr Peacock:

– I wish it was.


– You be quiet. I call the Treasurer.


– As I shall say in a moment, we shall be increasing pension rates in the near future but with the greatest reluctance we have decided that we should not proceed to the second step in the abolition of the means test, for persons aged 70 to 74 years, before the first pay-day after 1 April 1975. This temporary deferment will reduce prospective expenditure this financial year by some $45m.

The difficult economic circumstances which we face, however, do not allow us to shed our responsibility as a Government to those with slender resources who inevitably are hardest hit by inflation, namely, the recipients of social service pensions and benefits. Moreover, I am conscious of the fact that the recent elections, which were forced on us by the obstructionary tactics of the Opposition in the Senate, have caused the Budget to be delayed a month. If we pursued the normal course, pensioners would be deprived for that time of the benefit of the increased rates. Accordingly, the Government has decided to increase the levels of pensions and benefits now by $5 a week in the standard or single rate and $6 a week in the combined married rate. These increases bring the standard rate pension to almost 25 per cent of estimated seasonally adjusted average weekly earnings in the June quarter 1974. The increased rates will become payable from the first pension pay-day after the legislation receives Royal Assent. The increases will apply to age, invalid and widows pensions, supporting mothers benefit, sheltered employment and rehabilitation allowances, unemployment and sickness benefits, repatriation service pensions, repatriation war widows pensions, and to recipients of tuberculosis allowances. In accordance with our established policy, we shall again review pension rates and benefits in the autumn of 1975. The cost of these increased benefits will be $340m in 1974-75 and $355m in a full year. My colleague, the Minister for Social Security (Mr Hayden) will introduce the necessary legislation shortly.

Protection of Employment

The Government is satisfied that the approach it is adopting to the inflationary problem is the only one open to it. It recognises, however, that it is operating with instruments of policy which cannot discriminate finely. It will be necessary to ensure that no unnecessary waste ensues. The fact that the instruments of policy are necessarily somewhat rough and ready means that, for a time, the growth of activity is likely to fall off. In those circumstances I need hardly say that we shall take all possible steps to cushion the effects of the economic forces involved upon those individuals who find themselves directly affected and to alleviate any unavoidable distress that may arise. The major retraining programs now being brought into being by the Minister for Labor and Immigration (Mr Clyde Cameron) will be one element in that process. The national employment and training system is a broad and flexible scheme that can be geared to meet and integrate the needs of individuals and the conditions of the labour market. The scheme is designed to apply, for example, to persons rendered redundant and to persons whose employment prospects are affected by residence in an area where employment opportunities are limited or declining.

For people who become unemployed as a direct result of specific actions by the Government, designed to bring about significant structural changes that are in the national interest and that it judges will have effects beyond the normal adaptive capacity of the economy, a scheme of income maintenance was also recently announced. Instead of unemployment benefits this scheme provides for payments equal to a person’s average weekly earnings over the previous 6 months, with a limit equal to li times average weekly earnings, for up to 6 months or at least until suitable alternative employment is obtained where this is shorter. I also mention that, in relation to such assistance arising from the 25 per cent tariff cuts last year, the normally applicable time of 12 months within which applications are to be lodged has now been extended to 18 months. Within the general context of protection of employment I also indicate that we shall provide funds, as appropriate, in support of local initiatives work programs - such initiatives to be determined by the Minister for Labor and Immigration, the Treasurer, the Minister for Urban and Regional Development, the Minister for Manufacturing Industry and the Minister for Tourism and Recreation, in consultation.


The measures I have announced will not, in themselves, have an immediate effect on the current price and cost inflation. Nor can they, or anything else that could be done, now prevent prices from rising sharply in the September and, probably, December quarters.


– At least it is good to acknowledge that one sees the future. Those price rises are, so to speak, already ‘in the pipeline’. Our Budget to be brought down in September - including that part of it which, in effect, I have announced tonight - will however have an indirect effect on cost and price pressures through its impact on the economic climate in which wage bargaining is conducted. Closely linked with our present problems in the field of wage determination is the upward course of prices. It was for that reason that one of the first steps we took after coming to office in December 1972 was to move towards the establishment of a much greater degree of price surveillance - principally, though not solely, through the setting up of the Prices Justification Tribunal. The Bill which is now before the Parliament indicates our desire to move in a number of ways to enhance the role of the Tribunal further.

As the Prime Minister said in his statement to the Premiers, the Prices Justification Tribunal can do only so much. Nonetheless, we now propose to invite the Tribunal to scrutinise with care price claims that are based on wage costs in excess of awards; where profit margins exceed those operating in 1972; where firms are unwilling to absorb reasonable increases in wages and other costs by improvement in efficiency; where prices are expected to contribute towards further capital expenditure; or where selling costs, including advertising, appear excessive. As a means of bringing some further indirect pressures to bear upon prices, the Government will press ahead with its trade practices legislation. That legislation will outlaw, without scope for exemption, agreements between suppliers providing for the fixing or controlling of prices. Other kinds of agreements and arrangements restricting competition also will be generally prohibited.


I have sought tonight to make clear the Government’s deep concern about current inflationary trends and its determination to act to bring them under control. To do so will require a balanced program designed to have an effective impact but which can readily be adjusted to the changing needs of the emerging situation. In our forthcoming budgetary deliberations we shall be seeking to shape such a program. In doing so, we shall I hope demonstrate the Government’s determination to ensure reasonable protection for those who may be adversely affected by any measures taken, while at the same time making it clear that the halting of inflation is the necessary first step to the active resumption of our policies of social and economic advancement. Against that background I commend the measures I have outlined tonight to honourable members. I present the following paper:

Inflation- ‘Ministerial Statement, 23 July 1974.

Motion (by Mr Daly) proposed:

That the House take note of the paper.

Debate (on motion by Mr Snedden) adjourned.

page 511


Dr J F Cairns:
Minister for Overseas Trade · LALOR, VICTORIA · ALP

– I move:

Excise Tariff Proposals No. 1 and Customs Tariff Proposals No. 10, which I have just tabled, introduce the tariff changes foreshadowed by the Treasurer (Mr Crean) in the statement he made earlier this evening. The proposals increase the duties of customs and excise on manufactured tobacco products and spirits and will operate on and after 8 o’clock this evening. The proposals increase the rate of duty on cigarettes by the equivalent of 4c a packet of twenty. The increase on spirits manufactured in Australia is the equivalent of 3c a nip or 78c a bottle. I commend the proposals.

Debate (on motion by Dr Edwards) adjourned.

page 511


Bill - by leave - presented by Mr Lionel Bowen, and read a first time.

Second Reading

KingsfordSmithSpecial Minister of State · ALP

– I move:

At the Premiers Conference in Canberra on 7 June 1974 the Prime Minister (Mr Whitlam) announced that there would be substantial increases in postal and telecommunications charges. These are required to ensure that the rates which customers pay for Post Office services are sufficient to cover costs and also provide a surplus which can be re-invested to help meet the growing demand for service. Details of these proposed adjustments are contained in 2 Bills. Comments on the main proposals follow. For convenience details are set out in the schedules now available to honourable members. In the main, the effective date of variations is 1 August 1974. This Bill is to amend the Post and Telegraph Rates Act in respect of postal and telegraph charges. Another Bill will amend the Post and Telegraph Act and associated regulations. Certain miscellaneous charges will be adjusted by administrative action.

Post Office Trading Results

Although the Post Office’s commercial accounts for the year ended 30 June 1974 are not available at this stage, it appears from preliminary estimates that the overall result was a break-even position only. At current tariffs, the Post Office loss could exceed$1 00 million in 1974-75. In common with business undertakings throughout Australia, costs have risen because of higher wages, increases in material prices, and improvements in conditions of service, especially for recreation leave and superannuation. That proportion of costs which cannot be absorbed by productivity improvements needs to be passed on to customers.

Major changes in superannuation liability have occurred. In 1971 it was decided to increase the Government’s share of pensions and in 1972 the previous Government appointed Professor A. H. Pollard to inquire into methods of adjusting Commonwealth superannuation benefits. Resulting from his recommendation, the Superannuation Act 1973 provided for staff pensions to be adjusted by 1.4 times the percentage increase in the consumer price index. These actions increase future payments to past and present Post Office employees; so there must be a sharp increase in Post Office payments for superannuation liability. Post Office payments for superannuation liability increased from $49m in 1972-73 to $104m in 1973-74, and provision for payment of $130m has been made in the Post Office budget for this year.

One important change is being made to the financial structure of the postal service, which will offset in part some of the cost increases. As recommended by the Australian Post Office Commission of Inquiry, it is intended to write off accumulated postal losses as at 30 June 1974. This will reduce the postal service’s interest bill by about $17m in 1974-75. Much of theses losses has arisen because charges were set too low in relation to costs by decisions of the previous Government for economic or political reasons: Because interest has been payable on losses there is a spiral process which must be broken if the postal service is to be placed on a reasonable footing for the future. It is generally accepted that the Post Office should finance a significant proportion of postal and telecommunications expansion. The report of the Vernon Commission recommends that 50 per cent of fixed asset expenditure should be financed from internal sources - profits and provisions for depreciation and long service leave. This enables the Post Office to meet demand for service at a higher level than would be possible if finances were restricted to borrowings available through the Budget.

In particular, it has been decided as a deflationary measure to restrict Post Office borrowings in 1974-75 to the same amount as in 1973-74- $385m. The effect of the proposed higher charges on the consumer price index is marginal; it is estimated at about 0.2 per cent in 1974-75. With the proposed charges and likely increases in wage rates, a profit of about S60m is forecast, which is more comparable with the $60m earned in 1971-72, and the $41m in 1972-73.

Post Office Tariff Structure

Last year the Government made important changes in the Post Office tariff structure by tackling concessional and uneconomic areas of Post Office activity which provided hidden subsidies to selected areas of the community. It is unfortunate that some of the Government’s efforts to phase out concessions were obstructed, particularly the registered newspaper and periodical category which will lose about $9m in 1974-75. This loss continues to be met by other Post Office customers who must pay more than they should, on cost grounds, for the services they use. In these proposals attention is given to public telephone and telegraph facilities, both of which it is appreciated provide important community services. The public telephone local call fee was last varied in 1963 and public telegram rates in 1970. It is necessary for these to be adjusted to take into account cost increases since those years and thereby to reduce the loss which must be covered by other customers.

For many years up to 1964 the rental for government and business telephone services was higher than for residential services. This recognised that the telephone service is far more valuable to the. business subscriber than to the private subscriber. The businessman also has the advantage of claiming the telephone as an expense for taxation purposes. It is considered that these reasons are still valid and that it would be equitable to re-introduce a higher rental for business and government services than for residential and other services. The practice of differential rentals is followed in many other countries including Britain, Canada, the United States of America and New Zealand. In the postal service, also, an important change is being made in the tariff structure. The traditional letter and other articles categories, based on contents, will be replaced by standard postal articles and nonstandard postal articles, based on shape and size which are the major determinants of handling costs. Standard articles in envelopes conforming to the Australian Standards Association specification are the cheapest for the Post Office to handle, both in manual and machine systems because of their convenient size and shape, and should attract the cheapest postage rate for the ordinary mail.

page 512


The variations to telephone and telegraph charges, detailed in the. schedules, are expected to raise $109m in 1974-75.

Service Connection Fees and Telephone Rentals

In adding a telephone service to the network the cost involved well exceeds $2,000 on average, ranging from more than $1,600 in the capital cities to over $3,600 in country areas and even in excess of $9,000 in rural areas. At present levels the contribution which the connection fee makes towards the cost involved is too small. When a product or service is priced well below its cost it leads to an artificially high demand for it. For a Post Office service, the cost of meeting that demand makes inequitable inroads into the national resources available to meet total community needs. Connection fees are therefore being increased from $60 to $80 for new applicants where new plant is necessary to give service and from $30 to $40 where an existing subscriber moves to another address and new plant is required. No increases are proposed where the line and equipment are ‘in place’. The charges are estimated to increase receipts by about $5. 5m in 1974-75.

For telephone rentals, as indicated, differential rates are to be applied to government and business services compared with residential and other services. Government and business rentals will increase by $20 to $75 per annum and residence and other rentals by $10 to $65 per annum. Uniform rentals between metropolitan and country areas were introduced last year and, having regard to the higher costs of providing service in country areas than in metropolitan areas, the Government intends to continue with that principle. Metropolitan rentals were last increased 3 years ago. The rental adjustments will raise about $54m in 1974-75.

Telephone Call Charges

The local call fee will be increased from 4.75c to 6c per call. The local call fee was last altered in 1971. This increase will not reflect directly into trunk call charges where, with one exception, increases for day time calls are confined to between 3.5 per cent and 5.3 per cent. The exception concerns day rate calls over more than 645 kilometres - 400 miles - where the increase is 26 per cent. There are as many reductions in trunk call charges as there are increases. The reductions range from 3 per cent up to 40 per cent. At night, the shortest distance trunk calls, up to 50 kilometres, will cost only 6c - that is the local call fee - for each 3 minutes if subscribers dial the calls themselves. The charge for such a call in the day time will also be reduced by about 20 per cent to 12c. The outer metropolitan areas of capital cities will receive great benefit from these reductions but there will be considerable benefit to country people also. A statement illustrating the benefits of these reductions in the various electorates is available to honourable members.

If trunk call customers require their calls to be connected by a Post Office telephonist when they could dial the calls themselves, extra costs are incurred by the Department and it is reasonable to expect callers to pay extra for the personalised service. The fee for this service is being increased from 20c to 30c a call but even so the additional costs will not be met. Revenue from these increases in charges is estimated to be about $41m in 1974-75.

Public Telephone Call Charges

The fee for a local call from a departmental public telephone has been 5c since 1963. That charge is altogether uneconomic, taking into into account the high costs of new equipment incorporating anti-vandalism measures and the high costs of maintenance and repairs to damaged telephone cabinets and instruments. Even at the new rates, costs will not be covered. The new charges will not be effective until public telephones are converted to operate on 10c coins and this will take 12 months or so. Public telephones are used by a lot of people who do not have a telephone of their own. However, it is not reasonable that these users of public telephones should pay less than telephone subscribers who also have to pay rental for their service. Average weekly wages have risen by 130 per cent since 1963 and the increase in the public telephone fee is reasonable on the basis of that comparison. Similarly, Sydney bus and Melbourne tram fares have increased by 100 per cent over that period and the Sydney and Melbourne newspapers have increased by between 90 per cent and 140 per cent. Because of technical design most of the 30,000 public telephones would have to be replaced if they were to operate on a fee between 5c and 10c. Costs would exceed $10m and a substantial lead-time would be involved.


Since the present rates were set in 1970, wage rates for operating staff have increased by over 50 per cent and there have also been considerable improvements in conditions of service for staff. Each telegram handled currently means a loss of about $1.50 and that level of subsidy by users of other services or by the general community cannot be allowed to continue. The increases in telegram charges - about 50 per cent - will reduce but far from eliminate the present loss. The fee for lodging a telegram by telephone or teleprinter is also being increased from 10c to 15c due to increase in labour costs. The increases in telegram charges will raise about $2.5m in 1974-75.

Telex Call Charges

This service is akin to the STD telephone service but uses teleprinters as the means of communication. The present call charges have been in force for 3 years and an increase from 6c to 7 c per meter registration is being made. The extra revenue is estimated to be nearly $lm in 1974-75.

Telephone Directory Entries (White Pages)

The present rates for block type entries and additional information inserted at the request of subscribers were set in 1967. Directory layouts are being changed progressively from this year to provide clearer presentation of subscribers’ entries - yet requiring less paper - and a more appropriate structure of charges for special entries being introduced. This is a completely separate matter to the rates for entries in the pink and yellow pages, the space in which is sold by private advertising contractors.

Although revenue from this sector is estimated to increase by 50 per cent overall if present entries are retained, individual subscribers will be affected to varying degrees. They will, of course, have the opportunity to alter entries to reduce cost if they so desire. The adjustments are expected to result in additional revenue in 1974-75 of $0.3m.

Miscellaneous Telephone Facilities

Last year, it was indicated that certain miscellaneous equipment and services were being provided at unprofitable rates. Some charges were increased but the new rates even then barely covered costs; others were not increased at all. Adjustments now being made affect installation alteration charges for extension telephones, intercommunication equipment, alarm equipment, etc. and rentals for extension telephones and certain private manual branch exchanges. The adjustments will bring in about $5m in 1974-75.

Postal Services

Turning to the postal service, it is expected that the increased charges will bring in $37m in 1974-75.

Letters and Other Articles

The basic rate of 7c is being increased to 9c, irrespective of weight for those items contained in the most commonly used envelopes. These will be known as standard postal articles and they currently comprise about 92 per cent of all letters and 16 per cent of Other Articles. A standard postal article will be any item of mail between the dimensions 90 millimetres by 140 millimetres and 120 millimetres by 235 millimetres, having an oblong shape with a ratio of width to length of 1 to not less than 1.414 and with a maximum thickness of 5 millimetres. These dimensions apply at present to mail carried by air within Australia at normal rates of postage under Operation Post-Haste. There is no weight limit for standard postal articles so that such letters over 20 grams will pay reduced postage, 9c instead of 15c.

Non-standard postal articles will be charged for according to their weight. The 4 weight steps are the same as those now applying for Other Articles- that is, 50, 100, 250 and 500 grams. The basic rate becomes 10 cents, the subsequent ones being 20, 30 and 40c. Standard postal articles will continue to be carried by air where this will speed delivery. Airmail rates apply for non-standard items.

To allow a change-over period in which stocks of non-standard stationery can be run down, up to the end of 1974 non-standard enveloped items up to 50 grams may be posted at standard article postage rates although they will be forwarded by surface mail. The additional receipts in 1974-75 from these categories will be $23m.

Domestic Parcels

Rates will be increased and the pricing structure changed to provide a more evenly stepped tariff of a base fee plus a per kilogram charge. A more realistic arrangement of scales 3, 4 and 5 has been made to reflect the distances involved and the conveyance costs incurred. Compensation up to $10 will now be paid for parcels damaged in the post. This change will improve the competitiveness of the service and will be welcomed by customers.

Registered Publications

No further increases in the postage rates for Category A or Category B publications are proposed beyond those already prescribed in existing legislation to apply from 1 March 1975. However, rates are being increased for Category C from 1 March 1975, again recognising that standard articles are the cheapest to handle. A more gradual scale of charges is provided for items over 100 grams. Educational newspapers and periodicals published by non-profit professional and employer organisations, transferred to Category C on 1 March 1974 will be transferred back to Category B from 1 August 1974.

Currently, some mailers are paying private delivery organisations in competition with the Post Office to deliver their publications, particularly in high density areas, and are using the Post Office for the uneconomic areas. It is considered that the mailer should not have the benefit of the concession rates for Category A or B without giving the Post Office the business for the more economic parts of its network. From 1 March 1975, these rates will not apply if deliveries to subscribers or purchasers are made for payment by private delivery organisations competing with the Post Office. This proposal does not affect delivery by the members or staff of an organisation or by newsagents.

Bulk Presorted Mail

A new basis of charging will be adopted to reflect more closely the value of pre-sorting, with much less emphasis on overall volumes. The cheapest rates will apply to bags of mail all for one postcode. The standard postal article concept and an improved progression in charges according to weight over 100 grams have been incorporated.

Special Services

Increases are proposed for the unprofitable special services such as registered mail and certified mail, with higher compensation coverage. Increases in the fees for private boxes, bags and receptacles are also proposed with effect from 1 April next year for existing services. The higher fees are to operate from 1 August 1974 for new services. An annual registration fee of $10 for business reply permits is also proposed.

Overseas Mail

The standard item concept has not been introduced into the overseas service because the Universal Postal Union Convention requires the categories of letters and other articles to be used for international mail. Lower airmail fees are proposed for the heavy weight letters and cards to reflect charges and costs more accurately; charges for aerogrammes and lighter weight letters and cards are being increased because of higher handling costs.

Money Transfer Services

A flat fee of 60 cents for amounts up to $200 is to apply for all ordinary domestic money orders. This is a decrease of 10 cents on amounts over $30. Increases in the fees for postal orders and overseas money orders are also to apply. These continue to be unprofitable areas, particularly money orders, despite strenuous efforts to streamline documentation and procedures.

New Services

Agreement has been reached with the United States and United Kingdom postal administrations for a super fast international priority paid service between Australia and the United States and United Kingdom. The new service is expected to operate before Christmas. Freepost is a proposed new service to provide a means whereby people can reply post free, to advertisements quoting approved forms of address. The postage and fee is paid by the Freepost addressee.

In recent years there has been a rapid growth in the number of private courier services in capital cities. These ventures meet a substantial and growing customer need and are close to the traditional areas of postal operations. The appropriate legislative powers to establish a Post Office courier service are included in the Bill to amend the Post and Telegraph Act. Initially the service will be available in Sydney, Melbourne and Canberra with subsequent extension to other capital cities.


The Vernon Commission expressed the view that to meet the recommended financial objectives, postal tariffs would need to be increased at the rate of 15 per cent per annum and telecommunications charges at 7 per cent per annum. These proposals are in excess of those figures, being 22 per cent and 17 per cent, respectively. Costs have escalated at a much higher rate since this matter was considered by the Commission of Inquiry. At this point in time it seems likely that labour costs in 1974-75 will be about 25 per cent higher than in 1973-74, compared with the 12± per cent assumed previously by the Post Office and the Commission.

The Government is concerned about the rate of inflation and will continue vigorous efforts against it with the object of reducing it to 8 per cent by mid-1975. In the meantime, however, the cost increases being incurred by the Post Office must be passed on to a greater degree than formerly, as with other business undertakings. I commend the Bill to honourable members.

Debate (on motion by Mr Ellicott) adjourned.

page 515


Bill, by leave, presented by Mr Lionel Bowen, and read a first time.

Second Reading

Smith · Kingsford · ALP

– Special Minister of State and Minister assisting the Prime Minister in Matters Relating to the Public Service) (9.9) - I move:

That the Bill be now read a second time.

This Bill is complementary to the amendments to the Post and Telegraph Rates Act 1902- 1973 which I have just introduced. In order to implement the changes of which I have spoken in conjunction with the Post and Telegraph Rates Act amendments, it is necessary to make certain amendments to the Post and Telegraph Act and to the Postal Regulations, the Telephone Regulations, the Telegraph Regulations and the Radio-Telephone Exchange Service Regulations. As mentioned previously, this Bill also makes changes to the Post and

Telegraph Act which are necessary to permit the introduction of a Post Office courier service. I commend the Bill to honourable members and seek leave to incorporate in Hansard 2 tables relating to the adjustments of charges for postal and telecommunication services and to the effects of reducing the charges for trunk calls in the up to 50 kilometres category.


– Is there any objection? There being no objection, leave is granted. (The document read as follows) -

page 525


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

Second Reading

Minister for Social Security · Oxley · ALP

– by leave - I move:.

That the Bill be now read a second time.

This Bill gives effect to the increases in pensions, benefits and allowances announced by the Treasurer (Mr Crean). It exemplifies the Government’s concern for those for whom it has a great and important responsibility, that is, pensioners and beneficiaries living on fixed incomes. This measure has become of particular importance because of the delay in presenting the Budget that will occur as a result of the Opposition’s action in forcing the recent elections.

The Bill provides for the standard rate of pension to be increased by $5 a week to $31 a week and the individual married rate by $3 a week to $25.75 a week. The combined rate for a married pensioner couple will thus become $51.50 a week. Unemployment, sickness benefit and special benefits, sheltered employment allowances and rehabilitation allowances are to be increased on a similar basis.

The increases now proposed are the highest ever made and they will add an extra $3 07m to expenditure which would have otherwise been incurred in 1974-75 on pensions and benefits payable under the Social Services Act. As honourable members know the Government is committed to increasing pensions twice annually until the standard rate of pension reaches 25 per cent of average weekly male earnings.

The new standard rate established by this Bill will be 26 per cent of seasonally adjusted average weekly male earnings for the March quarter 1974, the latest quarter for which figures are available. It will be almost 25 per cent of the estimated average weekly male earnings seasonally adjusted for the June quarter of 1974. In the interim report of the Australian Government’s Commission of Enquiry into Poverty, Professor Henderson proposed that, for the Budget of 1974, the standard rate of pension should be $27 a week, increased by rises in average weekly male earnings since August 1973. On the basis of estimated average weekly male earnings for the June quarter 1974 this would justify an increase in the standard rate of pension of approximately $4.90 over the present weekly rate of $26. As already stated, the proposed Bill before the House increases the rate to $31 a week.

The proposed increases in pensions will have the effect of raising the limits of income and property at which pensions cease to be payable under the means test. This will enable people who are now excluded from pension entitlement to qualify for some payment for the first time. A single person without property affecting his pension will retain some pension entitlement until his income reaches $82 a week. If he has no other income he will be eligible to receive some pension until the value of his non-exempt property reaches $43,040. For a married couple, the equivalent limits of income and property will be $137.50 a week and $72,320 respectively. A widow with one child and no property affecting will now be able to receive income of up to $106.00 a week before losing her entitlement to widow’s pension, or up to $110.00 if her child is under 6 years of age or an invalid child requiring full-time care. If she has no income affecting, a widow with one child may have property to the value of $48,800, or $50,880 if her child is under 6 years of age or an invalid requiring full-time care, before her entitlement to widow’s pension is extinguished.

In my second reading speech on the Social Services Bill (No. 4) 1973 delivered on 11 September 1973 I announced the first phase of the Government’s program to abolish the means test on age pensions. The first phase applied to all residentially qualified people aged 75 or more. In that same year - and the matter is related - the Income Tax Assessment Act was amended to make pensions and similar benefits payable to people of pensionable age (65 years for men and 60 for women) taxable as from 1 July 1973. The Government at that time decided to introduce a transitional benefit for the aged blind of $3 a week to alleviate any detriment which they might have experienced when their pensions become taxable. As its name implies, the transitional benefit was intended to be phased out over subsequent years as increases in pension rates improved the benefit rate to these pensioners.

Mindful of the substantial increases in pensions now proposed the Government has decided that the Bill now before the House should provide for a reduction of $1.50 a week in the rate of this transitional benefit. In accordance with the usual practice, it is proposed that the pension increases provided under this Bill will operate from and including the paydays following royal assent. This will also apply to the reduction in the transitional benefit for the. blind. The increases in unemployment and sickness benefits will, as usual, operate in respect of the benefit week ending on the date of the royal assent and each benefit week thereafter. Mr Speaker, I commend the Bill to the House.

Debate (on motion by Mr Chipp) adjourned.

page 526


Bill- by leave - presented by Mr Lionel Bow en, and read a first time.

Second Reading

Mr LIONEL BOWEN (Kingsford-Smith-

Special Minister of State) (9.19)- by leaveI move:

That the Bill be now read a second time.

This Bill proposes to increase the rate of pension paid under column 2 of Schedule 1 to the Repatriation Act to the widows of servicemen who died while on war service, who have subsequently died from Service-related causes, or who are otherwise pensionedas war widows. It is proposed to increase the rate by $5 to $31 a week. There are just on 50,550 widows in receipt of this pension, including 51 pensioned under the provisions of the Seamen’s War Pensions and Allowances Act and 48 under ex gratia arrangements. The total cost of the proposed increases will be $1 3. 143m for a full year. Other repatriation pensioners who are to receive an immediate increase in their pensions are Service pensioners. They will receive the same increases as have just been announced for age and invalid pensioners under the Social Services Act, that is,$5 a week for the single Service pensioner and S3 a week for each of a married couple.

The remaining item dealt with by this Bill is to reduce the transitional benefit for the aged blind from$1 56 to$78 a year. The reason for this reduction has : been fully explained in the second reading speech on the Social Services Bill. Other repatriation pensions and allowances will be considered in the normal Budget deliberations and any increases will be announced in the Budget Speech. The Bill provides that the proposed increases will become payable from the first pension payday after the Bill receives royal assent and I, therefore, hope that honourable members opposite will give it a speedy passage through this chamber. It is my pleasure, Mr Speaker, to commend the Bill to the House.

Debate (on motion by Mr Street) adjourned.

page 526


Bill presented by Mr Charles Jones, and read a first time.

Second Reading

Minister for Transport · Newcastle · ALP

– by leave - I move:

That the Bill be now read a second time.

This Bill proposes an increase of $5 to $31 a week in the rate of pension payable to the widows pensioned under the Seamen’s War Pensions and Allowances Act. The number of widows involved is only 51 and the cost of the increase is included in the amount mentioned in the second reading speech on the Repatriation Bill (No. 2) 1974. The Bill provides that the increase will be payable from the first pension pay-day after the Bill receives royal assent. It is my pleasure to commend the Bill to the House.

Debate (on motion by Mr Street) adjourned.

page 526


Debate resumed (vide page 504).

Deputy Leader of the Opposition · Flinders

– Before the suspension of the sitting I was commenting on the views of Professor Hogan and spoke of non-bank financial intermediaries. While Professor Hogan concluded that there was no alternative to a revision of policies towards financial intermediaries he was constrained, in his conclusions in this regard, by the constitutional difficulties which limited the Commonwealth prior to the concrete pipes case.

In short, there is a concensus among economists that an uncontrolled non-bank financial sector has a capacity to create disintermediation. The greater the degree of control over the banking system, the greater is the potential for disintermediation. So long as there is a degree of direct control over the banking sector, it is reasonable to extend the Government’s ability to control the non-banking sector. The challenge for the authorities will be to avoid the adoption of heavy handed controls thus preventing the growth of new institutions outside the ambit of the controls - a phenomenon adverted to by the Radcliffe Commission.

As the Treasurer is aware, Governments in such countries as the United Kingdom, the United States and Canada have had the benefit of conclusions drawn by various committees of inquiry prior to introducing this type of financial legislation. The Opposition believes that the operations of the legislation before the House should be kept under continuing review. 1 believe it would be appropriate for the Treasurer, after consultation with the Reserve Bank to present a detailed report to the Parliament on this legislation after its first year of operation.

Finally, I refer to the amendments which are proposed by the Opposition. They are, I believe, constructive and positive initiatives. They in no way seek to interfere with the effective functioning of the legislation. Each amendment will, of course, be considered during the Committee stage of the Bill. My remarks during this second reading stage are directed towards the substantive amendments we propose. We seek to include a new Division 3 of the Bill which deals with lending policies. The existing clause 14, sub-section (6) provides that the Reserve Bank may not make a determination in respect of the provision of finance to a particular person. We propose to extend that prohibition so as to include particular persons or a particular transaction or transactions. This amendment, although of a technical nature, we believe, provides an important safeguard against the abuse of this clause.

We propose an additional sub-section to clause 14 to prohibit a determination being made, either deliberately or inadvertently, which would force a financial institution to cease operating in a particular area of finance or to operate in an area in which it had not generally operated previously. This is an important amendment. Non-bank financial institutions have developed in response to the need for specialised financing techniques in specific areas. Their financial skills and techniques on which their continued operations rely are highly developed but cannot necessarily be transferred to deal with the differing requirements of other areas of finance.

We seek to amend clause15 to provide that the Reserve Bank may make differing interest rate determinations in respect of building societies in particular States of the Commonwealth. In the absence of any amendment, the Reserve Bank would be forced to make common determinations for all building societies. Building societies operate, due to statutory requirements, on a State rather than a national basis. Their interest rates are already regulated by a majority of State Governments. It has been historically demonstrated that, for a variety of reasons, building societies in some States are able to attract funds at rates less than in other States. There is no discretion for the Reserve Bank to make interest rate determinations on a selective basis. This would penalise building societies - and home buyers - in some States. Interest rates could be unnecessarily high in some States, thereby adding costs to the home-owner, and too low in other States, resulting in insufficient funds to meet demand.

The Bill, as the result of a Government amendment, provides for the Treasurer, after consultation with the Reserve Bank, to exempt a corporation from the application of any determination if he considers that the public interest and the existence of special circumstances justify his so doing. It is intended that this provision be used where unforeseen difficulties arise pursuant to the application of a determination. We agree generally with this approach but propose a further amendment to remove the authority from the Treasurer and to place it solely with the Reserve Bank. I refer, in this instance, to Opposition amendment number 5.

Opposition amendment number 7 provides for an additional sub-clause to clause 25. The effect of the amendment is to authorise the Reserve Bank to use, in respect of building societies, the powers contained in section 8 of the Reserve Bank Act. This section permits the Reserve Bank to make loans, guarantees and so on. It is in the public interest to ensure that the Reserve Bank has the capacity to protect building societies should there be a serious threat of insolvency arising from the Reserve Bank’s own determinations under Part IV of the legislation. In drafting this amendment the Opposition had in mind a statement made in this House by the Prime Minister on 23 May 1973, when he said, in part:

It would be a very proper thing for this Parliament now to see that such basic financial institutions as building societies are equated much more in their operations to banks - that is, we should guarantee their security and in return they should pursue the public interest in their lending policies.

The amendment put forward by the Opposition falls short of the guarantees advocated by the Prime Minister and nor does it equate with lender of last resort’ facilities. It does, however, provide the Reserve Bank with the capacity to assist building societies should the bank consider it to be warranted.

We propose to amend clause 31. The effect of this amendment is to make it mandatory for the Reserve Bank to consult the associations or other bodies representing the companies under the Act prior to making a determination. As the Bill stands, the Reserve Bank is required to consult only ‘from time to time as it considers desirable*. We believe it is vital for proper consultation to take place between the Reserve Bank and the companies involved if the policies adopted are to be sound and effective.

The final substantive amendment to which I wish to refer, provides for the addition of a series of new sub-clauses to clause 22. Its effect is to ensure an adequate opportunity for the Parliament to examine, and debate if necessary, regulations proposed by the Government pursuant to this legislation. The effect of this amendment is to require regulations pursuant to the legislation to be implemented by the procedure of affirmative resolution. That is, no regulation will have effect until such time as both Houses have passed a resolution of affirmation. This procedure has not previously operated in the Australian Parliament but it does operate in respect of certain legislation in the United Kingdom. In the United Kingdom the legislation in respect of banks and non banks generally provides for what are termed subordinate ‘orders’ and ‘regulations’ to be made subject to annulment. There is, however, one important exception. In the case of the sums in excess of the statutorilyprescribed limit which the Chief Registrar of Friendly Societies may allow building societies to loan a customer in any one year, his order to this effect must be approved by resolution of each House.

Although there is no precedent for this procedure in the Australian Parliament and it will be necessary to suspend the application of section 48 of the Acts Interpretation Act, we believe the procedure is justified. Once the Parliament has approved the regulation, the Reserve Bank is in no way impeded in its speed and flexibility to make the accompanying determinations. We have also provided that, for the regulations made by the Parliament to stay in force, they must be re-affirmed every year. This is merely an additional safeguard; but, I believe, it is warranted in these circumstances. The Opposition parties regard the procedure of affirmative resolution as vital in view of the sweeping powers to make regulations under this legislation. The legislation itself sets no substantive limits to subsequent Government action. It is in essence, simply declaratory.

Finally, it must be emphasised that the Opposition would have substantially amended the Bill introduced by the Treasurer in 1973. The Bill before the House is, of course, a different Bill. It contains a number of amendments, endorsed by the Opposition, which arose following consultation between the Treasurer and the non-Bank financial institutions concerned. We welcome the Treasurer’s decision to revise the legislation and trust that the amendments which will be moved during the Committee stage will be accepted as positive and responsible initiatives.


– If a government is to exercise responsible control over ‘the national economy it is absolutely vital that it be clothed with the power it needs to take any measure which it sees as appropriate at any particular time. The Financial Corporations Bill, which we are examining tonight will provide the Government with a further option to those powers which it already possesses. It does not possess this option at present. This measure is long overdue. This Bill will extend the present powers which the Government, through the Reserve Bank, has over the banks to the non-bank financial institutions. It does not follow that the Government will bring in a whole range of direct controls over the non-bank financial institutions, any more than the existing powers have resulted in direct controls over the banks. But it is important that the powers are there to be used judiciously if and when necessary.

In the 1940s, when the then Labor Government introduced similar powers over the banks under the Banking Act, it appeared at the time that they would be sufficient to exercise adequate monetary controls. However, since that time there has been a burgeoning of the financial institutions outside the controls of the present Act. It is necessary, therefore, to adapt to the new economic environment. It is remarkable how the conventional wisdom on this matter changes. When the Labor Government in the 1940s introduced controls over the banks in the Banking Act the then Liberal Opposition vigorously opposed the measures. It said that a future Liberal ‘government would repeal the Act. Of course, history shows that the following liberal governments did not repeal the Act at all. I suppose the opposition of the Liberal Party at the time was the natural human fear of change. The change, of course, was essential and eventually it was accepted by all political parties in Australia as being essential. There is no question that after this measure we ‘are debating tonight has been adopted everyone will come to accept that it too is a normal and quite proper power for a central government to have in controlling the non-bank financial institutions.

The measure is, of course, very long overdue. The Opposition says that it supports it. But it was in power for many years - more than 20 years - and it did nothing about it. I presume that it was the same fear of change which dominates all Liberal governments which was responsible for its inertia. I well remember the remark of a former Labor member of this House when, in speaking about the long reign as Prime Minister of Australia of Sir Robert Menzies, he said that Sir Robert Menzies did not so very much bend events to his will, he merely presided over what happened. The attitude of Liberal governments is epitomised in this respect by their failure to do anything about the non-bank financial institutions. It is a good example of the inertia which characterises all Liberal governments.

In the recent months since this legislation was first mooted, considerable efforts have been made by the various financial institutions, which I shall call fringe banks, to persuade the Government to abandon the legislation. The hire purchase companies, not surprisingly, have expressed their outright opposition. Other institutions, seeing the writing on the wall, have each asked for special consideration. The permanent building societies, for instance, have said: ‘Go ahead with the measure but leave us out because we are a special case’. The acceptance houses have put forward a rather extraordinary proposition. On the one hand they say that they should be excluded from the legislation, but on the other hand they want the whole field of intercompany loans brought within the legislation. My view, if I make any criticism of the legislation, is that it does not go far enough. I believe it should include the inter-company market. I believe, as I implied in a question I asked the Treasurer (Mr Crean) the other day, that the legislation should include life insurance companies within its ambit. If they are not to be included I hope that in the future some appropriate complementary legislation will be brought in to provide similar controls over them.

As a general rule, the free market forces may be effective in generating an adequate degree of economic welfare. But this is only a general rule. The trouble is that markets in general are not free. I think nearly all economists now subscribe to that view. Even the right honourable member for Lowe (Mr McMahon), who is being unusually rowdy this evening and who is perhaps the most conservative economist in this Parliament and perhaps the most conservative economist this country has ever seen, I think would agree that some degree of public regulation over the private sector is essential. This does not apply only in the field of controlling financial institutions. There must be control in all spheres of the economy. To take an example, in the common area of wages, I think everybody accepts that the open market cannot be the only means of determining wages., because that would result in excessive inequality of incomes. Everybody accepts that there must be a body such as the Arbitration Commission separated from the open market to determine a national minimum wage to ensure that all workers are guaranteed the necessities of life.

Everybody accepts that unfettered private enterprise can and does result in monopoly or its opposite, excessive fragmentation. These matters undoubtedly require government intervention, although there may be legitimate disagreement about the type of in-, terventionthere ought to be. Certainly, the Australian Country Party believes in the distortion of market forces. Indeed, that is what the Country Party is all about. The plethora of rural subsidies and the granting of loans at subsidised interest rates to rural producers at the expense of everybody else in the community, of course, are completely orthodox to a Country Party man.

I notice that the Deputy Leader of the Opposition (Mr Lynch) said earlier that a Liberal-Country Party government would introduce a completely market-orientated monetary policy. It is interesting to listen to that statement in the light of the history of the Liberal-Country Party Government which interfered with the exchange rate to maintain it at an artificially low parity. There are a number of other examples of such policies.

For instance, it is only since the Labor Government has been in office that the banks have been free to operate in the open market in dealing with negotiable certificates of deposit. This is a restriction that was taken off them under the Labor Govenment. In fact, it is only since the Labor Government came to office that we have had a truly market orientated capital market in Australia. Similarly, distortions occur in the area where fringe banks operate, so it is essential that we have public regulation of these institutions! The most topical example of where direct controls over fringe banks are needed is the rates of interest at present being paid and received by hire purchase companies.

I refer particularly to the happenings in the financial market after the Government’s activities in the securities market last year and earlier this year. Last September the Reserve Bank began vigorous selling of government securities at a reduced price. Following this, Commonwealth cash loans were issued also at an increased rate. The effect of this was to divert funds out of the private sector into government securities. I rebuff the argument put earlier by the Deputy Leader of the Opposition (Mr Lynch). This was a proper action to take to reduce the demand for housing in the private sector back to the level where supply was able to “cope with demand - for building resources - and also to try to divert resources in into the welfare housing field and through the housing money made available through the Commonwealth and State Housing Agreement. This action has been successful in reducing the rate of approvals to a level with which the building industry can cope. I believe it will soon also be reflected in a levelling off of hous’ing costs.

However, there was an undesirable side effect in that building societies had to raise their interest rates to compete for the limited funds available. Some increased interest rates were passed on to people paying off existing mortgages. The Government successfully persuaded most building societies to restrain their increased interest rates to a maximum of one per cent. However, because of the lack of any direct controls over the fringe banks, the Government was quite powerless to do anything about the hire purchase companies. The result was that the hire purchase companies subsequently floated new loans at substantially increased rates of interest which must eventually, of course, be passed on to the borrowers. So the situation was that the interest rates of the building societies were controlled by voluntary co-operation- temporarily anyway - but no such restraint was applied to the hire purchase companies.’ Of course, if the Government had tried to’ get them to apply restraint; it would not have been possible for them to do so. In contrast to the building societies the hire purchase companies are primarily profit-making institutions. The hire purchase companies, as a result of this lopsided situation, were able to outbid the building societies which have now started to find the situation very difficult. Some have recently announced that their interest rates will have to go up further.

I believe that with the passage of this legislation the Government could limit the interest, rates of hire purchase companies and the building societies then would be able to compete for funds at a lower level of interest rates. I believe that this is an outstanding example of the need for judicious use of direct controls. This would not be the long term solution, but at the right time and in the right place direct control of interest rates could have improved the lot of many home owners and, beyond that, the situation that the Government was faced with last year. Perhaps the most important area in which this Bill could be effective is in the control of the type of lending activities carried out - that is, the qualitative control. These are areas which cry out for government control.

The problems which have occurred from the building activities of financial corporations have become a national scandal. 1 am refer.ring particularly to the excessive number of high rise office blocks being built in our capital cities. Large amounts of building materials and labour are being wasted on private office space. It was interesting to see even the spectacle in a recent television program of the director of a large building corporation admitting that the high rise development that is taking place now is far in excess of present needs. But he still said that it was a good financial investment. No government can tolerate that situation when labour and materials are urgently needed for building houses.

The direction of investment into areas of greatest priority is, therefore, a most important result of this Bill. If the interests of private enterprise do not coincide with the national interest, the lending institutions will have to be prevailed upon. I know that definition of the term ‘national interest’ is very elusive. Frequently when governments refer to the national interest they really mean their own political interest. Surely nobody could quibble with the proposition that building houses is much more important than building empty office blocks. Up to the present time the only body which has exercised any responsible attitude to what type of buildings should go up has been the Builders Labourers Federation with its highly commendable policy of preserving Sydney’s heritage. I should like to see the Builders Labourers Federation exert a similar influence to ensure that priorities in the building industry go towards building houses and not office blocks.

This Bill will enable the Government to have the same control over capital investment in Australia. I believe such government control is quite justifiable. I believe it is quite justifiable for the working people of Australia, such as members of the Builders Labourers Federation, to have a similar say in the direction of investment in Australia. I cannot see that it should be the exclusive prerogative of those people who own capital in Australia to determine what should be the direction of investment. I abhor the fact that in doing this in the public interest, at the cost of their own welfare, members of the Builders Labourers Federation found that their organisation was deregistered. That is a fact which I deplore. I hope we will not see it perpetuated.

As I have said, I regret that insurance companies have been excluded from this legislation because I believe that they are perhaps the main transgressors in the misallocation of resources in the building industry. I believe direct controls will be required to direct investment away from land. A major social problem has been the issuing of funds at high interest rates for people to purchase land for purely speculative reasons. The result has been to reduce the amount of land available for building houses and to drive up the cost of building blocks. I should like to add, however, that there are certain other urgent measures necessary to control land prices. I again ask the Government to give consideration to introducing a capital gains tax on land to be paid annually on the increased value of undeveloped land even if that increased value has not been realised at a sale.

The fringe banks have expressed the view that all controls, where possible, should be voluntary. I agree with them. I think that perhaps the Treasurer (Mr Crean) agrees also. It is quite clearly in the interests of the Government as well as the institutions concerned that controls should be obtained, as far as possible, by voluntary co-operation. In this way, we can avoid having to establish a bureaucracy to police the regulations. It would avoid the development of other institutions outside the ambit of the present Act or what I think is referred to by the ‘in’ group as disintermediation. However, it is important that the Government should have the power to enforce its monetary policy should that need arise. Perhaps one particular area will be when bond yields drop, which I hope will not be too for into the future, and when we find that there should be a tendency for interest rates to drop. However, what I do fear is that when the monetary situation in this country can be eased, it will not be followed by the fall in interest rates which we would like to expect. I suppose it is a little like what has happened with the revaluation of our currency; we found that the price of imports did not drop as it should have but merely that the importers were making a greater mark up.

If I recall correctly, under the LiberalCountry Party Government in 1971 there was an increase in interest rates which was passed on to borrowers but when subsequently the bond rate was reduced the same reduction in interest rates was not at the time passed on to borrowers. That is the sort of action over which some sort of direct control is essential to ensure that that type of ratchet effect does not occur.

In relation to the control of hire purchase companies, I believe we ought to examine the possibility of the Commonwealth Bank competing with private enterprise in hire purchase. I should like to see the Commonwealth Bank establish its own hire purchase subsidiary. The Commonwealth Bank, because of its highly competitive interest rates, has a beneficial influence on the conventional banking sector and in the field of housing in particular. I should like to see this precedent followed in the field of hire purchase. In bringing this measure in, the Government is not using the big stick. The open market will continue to operate as long as it is the servant of the people and not their master. It will act primarily in co-operation and consultation, and it will provide an invaluable instrument to all future governments in their control of the economy.

It is worth mentioning that the Banking Act, which I suppose is really the model for the measure we are discussing now, was a sequel to an unsuccessful attempt by a Labor Government to nationalise the banks. It is accepted as conventional wisdom today that perhaps the ultimate weapon of nationalisation of the banks is no longer appropriate. However, I think that in the light of some events that have occurred in recent months consideration might have to be given to stronger measures in the control of the banking institutions. We had the disgraceful situation of lender of last resort facilities being available to the private banking sector but rather than swallow their pride and go to the Reserve Bank - if what the general manager of one of the private banks said or implied on television is to be believed - the banks went outside the Reserve Bank. Rather than use the lender of last resort facilities they borrowed elsewhere at higher rates of interest, probably at the expense of the other borrowers from the banks. If the banks are to behave in such an irresponsible fashion, certain sanctions will have to be considered by the Government. The ultimate weapon, of course, would be the direct nationalisation of the banking institutions.

In conclusion, I support the Bill. I am pleased to note that the Opposition is generally supporting the Bill. I think the bipartisan attitude of the 2 sides on this measure shows that there is a difference as to whether governments get things done. We both agree with this measure. The Labor Government has done something about it. The Liberal and Country Parties, when they were in government, did nothing.


– The first question everyone must ask when considering this Bill is: Is it necessary or desirable? Before that, maybe it is prudent to state a case for the non-banking financial institutions. The somewhat changeable and notoriously wrong crystal ball gazer, the Treasurer (Mr Crean) - given, as he said tonight in the speech he made on the mini-Budget, to delusions - said in his second reading speech on the Financial Corporations Bill:

There is no denying that these non-bank financial institutions operating in a competitive environment can increase the efficiency of the financial sector in attracting funds and channelling them into the areas they are needed most

He cannot have it both ways and ought to be committed to protecting those financial institutions which have, according to him, done so much good. I challenge the Treasurer’s inaccurate statement that there is no disagreement that such intermediaries have significant potential to undertake activities which are inimical to an effective monetary policy. There is considerable disagreement, as I will indicate, and the Treasurer ought to identify those who agree with direct controls and with him. The Reserve Bank, when left free from political pressure, does not think direct controls over the non-banking financial intermediaries are necessary. The Governor of the Reserve Bank, Sir John Phillips, has said:

The use of direct controls usually hinders the process of having the community’s financing done by the most efficient means.

In its 1972 annual report at page 38 the Bank said:

Experience has shown that direct controls, although perhaps useful tools of policy over short periods, can diminish in effectiveness when applied continuously over long periods.

Recognition of this by the Bank of England led to a series of reforms in 1971. An English professor, R. R. Hirst, speaking about this matter in an address to the winter school of the New South Wales branch of the Economic Society in 1972 said:

Less emphasis is to be given to restrictions on lending to the private sector whether they are liquidity or qualitative constraints. The emphasis of monetary policy is to shift towards the control of broad monetary aggregates and to the associated level of structure of interest rates.

The British Radcliffe Commission had this to say about suggestions to substitute a complex of direct controls for the traditional controls over the money supply:

Such a prospect would not be welcome except as a last resort - not mainly because of its administrative burdens but because the further growth of new financial institutions would allow the situation continually to slip from under the grip of the authorities.

Speaking from long experience, I am sure that this view of direct controls is correct, and an understanding of its significance and importance is critically important when considering this Bill. Dr Coombs, the immediate past Governor of the Reserve Bank and now associated with the Prime Minister (Mr Whitlam), shares these views. My own attitude is that we would not need this Bill to enable the Reserve Bank to supervise the non-banking financial intermediaries if we lived in a world in which market forces were permitted to work freely within the context of sound and responsible budget and monetary policies, effective changes in foreign exchange rates, and money wages more in line with productivity, with a reasonable allowance for inflation. This is a very big ‘if. Political necessities and expediency, market imperfections and doctrinaire philosophies and attitudes can all too frequently prevent the use of appropriate policies or a proper mix of the appropriate policies being used at the appropriate time.

In today’s conditions such a policy of permanent direct control would be another clear admission by the Government and the Treasurer of their inability satisfactorily to manage the economy or understand the environment in which non-banking financial intermediaries work. I emphasise that neither the passage of this Bill nor any determination which the Reserve Bank might make could or would have more than a minimal impact on inflationary pressures or the general run of interest rates at this time or at any time in the foreseeable future. There must be no practised deceit or deliberately created misunderstanding about this. It will have minimal impact on interest rates and it will have minimal impast on inflation. Power should not be given to the Government to exercise these powers permanently, ruthlessly and maliciously or as an alternative to reckless and inadequate government policies as a whole.

Labor has failed and loudly proclaimed its total lack of will or capacity to handle budget or fiscal policy or wages policies. The pulldevilpullbaker attitude of the various cliques and personalities - the Prime Minister, the Deputy Prime Minister (Dr J. F. Cairns), the Treasurer, the Minister for Labor and Immigration (Mr Clyde Cameron) and the Minister for Social Security (Mr Hayden) and the Labor Caucus - have ensured that sound economic and financial policies by the Labor Government are impossible. To put it in Rolf Boldrewood’s language in ‘Robbery Under Arms’:

It’s all fair pulling ‘pull devil pull baker’. Someone has to get the worst of it. Now it’s us - now it’s them - that gets rubbed out.

Under Labor’s policies ‘them that gets rubbed out’ are the consumers and the least well off section of the community.

Voluntary arrangements - I want to emphasise this point, particularly as I can see sitting in the gallery a few people I have known in the past - between the Bank of England and the commercial banks and the non-banking intermediaries have worked and continue to work well in the United Kingdom. There is power under the United Kingdom Banking Act for the Bank of England with the consent of the Chancellor to exercise the appropriate banking controls. It has never been necessary to invoke this consent. In Australia, whilst there is power under section 50 of the Banking Act for the Reserve Bank to make regulations with the approval of the Treasurer for, amongst other things, provision for or in relation to the control of rates of interest payable to or by any banks or in the course of banking business, it has never been used. The Reserve Bank has not made regulations under the section because voluntary means have been successful. The trading banks have in fact played the game.

Clearly - I repeat for emphasis - indirect mediation in the money markets through the traditional methods available to a government and the Reserve Bank through open market operations in the bond market, call-ups to statutory reserve deposits, limitation on increases of overdraft commitments by the trading banks, and budget surplus or deficits are infinitely to be preferred to direct controls. In more positive words, direct controls over the non-banking financial intermediaries may perhaps be useful tools of economic and financial management for short periods. They will, with the passage of time, become ineffective and, over long periods, positively harmful.

As I have frequently pointed out, Labor has consistently refused to use fiscal or Budget policy and only lately, but too late, has all too savagely begun to use monetary and interest rate policy with, in all probability, growing overkill effects. Its use of the tariffs to reduce import prices may have been theoretically right but as the honourable member for Kingston (Dr Gun) who preceded me in this debate, said, of small practical value.

I turn to the specifics of the Bill itself. It is of a novel type for us. It is an enabling Bill - a Bill which will enable legislative powers to be conferred upon the Executive by regulation. As Erskine May in the 18th edition of Parliamentary Practice’, chapter 22, says in relation to such types of legislation in the United Kingdom in the last half century:

The justification and advantage of delegated legislation in normal times arise because of the need for speed, flexibility and adaptability. Once Parliament has by statute laid down the principles of a new law, the Executive may by means of delegated legislation

Or here by regulations: . . . work out the application of the law in greater detail within these principles . . .

Usually this is done by means of regulations. In my view, in all cases where Parliament has delegated legislative authority by Act of Parliament to the Executive, it - the Parliament - must retain parliamentary control of the regulation itself.

Under the particular type of Bill and delegated legislation we are considering, I ‘believe that the most effective and best means of ensuring control by Parliament described by May is for the relevant Act to provide by what is called an ‘affirmative resolution’ that the regulation ‘has no effect or continuing effect, until Parliament has expressly approved of it* to use May’s own words.

Reserve Bank ‘determinations’ or ‘declarations’ relate to the actual day to day administration of the substantive provision of the legislation contained in the regulation. There are thus 3 steps or procedures necessary in the case of delegated legislation of this kind contemplated in the Bill and subsequent action by a Government agency such as the Reserve Bank. The first is an enabling Bill or Act - the present Bill - then, an executive regulation and, finally, a ‘determination’ or series of ‘determinations’ by the Reserve Bank. The Treasurer’s rationalisation on pages 5 and 6 of the Explanatory Statement distributed immediately after his speech was made in the House in 1973 is absurdly wrong and as I will show clearly, insulting to all private members of this House and Parliament. The statement could not have been written by a member of Parliament and only incautiously used by a member of the Labor caucus. Let me quote what the Treasurer said. These are not the words of one well versed in the Banking Act or what was intended by the legislation. The Treasurer said:

Such changes - that is prior debate of proposed laws by regulation - are essentially a matter for which the Government is responsible and equipped to deal and do not seem readily susceptible to detailed examination and review by Parliament

Anyone who makes that statement has no respect for the parliamentary institution and should not be here. The statement deifies the Executive and implicitly says it is the repository of all knowledge in the field of nonbanking financial intermediaries. Such people have a hate of the Executive and many would like to destroy it. Prom what has been said it is obvious that either the Treasurer or his advisers do not understand the significance of enabling legislation and delegated or regulatory law.

Contrary to what the Treasurer has said, adequate and prior debate will not be permitted before the contents of the regulations become law. The Treasurer’s statement that ‘a review procedure conducted in the context that a determination would not finally be effective until passed by Parliament and would increase uncertainty in the money and capital markets and could give rise to substantial problems if disallowed’, has never been suggested. This statement either confuses resolution or regulation made by the Executive and determinations by the Reserve Bank or it is an obvious and cheap debating trick to confuse the issue. What has been suggested is that the intermediate process - that is, the regulations to be made by the Executive - should be the subject of affirmative resolution by the Parliament and not determinations of the Reserve Bank, and that determinations should be a Reserve Bank reserve power to be used as a last resort and as a strong psychological influence in precisely the same way as interest rates are used in banking.

Before speaking about the amendments the Opposition proposes to seek to make to the Bill now before the House let me refer to certain amendments that have been made to the earlier Bill subsequent to discussion and consultation, between the Treasurer and various interested parties, between the Treasurer and myself and between Treasury officials and the Liberal Party economic committee with the approval of the Treasurer. The assistance was freely and generously given and was of great help in permitting us to understand the proposals contained in the first Bill. I am sure the Liberal Party committee would want me to thank the Treasurer for this assistance. I also want to thank the AttorneyGeneral (Senator Murphy) for making the setvices of a Parliamentary Counsel available to me in drafting the amending regulations. A perusal of the second Bill now before the House shows that at least 3 amendments recommended by the Opposition have already been made. They are important. Their acceptance is welcomed. There is much left to be done. Based on the logic of the arguments, the Treasurer, Mr Lynch and I, have presented, the Opposition will propose . 5 substantial amendments to the 1974 Bill now before the House to ensure certain things. As my time is limited, I will move on to deal with the amendments proposed to the various clauses. We wish to ensure, amongst other things, that clause 32 is amended to add a sub-clause to require the Executive to have an ‘affirmative resolution’ passed by the Senate and House of Representatives before any regulation takes effect and, that regulations shall cease to have effect at the expiration of the period of 12 months after the date on which they took effect unless each House of the Parliament passes a resolution approving the continuation of the regulations. This provision does not apply to determinations by the Reserve Bank. For the reasons I have given this is unmistakably the most important change in a constitutional sense not only to ensure control of the Executive by the Parliament as an essential ingredient of representative government but also to prevent abuse of Executive powers and to practise the policy of open and honest government with Parliament acting as the means by which the public is informed and protected.

The second amendment proposes that clause 14 relating to lending policies be amended to make it clear, to use the Treasurer’s own words in the Explanatory Notes, that the regulations under sub-clauses (2) to (6) inclusive are restricted to granting power to the Reserve Bank to make ‘determinations’: ‘. . . only with respect to the volume or direction of lending’, and not further or otherwise.

The third amendment seeks to amend clause 15 to permit the Reserve Bank to make different determinations relating to the receipt or payment of interest rates by a permanent building society that carries on business in one State or Territory only. Our fourth amendment has as its purpose to amend clause 18 of the Bill to enable the Reserve Bank and not the Treasurer to grant exemptions from the application of the Reserve Bank’s determinations relating to asset ratios, lending policies and interest rates.

The fifth amendment seeks to amend subclause (3) of clause 25 to honour the Prime Minister’s promise made to the permanent building societies on 23 May 1973 that the Labor Government, to use the Prime Minister’s words: ‘. . . should guarantee their security and in return they should pursue the public interest’. This will be done by specifically providing in the Bill for lender of last resort facilities under section 8 (c) of the Reserve Bank Act 1959-1973 to be made available to the permanent building societies which are covered by the proposed legislation. The Treasurer’s statement in his speech of 1973 relating to this matter is sloppy and falsely argued. It fails to honour the Prime Minister’s promise. It raises the following critically important political questions: Who runs the Government and is the Prime Minister to be humiliated and his promises dishonoured by the Treasurer whenever he or his advisers feel that their own hunches or inclinations are involved?

There are two other amendments that I want to mention, however quickly. The first relates to clause 3, at page 2 of the Bill, and proposes that one of the objectives of the Act must be to provide an adequate level of finance for housing. The second relates to clause 31, at page 19 of the Bill which requires the Reserve Bank to have consultations. We propose that, in particular, consultations should take place before determinations are made. At page 8 of the speech to which I have referred the Treasurer said:

The exclusion of any group would materially weaken the proposed legislation and could make the achievement of the broad objective of the legislation substantially more difficult to achieve.

That ignores the fact that the inter-company market has been left out of the Bill, as the honourable member for Kingston so easily, but drawing improper conclusions, said. We know that this ‘left out’ part of the market is one which has been growing strongly and which is spreading its activities into many areas new to and presently connected with the non-banking financial institutions. (Extension of time granted.) 1 do not think that it would be known to those who drafted the Treasurer’s speech or who prepared the Bill that the introduction of TCDs or NCDs and the freedom for the trading banks to determine interest rates on overdrafts in excess of $50,000, together with the process of disintermediation - a word I have captured from the honourable member for Kingston - will substantially restrict the activities of the inter-company market. At least I hope it will. I hope that finally it will bring them under control.

I turn now to the lender of last resort facilities that are available under section 8 (c) of the Reserve Bank Act. It is well known to ¼the Liberal Party’s economic committee that lender of last resort facilities are not made available automatically to a trading bank or other organisation as of right. It has never been suggested that those facilities should be made available automatically to the permanent building societies or other organisations covered by the Act, as has been suggested by the Treasurer in his speech. Obviously, whoever wrote that part of his speech must have wanted to be blatantly obstructive or was ignorant both of the provisions of the Banking Act and of the accepted practice relating to lender of last resort facilities.

In the remaining minute or so that 1 have in which to speak, I would like to put a proposition to the Government on behalf of the Opposition. I have already prepared and had circulated a number of amendments. I ask the Leader of the House (Mr Daly) to agree to their incorporation in Hansard. If that were to happen, we would then agree not to pursue the matter any further and would let the Bill pass the Committee stage and the third reading stage without opposition.


– Is leave granted for the incorporation of the amendments in Hansard? There being no objection, leave is granted. (The document read as follows) -

Leave granted for third reading to be moved forthwith.

Motion (by Mr Daly) proposed:

That the Bill be now read a third time.

New England

– I shall be very brief in my remarks. I wish to explain to the House that, although the Opposition has not sought to debate this Bill in Committee, there are, as honourable members will be aware, a number of amendments of which we gave notice to the House in the course of the second reading debate. Those amendments were brought to the notice of honourable members by the right honourable member for Lowe (Mr McMahon). In the discussion that will ensue in another place the Opposition will be pursuing those amendments. The fact that they have not been debated or pursued any further in this chamber does not indicate in any way that the Opposition will not push them and support them in the debate in the other House of this Parliament. This is a very important piece of legislation. The Opposition is concerned about the matters which have been identified in the amendments to the Bill which the right honourable member for Lowe has notified to the Parliament. They are amendments that we believe will contribute towards the more effective operation of this piece of legislation. It is for that reason that those amendments will be moved and pursued in the Committee stage of the debate in the other place.

Question resolved in the affirmative.

Bill read a third time.

page 537


Adjournment Debates - Emergency Mousing - Australian Wool Corporation - Whitlam Ministry - Primary Producers - Unemployment in Rural Areas

Motion (by Mr Crean) proposed:

That the House do now adjourn.


– It was not my intention to rise at this early hour in the debate on the motion for the adjournment of the House, but I take the opportunity this evening to remark that the system which has operated in this House of closing off an adjournment debate at 11 o’clock is one which I think many honourable members have found to be workable. It will be recalled that when the system was proposed by the Leader of the House (Mr Daly) some reservations were expressed by certain honourable members, particularly on this side of the House, about the method of conducting the adjournment debate. The suggestion which appealed to me most and which I take this opportunity to present to the House is that in cutting off the debate strictly at 11 o’clock come what may - that is the position at present, pursuant to a resolution of the House - there is a danger that the last honourable member to speak in the debate will attack other honourable members or perhaps persons outside this House in a somewhat strong manner and not leave them any opportunity to reply. That is something which has worried many honourable members.

I do not want to elaborate on that aspect, but I do want to place on record the fact that that sort of thing has happened on one or two occasions in the last 12 months. I hasten to say that I appreciate the fact that when honourable members put their names on the list which is kept on the table in front of the occupant of the chair they sometimes find that they are not the first or second person to put their names on the list and as there are normally only 3 speeches of 10 minutes duration each in an adjournment debate it does not provide an opportunity for anyone else to reply to such remarks. But I do think that anyone who wishes to launch a strong attack, particularly a rather personal one, ought to remember that the person on whom the attack is launched is entitled to make some sort of rebuttal. I do not think it is right that the matter should be allowed to stand over until the next day, if the attack is made on a Tuesday or Wednesday night, or the following Tuesday or Tuesday week if the attack is made on a Thursday night. I make that point because we have had one or two experiences of it in the recent past. I will not mention the name of any particular honourable member in relation to this subject. I conclude by saying that honourable members ought to remember that the adjournment debate closes at 11 p.m. and each ought to make arrangements with the occupant of the chair who normally is you, Mr Speaker, to see that he is not the last speaker and that he has left some time for someone to reply.


– I should like to bring before the House an issue of great moment in my electorate and, I believe, in many other electorates. I refer to the matter of emergency housing. There is a need to define clearly what is meant by emergency housing. When I use that term I am not referring to the acute housing shortage for low income earners, although in my electorate that is a problem in itself. In the Dandenong area in the centre of the electorate there is the longest waiting list in Victoria for housing commission homes. I understand that at the present time the waiting time for a person wishing to purchase a 2-bedroom or 3-bed- room housing commission home is approximately 4 years. The waiting time for a tenancy is about 3 years to 3i years.

When I use the term ‘emergency housing’ I mean the situation in which people have an immediate need of accommodation for that night - not for 3 months time or 6 months time but for that night or that week. I can speak personally about this matter from the contacts that I have had in my electorate. I would say that it is one of the most desperate and heartbreaking problems that exist. I would go so far as to say that people would be sleeping in the open, in parks and the like, if it were not for the magnificent work that is being done at present by the voluntary social welfare agencies such as St Vincent de Paul even by professional social workers working after hours and by the churches. Only last Friday I was speaking to the monsignor in charge of the Dandenong parish. He confirmed the findings of people who had investigated this problem. He pointed out that only 2 days earlier he had received a knock on his door at 2 o’clock from someone seeking accommodation.

The need is clearly established when we look at the figures supplied by the welfare groups in my electorate, again using the definition of emergency housing that I used before - meaning a need for housing for the immediate night or the immediate week. The Dandenong Citizens Advisory Bureau has shown that in a period of one month, in October 1973, there were 23 requests for help. The Springvale Citizens Aid and Advisory Bureau has shown that in a period of 4 months there were 20 requests. The Doveton Social Work Office has shown that in a period of one year there were 30 requests. If we combine all those figures we see that in the electorate of Holt almost every day of the year there is a person or a family in desperate need of emergency accommodation. I point out to the House that these are only the ones that we know about - those who have actually come and asked for assistance.

I leave it to honourable members to equate what this means in terms of human suffering. The investigation that was carried out by social workers and welfare organisations in the municipalities of Springvale, Dandenong and Berwick showed that the groups most affected were, as one might imagine, the one parent families, particularly deserted wives; families who were evicted from their houses; the elderly; and also, in areas like those centred in Dandenong, quite a large group of young people and families who come to those areas in the expectation of easy employment because cities such as Dandenong are reputed to be boom cities. These people do not check to find out whether housing is available until they arrive.

I submit that the present situation is totally unsatisfactory. We depend entirely on a stopgap arrangement. We depend on organisations like St Vincent de Paul. We depend on hand outs. At no time at any level of government, except in sporadic cases by municipal councils, has there been an attempt to tackle the problem on a long term basis. I know that in my own electorate social workers have prepared a submission which was put to the Victorian Government but no action was taken. The submission highlights the fact that there is not available the right type of accommodation such as hostels, guest houses, low cost hotels and boarding houses. It also highlights the present makehift solution whereby the individual has to ask for and accept charity. That situation can lead only to a loss of self-respect and independence.

I believe that my electorate is not unique in having this serious problem, even if it is possibly more acute in my electorate than in many others. It is for this reason that I have brought the matter to the attention of the Minister for Housing and Construction (Mr Les Johnson). In doing so I am well aware that, he as the Minister has been responsible for negotiation with, the States whereby allocations for welfare housing have been higher than ever before. I know that he has always pleaded the cause for those in greatest need. However, I put to the Minister the proposal that specific grants be made to the States for emergency housing. I believe that this is possible. It has been done in many areas such as education. This could be a co-operative effort at the 3 levels - certainly with the States. Even if we do not go the whole way to start with at least pilot projects could be set up to try out such a scheme. I hasten to add’ that, if there were to be a pilot project, the electorate of Holt would be a suitable choice for a number of reasons. The first would be the severity of the problem that I have outlined. Virtually every night of the year there is one person or family who is in need of emergency accommodation. The second would be that, the groundwork has already been carried out in that electorate. Professional and lay workers in the field have met on a number of occasions. They have given considerable attention to this matter and as to how such a project could operate. They have set out the type of accommodation that is required, how it could be managed at a local level and the basic conditions of residency. I know that the Minister would agree that many difficulties would be involved in setting up a pilot project.

Mr Les Johnson:

– I would like to see the submission.


– I will certainly give the Minister a copy of the submission later. Finance for such a project has also been discussed.

I believe that a person who receives help, although he may not be able to make a contribution at the time, should be expected to make some small payment retrospectivity. I stress that even a pilot scheme or a more widely based scheme is seen only as the short term answer. We know that there is a great need for research in this area. There is very little factual information in the community as to the problems which precipitate housing crises of the proportion about which I have been talking.

Again I submit to the Minister that the electorate of Holt would be an excellent place for such research to be done, possibly by the Monash School of Sociology which is right alongside my electorate. I believe that, with the magnitude of the problem in my electorate, the research could well be done there. I commend this matter to the Minister for his scrutiny and investigation and press for some action to be forthcoming in the future.


– I rise tonight to discuss the importance of the Australian Wool Corporation and the very important role that it plays in marketing Australia’s most important export income earner. Wool is still Australia’s most important export trading commodity and, according to legislation, the Australian Wool Corporation has been given the very important task of marketing this clip. I am concerned that some of the happenings of the past week could in some way discredit the reputation and the integrity of an organisation that is doing a tremendous job for the Australian wool industry, the wool growers within it and the people who depend on the industry for their living, whether shearers, people living in country towns or supporting the trade in one way or another.

The Australian Wool Corporation assumes an importance not just to the industry and those depending upon it but also to Australia as a nation. The export income earning industries will undoubtedly assume an even greater importance to the Australian economy as time goes on and when we face all sorts of internal economic problems. Therefore, it is essential that nothing is done in what is a difficult world trading situation to disrupt or impair Australia’s capacity to sell wool, wheat, meat, ores or any product that can earn foreign exchange on the overseas markets. The Australian Government has embarked upon what is a most ambitious social welfare program. Its education program alone is going to cost many millions of dollars. This Government will have to rely upon the export income earning industries perhaps more heavily than any government has relied upon them in the past. Of course, the attacks that have been made upon the people serving on the Australian Wool Corporation are to be deplored.

I should like to read from the Wool Industry Act the section relating to the way in which the members of the Australian Wool Corporation are appointed. It states:

  1. – (1.) The Corporation shall consist of nine members, namely: -

    1. a Chairman;
    2. four members to represent Australian wool growers;
    3. one member to represent the Commonwealth; and
    4. three other members. (2.) The members shall be appointed by the Minister, the Chairman being appointed as a full-time member and the other members being appointed as part-time members. (3.) Before appointing the members referred to in paragraph (d) of sub-section (1.) of this section, the Minister shall consult the Australian Wool Industry Conference.

Honourable members should bear in mind that the Australian Wool Industry Conference is comprised of equal representation from the 2 major constitutent wool growing bodies in Australia - the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers’ Federation. Those organisations elect in a truly democratic fashion representation upon each of the national bodies. It is from that membership that the Australian Wool Industry Conference is established. The Act continues: (4.) The members to represent Australian wool growers shall be appointed on the nomination of the Australian Wool Industry Conference. ‘(5.) A member referred to in paragraph (d) of sub-section (1.) of this section shall be a person specially qualified for appointment by reason of experience in the marketing of wool or wool products, in the processing of wool or in the manufacture of wool products or by reason of other experience in commerce, finance, economics or science. (6.) The performance of the functions or the exercise of the powers of the Corporation is not affected by reason of there being a vacancy or vacancies in the membership of the Corporation.

I have quoted from the Act to demonstrate to the House and to honourable members opposite - to the few members who are in the House at the moment - the way in which the membership of the Australian Wool Corporation is constructed. Allegations that members have been chosen because of political affilia tion with the Australian Country Party are grossly unfair. In fact, I would not know what are the political affiliations of two of the members of the Corporation, nor do I care. However, I have a very high regard for the capacity and the ability of members to serve the Australian wool industry and Australia in this capacity.

I want to give the House some idea of the qualifications that these gentlemen possess. Mr David Asimus has been a member of the Australian Wool Commission since 1970. He has been a Director of the Australian Wool Marketing Corporation since 1970. He attended St Paul’s College, Sydney University, and won a Nuffield travelling agricultural scholarship to the United Kingdom. He is very highly regarded in the wool industry and in wool trade circles. Mr Reginald Vernon Sewell has been President of the Australian Wool and Meat Producers’ Federation since 1964. “He has been a member of the Commonwealth Banking Corporation Board since 1968. He was President of the Wool Secretariat of the Farmers’ Union of Western Australia from 1962 to 1964. He was Executive Member of the Australian Wool Industry Conference, a member of the Australian Wool Commission from 1970 and a member of the Export Development Council since 1969.

Mr Claude Dominic Renshaw has been a member of the Australian Wool Board since 1963. He has been President of the United Farmers and Woolgrowers’ Association of New South Wales since 1967 and a member of the Australia Wool Realisation Commission from 1946 to 1952. He was appointed by the then Chifley Government to serve on this very important Commission. Who could charge that this man was appointed by a Country Party Minister because he may have had Country Party affiliations? Here is a man who has proved himself over a long period of years to have capacity and knowledge of the Australian wool industry. He is a man who has given long and distinguished service to public life in more ways than one. I might say that he happens to be the brother of a former Labor Premier of New South Wales who currently is the Labor member for Castlereagh.

Mr Lloyd:

– They claim that he is a Country Party stooge.


– Yes, they claim that he is a Country Party stooge. He may have sympathy for the Australian Country Party but that is because that Party has given service to the Australian wool industry and to the farming community. Quite obviously those people who attack the Australian Wool Corporation merely because of its sympathy with the Country Party, or perhaps because some of its members have a sympathy with the Australian Country Party, are quite obviously frightened of the Australian Country Party. This Party stands on its record - a proud record of serving the rural community of Australia. We take some of the criticism with a degree of pride because it shows that some of the Labor rural members see the Australian Country Party as a real threat and will go to any ends to denigrate this great Party that has served the rural interests of Australia.

Last week the few Labor members who represent rural electorates met in the Lodge to try to work out some way to wrest the Country Party’s grip on the rural constituencies. If the shots that were fired here last week and this week were the first ways of doing it, all I can say is-


– Order! I have been following very carefully what the honourable member has been saying. The honourable member has been in order so far in his speech tonight but he is not allowed to debate what took place this afternoon, or to discuss debates that have taken place this session.


– Let me say in conclusion that the Australian Country Party stands on its record and is proud of it, and it hopes that the Government does not stoop to dirty tactics to denigrate the Party and the rural organisations that have a great respect for it.


– I believe this House should be indebted to the honourable member for Gwydir (Mr Hunt) for raising such a very important issue. It is a tragedy that under the Standing Orders he is not permitted to expand his thoughts on this most important subject because this is not the first occasion on which we have seen some Government supporters trying to interfere with the general free flow of industry. I do not wish to spend a great deal of time this evening outlining all the effects that the decisions of this Government have had on industry both primary and secondary but I believe that the Government has done an enormous disservice particularly to primary industry.

There is no need for me to spell out what has happened in recent times. We know how legislation which emanated from the last 2 Budgets has crippled some industries. We heard tonight another illustration of this but I am not permitted to speak on that matter. Some months ago we were concerned when the honourable member for Eden-Monaro (Mr Whan) made a very strong move to buy in and try to cripple the meat industry. He tried to introduce some sort of fixed price system whereby the housewife could get meat at a reduced rate. This, of course, failed as far as the housewife was concerned but it could have been a major contributing factor to sapping the confidence of the meat industry as a whole. One has only to look at the sales of stock in various markets today. Some quality meats are being reduced in price by one-third whilst other not so palatable meats have been reduced by at least 100 per cent and in some cases, it has been reported, by 200 per cent. These are just some examples.

Another important export industry appears to be running along very smoothly until we look at the trouble on the waterfront. Because of disturbances on the waterfront - about which this Government has evidently done nothing - the wheat industry is suffering a delay in shipping. Wheat growers expected to receive a second advance of about 20c per bushel on last year’s crop but they have now been informed that there will be an unknown delay. Because of reduced prices for wool and because of reduced prices for meat many wheat growers were dependent on receiving the extra advance of about 20c per bushel. They will not get this payment for some considerable time. This delay is creating chaos in the wheat industry. This chaos, has passed on to business houses. If I had the opportunity and sufficient time I could enlighten this House on many cases of hardship all of which have been caused by a lack of finance being made available to primary producers. Another angle to be considered is the credit squeeze. We could expand on all these angles at some length if only we had the time. However, I believe it is up to the Government to make some positive move. I know my colleague the honourable member for Mallee (Mr Fisher) is very concerned about the delay in wheat payments. I know that he is taking some action to try to get some relief for primary producers. The real reason why I rose this evening was to deal with a subject about which I read in the Melbourne ‘Sun’ of today’s date. It is headed:

The article states:

Rhodesia was supplying most of the funds for racehate campaigns in Australia, Mr Al Grassby said in the Philippines yesterday.

I do not know what other honourable members in this chamber think of that item - I do not intend to read all of it - but there are certain angles and certain portions in it which really concern me greatly. Because of his policies in this House a few weeks ago this gentleman was rightly displaced. To my mind he has no right to be making some of the statements he has made, unless the Prime Minister (Mr Whitlam) is prepared to say that the former Minister has that right. The end of this article states:

He warned that any Australian Ministers of State, public servants or Government workers would be sacked immediately if they sought to promote discrimination on the grounds of race, colour or creed.

I do not know, but I am led to believe by Press statements and, I think, a statement by the Prime Minister that Mr Grassby has been appointed as an ombudsman for migration in this country at a reported salary of $26,000- odd.

INDI, VICTORIA · CP; NCP from May 1975

– Plus expenses.


– Yes, of course that would be plus expenses. I realise that. No doubt expenses could be another amount in the vicinity of the amount I have just mentioned. I do not know. It all depends on the staff he has. I am told that he has offices in various parts of his former electorate. I do not know on what grounds he has those either. But I would like to know from the Prime Minister under what authority this man went to the Philippines and say that if we, as government employees, public servants or Ministers literally spoke out of turn we would be sacked immediately? Is he a spokesman for the Australian Government?

INDI, VICTORIA · CP; NCP from May 1975

– He is a roving Prime Minister.


– A roving Prime Minister, I am reminded by an interjector. Mr Grassby would like to be Prime Minister but I am quite sure that he will have to change his tactics, his policies and his principles if he even wants to be re-elected to this House. I certainly do not think he will get back the seat which was taken over by his successor just a few months ago. I believe that Australia has been a fortunate nation for a long time. We have had a homogeneous population in this country, perhaps unlike any other country. When I speak on this subject no doubt there will be some people, even honourable members in this House, who will declare that I am a racist. All I say is that I do not want to see discrimination in this country. It is like a fire - one does not wait until it gets into the bush before one tries to stop it. The right time to act is at the early stages. We have had a homogeneous population and let us keep it that way.

I recall visiting South East Asia not so many years ago with a parliamentary delegation. We were in Malaysia. The then Prime Minister Tunku Abdul Rahman met the delegation. I recall very vividly that this man, after discussing many subjects, said: ‘Australia is very fortunate that it has no racial problems. I wish my country was in the same position as yours. My only recommendation to you people from Australia is never alter your policy’. That came from a very successful Prime Minister in that area. This matter concerns me as I know it concerns many thousands of people outside this chamber. It is all very well to say that we will have no discrimination; we will open the doors to all and sundry. But then, of course, sooner or later there will be discrimination. There has to be discrimination. To my mind it is completely unbelieveable for a former Minister of this Government to suggest that countries like Rhodesia are financing a racehate campaign. It is an irresponsible statement and one which I believe the Prime Minister should nip in the bud. He should explain to this House what it all means. Does the Prime Minister agree with the former Minister for Immigration? Until such time as he is prepared to answer that question, he will have to go down as a contributing factor to racism in this country.

INDI, VICTORIA · CP; NCP from May 1975

– I want to bring to the notice of the House the serious situation that exists in the textile industry throughout Australia generally and in nonmetropolitan areas in particular, and I will make special reference to the largest city in the Indi electorate, Wangaratta, in which there are two of the largest textile mills in Australia. Certainly they are two of the largest in nonmetropolitan areas, namely, Bruck Australia Ltd and the Wangaratta Woollen Mills Ltd. For the information of the House, in the last 7 weeks 341 people have been dismissed from these 2 mills. Another 20 at least have not been replaced, making a total of 361, and I understand that at least 40 people have been asked to take their long service leave and other entitlements. In other words there is no work available for them. A total of 401 people out of a pretty stable work force of 1,330 people normally employed at these 2 mills, or over 30 per cent of the work force in these 2 great decentralised industries in the city of Wangaratta, have been put off work or have not worked in the last 7 weeks.

Mr Hunt:

– And they will not be able to drown their sorrows after tonight.


– As the honourable member for Gwydir has implied, further blows have been struck at country areas and country people and all those living outside the capital cities by the announcements made in the House tonight by the Treasurer (Mr Crean) and the Special Minister of State (Mr Lionel Bowen). The situation in the textile industry in Wangaratta is not to be treated, as some honourable members see it, as a minor pocket of unemployment. There is a very serious principle involved in the causes leading to the dismissal of these people. The causes lie directly and squarely at the door of the Labor Government. It is through the actions of the Labor Government that the textile industry has insufficient demand for its products and, therefore, does not have the required demand for its work force.

The decision made in July 1973 by the Prime Minister (Mr Whitlam) - an unprecedented and remarkable decision - to cut tariffs across the board by 25 per cent was the start of the rot. The announcement was welcomed by academics and people who have never produced anything in their lives, but it was regarded as a very sinister and disastrous decision by hard headed businessmen with the responsibility in Australia of employing people and producing the wealth of this country. The predictions they made in July are coming true and worse is yet to come. That decision started the rot, but on 1 March the Government announced the abolition of import quotas on textiles, particularly in respect of knitted and woven textiles. This allowed a flood of cheap imports from low cost countries to increase. How people in this country think that factories that have to pay employees $2.50 or $3 an hour can compete with people in low cost countries overseas paying their employees 20c or 30c an hour is beyond my comprehension. The present position in Wangaratta concerns people who have their homes there, people whose children are in the middle of a school year there and people who, together with their sons and daughters, comprise a vital part of the previously progressive, stable community of Wangaratta. They form a substantial part of the service clubs, youth movements, church congregations, sporting teams and sporting clubs in the City of Wangaratta.

Is this Government going to uproot these people as was implied in the statement by the Minister for Labor and Industry (Mr Clyde Cameron) to the House last Thursday night? While referring to the key manpower policy initiatives under active consideration at the moment, he used these words: … a relocation assistance scheme to assist persons without reasonable local employment prospects to move to areas of greater employment opportunity.

Is the Minister referring to .the people who have been dismissed from the mills and the textile industries in Wangaratta and other non-metropolitan cities or to people who have been dismissed from the meatworks? Is this Government going to uproot these people and follow some socialist philosophy by moving people about like pawns on a chessboard? Those of us who represent non-metropolitan areas in this Parliament will not stand for that and neither should the members of the Government whose various spokesmen claim to represent rural areas and non-metropolitan areas in this Parliament.

Where are those members of the Labor Party who boast that they represented areas outside the capital cities? Has there been one word from them about the disruption and the unemployment in areas outside the capital cities of this country which is being caused by Government action? Has there been one word from any of the Labor Party members on this matter? I have not heard one. I certainly think that country people will continue to show that they realise that members of the Labor Party, particularly those in the Ministry, are incapable of representing them in this Parliament.

Mr Hunt:

– The Government intends setting up a task force and having people sweeping the streets.


– That is the Government’s objective. What has been done is done. Appallingly bad judgment has been shown by the Government. We have to look to the future and to the remedy. Some of the factors requiring immediate consideration include the use of the funds which the Government has said it will use in order to give people 6 months’ pay for the purpose of employing those people who are willing, able and suitable to work on civic community programs for the time being in non-metropolitan areas, particularly in Wangaratta.

Secondly, the Government must expedite the arrangements in relation to imports and should inform the people of Wangaratta and other country areas of the estimated time table so that they may know when our industries will feel the benefit of restrictive action. The Government should immediately announce its assessment or its target for the number of employees it intends retaining at Bruck Ltd and the Wangaratta Woollen Mills. The vital question to be asked is: Does the Government intend to return the number of employees at Bruck Ltd to 900 and the number of employees at Wangaratta Woollen

Mills to 430 or does the Government intend to reduce the numbers to 70 per cent of those figures, 50 per cent or 30 per cent?

The next point we have to ask is whether these dismissed workers will be relocated in Melbourne and Sydney under the manpower policy of the Minister for Labor and Immigration to which I referred earlier. Short term stop-gap measures are essentia], but the long term stability and progress of the city of Wangaratta is of crucial importance. I am using the city of Wangaratta as an example so all those who represent country areas know that this position also exists in many other areas outside of the capital cities of Australia.


– Order! It being 11 p.m. the House stands adjourned until 2.15 p.m. tomorrow.

House adjourned at 11 p.m.

page 545


The following answers to questions upon notice were circulated:

Department of Foreign Affairs: Staff Training in Financial Procedures (Question No. 339)

Mr Snedden:

asked the Minister represent ing the Minister for Foreign Affairs, upon notice:

  1. How many officers in the Department of Foreign Affairs have been given some form of formal training in financial or auditing procedures used in Commonwealth Departments in the last twelve months.
  2. What is the division and classification of these officers.
  3. How many of these officers were in operational, as distinct from financial or accounting positions in the Service.

Mr Whitlam: The Minister for Foreign Affairs, has provided the following answer to the right honourable member’s question:

  1. In the period from 1 April 1973 to 17 July 1974, 131 officers in the Department of Foreign Affairs have been given formal training in financial procedures used in Departments of the Australian Government.
  2. All concerned were Third Division Officers. They were of the following classifications:
  1. 130 of the officers concerned filled operational positions in the Department. The remaining officer filled a financial position. During the same period, 97 Third Division officers received pre-posting training on the job in the Finance Section of the Department for periods ranging up to six weeks.

South Pacific Forum (Question No. 11)

Mr Snedden:

asked the Minister represent ing the Minister for Foreign Affairs, upon notice:

  1. At the Fifth South Pacific Forum in March 1974, was consideration given to the broadening of the membership of the Forum.
  2. If so, did the Australian delegation initiate this consideration; if not, which nation took the initiative.
  3. Which member countries (a) supported and (b) opposed this idea.
  4. Was any decision taken on the possible broadening of membership.

Mr Whitlam: The Minister for Foreign Affairs has provided the following answer to the right honourable member’s question:

  1. Yes. (2)and (3) The proceedings of the Forum are confidential.
  2. Information is available in the Final Press Communique issued at the end of the meeting of the Fifth South Pacific Forum in Rarotonga on 25 March, 1974. The relevant section reads:

The Forum discussed a request by the Congress of Micronesia to attend the Forum in Rarotonga as an observer. Forum members agreed that the Premier of the Cook Islands should inform the Congress of the requirements for attendance of observers at the Forum, namely that, observer status is accorded to leaders of Governments approaching full selfgovernment or independence, and request them in the light of this to advise the Government of Tonga, as the host of the next Forum, as to their possible attendance.

Margarine (Question No. 188)

Mr Lloyd:

asked the Minister for the Capital Territory, upon notice:

  1. Is it a fact that most of the employees at the Marrickville Margarine factory in the A.C.T. do not reside in the A.C.T. and are In fact outsiders brought in specially to work the plant,
  2. If so, is this contrary to the argument put forward by the Minister at the time of the licence being granted that it would add to employment opportunities in the A.C.T.
Mr Bryant:
Minister for the Capital Territory · WILLS, VICTORIA · ALP

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

  1. and (2) The places of residence of employees of Marrickville Margarine are not known and are their own private affair.

Margarine (Question No. 189)

Mr Lloyd:

asked the Minister for the Capital Territory, upon notice:

  1. Did the Marrickville Margarine factory in the A.C.T. open for production again on Saturday, 30 March 1974.
  2. If so, was some of this production loaded on to trucks with Victorian and South Australian registrations.
  3. If the position is as stated, is some of the production being exported to these or other States; if so, is this in contravention of (a) the Agricultural Council decision that production was for the A.C.T. only and (b) the quota arrangements.
Mr Bryant:

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

  1. This is not a matter on which I have any information.
  2. see (1).
  3. (a) No. (b) No.

Washington Energy Conference (Question No. 220)

Mr Snedden:

asked the Minister representing the Minister for Foreign Affairs, upon notice:

  1. Was Australia invited to attend the Washington Energy Conference from 11 to 13 February 1974.
  2. Will the Government take action to ensure that Australia is represented at the proposed meeting between consumer and producer nations.
  3. What contact has there been between the Australian Government or its representatives and the co-ordinating group established by the Washington Energy Conference.
Mr Whitlam:

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

  1. No.
  2. The Government would welcome the development of a dialogue between consumer and producer countries. It will take a decision on participation in any proposed conference between producer and con sumer nations when definite arrangements have been made for such a conference.
  3. Australia has kept in touch with the activities of the Co-ordinating Group through its membership of OECD and bilateral contacts with participating countries.

Christmas Island (Question No. 477)

Mr Hunt:

asked the Prime Minister, upon notice:

  1. In view of the importance of Christmas Island as a source of phosphate, and in view of its strategic significance, does the Government propose to incorporate this territory within the Commonwealth of Australia.
  2. If not, what are the Government’s plans for the future of Christmas Island.
Mr Whitlam:

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

  1. and (2) Christmas Island is an external territory over which Australia has full sovereign rights. The Government does not have under consideration any proposals to change the situation.

The ministers who introduced the legislation requesting and accepting the Island from Britain mentioned its importance as a source of phosphate but did not mention its strategic significance (Hansard, 3 December 1957, page 2739, and 21 August 1958, page 618). Australia and New Zealand have equal rights to the phosphate deposits on the Island.

Cite as: Australia, House of Representatives, Debates, 23 July 1974, viewed 22 October 2017, <>.