House of Representatives
25 September 1974

29th Parliament · 1st Session

Mr SPEAKER (Hon. J. F. Cope) took the chair at 3.5 p.m., and read prayers.

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The Clerk:

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

Child Endowment

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:

Child endowment received by families has declined relative to average earnings so that today it is about 20 per cent of its value in 1 949.

The Interim Report of the Australian Government’s Commission Into Poverty recommended a substantial increase in Child Endowment as a way of alleviating poverty.

This report pointed out that increased Child Endowment deserved priority and would be advantageous to the community in the long run.

It specifically recommended increasing child endowment from50 cents to $ 1 . 50 for the first child; from $ 1 . 00 to $2.00 for the second child; from $2.00 to $4.00 for the third child; from $2.25 to $7.00 for the fourth child; and to $8.00 for subsequent children.

Your petitioners humbly request that the Government increase Child Endowment in the September Budget.

And your petitioners as in duty bound will ever pray. by Mrs Child, Mr Fulton, Mr Scholes, Mr Staley and Mr Street

Petitions received.

Social Security

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

That the inflation which now besets so many countries today and in Australia is now at the rate of 14.4 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 test 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 Hewson and Mr Mulder.

Petitions 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 of 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 to function efficiently and economically.

And your petitioners as in duty bound will ever pray. by Dr Klugman and Mr Morris.

Petitions received.

Baltic States

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

Regarding the ‘recognition’ of the control by the Soviet Union of the three Baltic countries Latvia, Lithuania and Estonia by the Australian Government, be rescinded.

Your Petitioners therefore humbly pray that in the name of all that is dignified and decent in humanity that the ‘recognition ‘ above be rescinded.

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

Petition received.

Baltic States

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:

Whereas the Baltic States of Estonia, Latvia and Lithuania were independent republics and members of the League of Nations until occupied and annexed by the Soviet Union following a secret agreement between Hitler and Stalin, such annexation has not been recognised by the Governments of the United Kingdom, the United States of America, Canada and many European countries. As announced recently in Moscow, the Australian Government has now recognised them as part of the Soviet Union and according to the Australian Minister for Foreign Affairs such decision has been made by the Prime Minister without consulting the Government or Parliament. We the undersigned petitioners humbly beg Parliament to express its disapproval of such action.

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

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 a 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 least 50 per cent of the cost of educating children in government schools, thus enabling the nongovernment 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 Chipp and Mr Scholes.

Petitions received.


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

That whereas uranium found in vast quantities in Australia is the raw material for the nuclear fission reaction,

And whereas presently assured reserves of uranium in Australia represent a potential production of over 540,000 kilograms of Plutonium 239 if utilized in Light Water Reactors overseas,

And whereas the Maximum Permissible Inhalation of Plutonium 239 is 0.00000025 gram,

And whereas Plutonium 239 is one of the most dangerous substances human society has ever created, causing mutations and cancers,

And whereas there are no methods of safely and absolutely confining Plutonium from the biosphere for the requisite quarter of a million years,

And whereas Plutonium coming in contact with the air forms an aerosol cloud of micron-sized particles, its most dangerous form,

And whereas the export of uranium may return to us an import of Plutonium particles dispersed in the global environment via the circulation of the atmosphere,

And whereas there are no sure safeguards against the military use of nuclear fission, and the nuclear proliferation represents a prime environmental threat to all forms of life on the only earth available to us,

And that it is therefore an act of self-preservation to demand a halt to all exports of uranium except for biomedical uses,

Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:

  1. That further mining and export of uranium from Australia except for bio-medical purposes be banned,
  2. That the Australian Atomic Energy Commission be transformed by the rewriting of its charter into an Australian Energy Commission to further the understanding of energy flows through our society and to promote national economic independence and selfsufficiency.

And your petitioners as in duty bound will ever pray. byDr J. F. Cairns.

Petition received.

Australian Textile Industry

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

That we have cause to be greatly concerned with the state of the textile industry in Australia, and the effect upon this industry caused by the lifting of tariffs on low-cost garments entering this country from Taiwan, Hong Kong, China, Korea, etc.

For a period of over twelve months Australia has been flooded with low-cost garments of inferior quality imported from Asian countries.

This has caused a widespread slump in the garment industry and as a result many of our large and hitherto successful manufacturers have been forced to lay off large numbers of trained and qualified staff.

Many of these people are finding alternative employment difficult or impossible to obtain, thus suffering hardship and we, still in the industry feel that our jobs and our security are at grave risk.

Our employers too, are facing great economic difficulties and many have already closed their businesses as a direct result of the unfair competition arising from Asian produced textiles.

We, your petitioners, therefore humbly pray that the government examine closely the depressed state of the Australian textile industry and take the necessary steps to bring about a state of full employment and economic growth by imposing restraint on the importation of lowlabourcost textiles, particularly of Asian origin, and your petitioners as in duty bound will ever pray. byDr J.F. Cairns.

Petition received.


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 the whole principle of the Family Law Bill 1 974 is aimed at destroying the entire concept of marriage as traditionally recognised in Australia, with its special obligations between husband and wife and between parents and children.
  2. That the bill fails to recognise or provide for the equal rights and responsibilities of both parties to a marriage, such as are provided for in the Universal Declaration of Human Rights, including the rights of parents to choose the type of education they desire for their children.
  3. That this bill appears to express the desires of only a minority of Australians.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should not admit into the law of this land the principle that marriage is only temporary and the family no longer the fundamental unit of society.

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

Petition received.

Family Law Bill

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

That we strongly oppose the Family Law Bill, 1974, which is being introduced into our Federal Parliament by The Honourable The Attorney-General, Senator Lionel Murphy, because of the absence of protection for the human family in its natural and traditional constitution as the basic unit, the ostensibly permanent unit of human society.

We oppose the Bill because of the omission of a dearly defined clause like that which is incorporated in The Universal Declaration of Human Rights, and which declares that both men and women shall have equal rights in marriage and that Parents shall have the right to choose their children’s education.

We oppose the Bill which is accredited to Senator Murphy, because either of the parties to a marriage, if the Bill becomes law, will have no defence, i.e., no legal objection, to a divorce which might be desired and instituted by the other party. In this conception of law, there is no justice, no humanity, and no recognition of the traditionally accepted standard of marriage and the family, but there is a tremendously noticeable backward step in the civilisation of Australian people.

Whilst we oppose the Bill for abovementioned reasons, we see it as expressing the views of an individual, or the views of a minority of citizens or their Representatives, instead of the views of the majority of Australians. Therefore, we beg the rejection, and not the passing of this Bill. And your petitioners, as in duty bound ever Pray. by Mr Kevin Cairns.

Petition received.

Family Law Bill

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

  1. We are strongly opposed to any reduction in the present 24 month separation period requirement now to be fulfilled prior to the date of commencement of the hearing of an application for the dissolution of a marriage.
  2. We believe that evidence should be produced that genuine attempts have been made at reconciliation.
  3. We believe both parties are entitled to equitable distribution of family property and assets.
  4. We urge the inclusion, in this Bill or in other legislation, of positive steps to provide funds for Family Life Education in schools and in post school years, for Preparation for Marriage programmes and for the decentralising of approved Guidance Facilities and for education in Marriage Courses for young marrieds.

Your petitioners therefore humbly pray that the Government will amend the proposed Family Law Bill in accordance with the points contained herein.

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

Petition received.

Jervis Bay: Heavy Industry

To the Honourable The Speaker and Members of the House of Representatives. The petition of citizens of New South Wales and the Australian Capital Territory respectfully showeth that we seek to protect the natural environment of Jervis Bay.

We consider the construction of steel works or any other heavy industry requiring Wide Water Location to be the most immediate and serious threat to the natural values of Jervis Bay.

Your petitioners therefore humbly pray that your Honourable House will reject the Armco proposals or any other as stated above.

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

Petition 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 of the civil liberties of Australian citizens, particularly working wives and single persons.

That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual ‘s right to choose his/her own doctor.

Your petitioners therefore humbly pray that the Government will take no measures to interfere with the basic principles of the existing health scheme which functions efficiently and economically.

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

Petition received.

Supporting Fathers

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 a Pension Scheme for males, bringing up and supporting their children, similar to that which is in operation for females in a similar position, be implemented immediately to alleviate the suffering of the supporting males and their children and whereas in the case of a parent (male or female) working full time and employing a housekeeper, the housekeeper’s total wage should be totally tax deductable.

Your Petitioners therefore humbly pray that the Government take steps immediately to rectify this situation.

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

Petition received.

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– Will the Prime Minister condemn last night’s scandalous episode in which information about the decision to devalue the Australian dollar was widely available throughout Parliament House up to 7 or 8 hours before the official announcement which was made at 6 a.m. today. Is the Prime Minister aware that at the time of this disgraceful leakage of information it was about midday London time, allowing a full afternoon of trading to speculators in the northern hemisphere? Will he now order an urgent inquiry to establish how the premature disclosure occurred last night; which Minister has ministerial responsibility for the preservation of the secrecy of the decision; and the extent and effect of speculation in the Australian dollar on foreign money markets resulting from this leakage? Will the Prime Minister table the report of that inquiry in the House? Will he preserve the integrity of Australia’s international reputation by requiring the responsible Minister to resign as would be required by the Westminster system of parliamentary government?


-The right honourable gentleman makes assertions. He produces no facts at all. The Ministers concerned with this decision were the Treasurer, the Deputy Prime Minister and I. I would stake my life on my 2 colleagues whom I have mentioned. I have worked with the Treasurer in this Parliament for nearly 22 years and I have worked with the Deputy Prime Minister in this Parliament for nearly 18 years. From my close acquaintance with them I know them to be people of complete honour and trustworthiness. The right honourable gentleman is in no position to talk about speculation concerning the Australian dollar. When he was Treasurer he initiated Cabinet discussions concerning the value of the dollar. They went on for 3 days. Everybody knew who would win a contest between him and the Leader of the Australian Country Party. It was a field day for speculators at home and abroad- 3 field days, in fact.

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-Is the Minister for Education aware of the growing disquiet among parents and teachers over the spending of the Australian Schools Commission money by State governments? Would the Minister inform the House of the degree of accountability State governments have to the Australian Government in the spending of Schools Commission money? To what extent is it possible for members of the Australian Parliament to know in what State schools Australian Government money is being and has been spent?


– A considerable volume of correspondence is being sent to me by people who are expressing disquiet that State governments are not spending as additional sums of money the so-called Karmel grants, or the grants under the States Grants (Schools) Act 1973 to the States. I draw the honourable gentleman’s attention- answering his third question first- to the fact that section 59 of the States Grants (Schools) Act, which goes on for 2½ pages, specifies every section of the Act. It requires me to lay before both Houses of this Parliament the details of every form of State government expenditure on State schools after the academic year. That would mean that the information should be available as early as possible next year. So whether the money was spent on laboratories, programs for disadvantaged persons or any of the Karmel programs whatsoever, I am required to present those details to the Parliament. If a State government declines to give that information it would not be flouting me; it would be flouting this Parliament which has enacted that requirement.

On the subject of the grants to the States, I remind the honourable gentleman that the Prime Minister had an arrangement with the Premiers whereby the capital expenditure of the States should be the average of that of the 3 financial years before the Prime Minister made his arrangements with the State Premiers in 1973. The Prime Minister also made an arrangement with the Premiers that the percentage of their housing and other expenditure of a capital nature for which they accepted responsibility should not be lower than it had been before the commencement of the arrangement. As far as recurring grants are concerned, State appropriations must not be below the appropriation for the financial year 1971-72; it must be the same percentage of their recurring budgets. I think it will be possible for all of those things to be required. The Australian Schools Commission is obtaining information of an interim character. The details of every specific school are required of a State at the end of an academic year and they must by law then be made available to this Parliament. The honourable member in his question expressed the desire to know about these things. If any honourable gentlemen are interested in expenditure in their own localities we would certainly ask the State government concerned for the information. But in fairness to the States, I think that this information could be given only at the end of a complete academic year if one were to make any inferences or generalisations about their programs.

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– Does the Prime Minister deny that it was common knowledge in this Parliament last night-rather I should say ‘around the House’ because no statement was made to the Parliament- that there was to be a devaluation of the currency which would take place this morning? If he does deny it, how does he reconcile his denial with the fact that members of the Press wrote their stories giving the exact figure last night for publication in this morning’s newspapers? For instance, does he deny the accuracy of the statement in the ‘ Courier Mail ‘ of today that ‘The devaluation is expected to be by 12 per cent against the US dollar’, and that ‘A Government official said last night there would be an announcement today’? Does he deny that the Melbourne ‘Sun’ published the exact figure? Against this background, will he please put aside the bluster of the guilty and engage in an inquiry to ascertain how this serious information could become available to those people wishing to make profit from it? Does he realise that this is a worse example than anything that has been put in the Rae report? In the examples in the Rae report private information was used by private individuals from a private source, but this emanates from the Government. It was put last night that a Government official would make a statement today. Will the Prime Minister therefore have the inquiry which I requested?


– I do deny that this was common knowledge round the Parliament. It gave my colleagues the Treasurer and the Deputy Prime Minister exquisite pleasure to see how the right honourable gentleman was floundering throughout the evening’s proceedings. He had no inkling of what was going on in this matter. It has irked him for weeks, of course, that he has been deprived of making decisions in the Treasury. He had no idea what was going on. If he asserts that this was common knowledge, it is amazing that he showed no awareness of it himself whatever. The fact that a newspaper says ‘Government officials say’ does not prove that the Government and officials have said anything of the sort. It is commonplace to dress up stories by saying that they came from sources close to such and such a department or Government officials. It is a stock-in-trade. If the right honourable gentleman has anything specific at all it is his duty to give it to me and I will certainly pursue it. But I will not take up the time of the departments, my colleagues or the judiciary in investigating sheer allegations such as he has now twice made without substance. He cannot support them. He cannot adduce any evidence whatever. He knows that. If he does have any evidence he should give it and I shall pursue it.

Mr Snedden:

- Mr Speaker, I raise a point of order. This is a most serious matter. I have been asked to produce what I know. Mr Speaker, I ask leave to table this morning ‘s ‘ Courier-Mail ‘.


-Order! That is not a point of order; that is a request. I suggest the right honourable gentleman seek the indulgence of the Chair to make a request.

Mr Snedden:

– Then I shall take your advice, Mr Speaker. I ask your indulgence to make a request that this morning’s newspaper the ‘Courier-Mail’ and such other newspapers as refer to this matter should be tabled and that the Prime Minister should in pursuance of his undertaking, ascertain from the writers of the relevant articles in those newspapers the source of their knowledge. Unless that is pursued the inquiry cannot be successful.


– Order! The right honourable gentleman is not entitled to make a speech or to debate the question. The question is in regard to tabling. The right honourable gentleman has to seek leave and the answer has to be either yes or no. Let me explain the position. When any honourable member asks for leave to table a paper, leave either is granted or not granted. No debate can take place on that request. The Leader of the Opposition has asked for leave to table certain newspapers. What is the answer?

Government supporters- No.


– Leave is not granted.

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– Is the Minister for Overseas Trade aware that 2 textile manufacturers, Fibremakers Ltd at Bayswater and Courtaulds Hilton Ltd at Healesville, both in Victoria, have retrenched workers from their factories? Is he aware that reports of the number of those retrenched at Fibremakers vary from 106 to 180 and at Healesville from 30 to 40 women? What indications or assurances can he give these workers of continued employment, preferably in their former occupations, and when can the manufacturers expect an improvement in their situation?


-I am aware of the reports of retrenchments at the 2 factories mentioned by the honourable member. I point out that when an economy has reached a very high point of demand, of inflation, such as ours has, there is invariably sooner or later a downturn in demand and a downturn in employment. No matter what a government does or does not do, that is a very likely result. It has happened on many occasions before and it will happen again. No government can guarantee that every person in employment in those circumstances will remain in employment, especially in the place where he has been employed before. We have now a fairly adequate record of what has been happening as a result of changes in industry, which may be classified as structural changes resulting from such things as increased imports- and that applies strictly to the 2 cases mentioned by the honourable member. I should like the House to have an indication of the figures so that it may know and so that the people may know just where this unemployment is taking place. In the reported groups at the end of August the figures are: Chemicals and oils, 1; basic metals, 13; nonelectrical plant and machinery, 69; electrical machinery and cables, 278; vehicles, 77; textiles and knitted groups, 2,266; skins and leather, 24; clothing, 547; footwear, 407; furniture and furnishings, 5; paper products, 1; other types of industry, 11; other metal manufacturers, 9; bricks and tiles, 2 1; pottery, 2; and meat slaughtering, 8-a total of 3,739.

Those figures indicate the concentration that exists in the textiles and knitted groups of industries and in the clothing and footwear industries. If those figures are left out, the remaining figures are almost negligible. The concentration in the State of Victoria is shown by the number of people in receipt of special readjustment assistance at the end of August. The total Australian situation is that 1,733 people were in receipt of assistance, and of that number 1, 146 were in Victoria. The further indication that comes from these figures is that most of these people are concentrated in very few areas. Most of the people who are out of employment, and have been for any length of time- for more than a week or 10 days- are in those areas. In Geelong, 36.8 per cent were out of employment for less than a month; in Shepparton, 38.7 per cent; in Wangaratta, 38.3 per cent; in Kempsey, 32.5 per cent; and in Launceston, 43.9 per cent. Those are the figures for the areas in which unemployment is at the highest level.

The action taken to deal with the situation has to be specific. To be appropriate it has to be directed at the industry concerned and at the place concerned. It is the intention of the Government to bring about re-employment in the areas concerned, in the places concerned and, if possible, in the factories concerned by measures which will be taken and which will be administered by the Interim Structural Adjustment Board that was appointed last week. I point out also that I mentioned yesterday that the Government had adopted a policy appropriate to the circumstances that prevailed in 1973 and we are not now dealing, as we were then, simply with inflation. We are dealing now with inflation and unemployment as a result of economic circumstances which generate very largely in the economic system itself.

I pointed out yesterday that the policy adopted to deal with that situation included an appreciation of the Australian dollar. I said yesterday that when the Government was satisfied that circumstances had changed policy would change, and policy changed last night in respect of the value of the Australian dollar. I point out that the depreciation of the Australian dollar, which the Government brought about last night, will give considerable protection to the industries which I have just listed and will result in re-employment in those industries, as well as helping the establishment of confidence by business which will allow investment to proceed at a more rapid rate. The policy adopted last night is appropriate to the circumstances that prevail now. Never before in the history of this country- at least since World War II-have we had a government which has applied policy appropriate to circumstances and which is ready to change if circumstances change.

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-Does the Prime Minister deny that profits were made on overseas money markets arising out of the devaluation decision announced this morning and the circumstances preceding it last night? If he does deny that profits were so made, does he deny that the opportunity was created for making those profits? I ask the Prime Minister whether he recalls stating publicly on 29 November 1973:

It would be quite improper for a Minister, for a Public Service adviser, to allow persons who are not sworn to secrecy to know matters in a forthcoming Budget or proposed currency or interest or customs changes.

Does he still hold that view?


-The answer to the first question is: I do not know. The second question does not arise. The answer to the third and fourth questions is yes.

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– I direct a question to the Prime Minister in his capacity as Acting Minister for Foreign Affairs. Is it a fact that some of Australia’s posts abroad are sorely taxed by the number of visitors they are obliged to look after? For instance, is it a fact that our Commission in Hong Kong was subjected to about 32 visits from members of the Queensland Government and Parliament last year and our post in Japan received a similar number from that source? In view of the lack of co-operation by the Queensland Government with the Australian Government what is the Australian Government’s policy in relation to this matter?


– It is true that the Premiers write to me very frequently requesting that assistance be given to them, as Premiers, or to some of their Ministers, officials or fellow parliamentarians when they are visiting other countries. Naturally the Australian posts are willing to cooperate and the Premiers have thanked me for the co-operation that has been forthcoming. It is true, however, that this is a very considerable burden on the Australian Government. It would not appear to us to be by any means clear that the visits were required by any activities within the jurisdiction of the State parliaments. After all, the only parliament in Australia which has any international jurisdiction or standing is this Parliament. The State Parliaments are still, in constitutional terms, British colonies. They have no international standing. They are not given international recognition. Nevertheless, it is a matter of public knowledge that most Premiers spend more time out of Australia than the Prime Minister himself. There have been more overseas visits by State Ministers last year and this year than there have been by Federal Ministers.

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– My question is addressed to the Prime Minister. The Prime Minister has just said that he does not know whether profits were made on overseas money markets. Does he not realise that this represents a scandalous situation? Is he prepared to leave this scandalous situation without inquiry? If he does not know whether profits were made on overseas money markets, does he not believe that he has a responsibility to the Australian people, to the Government and to this Parliament to ascertain whether they were or were not made and, if they were, how much money was made and by whom? Will he now agree to the holding of an inquiry to ascertain the facts?


– If there has been any improper speculation in the Australian currency during the last 24 hours I have no doubt that it will be reported to the Treasurer. I have no doubt of that whatever. I can only repeat that the right honourable gentleman, for all his bluster and for all his allegations, has not produced one tittle- or, as his Deputy would say, one scintillaof evidence. The Deputy Leader of the Australian Country Party is handing a newspaper to the Leader of the Opposition. The Deputy Leader of the Australian Country Party would know quite well that all one can do on the basis -

Mr Snedden:

– Are you prepared to leave this scandalous situation unresolved?


-The Leader of the Opposition is fabricating a scandalous situation. The scandalous situation, I repeat, arose when he was the Treasurer and for 3 days was locked in a public brawl with the Leader of the Australian Country Party. As a result of that brawl there were 3 days of speculation in the Australian currency in London and in most other money markets. As I have said, everybody knew what the result of a brawl between the right honourable gentleman and the Leader of the Australian Country Party would be. In case anybody is impressed by all this bluster and fury from the right honourable gentleman I point out that he knows perfectly well that anything concerning the conduct of a member of this Parliament can be referred to the Committee of Privileges.

Mr Anthony:

– You will not let it.


– I could not stop it. If an allegation before the Committee of Privileges is based on a newspaper report the first witness is the reporter. The reporter obviously would swear that he had informants. He would also refuse to name those informants. Everybody knows those 2 facts: The reporter always swears to the truth of what he wrote and always refuses to name his informant. The right honourable gentleman knows this perfectly well.


- Mr Speaker, I rise on a point of order. The Committee of Privileges deals with trespassing against the Parliament, not with secrets of government. This is completely out of order.


– Order! That is not a point of order. The honourable gentleman will resume his seat.

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-I address a question to the Minister for Labor and Immigration. I refer to the necessary investigations which must be carried out by the Department of Immigration before people can be granted approval to migrate to Australia. Is it a fact that a large number of applications have been lodged by residents of Fiji to migrate to Australia? Is there a considerable delay in the processing of these applications? Will the Minister give consideration to increasing the staff of the Department of Immigration in Fiji to enable the more expeditious processing of these applications for permanent entry to Australia?


– I do not know the number of applicants for migration to Australia from Fiji. I do not know whether there is undue delay. I will examine the matter and if there is undue delay I will see what can be done to rectify it.

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– Has the Treasurer any evidence of any speculation on the London market late in the trading last night? If so, what is that evidence? If he has no such evidence will he ensure that an investigation is made of the volume of Australian bonds traded on the London market and will he report the substance of that trading to this Parliament?


– I have no such evidence but for the benefit of the questioner I will read 2 cables that I received today from London on this matter. The first reads:

Rumours of an Australian devaluation have been circulating in Britain for months. For this reason the latest wave of rumours caused only a slight ripple in the Australian sector of the London Stock Exchange. Brokers said that generally prices of Australian shares had been adjusted to take account of such a possibility but they said that the devaluation rumours served to reinforce a slight firming tendency in Australian mining shares today. Investors considered that mining shares might be a better prospect now as companies could earn more Australian dollars from mineral exports but on the other hand mining companies had lost some tax concessions in the recent Australian Budget brokers pointed out.

The other cable reads:

Rumours . . .

I repeat ‘ rumours ‘. One cannot be responsible for rumours. I do not think anybody has been punting on a revaluation of the Australian currency in recent times. The whole contemplation has been about a possible devaluation. As I indicated, rumours have been circulating in Britain for months. The second cable read:

Rumours of an imminent devaluation caused a flurry of selling on the foreign exchange market in London today. The rumours spread rapidly through financial circles following a Melbourne newspaper report.

I sometimes wonder how a journalist sees his job as a journalist against what might be called important national interests. I have no admiration whatever for those who, knowing that something is secret, will take advantage of a few hours for one day’s story. I am sure that all honourable members opposite who were Ministers in the past have had the experience of certain things which they would not like to have had divulged in fact being divulged before they should have been. The cable continues:

The rumours spread rapidly through financial circles following a Melbourne newspaper report that the Government had decided on a 12 per cent devaluation. One Australian bank said that trading was normal until late this afternoon, when there was a sudden burst of selling activity.

I hope honourable members opposite will listen to what follows. The cable goes on:

Much of the selling pressure came from international commodity and commercial quarters with links in Australia. Banks continued to maintain fairly stable rates for the Australian dollar despite the selling wave. One bank spokesman said that transactions went through immediately in the case of transactions which were for ‘regular customers’ or which were considered to arise out of ‘genuine business*. In the case of ‘speculative’ moves, the bank offered to complete the transactions tomorrow, he said.

Mr Snedden:

– I rise on a point of order. The honourable gentleman read from a document. In accordance with the Standing Orders I ask for the whole of the document to be tabled.


– The Minister may table the document if it is not classified.


-I table the whole of the document. I resent the suggestion that I am giving only selected parts. You can have the document.

page 1789




-Has the attention of the Minister for Education been directed to the article ‘Racism in School Books’ in the latest edition of the ‘Australian Quarterly*? Is the Minister aware that this article demonstrates that most social science textbooks now being used in schools develop and reinforce racist attitudes in the students, and that the most effective way of reversing this situation is for the Curriculum Development Centre to undertake the task of preparing such textbooks? Will the Minister use his best efforts to ensure that this project is given top priority by the Curriculum Development Centre?


– I read an article in the ‘Australian Quarterly’. I would like to inform the honourable gentleman that the Australian Government and the State governments, which jointly have an interest in the Curriculum Development Centre, have authorised it to carry out research into the whole question of the teaching of social sciences in Australia. The purpose of this is to endeavour to ensure that the teaching of social sciences in Australia is valid. In addition, the Curriculum Development Centre has authorised Dr Betty Watts to supervise the preparation of what I might call a teaching kit on the Aboriginal peoples. There are many cultures among Aborigines. I would hope that the findings of the Australian Institute of Aboriginal Studies would go into our schools and our school textbooks. However, I think that the article in the ‘Australian Quarterly’ was itself an extremely prejudiced piece of work. It had a lot of strictures to offer on European cultures and what it regards as fallacies in European cultures. The article contained the complete implication that, although children may derive bias from many quarters, they derive bias from the one quarter which is under the control of the Government-school textbooks. I hope that school textbooks will not be under the control of any government. I want school textbooks to be produced by scholars who are seeking to advance valid information. I would think that the assessment of Aboriginal culture should be honestly done according to anthropological findings and according to the facts. I agree that bias of a destructive kind against the people would of itself be entirely unscientific because the cultures that people have are usually the products of their environment and situation, and any inferences of superiority or inferiority arising out of them would be unscientific. I would hope that there is no suggestion of government direction of scholarly research.

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-The Deputy Prime Minister will know that one of the conditions laid down by the unions for their discussions with the Government on wage restraint is that the Government will reintroduce import quotas and provide assistance to industry to restore full employment. I ask the Deputy Prime Minister whether the Government considers that the action which it has taken on the exchange ratefor which I commend the Minister, particularly after his statement to Parliament yesterdaymeets the conditions that the unions want.


– This is a very important matter. It is true that the Australian Council of Trade Unions- it has taken a position that is widely understood as being representative of the view of the trade union movement- has submitted to the Government that, in the course of establishing what would be a common policy to deal with the present economic situation, including both inflation and unemployment, in Australia, the Government should consider favourably the introduction of import quotas or the introduction of quotas allowing smaller amounts to come into Australia than exist under quotas already. It is true also that I informed the President of the ACTU last week that the Government would give consideration to that request. That is still our position.

I pointed out, in answering a question a few minutes ago, that the depreciation of the Australian dollar has the effect, among other effects, of protecting those industries that are under pressure. Whilst I am sure that no remedy can have an effect for a month or two, because of the time taken for orders that are already made to reach Australia and to be sold, I would hope and expect that the depreciation of the currency would have the kind of effect that the ACTU and the unions want. I hope that the unions and the workers will understand the effect of that depreciation and that it will be unnecessary in the interests of industry and the country to proceed any further by any other protective measures at all.

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– I have a message-I mean I have a question, and it is without notice, for the Minister for Social Security. The Minister will be aware of the financial problems of many nursing homes and aged persons homes organisations which signed contracts for building operations with rise and fall clauses prior to the Government giving further benefits in this area. Has the Minister any news for these organisations?

Minister for Social Security · OXLEY, QUEENSLAND · ALP

– It is a fact that the question is without notice. I cannot say any more than the points that I expressed last week. The Department of Social Security and the Treasury- it is always handy to try to have the Treasury on side in these matters- have had a joint working party considering ways in which we can provide some assistance to these organisations. I recognise that there are serious financial problems. I hope that, quite soon, we will have some proposals in respect of this problem on which the Caucus committee and subsequently the Caucus can make a decision.

page 1790




-My question is directed to the Prime Minister. It deals with a different matter from the one on which he has been questioned today. It relates yet again to differences between he and the Deputy Prime Minister. On 24 May last year, in his first statement to this Parliament on international relations, the Prime Minister said:

We do not seek membership of the non-aligned movement

Given that the Deputy Prime Minister is not only a member of the Congress for International Cooperation and Disarmament but also, as I understand it, is its elected president, and given also the fact that that organisation is currently distributing brochures and pamphlets calling on this Government to adopt a non-aligned foreign policy for Australia, will the Prime Minister state unequivocally that non-alignment is not to be the foreign policy aim of his Government?


– I have not had the advantage of seeing any of these documents. Therefore, I have not had the advantage of having any discussions about them with my deputy. The honourable gentleman alleges that there are differences of opinion between my deputy and me. I am not aware of them. If the honourable gentleman wants to pursue this I will, of course, give very earnest consideration to his allegations. If he puts them on notice I will see whether there is any substance in the allegations he makes of differences of opinion between he, as he puts it, and me.

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Minister for Transport · NEWCASTLE, VICTORIA · ALP

-I realise the honourable member’s problem concerning the curtailment of New South Wales passenger services. One of the unfortunate aspects is that the New South Wales Department of Railways is closing down quite a considerable number of railway services throughout New South Wales without having due regard to the needs of the people in those areas. This Government has made numerous offers. The Prime Minister made an offer as late as June this year at a Premiers Conference. He made an offer in his policy speech of December 1972 and he repeated it again in May 1974 that this Government is prepared to take over these services and to accept full responsibility for them. Before we would be prepared to consider these matters they should be given a complete and total inquiry to determine the harmful and sociological effects on the people involved. Unfortunately the New South Wales Government has not done all of these things. Therefore we have the situation in which the honourable member for Darling finds himself. My understanding- I will check this out for the honourable member- is that the ‘Indian Pacific’ is travelling at maximum capacity. If there is any possibility of assisting we certainly will.

Mr Whitlam:

– I ask that further questions be placed on the notice paper.

page 1790




-Mr Speaker, I ask for your indulgence for a moment. During question time the Prime Minister said that if there was any evidence he would, himself, make sure an inquiry was made. I rely upon this evidence, which is produced by the Treasurer, and presumably he relies on it It was included in the document which was tabled. It reads:

Rumours of an imminent devaluation caused a flurry of selling on the foreign exchange market in London today. The rumours spread rapidly through financial circles following a Melbourne newspaper report that the Government had decided on the 1 2 per cent devaluation.


– Order! I should like to put this matter in its right order. The right honourable gentleman has sought to make a statement by seeking the indulgence of the Chair. I think it is better to seek leave to make a statement because probably there will be a reply to what the Leader of the Opposition is saying now, and I will have to grant leave for that reply.

Mr Snedden:

– Certainly. I ask for leave to make a statement.


-Is leave granted?

Government supporters- No.


– Order! This is really an extension of question time. The right honourable gentleman is placing the Chair in an invidious position in regard to this matter. I suggest that if he wants to debate the telegram that was passed over by the Treasurer he should seek leave to make a statement.

Mr Snedden:

- Mr Speaker, perhaps I could just put it to you that I do not want to debate the matter. I was quoting but I do not need to. The point is that I was quoting evidence and the Prime Minister has said that if evidence were produced he would have an inquiry made into this matter. The Treasurer has produced this document -


-Order! The telegram has been tabled and is now the property of the House. The question is: When is the correct time to debate this matter? I think what the Leader of the Opposition is saying now would evoke an answer from the Prime Minister. So I think the Leader of the Opposition would be out of order in speaking to this matter now unless he obtained leave to make a statement. He sought leave but it was not granted.

Mr Snedden:

– The Prime Minister said an inquiry would be held if evidence were produced. I am pointing out that evidence exists in the document which has been tabled.

Mr Keating:

– I rise to order, Mr Speaker. The inquisition which the Leader of the Opposition is now attempting to pursue is, in fact, an extension of question time. The Prime Minister has asked that further questions be placed on notice. You, Mr Speaker, have asked the House whether the Leader of the Opposition was granted leave to make a statement. Leave was not granted. The Leader of the Opposition has no right to speak on this matter unless he moves a substantive motion.


-Order! I think the point of order is valid. The Leader of the Opposition will have other opportunities to pursue this matter, such as the adjournment debate tonight. I am only enforcing the Standing Orders. If leave has been refused to the Leader of the Opposition to make a statement I cannot do anything about it. The Leader of the Opposition has sought the indulgence of the Chair and has sought leave to make a statement. I cannot let him debate the matter because I assume it would evoke an answer from the Prime Minister, which would be out of order.

Mr Snedden:

– The Prime Minister has clearly said that if there were evidence he would pursue it with an inquiry.

Mr Snedden:

– There is evidence.


-Order! The matter is concluded. There will be no further debate on it.

Mr Anthony:

- Mr Speaker, I rise to order. I believe that when the Leader of the Opposition seeks the indulgence of the Chair when such a serious allegation is made he is not wasting the time -


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

Mr Anthony:

– Consideration should be given to the Leader of the Opposition.


-Order! There is no substance to the point of order. The right honourable gentleman will resume his seat.

Mr Anthony:

– You are depriving this Parliament of justice. How do you expect the Opposition to work?


-Order! The right honourable gentleman will resume his seat. The point of order taken by the honourable member for Blaxland was quite valid. Question time has finished. If leave to make a statement on a document which has been tabled by the Treasurer, with the consent of the House, is refused, there is nothing I can do about it. If the right honourable gentleman wants to pursue the matter he can do so at the right time. I am sure that if he puts his name on the list of speakers to speak on the adjournment tonight he will have an opportunity to pursue the matter.

Mr Anthony:

– Order! I am telling the right honourable gentleman the forms of the House in case he wishes to use them. The matter cannot be debated now. Question time has concluded and there will be no further questions.

page 1792


Minister for Minerals and Energy · Cunningham · ALP

– Pursuant to section 32 of the Hydro-Electric Power Act 1949-73 I present for the information of honourable members the 25th Annual Report of the Snowy Mountains Hydro-Electric Authority.

page 1792


Mr CREAN (Melbourne PortsTreasurer)Pursuant to Section 34 (2) of the Services Trust Fund Act 1947-73 I present for the information of honourable members the following reports: The Royal Australian Air Force Welfare Trust Fund; the Australian Military Forces Relief Trust Fund; and the Royal Australian Navy Relief Trust Fund. Because these funds are in the process of changing to a calendar year accounting period these reports cover the period 1 July 1973 to 31 December 1973.

page 1792


Special Minister of State · KingsfordSmithSpecial Minister of State · ALP

– Pursuant to Section 25 of the Apple and Pear Organization Act 1938-71 1 present for the information of honourable members the Twenty-Eighth Annual Report of the Australian Apple and Pear Board for the year ended 30 June 1974.

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KingsfordSmithSpecial Minister of State · ALP

– Pursuant to Section 8 of the Poultry Industry Assistance Act 1965-66 1 present for the information of honourable members the Ninth Annual Report on the Operation of the Poultry Industry Assistance Act for the year 1973-74.

page 1792


KingsfordSmithSpecial Minister of State · ALP

– For the information of honourable members I present the interim report of the Director of Defence Service Homes on operations in relation to insurance and financial statements for the year ended 30 June 1 974.

page 1792


Minister for Education · Fremantle · ALP

– Pursuant to section 33 (2) of the Australian National University Act 1946-1973 I present for the information of honourable members the report of the Council of the Australian National University for the calendar year 1973.

page 1792



-I wish to make a personal explanation


-Does the honourable gentleman claim to have been misrepresented?


-Yes. I thank you for calling me, Mr Speaker. You said that you would do so when the House adjourned last night. Before the House adjourned the Special Minister of State (Mr Lionel Bowen) made certain statements in regard to me which I think I should take this opportunity of refuting. First, at page 1727 of Hansard the Minister is reported to have said: … the honourable member for Mackellar, even though he says he is retiring . . .

I have made no such statement. I think that the Minister is taking too much for granted in making such a statement. The Minister, referring to me, also said:

He said they were Marxist union officials. That is not true either, but he uses the privilege of the House to talk about people in this fashion, knowing that they cannot defend themselves.

I turn to my original statement to which the Minister was referring. It was:

It is an unhappy fact the postal unions have to a large extent fallen under the control of Marxists.

I have made this statement not only in this House but outside the House. When the Minister says that I am using the privilege of this House he is entirely and completely wrong. I have made that statement outside the House. I am prepared to make it outside the House again. The Minister traduces me entirely by saying that I am relying on the privilege of this House in order to make such statements.


-Order! The honourable gentleman sought leave to make a personal explanation. He cannot debate the subject.


– I will not debate it.


-He cannot say who is a Marxist and who is not.


-Thank you, Sir. I simply say that what the Minister said in regard to me was factually untrue. On page 1580 of Hansard I am reported as saying:

I am told that the Minister put his signature on that series of demands at the meeting. If this be untrue, let the Minister deny it.

By way of interjection the Minister said:

Ofcourse it is untrue.

Yet last night in the House he admitted that it was true, that he had signed a series of documents.


-Order! The honourable member is debating the subject. I think that the honourable member would agree that I have been very lenient with him and that I have shown him quite a bit of latitude last night and today. I ask the honourable gentleman to show where he has been misrepresented and not to debate the question. If he does debate the question I will have to ask him to resume his seat.


- Sir, I was misrepresented in that the Minister said something that I said was untrue when in fact it was true. There are many other matters which I would like to raise but which I will not pursue at this stage. Later on, perhaps next week, some other aspects . of the Minister’s statements will have to be considered by the House. I will not pursue the extraordinary statement made by the Minister and reported on page 1728 of Hansard which I think is a proper matter to be dealt with by the Standing Committee on Privileges. I shall speak on that later, Mr Speaker. I am taking legal advice in regard to that matter. Sir, I have been grievously misrepresented by this outrageous Minister who has used his privileges as a Minister.


- Mr Speaker, I wish to make a personal explanation.


-Does the Minister claim to have been misrepresented?


– Yes. I claim to have been misrepresented by the honourable member for Mackellar (Mr Wentworth). The honourable member, in the course of making an explanation of what he said he meant, referred to comments he made which appear in page 1580 of Hansard. On this same page the honourable member said that I said: ‘If you elect us as the government, this is what we will do’.

That is untrue, and again today -

Mr Wentworth:

– I rise on a point of order. I have not referred to that at all. The Minister is entirely out of order, Sir.


-Order! I would suggest that the 2 gentlemen come around to my suite and we will debate this matter over a cup of tea.


-As long as the remarks of mine appear in Hansard, that will be all right with me.

Leader of the Opposition · Bruce

– I wish to make a personal explanation.


-Does the right honourable member claim to have been misrepresented?


-Yes. The Prime Minister (Mr Whitlam) at a Press conference yesterday said:

Tax indexation would preserve the present ratio of income to taxation but it would do nothing to remove the unfair features of the present scale- of the scale which was there until Mr Crean announced the changes, the first changes for 20 years- in the Budget last Tuesday.

This misrepresents me because in 1972 I did restructure the tax scale. The Prime Minister’s statement was a misrepresentation. It was tantamount to accepting and peddling lies. I wish to quote from my Budget Speech of 1972.


- Mr Speaker, I direct your attention to the practice of the Leader of the Opposition of making accusations far worse than the ones which he claims have misrepresented him. I suggest that you keep him in order.


– I think it is a well known fact that personal explanations can be made when an honourable member has been misrepresented. The honourable member making the personal explanation should not debate the subject matter.


– It was a misrepresentation and that is why I am making my point clear. My case can be made clearer by a reference to a short passage from my Budget Speech of 1972 in which I said:

Last and most importantly, we propose to reduce the rates of personal income tax payable by an average of 10 per cent. In April we reduced personal income tax by 2½ per cent. The reduction I now propose is on top of that. A flat rate cut based on removing the present 2’A per cent levy and the granting of VA per cent rebate across the board was a possible course. However, we have decided to take what we regard as the more equitable course of restructuring the tax scale so as to ensure diminishing percentage reduction as incomes rise.

Mr Speaker, that discloses the misrepresentation in the allegation by the Prime Minister that there was no restructuring of the tax rates for 20 years.

page 1793


Minister for Overseas Trade · LALOR, VICTORIA · ALP

– I move:

On 12 September the Prime Minister (Mr Whitlam) announced that the Government had accepted the recommendations of the Industries Assistance Commission in its report on gloves, mittens or mitts. Customs Tariff Proposals No. 13 (1974) which I have just tabled give effect to that decision. The Government’s decision to implement the Commission’s recommendations will mean that a general rate of 25 per cent will apply to gloves of the industrial type that are wholly or partly coated or covered with artificial plastic material and to uncoated knitted or crocheted gloves that are suitable for use in the production of such industrial type gloves. Minimum rates of duty will apply to all other goods covered by the Commission’s report, such as dress gloves. The new duties will operate from tomorrow. Proposals No. 13 (1974) also include an amendment to correct a drafting deficiency in the item relating to compressed gas cylinders. I commend the proposals.

Debate (on motion by Mr Adermann) adjourned.

page 1794


Second Reading

Debate resumed from 19 September (vide page 1553), on motion by Mr Crean:

That the Bill be now read a second time.

Leader of the House · Grayndler · ALP

– May I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Wool Tax Bills (Nos 1 to 5) and the Wool Industry Bill, as they are associated measures. Separate questions will, 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 the 7 Bills to be discussed in the debate.


-Is it the wish of the House to adopt this procedure? There being no objection, I will allow that procedure to be adopted.

New England

-The Opposition accepts the proposition by the Leader of the House (Mr Daly) that these 7 Bills should be debated together simply because it is a lot easier for those of us who have an interest in the wool industry to talk in general terms in a second reading debate on the subject of wool, even if the measures are disparate. The wool industry, of course, is very vitally affected and concerned with each one of these measures. Although they are today being debated at the one time the proposals that are advanced within each one of them are different. The Opposition in fact has a point of view that relates to each one of these Bills. The Wool Marketing (Loan) Bill, which is the first of the measures to come forward, is one with respect to which we intend to move an amendment at the second reading stage. I shall elucidate the detail of that amendment in a moment. The Wool Tax Bills (Nos 1 to 5) relate to a levy to be charged on wool growers’ incomes. In regard to those Bills there is also an amendment which will be moved in relation to the Wool Industry Bill, but relating specifically to the funds collected under the Wool Tax Bills. The amendment provides that the money collected should be paid into a trust fund from which its payment to the Australian Wool Corporation can be ensured and about which reports may be made to this Parliament.

We propose to move at the second reading stage to the Wool Industry Bill, an amendment which relates not to the passage or non-passage of this Bill but to the consequences which flow from a statement made initially by the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) when the legislation was first introduced into this House at the beginning of this year, and an implication from the Budget of the Treasurer (Mr Crean) the other night as to the dollar for dollar aspect of the payment by the Government and payment by the industry. The detail of that second reading amendment is a product of some very commendable research by the honourable member for Canning (Mr Bungey). I commend him for the study that he has put into the details which have brought forward this amendment.

I turn first to the Wool Marketing (Loan) Bill. This piece of legislation is, of course, one for which the Treasurer is responsible. I mention that because we are talking about the wool industry. One of the first things I wanted to say in relation to the 7 Bills is that from our side of the House we regard it as rather strange that there should be apparent distrust between the members of the Ministry which has seen expression in this legislation- when I say this legislation I am speaking in the compass of all the Bills- in the sense of the overseeing of the work of the now Minister for Agriculture (Senator Wriedt) by the Treasurer to a greater degree than has previously been the case.

When we were in government there were, as there must be, constant consultations between the Treasurer and the then Minister for Primary Industry. In this instance we find that more and more the function performed by the Minister for Agriculture is to be supervised by the Treasurer. It is true that the Wool Marketing (Loan) Bill and the Wool Tax Bills, tend to be in the Treasurer’s province. But I think that it is necessary for the wool industry, and those associated with primary industry generally, to be conscious that they are falling more and more under the intervention of departments other than that which is nominally responsible for the guidance of agriculture. Of course, they have always been conscious of the role they play in the economy. In fact, the wool industry has quite rightly been looked upon as having played a major part in the development of Australia and as such it has been involved in the total economy. But I think that it is unfortunate if, in the expression of legislation any personal suspicion- which I am sure does not apply to the personality of the Treasurer, nor to the personality of the Minister for Agricultureis perpetuated in a way which means that one cannot act without the other also saying yea, or cannot refuse to act without the other saying nay. It would seem to me that surely even in a Labor administration they should be able to resolve their differences so that one man may be given the responsibility.

The Wool Marketing (Loan) Bill is to provide funds urgently needed for the operation of the Australian Wool Corporation. There does seem to be some confusion as to the degree to which the banks were able and available to advance funds for the purposes of the marketing operations of the Australian Wool Corporation. The Australian Wool Corporation, apparently in conjunction with the Government, had some discussions with the Australian banking system. The banks, the Corporation and the Government people, however, seem to have different attitudes as to the stage which those negotiations had reached when the Government decided that it would introduce this form of assistance. We are told on the one hand by the Corporation and the Government that there was no alternative but that funds be advanced from the Government. The banks on the other hand have said that they believe that discussions that were then continuing with the reserve bank might well have enabled them, either through the release of statutory reserve deposits over the period which will be covered by this legislation or, in any event, over the period within which the Corporation expected to borrow the funds necessary for it to perform adequately its functions, to make the necessary advance. However, whatever the result, this legislation enables the Government to provide the money. At first blush, of course, that is a very commendable action by the Government. The Government is providing money to assist the industry in the preservation of a floor price to ensure that growers receive an adequate return. But again, I think the benefits need to be analysed because to us they are somewhat illusory.

Firstly, so far as the loan is concerned, we regard the whole circumstances of borrowings by the Australian Wool Corporation as being preferably in the commercial stream. Of course there is an area where some funds must be advanced, and a $ 1 3m advance is already part of the capital of the Australian Wool Corporation. If the other funds were to be considered in the same light, indeed, I believe one should rightly query whether $163m was the rightful capital. In this instance of course the funds are not a grant; they are a loan, and a loan on commercial terms. In other words, the period and the interest are to be set in the same way as though the money were to be borrowed from the banks. The Opposition is concerned that a government which is responsible for policy should also be the banker. We are concerned because of the wool marketing report, a report which has very many commendable features, but a report which, if the Government is in a position not only of advising on policy but also of acting as principal financier, can be changed in any way which suits the will of the Government. A wool marketing scheme could be implemented without reference to the Australian Wool Industry Conference, without reference to this Parliament or to any of those who have an interest in the whole scheme of marketing of the Australian wool clip. If that were to be so, it would be of very great concern, not only to the members of this Parliament but, I believe, also to the whole Australian community and in particular the wool growing section of it.

We believe that the $150m advance is not quite as it is presented. We believe that in the circumstances, however, there is no alternative but that we support the provision of the funds. But the purpose of our second reading amendments are, in the first place, to assert that we believe that the Government should have maintained a national economic climate which would have enabled the Australian Wool Corporation to borrow the funds commercially. If it was not able to do so, then at the very least it should have done with the wool industry as it has done with the wheat industry and other primary industries; that is, advance funds from the Rural Credits Department of the Reserve Bank. Certainly, then the wool growers would receive the benefit of the preferential interest rate that is provided from that source and they would therefore be in the same position as producers in other industries. But they also would be able to operate in a way which would put them on a completely similar basis to producers in other industries.

The second part of the amendment expresses our belief that if the funds are advanced-the expectancy, of course, is that they will be- as soon as the liquidity of the community permits the Wool Corporation should repay to the Government those funds advanced under this particular legislation and then operate from normal commercial sources. In other words, we would accept as being a necessary continuing part of the funds of the Corporation the $13m worth of capital which it has, but we would expect that borrowings made in accordance with this legislation would be repaid to the Government as soon as the liquidity circumstances in the community permit and that borrowings then be made in the normal commercial sense. I do not want to go into great detail on this, but it is quite obvious that there is a chain in the financing of the wool industry which, I believe, is of very real interest. It is a chain which begins at the production end with the primary producer. It flows through the marketing operation, in the instance of both the Wool Corporation and the wool brokers and private buyers. It flows through to the buyers themselves and ultimately through to the processors. Any interruption of such a significant amount as the $150m which is referred to here must be seen as interfering in a chain of commercial relationships, and I think this is of concern.

So it is our intention to move an amendment to the motion for the second reading of the Wool Marketing (Loan) Bill. Mr Deputy Speaker, I seek your guidance. We have 7 Bills to debate. Should I move my amendment at this time or should I move it when we are specifically discussing the Wool Marketing (Loan) Bill? I suspect that I should move it at a later stage. There are 7 Bills and I was not too sure at what stage I should move the amendment. The Opposition will be moving an amendment to the motion for the second reading of the Wool Marketing (Loan) Bill at the appropriate time. The impact of the amendment is that, while we are not refusing the BUI a second reading -

Mr DEPUTY SPEAKER (Mr Martin)Order! I think it would be appropriate to move the amendment to the first BUI, the Wool Marketing (Loan) BUI, at this stage.


-In relation to the motion for the second reading of the Wool Marketing (Loan) BUI 1974 1 move:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘while not refusing the Bill a second reading, this House-

1 ) expresses its concern at the Government’s failure to maintain a national economic climate in which the Australian Wool Corporation would be able to borrow commercially funds necessary for its functions and

is of the opinion that the Australian Wool Corporation should at the earliest opportunity repay any borrowings under this Bill from Australia and fever to normal commercial sources for rural borrowings or such borrowings as it may need for its marketing operations.’.

I deal now with the Wool Tax Bills (Nos. 1 to 5). These Wool Tax Bills provide for a levy of 5 per cent to be paid by the wool grower in order to provide a sum of money from which a fund can be built up. In the first instance, of course, these Bills operate only until the end of the current wool selling season- until 1 July 1975- and they commence on 2 September. The purpose of these Bills is to raise by a 5 per cent levy money for the marketing purposes of the Australian Wool Corporation. The Opposition does not oppose that proposition. However, we are concerned that money raised in this way should be spent directly for the purposes for which it is intended. In the short term there is no doubt that the Wool Corporation will need significant capital injections; but, in the long term, if this particular levy were to be extended into subsequent years- this would apply even in this year if there were to be a marked upturn in the demand for wool in the later stages of this wool selling year- a surplus could develop.

The Opposition is of the opinion that this money should be paid into a trust fund and that within that trust fund the money should be identified as being contributed specifically for marketing purposes. If the fund has a credit balance, then that money can attract interest and at some future time it can, if necessary, either be used as a basis for a marketing scheme or be repaid to the growers if circumstances are such that the money is not required. So we believe that a specific trust fund needs to be created with respect to these Wool Tax Bills and that it should be not the old type of research and promotion trust fund, to which I will refer in a moment, but a fund consisting of the moneys received from the levy applied for the purpose of operating the marketing scheme within the function of the Australian Wool Corporation.

I understand that the Government had intended at some stage to create such a trust fund as we intend from moneys received from the levy. The reason, of course, relates back to the concern that we expressed at the time of the application of the meat industry levy. By means of a similar amendment to that legislation, we provided for the setting up specifically of a trust fund which would be used for the purpose of the meat industry. We believe that, just as in that industry there is a necessity for a specific trust fund, there is here also. We believe, of course, that there needs to be an identification of payments into and out of the fund. We believe that a report on the substance of the payments into and out of the fund needs to be tabled in this Parliament annually. In that way we believe that growers’ interests can be protected. The point of view has been put to me that perhaps it would be advisable for individual contributions to the fund to be identified so that those who are paying in at this initial stage can at some later stage, if there is to be a repayment, be repaid to the same degree. In administrative terms this may well prove to be impractical, but I believe that it is necessary that at the very least there be a trust fund and an accountability of moneys received in this way.

Politically, there is one aspect of this matter that very badly needs to be brought to the light of day. The Government has endeavoured to make some capital out of the fixing of a reserve price level of 250c per kilo for clean micron wool. It has been suggested that this is an extraordinarily magnanimous gesture to the wool industry and one for which all wool growers should be forever grateful. There are 2 elements that they need to recognise, however. The first is that this 5 per cent levy means that, with a 20 per cent loss on a $S00m turnover by the Australian Wool Corporation, the wool industry itself will pick up any loss that may be incurred. In other words, this Government is not carrying the can for the wool industry. The wool industry itself is being required to contribute in such a way that it is carrying on its own shoulders the whole burden of the financial loss, if there should be one, on the functions of the Australian Wool Corporation. So, for all that the Government comes out and makes great play about a 250c per kilo base price, it is not a base price in the sense of the guarantees that been given by governments constituted by the Parties which sit on this side of the House. It is a guarantee given in the recognition that the wool industry itself will bear the first loss, which is a loss of up to 20 per cent or $47m in this 12 month period, on any marketing operation of the Australian Wool Corporation. The second aspect of the 250c per kilo base price that needs to be recognised is the degree to which the level is not as high as the figures might indicate to some people who look at them in bland terms. Of course, it is calculated in cents per kilo, and it is not a price in terms of clean 21 micron wool which can be related to the old terminology of the industry. It is not greasy wool, but clean wool.

It is measured in terms of microns and not in terms of the old 60s, 64s and 70s quality count. On the calculations that one can make, it is not that much better than the 36c per lb base that we provided in days gone by. Ofcourse, that 36c per lb guarantee was in fact subsidised entirely by the Government. The wool growers were not required to contribute. In this instance they are required to contribute. They are required to contribute the $47m that these Wool Tax Bills represent.

I think that it might be better if we were to look at this matter in terms of the 90 per cent increase in the selling costs or the costs of operation of the wool growers and to look at the actual degree to which the 250c per kilo reserve price can be translated into the old terminology. If we were to do so we would see that it means approximately 99c per kilo or 45c per lb. If we were to look at it in terms of the 90 per cent increase in costs it would not be in fact very much greater than the 36c in quantitative terms. If we were to take into account the 5 per cent deductionthe $47m to which we have just been referringwe would find that it is in fact considerably worse. So all the great play that the Government has made of the contribution that it has made to the wool industry is one of those tricks to which we are becoming accustomed from the Government in the presentation of things financial. In saying, ‘We are giving to you, the Australian people, these magnificent benefits’, the Government is completely forgetting the fact that the taxpayer is the one who is called upon to pay for the sum total of their cost. In this instance it is the wool grower who has been told that he is getting a benefit and it is the wool grower who is paying for it.

Mr Kelly:

– Like a cow which sucks itself.


-Precisely. We commend the industry for the degree to which it has been able to support Australia for so long. We know that those who operate within the industry are a pretty independent lot. I think that they need to be recognised by all Australian people as still being an independent lot because the Government is certainly not helping them, to the degree to which or in the way in which it would assert. The Government is helping them only to the degree to which there is a mechanism through which the wool growers are required to contribute this 5c per kilo. So while we support the Wool Tax Bills we would require that a trust fund be established into which can be paid the funds allocated through Consolidated Revenue, that they then be identified with respect to the wool industry, that they attract interest when they are in surplus and that they be used in such a way that each year there is an accountability to the Parliament and to the Australian wool growers so that they will know where their money is going.

The third of these groups of Bills is the Wool Industry Bill. This Bill was first introduced at the very beginning of this year. It is a Bill which is significantly similar to measures that have been passed by this Parliament on other occasions. The only difference, of course, is that when the Wool Industry Bill was introduced much to-do was made by the Minister for Northern Development (Dr Patterson), who is now absent in the United Kingdom, to the effect that things were good in the wool industry and that therefore it was possible for the basis upon which the industry contributed to research and promotion to be varied. It was suggested that the Government should pick up a greater percentage of the contribution for research and that perhaps the industry might maintain a greater contribution in return for promotion. Nonetheless it was asserted that there should be a dollar for dollar contribution over the period for the purposes of research and promotion.

It seems, however, that the Government has forgotten in its reintroduction of this legislation that things are not quite as good as they were for the wool industry. The Government needs to recognise that the levy that it has now placed upon the industry- if the figures that came out during the presentation of the Budget by the Treasurer are to be taken into account- may well need to be increased to the maximum of 3 per cent that is provided for in the legislation, although the amount initially intended, if we were looking at a levy to be sufficient for the contribution at current prices, would have been only 2.4 per cent of the gross proceeds, which is the amount referred to in the second reading speech made by the Minister for Northern Development when the research and promotion budgets were originally collected. Of course, it was intended and explained by the Minister that the levy should be lifted to 2.75 per cent so that there would be a surplus at the end of the financial year. I reiterate that since the time when this legislation was introduced there has been a significant deterioration in the returns for wool sold on the world market and that, as a result, the amount that will be received in accordance with this Wool Industry Bill is such that it is unlikely that at 2.75 per cent there will be an ability to meet the 50 per cent of the $49m contribution required for those purposes during the course of the present year.

As the amendment which I will move at the appropriate time to the motion for the second reading of the Wool Industry Bill indicates, it seems that the Treasurer has provided in the Budget for only the sum of $22m this year, which means that the industry will be required to contribute $27m, which is less than the $1 for $1 contribution that the Minister for Northern Development, in presenting this Bill, said would be the basis for industry contributions. We have asked in our amendment that the Government take note of its undertaking and make an appropriate variation to the legislation in order that, preferably, there should be an increased contribution by the Government so that the budget for the year can be met. It would seem that perhaps the only way in which this can be accomplished- it being outside the province of the Opposition to provide additional funds- will be by the Treasurer providing in some way from one of the funds over which he has control for a supplementary allocation from the Treasury for the purpose of increasing the Government’s contribution to the one-half or $24.5 m that is necessary to provide for a $1 for $1 contribution from the Government. The alternative, of course, is for the levy to be increased to 3 per cent of the gross proceeds, which would enable the wool growers to provide the $27m which, given the state of the industry and given the additional 5 per cent levy, would be a very severe penalty upon the Australian wool growing industry. One other thing that I want to stress with respect to the Wool Industry Bill is that it is when things are crook that the Government needs to come to the party.

Regrettably under this legislation promotion is becoming more and more a burden for the industry; yet it is promotion which so demonstrably, through the activities of the International Wool Secretariat, was responsible for assisting wool back to the very high demand situation that existed during late 1972 and 1973. 1 believe that it would be most regrettable if, because of the restraints imposed by this legislation, promotion itself and the funds available for promotion were to be prejudiced because of the degree to which there has been a change in the balance between industry and government contributions. Indeed, I think that it is quite critical that research be maintained. I commend the Government for its contribution in that area. It is, of course, a contribution which we, when in government, initiated, expanded and completely endorsed. It is also necessary that the Government recognise the problems that have been imposed upon the operations of those who are promoting the Australian wool clip.

We believe that the functions of the International Wool Secretariat have been well worth while in the interests of the Australian industry. There are many who have looked at it and have been critical of it. Indeed, I was one. As a Minister I initiated an inquiry into its functions and operations. But I believe that in at least one areaperhaps I can refer briefly to it- that is, in the application of research, much of which was initiated by the Commonwealth Scientific and Industrial Research Organisation, the International Wool Secretariat has been able to translate out of the cobwebbed files that seem to abound in so many areas of agricultural extension the knowledge that is obtained in research institutions into the field. It translated the knowledge that came from the CSIRO into the wool processing plants. The processes we saw in terms of both permanency of colouring and the permanency of creases, even in the anti-shrink characteristics of cloth, are processes that the International Wool Secretariat has been able to promote in the field. The contribution by the growers has played an important part in making this possible. But when the industry is down and returns are down it is the Government’s responsibility to supplement that contribution. I regret that in accordance with this legislation there will not be for promotion purposes the availability of money to finance the operations of the International Wool Secretariat if the industry should take a downturn beyond its present point.

It is difficult in a brief time to cover the ambit of 7 separate Bills, each one of them vital for the Australian wool industry. The growers themselves need to recognise the degree to which the Government is not itself carrying the can for the difficulties of the industry. The industry itselfthe Australian wool grower- is being called on to subsidise any deficiency in wool marketing returns and in the functioning of the Australian Wool Corporation. For that reason the several amendments which I have identified will be moved by the Opposition during the course of this debate.


-The Deputy Leader of the Country Party has moved an amendment to the Wool Marketing (Loan) Bill 1974. Is the amendment seconded?

Mr Street:

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

Monaro · Eden

– I refer to one comment that the previous speaker, the honourable member for New England (Mr Sinclair), made concerning the influence of Treasury over the Minister for Agriculture (Senator Wriedt) on this occasion. These words must come passing strange to anybody who was associated with the previous reserve price debate in 1965. It was common knowledge, never denied, that the then Treasurer, the right honourable member for Lowe (Mr McMahon), was instrumental in refusing Government support for the reserve price at that time. Either directly or indirectly, the Treasurer on that occasion was almost completely responsible for the fact that the reserve price was not passed in 1965. The influence of the Treasurer then far exceeded any sort of influence that the present Treasurer (Mr Crean), who is sitting at the table, exercised over the Minister for Agriculture on this occasion.

The justification for this particular scheme has been deeply rooted in debate that raged fiercely in 1965 and went back beyond that time. A great deal of work was carried out on this subject in the Bureau of Agricultural Economics and in various universities in Australia. The reserve price plan, as we see it now, is a sophisticated version of the true principles that were enunciated during the referendum in 1965. My views on this have been firmly recorded and were published in 1972 in the journal ‘Sheep Breeding and Wool Technology’. To give some background to this I refer to that article. Regarding justification for this particular mechanism I draw the attention of the House to the factors that influenced price formation in the wool market. There is in this world an underlying demand for textile fibres which is extraordinarily large, so large in fact that within 3 years the aggregate demand, the new demand, for textile fibres as a whole could cope with the total wool production. Given this rapid increase in demand for textile fibres there is a consequent reduction of influence in the total by wool itself. It is likely to become, and is becoming, a specialist textile fibre that will be used in uniquely specialised end uses in the future. An examination of price movements over the past years suggests that the changes in demand which underly the changes in price are unpredictable. Many people lose sight of this fact. These changes are due to changes in fashion and income movements. During periods of relatively low domestic income, people in the domestic situation can easily defer the purchase of clothes, particularly wool products, and return to the purchase of those clothes when incomes are high. As it is very difficult to predict movements in domestic incomes in the various wool consuming countries the safest assumption, when looking at the wool market, is that the price formation or the actual price at any given moment is a random event. God ‘s hand is not often on the shoulders of these people who predict the future of the wool industry. None of them has yet illustrated that he does have this divine inspiration. I think it is only sensible to assume that the price movement in the wool market will be completely random in future. If we accept that proposition we can go ahead and formulate exactly the sort of proposal the House now has before it.

This plan has evolved over time. The Crawford Committee instituted a flexible reserve price which is, as it were, the second leg of this particular proposal. Because wool prices are so variable and so unpredictable it is vital that we bring more to bear on the market than simply the flexible reserve price, the mechanism of which I will describe in a moment. We need this underlying support in the market which we now have in this fixed price for wool. Price stabilisation, such as this represents, can be regarded as an insurance against low market prices during temporary periods of recession in the wool market. Subsidiesthis is mainly the area in which such a scheme has been criticised- become necessary only to sustain a price stabilisation scheme where the marketing organisation deliberately incorporates a welfare component in its floor price. When price equalisation is viewed as an insurance against fluctuating incomes for wool growers and not as a means of subsidising sectional groups, a scheme such as the one the House has before it can be developed on a purely commercial basis.

Mr Kelly:

– You are not holding your own people in the chamber.


– Do not call for a quorum, my friend. No individual grower or private enterprise group in Australia can provide the capital backing to support an insurance scheme large enough to cover the Australian wool market against low prices, but a national trading group supported by the Government can supply this capital. This is another factor that needs to be considered. The wool market in Australia is big business- $ 1,000m a year; sometimes more, sometimes less. If in private enterprise we were dealing with such big business we could be sure that the reserves behind that private enterprise group would be considerably more than the reserves with which we are now endowing the Wool Corporation. This problem of providing support for such a huge industry undertaking in Australia can be solved only by government support and interventions such as we have in this Bill.

The scheme we are now considering has this floor price justified on commercial grounds. The floor price should be based on the objective of averaging rises and falls in the market over a period of, say, five to ten years. It should provide a certain minimum income for growers over this period. The flexible reserve price is operated above the floor in order to maximise growers’ returns and make sure that the country gets the maximum return for wool. This reserve should follow just below the market price when prices are rising, come out above the market when prices peak and follow the market down above the market price in order gradually to let the market back to the floor, if necessary. Such a system provides a sensitive indicator of changes in the market price. When the reserve comes out above the peak at the turn in prices the trading group can purchase wool which can never be sold at a profit because it was bought at the peak of the market. This can be regarded as part of the premium paid for insurance. On the other hand, when the Corporation buys wool on the downswing or in the trough it can subsequently sell the wool at a marked profit. Many people who criticise the present scheme do not have a sense of history so far as the wool industry is concerned. This market has fluctuated violently over the last twenty to thirty years. .Anybody who has had experience with it can. never get unduly perturbed when the market rises and falls. There is an inevitability that the market will continue to do this in the future as it has done in the past.

I turn now to the actual mechanism that has been established. The selection of 250c a kilo clean for the floor price is a very good choice. This particular floor was broken in 1963 briefly, and also, for a long period, from 1949 to 1 956. If we take the 20 years from 1954 to the present it will be seen that this is exactly where the market comes out- at 123c a lb greasy. On that point I would like to correct the arithmetic of the honourable member for New England. Once again it seems to be failing. The 250c per kilo clean for 21 micron wool, which for those who like the old jargon is the 64s, represents 123c per kilo greasy. The honourable member says that this is not very much more than the 36c per lb greasy at which the market was previously supported. The 123c greasy has to be compared with 79.2c, which is 44c more than the 36c which the honourable member said was not very much more. It is 8c more than the actual price at which the market was supported as recently as 2 years ago. I repeat those figures. The 123c greasy is the floor that this scheme puts into the market, and 79.2c greasy is the figure that would have applied if we had retained the 36c per lb greasy.

It is interesting to see what would happen. There is only one occasion when the 36c per lb was the lowest price paid in the market, and that was in the year that the 36c a lb price support scheme was brought in. It lasted for 2 years. In relation to price movements over the years, 123c represents a very intelligent estimate of where the floor ought to be. Of course, we heard a great deal of comment about 300c being the floor. It is interesting to observe that 300c for 21 micron wool turns out to be about IS 8c greasy. It was only exceeded on 2 occasions- for a 2-year period from 1949 to 1951 and in 1972. It is interesting also to observe that the floor we have now established in the market has been penetrated only once since 1956. So we have given to the market much more security than it ever had before. We have given it the sort of security that previous governments, have never been able to provide. We have grasped the nettle.

In this Bill, which provides $150m to finance the operations of the Australian Wool Corporation, we have introduced a revolutionary principle into wool marketing. Mr von Bibra has said that the agreement between the industry and the Government represents^ milestone in the history of the wool industry. He said:

After very many years of dissension and debate within the industry and with governments, we now have a commerically viable marketing proposal which can overcome the crippling uncertainty that has been evident in recent times in the wool market.

That, in itself, will be of enormous relief to both wool producers and to wool users around the world.

Mr von Bibra ‘s views obviously were not shared by Mr Roberts, the President of the Australian Woolgrowers and Graziers Council. He is reported in the ‘Queensland Country Life’ as saying that he was disappointed that the Government had not supported the Council’s proposal of 300c as a firm floor price for wool. His disappointment was so great that he. could barely say that he was pleased that the principle of a floor price had been established. This was reflected in the editorial of the ‘Queensland Country Life’ and gives some indication of the reason why the revolutionary policies of this Government are being regarded by the electorate in the country areas with disfavour. The ‘Queensland Country Life’ had this to say:

The Whitlam Government’s lack of concern for the welfare of rural industry was demonstrated by its reluctance to back the Wool Corporation’s floor price plan.

Fortunately, commonsense prevailed, but the guarantee falls far short of what the industry needs.

All the editorial could do was criticise when we have introduced into the wool industry one of the greatest steps forward that has ever been made for the industry in insurance terms by setting a floor price which is completely justifiable in commercial terms and which offers the growers of this country a reasonable level of income when the going is tough. That point needs to be emphasised. This is an insurance proposal. We are not proposing a revolutionary change in wool marketing because this scheme has very little to do with wool marketing. It has everything to do with insurance. It is very important to make that distinction. Wool marketing and its technical aspects are a completely different subject.

Let us consider another aspect which has attracted criticism. I notice that in the ‘Australian Financial Review’ criticism has been levelled at the scheme. There is tendency to indicate that this scheme involves $ 1 50m of taxpayers ‘ money which taxpayers will never see again. That of course is absurdly wrong. If instead of paying $53m to growers during the period of the wool price deficiency payment scheme we had in fact spent that money on wool- the growers would have had the same incomes- we would now have something like $ 100m in reserves for the Corporation. Let us never do that again. The $53m was wasted with no particular advantage to the wool industry except that it provided temporary respite for the growers at the time. The money would have been far better spent on wool which subsequently could have been resold during what has proved to be the second highest boom in wool marketing since 1950-51.

Let us consider events in sequence. A grant of $ 1 50m is to flow to the Wool Corporation out of government funds to purchase wool. The criticism that the ‘Australian Financial Review’ has levelled at this grant is that the money coming from private banks would have mopped up liquidity in the economy. But because the money is coming out of Government funds, it will not mop up any liquidity in the economy. Whether we need to mop up liquidity at the moment is a moot point, but let us argue for a moment that we do. The argument is completely false because the Wool Corporation is purchasing wool which otherwise would have been sold to foreign buyers whose money would have flowed into our foreign reserves and increased liquidity internally. The fact is that there is an off-setting flow. There is a marginal impact on liquidity and it is very difficult to predict whether it is positive or negative because it is a difference between the money supplied on a credit basis from the funds backing the Wool Corporation and the overseas reserves that would have accrued if the wool had been sold to overseas buyers at low prices. We have deferred the aggregation of overseas reserves until a later date to sell the wool at a higher price and therefore increase the aggregate that we get in terms of overseas reserves. The liquidity argument stands or falls once we look at the sequence of events. (Quorum formed).

Before the quorum was called, I was referring to the effect of the reserve price on the internal liquidity of the economy. As I have demonstrated, there will be a marginal effect in the short term. In the long term the effect of the reserve price will be to increase our reserves when the wool is sold off at a profit. As the honourable member for New England has pointed out, the wool industry itself has opted to contribute $50m to cover the risk element involved in the insurance scheme. In my view, the money will not be needed. It is a question of how good the judgment of the Corporation is on this particular issue. It is reasonable to ask the industry to contribute $50m to this, the best insurance proposal it has ever had. Many other agricultural industries would envy the security that this scheme will be bringing into wool marketing.

We have the interesting phenomenon too of the private banks not being able to supply funds at this time. Admittedly this is for reasons that are rather extraordinary, but it is interesting to speculate on what would have happened if the private banks had been financing the Wool Corporation and had to call up funds at a time such as this. The dependence of the Corporation on private banks could prove to be shaky in the future. It is fortuitous that such a weakness has displayed itself at the beginning of the scheme. It is worth remembering that the precedents have been established for financing what are fundamentally commercial business operations through government funds. I refer, of course, to Trans-Australia Airlines, Qantas Airways Ltd and, to some degree, Ansett Airlines of Australia. We have these precedents in all economic activities of the Government

In this complex of Bills we find witness to the fact that this Government is concerned about the fundamental issues which worry the agricultural sector. In the case of the wool industry, the Government has brought to bear all the research and knowledge available to provide the wool industry with an insurance scheme which can be supported technically and in every other possible way. It is a step that the previous Government was not brave enough to take. As the honourable member for New England has reminded me, the previous Treasurer prevented his Government from taking such a step. This Government has been brave enough to take that step.


– I have much pleasure in seconding the amendment moved to the motion for the second reading of the Wool Marketing (Loan) Bill by the Deputy Leader of the Australian Country Party, the honourable member for New England (Mr Sinclair). Before developing the arguments inherent in the amendment, I wish to refer to comments made by the honourable member for Eden-Monaro (Mr Whan) in relation to the 250c per kilo clean guaranteed price which operates for the present season. The honourable member for Eden-Monaro alleged that this price was 44c per lb more than the price of 36c per lb guaranteed by the previous Government. That was the price guaranteed by the Liberal and Country Parties when we were in government and when wool prices were disastrously low.

Two points need to be made in relation to that claim. The first is that under our scheme, when we guaranteed 36c per lb, any gap between the price actually realised below that figure of 36c per lb was met by the Government; there was no liability on the grower. In the present circumstances, any losses made as a result of the operation of the 250c per kilo clean price becomes a liability of the grower. I do not want to debate at this stage the rights or wrongs of that situation. I merely point out to the House that the present proposal is entirely different from the previous arrangement; they are not comparable. It gives me no pleasure to say so, but it is quite dishonest for the honourable member for Eden-Monaro to petend that they are comparable.

The second point is that the disastrous economic policies of the present Government- or, rather, its disastrous abrogation of economic responsibility- have meant an enormous increase in costs, not only to the wool industry, of course, but to all Australian industries. But it is the wool industry about which we are talking at the moment. It is incontrovertible that since the Labor Government came to power there has been a huge increase in costs of production. I make this point: The grower is not interested in his gross return if, for example, his gross return is $10,000 but his costs are $10,500 In that situation the guaranteed price becomes only of academic interest to him. Therefore, again it is entirely dishonest for the honourable member for Eden-Monaro to allege that today’s scheme and price are comparable to those of the years when the price of 36c per lb was guaranteed under the Liberal and Country Parties Government’s scheme.

Dr Gun:

– Don’t you care about the shearers?


– Yes, I do care about the shearers. The honourable member for Kingston makes a good comment. There is a grave shortage of shearers in the industry. For many years, the grazing industry has been trying to get agreement on a scheme which would enable an apprentice system to be introduced for the industry. It has my complete support and, I am sure, that of the Opposition. We are acutely aware of the need to encourage young men to enter this industry.

The main purpose of the first series of Bills is to make provision for the future of financing research and promotion for Australia’s greatest industry. There has been a long history of industry and government co-operation in this field. A joint fund has been established, as has been done with respect to many other primary industries, usually on a $ 1 for $ 1 basis. It is quite reasonable that the Government should contribute to such a fund, firstly, for the very reason I mentioned a moment ago, that is, that this is our greatest industry. It is a major export earner. But it also has important and diverse effects through the economy itself. So, it is good business from the points of view of the Government and the community for the Government representing the community to contribute to this fund.

I also bring to the notice of the House the fact that included in the costs which the levy on growers has to meet is the cost of the administration of the Australian Wool Corporation. It is wise to mention this fact to remind growers that such organisations do not run for nothing. They must be paid for. In this instance, and I think properly, the organisation is paid for by the growers. It is up to them to ensure that they get good value for money. I believe that in the Australian Wool Corporation the growers have had good value for money and I hope that they will continue to get it.

We are beginning to see, although it is impossible to put a precise value on them, some of the results, inevitably long term in nature, of the expenditure in the past on research and promotion. The honourable member for New England mentioned some of the developments which have taken place, such as machine washable wool, drip dry characteristics, fast pastel shade dyes and similar advances, nearly all of which, I remind the House, have been initiated within Australia. It is difficult, if not impossible, to put a precise figure on the value of that work. But there is general agreement throughout all sections of the industry, not only among the growers, that the great dedication of Australian scientists and research workers, and their colleagues overseas, is now showing results. It has been shown possible that the nexus between the prices of synthetic competitors with wool and wool itself can be broken; in other words, that a quality image for wool can be established which enables wool to command a premium price over other fibres. But there is a need for a continuing research effort. Research which is hampered by not knowing whether it will receive finance next year or the year after is inevitably inhibited. There is a need to enable those carrying out this research work to have some guarantee of future income- I am talking of the International Wool Secretariat in particular now- to enable them to undertake the programs which they should undertake.

As a consequence of this legislation, the industry has agreed to raise its contribution for research and promotion, much of which will go to the International Wool Secretariat. Because wool prices have fallen, and even taking into account the guaranteed floor price, the question now arises: Will the 2.75 per cent levy be sufficient? We know that, under the legislation, it is possible to increase the contribution to 3 per cent. The growers naturally are hopeful that this will not be necessary. In the second reading speech which he delivered on this legislation last year, the Minister for Northern Development (Dr Patterson) indicated that in the first year of this 3-year program, as before, Government and industry would contribute to the fund on a $ 1 for $1 basis. The Government subsequently would increase its proportionate contribution for research while reducing that for promotion.

The point I raise now is the relative responsibilities of the industry and the Government for the first year. I refer to page 60 of the attachments to the Budget Speech which shows that the expenditure for 1974-75 for research, promotion and other expenditure on wool will be $44. 3 m. We know, according to the legislation, that there is a limit on government expenditure for 1 974-75 of $22m. Obviously the balance requires, near enough, a $1 for $1 contribution by the industry. I draw the attention of the Minister to the estimates of receipts and summary of estimated expenditure of the Budget, as shown on page 29 of Budget Paper No. 4. It shows that the expenditure for Wool Industry- Promotion and Research (Act 1972-73) in 1974-75 will be $49m. By legislation the Government’s contribution is limited to $22m. If the total expenditure is $44m the Opposition has no argument as the money will be supplied on a $1 for $1 basis. But if the total expenditure is to be $49m and the industry is required to contribute, therefore, $27m, the money will not be supplied on a $ 1 for $1 basis. We hope that the Minister will be able to explain this, otherwise the Opposition will probably find it necessary to move an amendment making the position quite clear.

The net effect of the new legislation will be, by the third year, to lower the Government’s contribution. Instead of being on a 50/50 basis it will be on the basis of a 40 per cent contribution by the Government and a 60 per cent contribution by the industry. As I mentioned before, the amount raised by the levy is directly proportional to the proceeds from the sale of wool. With declining wool prices, not only does the question arise whether sufficient funds will be available for the International Wool Secretariat, but also the point arises of whether this will be too severe an impost on the industry itself on a time of declining prices. I remind the House that when prices reached a disastrously low level before, the Opposition Parties when in government came to the decision- quite a right one in my opinion- to make a $2 for $1 contribution during the time of the industry’s difficulties. I hope that a similar sympathetic approach will be shown by this Government should the net returns- I emphasise the words ‘net returns’- fall to a dangerously low level.

I turn now to some of the other Bills that we are debating in this very complex debate encompassing 7 Bills. I refer to the proposed 5 per cent levy on growers to finance the possible losses on the Australian Wool Corporation’s trading operations. I emphasise again that this is a quite different levy from the previous one which I mentioned and which was on a joint industry and government basis. This is a grower contribution. There is no corresponding government liability. A lot of nonsense has been written in the Press lately about the Government’s using taxpayers ‘ money to prop up the wool industry. The reports are confusing 2 things. First of all they are confusing the fact that no government contribution is involved in the 5 per cent levy; secondly, they are confusing the fact that the $ 1 50m advanced to the Australian Wool Corporation by the Government is a loan and not a grant. Not only that- the industry has to finance that loan at current rates of interest and by the levy it has to meet any losses which might be incurred by the Corporation as a result of its buying-in activities. This emphasises the basic philosophy of the Australian Wool Industry Conference and its Wool Policy Committee in particular. It is the firm intention of the Conference, and it always has been, to maintain the Australian Wool Corporation as an autonomous body. This is quite vital if the industry is to continue to be the master of its own destiny.

The Australian Wool Corporation had no reason to suppose that the finance required for its operations would not be available from normal commercial sources. The only reason it is not available from normal commercial sources is the disastrous economic policies of this Government. I need to refer only to the savage discriminatory attitude and the measures taken by the Labor Government against primary industry in general. Now, probably by mistake, the Government finds itself financing the operations of the Australian Wool Corporation. It is not surprising, in view of this record, that the Opposition has grave reservations about the wool industry’s going into pawn to this Government. Therefore we have moved the amendment in the terms given by the honourable member for New England, the Deputy Leader of the Country Party. I have much pleasure in seconding it.


-By and large speakers in this debate have attempted to make quite a few constructive points about the wool industry generally. We have seen a tendency to bog down a bit. There has been some rather tortuous argument on the question of prices, such as how many cents will be paid for greasy wool and how many cents will be paid for clean wool. I point out at the outset that some of the comparisons that are being attempted refer to parameters that are not directly comparable. We have a situation that is similar to what it was 2 years ago. I remind members of the House that it was only 2 years ago when we started to look at money values. The reason why this scheme cannot be compared directly with the previous scheme is that the previous scheme was not a reserve scheme in the true meaning of the expression at all. It was a deficiency payments scheme whereby the Government came to the party when the prices dropped below 36c a lb. The Government then sold the wool at whatever price it could get and made up the difference. This is a fixed reserve price. This is not simply splitting hairs; this is a very different animal.

I was genuinely confused by the approach taken by the honourable member for New England (Mr Sinclair). In his speech he said on the one hand that decisions about the wool industry should more properly be made in Parliament, but on the other hand in his amendment he said that the financial arrangements should be made outside the Parliament. I do not particularly disagree with what he is getting at in his second point, but implicit in the activities of the Australian Wool Corporation is this ability to act properly as a marketer in the market. The Government, when it found there were problems with the trading banks which are the usual source of finance for industries, acted perfectly flexibly. I think it is a bit ironic that this cognate debate on wool legislation should come on the day after the Government was censured for having no regard for the economic conditions of the various primary industries. Of course, this debate is taking place less than 24 hours after the decision to devalue.

As the Green Paper clearly showed, flexible exchange rates are to be the normal business expectancy of the future, particularly for any country trying to reduce tariffs when the world monetary order is in disarray. Devaluation has not been carried out in the singular interests of the wool industry or exporters generally any more than revaluations of last year were carried out to persecute the farmer. I have said before in this place that the reason why the previous Government did not revalue and cut tariffs in 1971, as could have been recommended, was due to the Country Party tail wagging the Liberal dog and to the parlous situation in the wool industry at the time. It was a very hard decision. The point I make is that because wool historically has been so much a consideration when currency matters were being scrutinised the devaluation must be of importance to the industry as a whole. This, together with other measures the Government has announced, must give the industry more confidence in the future. The increased levy made by the growers can now be made in trust. It was the industry’s wish. With reference to the second part of the amendment of the honourable member for New England I think it was the desire of the farmers themselves to have some commitment to the industry, apart from government commitment, to give them more independence. This is the reason that the farmers were happy to accept the added levy. But, more importantly, the devaluation decision the Government has made has taken a load off the Australian Wool Corporation which is in a more responsible position than ever before.

The buyers of our wool, particularly our friends in Japan, will benefit by the decision. It is with interest that I have seen the wool futures market in the last few weeks anticipate the devaluation up till this week. The Bills before the House are simple and undramatic. They could be regarded purely as machinery measures except for the background on which they are superimposed and the dynamic situation which exists at present. The decisions represented by these Bills have been praised by the industry and deserve to be so praised. A major point that must be made is that the Government’s action with regard to the wool industry and the way in which the Minister for Agriculture, Ken Wriedt, has quietly, patiently and logically tackled the problems of our major industries are in no way a panic measure. The way the Minister for Agriculture has consulted and negotiated with the wheat industry, the way he has stood firm against pressures when he did not believe in them and the way he has fought, without running to the Press on issues where he has felt his colleagues have erred, has been a model for any person wishing to observe responsible Cabinet government. He has taken flack without becoming ruffled. He has always tried to explain the reasons for actions with which he has agreed or even privately disagreed. To say that the Treasurer (Mr Crean) of this Government is in any way superimposing the wishes of his Department over the Department of Agriculture is nonsense.

The present situation is that proposals of the Minister for Agriculture have been subjected only to the usual Treasury scrutiny. The decision to strike a fixed reserve price for wool at 250c a kilo of average clean micron wool and the decision to devalue are not panic measures, as I said. The decision to make 250c the level of the fixed reserve is in accordance with the figure that the Australian Wool Corporation itself has submitted to the Government in its overall case for market reform and wider powers. The debate about fixed and flexible reserve price schemes has been carried on in Australia since the early 1960s. One only has to think back to the memorable days when Sir William Gunn tried to convince the industry of the wisdom of accepting the future reality of trade in commodities such as wool.

An incredible amount of academic, industry and practical grazier evaluation of various proposals has been carried out. The theory and application of buffer stock schemes has been well canvassed. Today’s legislation is a very logical development of moves for reform in the industry over a long period. I must stress that these steps do not themselves represent total market reform or any finality in the debate on this commodity. What the legislation represents, above all, is an insurance against fluctuations and a breathing space for the industry. To continue my analogy, we only have to hold our breath to be sure that loans advanced by the Government will be recouped. Contrary to the line taken by the city Press, taxpayers’ funds are not in any way at risk. Of course, it can and must be clearly stated that the last government would not make such confident decisions about the wool market.

The right honourable member for Lowe (Mr McMahon) when he was Treasurer or Prime Minister would not buy a fixed reserve scheme on behalf of his Party. In 1970, due to fears of the future, the past Government backed the market with a flexible reserve price scheme which amounted to a shaky guarantee of some 79c a kilo average greasy, in today’s terminology. The fixed reserve scheme we have introduced gives a firm guarantee of 123c a kilo average greasy. In fact, the market is giving a price very close to that at present. It might be slightly above it at the present day. People may say that things are different now and that we are now in a far different industry situation but I do not believe this is so. People making claims such as this should substantiate them.

As my colleague, the honourable member for Eden-Monaro (Mr Whan) has said, the price we are now guaranteeing on a fixed reserve, not just as a deficiency payment, is 44c a lb above that of the last Government. That was only 2 years ago. Even if we take the most pessimistic figure for inflation in that period of 20 per cent, we will find that the increase in a fixed reserve is in the order of 55 per cent. The price of 123c a kilo has only been exceeded in 6 years of the 23 years that the past Government was in office. This does not mean that the price must hold at 123c but that is the floor below which the price will not sink. Apparently in the past the Country Party would not agree to a fixed reserve price scheme if we are to believe what the honourable member for Richmond said on 15 November 1970. He said: … the scheme was not intended to force or defy the wool market, but to test it and to get the best and most realistic price the market can pay. I am afraid that those wool growers who believe that wool users can be forced- in this day of ready availability of cheaper, though perhaps inferior textile substitutes- to pay a certain price for wool, are not facing up to the realities of the situation.

The honourable member for Richmond was clearly implying that he was opposed to a floor price and that the market should be allowed to fall to levels dictated by buyers in the auction room. In those days also there were no proponents of a floor price scheme within the Liberal Party. As well as guaranteeing funds, the Labor Government has acted to expand the powers of the Australian Wool Corporation. Again, these powers are- and other powers now under consideration, if granted will be- a logical extension of marketing research and the Government’s desire to guarantee orderly marketing.

The Australian Wool Corporation now has powers to control the flow of wool on to the market and the nominal power to persuade growers to hold wool on their property. The Australian Wool Corporation in my opinion needs to have the power to buy outside the reserve price scheme if an opportunity presents itself. It also needs to have the power to trade in other than greasy wool. I think at this stage the Australian Wool Corporation would be wise to look carefully towards the next step. I think it would be advised to absorb its new powers and work towards refining the plan it has put up to the Government. The present plan still causes me concern with respect to the concepts of ceiling price, allocation and key user. Having said that the measures taken by the Government do not represent complete market reform, it needs to be said that developments in technology and marketing techniques must continue to run parallel to our moves to give insurance and ameliorate fluctuations in the market.

There is still a lot of work to be done with respect to handling and work on the mill end of the pipeline as far as objective measurement is concerned. What we need to do now is to talk of an overall marketing system. Although we are starting to see this sort of system develop in Australia it is not so certain that we understand the mill end in terms of lot size and stock holding in particular. Mill confidence needs to be retained. We must work more on this end of the wool pipeline. The handling system that needs to be developed by research very carefully from now on must centre on the flow of wool from grower to mill.

I have only a few other comments on these Bills. Other honourable members have raised the question of promotion. Again, I would like to see far more scrutiny, particularly in the International Wool Secretariat and some of these bodies engaged in wool promotion. Criteria have to be met for advertising and promoting agricultural products if they are to have reasonable prospects of success. Ross Parish, an agricultural economist, set out in an article the following product characteristics favourable to advertising:

  1. The existence of an opportunity to differentiate the product.
  2. The presence of important ‘hidden’ qualities in the product.
  3. The association of powerful emotional buying motives.

Also favouring promotion were the following points:

  1. A favourable demand trend.
  2. Existence of many potential consumers.
  3. A fast turnover of buyers.
  4. Frequent product changes.
  5. Frequent price changes.

It is in that sort of setting that one needs to evaluate promotion in the wool industry. I am afraid that in the past it simply has not been carried out. If one wants to sum up this criteria to see what general criterion of effectiveness one can give, one has to find out whether it supplies the consumer with useful information. Comparing the characteristics of wool with the checklist I have given, only items 1, 3 and 4 seem to be relevant to wool- to separate the identity of wool from synthetics and because the demand for wool is responsive to fashion and income changes. On the other hand, apart from these criteria, synthetics appear to be favoured by the check list numbers of 2, 5, 6 and 7. Along with Parish I see wool promotion as essentially defensive with so many resources committed to wool production in Australia. Promotion to offset the potential risk of not advertising in competition with synthetics could be justified even in the absence of clear evidence of the potential pay-offs. Wool is a commodity which also suffers in that if your promotion is very effective there may be times where all you are doing is simply accentuating the trends. I commend the Bills to the House.


– This is an important debate for the wool industry because as a result of a series of events that have been put in train by this Government the wool industry, with other export and primary industries, has got into a very difficult situation. One of the remarkable things about the political perspicacity of the Minister for Agriculture (Senator Wriedt) seems to be that every time he is defeated in Cabinet and every time his Government puts the boot into rural industries he is able to persuade farm leaders that he is a good chap after all because the situation would have been so much worse if he had not been there. But after some of the decisions that have been announced throughout this year I think that most people would agree that the situation could not have been worse whether he was there or not.

We know the factors that have contributed to this long series of events. We know of the rapid increase in inflation in particular. We know of the successive revaluations- the revaluations upwards- which have done an enormous amount of harm to a great many rural industries. We have the situation in which costs have been increased by 90 per cent over a three or four year period and 40 to 45 per cent in the lifetime of this Government. That is a record of which the Government surely should not be proud. I think there are many problems confronting the industry which farmers will not realise for the next 8, 12 or 14 months because I suspect that a good many people are still carrying out contracts and work that was negotiated last year when income was much better and costs were much lower. These people are banking in part on income being maintained at roughly last year’s levels. I suspect, and I hope I am wrong, that there might be a good number who do not realise that in the beef and wool areas farm income will be half of what it was last year. This will become increasingly evident as more wool, sheep, cattle and calves are sold.

One of the problems for the farming community, and one of the problems for every industry throughout Australia, is that of liquidity. Liquidity problems will be monstrous. One has only to look at a situation in which costs will have gone up by the end of this year and in which actual inflation will be about 40 per cent over 2 years. The costs in the farming sector over a 3-year period which concludes at the end of this year will have in fact doubled and income will have been halved. The liquid resources therefore available to farmers have been cut in half but their requirements and needs for carry-on funds, for liquidity, will have been enormously increased. A person in a secondary industry who is carrying $100,000 worth of stocks would now need $120,000 to $125,000 worth of stocks if he wanted to maintain the same level of activity. But the situation will be so much worse in the farming community because of the fall in gross income and because of additions to runnning costs which have in fact nothing to do with inflation. If we try to measure the increase in costs to the farming community the figure will be much nearer 100 per cent than something like 30 per cent or 40 per cent.

It is against this background that these Bills have been introduced. When the wool levy was increased some time ago for research and promotion the Government contribution was significantly reduced. It was cut. At that time the Government said: ‘Oh, the industry is prosperous; the industry can afford it’. The corollary and logic of that, now that the industry is not so prosperous and is facing severe liquidity problems and therefore needs the benefit of promotion and effective research, especially in the field of shearing, ought to be that the Government will increase its contribution. But that, of course, is not in the Government’s philosophy or mariner.

The main elements of the legislation will, of course, affect the Australian Wool Corporation. Bank finance is not available not because the

Corporation does not want it, not because the banks are unwilling to finance the Corporation, but because of the economic policies of this Government which have been utterly disastrous and which are running in about half a dozen directions at once. The Budget which was presented last week will, as a result of the squeeze it has applied to the private sector of the economy and its expansion of the government sector, add enormously to inflation, will add to our balance of payments problems and will add also to the level of unemployment because of the blow which it has struck at business confidence. This week we have a devaluation in somewhat murky circumstances which runs in a quite different direction. If the Government had a devaluation in mind a week ago the Budget ought to have been of a very different kind from that which was introduced. These are the circumstances in which we are looking at this legislation.

Bank finance is not available because of the overall Australian liquidity situation in which business and farmers throughout Australia will be short of thousands of millions of dollars of liquidity throughout the next 8, 10 to 12 months. Thus we need Government finance to support the industry and a 5 per cent industry levy. Of course, the Press, the media and the Government have done nothing to discourage the situation. The media have tended to suggest that these are funds that the taxpayers are providing at some cost and risk to themselves. Of course, the industry stands behind the funds. These funds are lent on the security of the clip. The growers ‘ contributions and not the funds that the Government might provide pay for any loss that may occur. The Government has not been particularly generous. I am advised that the interest rate to be charged is something approaching 14 per cent, and if anyone thinks that is a gift to the wool industry, I do not know what is. I think it is slightly sinister that the rate of interest on the funds being made available to the Corporation has not in reality been published. If, as has been suggested, the rate is approaching 14 per cent, I think that such a decision is a scandal of which the Government ought to be ashamed.

The Australian Wool Corporation has over a long and difficult period provided substantial support to the wool market. The Corporation is a significant improvement on the free and uninhibited auction which I have opposed since at least 1962. The Government claimed when it was in Opposition that it would support organised marketing for the wool industry. One of the tragedies of the present situation and one of the causes of the present market circumstances is the demolition job being carried out by those 2 destroyers of primary industries- the honourable member for Eden-Monaro (Mr Whan) and the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson). They have attacked the Wool Corporation and they have made it quite plain that they believed -one is a Minister; the other might not matterthe Corporation in trying to sustain a temporarily difficult market situation had gone beyond guidelines set by the Government, although there is information to suggest that the Corporation had discussed these guidelines with the Government shortly after the election and that the Corporation was acting in conformity with the guidelines, and from members and the Chairman of the Corporation I would have expected nothing else. But the Minister and the honourable member for Eden-Monaro, supported by the Australian Labor Party and by the Government did a very effective job of destroying worldwide confidence in the Corporation and in the Government’s determination to back the market which was quite essential to hold the market at the price of 300c a kilo. As a result of Government action the price has been dropped by 50c a kilo; But the Corporation has to buy as much wool at that price as it would have had to buy at the higher price. I would venture to say that if the price had been set at 300c a kilo the Corporation would not have bought one additional kilo of wool.

It is not the price that deters people in the present circumstances from buying wool; it is the need to know that the price that is set will be maintained. But the Government thought that the poverty level- and it is a poverty level at 250c a kilo- would be adequate for the wool industry. That might not have been so in earlier days when costs were very much less than they are now. It would have been a good price in days when there was a deficiency payment and a guarantee of 36c per lb. But the present price is about 44c per lb, translated into old terms. Since the days of 36c per lb guarantee there has been a 90 per cent increase in costs and 40 per cent inflation over the last 2 years- last year and this year. By the end of this financial year I believe there will have been an increase of 100 per cent in total costs over the last 3 years. So to compare the present guaranteed price of 44c per lb with the old one of 36c per lb one would really double the old price to 72c per lb, making allowance for inflation and cost increases, all caused by this Government. Then one would have a situation in which one would be comparing the 44c per lb with the 72c per lb which would have been the comparative figure on the basis on which the industry was being paid three, four or five years ago. That would not make the Government come out so well. It does not make the Government’s generosity or its view of the wool industry sound quite so well. One of the tragedies of this situation is that I do not really believe that enough people in farming industries have done their homework about the increasing costs which have come upon them over the last year or two and the reduced returns which will be affecting so many.

The Government might claim that it has revalued and introduced a currency devaluation of 12 per cent. But after a revaluation upwards of about 30 per cent and an inflation over the last 2 years of 40 per cent the 12 per cent devaluation figure appears modest. Again, there is no solution for the industry’s problems in that area. There is help at the margin, but that will not overcome the problems and difficulties that have been caused quite directly by the Government, which obviously has no interest in this debate at all.

A number of problems have occurred because of the Government’s delay in these matters and because of the Government’s destruction of the confidence in the wool industry. I should have added that during and after the attack by the honourable member for Eden-Monaro and the Minister for Northern Development there were Japanese reports that quite obviously the price had been propped up for political reasons. In other words, not unexpectedly overseas buyers picked up the false claims of the Minister and adjusted their buying limits accordingly. The Australian wool grower is now paying the price for that. As a result of the destruction of confidence in the industry at that time there has been a very difficlt marketing situation since. Some sales have been postponed because of shortage of funds and there have been cancellations of sales. Growers who would otherwise have got their reduced cheque on a certain date will clearly have to wait a longer period.

I understand that there are some proposals to overcome some part of that difficulty- again, proposals that growers will be paying for. If, as I am advised, the interest rate on the loans is at 14 per cent a year the growers will be paying for the proposals in a scandalous fashion. The Opposition, as has been made plain by the amendment that has been moved, supports the legislation. There is no alternative in the circumstances that have been created by the Government. But we are concerned at the degree of control that could be exerted on this industry by this

Government. There is a great deal of evidence to suggest that at least some people in the Government are seeking, through a program of inflation, to destroy all those who have contributed to Australia in the past and who have built up some assets, very often from nothing. The farming community is one part of that group. People who own their own homes, who have small businesses, who have established businesses are being grievously hurt. Those who have retired after working for a long period are being hurt perhaps most of all. Some of the measures that the Government has introduced in such a mean and petty fashion have attacked groups in this area. How the Minister for Tourism and Recreation (Mr Stewart), who is sitting at the table, can believe that the retired people in his electorate ought to be attacked as the recent Budget has attacked them I cannot understand. It is not only people such as that -

Mr Stewart:

– What do you mean by that?


-The tax on unearned income. I should like to know how somebody who has retired and is 70 years old in the Minister’s electorate can go out and earn income afresh- or someone in the electorate of the Leader of the House (Mr Daly).

Mr Daly:

-What has that got to do with the wool Bills?


-Because the same tax is aimed in a quite vicious manner at anyone who tries to produce anything in Australia and who employs capital to do it. We have to see the details of the tax when it comes forward, but I would have thought that there would be a large number of supporters -

Mr Stewart:

– That might be right if you wait until it comes forward.


-The Minister is implying that there will be another Caucus revolt. It will be a wonderful thing if there is. I thank the Minister for his admission and for his honesty in saying that before the revolt has actually occurred.

Mr Daly:

– We will get you to use the knife next time.


-We are saving it up for you, and it will be very sharp. There is a necessity to support this legislation because there is no alternative. It will help to establish a structure which if wisely used, as it will if the Corporation is left to its own account, will help to meet the problems and needs of the industry. If the Government unduly interferes as it has in recent weeks and months that will not be the case. But it will be difficult, in the circumstances that have been created, for the measures and for the degree of authority given the Corporation by the legislation to overcome the very real difficulties which the wool industry is in as a result of the general economic and inflationary problems of the industry. The decisions on superphosphate, petrol tax, the Post Office, local government, education and roads are all kicking the backside of people who live outside of the capital cities. That seems to give a great deal of pleasure to people on the Government side of the House. The fact that they have introduced a measure which partially meets the needs of a great Australian industry will not for one moment deceive a single farmer or a single person who lives outside Melbourne or Sydney.


-All the Opposition speakers so far seem to have made quite great play on what they regard as niggardliness by the Government. I think perhaps what speakers from that side said in the past ought to be quoted in this context. They said that there is no such thing as a free lunch. Yet the honourable member for New England (Mr Sinclair) has said quite a lot about how the previous Government paid all of the 36c a lb and the growers did not have to pay anything. The same thing was mouthed by the Honourable member for Corangamite (Mr Street). We just heard the honourable member for Wannon (Mr Malcolm Fraser) saying that the Government is being pretty lousy in not providing enough to the wool growers.

I think the first thing that ought to be said is that it is not a question of the Government providing anything. The Government does not have income as such; it is other people’s money that we are talking about. When we talk about distributing money to wool growers or to anybody else we must always bear in mind, if we are to be responsible about this, that if we are to give a benefit to some group, such as wool growers, we must deny funds and deny buying power to some other section of the community. When the Government makes a decision to give a benefit to a certain section of the community, it is not giving away its own money; it is really making a collective decision on behalf of the community as to who will pay for what. I think that this is a matter which should be put in its prospective.

Notwithstanding that, this measure is undoubtedly very generous to wool growers. There will be very significant short term benefits to wool growers. The main benefits of this measure are these: By means of the levy which will be imposed on wool growers, the Government will be enabled to ensure that 250c per kilo will be the reserve price of the Australian Wool Corporation. A sum of $ 150m will be provided by the Government to underwrite that floor price. What does that mean when compared with past support schemes for the wool industry, such as the one which had a reserve price of 36c per lb and which was mentioned previously? On my understanding, one can equilibrate the two by saying that the yield from greasy wool was about 60 per cent of the yield from an equivalent volume of clean wool. So 250c per kilo for clean wool is something of the order of 160c per kilo for greasy wool which, before metrication, comes down to 72c per lb greasy. According to my calculations, that is exactly double the 36c per lb which was the reserve price provided when the wool industry was going through its very bad slump a couple of years ago. It is true, of course, that there has been some inflation since that time; but I do not think anybody, even honourable members opposite, would assert that costs have increased to such an extent that they would fully offset this very generous increase to what I believe is double the price that was payable under the scheme brought in by the previous Government.

A measure that would offset any increase in costs is, of course, the reduction of tariffs. We must remember that the 25 per cent reduction in tariffs which was brought in by this Government about a year ago must have significant benefits for the wool industry. I recall that a report produced some years ago by the Committee for the Economic Development of Australia indicated that the added costs to the wool industry which resulted from tariff protection would amount to something like 12 per cent. I suggest, therefore, that the tariff reduction does provide some offset against any increase in costs that may have occurred in the last couple of years. So, there is a very much greater benefit to the wool industry than honourable members opposite are prepared to concede.

I know that this measure has been criticised, particularly in some sections of the Press, as being too generous and as meaning in the end a net loss to taxpayers. I must confess that I also had some fears that this would be the case, and I was becoming more apprehensive when I could see that the profits from the activities of the Corporation in the previous season were being eroded and it was starting to look as though the growers’ contributions would also be eroded. However, I think that this situation has been changed considerably by the announcement in the last 24 hours of a devaluation of the Australian dollar. I think we must have a look at what the situation will “-e in the light of this devaluation. I have here a short report which came into my possession today. It was put out by the Bureau of Agricultural Economics. In the context of the devaluation, under the heading * Wool ‘ the report states:

In the present situation of a weak demand for wool and heavy purchases by the Australian Wool Corporation, the devaluation of the Australian dollar is likely to lead to the trade purchasing larger quantities of wool, rather than to an immediate rise in auction prices. Later in the season when it is expected that the demand will be firmer and that prices will rise above the AWC floor the impact of the devaluation can be expected to be reflected in even higher prices. The devaluation decision should reduce the quantity of wool which otherwise was estimated to be held by the Corporation at the end of the season. This means that the total gain in export income from wool would be greater than the increase in receipts by growers.

I take that to mean that the growers themselves will already have received the benefit of thenown receipts by direct payment from the Wool Corporation. In the first instance, the devaluation should help the Corporation to clear a lot of its stocks- Then, later in the season, if the market becomes more buoyant, there should be a significant increase in the receipts of wool growers and a further increase in Australia’s export income. I think this shows quite clearly that there will be a direct benefit to the wool growers. Of course, in the case of a devaluation, this applies to all sections of primary industry which export.

Honourable members opposite, particularly members of the Country Party, are very quick to criticise this Government for any measure which they regard as inflationary. But I notice that they have come in very quickly to support the devaluation. I think this shows a curious double standard on the part of members of the Country Party because any impartial person must acknowledge that there is some inflationary impact in devaluation. Yet the Country Party has not criticised the Government for this policy action because it knows that it will mean a direct increase in the receipts of primary producers. Members of the Country Party are always the same; they are prepared to do anything to prevent other people from trying to compensate themselves for increased costs of living- such as workers receiving increased wages- but they do not say anything when it comes to their own sectional interests. We saw this demonstrated very lucidly and very starkly at the last Federal election. When the Leader of the Liberal Party said that he would control prices, the Leader of the Country Party made it quite clear that perishables- in other words, what his sectional interests produce- would be exempted, because if housewives were to pay less for their foodstuffs it would mean that his sectional interests would receive a lower income. The members of the Country Party were not going to have a bar of that.

It should not be forgotten, therefore, that devaluation has the effect of increasing directly the receipts of primary producers who export. This is something that ought to be acknowledge by honourable members of the Opposition if they are to be honest about it. I am not saying that I personally do not support the Government’s devaluation. In fact, I do support it. But the main reason why I support the devaluation announced by the Government is that it protects the import competing industries in Australia against what is a very abnormal international economic situation. There is a worldwide recession and other countries are faced with rising stocks of unsold goods. They are trying as hard as they can, aggressively, to push those goods in any market that they can find, and that includes Australia. That is a very good justification for the devaluation announced by the Government.

I find the amendment moved by the honourable member for New England very difficult to understand. As far as I am concerned, what we want to do is to try to ease the liquidity situation in Australia, and this measure of course will do that. I cannot see any reason why the banks should lend money to the wool industry rather than anybody else. I cannot see why the banks should have to lend preferentially to the wool industry rather than to some other industry. I personally would like to see some money going from the banks to the housing industry because the signs indicate that a slackness will develop in that industry. I hope that the banks are able to lend money to the housing industry. Incidentally, this measure will enable that to happen, because this payment of $ 150m to the Wool Corporation will enable a substantial and very rapid increase in the liquidity situation of the trading banks.

Presumably, as soon as the Corporation pays the growers, the growers- at least, those of them who do not put the money under the bed in a sock- will put the money into the bank. That will immediately improve the liquidity situation of the banks. I hope that then they will be able to increase their lending to the housing industry. Because of the multiplier effect, they will have available an amount considerably in excess of $150m. This is a very welcome side effect of this measure, because it will be injecting a considerable amount of liquidity into the economy and should help to overcome the liquidity squeeze with which we are faced. But I cannot understand why banks should be required specifically to lend to the wool industry. This was not explained by honourable members opposite. As far as I can see their objection to this measure is purely an ideological one.

I am less certain about the effects of these measures on the industry in the long term. I am not talking about the taxpayers now; I am talking about the wool industry itself. If the price is 250c per kilo it will be because the interaction of supply and demand has determined that that is the price of wool. It will not be 250c per kilo because the sellers say that that is the price. It has to be remembered that there are substitutes for wool. They are not as good, but there are substitutes. It is all very well for us to say that the wool industry always will be there because it always has been there. Other countries might not necessarily see it in that way. For example, because of the protection that has been put up against wool in the United States, the wool industry has been of comparatively smaller importance in that country. In other words, what has happened in the United States is that wool has virtually been priced out of the market.

We do require a viable wool industry. We want it to remain a good export earner for Australia. It is absolutely essential to us to have viable export industries if we are to import the capital equipment that we need for our continued economic welfare. To have a viable industry we must be responsive to the market. If we try to force the market we might not only encourage substitution but also discourage efficiency in the industry itself. The best way to ensure that there is a viable industry is to ensure that it becomes efficient. Whether the industry can do that while it is insulated from market forces I suppose only time will tell.

However, I think that the measures which have been taken will provide significant benefits now. Devaluation itself will provide a substantial increase in our export earnings and will help the receipts of wool growers. The measure that has been used to advance money to the Australian Wool Corporation also will do something to increase the liquidity in the economy. The beneficial effects of that will be felt throughout Australia.


-The honourable member for Kingston (Dr Gun) commenced his remarks by saying that these measures are rather generous to the wool growers. He went on to explain how the 250c per kilo reserve price for 21 micron clean basis wool works out at 72c per lb greasy. All I want to say to the honourable member for Kingston is that all the theory in the world will not improve the actual selling price to the grower. If he were to cast his mind back to the results of the first week’s trading under the new proposals he would remember that the actual sale price was in the vicinity of 50c. If the actual cost involved were taken off the price would be closer to 41c or 42c. I believe that the honourable member ruined the whole of his argument and that of some of the speakers before him by referring to the importance of the devaluation of the currency and saying that that is going to let the wool industry off the hook.

This cognate debate covers almost every aspect of the wool industry, but I feel quite sure that basically the important issue is that of the wool plan announced by the Minister for Agriculture (Senator Wriedt) on, I think, 27 August last. It is known as the floor price plan. It has been very interesting to note the various statements that have been made since the making of that announcement. I recall what happened in the very early days of that announcement being made. It is true that a number of industry leaders referred to the new plan as being a breakthrough and a milestone in the history of the wool industry. I think that there were plenty of people who welcomed the whole issue before they analysed it thoroughly. There were others, including myself, who just welcomed the principle. I have no arguments against that. But I, and I am quite sure many thousands of others, have never accepted the principle laid down of the price being set by the Government. I was absolutely staggered to hear the honourable member for Macarthur (Mr Kerin) say on several occasions- firstly in a television program I saw one Sunday afternoon and then in response to an interjection yesterday by the honourable member for Corangamite (Mr Street)- that this was an equitable price. I was absolutely staggered to hear that said by a man who represents a large wool growing area. I am mindful of the fact that the seat he holds is named ‘Macarthur’ because of the early introduction of merino sheep into that area by Macarthur.

The figure of 250c per kilo is a very misleading one. I almost said that it was deliberately put out as a misleading figure, but I do not think that I should say that. I am not too sure whether it was deliberately put out to mislead, but the figure is, as I have said, very misleading and is not acceptable to the wool growers. Anyone who suggests that it is a reasonable figure does not understand the situation. One has to convert the 250c per kilo into real values compared with other prices and with ones that the people can understand. First and foremost 21 micron wool has been mentioned. It is a severing of the old principle of the wool count. Twenty-one micron wool is not average wool. The average is not up to the standard of 21 micron wool. I think I should make that point very clear. Only a small proportion of the wool produced in this country is 21 micron or better. The average is well below it. In the not so effective wool growing areas the standard is well below that figure. Naturally any wool that is of lesser standard than 21 micron standard will receive a lower price.

The price is based on the weight per kilogram, which again is misleading to many people. Many people keep referring to the price of wool as though it is still weighed on the pounds basis of a few years ago. By converting the present figure to the old formula of pounds greasy one comes to light with a different price altogether. It should be always remembered that from the price quoted there is an automatic deduction of about 14 per cent to 14.5 per cent for such things as freight, insurance, handling charges, commission and the like as well as the increased levy of 5 per cent that is over and above the levy of 2.75 per cent for research and promotion. So what it all really boils down to is what the grower receives in the form of a cheque. All he is interested in is the final cheque that he receives. It is unfortunate that people are being misled into believing that they are going to get not a cheque that is based on the figure of 4lc per lb but one that is based on a figure that is much in excess of that, as the honourable member for Kingston mentioned a little while ago.

The $64 question is: What brought the price down? That is the all important thing. When the present Opposition was voted out of office in 1972 the price of wool was almost at its peak for recent times. I am referring to the period since the early 1950s. But after 6 months in office by the Australian Labor Party we saw a change taking place. We saw the price starting to slip down. Why? For many reasons. I would like to mention one. I refer to an incident that took place in this chamber not so very many months ago when both the honourable member for Eden-Monaro (Mr Whan) and the Minister for Northern Development (Dr Patterson) made great play about sapping the confidence of the people in the Australian Wool Corporation. I ask anyone who disputes that statement to check Hansard and see just what they did say and how they brought the Leader of the Australian Country Party (Mr Anthony) and the Deputy Leader of the Australian Country Party (Mr Sinclair) into the picture. They were the ones who set the ball rolling. I vividly recall that when the Minister for Northern Development, who acts in this House for the

Minister for Agriculture, was challenged to indicate what future backing there would be from the Government to enable the Wool Corporation to continue its operations he evaded the question. Whether he had this new proposal in mind at that stage I do not know. However, this upset the industry and the growers and affected the confidence of people. No doubt the buyers took advantage of the situation.

Dr Gun:

– Are you serious?


– Of course I am. It is a pity that the honourable member did not take particular note of this point because it is one of the reasons for people starting to lose confidence. The matter was referred to Senator Wriedt, the Minister for Agriculture. He said that he would form his own judgment on this issue. He did not support the honourable member for Eden-Monaro or the Minister for Northern Development. He was man enough not to criticise his own colleagues. He merely said that he would form his own judgment. Surely that indicates what he thought.

As I said earlier, the Government refused to give an assurance that it would continue providing funds for the Wool Corporation to enable it to buy the quantity of wool necessary to maintain a reasonable and static price. I believe that since then the Government has tended to panic. I do not know how long it worked on this plan. The industry has been making submissions for some considerable time. When the final decision was made, how long did the Government or the Minister give the industry to consider the proposal? I think I am right in saying it was in the vicinity of one day. Wool industry leaders met in Melbourne and literally had to decide in a matter of hours whether to accept this plan. They had no alternative but to accept the plan as presented by the Minister. It was miles too late to start renegotiating. It takes a considerable time for the wool industry to determine a course of action because every State and every sector of the industry must be consulted and this cannot be done in a matter of hours. This is why we find ourselves in a most peculiar position.

Sitting suspended from 6.13 to 8 p.m.


– Prior to the suspension of the sitting for dinner I was indicating what this new plan really means. I had reached the stage where I could well ask what is the difference between this plan and the previous one, which was the deficiency payments scheme that was known to many wool growers. The previous scheme placed a floor on the market to prevent violent price fluctuations. At the conclusion of that scheme and prior to the introduction of the new one, the virtual reserve price was running at 300c or better. That was the lowest price for some considerable time. The new scheme was introduced with the price at 250c Growers have to pay a 5 per cent levy on wool sold at this price. It is my opinion- I think it is held in many other areas of the wool industry and no doubt in the trade and possibly by some people who have made a close study of the subject- that had the floor price been set at 300c instead of 250c there would have been little more, if any more, wool purchased than is being purchased today.

During the suspension of the sitting for dinner, my colleague the honourable member for Moore (Mr Hyde) had some figures taken out to test some of the statements being made by members on the Government side. He asked the Parliamentary Library to calculate how the price of 36c per lb clean wool in 1970-71 would compare with that of 250c per kilo clean in September 1974, adjusted for inflation. It is true that we on this side of the House were somewhat critical of the previous reserve price of 36c, which was only a holding figure because just prior to its introduction the price of wool had reached an all time record low and something had to be done. The answer that the honourable member for Moore received was that the price was practically the same, excluding the 5 per cent levy on wool sold at the floor price of 250c a kilo clean. The important point, and I repeat it, is that the price excluded the 5 per cent levy. These are the estimates taken out by the Library and they show that 250c a kilo today represents a lower return to the growers than they received in 1970. Surely that proves the point that the people who are saying that they are satisfied with 250c know little of what they are talking about.

My colleague the honourable member for Mallee (Mr Fisher) drew my attention to some prices which I believe should be of interest to the House. A grower sheared some dorset horn stud rams and sold the wool. He shore 2V4 kilos per head. The return to the grower was 46/20 clear per kilo. That works out at $1.16 per sheep. These were studs and there have been a lot of increases in shearing costs. Anyone who knows anything about the industry will appreciate that the normal rate to have a sheep put in a shed and shorn is running in the vicinity of $ 1 .20 per head. The rate for stud rams is double which means an added 45c. So the return to the grower for his wool amounted to $1.16 and his costs came to $ 1.65. That is a loss of 49c per sheep. Yet people on the other side of the chamber say that it is not a bad price; that it is quite a satisfactory one. I repeat what I said before. Those people have little or no idea of the cost. They have to rememberI am referring now to the information given me by the honourable member for Moore- that the price about 3 years ago was about 3 times what the price is today. If today’s costs are compared with those of 3 years ago, it will be found that costs are increasing by 90 per cent to 100 per cent. So that is how good this wool scheme is.

At the present price level, which is caused by lack of confidence, it is my considered judgment that the $150m that the Government has put aside to lend to the wool industry- I repeat the word ‘lend’- at interest which I believe will be about 1 1 or 1 1 Vi per cent, will run out in the not too distant future. It is my guess that it will all be gone by Christmas unless something happens. If one looks at the fact that the growers contribute 5 per cent of their income, mindful that interest has to be paid over a 12-month period, one would find that about one-third of the grower’s contribution could all be used up in a matter of 12 to 18 months. So I hope that those Government supporters who appear to be proud of this new scheme and take a lot of credit for introducing it to the wool industry for the first time will remember what they have said in a few years time. Perhaps when they move around the country electorates at election time they will remember it. I hope that they will also take some responsibility if and when the industry decides that this scheme is not quite as they thought it was to be originally.

As I said earlier in my remarks, it must be remembered that the industry had little time to study the proposal. It knew that the old scheme was out and that there was nothing to take its place. The Minister for Agriculture (Senator Wriedt) virtually gave the growers 24 hours to make up their minds as to whether they were going to accept the proposal. I trust that members on the Government side will take these things into consideration and that they will also take the responsibility for the weaknesses of the scheme, so that at some future time they will try to make every endeavour to improve it. I believe the Government must take the responsibility for the collapse of the wool market. It is as simple as that. Had we remained with the old scheme,’ growers would be receiving at least 50c a kilo more than they are receiving on the present market I am sure that all those members who are satisfied with the present price will go down in history as either not knowing anything about the industry and its problems, or as directly sabotaging the number one Australian industry, the wool industry.

Debate (on motion by Mr Daly) adjourned.

page 1815


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

Second Reading

Mr LIONEL BOWEN (Kingsford-Smith-

Special Minister of State) (8.10)- I move:

Honourable members will be aware that elections are to be held during October 1974 for the Legislative Assembly for the Northern Territory. Nominations for this election close this month. This follows the recent passage of amendments to the Northern Territory (Administration) Act. The Northern Territory (Administration) Act provides that a person is not qualified to be a candidate for election as a member of the Legislative Assembly if, at the date of nomination, he is employed in the Australian Public Service. If no amendment is made to existing legislation, approximately 11,000 public servants in the Northern Territory could be denied the incentive for or opportunity of standing for election. At present there is no specific provision enabling a public servant who resigns to contest an election in the Northern Territory, to be re-appointed or re-employed in the Public Service if he fails to be elected. Members of the defence force are in the same position.

The purpose of the Bill is to enable officers or employees of the Australian Public Service and members of the defence force, who resign to contest elections for the Northern Territory Legislative Assembly, to be re-appointed or re-employed if they fail to gain election. Part II of the Bill extends the existing provisions of section 47C, which relates to permanent officers, and section 82B, which relates to temporary employees, of the Public Service Act. A person who retired from the Public Service to contest an election for the Legislative Assembly for the Northern Territory may, if he fails to be elected, be reappointed or re-employed at his previous level. Provision is also made to enable the sections to be applied by regulation to elections for legislative or advisory bodies of other Territories. This will be used as necessary in the future. The amendments made to the Superannuation Act by Part III of the Bill will extend to these candidates the same superannuation rights and privileges as presently apply to Australian Government employees who resign to contest Federal or State elections.

Parts IV and V of the Bill relate to members of the defence force who resign to contest the elections. The amendments apply the provisions of the Defence (Parliamentary Candidates) Act and the Defence Force Retirement and Death Benefits Act to those elections, thus giving members of the defence force similar rights to public servants. In view of the nature and urgency of this Bill, and the fact that it will amend several Acts, it is hoped that honourable members will not delay its passage to discuss other matters associated with the relevant Acts. I refer in particular to the removal of the oaths and affirmations requirements from the Public Service Act during 1973. I can assure honourable members that opportunity will be given to them to debate that matter when another Bill to amend the Public Service Act is introduced later in this session. I commend the Bill to honourable members.

Debate (on motion by Mr MacKellar) adjourned.

page 1815


Second Reading

Debate resumed.


-This debate is concerned with one of Australia’s greatest industries. It is an industry which still earns a greater proportion of our export income, or very close to it, than any other industry. This industry has been done grievous harm by the actions and policies of this Labor Government in the short space of almost 2 years that it has been in office.

When this Government came to office, it argued, to quote the Prime Minister (Mr Whitlam), that the wool industry had never had it so good- in other words, that the prosperous conditions which existed for the industry at that time did not justify support from the Australian taxpayers. On that basis, the Government took many actions which affected the industry. It revalued the currency. It removed the superphosphate bounty. It removed the vital taxation concessions which the industry enjoyed. It removed the subsidy which sought to equalise charges for fuel in city and country areas. The special Minister of State (Mr Lionel Bowen), who is at the table, as Postmaster-General was primarily instrumental in removing concessions to country people in respect of telephone and telecommunication services. There were many other actions of this sort. Later, in the miniBudget, the Government increased the excise on petrol. This move has vitally affected the wool industry in the same way as it affected every other primary industry.

The argument advanced at the time to support such action ignored the fact that the industry had just come through what was almost the worst recession in its history. It was, and in many ways still is, loaded down with mountains of debts. What I am saying is that the prices received by the industry at the time when this Government came to office and took these actions did not reflect the true economic situation of the industry. The industry desperately needed those higher prices in order to make a start to extricate itself from the difficulties in which it was in the period of the rural recession.

However, let us assume for the moment that the Government’s argument is valid. I ask the Government and the Minister at the table, or whoever accepts responsibility for these Bills on the part of the Government- I am not quite sure who it is- why the Government is not being consistent. If it was reasonable to withdraw concessions at a time when the industry was prosperous, why is the Government not restoring those concessions now? Does the Government believe that at the level of costs and prices today the industry is still prosperous? Is that an argument that it would use as a basis for consistency? Not only has the Government not restored those concessions which I have mentioned, but it has dealt the industry further tremendous blows in the Budget for 1974-75. I do not need to repeat to the House that inflation has a greater impact on an industry like the wool industry, which sells the great bulk of its produce overseas, than on any other industry in Australia. The Government proposes to introduce a capital gains tax, to increase postal and telecommunications chargespostal and telecommunication services are vital to people in the country- and to increase charges imposed on the aviation industry. These Budget measures will cost the wool industry dearly.

Take, as an example of this lack of consistency on the part of the Government, the levy for wool research and promotion. In introducing the Wool Levy Bill 1973, on 2 May 1973, the Minister for Northern Development (Dr Patterson) said:

Thus values compare favourably with prices realised in the years when the industry alone financed expenditure on wool promotion. For these reasons, the Government considers that in 1973-74, wool growers should finance a greater share of the expenditure on research and promotion and that its decision to provide $22m for this purpose and for the cost of administering the marketing functions of the Australian Wool Corporation represents a reasonable balance in the circumstances.

That is what the Minister said in 1973. He said that the industry was prosperous and was getting good prices and therefore could bear a greater proportion of the cost of financing wool promotion and research. As a result the Government increased the levy and reduced the Government’s contribution. What do we find in these Bills before us? Do we find that to be consistent with that argument the Government has reduced the levy for wool promotion and research and accordingly has increased its contribution? We do not find anything of the sort. The levy remains exactly the same, despite the change in the economic circumstances of the industry.

The Government claims that the $150m being provided for the Wool Corporation to carry on its activities is a recognition by the Governmenta sympathetic Government, its supporters say- of the problems of the industry. I have no hesitation in welcoming the Government’s action in providing this money, as long as it does not use it to interfere with the activities of the Corporation. I believe that we will need- given the attitude of this Government- to watch that situation very carefully. Apart from that particular consideration I have no hesitation in saying that I welcome this measure. I have always believed that a floor price scheme is in the interests of the industry. That having been said, I ask: How generous and how adequate is the Government ‘s action? I think that we can come to a conclusion. We can make a judgment about the adequacy of the Government’s action and about the claims by the Minister, the Government and Government supporters that the Government is being extremely generous to the wool industry. We can make a judgment by comparing the present situation that is being achieved by the provision of this $150m and the conditions on which it has been made available with the situation that existed under the previous LiberalCountry Party Government.

The House will remember- it has been mentioned by almost every speaker in this debate, but needs to be said again- that the previous Government underwrote a price of 36c per lb. The present Government is providing money to underwrite 250c a kilo. This sounds a substantial improvement on the present situation, and it has been represented as such by the Government. In fact, when one does some figuring on this matter, it becomes quite apparent in relation to the only thing that matters- the real return to the grower- that his real return from the new situation is very little different, if different at all, from the previous situation. This is because of the enormous increase in costs to the industry as a result of the economic mismanagement, the inflation and the general ineptitude of the handling of the economy by this Government.

In addition to a situation where the grower in real terms will be no better off under the new arrangement than he was under the old, taken purely on the basis of the floor price arrangements the growers are much worse off. They are worse off firstly because they have been deprived, as I mentioned earlier, of the other assistance that was provided by the previous Government- the superphosphate bounty, the taxation concessions, the telephone concessions and all the rest of it. These were essential components in determining the real economic situation of the grower. Secondly, under this legislation the grower now has to pay a 5 per cent levy designed to meet the losses incurred by the Corporation.

The levy will produce $47m. I do not object tc that. It has always been a policy of the industry to stand on its own feet. I congratulate the industry, I think it is highly desirable. I mention it in the context of the claims made again and again by Government supporters that the Government is being generous to the industry.

Mr Daly:

– So we are.


– The Government is not being generous to the industry. To bandy around a figure which represents 250c a kilo and to say that it is extremely generous in the light of the factors in the situation which I have mentioned is a travesty of the truth. To represent this as generous assistance to the wool industry is quite laughable. It is assistance which will cost the Government nothing because the growers are meeting the losses, not the Government or the taxpayers. It is assistance, I repeat, which will cost the Government nothing and will do very little indeed to compensate the industry for the incessant rain of blows that has fallen on it from the policies of this Government.

We have no other course open to us but to support the legislation. As many speakers on this side have said, and I have underlined, we regard it as a marginal minimal action on the part of the Government. I agree, as most of the newspapers in Australia have suggested, that this is something which the Government was dragged into almost against its will and almost without knowing what it was doing. If it had not moved in such a hurry and at such a run this minimal marginal action to assist an industry to which it has done so much harm would not have been taken. I support the legislation.


– I welcome the Government’s recognition of the problems that are facing the wool industry today. We are talking about a $ 1,000m industry. It is still Australia’s greatest export earner and it still involves a very significant portion of the Australian population. It is beset with all sorts of problems. It has the problem of low prices and rising costs, the classic squeeze situation. It should be made clear that the Government is not really committing itself to any great deal of support for this great industry. It is not committing itself to any expenditure of taxpayers’ funds. This money is being made available on a loan basis and the funds will attract interest at something around the current levels. I will come back to the question of interest a little later. It is sufficient to say at this stage that no taxpayers’ funds are going to be wasted as has been suggested by many different sources in recent weeks. The industry will in fact have a 5 per cent levy placed on it which will amount to $47m this year. This is a significant sum of money. It is this levy which will in fact absorb any losses which may be incurred. It is a levy on the growers and the growers themselves will have to foot the bill for any losses that may be sustained by the support operation.

There is no question that the $150m is welcome but it must be seen in its true context. The industry would have been more than happy to have borrowed this money commercially but the way things worked out it is a government provided sum of money. It is interesting, I think, to look back on the banks’ attitude to the proposal that they should in fact provide the money and guarantees for this operation. The banks were prepared to do this as long as the Reserve Bank was prepared to allow them to have access to statutory reserve deposits. If the bank had been a little more flexible in its approach to the liquidity situation, this may have been achieved. The Reserve Bank itself could have made funds available perhaps at more attractive interest rates than may now be the case, through the rural credits department. The word that has been floating around is that whatever decision might have been made by the banks in deciding whether they were going to support this particular project was going to be, in fact, overruled by a government decision which had been taken earlier, that the funds would be provided by the Government in this particular case. I do not know whether there is any politics behind that decision. I do not know whether the Government thinks it can gain some political points because the Government itself is providing those funds.

It can now be said that the Government has made a commitment and that the industry cannot say that the Government was not responsible for providing this money. I support the Government. I support the Treasurer (Mr Crean) and the Minister for Northern Development (Dr Patterson) for in fact coming to the aid of the industry. I sincerely hope that at some later stage we are not put in a position where politics are brought into this situation and the industry is held up to ransom. I hope we are not put in an invidious position simply because the Government itself provided the funds in this situation. This is, I think, very important in the light of the amendments which have been moved by the honourable member for New England (Mr Sinclair) because the industry wants to get itself on to a commercial and a viable basis. The industry wants to be able to borrow and to be responsible for its own funds. The industry wants to be able to be free of political manoeuvrings, if that is going to be at all possible.

I think the point was made earlier that the Government’s policy of providing funds was potentially dangerous. I think it was pointed out by the honourable member for Eden-Monaro (Mr Whan) that the wool industry would be fairly happy to be dealing with the Government in this situation. I do not think I am misquoting him. But I think that the position is rather the reverse. I think the industry would rather be dealing with the banking system than with the Government because the Government and the finances that are involved in government are so terribly subject to the whims of budgeting. With funds that are as important as these, a degree of certainty is attached to commercial borrowing which is not attached to governmental borrowings. The industry does not want to be in debt to the Government. If it is at all possible, the industry wants to be on its own sound economic footing.

We have heard a lot said tonight about the figure of 250c clean per kilogram. I think this concerns an important point and the position is worth canvassing further because it is this particular figure which is being bandied around as being the great offer and the great floor support scheme price level for this industry. It has been demonstrated earlier tonight that this figure is equivalent only to the 36c which was made available under previous governments when one takes into account inflation. Charts are available to demonstrate the correctness of this figure. Everybody knows the figures that relate to earlier wool marketing exercises and people know just how much the price of wool has moved. It is sufficient to say that this particular price which is, in money terms, really only equivalent to what people were getting 3 or 4 years ago, is not anything to be put on a pedestal as representing a wonderful situation and a very magnanimous gesture on behalf of this Government. It was the immediate required figure which, in the circumstances, the Government could get away with. What other industry would be prepared to accept a price level which virtually has applied as an average over the last 10 to 15 years if we iron out the fluctuations that have occurred over that time?

There has been no significant growth in the price of wool as it is received by the growers. It is pretty much the same price which is being dealt out year by year and the costs are rising at astronomical rates. In this particular year, it would seem that the award rates for shearing are being pushed through the roof. Contractors are now quoting $1.20 a head to shear in a reasonably sized shed, which involves classers and cooks. What is the effect in money terms to the grower of the price level which was set by the Government when it established this support scheme? In round figures it works out at a little less than $5 a head per sheep in the hands of the grower. The grower has an immediate payout of $ 1.20 a head for shearing costs. He has to pay a 5 per cent levy as his contribution to this support scheme in order to help cover any losses that may be incurred. I think he has a 4.7 per cent promotion levy which also is taken from the gross profit. His commission is something like 3.5 to 3.75 per cent. The grower has all sorts of other costs, such as transport charges which have to be taken into account. The net return in the hands of the wool grower is getting smaller at a time when the squeeze is probably as great as it has ever been in the history of this particular industry.

It is to be regretted that wool has, through the vagaries of the market, been put into a position where it is almost on its knees. I think that everyone wants as soon as practicable- as soon as world markets and seasonal conditions will allow- to see wool growers return to the honourable position which they have occupied in this great industry and the economy for so many decades- in fact, going back to the original days of settlement of this country. It is wool that got Australia off the ground, as was pointed out by our guest from Iran, His Majesty the Shah, at lunch today.

I should like to examine the question of the levy, how it is to be administered and what the charges will be. I think it is very important that we understand just what the Government intends to do with the levy. The levy will raise about $47m and it is from that money that losses will be recouped, if losses are in fact incurred. We have to examine also the interest rates which are being charged on the $150m or that portion of it which might be drawn and the relationship between the interest payment and the grower levy of 5 per cent which will raise the sum of $47m. If we look at an interest rate of 12 per cent or 1 4 per cent and relate it to an amount of $80m or $100m which might be drawn at a particular stage, it becomes apparent that the interest burden that will accrue on those borrowings will be something in the order of $ 10m, and that $10m in itself is a significant amount. We have to be certain in our minds as to just how this $ 10m will be treated. Will the interest be calculated among the losses and therefore be a direct charge against the growers’ 5 per cent levy? If, as in the instance I gave, the interest amounts to $10m does that mean that growers will have only $3 7m with which to meet the losses that may be incurred? Or will the interest be a general charge against the operations of the Australian Wool Corporation and not specifically accounted for as a loss?

I think that in any case it is important that the Corporation should continue to take into account the fact that interest will be accruing and that this should be a factor in the Commission setting the levels at which it is prepared to dispose of wool in the event of an increase in the market because the interest factor will continue to be a more than significant feature of the whole of the operations of this support scheme and of the position of growers as they organise themselves to meet the costs of running the scheme.

We also have to take particular note when considering the series of Bills before us of the promotion levy because this levy has now been taken away from the position of operating on a dollar for dollar basis and has been put into the category of being supported more by the industry than by the Government. I think it is most important that we continue to see that promotion and research are continued and that the International Wool Secretariat continues to carry out its operations. We have to make sure that new markets are continued to be found and that we develop new variations on the theme around wool. Mention has been made in this debate of the importance of such things as machine washability for woollen products, the processes designed for permanent creasing of woollen products, and the fact that we have now better processes for dying and colouring garments and fabrics. All of these processes have been great breakthroughs in the history of wool. We have to see that we do not sit back and rest on our laurels and on the past breakthroughs by the scientists and the researchers which have been applied by those in the marketing side of this great industry. It is important that research continues because if it does not wool as a major fibre will be overcome and passed by synthetics. We will find that synthetics will come back to a position of being far and away ahead of wool and far and away more attractive in the competition which develops amongst fibres for a place on our backs and around our legs.

We have to see that the Government continues to support the industry on as fair a basis as is possible through this promotion levy. I think that we have to understand that the growers are prepared to take upon their shoulders the future of their industry insofar as they are able to do so. The growers realise that if there is to be any future for themselves and for the industry, the industry will have to continue to find new markets and new techniques. It will have to find new uses for wool. But more than anything else the industry will have to keep wool in the forefront of the world apparel market. The operations of the Commonwealth Scientific and Industrial Research Organisation and the other research bodies and of the Secretariat will ensure that this is continued.

I feel sure that the Government is not going to renege on its contribution. I think it is important that we see that the industry is not required to accept an unfair burden in this respect. As I mentioned earlier the charges against the wool clip are getting larger year by year. Commissions are not going down, the costs of freight are not going down, the costs of promotion and research are not going down and we are now finding ourselves in a situation where new impositions such as the levy to support the price of 250c clean are being imposed on the industry.

The amendment which has been moved by the honourable member for New England (Mr Sinclair) who is the Deputy Leader of the Australian Country Party, in my opinion has considerable merit and I hope that the Government will give serious consideration to adopting it. It is in the interests not only of the industry but of the sound economic management of this country. Large funds are being tied up and committed to the Wool Corporation should they be needed. If these funds can be obtained commercially, as they will be obtained, in a period of less tight liquidity than we are facing at the moment, the Government should be keen to allow this to happen and the industry will be keen to see that it does happen. I think that we have to be awfully careful that there is no suggestion of a political tie between the industry and the Government because the Government has been magnanimous enough to come forward with funds at a time when the commercial market appeared not to be able to provide those funds. It is very important that we allow the industry to get onto a proper commercial footing in this respect as soon as it is able to be done. I would suggest that the amendment moved by the honourable member for New England would allow the Government to see that the industry does get itself onto this footing when liquidity starts to ease.

I also urge the Government to accept the important amendments concerning the protection of the levy funds which have been and will be collected by the Government from the gross value of the wool clip. That $47m needs to have a far greater degree of protection than is presently indicated it will have. I would think that if the Government acts responsibly in this instance it will accept the amendments which have been put forward and which have the support of the growers and of honourable members on this side of the House.

KingsfordSmithSpecial Minister of State · ALP

– As the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) is unable to be present during this debate, I would like to reply for him. A number of matters have been mentioned in my presence. I am reminded by the honourable member for Eden-Monaro (Mr Whan) that figures prepared by the Bureau of Agricultural Economics show that the level of the Government’s support is equivalent to 56c a lb whereas some 2 years ago when the present Opposition was in Government the support was some 36c a lb. So there has been a 55 per cent increase in the size of the support. The honourable gentleman has shown me the chart from which these figures have been taken. The figures were prepared by the appropriate authorities and I understand that they have not been disputed.

Mr MacKellar:

– Did he add the costs on?


-Admittedly costs have increased. Mention has been made of superphosphate and the fact that its price has been increasing throughout the world. So it is. But it should be recognised that Australia produces a fair bit of superphosphate at a very low cost and that the local and imported superphosphate is combined before it is sold in this country. Honourable members opposite ought to have a look at the hidden subsidy in that factor. They should take this into consideration and -note the world price of superphosphate and the price that is charged by phosphate producers in Australia. The big problem with the superphosphate subsidy was, of course, that it was given across the board and the bigger one was the greater subsidy one received. That really did not help much in assisting the small man on the land. The previous Government was asking the taxpayer to make that contribution. We do not want to go into that question here; we want to deal with this Bill. But let us make it clear, and it can be discussed at some other stage, that half of the superphosphate used by Australian farmers is obtained at a very competitive rate compared with the world market.

Mr Sinclair:

– This is one of the reasons why you will be able to achieve some of your social objectives.


-No, the real issue is this: As honourable members know, the American farmer is suffering greatly because of the superphosphate costs he has to pay. The Australian farmer is not asked to pay those costs. We recognise the difficulties. On another point, the honourable member for Barker (Dr Forbes), because he sighted me, decided to talk about telephone charges. Again I just repeat this fact: If we did not have the income from the commercial man using telephones in the cities we would not have been able to get any development of the country services. It has been the profit taken from him that has gone back into the system. No recognition has been given for that subsidy either.

Mr Katter:

– That is a most fallacious argument.


-It is not a fallacious argument. If we were to charge on the actual cost of usage we could really decrease the cost to the city man. But of course country people want the subsidy on the basis that they really need a telephone. That is recognised. But the fact is that the previous Government always used the profits on telephone services used by the fellow in the city to guarantee that telephone services were provided in country areas.

Having stimulated the Opposition enough, I am advised that since the floor price was introduced on 2 September, the Australian Wool Corporation has had to buy more than 50 per cent of the offerings. In the light of that experience it is suggested that any fair-minded person would find it difficult to argue that the floor price should have been fixed at a higher level than 250c a kilo. Equally, any fair-minded personwe are talking about fair-minded personswould recognise that the floor price approved by the Government is providing firm support for the market and is giving greater confidence both to wool growers and to overseas buyers. I understand that a number of amendments are to be moved in the Committee stage. I shall reserve any further remarks until such time as the proposed amendments are actually moved.

Question put:

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

The House divided. (The Deputy Chairman- Dr H. A. Jenkins)

AYES: 55

NOES: 52

Majority……. 3



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

WOOL TAX BILLS (Nos 1 to 5) 1974

Second Readings

Consideration resumed from 18 September (vide page 1461), on motion by Mr Crean:

That the Bills be now read a second time.

Question resolved in the affirmative.

Bills together read a second time.

In Committee

The Bills.

New England

-I simply want to raise a point briefly in relation to the Wool Tax Bills. I believe that the departmental officers have already had a brief look at this matter, which is related to the last of the 7 Bills appearing before us as a group. The Opposition has an amendment which may well entail the moving of a consequential amendment to the substance of the Wool Tax Bills. The purpose of the amendment is to ensure that the funds collected, having been paid into Consolidated Revenue, are then put into a trust account from which they can then be allocated to the Australian Wool Corporation according to the purpose for which the Act has been devised. Although we have produced an amendment, we do not guarantee that there will not be a necessity to move a consequential amendment to the legislation which is now before us. I raise this point at this stage only for the information of the officers concerned, so that the matter can be looked at between this stage and the legislation being passed in the other place to see whether any consequential amendment may be required.

Bills agreed to.

Bills reported without amendment; report adopted.

Third Readings

Bills (on motion by Mr Lionel Bowen) together read a third time.

page 1822


Second Reading

Debate resumed from 17 July (vide page 291), on motion by Dr Patterson:

That the Bill be now read a second time.

New England

-As an amendment to the motion for the second reading of the Wool Industry Bill, I move:

That all words after ‘that’ be omitted with a view to substituting the following words: ‘whilst not opposing the provisions of the Bill, this House is of the opinion that-

the funds available for research and promotion provided in this Bill are much less than the SO per cent of total funds promised for 1974-75 in the second reading speech on the original Bill introduced in March this year and

the Government should review its total commitment to research and promotion for the course of the current triennium.’.

I do not intend to speak to this amendment. In a paper I have handed to the Treasurer (Mr Crean) I have already explained the purpose of this amendment. Both my colleague, the honourable member for Corangamite (Mr Street), and I referred to the purpose of this amendment in the course of our speeches during the cognate debate at the second reading stage. We hope that the Special Minister of State (Mr Lionel Bowen), who is at the table, will be able to offer an explanation of the apparent discrepancy.


-Is the amendment seconded?

Mr Street:

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

KingsfordSmithSpecial Minister of State · ALP

-The amendment is not acceptable to the Government, but I do appreciate the courtesy shown by the Opposition in seeking information as to the position in relation to the research and promotion financial program. I am advised that the $49m involved comprises $22m, as the Australian Government contribution to be appropriated under the Wool Industry Act, plus $27m, as the estimated proceeds of the existing wool tax of 2% per cent. The proceeds of the tax go partly to research and promotion - an amount of $22m in 1974-75- and partly to meet administration costs of the Australian Wool Corporation- an amount of $1.7m. The tax proceeds vary from year to year as growers’ wool returns vary. I am informed that if the full estimate of $27m is realised in 1974-75 the excess over the amount needed for administration costs, plus the amount set down for research and promotion, would be paid into the Wool Research Fund and kept there to help finance wool research in any future year when the levy proceeds are below what is needed for research and promotion and administration costs. There is already a balance in the research fund which can be drawn on to finance research if required.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

In Committee

The Bill.

New England

– I move:

After clause 14, add the following new clause: ‘15. After section 84a of the Principal Act the following sections are inserted: “84B. ( 1 ) An account is hereby established to be known as the Australian Wool Corporation (Woolgrowers Marketing) Trust Account.

The Australian Wool Corporation (Woolgrowers Marketing) Trust Account is a Trust Account for the purposes of section 62a of the Audit Act 1 90 1 - 1 973. “84C. (1) There shall be paid into the Australian Wool Corporation (Woolgrowers Marketing) Trust Account-

all moneys received in respect of Wool Tax Acts (Nos 1 to 5) 1974; and

interest from the investment of moneys standing to the credit of the Trust Account.

Amounts payable into the Australian Wool Corporation (Woolgrowers Marketing) Trust Account by virtue of paragraph 1 (a) are payable out of moneys to be appropriated by the Parliament for that purpose. “84D. The Minister shall, as soon as practicable after 30 June 1975 cause a report of the operation of the Australian Wool Corporation (Woolgrowers Marketing) Trust Account during the year ended on that date to be laid before each House of the Parliament. “84E. Moneys standing to the credit of the Australian Wool Corporation (Woolgrowers Marketing) Trust Account may, with the approval of the Minister be expended-

in the payment of expenses incurred by Australia in connection with the provision of funds directly or via loans guaranteed by the Government under the provisions of the Act to authorise certain advances to the Australian Wool Corporation and to authorise the borrowing of certain moneys by the Treasurer, and

to finance the operations of the Australian Wool Corporation in relation to wool marketing as set out in sections 38 to 42 (inclusive) of the Principal Act. ‘ ‘. ‘.

This amendment is intended to implement the establishment of a proposed separate trust account with respect to the 5 per cent levy covered by the Wool Tax Bills (Nos. 1 to 5) 1974 which have just passed through this chamber. The purpose of the establishment of the trust fund is to ensure that moneys paid for the operation of the marketing responsibilities of the Australian Wool Corporation are separately identified, are separately maintained and are separately reported on to this Parliament for the purpose of future checking on the movement in and out not just of these moneys, for these moneys will of course finish on 1 July 1975, but also of any other levies that might be applied for the purpose. The Opposition quite strongly believes that it is not sufficient for the already existing research trust fund to receive moneys of this character. It is possible that these moneys will be used either for the establishment of a future marketing plan or certainly for purposes related to the marketing operations of the Corporation.

We would hope that the Corporation itself would operate profitably and would in the normal course of its operations be able to cover the interest charges and any other incremental administrative charges that might relate to the handling, holding and storage of the wool purchased. But we still believe that there will be as far as this legislation is concerned a serious shortfall if the moneys which are collected for the particular purpose of providing for the marketing operations of the Corporations are lost in either Consolidated Revenue or in the other research trust fund. I am doubtful whether under the present legislation they may move from Consolidated Revenue into the research trust fund. As the legislation stands they certainly are collected and paid into Consolidated Revenue, but it does seem doubtful that they would go into any trust fund. The other problem in that respect is not only that they are not held in a trust fund but also that there is no responsibility on the Government or the ultimate borrower of the fund- the Wool Corporation- to report back to the Parliament on the way in which those moneys have been used. They are moneys received by the Government and then, of course, by the Corporation on trust for the Australian wool grower.

As it is felt by many people in the wool growing industry that they may well be needed in the short term to cover the losses which could be incurred by the Corporation it is obviously necessary to know where those moneys go and the extent to which they have been used for any particular purpose. Therefore a report should be tabled in this chamber so that honourable members can see for themselves just what happened to the money and, of course, can report back to their constituents. It also would be available thereafter for wool growers and others to peruse. The purpose of this amendment is therefore to ensure that funds contributed by wool growers for the purpose of the marketing function of the Corporation can be supervised in that way.

It is possible however- again because of the difficulties of ensuring without the reserves of the Public Service to draw on- that we have not covered all the drafting technicalities that may apply to the purpose which I have just endeavoured to express. It is therefore hoped that the Government will look at this amendment between now and the introduction of this legislation in the Senate. If it sees fit to modify the legislation in some way which relates to the technicalities of implementing our purpose we will be prepared to accept those modifications when we proceed with the same amendment in the other place. However, it is the intention of the Opposition to ensure that there is separately identified within a trust account those moneys which are collected by the 5 per cent levy covered by the tax Bills which have just passed through this chamber.


– I shall be brief in my reply. The amendment is not acceptable to the Government but the principle of identity is one that the Government is anxious to look at further. I have been advised that it can be done without the multiplicity of trust accounts that is involved in this amendment. I have been further advised that it is the Government’s intention that further amendments to the Wool Industry Act will be introduced into the Parliament to provide for the Government’s overall decision on wool marketing for 1974-75. Those amendments will make it clear that the proceeds of the 5 per cent increase in the wool tax will be paid to the Corporation and that the Corporation will be required to establish a separate market support fund in its accounts in which the proceeds of the 5 per cent increase will be separately identified. The purpose of the fund would be to meet any possible losses resulting from the maintenance of the floor price during the 1974-75 season. In the meantime moneys standing to the credit of the fund could be used by the Corporation for wool purchases or for advances to growers the sale of whose wool has been delayed.

The proposed amendments will achieve the objective of the amendment now proposed by the Opposition. The position of the market support fund will be shown quite clearly in the Corporation ‘s annual accounts. The amendments will avoid the procedural complexities associated with the unnecessary proliferation of trust accounts. Pending the introduction of the further amendments I have foreshadowed the Government will, of course, arrange for the Corporation to account separately for the proceeds of the 5 per cent increase.

Question put:

That the proposed new clause be added (Mr Sinclair’s amendment).

The Committee divided. (The Chairman-Mr G. G. D. Scholes)

AYES: 51

NOES: 55

Majority……. 4



Question so resolved in the negative.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 1824


Second Reading (Budget Debate)

Debate resumed from 24 September (vide page 1734), on motion by Mr Crean:

That the Bill be now read a second time.

Upon which Mr Snedden had moved by way of amendment:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘this House is of the opinion that the Budget fails to tackle Australia’s economic crisis, in that:

1 ) unemployment is permitted to grow and the prospect for school leavers is prejudiced,

inflation is accelerated,

existing poverty is ignored and new poverty is created,

personal income tax is increased 45 per cent,

living standards will be lowered,

private enterprise is stifled,

Government power is further centralised,

individual incentive and thrift is penalised, and

a double tax is levied on estates; and because the Government:

has made the Budget a socialist vehicle to intensify the attack on the States and break down the free enterprise system,

believes the absurdity that the Government can spend without people paying or can build without people producing, and

has preached private restraint but has threatened its achievement by its own Government extravagance ‘.


-The Budget we are debating contains a considerable number of proposals with which I think every honourable member will agree. There is a new proposal to give assistance to handicapped children living at home. There are proposals to increase assistance for the provision of homes for pensioners. Alterations are proposed to the Aged Persons Homes Act. Substantial increases in financial assistance are being made available for education, not only to cope with the effects of inflation but also to assist in upgrading existing educational services in order to provide children with a better chance of attaining the level of education from which they are capable of benefiting.

There are also aspects of any Budget with which honourable members will disagree. Honourable members are not noted for liking to introduce new taxes. They are not noted for liking to impose new forms of revenue raising. We all like to do the popular thing, and rarely do we like to do the unpopular. In this Budget, in the circumstances which exist at the moment, there is a minimum of items which one could suggest are unpopular or repressive in any way. The television licence fees have been dropped. A new tax has been imposed on unearned incomes. This tax may be a source of annoyance to some, but when people add up all the deductions that have been made most will find that it is not a very great impost. It will certainly be a lower impost on most taxpayers than were the 5 per cent or 10 per cent levies which were imposed across the board in the past.

The Leader of the Opposition (Mr Snedden), in his remarks on the Budget, came to some rather remarkable conclusions. His major argument was that the expansion in budgetary expenditure was too great, and he suggested that the increase should be cut from 32.8 per cent to 25 per cent. In the period prior to the Budget he had been supporting the States in their demands for additional funds. It should be remembered that the payments which will go to the States under this Budget are increased by more than 38 per cent compared with a total expenditure increase of 32 per cent. The increase to the States is greater than the total increase. If the Leader of the Opposition suggests that payments to the States should be increased but that public sector expenditure should be decreased, it is in some areas in which the Commonwealth is involved that he is suggesting expenditure should be cut. I think he owes it to this House and to the people of Australia to tell us where the 7 per cent cut in the growth of government spending is to take place. A 7 per cent cut in the rate of growth of government expenditure does not involve an insignificant amount.

If we are to increase the amount provided for expenditure by the States, are we to reduce the amount that is to be spent on social welfare measures? The Leader of the Opposition, from all the inferences that could be drawn from his remarks, was suggesting that what the Government was doing was not sufficient and that it should also increase its expenditure on social welfare. He certainly made it quite clear that he did not believe the Government was spending enough on defence. I presume that he would want to increase the defence vote by the 3.5 per cent that he rather regularly mentions. The things he mentions are additions, not subtractions; but at the same time he talks about a 7 per cent cut in government spending. Is he saying the Government should cut expenditure in the fields of health and housing? All the suggestions from the Opposition are that the Government is not providing enough money for housing, although it is interesting to note that the States were not able to expend the money that was made available to them for housing last year and that money is being reallocated this year out of funds that had been made available in the previous 12 months.

In the existing difficult economic conditions I think that the Budget is a reasonable one. No one will agree with all of the things in it. In fact, my experience is that most people will consider those things that benefit themselves to be good parts of the Budget and those things that disadvantage them to be bad parts of the Budget. Very few people do not want to give more to the pensioners, do not want to give more to Aborigines, do not want to see a better education system and do not want to pay a cent for it. Everything in the public sector costs money, just as it does in the private sector. Because the public sector has always been that section of our economy which has gone without in the past when there has been a need to cut expenditure, the needs of the public sector are greater than they should be.

I believe that the Budget is a very sound economic document. It is significant that almost all of the complaints about it have related to one small area, the surcharge on unearned income. It is also significant that the people who have made the most noise are the people who will most likely pay the most under this scheme. To some people whose unearned income is a small part of their total income the new tax will be a nuisance rather than a revenue raiser or a punitive form of taxation.

Mr Fisher:

– What about retired people?


– People on superannuation pension are not subject to this tax. I said last night that the Government must look at the need to provide the wherewithal for communities to provide greater recreation facilities. I mentioned the need to provide theatres, halls and other buildings where people can engage in the performing arts, which is one of the major art forms. The Government has moved into the area of encouragement of art. The performing arts are as important a section of the arts as any other section. In the larger country towns, especially in the regional centres, a need exists for proper theatre facilities so that people in these areas can gain the benefit of seeing the work of professional companies and so that those people who are actively engaged in this area can perform in decent circumstances which offer them a chance to give of their best and show off their abilities to the audiences. Nothing brings out the best in people and encourages them more than the opportunity to perform in circumstances which befit the standards of their performance. I hope that the Government will be able to devise programs of assistance which will enable basic facilities for the performing arts to be established.

In any short period it is not possible to cover all of the matters which are contained in a national Budget for one year. The change in the value of our currency made last night or this morning is a matter on which I do not intend to comment at this time, except to express the hope that this action will give real assistance and encouragement to those industries which have suffered the cumulative blows of tariff cuts, removal of quotas and adverse economic circumstances. In what order these factors have affected those industries is difficult to establish. But certainly the people who have worked and do work in these industries are as entitled to expect jobs as are any other section of the community.


-This Budget debate continues in the context of a devaluation to which I will refer later, impending import quotas, conflicting Government statements on monetary policy, suggestions by the Treasurer (Mr Crean) of a further taxation cut, and the failure of the trade union movement to accept the Budget formula for wage restraint. This is an extraordinary situation only one week after the Budget’s introduction. It illustrates almost conclusively the incapacity of this Government to act in a decisive, coherent and rational manner. This is a stagflation Budget. It pushes the economy deeper into both inflation and unemployment. It is the Budget of illusory gain and real loss.

The 1974-75 Budget is unique in Australia’s post-war economic history. It represents an abdication of national responsibility by a Government which apparently is prepared to tolerate a combination of unemployment and inflation not experienced by this nation since the shattering depression of the 1930s. Neither the Budget itself, nor the Treasurer’s Speech, contained a strategy to combat the serious disequilibrium in Australia’s internal and external economic position. The Budget is the culmination of successive economic errors, initiated principally by the 1973-74 Budget, which make inflation of 20 per cent and unemployment of 3 per cent inevitable by December this year. Australia’s social and political stability has been placed at risk by this Government’s absolute incapacity to manage the national economy.

On successive occasions the Opposition has called for a well-defined and comprehensive anti-inflation strategy. On successive occasions, including the week prior to this Budget, we have put forward a detailed program. The seriousness of Australia’s present economic circumstances calls for a Budget to act decisively against inflation and unemployment. An effective Budget would have reduced receipts by at leat $1 billion and held outlays to an increase of around 25 per cent. It would have contained policies to encourage investment, growth and productivity. These basic Budget objectives were clearly set out last week by the Leader of the Opposition (Mr Snedden) and myself as Treasury spokesman. The alternative policy which has been put forward has been ignored.

The 1974-75 Budget is predicted on an assumption of 20 per cent inflation- a complete abrogation of the Prime Minister’s pre-election assurance, repeated in this Parliament, that inflation would be reduced to 8 per cent by the end of this year. It is a Budget which will lead to a decline in Australia’s national economic growth. It is a Budget which has deliberately programmed the average Australian wage-earner to accept a reduction in real income in spite of a 22.5 per cent increase in salary. It is a Budget which contains no substantive measures directed towards curbing cost-inflation. It is a Budget which expands the public sector at a time when national expenditure restraint is demanded. It is a Budget which will inhibit incentive, thrift and productivity. It is a Budget which ignores the real question of poverty and will lead to the development of a ‘new poor’ in Australia. It is a Budget which washes its hands of the human hardships which inevitably derive from serious economic instability. It is a Budget which preaches tax concessions but, in reality, proceeds to increase income tax by an unprecedented 45 per cent. In short, it is a Budget which has attempted to purchase a welfare program at the expense of the economy required to sustain it.

The Budget proposes an increase in outlays of 32.4 per cent in money terms or 10.3 per cent in real terms. This is the largest post-war increase in both real and money terms. The magnitude of the proposed Government expenditure is, on any analysis, excessive and inflationary. On 7 June, at the Premiers Conference, the Prime Minister (Mr Whitlam) referred to the Government’s expenditure policies in the following terms:

There is, however, a need for all of us not to try to push ahead so fast that the economy is unable to meet our demands. . . . As part of the battle to contain inflation we will be following a policy of restraint in our own spending.

The Treasurer, in delivering his July miniBudget, said:

The Government acknowledges that public expenditure must be restrained … 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 1974-7S Budget . . . the expenditure restraints we have required of the States will be fully matched by our own.

Those 2 major policy statements have been completely reversed. It is almost impossible to conceive of a government lifting its domestic outlays by a record 33 per cent in the light of the previous policy statements by the Prime Minister and the Treasurer. But public dishonesty has almost assumed a cloak of respectability in the Whitlam Adminstration. Insofar as the economy is concerned the Prime Minister and his senior Ministers have woven a web of fabrications, broken promises and deliberately misleading statements.

During the May election campaign the Prime Minister told the Australian public that inflation had been reduced and was no longer a problem. It was said:

Only Whitlam has reduced inflation by one-third.

He promised full employment. It was said:

In Australia alone, unemployment and inflation do not march side by side.

Because the Prime Minister allegedly had controlled inflation he attacked the Opposition’s call for spending reductions. Two months later he said that they were vital to curbing inflation. Two months after that he approved a Budget which lifted expenditure by 33 per cent.

Government expenditure during 1974-75 will effectively drive up prices without stimulating economic activity within the private sector. In other words, price inflation will increase simultaneously with a contraction in the level of economic activity. This, after all, is the classic dilemma of stagflation. The Opposition has consistently warned the Government that its policies were inducing the phenomenon of stagflation. The Prime Minister, on 7 June, stated:

If the situation is allowed to drift, we are likely to end up with the worst of all worlds- output will slow, but cost and price levels will go on rising.

The fact is that the situation has been allowed to drift. The Budget represents a classic prescription for stagflation.

The expansion of public sector expenditure will drive up prices without increasing economic activity for 4 principal reasons. Firstly, the productive resources in the private sector, both capital and labour, cannot easily be transferred for uses within the public sector. The lessons of the adjustments, still in progress, arising from the effects of the Government’s external policies are still apparent. The Budget allocations for adjustment assistance and expenditures designed to facilitate the transfer of resources within the economy are simply inadequate to meet the implicit transfer of domestic resources. Second, the expansion of public expenditure has, to all intents and purposes, shut off the Government’s option of easing the present monetary restrictions. Without an easing of monetary policies the private sector will have insufficient funds for expansion. Third, the high level of pressure on profits, the serious difficulties of capital mobilisation and the problems associated with extreme levels of industrial unrest have created an environment in which the private sector is simply unwilling to expand its activities. Finally, the fact that real investment in manufacturing industry has fallen below the level established in 1964-65 has severely jeopardised Australia’s industrial base and therefore its capacity to respond to increased demand.

In short, the increased level of demand- which on the face of it should add around $1.5 billion to the real value of output or a 3 per cent net generation of real economic activity- will be illusory. The contractionary impact of the declining rate of economic activity will not be offset by this Budget. As this Government should well understand this has serious implications for the labour market. After extracting the adjustments to the employment series made by the Government in July 1973, it can be demonstrated that the level of unemployment- on a seasonally adjusted basis- reached 2.3 per cent in August 1974. This is the highest level recorded in 10 years and exceeds the highest figure recorded during 1972, under the former Government, of 2.1 per cent. The unanimous and almost hysterical concern shown by the Australian Labor Party in August 1972 has of course now evaporated, in spite of the fact that unemployment today is far more serious than it was at its worst point in 1972. I seek leave to incoporate a statistical table to illustrate this point.


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


– The tragedy is that the Budget is insufficient to prevent a further and inevitable deterioration in the labor market. Unemployment has been caused by two principal instruments of government policy: First, the serious misjudgment as to the localised effects of the 25 per cent tariff reductions on the footwear, clothing and electronics industries; second, the severity of the monetary restrictions which have operated since the last quarter of 1973. Action can and must be taken to prevent the total collapse of those industries adversely affected by the tariff reductions. However, the vast increase in Budget outlays has virtually precluded any substantial relaxation of monetary policy. For the first time in Budget statements there is in fact no specific reference to monetary policy. This will be seen as a serious omission. The monetary policy pursued by the Government to curb the inflationary effects of last year’s excessive spending has been a primary factor leading to the present stagflationary circumstances. During the Budget debate last year the Opposition warned that an over-reliance on monetary policies to curb the demand stimulus of its financial policies would in fact prove to be disastrous. We have been proved right. The Government is apparently now prepared to compound the errors of last year’s fiscal and monetary imbalance.

The Government has argued that the monetary restrictions were applied to counter the excess of liquidity generated during 1972. But as the Organisation for Economic Co-operation and Development has pointed out, the money supply- in seasonally adjusted terms- grew in similarly high proportions in 1972 as it did during the first three quarters of 1973 because of the present Government’s fiscal policies. The point of distinction, and the basis of this Government’s ineptitude, is that during 1972 stimulus was required. During 1973, with the economy moving strongly ahead, restraint and an over-riding sense of moderation were required. In short, the Government’s monetary policies applied to compensate for its fiscal programs were applied too late and too severely. Notwithstanding the monetary expansion during the first three quarters of 1973, monetary restrictions imposed after last year’s Budget caused the narrowly defined money supply to increase by only 2 per cent during the 12 months ending in June this year.

Because of the severe impact of monetary restrictions on the level of economic activity- and therefore of course on unemployment- the Opposition argued, before the present Budget, that the growth in government outlays should be moderated to allow a relaxation of monetary policy. The program we advocated was simply one which, in essence, recognised the fundamental need to achieve an adequate balance between fiscal and monetary policies. If, as forecast by the Institute of Applied Economic and Social Research, the money supply falls by around $1 billion during 1974-75 the effects will be severely contractionary. It will prevent any recovery of private sector investment and add immense pressure to the general interest rate structure. This, in turn, will substantially increase cost pressures throughout the economy as firms and wage earners seek to pass on the effects through increased price and incomes claims.

The Government’s essential rationale underlying the Budget is that it purports to form the basis for community restraint and co-operation. While the Opposition parties fully support that objective, we believe that the provisions of the Budget fall far short of laying an adequate groundwork for such a program. In so doing the Budget will add materially to the problem of cost-push inflation in Australia. By budgeting for a 45 per cent increase in income tax receipts the Government has completely ignored the impact of tax compensation in the current level of incomes claims. The so-called ‘tax cut’ of $430m has served merely to reduce the rate of increase in income tax collections from 49 per cent to 45 per cent. This represents an enormous departure from the formula advocated by the Opposition parties in respect of the need- the overriding compulsion, economically and in terms of equity- for taxation concessions. We believe that it is essential that the percentage growth in personal income tax collections should be broadly equal to the percentage increase in average weekly earnings during 1974-75. On the Budget’s assumed 22.5 per cent increase in average weekly earnings this would require a tax cut of around $950m- more than double the tax cut provided in the Budget which has been brought down.

This is, of course, vital if wage restraint is to represent in the Australian community a feasible proposition. On the Budget’s own assumptions the average wage earner, married with 2 children, will suffer a net decline in real income of over 1 per cent during 1974-75. This is in spite of a 22.5 per cent increase in take home pay. A married man now earning $10,000 per annum, will, on the same basis, see his real income decline by 3.5 per cent. The Budget has been deliberately designed to lower the living standards of the majority of Australian wage and salary earners. On no account can a formula of this type be put forward as a basis for incomes restraint. The Budget has done nothing to defuse the magnitude of tax induced incomes claims. Neither is it a monument to income redistribution. The minimum wage earner, at the end of 2 financial years under this Government, will have improved his real income by a marginal 1.6 per cent. Even this improvement is dependent on a 22.5 per cent increase in money income this year. (Extension of time granted).

Not only is the quantum of tax concessions totally inadequate but its incidence pays no regard to the income levels of those in the forefront of militant wage negotiations. For example, the majority of metal trades employees receive incomes around average weekly earnings and not based on the minimum wage. Thus the tax adjustments in this Budget have in no way been designed as part of any cohesive, deliberate policy to achieve incomes restraint.

Not only has the Government failed fully to utilise the income tax mechanism to combat inflation it has totally neglected a policy of selective reductions in indirect taxation. Such reductions should have been implemented with the specific intention of reducing the prices of certain goods and services. The impact of indirect taxation, substantially increased in the 1973-74 Budget and the July mini-budget, is not only costinflationary, it is socially inequitable. The $70m reduction in revenue caused by the removal of radio and television licence fees would, on economic grounds, have been far better conceded in the area of sales taxation.

In short, the Government has made a major error by permitting an almost unbridled increase in both the expenditure and the receipts components of the Budget. It has constructed a budget which is not simply out of balance with economic reality; it is contrary to the clear policy lines established by the Prime Minister at the Premiers’ Conference and the Treasurer in the 1974 mini-budget. It is a budget which avoids measures to counteract cost-inflation and which poses a new dilemma so far as demand forces are concerned. On any analysis, this Budget has failed to meet the economic and social objectives which the majority of Australians have the right to expect from a responsible national Government.

The 1974-75 Budget has a number of principal implications in addition to the immediate effects so far as inflation and unemployment are concerned. A most disturbing feature of the Budget is its impact on Australia’s real economic growth. During the last decade of Liberal-Country Party administration, real non-farm gross domestic product grew at an annual average rate of 5.63 per cent. That growth was achieved in a period of unparalleled economic stability. During 1973-74, under this Government, real non-farm gross domestic product increased by 5.46 per cent. I seek leave to incorporate in Hansard a statistical table setting out these facts.


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


-The 5.46 per cent increase to which I have referred was below the average achieved by the former Government- in spite of boom economic conditions. During 1974-75 real economic growth will be virtually non-existent. The Budget papers themselves assume a growth in employment of 2 per cent and a zero productivity result -in other words an approximate real growth in the order of 2 per cent. This outcome is, I believe, very much optimistic. Forecasts by the Institute of Applied Economic and Social Research have estimated an 0.86 per cent decline in real gross non-farm product this year. The June quarter decline of 2 per cent in this measure of economic growth has added considerable weight to the accuracy of that forecast. A probable decline in real economic growth is in essence a dangerous outcome for a Government so intent with the distribution of welfare and so unconcerned with the economic base which is required to sustain and to support such a program.

A further disturbing feature of the Budget is its contractionary impact on private investment. The Budget papers themselves forecast a decline in fixed investment by the business community. An approximate calculation, based on the Budget’s own assumptions, shows that real private investment spending could decline by around 2 per cent during 1974-75. The situation could be even more serious. The Budget papers predict that ‘substantial- and largely unplannedincreases in stocks could occur’. This would, of course, greatly exacerbate the decline in investment. We recall today, with some sense of nostalgia, that investment was both a dynamic and a leading factor in Australia’s economic growth between 1950 and 1965. But, real investment at the present time is now marginally below the level established in 1965. 1 seek leave to incorporate in Hansard a further table showing the position.


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


-This Budget should have been constructed to allow an easing of monetary policy and with specific measures to stimulate investment. The hard and unpalatable reality is that the policies of this government are making the private sector of the economy practically unworkable. Those policies are being deliberately pursued as part of the Government’s philosophy. I refer to the Treasurer’s Budget Speech in which he made the following statement:

The relatively subdued conditions in prospect in the private sector provide the first real opportunity we have had to transfer resources to the public sector.

In other words, this Government has adopted a policy which entails a redistribution of a diminishing economic resource. If I may put it to the House in plain terms, the policy entails a redistribution of a shrinking national cake. This is not a policy which is in the national interest. It is a policy pursued to satisfy a political philosophy irrespective of its economic outcome. It is a policy which no longer has any relevance to the economic growth rate of 6 per cent to 7 per cent promised by the Prime Minister in his 1972 policy speech.

The Budget failed to outline the Government’s plans to deal effectively with Australia’s rapidly worsening balance of payments deficit The fundamental imbalance in Australia’s external economic policies will clearly lead to an overall deficit well in excess of $1 billion. Australia’s comparatively high rate of inflation, the decline in world commodity prices and the effects of the world oil crisis will clearly exacerbate the developing negative balance of trade. It has been variously estimated that increased oil prices will cause an aggregate deterioration of some $50 billion in the balance of payment’s positions of oil importing countries during 1974. The clear indication is that these countries, in the absence of surplus foreign exchange reserves, will endeavour to balance their external accounts through restrictive domestic policies, by borrowing programs and by export drives.

Today’s devaluation was necessary to correct the increasingly artificial value of the Australian dollar caused by the former fixed parity with the United States dollar. Its capacity to provide real stimulus to the private sector must, however, be offset by our high rate of inflation in comparative terms and the world balance of payments upheavals. It was an ad hoc decision, not taken as part of any cohesive, overall economic philosophy. It was a decision which was not taken to balance external and domestic economic objectives. In fact, the devaluation is largely contrary to the Budget’s impact and will not be a solution to the monetary dilemma.

The Opposition has been critical of the 1974-75 Budget. We recognise that many of its provisions in respect of education, social welfare and urban development are considerable. Nevertheless, the Budget offers no positive solution to Australia’s 2 major economic and social problems- accelerating unemployment and increasing inflation. It is a Budget which fails to meet the basic requirements of sound economic management. It is a Budget which is contrary to the national interest. I support very strongly the amendment which has been moved by the Leader of the Opposition.

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

Debate (on motion by Mr Daly) adjourned.

page 1831


Second Reading

Debate resumed from 17 September (vide page 1269), on motion by Dr Patterson:

That the Bill be now read a second time.

Leader of the House · Grayndler · ALP

- Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Julius Dam Agreement Bill as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest, therefore, that you permit the subject matter of both Bills to be discussed in this debate.


-Is it the wish of the House that this course be followed? There being no objection, I will allow the course to be followed.


– I would like to thank the Leader of the House (Mr Daly) who made it possible for these Bills to come before the House this evening. I have the responsibility of leading for the Opposition on the legislation and I will be away tomorrow and I would not have been able to speak if the debate were brought on then. The Opposition, of course, supports the legislation which relates to the Julius Dam and stage 2 of the Ross River project. However, I would like to make a number of comments, particularly about the Julius project. However, I just point out that the previous Government was responsible for the construction of stage 1 of the Ross River Dam project. The legislation now before us relating to the Ross River Dam seeks our approval for the second stage of the dam which will provide increased storage.

It is significant that the Julius Dam Agreement Bill should come before the House tonight because it was only the day before yesterday that Julius Krutschnitt, after whom the dam was named, died. He was a man who was very much endeared to the people of Mt Isa. I am sure that you will not mind, Mr Deputy Speaker, if I make a very brief mention of this very splendid gentleman. He was one of the men who were responsible for establishing the splendid industrial climate which exists in Mt Isa. He was known to all as’ ‘JK’. I pay a brief tribute to him tonight.

The Julius Dam has some rather interesting and unusual features. Firstly the dam was not built for just one purpose. The fundamental and original objective of building the dam was to provide both for the domestic and industrial requirements of Mt Isa. Since the dam was first conceived, other projects in this highly mineralised area have begun to emerge, to be developed and to be extended. One project which I hope will come into existence is the great Lady Annie operation. I hope that we will see it come into operaion a little sooner now that the dollar has been devalued. This huge $200m project will draw water from the dam. I might mention that the Julius Dam is well under construction and we hope that it will be completed by the end of 1975. The dam is about 65 kilometres east of Mt Isa. The dam has the unusual attribute that it will have spare capacity. Money for this extra capacity has not been frivolously approved and spent by the State and Federal governments. The spare capacity, of course, is commensurate with the future demands of the area. It was thought that the cost of providing the extra storage capacity would be $2.9m, but the latest cost is $3.9m.

The Government proposed to provide $2.56m by way of grant to the Queensland Government towards the cost of stage 2 of the Ross River Dam. I very much regret to say that intense persuasion was not able to convince the Government that the $2m which it proposes to provide for the Julius Dam should be made other than as a loan. I note with pleasure that the period of the loan has been extended after consultation with the Queensland Premier and Government, and that this Government has approved the arrangement that the original terms of repayment of 10 years should be extended to 15 years. I would like to make it perfectly clear that if ever a grant was merited, it is merited for the Julius Dam project, for some very clear and almost third dimensional reasons. One reason is that the dam is providing the life blood for one of the greatest industrial complexes in all of Australia, one of the great money earners.

With all due respect to my friend, the Special Minister of State (Mr Lionel Bowen), who is sitting opposite and who is deep in thought, he did mention a little earlier in the night- I do not want to get off the subject, Mr Deputy Speaker, because I know that you would not permit me to do so- that the great revenue earned from city people who used telephones subsidised the provision of telephones in country areas.

In reply I would point out that the latest statistics I have seen show very clearly that 77.7 per cent of this nation’s income is derived from primary industry. I would imagine that a great part of that primary industry is out in the back blocks where the backwood bolshies as we have been called recently, go. If we are backwood bolshies that is all right- we are proud to be anything that is in the backwoods. I want to make it clear- I want to repeat it here and I will cry it until the end of my days- that the great preponderance of the wealth of this nation is earned in the back blocks of this great country. So we are not being subsidised by anyone.

If the men working underground at Mt Isa decided not to work any more, if the wheat growers said that they were not going to grow any wheat and if the cattlemen said: ‘We are finished; we have had enough’, the whole fabric of the financial structure of this nation would collapse. What has this to do with the Julius Dam? It has everything to do with it because the dam provides the life blood for the huge complex of Mt Isa- the water which is so critically required. Honourable members should know that during the great drought Mt Isa Mines would have been able to continue for only 6 weeks more if the area had not received a little rain, and it rained only a little, let me tell you. The present water supplies at Mt Isa are inadequate.

Who is to pay for the construction of the dam? Who is to foot the bill? As the money being made available will be a loan and not a grant, the ratepayers of Mt Isa will have to pay. It is not as though the people of Mt Isa do not have enough to pay living out where they do. They pay about 70c or 72c a gallon for petrol. If one drives one ‘s car 100 miles and puts it in for repairs, in some cases it is cheaper to let the garage keep the car as that might cover the cost of the repairs. The people of Mt Isa have to contend with all these things. One would imagine that, in view of the fact that the national income is to increase by about $ 1,400m, $2m of that amount could be made available as a grant to take the huge burden of financial responsibility off the ratepayers of Mt Isa.

However, the Opposition supports the Bill with enthusiasm. We are pleased to see that at long last- it has been a long trail- this money is to be granted. May I ask you, Mr Minister, to ask the Treasurer (Mr Crean) to make the transfer by telegram and to send the $2m up as quickly as possible because we need it desperately. I do not intend to speak on the Ross River Dam because the honourable member for Herbert (Mr Bonnett) has been the person responsible for persuading both the previous Government and this Government to bring this project into existence.

I should like to conclude on one point. I do wish the Government would look into the policy which we of the previous Government were beginning to examine very closely; that is, the policy of encouraging small water conservation projects such as the key line scheme of irrigation and water conservation. Such a program would do a great service to the nation. What is more, if there are droughts in the future- and there will be, let us face it- if these small water conservation schemes are dotted tight throughout this nation the Government will virtually save millions of dollars. During the most drastic droughts such a program would enable the most arid areas to be fertile and to produce. We support both Bills. I again thank the Leader of the House for making it possible for me to add my small contibution to this debate.


– I too should like to thank the Leader of the House (Mr Daly) for bringing on this Bill and allowing the opportunity for it to go through this House and to let us get on with the job. As I promised, I shall talk for only a few minutes. The Townsville people and the local authorities affected will of course be pleased that at long last finance for the construction of stage 2 of the Ross River Dam has been granted by the Government. But it amazes me that this legislation has taken so long to be introduced into this chamber, despite my repeated requests for advice and action during the whole of last year.

One particular portion of this Bill which causes some dissatisfaction among local people and authorities is the amount the Government is granting. I mention this because during the election campaign of 1972 statements made by the then Labor candidate in my electorate and the Prime Minister (Mr Whitlam) gave the impression that all financial commitments for stage 2 of the dam’s construction would be met by the Federal Government. Therefore the decision that only $2. 56m be allocated was a disappointment to many of the people of the north. Also, if the money had been allocated when I first requested it, the dam and the flood mitigation project would have been completed this year as the construction teams could have continued operations directly after the completion of stage 1. 1 explain to the House, to the Prime Minister, to the Minister for Northern Development (Dr Patterson), to the Treasurer (Mr Crean)- and, I thought, quite reasonably and lucidly- that once contractors and sub-contractors working on the project were disbanded after stage 1 it would take some time for them to be assembled again to commence the necessary work on stage 2. This is time we can ill afford considering the fact that the prime purpose of the whole dam was to protect the city of Townsville from floods.

After experiencing some heavy monsoonal seasons and knowing the damage that they can cause to the city, I had no desire to see the completion of the dam delayed to any extent. But for some reason the present Government chose to ignore this and has left the allocation of finance until this time. It will take some time for stage 2 to get under way and the delay by the Government in allocating the finance was not warranted. I would have thought that the concern expressed by the Prime Minister and other Ministers who visited the city of Townsville regarding the nomination of Townsville as a growth centre would have spurred them on to earlier action.

The completion of stage 1 has already proved beneficial to the city. I fail to understand why they did not realise that stage 2 was definitely necessary, for the water impounded by stage 1 has meant more water for industrial and individual purposes. This is the first year for many years that residents and businesses in Townsville have not experienced water restrictions. It was interesting to note in the second reading speech of the Minister for Northern Development that he considers Townsville a city of considerable importance, not only to the north but to Australia generally. He repeated again that Townsville has been selected by the Australian Government as a growth centre. Considering this recognition I would have thought that the Government would allocate more than a mere $2.56m for the construction of the dam to show that it actually backed up its recognition of the city as a growth centre.

It was also extremely interesting to note that the Minister stated: ‘The growth of the city owes much to Australian Government decisions’. He mentioned such projects as the defence installations, the university, the Marine Science Institute, the prospective provision of an international airport and the grant of $ 1.5m in 1973 towards the cost of constructing stage 1 of the dam. But I remind the Minister for Northern Development that every growth project he has mentioned, including the grant of $1.5m, had been authorised by the previous Liberal-Country Party Government and in fact all his Government is doing is implementing decisions made by the previous Government. The Minister stated that his Department and the Department of Urban and Regional Development are working in close consultation on regional growth centre matters. If this is so, how about the Minister for Northern Development obtaining from the Minister for Urban and Regional Development (Mr Uren) an idea of what is planned for Townsville as a growth centre? I can assure him that we would all be extremely interested. Up to date there has been a lot of talk about it and apparently nothing concrete in the matter of growth proposals has been arrived at

Whether this $2.56m, which was the sum decided upon some 12 months or more ago, would be a fair share of the costs to be met by the Australian Government is open to question. I say that in view of the sharp escalation of construction costs. In view of this I ask the Government to keep its options open in this matter and to give some consideration to any request for additional financial assistance to meet these escalating costs because in view of present inflationary trends- to which we can see no end at the moment- there is no doubt whatsoever that the cost of construction of stage 2 will be much higher than that originally planned for some 18 months ago. I welcome the introduction of this Bill and have no wish to delay its progress through this House by further discussion. I wholeheartedly support it.


– I should like shortly to add my support to these measures. I hesitate to intrude after the 2 honourable members who have spoken, the honourable member for Herbert (Mr Bonnett) and the honourable member for Kennedy (Mr Katter), both of whom live in the area and know the great advantages that will be provided by these dams. But I do so because of my great interest in water conservation, which perhaps started when I became Minister for National Development. I do so also to call the attention of the Parliament and the people to the virtually complete lack of support by the Australian Labor Party for water conservation projects. Both of these projects, as of course we know, were initially arranged during the period of government of the Liberal and Country Parties. It is true, of course, that the Ross River Dam second stage which we are now debating is a matter which has received allocation of funds from the Labor Government. But the first stage was arranged by a Liberal-Country Party Government. It was to be financed onethird by the Federal Government by way of grant and two-thirds by the Queensland Government and the Townsville City Council.

I think all of those who have been associated in any way with or who have visited Townsville regularly realise the great problem that is associated with water conservation in that area. While it has high rainfall during a short period of the year it has very long periods of virtual drought. Therefore, this dam will have 3 advantages. First of all, it will ensure adequate water supplies. The present capacity will be doubled when stage 2 is brought into operation. We know that the supply of water for Townsville is very limited during periods of drought. Secondly, it will act as a flood mitigation storage, with a capacity of some 338,000 acre feet.

Debate interrupted.

page 1834


Mr DEPUTY SPEAKER (Mr Scholes)Order! It being 10.30 p.m., in accordance with the order of the House of 1 1 July, I propose the question:

That the House do now adjourn.

Question resolved in the negative.

page 1835


Second Reading

Debate resumed.


– The third advantage, of course, is the recreation and relaxation facility provided by a large storage of some 338,000 acre feet near the growth centre of Townsville. We have not yet seen the Commonwealth move into Townsville as a growth centre. As I come from the growth centre into which the Commonwealth has moved, let me say to the honourable member for Herbert that he is extremely lucky. Townsville is going ahead now, whereas my centre is yet to go ahead under the growth centre scheme. Perhaps it will do so in the not too distant future. There is no doubt whatever that Townsville is going ahead with great rapidity, with a growth rate of some 8 per cent. As the honourable member for Herbert pointed out, this is due to decisions taken by the previous Liberal-Country Party Government.

I refer to decisions such as that on the setting up of defence installations. I well recall this decision because I was a member of Cabinet at the time. The recommendation from the Department of Defence certainly was not to put the defence installation at Townsville. But the late Harold Holt, who was the Prime Minister at the time and who had at heart the interests of the nation as far as decentralisation was concerned, suggested that the installations be located at Townsville. This was considered and the decision was made. I am sure that it was one of the best decisions on decentralisation ever made. The development of industries concerned with mining and abattoirs, the defence installations, the James Cook University and the Institute of Marine Science, for which the honourable member for Herbert again worked very hard over a long period of time- he must be delighted that that project is going ahead- will increase the size of Townsville and increase the necessity for the construction of this dam to go ahead. The Opposition strongly supports water conservation and strongly supports this project.

The Liberal-Country Party Government was responsible for bringing in the national water resources development program which has changed the face of Australia. Some $150m was earmarked by our Government for this purpose, and it is interesting to see the effect this has had on our nation. When Labor went out of office in 1 949 the total water storage capacity of all major dams in Australia was 7 million acre feet. By early 1971 this had increased to 32 million acre feet. It was estimated that when all work that was then under construction was completed it would have increased to more than 50 million acre feet. One sees these dams throughout the length and breadth of the country. I must mention first the Fairbairn Dam on the Nogoa. I mention also the Copeton Dam on the Gwydir, the Tailem Bend pipe, the Eyre Peninsula project, the King River project, the salinity dams on the Murray at Barr Creek and Lake Hawthorne, the CressyLongford project, the Kolan project at Bundaberg, the Pike Creek Dam which we started and which the present Government has stopped, the Millewa project and, of course, the greatest of them all, the Ord River project. We advanced money also for the Tasmanian hydro-electric scheme on the Gordon River.

In its election campaign of 1972 the Labor Party made great play of its water conservation policies. Of course, we know that anyone only had to ask for something and it was included in the document ‘It’s time’. It is interesting to look back on what the Labor Party said about water conservation in its policy speech for the 1972 election. The speech reads:

The conservation of water has always been an integral part of Labor’s development policies as they affect primary industry. Australia’s water needs underline the growing interdependence between city and country. The proper use of the Murray-Darling system is as vital to Adelaide as it is to the Riverina and Sunraysia. The Ross River and Burdekin projects are as vital to Townsville as to Townsville ‘s hinterland. They will be prime responsibilities of the Conservation and Construction Authority, which will be financed from the $47m which Victoria and New South Wales will pay each year for the next SO years for the Snowy Mountains Scheme.

I would like to know what has happened to the Conservation and Construction Authority and what has happened to the $47m which was supposed to be spent on it each year. As I said previously, all that the present Government has done is to cancel one project, namely, the Pike Creek project- luckily the 2 States involved realised how essential this project was and they are carrying on the work themselves, although at a reduced rate- and to start one project, the Kinchant project. As I pointed out previously in the House, that project was started in the electorate of the Minister for Northern Development (Dr Patterson).

Mr Hunt:

– The Government also reneged on the $2. 1 m for the weirs on the Namoi.


– Yes, the honourable member is correct there. Of course, I have excluded the Dartmouth Dam because that was a project which we had under way. Had it not been for the obstruction of the South Australian Premier, Mr Dunstan, that project would be completed today and probably the dam would be almost full or certainly filling. The position is that that dam is just commencing to be built. What has happened to the request by Sir Charles Court for more money for the Ord project? In August 1965, when the present honourable member for Dawson was not a member of this House, he put out a pamphlet on the economic justification of the Ord River project in which he said:

The additional investment required to expand the project from an irrigable area of 30,000 acres to 200,000 acres will generate increased benefits significantly in excess of increased costs.

That is an interesting comment. Of course, he could say that when he did not have responsibility for these matters, but today he does have responsibility for them and of course he has rejected Sir Charles Court’s request. I do not say that he has actually done that. It is probably a case of the Treasury winning. I think everyone associated with water conservation knows that one of the hardest things of all is to convince a Treasury official that there is any benefit in water conservation. The Treasury has a motto which is to the effect that there is only one thing which is more uneconomic than allowing water to flow out to the sea and that is storing it in uneconomic dams. So the Treasury has won with this Government, with the assistance of other honourable members. The Minister for Northern Development should either put up or shut up. This Government which promised the world in water conservation, has broken that promise, among many others.

I do not want to delay the House unnecessarily, but I have here a quite long letter sent by the Mayor of Bundaberg, claiming that it was much more important for the Kolan scheme at Bundaberg to proceed than for the money to be spent on the Kinchant Dam which he claims was of much lower priority. But I will not delay the House by reading that letter. All I can say is that if these are the priorities of the present Government it is no wonder that the former honourable member for Wide Bay was defeated at the last election.

It has been mentioned that there is to be a difference in the financial arrangements for these 2 projects in that the moneys for the Julius Dam will be provided by way of loan and the moneys for the Ross River Dam will be provided by way of grant. I do not want to make a point of this. I think the decision to make a grant for the Ross River Dam was made originally because it was felt that the Commonwealth, through its defence installation and its university and other installations in the area, would be responsible for using a considerable part of the water and therefore it should make a grant. However, I suggest that the Commonwealth Scientific and Industrial Research Organisation should be asked to look very carefully at the Julius Dam project to see whether it is not possible to use a system which it introduced some years ago and which involves the use of cetyl alcohol to prevent evaporation. The climate in these northern areas is such that there is enormous evaporation, enormous loss of water. This system has proved successful in some areas and as long as this film of cetyl acohol could be maintained by means of a float or something of that sort undoubtedly the dam would be much more effective than it otherwise would be.

Thank goodness we have one Minister- I say this in favour of the Minister for Northern Development- who recognises the contribution made by the minerals industry and the necessity for these projects to proceed. In this second reading speech the Minister said:

The mining industries of northern Australia are making a noteworthy and vitally important contribution to the economy of Australia. They will continue to do so in the future and, in one way or another, we must assure that the heavy burden of costs for water, transport and other basic facilities does not act as a deterrent to those people whose personal contribution is indispensable to the success of the development of our northern resources.

I believe that every supporter of the Government should read, mark, learn and inwardly digest those words because, unfortunately, the Government seems to have forgotten them. We get support nowadays not for productive matters of this sort but for unproductive matters- for the purchase of the painting ‘Blue Poles’ and for teaching people how to throw boomerangs. It makes one wonder where the Government is going. Thank goodness it is in this case opting for something which is productive. I strongly support the Bills and congratulate the Government for proceeding with them.

KingsfordSmithSpecial Minister of State · ALP

– I thank the honourable members who have contributed to the debate. I have noted that the Opposition is not opposing this legislation. I have also noted the appreciation expressed by honourable members opposite of the work done by the Minister for Northern Development (Dr Patterson), who is unable to be present this evening because he is absent from the country in the course of his duties. The 2 significant factors are that the

Queensland Grant (Ross River Dam) Bill involves a grant, for the reasons mentioned by the honourable member for Farrer (Mr Fairbairn), and the Julius Dam Agreement Bill involves a loan. That, as it appears from the instructions I have been given, was the proposition accepted by the Premier of Queensland. It provides for additional storage.

I want to make one comment. The honourable member for Herbert (Mr Bonnett) spoke about Townsville. It is obvious that it has a bright future. I am not aware of whether the Premier of Queensland has proclaimed Townsville as a growth centre to the extent that would be required. If he has I can guarantee that it will proceed. But one of the great difficulties that we have is in getting the State governments to agree to nominate areas as growth centres. When I was in Queensland one of the difficulties I experienced was in trying to ascertain whether Townsville is going to be a growth centre in the future or whether it is going to be Gladstone or somewhere else. While there is that indecision there is not going to be the progress that obviously is warranted. I shall say no more about the remarks that have been made in this debate because I think that everybody is in agreement with the proposition. I thank honourable members for their remarks.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 1837


Second Reading

Consideration resumed from 17 September (vide page 1270), on motion by Dr Patterson:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 1837


Locust Plague in QueenslandSecretarial Assistance for Members of Parliament

Motion (by Mr Lionel Bowen) proposed:

That the House do now adjourn.

Darling Downs

– Some weeks ago during a debate on the motion for the adjournment of the House my colleague the honourable member for Maranoa (Mr Corbett) drew the attention of the House to the possibility of another outbreak of locusts occurring in the State of Queensland, spreading to the northern areas of Australia and also down to the wheat growing areas of north-western New South Wales. Unfortunately the position has deteriorated somewhat alarminingly since the honourable member for Maranoa drew the attention of the people of Australia to this threat. It has deteriorated to such an extent that a warning has been given in the grimmest and gravest possible terms that the anticipated harvest of some 600,000 tons of wheat in Queensland is threatened. A similar situation exists in northwestern New South Wales.

This is an appropriate occasion to talk about locust plagues because I understand that in the Budget discussions a proposal will be outlined to set up an Australian plague locust committee. However, this committee will be rather limited in scope and will refer only to plague locusts. I point out that in Queensland last year, and in other years when locusts were in plague proportions, the plague locust was the one which gave the least concern of all. Last year out of the total of $410,066 spent by the Queensland Government only $14,810 was spent on the spraying and eradication of the plague locust. I wonder why the Australian Government has seen fit not to include in the proposed program the spur throated locust and what is called the migratory locust.

We of the Opposition submit that the stage has been reached when the spur throated locust should be included in an Australia-wide scheme because- I point out, Mr Deputy Speaker, that we in Queensland are not proud of this- unfortunately Queensland has exported it to northern New South Wales. The migratory locust should be included also because it is found not only in the Australian scene but also in Africa, Europe and Asia. The spur throated locust probably is the most damaging of all because it respects no crops. It attacks them all. It also attacks grass and this is of particular concern to the cattlemen in the area of my friend the honourable member for Kennedy (Mr Katter) who already have been savagely hit by floods. I think we should pay a tribute to the honourable member for Kennedy for the tremendous amount of work he has done in his area and in drawing the attention of governments to the great damage caused by locusts. In his area they have had floods. In other areas they have had droughts. They have suffered also from low prices and increased costs over which they have had no control. The cattlemen will be affected by the spur throated locust as well as the grain men. °

The migratory locust is somewhat more selective. It does attack the main crops in the area, sorghum and wheat, but keeps away from the broad leaf crops such as sunflower, safflower and cotton. I am not one who advocates immediately running to the Federal Government when there is an isolated outbreak of any plague, be it locusts or anything else. I believe there should be fairly well defined principles covering this. If there is a local outbreak the property owner should be the one responsible for control for control and eradication procedures. If the outbreak spreads there then should be involvement by the State. When the outbreak becomes a national catastrophe I submit it becomes the responsibility of the Federal Government to initiate control measures because of the national importance of it. It is significant to point out that in Queensland last year the State Government provided 50 per cent of the cost of insecticide necessary for spraying. The other 50 per cent was covered by a combination of the individual and the local locust committees which were in effect financed by the local shire councils. Of course, this on top of everything else is placing a further strain on the rather limited sources of finance available to the local authority areas.

I am pleased that the Minister for Education (Mr Beazley) and the Special Minister of State (Mr Lionel Bowen) are in the House tonight I ask them to take up at one of the future Cabinet meetings the matter of why the Commonwealth Government at this stage has not contributed, notwithstanding requests from the Queensland Government, half the $14,810 which the Commonwealth promised to pay to the Queensland Government for the eradication of the plague locusts that I referred to initially when there was only one outbreak The sum is only small but I think the principle is the thing that matters. It would be appreciated if they would ascertain from their Cabinet colleagues the reason for the non-payment of this 50 per cent contribution which had been promised. The amount is not great but a principle is involved. It cost $ 1 72,286 to eradicate the spur throated locust and $222,969 to eradicate the migratory locust. The cost of keeping the Army in the field- and the Army is to be thanked for the tremendous contribution it made- was some $40,000. The cost factor, however high, is proportionate to what was saved. It is estimated that the total losses were $3m but the crops saved were worth $ 14m. It is submitted that these sums of money- the total loss involved and the estimated savingsare of significance, particularly if there is to be a continuation of locust plagues which Queensland seems to have suffered over the last few years.

Locust plagues are a national disaster and it is unreasonable to expect individual landholders and State resources to have to pick up the bill and spend, as they spent last year, in excess of $400,000 exclusive of the cost of associated equipment. The cost to landholders in Queensland last year was estimated at $500,000. Clearly this is an intolerable situation. If climatic conditions are favourable for locust hatchingsthat is, if moisture conditions enable the host to build up to plague proportions- it is unacceptable to expect the Queensland primary producer to meet once again a bill of this magnitude. I ask those Ministers present to treat this matter with concern. The only successful way of eradicating a locust plague is to have everything in readiness in anticipation of such a plague, such anticipation being based on available material and knowledge. There can be a problem of insecticides not being readily available. There can also be the associated problem of ensuring that any insecticide used does not have any residual effect on man or beast. The insecticides used have been dibron, maldison, carbonyl and diazanon. I hope that moves can be taken to ensure a stockpile of these necessary materials. It is also to be hoped that the Army will have sufficient fuel. My colleague, the honourable member for Barker (Dr Forbes), drew the attention of the House to the great problems created for defence manoeuvres because of lack of suitable fuel-

It is hoped too that these plagues will not occur with the monotonous regularity that they have done because they are eating the hearts out of many the primary producers in the areas affected. Those producers have to put up with this problem on an almost continuing basis. They realise that the world is desperately short of food and is crying out for supplies to keep people alive in poorer areas. This is a matter of the greatest importance. It is of deep national significance and I trust that the Federal Government will treat it as such. People are concerned, great personal hardship is being caused and it is no use parrying with Olympic expertise a situation in which people are being gravely hurt.


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

KingsfordSmithSpecial Minister of State · ALP

– In answer to the honourable member- he was good enough to indicate -


-The Minister will be closing the debate.

Mr Lionel Bowen:

– I am sorry.


– During the latter part of July and the early part of August I raised in this House a question referring to the administration of the Minister for Services and Property (Mr Daly). That question related to what I believe to be an unfair distribution of extra secretarial help to Government supporters prior to the 1974 elections at the expense of fairness to members on all sides of this House. Hansard of 24 July 1974 records on pages 619 to 621 my initial speech, and that night the Minister, as recorded on pages 621 to 623, made his initial answer. Shortly after that the honourable member for Lilley (Mr Kevin Cairns) expressed a concern that he felt. The Minister again spoke on 25 July 1974 as recorded on pages 725 to 727. I followed him and my speech is recorded on pages 727 to 729. On 31 July 1974 I spoke again, as recorded on pages 9 13 to 914. On 1 August Mr Daly spoke, as recorded on pages 1026, 1027 and 1028. Mr McLeay, the honourable member for Boothby, followed him as recorded on pages 1030 and 1031.I spoke again on 2 August, as recorded on pages 1097 and 1098. Following that I placed on notice question No. 853, directed to the Minister. This is the text of the question:

  1. What are the names and Party affiliations of all members and senators who were allocated extra secretarial assistance at Government expense during the period 29 April 1974 to 17 May 1974, what were the dates that each of those persons requested the extra help, and for how long was it given to each of them.
  2. Did Senator Marriott complain to him, at least 2 weeks prior to the election date, and then to the Departmental officer, that in Tasmania the entire pool had been allocated to members of the Australian Labor Party.
  3. Will he provide a copy of the directions to members of Parliament in which advice as to the availability and terms of use of extra secretarial assistance was given; if not, why not.
  4. What date was the advice sent out.
  5. Were some Opposition members in South Australia refused extra help which brought about an angry reaction from two of these members.
  6. As a result of this reaction, is it a fact that the South Australia relieving pool had to be reallocated and members of the pool withdrawn from members of the Australian Labor Party.
  7. Excluding any permanent arrangements for extra secretarial assistance at appointed times, what were the total extra man hours given by way of extra assistance to-

    1. Members or senators of the Australian Labor Party,
    2. Members or senators of the Australian Country Party,
    3. Members or senators of the Liberal Party of Australia, and
    4. Senators of the Democratic Labor Party.
  8. Were certain members refused assistance; if so, who were they, and what was the Party affiliation of each.
  9. In which States was extra help given only to ALP members.
  10. Did he deny any knowledge of the foregoing in a speech on Wednesday, 24 July 1974; if so, why.

The Minister answered eventually in these terms:

I refer the honourable member to the statements made by me on the adjournment of the House relating to his accusations in relation to the abovementioned matters, vide Hansard:

Hansard 24 July 1 974, page 62 1 ;

Hansard 25 July 1974, pages 725 to 727;

Hansard 1 August 1974, pages 1026 to 1028.

So much for open government. It is a lot of bunkum. In closing this matter I make a plea to the Minister to recognise that what happened at that time was not right. The Minister simply says that he who puts in his order first gets first claim. On that principle I could immediately put in an order, because Mr Bob Hawke has given notice that there will be an election next April. This matter can be politically exploited at public expense. I believe that the Government gave members of the Australian Labor Party a bonus of at least $7,000 in extra secretarial assistance during the campaign. It is only fair in the name of democracy that a system be devised to ensure that all get a fair crack of the whip and the arrangement is not exploited.


-Order! It being 1 1 o’clock, the House stands adjourned till 10 a.m. tomorrow.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 25 September 1974, viewed 22 October 2017, <>.