29th Parliament · 1st Session
Mr SPEAKER (Hon. G. G. D. Scholes) took the chair at 10 a.m. and read prayers.
– I have to inform the House that we have present in the gallery this morning the Honourable G. A. Regan, Q.C., M.L.A., Premier of Nova Scotia and Chairman of the Executive Committee of the General Council of the Commonwealth Parliamentary Association. On behalf of the House I extend a very warm welcome to the Premier.
Honourable Members- Hear, hear.
The CLERK-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
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:
That the plan to obliterate the traditional weights and measures of this country is causing and will cause widespread inconvenience, confusion, expense and distress.
That there is no certainty that any significant benefits or indeed any benefits at all will follow the use of the new weights and measures.
That the traditional weights and measures are eminently satisfactory.
Your Petitioners therefore pray:
That the Metric Conversion Act be repealed, and that the Government take urgent steps to cause the traditional and familiar units to be restored to those areas where the greatest inconvenience and distress are occurring, that is to say, in meteorology, in road distances, in sport, in the building and allied trades, in the printing trade, and in retail trade.
And your petitioners as in duty bound will ever pray. by Mr Barnard, Mr Lynch, Mr Gorton, Mr Bonnett, Mr Bourchier, Mrs Child, Mr Erwin, Mr Hodges, Mr Lamb, Mr Macphee, Mr Oldmeadow, Mr Staley and Mr Street.
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 establishment of an Australian Government Insurance Office will:
Your Petitioners therefore humbly pray that the House of Representatives rejects completely the Australian Government Insurance Office Bill1975.
And your petitioners as in duty bound will ever pray. byMrEllicott.
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:
Your Petitioners therefore humbly pray that the House of Representatives will reject the Australian Government Insurance Office Bill in its entirety.
And your petitioners as in duty bound will ever pray. by Mr Erwin.
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 establishment of an Australian Government Insurance Office will:
Your Petitioners therefore humbly pray that the House of Representatives rejects completely the Australian Government Insurance Office Bill 1975.
And your petitioners as in duty bound will ever pray. by Mr Macphee and Mr Eric Robinson.
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:
Your Petitioners therefore humbly pray that the House of Representatives rejects completely the Australian Government Insurance Office Bill 1975.
And your petitioners as in duty bound will ever pray. by Mr Oldmeadow.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble Petition of the undersigned employees and agents of the Australian insurance industry respectfully showeth:
That the insurance industry is already coping with
Your petitioners therefore humbly pray that the House will reject the Bill.
And your petitioners as in duty bound will ever pray. by Mr Anthony, Mr Gorton and Mr Connolly.
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 marriage is an exclusive lifelong partnership between one woman and one. man, which should not be dissolved at the will of one party after 12 months notice nor without a reasonable attempt at reconciliation and
That a husband should normally be responsible for maintaining his wife and children within marriage.
Your petitioners therefore humbly pray that the Family Law Bill 1974 be amended
To specify three objective tests for irretrievable breakdown, namely
And your petitioners as in duty bound will ever pray. by Mr Sinclair and Mr Wallis.
To the Honourable the Speaker and Members of the House of Representatives assembled. The humble Petition of the undersigned, all being of or above the age of 18 years as follows:
Your Petitioners oppose and seek the deletion of those provisions of the Family Law Bill 1974 which supplant the existing grounds by the introduction of the sole ground of irretrievable break-down, which remove any consideration of fault, and which will weaken the family unit while causing more widespread injustice because:-
Your Petitioners commend the divorce legislation introduced in Great Britain in 1973, which acknowledges the importance of the family unit, mirrors community requirements, secures justice for innocent people and establishes a realistic definition of irretrievable breakdown, and call for similar legislation to be provided in Australia.
Your Petitioners, therefore, humbly pray that the House of Representatives in Parliament assembled will make provision accordingly. byMrDrury.
To the Honourable The Speaker and members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth:
That the Family Law Bill1974 would be an unjust law if passed since the innocent party could be divorced against his or her will after a year’s separation.
That the Bill does not only facilitate divorces but changes the nature of marriage and the husband-wife relationships. Legislation ought to reflect public opinion, not attempt to condition it. Gallup polls indicate 75 per cent of Australians are opposed to the concepts of the Family Law Bill. Therefore Parliament has no mandate from the people to ask such a far reaching change in the nature of our society.
That children need a stable emotional and psychological environment in which to grow up. This stability is upset by divorce. A high proportion of criminals came from broken homes. Consequently any law which makes divorce easier is harmful to society.
Your petitioners humbly pray that the Parliament so vote as to defeat the Family Law Bill.
And your petitioners as in duty bound will ever pray. by Mr Jarman.
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:
In view of the appalling need of millions of people in Vietnam, that immediate aid in much larger proportions than has been given to date by the Australian Government be sent as quickly as possible for humanitarian reasons. The innocent victims and also defenceless, have a right to be fed, receive medical aid and villages rebuilt. We, a land of plenty should not deny help of this kind, to another in need.
Your Petitioners therefore humbly pray that the Australian Government will act on this matter without delay.
And your petitioners as in duty bound will ever pray. by Mr Jarman.
– I ask the Prime Minister a question. A few days ago the Treasurer was reported as having said that the Government planned to reduce Government expenditure. He said that this referred to new programs and to old. With the full resources of the departments and the Treasury available to the Prime Minister, is he prepared to tell the Parliament where these cuts will be made?
– I did not see the report and I believe that there is a question on notice for me on this matter.
-I direct a question to the Minister for Education. For the information of the Minister there are approximately 60 students attending the Ballarat Institute of Advanced
Education who have not as yet received any tertiary allowance payments for 1975. Many of these students are in adverse financial circumstances. What is the reason for such late payments? How does he intend to overcome this difficulty in the future?
-A senior officer of my Department has been asked to investigate this question specifically in that institution. I have been to 2 universities and a college of advanced education and have interviewed students in regard to whom there has been a late payment of a tertiary allowance. I would say that what has happened is that there has been a tremendous increase in the obligations on the Department without a corresponding increase in staff and that this has led to some of these problems. When I had investigated the cases of students who came to me I found that sometimes they were not in fact eligible for grants. It does not follow that all the 60 students at the Ballarat Institute of Advanced Education will be eligible for a payment. Nevertheless, the situation has appeared to me to be serious. About 70 000 allowances are being paid and, I assume, about 7000 students are not being paid. I have asked for the utmost acceleration of the consideration of those 7000 cases and I have asked for a specific investigation of the cases in the institute which the honourable gentleman has mentioned.
One of the problems in Victoria has been the difference in the procedure of some tertiary institutions in not releasing student results to the Department. So there is correspondence produced in that State which puts a much heavier load on the Department in finding out facts which in other States it can find out much more quickly.
– Is the Attorney-General aware that, as part of the party political campaign the Australian Mutual Provident Society is currently conducting at the expense of its policy holders, the Society has written to employees instructing them to send letters to members of Parliament opposing the Corporations and Securities Industry Bill? Can he give the House any indication of the reasons for this opposition or is it merely another example of opposition by the AMP to the Government program as a whole?
– I have seen reports as indicated by the honourable member. One can only be aghast at the proposition that is involved in what seems to be under way. The draft letter seems to have been sent out to subscribers with the invitation that they use it as a guide to write to their members of Parliament. The letter lists some measures that they should seek to have opposed. They include national superannuation, Commonwealth Public Service superannuation, national compensation, the Australian Government Insurance Office, corporation and securities industry control and other matters. One wonders what a great corporation like the Australian Mutual Provident Society has to fear when it opposes measures like the Corporations and Securities Industry Bill which is designed to stop abuses, white collar crime and corporate crime. One wonders what a great corporation like that is concerned about. One wonders what other corporations which oppose such measures also have to hide. It is relevant to the answer that I would like to give that I refer to a question that you, Mr Speaker, ruled out of order a moment ago. Implicit in the federal structure of Australia and the fact that Australian laws, companies and securities are fragmented and they cannot cover the field -
- Mr Speaker, I rise to order. Is it appropriate for the Attorney-General to refer to a question which you earlier ruled out of order?
– It is not appropriate for the Attorney-General to answer a question that I have ruled out of order. I noted his remark. I thought it was inappropriate but I think the matter he is stating is properly within the ambit of the question that he was asked.
– I thank you, Mr Speaker.
– If the Attorney-General refers to the parts of the question that I declared out of order he will stop answering the question.
– I certainly do not intend to do that, Mr Speaker. One sees the opposition to a Bill intended to cover the field and to give Australians a single law on this very important matter. One sees why that opposition to it comes into being. The reason is that the people putting forward the opposition prefer to have a set of fragmented laws. They prefer to have a different companies law for the Australian Capital Territory, a different companies law for New South Wales, a different companies law for Victoria, and so on; behind those differences, behind the fragmentation and behind the incapacity that rests in that fragmentation, opportunity exists for abuse, excess, negligence and all the other things that the Government’s measure seeks to overcome.
- Mr Speaker, I raise a point of order. Is the Minister not anticipating debate?
Above all, is he not inventing something that is not in the second reading speech relating to the Bill?
-Order! The right honourable gentleman is aware that that is not a point of order. He is debating rather than -
– I would like you to think of it, Sir.
– Order! I suggest to the right honourable gentleman that he resume his seat. The Corporations and Securities Industry Bill is not before this House; it has already passed this House.
– I will conclude by reminding honourable members of the investigation into the corporations and securities industry that was conducted by the Senate at great length, of the unanimity that surrounded the report of that investigation and of all the studies that have been made of that industry. The unanimity is to the effect that there is great need for a single overriding piece of legislation of this sort. The Opposition to such legislation comes from the people who seek to gain from the existing set of fragmented laws. The Australian people should weigh up the words of the insurance companies against their actions and the ways in which they benefit from the existing system.
-Will the Prime Minister tell the House what assurances he gave while overseas regarding the admission of refugees to Australia? Is it a fact that the United Nations High Commissioner for Refugees has asked that Australia accept Vietnamese refugees? Is the Prime Minister yet in a position, or is he still procrastinating on the whole matter, to tell the Australian Parliament just how many and what categories of Vietnamese refugees are to be admitted and when the admissions will start?
-Probably nearly 2 weeks ago, certainly the weekend before last, the Government told the United Nations High Commissioner for Refugees that it was willing to take part in a program to settle those who had left South Vietnam. On Sunday the High Commissioner sent a response to the Department of Foreign Affairs. On Tuesday the Ministers concerned and I conferred on this matter and a reply was sent to the High Commissioner. There is no question of particular numbers and so on. I realise the interest that the honourable gentleman has in stirring up these matters without ever being precise himself. After all, a couple of weeks ago there was a headline in one of the largest daily newspapers in Australia that there were 100 000 people in an armada setting sail for Australia from Singapore. Of course, this was absolute nonsense.
The Government takes the attitude that the UNHCR has the experience and the respect which are required to carry out a humane and effective resettlement program. The Australian Government has always operated through the UNHCR. The people who have been resettled and the Australian people should be grateful for the skill and humanity which the UNHCR has brought to bear on such cases in the past. We can rely on him to apply that skill and humanity in the present case.
I can give more details on the matter if the House wishes to hear. On 4 May ships and small vessels began arriving in Singapore from South Vietnam, carrying large numbers of refugees. Within a few days the number reached a total of nearly 8000. These persons were not permitted to land by the Singapore authorities but remained on the ships. The Australian High Commission in Singapore received a letter from a small group of people on one of the small vessels saying that they would like to come to Australia. However, no direct contact was made between the persons on the ship and officers of the High Commission- that is the Australian High Commission in Singapore- because none of the Vietnamese were allowed to land and the vessels were kept by the Singapore authorities in isolation.
During last weekend most of the ships left Singapore after the Singapore authorities had allowed them to reprovision and refuel. We do not know their destination but it is generally reported that they were headed for the island of Guam or for Subic Bay in the Philippines. We understand that on 13 and 14 May most of the remaining small craft left Singapore. There are reports that some of these small craft may be headed towards Australia. The Singapore authorities permitted only 110 of the Vietnamese, all of them fishermen, to remain temporarily in Singapore.
On 6 May the Australian Government approached the office of the United Nations High Commissioner for Refugees and the SecretaryGeneral of the United Nations and urged that there should be co-ordinated international action under the direction of the High Commissioner for the placement of refugees from Vietnam in as many countries as possible. The High Commissioner and the Secretary-General were told that Australia would be willing to participate on a basis of equality in such an international effort. The UNHCR sent his regional representative in South-East Asia to Singapore to make contact with the refugees. It was quite some days before the Singapore authorities allowed the UNHCR ‘s regional representative to make contact with the refugees. He was able to make contact with only a very few of them who remained. They may have left Singapore since then.
I conclude by saying that the problem of Vietnamese refugees is a very difficult one and clearly the best solution is an international effort under the co-ordinating direction of the UNHCR. I discussed this matter with the heads of government in some neighbour countries when I was in Washington and in Jamaica last month, namely the Prime Ministers of Singapore, Malaysia, New Zealand, Fiji and Britain, and I also discussed the matter with the President of the United States and with the United States House of Representatives International Relations Committee and the United States Senate Foreign Relations Committee.
- Mr Speaker, in accordance with Standing Orders, I ask the Prime Minister to table the document from which he read.
– I ask leave to have the document incorporated in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
For the Minister
You may be asked about criticisms made by the Singapore Government that Australia has not taken any refugees from Vietnam who have arrived in Singapore.
Criticism that the Australian Government was dilatory or avoiding any responsibility in this matter are quite wrong and misleading. Our early approach to the High Commissioner and our expressed willingness to participate in an international program are sufficient evidence of this. It is clear that any such operation has to be well organised and Australia, when accepting refugees for settlement in Australia, must follow its normal processes of interview and selection. We could not possibly be asked or expected to take a number of refugees sight unseen from ships in Singapore harbour at a time when we had no idea who these people were or what their own wishes were.
– Has the Attorney-General’s attention been drawn to the recent House of Lords rape decision which gained massive publicity around the world? Does the decision have any application in Australia and does the Government propose to take any action as a result of the decision? In view of the increasing incidence of rape crimes, Australians are deeply concerned in legislation dealing with the matter.
– Like most honourable members, I have had my attention drawn to the reports of the House of Lords decision. As far as I know, no official report has reached Australia yet, but there is a report in the ‘Times ‘ which one can assume to be accurate. The facts, as I understand them, were that a gentleman was alleged to have brought some friends home to his house and invited them to have intercourse with his wife, telling them that they were not to be put off by her protests because that was her way and that she really enjoyed protesting and the act of intercourse. The question went to the House of Lords following a conviction. The question of the appeal was the question of the reasonableness or the propriety of the judge’s direction on whether the belief of the men that they had the woman’s consent was reasonable. The trial judge had so directed. I shall quote from the decision of the House of Lords what Lord Hailsham had to say on this point because it may be of interest to honourable members. He said:
Mens rea -
For the non-lawyers, that means guilty mind- meant ‘guilty’or ‘criminal mind’ and if the mental element in rape was not knowledge but intent, then to insist that a belief must be reasonable to excuse was to insist that either the accused was to be found guilty of intending to do that which in truth he did not intend to do, or that his state of mind, though innocent of evil intent, could convict him if it were honest but not rational.
The reasoning in the House of Lords decision is probably common to a number of State jurisdictions in Australia. The precedents differ. For example, the precedents in New South Wales differ from the precedents in Victoria. This brings me back to the point I tried to make earlier about fragmentation of laws in Australia. What I think is of considerable concern to women, women’s groups and women’s movements in Australia about the effect of the decision is the degree of corroboration which judges are required to direct a jury about in rape cases- that it is unwise to convict unless there is an element of corroboration. In this sense, under the law historically and as it stands today the prosecutrix, the woman who has been raped or claims to have been raped, is put on the same par as an accomplice, because the same rule applies to an accomplice in a crime; the judges are required to give a similar direction there. That, I think, is the most unfortunate aspect of it as it is now becoming known to the Australian non-legal community.
I think the other aspect that has to be borne in mind- and this is where it becomes unfair- is that whereas a prosecutrix, a lady who claims to have been raped, can be cross-examined on her previous sexual life with other men- all her antecedents can be brought in, in that regard.
-Order! I think the honourable gentleman is going a long way beyond the question.
– I will wind up my remarks with this sentence, if I may, Mr Speaker. (Honourable members interjecting)
– Order! I suggest that honourable members remain silent even though the Minister is taking a long time to answer the question. I think the matter is of serious consequence.
– Whereas a woman can be so cross-examined, the accused cannot be crossexamined on his antecedents.
– My question is directed to the Attorney-General. I refer the AttorneyGeneral to rumours that are being circulated by sections of the media and others, alleging that a number of public figures have been cited in a divorce petition allegedly issued recently. Can the Attorney-General give the lie to these seemingly unfounded rumours?
– Yes, I can give the lie to the rumours. They have been brought to my notice, as I am sure they have been brought to the notice of many honourable members. Under rule 299, 1 think it is, of the divorce rules, I caused inquiries to be made of all State registries and the registry of the Australian Capital Territory. We did not make a search in the Northern Territory, as that seemed unnecessary. There is no truth at all in the rumours that have been circulated.
– My question is addressed to the Minister for Northern Development. What is the current situation with respect to establishing a water storage system to meet the needs of the town of Carnarvon and the Gascoyne River plantation in Western Australia? Is legislation likely to be introduced this year to enable the project to commence?
– I am aware of statements being made by the Premier of Western Australia and others regarding the proposed water conservation scheme on the Gascoyne River to serve the Carnarvon area. As regards legislation, I am aware, as other honourable members are aware, that Her Majesty the Queen of Australia, when opening the Parliament, referred to proposed legislation for the Ross River Dam in Queensland and the Carnarvon-Gascoyne project in Western Australia. As honourable members know, the Government has acted on the Ross River project. Legislation has been enacted and that scheme is now in operation in terms of construction. As regards the Gascoyne project, the technical investigations have been completed by my Department. There were, however, serious environmental objections raised against some of the aspects of the scheme itself.
The honourable member will know that the whole project is based on pumping from bores in the Gascoyne River in which there is the possibility of salt intrusion if the safe draw is exceeded. I am happy to say that the environmental aspects have been overcome. There is agreement on this matter between the Australian Government and the Western Australian Government. The proposal will be now considered in the normal way by Cabinet in the budgetary context.
– I again ask the Prime Minister whether he will refer himself to newspapers of Thursday 8 May in which it is reported that the Treasurer had said:
If we are going to cut expenditure we are going to cut expenditure. This involves not only new programs but old programs too.
I again ask the Prime Minister: If he is not prepared to answer that question, will he indicate which question on notice he believes refers to that Press conference of the Treasurer? From a quick examination of the Notice Paper I do not believe that there is any question on notice referring to that matter. It would seem that the Prime Minister is merely seeking to evade answering where he will cut Government programs.
– I did not say there was a question on notice referring to any Press conference given by the Treasurer who was acting as Prime Minister in my absence. I did say there was a question concerning the review of programs, and there is. It relates to a Press conference that I gave and it is question No. 2447 asked by the honourable member for Curtin.
– On a point of order, could I suggest that question No. 2447 which refers to a Press conference given on 1 8 February 1975 and which relates to an alleged review of programs taking place in January or February of this year has no relevance at all to the Press conference and the statements of the Treasurer made a few days ago.
-Order! It is not the responsibility of the Chair to judge the accuracy of answers.
– My question is addressed to you, Mr Speaker. Has your attention been drawn to the difficult and cramped office accommodation in which members of the Parliamentary Press Gallery have to work? Can you inform the House of the cost of providing the facilities which are made available to members of the Press Gallery, who pays for these facilities and what can be done to improve them?
– I can advise the honourable member that the cost of the facilities provided to members of the Press Gallery is met by the Parliament. I will seek answers to the other questions asked by the honourable member and provide him with the information when it is available.
– I ask the Minister for Minerals and Energy a question. When replying to my question on 18 April about the natural gas spur line to Wagga did the Minister say:
Some months ago I approached my Victorian counterpart and suggested to mm that in the national interest it might be appropriate if we were to consider a real interconnection of the proposed national natural gas grid, and for that purpose that we might construct a 20-inch line from Young down through Wagga and Albury to Melbourne.
Did he go on to say:
I got, frankly, quite a cool reception. A few weeks later it was announced, for reasons best known to the gentleman concerned, that the Victorian pipeline, which was to be of the order of ten or twelve inches in diameter, would be extended across the border to Albury . . .
Did he agree on 15 March 1974 that he would arrange for technical experts from the Department of Minerals and Energy to visit the Gas and Fuel Corporation of Victoria to discuss pipe sizes at an early date? Is he aware that Mr Smith, the Chairman of the Gas and Fuel Corporation, made 3 personal requests to his Department, but was unable to obtain the visit promised by the Minister? Was the Minister’s reply to me an attempt to mislead the Parliament?
-The answer, Sir, is no.
– My question is directed to the Minister for Housing and Construction. I refer to a point which I raised during an adjournment debate some time ago about the supply of pumps to the Googong Dam. I mentioned at that stage that it had been suggested that these pumps would be supplied by a Russian firm to the detriment of Australian manufacturers. I ask him now: Will he state quite emphatically that this contract has not been let to a Russian firm, as I have good grounds to believe it has? If it has been let to a Russian firm, does he agree that this is a blatant attack on Australian industry and employment?
-I well remember the honourable gentleman’s adjournment speech, which I regarded as intimidatory in the sense that it was an attempt to interfere with the properly established tendering process and to bring favourable consideration to a tenderer whom he apparently favoured. I made the position very clear in my reply to the honourable member’s adjournment speech. On that occasion I contended that I regarded his action not only as unprecedented but also as quite contemptible. I strongly discourage the tendency for members of Parliament to interfere in well established tendering processes which take into account the merits of tenders and the capacity of the tenderer to perform the work. The honourable gentleman was putting forward that there should be discrimination against tenderers on the grounds that they either derive from or have some association with companies overseas. That is not the premise upon which such decisions are made. Moreover, the honourable gentleman ought to be aware that in this matter, which is associated with the pumping system of the Googong Dam, my colleague the Minister for Urban and Regional Development has the final prerogative in relation to the selection of the tender after having received advice from the Department of Housing and Construction as to the respective merits of all the tenders concerned. I do not know what point the honourable gentleman is making, except that it is very clear that he is grovelling and pandering for votes in his electorate by trying to influence a decision in favour of a tender from his area.
– I ask the Minister for Social Security whether he has received complaints about delays in the processing of claims for medical and hospital benefit refunds from private hospital insurance companies. What is the nature of these delays? If the delays are noticeable, is this further evidence of the inefficient and unsatisfactory nature of the present private health insurance scheme?
– I am not surprised that the honourable member has asked this question. There have been numerous complaints of this nature in the community. I have received quite a volume of correspondence complaining about increasing delays in the processing of claims for benefits from private hospital and medical funds. The average delays range from 4 to 6 weeks and, in particular cases, for much longer periods. The situation seems to be worsening. For example, the Medical Benefits Fund of Australia Ltd in Queensland, in both medical and hospital funds, has an average delay of 6 weeks in the processing of claims from the date on which the claim is received until the date on which a cheque is dispatched. The Hospitals Contribution Fund of Australia in New South Wales in both cases has an average delay of 4 weeks. Fortunately, after 1 July with the introduction of Medibank, claims which are processed through Medibank, once the scheme and the system are fully operational, will involve a delay of about 5 days on average from the date of receipt of the claim to the date of dispatch of the cheque. This is a considerable turnaround.
There is one other matter which I should mention quickly while I am on my feet, and that is a concern not only about the increasing inefficiency of the private funds and the dissatisfaction which this creates in the processing of claims but also- this is a very real fear in my mind- that a number of these funds will probably close down either before or subsequent to 1 July and, accordingly, will be unable to meet claims for refunds directed to them by their members, in most cases members of long standing. This Government proposed legislation which would have allowed us to guarantee payment at Government expense of those claims, but the obstructionism of the Opposition in the Senate has prevented this from being done. I am afraid that considerable distress could be caused in the community to people who suffer as a result of these sorts of failures.
– My question is addressed to the Minister for the Capital Territory. Will he confirm that he visited Darwin last week? Will he confirm that his -stated reason for being in the city was to try to improve the image of the Australian Labor Party and that while there he issued some gratuitous advice concerning the establishment of a government owned and operated newspaper? What written reason did he give for obtaining an entry permit, which is known to be required to enter Darwin, and who granted it? How many staff did he take with him, and how long did they stay? What reason was given for their permit entry to Darwin?
– I did visit Darwin, and the people were grateful to see me. There is an enormous information vacuum caused by the misrepresentation of the honourable member. It is necessary that members of the Parliament from all sides visit Darwin to determine the direction which events ought to take. As a member of Cabinet and a Minister in this Government, it is my duty to visit those places in which this
Government is deeply involved. I might add that I have been visiting Darwin on and off for some 30 years now and on each occasion I take the opportunity to talk to people from all areas of the community. It is true that one of the reasons for my visit to Darwin was to establish better communications on behalf of the Government with the people there. There is no problem with the image and there is no problem with the reality. There is only a problem of communication.
In answer to the honourable member’s question about a newspaper, let me say that I am firmly of the belief that throughout this country there is a need for an independent, publicly operated newspaper system to compete with the monopoly systems, which sometimes sponsor the Opposition Parties, so bless me! On the question of the permit, I indicated that I was visiting Darwin in my capacity as a member of Cabinet and I took with me a couple of members of my staff who were as equally competent to judge the situation. Like the other Ministers in this Government, I take a deep interest in everything throughout the continent. I just want to advise honourable members that a great number of people in the Darwin area regard themselves as totally disfranchised by the monopoly control of the National Country Party, and I warn them against putting any faith in it.
-Can the Prime Minister provide information about the proposed Australian Government Insurance Corporation, especially having regard to the current hostile propaganda that is being circulated against this community insurance service?
-The Attorney-General already has quoted some of the propaganda which the Australian Mutual Provident Society, for instance, is giving to its insurance salesmen.
– I raise a point of order, Mr Speaker. My understanding is that the second reading speech on this Bill has been given. Plainly the question and the answer anticipate the debate on the matter.
-Order! I would think that if the Prime Minister refers to the Bill or the proposals within the Bill he will be out of order. I think the question referred to certain political matter -
– Watch it, Gordon.
– If the honourable member for Gippsland makes an interjection like that again I will name him without warning. I do not consider that that is funny although he may want to laugh. I will continue with the point of order. Comment by the Prime Minister, in answer to the question, on other matters which are currently being circulated, which have no relevance at all to the Bill, would be in order.
-The Attorney-General has already quoted from a draft letter which the Australian Mutual Provident Society has been giving some of its insurance salesmen to give to their customers or to their prospective customers, suggesting particular actions of the Government or pieces of legislation on which they may oppose.
– I raise a point of order, Mr Speaker. The Prime Minister has referred to the legislation when he said ‘particular actions of the Government’, clearly referring to the Australian Government Insurance Office legislation. With respect, Mr Speaker, I would suggest that it is not possible to answer the question without reference to the legislation which will be debated by this House.
– Order! In answer to the point of order, from correspondence that I have received as Speaker, the particular firm concerned is seeking discontinuance of the Superannuation Bill, the Corporations and Security Industry Bill, the proposal for an amalgamated Australian police force, the national superannuation scheme which is a policy proposal, I presume, and not a piece of legislation, and a number of other pieces of legislation which have nothing to do with the insurance legislation that is before this House. The Prime Minister is in order in informing the House on those matters. I call the Prime Minister.
Mr.WHITLAM- I also have had given to me a card addressed to ‘Member for’ and leaving then a space for the electorate, ‘Parliament House, Canberra, ACT, 2600’. On the other side it begins ‘Dear Member’ and the letter follows. Then there is a space for the name, address and signature of the resident in that electorate to be filled in. On this obverse side of the card is ‘Printed by Australian Mutual Provident Society, 1-3 Phillip Street, Sydney, Australia’. I will not quote the whole card but it commences:
I am concerned at the ramifications of the Government’s proposed social welfare program. I urge you to use your influence to modify the proposals . . . for various reasons, which are set out. The reasons are quite often false and certainly irrelevant to any promised or pending legislation. But one of the other documents which have come to me from the Regional Manager of the AMP states:
As you are very well aware it has been recommended and urged by the Society that we take personal action in protesting at Government proposals. Attached is material which could be a guide to what you or your clients write. AMP letterheads cannot be used of course.
The word ‘cannot’ is underlined.
It is very important that any written protest you make is done immediately.
It is astonishing that the funds of policy holders are used for this sort of campaign. All of us will be concerned that the money we pay for our insurance policies should be used to print circulars which members of the public can then post to their members of Parliament and that the premiums we pay to our insurance companies can be used to employ the staff of those companies to engage in political propaganda. It is quite clear that the AMP Society, the largest of the life societies in Australia, is conducting a campaign against the whole social welfare proposals, not only of this Government but also of previous governments.
To refer to the letter which the AttorneyGeneral quoted, certainly my Government is inclined to see that the superannuation for Commonwealth public servants is kept abreast of current expectations. But it must be conceded that previous governments of the opposite political persuasion have also improved the superannuation for Commonwealth public servants. That is now to be challenged. If the AMP, through its touts, is to have its way we are to see that the superannuation for Commonwealth public servants is to be frozen; we are to see that other people in the community who are not Commonwealth public servants are not to “have the opportunity for national superannuation; that members of the public are not to have the opportunity for national compensation at a time when the rates they have to pay for third party insurance are rising so abominably and onerously; that other forms of legislation which this Government has undertaken to provide for the benefit of the Australian people are to be stalled or repealed.
It appears that the insurance industry, through its leaders, is now undertaking a program against the whole of the welfare programs which the Australian people enjoy or which they expect. The whole of this expensive campaign- all this printed material, all these draft letters which are being handed out- is not relevant to the interests of policy holders at all, however relevant it may be to the interests of those oligarchs who are the directors of these companies and to the private beaurocracies which have so long battened on the insurance paying public in Australia. The Government is trying to make insurance available under better conditions to citizens in general.
– I call the honourable member for Kennedy.
- Mr Speaker, I ask that further questions be placed on notice.
– I have called the honourable member for Kennedy.
-Thank you, Mr Speaker. I address my question to the Minister for Northern Development and the Minister for the Northern Territory. In view of the discontent and disillusionment of the people of Darwin at all levels- a feeling that is reaching crisis point and constantly being expressed through the’ honourable member for the Northern Territory and myself- will the Minister inform the House why the rebuilding of the residential areas of Darwin is making little progress? How does the Minister regard the suggestion made on the ‘AM’ program this morning by an independent member of the Northern Territory Legislative Assembly, that the Government could be deliberately retarding the building of houses and concentrating on what -
-Order! I suggest that the honourable gentleman is lucky to be asking this question. I hope he will not debate the matter and make me stop him from completing it.
– I have only about 3 more lines, Mr Speaker. It was suggested that the Government is concentrating on what could well be delaying tactics, that is, a tedious drawn out replanning operation. Why is there no real action? Will the Minister also affirm or deny that the rebuilding of damaged houses is costing $40,000 each?
– In brief, it is quite obvious that the honourable member for Kennedy knows absolutely nothing of what is happening in Darwin. His facts are completely wrong. He bases his whole allegation on the statement by Mr Withnall, who is now regarded in the Northern Territory as the Northern Territory galah. Almost every day he makes statements against the Government.
- Mr Speaker, I ask that further questions be placed on notice.
– For the information of honourable members I present the following reports by the Industries Assistance Commission:
Report on certain textile floor coverings dated 7 February 1975;
Report on fabricated asbestos dated 9 April 1975;
Report on brucellosis and tuberculosis dated 10 April 1975.
Report on floor and wall tiles dated 11 April 1975.
Bill returned from the Senate without amendment.
-Mr Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes, unfortunately, by a Printer’s error in the report of my speech on the subject of sand mining on Fraser Island, Hansard page 1771, 17 April 1975. 1 quoted a passage from a letter written to the Prime Minister (Mr Whitlam) on 10 April 1975 and signed by Mr Nigel Wace. The letter read in part:
One of the reasons that I voted for your party in the last 2 Federal Elections was that the ALP policy seemed to offer some hope that environmental issues within the community would be resolved by democratic- and ultimately by legalprocess. Your proposals for the compulsory issue of Environment Impact Statements seem to go some way in this direction. The EIS is, in the field of man /environment relations an embodyment of a truly socialist philosophy which allows the people to express a view about the quality of the environment they live in. If you allow the purpose of this proposal to be subverted right from the start by permitting the export of dune sand minerals from Fraser Island before an EIS, or in defiance of its findings, you will forfeit my support.
In the printing process, the words ‘to express a view about the quality of the environment they live in. If you allow the purpose of this proposal’ were omitted from the quotation.
The Principal Parliamentary Reporter assures me that the correction will be made in the bound volume, but injustice to Mr Wace I now put the record straight for the information of the House.
Motion (by Mr Daly) agreed to:
That the House, at its rising, adjourn until Monday next at 15 minutes past 2 o’clock p.m. ‘
Office -Superannuation-Road Maintenance Tax- Television Programs -Drug Manufacturers-British Law Lords Decision on Rape- Commonwealth Brick Works-Local Government- Unemployment
That grievances be noted.
-Today I would like to grieve about the wine industry, but before doing so I point out that certain polling centres in country areas have been closed. This matter was mentioned last night by my colleague the honourable member for Paterson (Mr 0 ‘Keefe) and very properly so because a lot of principles are involved. When speaking in the adjournment debate I made a small error in not giving the relevant Ministers their correct title. During the adjournment debate last night I suggested that the Minister for Services and Property (Mr Daly) should sometimes let the Minister for Urban and Regional Development (Mr Uren) know precisely what policy decisions he is taking, because as part of his policy of closing down country polling centres in areas with less than a certain population which he considers reasonable, he has inadvertently closed down the polling centre at the regional growth centre of Monarto. I wonder whether he had let his colleague know about this.
I am not sure whether this is a sign of the times or whether the Minister for Services and Property knows a lot more than the Minister for Urban and Regional Development knows. In other words, I am not quite sure whether it is a sign of the times that the much vaunted regional growth centre of Monarto, which is shortly to have a population of 100 000, is now to have its polling centre closed. To say the least, it is a rather humorous situation and one which must lead members on this side of the House to wonder precisely what the Government has up its sleeve in relation to the future planning of that centre.
I think it is true to say that the Government has a new found zeal. One must assume that by honest knowledge it suddenly has discovered that businesses, particularly some small businesses in certain sections of Australia, are getting into very deep trouble. These include businesses in country areas, in certain regional areas and, indeed, in some cases in capital cities. It is well known, even within some sections of the Government now, that this is due to inflation, to the high costs of plant replacement, to increasing costs of wages- in some cases justifiable- to a heavy taxation onus and to a general lack of cash flow caused by the pressures of these 4 factors on the businesses concerned. I think that even the Government is now beginning to realise that this rate of inflation, with the other pressures that have been induced such as heavy taxation, is causing a great deal of gloom and a great deal of lack of private investment in the private sector, which employs 70 per cent of the work force of Australia today. This brings with it the strong danger of added unemployment arising.
Having said that, let me say that there is no question in my mind that one sector of the business community has been hit a great deal harder than any other single sector. I am referring to an industry which I think has had an extraordinarily rough deal from this Government over the 2Vi yean it has been in power. I refer to the wine and brandy industry. I think it is fair to say- I certainly will attempt to justify this remark during the remainder of my 10 minutes- that the Labor Party policy in relation to the wine industry has been downright apathetic, ambivalent and in some cases completely dishonest. I suppose that I had better justify that remark. Historically, as a party, the Australian Labor Party has played political football with the industry on the question of the wine excise which was introduced in the time of Prime Minister Gorton. The Labor Party promised to remove this tax if elected to power in 1972. It honoured that promise. However, prior to the 1972 election the then Leader of the Opposition promised that no other tax would be substituted for the wine excise. In the meantime, judged on the first year’s statistics after the introduction of the wine excise in its original form, Professor Grant brought down a report to the Government. As a result of that report, 50 per cent of the excise was removed. From memory, this occurred on 25 May 1972. 1 think it is worthwhile honourable members remembering that the maximum amount collected in any one year under that wine excise was, in round figures, $ 1 1 .5m.
I cite the reaction of the Labor Party Premier of South Australia, Mr Dunstan, on behalf of wine growing areas such as Riverland, the Barossa Valley, Clare, McLaren Vale and Coonawarra. They are great names, and the Premier of South Australia should have stuck up for them. I remind the House of Mr Dunstan ‘s reaction when this Government proceeded to levy on that industry a higher rate of taxation than the rate of excise which that taxation replaced. This was not a marginal matter. A moment ago I cited the excise receipts in a top year as being $ 11.5m. In a few minutes time I will attempt to substantiate the case by showing that this Government has levied on the industry a tax which will collect approximately $50m this year. That $1 1.5m of the original wine excise was at the full rate. Honourable members would do well to remember also that from May 1972 half of that excise rate was taken off, making the excise 25c in the gallon. At that level, the tax levied by this Government on the wine industry has amounted to $50m as compared with $5.75m previously.
The fact of the matter is that the Prime Minister (Mr Whitlam) who gave the South Australian Premier an assurance that no alternate tax would be levied has presided over a situation in which the taxes levied on the wine industry have risen from an equivalent of $5.75m to approximately $50m. So much for words of honour from this Government as far as the wine and brandy industry is concerned.
I quote from the front page of the Adelaide ‘News’. In a report on 23 November 1973, the ‘News’ stated:
An angry Premier, Mr Dunstan . . .
The South Australian Labor Premier: . . . said today the Federal Government had placed him in a ‘shamefully difficult position’ by insisting on new imposts on the wine industry. ‘I have been put in a position of personal dishonour and I bitterly resent it, ‘ said Mr Dunstan.
In an almost unprecedented attack by a Labor Premier on the Federal Labor Government, Mr Dunstan said . . . … he had assured the wine industry that not only would the 50c per gallon wine impost imposed by the Liberal Government be removed by a Labor Government, but no new imposts would be applied.
He had given these assurances at the request of the then Opposition Leader, Mr Whitlam, on behalf of the Federal Labor Party. ‘No one can say the removal of the brandy differential and the revaluation of wine are not new imposts,’ Mr Dunstan said.
That is the background to the present position in the industry whose members feel that they have been treated with dishonesty and unfairness and to untruthful statements in a situation in which they have no redress.
In the last 6 months, this is what has happened: The Treasurer (Dr J. F. Cairns) has expressed sympathy with new suggestions put forward by the industry. He has told in confidence of his possible submissions to Cabinet. He told me that. It is a confidence that I have honoured. The honourable member for Adelaide (Mr Hurford) was acquainted with those submissions as were certain departmental officers. At this stage we heard that Professor Mathews of the Mathews Committee had told the Treasury that these submissions were outside his terms of reference. In the meantime, the Treasurer agreed that the industry should telegram its members saying that he was sympathetic and would give a reply by 3 1 March. When this date was passed, and the Treasurer was about to go to the Philippines on about Anzac Day the industry in some concern sent a paper to the Prime Minister and requested an interview. It obtained no interview. It received a curt reply saying no to all the industry’s suggestions. This in a nutshell is the position now. These industries are trying to exist while paying up to 8 1 per cent of their taxable income and they cannot persist indefinitely on that basis.
Mr DEPUTY SPEAKER (Mr Luchetti)Order! The honourable member’s time has expired.
-On Monday of this week, the Cabinet concurred with the findings of the Industries Assistance Commission on the mushroom industry. The reference was sent to the IAC on 8 March following a Temporary Assistance Authority reference. The report was completed by 17 December 1974. Since that time, the report has been debated by the industry, various government departments and finally an interdepartmental committee. Two commissioners conducted the inquiry by the IAC, both of whom agreed to a recommendation of a 25 per cent duty and a dollar for dollar research subsidy. But one of the commissioners dissented from the recommendation of the IAC by proposing that imports should be restricted for 3 years to enable the local industry to assess the practicability of entering the market for mushrooms canned in brine. Up to this stage, the industry has conducted all its own research, has engaged in various measures of product development and at this time is pursuing funds through the Australian Industries Development Corporation.
The main source of imports has been mushrooms in brine as champignons and the rate of importation has shown a rapid and continuous growth. The Industries Assistance Commission says that these imports do not compete with mushrooms canned in butter sauce which is the usual product in Australia as these have their own market. The Commission said: . . . any competitive threat which they pose is to fresh mushrooms, but the extent of this competition is at present marginal.
The IAC in its report points to the industry’s problems over a long period. These include the problem of over-production, particularly in the mid 1960s, which provoked the Tariff Board reference of 1968 and the early 1970s. At that time, 1 968, there were about 230 farmers in the industry. At present there are about 120 farmers.
The report does not mention in any detail the effects of the 25 per cent across the board tariff cut or the currency revaluation of the past 2 years. Let me quote, however, from the 1968 Tariff Board report which gives a fair historical background of the industry. It says:
The major part of demand in Australia for mushrooms is for mushrooms in butter sauce, practically all locally produced, the next most important part being for champignon-type mushrooms in brine, almost all imported. The extent of competition between these 2 products was limited and difficult to assess.
The nitty gritty of the argument within the industry is on the level of competition between imports in brine and some dehydrated frozen mushrooms and with the local product which is in butter sauce.
The 1974 Temporary Assistance Authority report also took issue on this very point. The Australian Mushroom Growers Association requested temporary assistance against all imported mushrooms and mushroom products, but later withdrew its request in respect of fresh and dried mushrooms. Although the Australian Mushroom Growers Association claimed that there was competition from imports of frozen mushrooms, the Temporary Assistance Authority concluded that estimates made of the quantities of frozen mushrooms to be imported during 1974 did not indicate a critical position. The Authority considered that the local canning industry was clearly experiencing difficulty with import competition in marketing mushrooms in brine but this product represented Utile more than 3 per cent of domestic production. The nature and extent of competition between the traditional Australian pack of mushrooms in butter sauce and imported mushrooms in brine was far from clear. So, the Authority eventually concluded that there were insufficient grounds to warrant special temporary assistance.
The Prime Minister (Mr Whitlam) referred the whole matter to the Industries Assistance Commission as, not long after this report there was evidence of firms in the industry going broke. I must state that I have great doubts about the findings particularly on the proposition by the Industries Assistance Commission and the Temporary Assistance Authority that there is no competition between the imported product and what is largely produced in Australia. However, I say at the outset that I support the principles of the Temporary Assistance Authority, the Industries Assistance Commission and other semiindependent or independent bodies such as the Prices Justification Tribunal. I do not think government departments should be clients for industry. I think there is a need for such organisations to exist so that an independent, overall look can be given to industry in general from the whole community point of view. At the same time, the Government must have the power to override decisions by such bodies when there are sufficient and necessary political reasons to do so.
This is a very small industry. I am most concerned that by subjecting this industry to a whole series of hoops and hurdles in a very independent objective manner working from statisticsstatistics in the case of the IAC report which were considered in September 1974- we have a situation where an industry can see something clearly ahead for itself and yet with all the will in the world the public servants and the commissioners looking at the industry are in no position to predict accurately what is going to occur. I trunk the industry and many members of this House have a better idea of what is going to occur in terms of human behaviour, business expectations and business behaviour.
As I said, the mushroom industry is a small industry. There are only 120 growers. There are no votes in it. There are 5 mushroom growers in my electorate and a few more growers in the electorate of the honourable member for Mitchell (Mr Cadman). I can only conclude that because there are no votes in the industry the Opposition has not taken this matter up. I am pleased that the Opposition spokesman on manufacuring industry, the honourable member for Berowra (Dr Edwards) is sitting at the table. Perhaps he can inform us why he has not brought this matter to the attention of the House. Up to this time no other country has been able to grow a mature mushroom and most of the competition to mushroom production in Australia has come from imported champignons. They are the very small mushrooms. We have been producing them in butter sauce.
Previous figures have indicated that there is a market structure of 2 separate components. I point out that the Australian industry has been exceptionally efficient. For example, in 1964, when the labour cost was approximately 70c an hour, the price to the local canners was 34c per lb. In 1975, when labour costs are $2.41 an hour, the price to the canners is only 40c per lb. The growers, in presenting their case, say that the IAC is expressing very incorrect views. As I have already mentioned, they are saying that imported mushrooms in brine compete with the local fresh mushrooms and mushrooms in butter sauce. Australian mushroom growers can produce a champignon type mushroom, or button mushroom, as we call it here. They dispute the proposition that import figures are falling every month. I will give figures to support their claim. They are also saying that imported champignons in brine are in direct competition with Australian fresh mushrooms. In February 1974 92 2 10 kilos of mushrooms were imported into Australia. In February 1975 732 433 kilos were imported into Australia. There has been a dramatic increase in imports in January and February this year. There have been more imports in the first 8 months of this financial year than in all of last year. Even if we accept the figures at which the IAC was looking as perfectly accurate and correct and if even more recent figures have been properly assessed, I think we can now say, looking to the future, that this industry will be in very big trouble and that there will be a need for it to put another case and go through another hoop and over another hurdle to prove disruption to its industry and to show how badly it is affected. Of the 5 growers in my electorate, one is out of production, one is in receivership, two are producing about 70 per cent of their normal production, and I have not been in contact with the other fellow lately. One can say, although one cannot prove it, that the local canned output figure for example, includes a figure for frozen mushrooms being repacked under Australian labels. Bulk frozen mushrooms coming into Australia are also being labelled by local firms. I have with me some of the labels of firms which we accept as being local producers. I will not say that they are actually deceptive. For example, the label on an Edgell’s product says: ‘Product of Taiwan’. The labels of other firms- I will not give the names- say: ‘Packed in Australia’ rather than where the mushrooms come from. Others just simply do not say where they come from at all. The growers really have no way of finding how much of the imported product, which they say and which I say is mixable, is going into the local cans and products.
Many of the growers’ contracts will expire at the end of this month. So far the canners have not been talking in terms of price or quantity. The growers say that it is only a matter of time before sliced mushrooms will be brought into this country and the canneries will simply become importers. We really do not know how much the consumers are benefiting from the cheaper imports in any case. So I still say that unfortunately this argument is not over for the mushroom industry. It is unfortunate that the industry will have to come up with more facts and figures, but I would like the Government to know that there is a large body of people in this House who feel that the procedures through which this industry is going have proved unsatisfactory, that there are grounds for real debate and that we need to know a lot more about the matter.
Mr DEPUTY SPEAKER (Mr Luchetti)Order! The honourable member’s time has expired.
-Mr Deputy Speaker, I wish to make a personal explanation.
-Order! Does the honourable member claim to have been misrepresented?
-Yes. The honourable member for Macarthur (Mr Kerin), who has just resumed his seat, spoke ambiguously of my attitude on this matter. I want to make it quite clear that I fully support the points that he has made, that imported mushrooms in brine are competitive with the products of the Australian industry, that local canned production has not been growing and that imports are increasing spectacularly. I seek leave to have incorporated in Hansard a Press statement on the matter I issued last week.
-Order! I do not think the honourable member is entitled to go to that extent. He has made his point on the personal misrepresentation. I think he should avail himself of an opportunity during the grievance debate to proceed along the lines he has indicated.
-Mr Deputy Speaker, with respect, it would clear up the matter if I could have incorporated in Hansard the statement which was issued last week.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
The Australian Government should not fail to recognise the legitimate aspirations of mushroom growers in Australia, Dr Harry Edwards, Shadow Minister for Tariffs and the Industries Assistance Commission, said.
Mushroom growers are currently seeking reasonable protection from imports while production facilities in the industry are adapted to provide this useful food to the Australian consumer in the form the consumer prefers.
Over the past eighteen months Australian consumption has risen by 58 percent. But whereas the capacity of the local industry was increased to meet this greater demand, in fact domestic production increased by only 6 per cent while imports increased 290 per cent!
What the industry now requires is a respite from the flood of Asian imports. This is especially true of canned ‘mushrooms in brine’- the bulk of recent imports- which are competitive with ‘fresh’ mushrooms, the main product of the Australian industry.
It is essential that a quota for imports be imposed, at least for a period while the processing of mushrooms in brine is firmly established in this country. There is no other way to maintain the viability of the industry in Australia.
It needs to be appreciated that all entry of mushrooms to the EEC is strictly on a quota basis, and this also applies to the U.S.A. Taiwan is the major exporting country and the canneries there are owned by such U.S. multi-nationals as (he Green Great Canneries. 9 May 1975.
– I thank the House. I add only that the threat of severe market disruption hangs heavily over the mushroom industry. Does the blood actually have to flow before the Government will move?
– Today I wish to spend the few minutes allotted to me to express some concern about the direction in which we as a nation are being steered by the present socialist Government. I refer to Christianity for a start. I do not stand here today and parade myself as a great Christian, but I believe that Australia, as a Christian country, should not have interference by the Government to such an extent that it would steer Australia away from Christianity. If Australians wish to continue to be Christians, that is their own private business; I do not believe it is the role of government to interfere in this area.
The first matter I refer to is the Medibank form which was placed in everybody’s letter box in the last week or so with a booklet containing a letter from the Minister for Social Security (Mr Hayden). The Minister does not profess to be a Christian- I do not know what he is- but that is his business and his right. What I object to is the Minister’s using his position to place on the form which citizens will use to make application for a refund of medical expenses only the words ‘given name’. The Government has eliminated ‘Christian name’. I believe that it would have been more appropriate if the form had been worded ‘Christian/given names’ because people would have an opportunity to choose for themselves.
– This is a grievance debate, not a comedy hour.
-My heathen friend opposite with the beard who represents the seat of Kingston would not understand what we are talking about, but I am quite sure that come the next election he will no longer be a representative in this Parliament.
The other matter I refer to is the discrimination in the application of the National Employment and Training scheme (NEAT). We all know that under the Australian Labor Party’s emergency proposals to try to minimise the unemployment which is wracking this country it has introduced 2 schemes called the National Employment and Training scheme and the Regional Employment Development scheme. Under the NEAT scheme a person can be trained to become almost anything from a dog catcher to a doctor.
– You could even be a politician.
– If it were possible to be trained as a politician I am sure that the honourable member should go back to school for a couple of years, because he has not made much of a mark on this place since he has arrived. I have received a letter from a constituent who lives in the Federal electorate of Bowman. It is not Uke me to cross the border of my electorate, but I received this letter from an ex-serviceman:
I have just completed 6 years in the Australian Regular Army, for the greater part of that time I was employed in the catering capacity as a cook. Over the last 3 years of my engagement, I became very involved with Christian youth work in civilian life. It was during in this time in which I saw the need that I should continue full time in the work after my discharge from the Army. To enter this particular field of ministry through the Baptist Theological College of Queensland, I am required to do a minimum of 2 years full time college. At that stage under rehabilitation, Army officers inform me that I could receive financial assistance from the Government while undertaking this course. When the NEAT scheme replaced the old scheme I was assured that assistance would be given under the new scheme. Right up until I was discharged last month the Education Officers were still telling me that I would have no problems whatsoever in receiving assistance under ‘retraining’ for this work. Now I am told that the present Federal Government has decided not to grant assistance to those desiring to attend Theological Colleges.
Mr Williams went on to ask the question: ‘Why?’. In these times, when the generosity of the Government is excelled only by the number of unemployed in this country I ask why discrimination against people wishing to enter theological colleges should be practised. As I said earlier, a person can be trained to be a dog catcher or anything else he wishes at Government expense and be paid $93 a week. A person can be retrained to become a social worker and at the end of that training might be in the employ of a State, local or Federal government. Alternatively a person might be in the employ of private enterprise. But at these times, when there is a decrease in the number of people of all denominations wishing to enter the ministry- there is a great shortage of such people- the argument which applies to the refusal to allow people to become lawyers, the argument being that there is a surplus of people in the legal profession, does not apply. I believe that this is simply an extension of anti-Christian attitudes by this present Federal Government. I know that there are people on both sides of this Parliament who profess- and rightly so- to be greater Christians than I. But as they are on the Government side, and in great numbers, and have been told of these happenings, if they are true men at least they should have the character or the courage to stand up in their Party room and demand the removal of this discrimination.
In other times I would never be an advocate of the Government financing people into the ministry. If people want to enter the ministry, that is their business. But at a time such as we are going through now, and through which we have been going for the last year or so, when so many people are being financed by the Government to retrain themselves, to re-educate themselves for the purpose of a new career, I see the Government’s action as simply being discriminatory. As I pointed out earlier, the same situation applies to the Government taking the lead in the removal of the words ‘christian name’ in the Medibank form. I am told that it has also been removed from passports and other forms. I do not think that the Government has the right to take this course and I am sure that the majority of Australians would agree with my view.
– I wish to raise a question of very basic importance to my electorate and to all of metropolitan Adelaide and therefore to the economy of South Australia. It relates to the car industry. I should like to commend and encourage the Australian Government for the strong support which it is giving to the car industry in South Australia. I want to make it known that the car industry in South Australia does not have the support of the Liberal Party. All South Australians should examine closely the remarks of the honourable member for Corangamite, Mr Street, who is the Liberal Party’s official spokesman on labour matters. He has made it clear that South Australia’s car industry can expect no support under a LiberalNational Country Party government. According to him, South Australians can expect no support for their most crucial industry under any future Federal Liberal government. It is no secret that the Australian Government is actively supporting a proposal for the Chrysler motor company and 2 Japanese companies for the joint manufacture of a 4-cylinder engine at the Chrysler engine plant at Lonsdale in South Australia. It is also possible that the Australian Government, through the Australian Industry Development Corporation, could take up an equi ty itself in this venture. But for some inexplicable reason the Opposition spokesman on these matters has come out against the idea. The Government’s proposals are aimed at making the Australian car industry competitive and thereby sustaining, or even increasing, the capacity of the car industry to provide employment.
What are the problems of the Australian motor vehicle industry at the moment? For a start- and this is a problem which I do not suppose we can ever really overcome- Australia is a relatively small market compared with the large domestic markets of Japan, the United States and the European Economic Community. But the Australian market, until recent years, has been divided amongst 3 manufacturers. These 3 manufacturers have locked themselves into a situation where they are building only 6-cylinder engine models. Consequently these manufacturers have had only small runs of vehicles against which to offset the very high fixed costs of motor vehicle manufacture. That has made it a relatively uneconomic operation. This problem has now been compounded by the rising relative popularity of small cars. With the problem I have just mentioned, we still have the situation where no 4-cylinder engine is made in this country. With the small market already divided amongst 3 local manufacturers there has been a further reduction in the market by the import of small cars. The imports are of 2 kinds. There are the completely built-up imports which provide very little employment in this country, and the other form comprising the completely knocked down packs which are brought to this country and then assembled. They do provide some employment in the assembly line but not very much in component manufacture.
The rising popularity of small cars in Australia has meant a further fragmentation. This is the fundamental point. The 2 main Japanese companiesToyota and Nissan- have already made heavy inroads into the market. The market is now shared by 5 companies, but two of those companies are importers. If those 2 Japanese companies intend to raise the Australian content of their cars- that is what is proposed- that in itself will not mean a further fragmentation; it will mean that precisely the same number of companies will operate as at the present. The difference is that instead of having 3 local manufacturers and 2 importers, all of them will manufacture locally. There is no doubt that the Australian consumer has shown a liking for small cars, so surely we must try to make them here or at least manufacture those components which we can manufacture with relative efficiency. What better way is there of bringing in a 4-cylinder engine manufacturing capacity in Australia than using the unused capacity such as already exists at the engine plant of the Chrysler company at Lonsdale in South Australia? This means that the longer runs would be offset against the fixed costs of that plant which is at present under-utilised. In other words, we would be applying economies of scale. This will mean more efficiency in the production of the 4-cylinder engine and the other components manufactured at that plant such as the 6-cylinder engines being manufactured for other models.
I should have thought that the result of this would be pretty obvious. It will mean an excellent combination of having more jobs and at the same time providing a greater efficiency through having greater economies of scale. Is this not what everybody wants? Apparently that is not what the Liberal Party wants. Apparently the Opposition is against the manufacture of a 4- cylinder engine in Australia. Apparently the Opposition wants to abdicate this expanding small car market in favour of imports. That might be what the Opposition wants, but it is not what the Government wants. I do not think we should get the idea that reliance on the importation of small cars will help Ford or GMH. If 6-cylinder car sales are declining, what comfort is it to Ford and GMH, or Chrysler for that matter, to be told that it is imports which are eroding their market? Contrary to what has been said by the honourable member for Corangamite, the Australian Government plan will not mean further fragmentation. I remind the honourable member, if he does not already know, that Toyota and Nissan already have their assembly plants in Melbourne.
In conclusion I would like to make one point very clear. The Government’s plan, if implemented, will not just mean more jobs in South Australia; it will mean more jobs in Victoria as well, if Toyota and Nissan enter the 85 per cent plan which was announced by the Government last November. It is not just a question of more engines or the 4 cylinder engines being made in Australia because many other motor vehicle components will also have to be manufactured in Australia if the requirements of the 85 per cent plan are to be met. This will give a boost to component manufacturers not only in South Australia but in Victoria as well. Under existing arrangements it will also give a further boost to the assembly plants of the Japanese companies in Melbourne because at the present time they are limited to assembling c.k.d. packs. These companies of course, are limited in what they can do because of the import quotas that apply to their operations as well as to fully assembled imports. If they get into the 85 per cent plan, surely there will be increased capacity and increased employment not only for the component manufacturers but also in the assembly plants in Melbourne. So this will be of benefit to everyone.
I believe that the outlook under the Australian Labor Government’s proposal is very good. I believe that we will be able to dispense with import quotas. This would be important to Japan which is one of our trading partners. We have to remember that we have products that we want to sell on the Japanese market. We also believe that under this plan we will be promoting an efficient car industry which will be fully competitive with imports. The Labor Government’s policy means an efficient industry, a competitive industry, which will provide more employment and, for that matter, more Australian ownership through the Australian Industry Development Corporation. Furthermore, the plan will provide the cars that the Australian people want.
The Government supports the economy of South Australia. It has given great and very heartwarming support to the motor industry in South Australia, an industry which is absolutely vital and critical to that State. But I warn South Australians to look out because under what has been espoused by the Liberal Party spokesman they cannot expect much support from the Liberal Party on this matter. Indeed, if the statements are to be taken at face value, the policy of the Liberal Party means disaster for the economy of South Australia.
-I call the honourable member for Wimmera.
– I wish to make a personal explanation.
– I think that we should hear the honourable member for Wimmera.
– May I make a personal explanation at the conclusion of his speech?
– I will consider that.
– I hope my time commences from now. I am almost grateful to the Minister for Services and Property (Mr Daly) for the answer he gave yesterday to a question by the honourable member for Evans (Mr Mulder) in relation to insurance. I want to say at the outset that I am not discussing the Australian Government Insurance Office Bill which is before the Parliament. Rather, I am discussing a matter that was raised yesterday by the Minister. I would like to say also that I am most grateful- not quite to the same extent as I am grateful to the Minister in whose case I am almost grateful- to the Melbourne ‘Age’ for first covering this issue of a so-called secret deal that took place between officials of the Australian Mutual Provident Society and members of the National Country Party of Australia over the proposals of the Government on this allimportant subject. The Melbourne ‘Age’ made the first reference to this matter on 14 May. I do not have the time to read the whole article which appeared on page 3 of the ‘Age’. Under the heading ‘Help us beat bill, insurers ask CP’, the article in part states:
Senator Wheeldon said yesterday the documents revealed that there was ‘a secret alliance between the AMP Society and the Country Party and that secret meetings had taken place’.
He said: ‘I believe it is outrageous that the funds of the policyholders in the AMP should be used for the purpose of assisting the Country Party without any consultation with the policyholders, or any hint of the company’s private political intentions’.
A further article again at page 3 appeared in this morning’s edition of the ‘Age’. The article, in part, stated:
A spokesman for the AMP said documents covering correspondence between the society and the Country Party were ‘not secret’.
The spokesman said: ‘We have been very careful to be thoroughly partisan on the establishment of the Australian Government Insurance Corporation.’ ‘We are not playing politics,
-The Minister laughs. The article continued: ‘Our officers have had talks with the Liberal and Labor Party members as well as the Country Party. ‘
Surely that proves the point. As one of the members who organised this so-called secret deal, I want to make a brief comment. I want to make it quite clear to the Australian people what actually did take place so as to prove beyond all doubt how incorrect these ministerial statements have been. In fact, they are downright untrue and were made possibly to deceive people into believing that both the National Country Party and the AMP were carrying out behind the scenes discussions against the interests or views of policy holders. There were no secret divisions and no secret discussions as has been pointed out by a member of the AMP Society.
– That is something else from the dirty tricks department.
– That is quite correct. No doubt there are plenty of honourable members on the
Government side who are prepared to indulge in such activity.
Some two or three weeks ago I had a telephone call from an officer of the AMP Society, who incidentally was a resident of my electorate and known to me for many years. He said that he would like to speak to me and other members of the Parliament. To make his job a little easier I suggested to him that instead of meeting individuals, which would take time, he should meet these people collectively. I suggested that we should get a few fellows together. This is what we did. I offered to organise this because I believed that this was a very important matter. It was not just a case of members of the National Country Party only speaking to officers of the various societies; members of the Liberal Party and the Labor Party also spoke to them. Why the Minister for Repatriation and Compensation (Senator Wheeldon) should select the National Country Party and say that it engaged in a secret deal of handing over money I would not know.
A number of people raised the question of the Australian Government Insurance Office when I returned to my electorate during the fortnight’s recess. These people included many insurance agents who certainly were not all members of the AMP. I agreed to talk to them at very short notice. During the discussions no mention was ever made of any financial of physical assistance that would be given during a campaign. People from the various companies came along to the meeting with a view to informing me of their views and their announced policies and platforms in regard to the Bill that was presented on 23 March. But the question was certainly stirred by various members of the Australian Labor Party. I will make a brief comment on the question of money before I resume my seat. As I said, the question of money was not mentioned, except that the officers said that under no circumstances do they contribute to or take part in campaigning as a company. This I accept. They have made this point very clear not only on this occasion but also on other occasions to anybody who may have been interested.
I believe that as a result of decisions made by the Australian Labor Party or the Government many people in the insurance field are now very conscious of what the Government is trying to do to the insurance industry. The Government is trying to socialise the industry or to nationalise it by a back door entry. It would not surprise me to see many hundreds, if not thousands, of insurance agents, as well as many of the 3 million policy holders in Australia, making every effort to see that this Government is removed from office, as distinct from the official platform of any insurance company laying down a policy of playing party politics. I want to make this point very clear. I have checked with senior officers of my Party, and at no stage has any life insurance office made any moneys available to the former Australian Country Party or to the now National Country Party of Australia. This matter has been raised by Senator Wheeldon, the Minister for Repatriation and Compensation in another place, and by the Minister for Services and Property, who have made the suggestion that we are making secret and sinister deals with the companies. It is my opinion that the matter has been raised by these 2 Ministers with a sinister view in mind. They know that their suggestion is false, but they are trying to confuse people into believing that in fact the Government is introducing measures which are not nationalistic.
This morning the Prime Minister (Mr Whitlam) criticised the fact that policyholders’ money was being used to carry out political propaganda. Is there really much difference between policyholders’ money and money collected from the taxpayers and used to propagate propaganda by the Government or contributions made to the trade union movement by members who do not believe in the Australian Labor Party? Surely there is no difference at all. However, on the one hand the insurance companies refrain from making the contributions; but, on the other hand, the money of both the trade union movement and the taxpayers is used to propagate Government policy. This is why I raise this matter. I am grateful to the Melbourne ‘Age ‘ for also raising the matter, because I believe that perhaps that newspaper has unearthed something which today the Labor Government is trying to instil in the minds of the people, namely, that all is well and that there is no fear of the nationalisation of the insurance industry.
Mr DEPUTY SPEAKER (Mr Luchetti)Order! The honourable member’s time has expired.
-Firstly, i wish to raise a grievous situation which I believe exists in relation to people who contribute to private employee superannuation funds with the employer contributing through an insurance company. In a situation of rising costs and wages it is interesting to note that people are put off work on the ground of redundancy, yet they have contributed to the firm’s superannuation fund in the belief that they had security until retirement. In fact, they are put off when other people who are not contributing are retained. Many of those other people have much shorter service or are recently engaged employees. One wonders where the pressure comes from. Is it the small percentage amount contributed by the company which makes the company say that it is more economic to dismiss someone who is costing that company that little extra? Are these firms so vicious, I wonder, as to discard people in the evening of their lives? Or does the pressure come for a more sinister reason from another source, and that is the insurance companies which face a large payout in the case of death or retirement? Is the pressure on to get rid of people once they are in a high risk area?
A case which came to my notice concerned the Australian Mutual Provident Society and a large retail establishment. This allegation was made to me by a constituent of mine. There was little real evidence until this blatant case which involved a woman of 55 years of age with 1 1 years service. She was dismissed prior to annual leave, yet younger people were retained in the same department and other people have been employed since she was dismissed. The significant factor is that the other people are not contributing to the superannuation fund, so the employer saves on the wage structure. Not only does the employer save, but the insurance company opts out of an obligation when it reaches a high risk area. Let us face it, the lady’s chances of employment are next to nil and there is no chance that another employer will take over the furtherance of the policy. The insurance industry must save thousands of dollars in this underhanded manner. It is no wonder that many people with similar insurance policies fear for their jobs as they get older and become insurance risks. This is indeed a contemptible practice adopted by the insurance industry.
If the insurance industry continues this practice of hidden pressure on employers, the unions should look closely at past redundancy and at payments made to those people by companies such as the AMP. In fact, I am sure that all members of Parliament would like to hear from people who have been so mistreated, so that we will have all the facts before us when dealing with these firms. My constituent, on the return of her contributions and her employer’s contributions, plus interest at the minimal rate, received a paltry total of some $616 after 11 years. She received no other benefit from the AMP. She and her employer would have done better to have invested the money in a savings bank at compound interest. She was supposed to have a death cover during this period; but, in noting the curtailment of her services when she became a high risk, one wonders what would have happened if she had died. Would the company have tried to avoid payment? One would need to look at the fine print in the policy. Such appalling practices must cease. Let us have a superannuation system which does not become a rout. Preference of employment and protection should be given to these people. This should not be looked at as a way in which to utilise people’s savings without any obligations and with little further risk.
I now wish to continue my protest at the continual imposition of road maintenance tax by States on heavy transport. I raise this matter again, now that the national highways have been declared and the Australian Government has undertaken responsibility for national highways around most of Australia. We have the anomalous situation of State authorities charging road tax over these very roads to help maintain the State budget. I wonder about the validity of this practice under which a person is submitted an account by another person for using someone else’s facility. I admit that the States receive the money to maintain these roads and act as agents in this matter. But what proportion of the revenue gained do the States remit to the Australian Government, or what proportion of the revenue do they use to maintain the actual roads used by the person billed? I venture to say: ‘None or very little’. This action is gross dishonesty, if done intentionally. If it is not done intentionally, it is gross incompetence. What adds salt to the wound is that if the transport operator fails to pay the alleged charge he is fined; or, even worse, if he is unable to pay the fine he is gaoled. This is an incredible situation. In this year of 1975, to have a situation where a person can be gaoled in respect of a civil debt is archaic. But to gaol a person after a deception is practised by the administering authority is monstrous.
I ask the Attorney-General (Mr Enderby) to examine the legal aspects of the situation and to confer with the Minister for Transport (Mr Charles Jones) to see what relief the Australian Government can give to those affected. I suggest that the State authorities examine their consciences to see whether they wish to continue to be parties to such an unsavoury practice. People currently are being gaoled in Western Australia for debts owing under road maintenance tax legislation. Some debts go back 6 or 7 years. These people are the every day pioneers of Australia. They are the very backbone and the lifeline of the outback. Many of these debts allegedly incurred by the small businessmen were incurred during the development period of the north-west. What a price to pay for being part of the nation’s development- gaol after this long period or pay some fantastic sum, often many thousands of dollars, to a State authority! These people have paid full income tax, taxes on fuel and vehicles, payroll tax, spare parts costs, high repair costs and tyre costs incurred through travelling over undeveloped and neglected roads in isolated areas.
Some compassion and common sense in relation to this system of tax is needed. The cost structure in maintaining this vicious system must be hard to justify, even for those administering it. I have felt total repugnance towards the system since it was first proposed in Western Australia, and still feel it, being renewed in my opposition to it by the recent gaolings of struggling business people and people who have failed in their businesses and stand to lose all assets if they succumb to payment demands under the threat of gaol. The efforts of the authorities would be better directed towards improving safety aspects for truck and other road users. We do not have even a safety run-off ramp for heavy vehicles on Greenmount Hill, a major city entrance, or in many other dangerous areas throughout Western Australia. Let us get our priorities right but, more importantly, stop gaoling people for civil debts.
-Time and again we hear criticism of the poor average quality of Australian television programs. No doubt this is a generalisation and, not being a television fan myself, I cannot be very specific. I do not watch television regularly except for news sessions and current affairs programs, but such other programs as I do see from time to time have, I believe, fallen off in quality in recent years. For example, I do not consider the one or two recent productions of ‘Homicide’ that I have happened to see to be nearly as good as were those of earlier years. By all means let us have substantial Australian content in our television programs but surely there are resources and talent enough in this country to enable the production of more worthwhile Australian programs. A number of people in my electorate have told me they consider there are too many programs on television depicting violence, and this is supported by comments by police and the courts. It has been established that the ideas for many crimes of violence committed in this country are derived from watching television programs. Surely there must be some alternative approach or approaches for improving the content of our programs and, so, the tone of our society.
For years we have been reading of the brain and talent drain from Australia. Men and women of outstanding ability and talent in various fields who have not been adequately recognised in their own country have reached their zenith and obtained full reward only when they have gone to Britain, Europe or America. I believe that this is unfortunate for Australia, not least because it tends to discourage younger people of outstanding talent from remaining here. Our failure to give due recognition to outstandingly talented Australians could be to some extent offset and remedied by improving the quality of our television programs and producing films based on the lives and achievements of Australian-born citizens of note, both past and present. Surely this would be a more constructive approach than simply commemorating their names on postage stamps. True, there has been a very occasional production of the kind I have in mind but, as I have gathered from talking to my constituents in Queensland, much more could and should be done in this field. The lives of notable Australians representing a wide range of talents and achievements would provide excellent material for better and more informative Australian programs.
I was glancing through a book the other day called ‘Fifty Famous Australians’. I will not mention all of them and it is by no means an allinclusive list, but it was very interesting to glance through the names. I would like to mention some of the names which appeared, for example, under the heading ‘Explorers and Leaders’, just by way of putting a positive suggestion. The explorers I could suggest whose lives are worth depicting on television and in films would be Sturt. Hume, Mawson, Cunningham and a great many others. Among leaders and jurists there would be such men as Sir Henry Parkes, Peter Lalor, Sir Isaac Isaacs, Sir Edmund Barton, Sir Alfred Deakin, W. M. Hughes, Sir John Monash, John Curtin, Dame Enid Lyons, Lord Bruce of Melbourne and Lord Casey of Berwick. There are a great many others. Among poets, writers and singers there would be Adam Lindsay Gordon, Henry Lawson, Banjo Paterson, Dame Nellie Melba, Mrs Aeneas Gunn, Joan Sutherland the famous signer and Eileen Joyce the international pianist of note. Among the men and women of science and medicine would be Lord Florey- -ealier Sir Howard Florey- the codiscoverer of penicillin which has transfored medical science and saved so many lives. There would also be William Farrer whose names will always be identified with the wheat industry, and Sir Joseph Banks. People famous in primary and secondary industries would include John Macarthur, Thomas Sutcliffe Mort, the founder of our frozen meat trade which has meant so much to this country, Essington Lewis, one of the great names in industry. Social reformers would include Mrs Caroline Chisholm and Mrs Daisy Bates. Famous airmen would include Sir Charles Kingsford-Smith, Sir Ross Smith and Bert Hinkler, who is well-known in Queensland as the Bundaberg Boy. There are noted sportsmen and sportswomen in a whole variety of fields such as- and I mention only a few of them- swimming, tennis, cricket and athletics.
I believe there have been Australians who could hold their own anywhere in the world, and the depicting of their lives, achievements and performances would be a very positive contribution towards improving the content and standard of these productions. Recently we all received a circular letter from The Professional Musicians’ Union of Australia enclosing a fairly bulky paper which contains a comment under the heading of ‘The Power of Television’ with which I agree very much. It states:
Television is the single most influential medium for the dissemination of information and for the recording and development of our national identity and culture.
I agree with that statement. I hope that in what I have said this morning there is some food for thought for Australian producers in the field of entertainment and enlightenment which might perhaps help to improve Australian programs.
-There are several matters I want to raise in this Grievance debate and shortly I will add to the remarks made by the honourable member for Ryan (Mr Drury). However, last night on the adjournment debate time did not permit me to conclude my remarks in connection with a very serious problem that affects all Australian people, a problem that grew up under the present Opposition when it was in power. My Government, I am proud to say, is struggling with this great problem, the monopoly of the drug industry in Australia. I pointed out last night that the international drug combines control the overwhelming proportion of sales of drugs in Australia. I pointed out that the Americans have 60 per cent of the Australian market while Australians have only 6 per cent. I draw to the attention of honourable members the remarks I made in the Parliament last night and which appear in Hansard today.
I would like to see my Government authorise the Commonwealth Serum Laboratories to go into the production of the substitutes for the most common life saving and ethical drugs in Australia and further assist it by creating a drug research division of the Commonwealth Scientific and Industrial Research Organisation. Professor Gus Nossal, Executive Director of the Walter and Eliza Hall Trust recently publicly stated that Hoffman-Roche, a Swiss-based international drug company, had not made its riches from the sale of the many drugs it manufactured but almost exclusively from its world monopoly of librium and valium. These drugs are used extensively in Australia and are supplied by that international multi-national drug company. If necessary, the Commonwealth Serum Laboratories could purchase the plant of an established Australian drug manufacturer.
My final suggestion is that the Government, when framing its coming Budget, may consider the introduction of a foreign profits exports tax, imposing a super tax on the profits of foreign owned corporations operating in Australia and exporting to their overseas principals. Such a tax would cover the profits made not only by the drug combines but also by car manufacturers, oil companies and foreign controlled mineral companies such as Utah Development Company, Mt Isa Mines and Hamersley Holdings Ltd. An article in the Newcastle ‘Morning Herald’ of 9 May states:
The Commonwealth Serum Laboratories today sought power to manufacture some of the drugs most commonly used in Australia.
This could bring them into direct competition with major drug manufacturers.
A CSL spokesman said the organisation was bound by legislation which restricted it to biological manufacture.
This legislation, implemented by the previous Government, restricted the Commonwealth Serum Laboratories. The article states further:
It presented a case for an expanded chaner to the Senate standing committee on health and welfare.
Senator Townley (Lib, Tas), a member of the Senate committee, said the move could nationalise the drug industry.
It could damage the pharmaceutical industry by forcing drug companies to leave Australia, he said.
The CSL Director (Dr N. J. McCarthy) said that under an expanded charter CSL would investigate the opportunities available in the manufacture of the top 20 or 30 drugs used in Australia. ‘We would examine the value of sales, the feasibility of producing the drugs, and patent restrictions’, he said.
I virtually touched on that matter in another way last night. I hope that the policies of my Government, which is endeavouring to overcome the monopolistic control of the drug industry in Australia by foreign multi-nationals, will eventuate.
The second matter to which I refer has been mentioned this morning. It relates to violent television programs. I applaud the honourable member for Ryan (Mr Drury) for raising this matter. I now deal with the question of crime and, in particular, with the recent legal decision given in Britain by a top legal authority in connection with rape. Before I expand on those questions I applaud the Women’s Electoral Lobby which, I understand, demonstrated outside Parliament House yesterday. I understand its members demonstrated in connection with the liberation in Britain of the law relating to rape.
Crime in Australia, like that in America and in the Western democracies, has reached an all time high today. Crime is increasing in Australia more rapidly than the population. Yet we find that our legal luminaries in Great Britain which establish our precedents for law, have statedthe media has published this- that if an accused person honestly believes that the female he has raped was a consenting party he cannot be convicted. That leaves the gate open, as I see it, for the most hardened criminals. No matter how violently a female struggles to protect her virginity or to prevent the violation of her body, if the criminal says: ‘I believed that when she was struggling she was putting on an act and really consenting’, the judge- according to my meagre knowledge of the criminal law- must tell the jury that it is dangerous to convict. I think this is an indictment of the interpreters of the British law in the United Kingdom.
Our very learned Attorney-General (Mr Enderby) this morning at question time said- I interjected several times which I seldom do- that the witnesses in a criminal trial can be crossexamined with all the vigour that a criminal counsel can muster about their background and asked whether they have any criminal convictions.
– So can the victim.
– A victim can be interrogated with the greatest vigour and humiliation. I recognise, reluctantly, that about 50 per cent of rape cases are not reported to the police today.
– More than that.
– I appreciate the interjection of the honourable member for Hotham. That could well be the case. I accept the honourable member’s interjection because he probably has made a deeper study -
– The estimate in the United Kingdom is nine out of ten.
-The estimate in the United Kingdom is that nine out of ten do not report rape because of the vigorous cross-examination they must face by defence counsel in their desire to obtain acquittals for their clients. Yet an accused person, who could have served 2, 3 or 5 sentences for rape cannot have his background probed. He comes before the jury as virtually- to use the vernacular- a ‘clean skin ‘.
It is time the legal members of Parliament protested at this anomaly in the criminal law. If they do not, we, the backbenchers should protest. I believe that a person’s record should be disclosed to a jury in a criminal case. The judge should say to the jury: ‘You can only use that as a guide; you cannot convict him of the charge which is laid against him now simply because he has that previous criminal record. You can use that as a guide to determine whether in view of his background you think he is the type of man who would commit the crime with which he is charged’. Some accused persons come before judges and juries in criminal trials and appear to be lily white. Jurors have frequently said to me after a criminal trial: ‘I was astonished to sit in that court and listen to 3 pages of criminal record. In fact, I was reluctant to convict the man but I am glad that I finally agreed now that his criminal record has come out’. There are movements in Britain to amend -
-Order! The honourable member’s time has expired.
– I concur with the sentiments of the honourable member for Hunter (Mr James) in his description of the law of rape. I would like to talk about rape of a different kind- the rape of the private sector of the economy. I refer specifically to a proposal by the Government to extend and rebuild the Commonwealth Brickworks (Canberra) Ltd. The Commonwealth Brickworks began before Canberra was properly established. It was a necessary move to make sure that there was a brickworks in Canberra. This organisation has been operating for more than 50 years and the decision of the McMahon Government was that the brickworks should be phased out. Instead of that, the present Government has decided that although the machinery is antiquated and although it had to be phased out and removed from the site at which it was located, it would get a new site and install modern equipment- equipment which has been designed, invented and proved to be effective as a result of private industry endeavour. The Government set out to set up what amounts to a monopoly in brick production in Canberra and the surrounding areas.
It is important to recognise that it has served a very useful purpose. It was a non party political decision really that kept this brickworks operating. But now that Canberra is so well established and now that in the surrounding areas- notably in Queanbeyan- there are 2 major brickworks which have invested during the last 10 years the best part of $5m in capital expansion and modernisation and are able to supply bricks to Canberra and the surrounding areas, it is quite unjustified to spend taxpayers’ money, waste the resources of the taxpayer and waste the resources of the private sector because of the grave overcapacity problem which will be made graver still. The capital cost to the taxpayers is estimated to be $4.5 m. If one considers the way costs are escalating under this Government and the way Government estimates are notoriously wrong, the amount is more likely to be $6m or $7m of taxpayers ‘funds.
I raise the matter today so that the Minister for the Capital Territory may examine some of the matters I raise and look at the project again with a view to deferring or abandoning it. At the very least the Minister ought to answer to this Parliament a number of questions which I shall ask. I informed the Minister that I intended to speak on this subject this morning. I ask: Have tenders actually been called for? If so, when are the contracts likely to be signed? When is the building to commence? At what cost and on what terms? What survey has been done regarding the marketing needs of the ACT and the existing supplies from private industry? What environmental impact studies have been conducted? What are the results of these? The Minister should make a full statement to Parliament. The honourable member for Bruce (Mr Snedden) asked the Minister a question on this subject. The Minister’s reply appears on page 1040 of Hansard of 1 August 1974. The Minister stated:
It is the present policy of the Company -
That is, Commonwealth Brickworks (Canberra) Ltd.- to modernise and expand its production sufficiently to retain its traditional share of the local market for clay bricks.
Traditionally the company made simply the basic bricks. It did not make the facial, more aesthetic bricks. Now the company is to move into all areas of bricks and will expand in such a way that if it is really to make maximum use of the capital equipment it will install it most certainly will be seeking to manufacture a wide range of bricks in such quantities as to supply not only the needs of Canberra but also those of the surrounding environs.
So the Minister owes us an explanation of just what is the program. Is it proposed that the brickworks will be running at under capacity? If it is to run at over capacity, what consideration has the Government given to advising those who have invested their capital and their labour in surrounding areas? If the brickworks expands and develops it will have the effect eventually of forcing the private companies in surrounding areas to consider closing down. They would be reluctant to close down because of their capital investment, but it is certain that with the over capacity that already exists in Canberra to introduce this new measure would cause the other companies to make retrenchments. Without being unduly alarmist, retrenchment is the main area of my emphasis today. The honourable member for Eden Monaro (Mr Whan) is in the chamber. His electorate will be the most affected by retrenchments because it is the Queanbeyan area in which 2 major companies supplying bricks to Canberra are located.
I have some important figures that I think should be recorded in Hansard. The installed capacity of existing company plants which are economically able to supply Canberra is 124 million bricks per annum. The approximate capacity of the existing Government brickworks in Canberra is 30 million bricks per annum. This makes a total of 154 million bricks per annum. The existing demand for bricks in Canberra is 80 million bricks per annum. This means there is a surplus capacity of bricks of suitable quality of 74 million bricks per annum. Therefore, the industry is working at a little more than 50 per cent of installed capacity and consequently it is operating at loss or near loss conditions.
The brick industry in Canberra, Queanbeyan, Bowral and Cooma employs or hopes by expansion to employ more than 260 people. I think it is important to note that a factory at Cooma is being expanded and that 25 per cent of the Bowral brickworks’ production comes to Canberra. This means that a lot of people will be affected by the decision of the Minister for the Capital Territory. Another question which the Minister should answer concerns the intention of the Government to make this Government brick factory compete fairly with private industry. It was the decision of the honourable member for Gwyder (Mr Hunt) when he was Minister for the Interior that this should happen. He said that all the taxes, rates and charges and costs which private companies must meet would be met by the Commonwealth brick factory. We should hear the Minister on this. This question is remarkably reminiscent of the theme which we will be discussing this afternoon when we debate the Australian Government Insurance Office Bill. The
Commonwealth brick factory of course has never operated fairly and never operated according to sound commercial principles.
– It did not have to make a profit.
-That is right. In 1971-72 the company made a net profit of $780. No tax was payable then. In 1972-73 the company made a net profit, after tax, of $7,807. If this company were competing fairly it would have to charge prices for its bricks which would enable it to earn profits commensurate with invested funds. This would mean that it would be charging much more for its bricks than does private industry. The company’s accounts for the 1973-74 financial year are simply not available. This is something which no private industry would be allowed to get away with under the Companies Act. But this company has not even produced its accounts for the year 1973-74. The accounts for 1971-72 show that the Commonwealth Government provided a total capital of $1,232,027. The Minister should tell the Parliament just what is the net profit or loss of the company for each year since its inception. He should discuss the question of future income tax and also should tell us what the dividends have been to the Commonwealth.
It is worth noting that the Treasury has advanced $800,000 and that no interest had been charged as at the time of the last available annual accounts, 30 June 1972. Therefore, the so-called profit of $780 is no profit at all. The latest price list of the company shows that when compared with the price lists of private enterprise the company is not really competing. It is a subsidised Government operation and it could not compete with the prices of private industry. The Commonwealth Government simply should not compete with private industry unless it is prepared to do so openly, fully and fairly. This it cannot do. The whole notion of private enterprise, of the profit motivation, is so foreign to the Public Service and the Government that the Government should stay out of it and prevent the waste of taxpayers’ funds and the waste of private investment funds. We have a situation of over capacity and if the Government goes ahead and aggravates that over capacity we will have a serious situation of unemployment in the brick industry in the surrounding areas of Canberra. It is time for the Minister to call a halt to this, to analyse the method and to abandon the idea of having an extended Commonwealth brickworks.
– I rise in reply to the honourable member for Balaclava (Mr Macphee). I think his speech represented a peculiar way of raising difficulties that occur in electorates. The first I heard of difficulties or foreseen difficulties likely to be experienced by brickworks in my electorate was when the honourable member for Balaclava told me this morning- I thank him for this- that he would raise the matter in the House today. So I start at a disadvantage. The people in my electorate who presumably will be affected do not feel that they will be affected seriously enough to approach their Federal member, although I understand that the Melbourne directors of the companies, wrote to the Prime Minister (Mr Whitlam) on 1 8 April, which was not very long ago, and the issues that have been canvassed here today were alluded to in that letter.
We have a delicate situation. I suspect that the points raised by the honourable member for Balaclava are likely to open issues which would be uncomfortable for the brickworks that he is trying to protect. For example, I am informed that freight on bricks from Bowral is subsidised. I know for a fact that the profitability of brickworks in Eden Monaro has not been very significant. The ‘Australian Financial Review’ states that the Highland Brickworks Ltd in Cooma incurred a loss of $1 14,000 in the March half-year. So if we are to use profitability as some measure of success we are in fact opening up an issue which could be very embarrassing to the brickworks that are important to me and to my electors. Quite frankly, I feel that this is not the place to examine this issue in this sort of manner. It is absolutely essential that we look at the projections of, for example, the brick usage in Canberra and the surrounding regions, against all the available information.
As a member of the Joint Parliamentary Committee on the Australian Capital Territory, I am aware of the very rapid development that is forecast for Canberra over the next 10 years or so, -when the population will rise from about 180 000 to 500 000. Quite clearly, the potential for the sale of bricks in Canberra is very great. I am informed that the demand for bricks in Canberra has been rising at the rate of 10 per cent per annum over recent years. It dropped to 6 per cent recently, but we can look forward to very large increases in the demand for bricks in the near future. Also I find the honourable member’s argument dangerous in the sense that as the Federal member of Parliament I have received representations from private enterprise to establish other brickworks in the electorate of
Eden-Monaro. It is interesting to note that on each occasion on which private enterprise has approached me with a case for the establishment of other brickworks in Eden-Monaro the point has been made that the demand for bricks in this region is not being met satisfactorily. So the honourable member cannot have the argument both ways.
It is quite clear that the proposed development of the Commonwealth Brickworks (Canberra) Ltd has to be considered in the light of the overall brick market. It is unlikely that anybody can make the argument that the Commonwealth Brickworks should not survive. It was there first. It supplies a market which is largely a government market; it supplies bricks for government houses. The argument that the Commonwealth Brickworks has no right to be in the market can be justified only in terms of a reduction in completion. Surely the private enterprise sector does not really want to go in to bat on that particular argument. I am very concerned about the possibilities of retrenchment in the brickworks in my electorate. I find it quite disappointing that the issue should be raised in these circumstances. I am confident that the arrangements that can be made between the respective Ministers involved and myself will ensure that the existing work force in Eden-Monaro will be protected.
– I am very concerned about the present financial position of local government and what the future holds for it. In the past, local governments have relied on their own resources for about 80 per cent of their current receipts and on grants from the State, governments for the remainder. This applied in the 1972-73 financial year, which was the latest year for which I could obtain authentic figures. Revenue available from local governments’ own resources largely comprises general rates based on land values. As demand for local government services has increased, local governments have had to rely increasingly on loan funds to finance their current expenditure. Between 1968-69 and 1972-73 final consumption expenditure of a non-capital nature increased by about 58 per cent, while total receipts, not including advances on loans, increased by only 49 per cent. This means that the local government debt burden has been growing steadily to the extent that local government debts outstanding on all loans as at 30 June 1971 were no less than $ 1,730.5m. That again is the latest figure I could obtain.
The Queensland figures for 1972-73 represented a rise of approximately 20 per cent over the 1970-71 figures. This indicates a substantial rise in the national figure. It means that funds intended for investment projects have had to be used for current or consumption expenditure, creating a backlog of essential capital works projects. More recently, local government authorities, in common with other people, have been facing rapidly rising costs- particularly wages. This has made a worsening financial situation critical for some local authorities and in some cases has resulted in cutback in staff and hence on planned projects. To try to cope with the number of unemployed which is increasing in local government areas and in local government employees, the Government has introduced the Regional Employment Development scheme. But that, while welcomed by local authorities and by myself as a member of Parliament, has the disadvantage of being a temporary measure. It provides work for only a limited period and people have to go on the unemployment list again before being re-employed. It is a relief measure, but only a relief measure.
The following figures show the latest award increases for some selected grades of employees. These figures are taken from the local authorities and main roads awards for Queensland, excluding Brisbane. For example, a general construction labourer had a wage of $57.80 a week in March 1973 and $94.01 in October 1974-an increase of 63 per cent. Under the Brisbane City Council Municipal Officers Award, in March 1973 the salary of a male clerk, first year, was $3,632 per annum and by July 1974 it had risen to $6,384 per annum- an increase of 76 per cent. I could quote other figures of a similar nature. Faced with such large and unpredictable cost increases, local governments find it difficult to adjust their rate revenue to meet rising costs. Indeed, in many local government areas rates have already reached saturation point.
Local government associations and many people actively involved in local government write with certainty and with considerable indignation on the burden imposed on the ratepayer. The Australian Council of Local Government Associations’ survey of local government finances states:
The result is that one section of the community only- the ratepayer- has received and is receiving the full impact of the heavy increases, particularly in respect of those services and amenities the whole community shares.
The States also have been faced with increasing demands for the provision of goods and services for which they are responsible and also have incurred an increase in the debt burden over the years. Under the uniform tax legislation passed in 1942, only the Federal Government levies income tax. Consequently, the revenue resources of the States are limited, like those of local governments, and they have to rely increasingly on transfer payments from the Federal Government. As a result, local governments also have had to turn in recent years to the Australian Government for financial assistance. Unless Federal-State financial relations are changed, this trend will of necessity continue.
It is becoming increasingly obvious that the methods by which local governments have been financed down the years is now very unsatisfactory. I believe that the best and fairest method of financing local authorities would be for local government to be provided with a percentage of tax collected by the Australian Government and paid through the State governments. The Australian Council of Local Government Associations accepts this view and favours 5 per cent of income tax being allocated for the purpose of local government finance, thus providing local governments with a growth tax income. A number of local and State government interests have strongly criticised the Australian Government’s plan of regionalism. They have seen it as a diminution of local freedom, as a less effective community democracy and’ as an encroachment of Canberra control over local councils, to the ultimate disadvantage of both State and local governments. I contend that there is a sound basis for that reasoning.
The payment of revenue assistance to local government bodies with strings attached could reduce the economy of local governments. The extent to which this will occur will depend on the nature and flexibility of the conditions imposed. While the Regional Employment Development scheme certainly is not designed to assist the long term financial difficulties of local government authorities, there is even some doubt as to whether it is effectively assisting local authorities in alleviating pockets of unemployment to the extent desired. Although the Australian Government had committed $65. 4m as at 5 March 1975 under the RED scheme, only $ 15.5m had been spent by the end of March. The main problem is probably the time involved in planning and submitting a suitable program and having that program approved.
In conclusion, I urge the Government to recognise the desperate financial situation in which many local governments now find themselves. Let me emphasise that the position is steadily growing worse. It is being aggravated by the extra responsibilities that local governments have to face. The local ownership plan for aerodromes is an example of the type of responsibility that local government is now expected to shoulder. I repeat that there is an urgent need for local governments to be provided with a source of revenue which has an inherent growth factor. The request for the provision of 5 per cent of income tax receipts, as recommended by the Australian Council of Local Government Associations, is one that should be met by the Australian Government if it expects local government to continue to carry the ever-increasing responsibilities it has to shoulder and if local government is to survive.
Despite the present very depressed conditions in the pastoral industry, particularly the beef industry, the Government is pressing forward with its plan to have local government accept responsibility for the ownership of local aerodromes where, in fact, that has not been done already. This program has been going on for some time, but I think that some consideration should be given to local government. Where the Federal Government still has control of local aerodromes, in areas in which the local authorities are in very serious financial difficulty, at least some consideration should be given to such authorities in local government.
It is absolutely essential that local government be able to plan ahead and to plan for the work it has to do in the provision of amenities and in looking after the needs of citizens. In my opinion, local government, dollar for dollar provides better value for the community than the other 2 arms of government do. So it is a false economy to limit the finances that are available to local government. I make this plea today that the Government give very serious consideration to the ever- worsening position of local government financing and take some concrete steps- apart from the Regional Employment Development Scheme- which will allow local government to plan ahead and to receive the finances that it deserves to fulfil its reponsibility.
– I respond first of all to my colleague, the honourable member for Maranoa (Mr Corbett), who is occasionally right but so often wrong. I would say this on the question of local government: The advent of this Government in 1972 revolutionised the situation of local government authorities in Australia. For so many of them it has been a process of going from rags to riches. For the first time they have access to the resources of the Australian Government. But against what obstruction has this taken place? The Australian Government conducted a referendum campaign in which it invited the people of Australia to allow it to deal directly with local government and to work out programs with it. What was the action of this latter day advocate of local government support? He opposed the referendum. It was not carried in his electorate. All the resources of non-Labor politics, including those of the National Country Party, were mobilised to defeat the referendum proposal. Now, we see their representatives in the Parliament weeping as the honourable member for Maranoa was weeping this morning. However, such is the tolerance of this Government and such is its relationship with the people that it proposes to proceed by whatever means it can. I think that I can make this statement on behalf of the Party that I represent: We will not let anybody stand between us and dealing directly with the Australian people. We represent them directly. We will deal with them directly. No matter how obstructive some of the State governments and the members of the Liberal and National Country Parties in this House become, we will be able to get through to the Australian people just the same.
I rose to speak in this debate this morning to answer the statement made by the honourable member for Balaclava (Mr Macphee) about Commonwealth Brickworks (Canberra) Ltd. My colleague, the honourable member for Eden Monaro (Mr Whan), answered most of the points that were raised. But I think that I should place on the record some of the points about the Commonwealth Brickworks so far as the Government is concerned. The Commonwealth Brickworks in Canberra is one of the oldest established institutions in this city. It was established originally in 1912. It grew to real capacity in the 1920s when the construction of Canberra got under way. It is like the cheek of honourable members opposite to suggest that we should withdraw from the field so that other people can carry on with the brickworks at this stage. In fact, the brickworks is one of the foundations of Canberra. Its products have gone into so many of the houses in Canberra. Complaints have been voiced that we will reorganise and re-equip the works. In fact, we are to do this.
Currently, the Works are situated at Yarralumla in a spot that should be used for some other purpose. The brickworks will be transferred to the Crace area and will be re-equipped with the best equipment that can be obtained anywhere in the world. The brickworks will be equipped in what might be called a private enterprise way, that is, with borrowed money. Of course, the Australian Government supports this by guarantee, but in fact it will be done without calling upon the resources of the Australian people through budgetary arrangements. This is creating employment on the outskirts of Melbourne where a firm will be involved in the manufacture of most of the equipment. I give an undertaking that the directors of the Board of the Commonwealth Brickworks (Canberra) Ltd have examined this matter with great responsibility and have produced a program of development which will make the works one of the most modern brickworks in the world. But honourable members opposite suggest that we ought not to do this. They suggest that we ought not to reequip the works and that we ought to go out of business. This represents a threat to employment in this city.
One of the great disadvantages of Canberra is the inability to supply a variety of employment. There is not enough diversity of industry. Part of what diversity there is comes from the Commonwealth Brickworks. Of course, it is also a fundamental requirement of the housing programs of Canberra to have the bricks readily available at a local source. The profitability of the works is not high, no higher than is that of any other brickworks. It is not subsidised by anybody. It operates on its own resources. But because we have the brickworks, we have an effective form of price control. It is probably a much better form of price control than anything that could be implemented through legislation. So while some types of Canberra bricks are more expensive than those from other brickworks , some of them sell at lower prices. But whilst the production remains as it is, with a capacity even on the present site of about 600,000 bricks a week- it is currently producing about 320,000 bricks a week- other brickworks cannot raise their prices. They know that they have to compete. What is wrong with that? I thought that that was a fundamental point of our opponent’s philosophy. But apparently it is not any more.
I would like to thank those people who conduct the Commonwealth Brickworks. The enterprise is a successful marrying of public ownership and private enterprise techniques. There is a board of directors. Mr Arthur Kenyon, a prominent and I hope successful local businessman in this city, is the chairman of the board. Mr Colin Davis, one of the senior officers of my Department, is a member of the board. Professor Olsson from Sydney brings great skills and intelligence to bear in the board’s considerations. We also have on the board a person who is well known to everybody with any real sense of Aus.tralian history. I refer to Mr W. J. O’Reilly of test cricket fame who is a brickmaker from way back. This is a very important Australian Government enterprise. It is an example of what can be done when the resources of the public are married to the techniques that have been developed over the last three or four centuries by private enterprise. I would think that every honourable member and every person in the community would not only be glad and grateful that the brickworks are there but also would encourage its continuance and would encourage others to go and do likewise. The brickworks are an important part of Canberra’s history. I am astonished that anybody outside the works for competitive reasons or inside the works for other reasons should want this activity to be diminished.
I apologise to the honourable member for Balaclava that I was not able to be in the House during most of his speech. But I will obtain the information about profitability, expenditure and the other matters for him and make sure that he receives it. If he cares to place a question on the notice paper, I will see that the information is incorporated in Hanard in reply to that question because there is no reason to be ashamed in any way of the activities of the Commonwealth Brickworks.
-In the few minutes I have available to speak in this grievance day debate I would first like to draw to the attention of the House the comment of the Minister for the Capital Territory (Mr Bryant that he was very concerned about employment in the Australian Capital Territory which could possibly be affected by some action in relation to Commonwealth Brickworks (Canberra) Ltd. I will put the Minister’s mind at rest. I will not talk about the Commonwealth Brickworks. I want to point out that I am very pleased that he is concerned about employment because obviously some of his fellow Ministers are not. I refer to the answer given by the Minister for Housing and Construction (Mr Les Johnson) to a speech I made concerning the supply of pumps for the Googong Dam construction. I raised the matter some months ago when tenders were called for the supply of pumps for this dam. It had come to my notice that there was a chance that the tender would be given to a Russian firm- that is, to an overseas company. At a time of high unemployment levels and with manufacturing industry trying desperately to achieve all the successes it can in obtaining tenders, it somewhat surprised me that this action could even have been considered by a Government. I thought, with due respect to the Minister, that from the replies I received from him to that speech I made in an adjourment debate that he was making some attempt to see that some action would be taken. He was not prepared to admit that outright but I got the impression that he was going to try to achieve something for an Australian firm. I was not, as he claimed, parochial. If he claims that I am parochial and if that means that I am trying to retain business in Australia for Australian manufacturing industries, he can brand me as being parochial. I will be delighted to be called that.
I have been told that the tender has been let to a firm supplying Russian material and Russian parts. It appears to me that the House is unaware that involved in this contract are 5500 man hours of manufacturing work to produce all these parts. I am pleased to see that the Minister for Housing and Construction has entered the House. He will acknowledge that I did advise him that I would talk on this matter. I repeat that 5500 man hours are involved in this project. It seems to me a dreadful waste to allow that amount of work to go to overseas countries.
The Treasurer (Dr J. F. Cairns) has claimed that this Government is the great protector of employees. It is the one that will make sure that there is full employment. I quote from a statement made by the Deputy Prime Minister in March 1973. He made the following promise:
The first responsibility of this Government is to maintain full employment.
That is a joke. He continued:
Nothing will be done that will endanger one job in this country.
I hope that the Minister for Housing and Construction has read that promise by Dr Cairns, who said that not one job in this country would be endangered. The greatest offender in respect of that promise has been Dr Cairns himself. Not very long after making that statement he introduced the 25 per cent across the board tariff cut which put thousands, tens of thousands and hundreds of thousands of men and women in the textile and other industries out of work.
I turn next to the Minister for Labor and Immigration (Mr Clyde Cameron) who perhaps should be called the Minister for unemployment. In January 1972, as spokesman for the Opposition on labour matters, when speaking to about 600 people at an Australian Labor Party meeting he pointed out that thousands of good Australians were unemployed because of deliberate Government policy. At that stage, he was talking about 100 000 persons unemployed. The present Government would think that it had been born again if it could reduce the present level of unemployment to 100 000. I understand that, some time in his rash career, the Minister for Labor and Immigration made the statement that he would resign if unemployment ever exceeded 200 000. Unfortunately for the Government, for Australia and for us, he is still here.
I mentioned that the Deputy Prime Minister made some statements regarding unemployment. Let us look a little further at what he said. In July 1973 he said:
Figures indicate that up to 28 June unemployment is insignificant and is carefully under control.
At that stage unemployment was 180 000 persons. Only some 6 months before that time, he and the shadow Minister for labor, the present Minister for Labor and Immigration, were screaming that any government which faced an unemployment level of 100 000 or 1 10 000 persons should resign as it was not fit to govern a country. The then shadow Minister for labor said:
If you get children of old Australians unable to find work, seeing migrants getting jobs, there could be sociological problems.
I wonder what he has to say on that aspect today?
It appears to me that this socialist Government has not a clue as to what it is supposed to be doing or where it is supposed to be going. On the one hand we have an economic situation in which the level of inflation is absolutely beyond anything the Labor Party ever dreamed it would reach; it has no idea how to control inflation. In 1972, when it tricked the people of this country into putting it into power, the Labor Party made rash statements to the effect that it would reduce the rate of inflation. But inflation has risen four times and the level is going even higher. At that time, the Labor Party also said that 100 000 persons was an unacceptable unemployment level. We had the level of unemployment down to 80 000 persons. The Labor Party said that 100 000 persons would be unacceptable and that unemployment under the former Government would reach 200000 persons. Under Labor’s control the level of unemployment is over 300 000 persons.
The Minister for Labor and Immigration is misleading the people also inasmuch as, through the activities of his RED scheme, monetary assistance is being provided to place many people in jobs which have a temporary base. The fact of life is that these people are basically unemployed as they are not in regular employment. If the 30 000 or 40 000 people receiving assistance through that scheme are added to the current unemployment figures, the number of persons unemployed reaches a mammoth level never before equalled in this country. The Minister for Housing and Construction through his activities, to which I have referred, is denying to Australian workers the right to obtain employment. The Deputy Prime Minister is making rash statements -
-Order! It is now 15 minutes to one o’clock. In accordance with standing order 106, the debate is interrupted. I now put the question:
That grievances be noted.
Question resolved in the affirmative.
Assent to the following Bills reported:
Appropriation Bill (No. 5) 1974-75
Appropriation Bill (No. 6) 1974-75
– I have received a message from the Administrator informing the House that Her Majesty the Queen has assented to the Privy Council (Appeals from the High Court) Bill 1975, which was reserved for Her Majesty’s pleasure.
-I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes. In his remarks on the motor industry this morning, the honourable member for Kingston (Dr Gun) referred to my colleague, the honourable member for Corangamite (Mr Street) as the ‘spokesman on these matters for the Liberal Party’. I inform the honourable member for Kingston that I am the spokesman for the Opposition in this House on manufacturing industry. I state categorically that while my colleague, the honourable member for Corangamite has expressed concern at any further proliferation of motor plants in Australia, the Liberal Party is not against the motor industry in South Australia -
-Order! The honourable member has made his point. I do not want him to go over the debate.
Dr EDWARDS . . . where the major companies in the industry, the GMH and Chrysler organisations, have large installations and the Liberal Party strongly supports the industry.
– Order! The honourable member is taking advantage of the situation. I gave the honourable member the opportunity to make a personal explanation.
– I have finished. That is all I wish to say.
-As ViceChairman of the Joint Committee of Public Accounts, I present the153rd report of the Public Accounts Committee.
Ordered that the report be printed.
-by leave- The153rd report of the Public Accounts Committee is concerned with the Committee’s inquiry into delays by Australian Government departments in occupying leased premises. The inquiry arose from repeated references in annual reports of the Auditor-General to significant amounts of avoidable expenditure being incurred by departments because of these delays. In its inquiry, the Committee took evidence from the Departments of Services and Property, Social Security, Labor, now the Department of Labor and Immigration, Overseas Trade, Transport and Civil Aviation, now the Department of Transport, and the Public Service Board.
The evidence presented to the Committee showed clearly that delays had occurred in the occupation of leased premises which could have been avoided or lessened by a better coordinated effort by the principal departments. The evidence also showed that, at the time of the inquiry, there was a large degree of confusion and disagreement among the principal departments involved and that the procedures then in operation were not capable of coping with demands placed on them either in the normal course of events or when unusual pressures or circumstances arose.
The Committee has recommended that the existing interdepartmental committee comprising the Departments of Services and Property, Housing and Construction, the Treasury and the Public Service Board should as a matter of urgency complete its deliberations on the roles of the principal departments and should produce a set of recommendations covering all aspects of leasing and occupying office accommodation. The Committee has recommended also that where substantial expenditure is involved in the leasing of privately owned office accommodation by the Australian Government on behalf of a department or group of Departments or where changes are planned to existing occupants of already leased premises, an interdepartmental committee should be established immediately comprising representatives from the principal departments, the Public Service Board and the client departments. The Committee has proposed that the interdepartmental committee should carry out certain functions and should be chaired by an officer specifically appointed to coordinate a particular project or projects.
Other recommendations made by the Committee in this report included a proposal that the Department of Services and Property should carry out regular reviews of future accommodation requirements of departments and should sponsor such matters as the fitting out of leased buildings and place all requests for funds for consequential works directly with the Treasury. I commend the report to honourable members.
Bill presented by Dr J. F. Cairns, and read a first time.
The purpose of this Bill and the accompanying Superannuation Act Amendment Bill 1975 and Defence Force Retirement and Death Benefits Bill 1975, which I will introduce shortly, is to give effect to the Government’s decision, announced on 4 December last year, to provide a new superannuation scheme for Australian Government employees. The new scheme will replace the pension scheme and the lump sum provident account under the Superannuation Act 1922-1974 and is to come into operation on 1 July 1975.
The Present Scheme
Superannuation has always been an important condition of service for Australian Government employees. When the present scheme was introduced in 1922 it was seen as a major advance in the superannuation field and the scheme has generally led developments ever since. There is no reason why it should not; indeed the national Government should lead. From the outset the scheme provided such benefits as full pension on invalidity retirement during service, pensions for widows and children on the death of the member and the opportunity to purchase full pension on normal retirement after reaching age 60.
The scheme has undergone many changes since then. The provident account was introduced in 1937 and membership has been progressively widened to enable statutory officials, employees of Australian Government statutory authorities and longer serving temporary employees to contribute under the Act. Benefits have been gradually improved and in recent years provision has been made for the preservation of superannuation rights on entry into or exit from the scheme and noncontributory units have been introduced to give some relief to members faced with very nigh contributions in their later years of service. Provision has also been made for the annual updating of pensions.
The contribution structure of the present units of pension scheme has proved to be its fundamental weakness. Early in a career, contributions may represent only 2 per cent or less of a member’s salary but, in later years, contributions may take 25 per cent and even more of salary if the member seeks to maintain his full contributory entitlement. The contributions system is complex; it complicates administration and requires contributors, particularly those over 40, to make frequent and sometimes difficult decisions involving, on their part, judgments on future trends and events. There is a growing contributor population now exceeding 220 000 and there are frequent changes in salaries with consequential adjustments of superannuation contributions. The result of all this is extreme fluctuations in work loads and, under the complicated arrangements that are inherent in the present scheme, these are producing crisis situations in the Australian Government Retirement Benefits Office and organisations employing large numbers of staff, such as the Post Office.
For many years the pension scheme has provided for most members- so long as they are able to meet the necessary contributions- a pension of about 70 per cent of final salary on retirement at age 60 or later after 20 or more years of contributory service. Of this pension, the Government-financed element is around 50 per cent of final salary and the contributor-financed element 20 per cent. Should the member qualify for and avail himself of non-contributory units, providing he makes the necessary lump sum payment at retirement, he is still able to obtain the Government-financed element of pension of 50 per cent of final salary at age 60 but the . contributor-financed element may be reduced to around 10 per cent of final salary if he has utilised non-contributory units to the fullest extent.
Since July 1973, the Government-financed element of pensions in payment, but not the contributorfinanced element, has been automatically updated annually in accordance with the formula, 1.4 times the increase in the consumer price index or, if it is less, the change in average weekly earnings, that was recommended to the Government by the actuary, Professor A. H. Pollard of Macquarie University. This provision replaced the ad hoc arrangements under which fairly regular increases in pension had been granted from 1961 onwards.
Development of the New Scheme
On 8 May 1973 my predecessor tabled in the House a report by a departmental committee on the present scheme. The report canvassed in considerable detail the problems being experienced with the scheme and, after examining various possibilities, recommended the introduction of a new scheme. Interested parties were invited to comment. As a result, my predecessor made certain changes to the recommended scheme and, on 12 March 1974, tabled his proposals for a new superannuation scheme for Australian Government employees. The Government appointed Mr G. L. Melville, a Sydney actuary, and Professor Pollard to report on these proposals. Their report, tabled on 10 July 1974, resulted in changes that significantly reduced the cost of the scheme finally approved by the Government and announced on 4 December 1974.
The New Scheme Contributions
The overall benefit levels of the new scheme do not vary greatly from those already available under the present pension scheme and perhaps the most important change in the new scheme is in the approach to contributions. A member’s contributions will no longer be designed to purchase a specific annual amount of pension at retirement or a pension element that is a specific percentage of final salary. A new contributor after commencement of the scheme will be required to make a basic contribution of 5 per cent of salary and will, if he so desires, be able to contribute up to a further 5 per cent in supplementary contributions on a voluntary basis. His accumulated contributions, basic and supplementary, will determine the pension, additional to the Government-financed pension, that will be available to him at retirement.
The change in the contribution basis will mean an immediate increase in the contributions presently being paid by more than half the contributors to the present pension scheme although for younger contributors the move to 5 per cent will be in stages. The change will have considerable advantages for younger contributors in the longer term by avoiding the very high contribution levels at later ages that are characteristic of the present scheme. As well, once the introductory stage of the new scheme has passed, the administrative advantages in departments of the simpler contribution arrangements are expected to be significant.
The benefit levels have been developed around those of the present scheme but there are significant changes. Whereas a Governmentfinanced element of pension equal to 50 per cent of final salary is, subject to the payment of the necessary contributions, available to most members under the present scheme on retirement atage 60 or later on completion of 20 years contributory service, a new contributor entering the new scheme will need to complete 30 years contributory service for that pension. But the availability of that pension, if a contributor chooses to retire on reaching age 60, will not be conditional upon his paying higher contributions or a lump sum at retirement. As well, should contributory service to age 60 exceed 30 years, the Governmentfinanced pension will be increased to a maximum of 55 per cent of final salary by one half per cent of salary for each year of contributory service in excess of 30.
Sitting suspended from 1 to 2.15 p.m. (Quorum formed)
– At retirement, the accumulated basic and supplementary contributions of a member will be converted into additional pension not exceeding 20 per cent of salary, any excess contributions being paid in cash, together with a reversionary pension benefit for a spouse. The member will, if he wishes, be able to increase the additional pension by reducing the reversionary pension benefit for his spouse or vice versa. The additional pension and reversionary benefit may also be converted in whole or in part to a lump sum. These flexible arrangements will provide each member at retirement with an opportunity to select benefits that suit his own situation. This is a facility not provided by the present scheme.
The scheme provides comprehensive cover for the death or invalidity retirement of a contributor before age 60 but, unlike the present scheme, death or invalidity retirement of a contributor after age 60 will attract benefits on an age retirement basis only. Provision is made for a partial invalidity pension to be paid when an invalidity pensioner is re-employed on a lower salary and when a contributor’s status and salary is reduced on medical grounds. Spouses’ benefits will be available to a wider range of persons including, under certain conditions, de facto spouses and the spouse of a marriage after retirement. The scheme’, however, places greater emphasis on dependency than does the present scheme. The standard benefit for a spouse will be 67 per cent of the member’s pension compared with the present 62.5 per cent. This improvement will extend to present scheme pensions as will an improvement in children’s pensions.
Persons of lower medical standard on entry who, under the present arrangements, would be required to join the Provident Account, will come under the new scheme as will those members at present contributing to the Provident Account. Benefits from the scheme may be reduced on medical grounds in the event of their death or invalidity retirement before completing 20 years of contributory service.
Updating of Pensions
Subject to the improvements in spouses’ and children’s pensions, pensions already in existence at 30 June 1975 will continue to be paid at the levels provided by the present Act and be updated annually in accordance with the 1.4 times formula I have previously explained. Pensions under the new scheme will be increased annually in accordance with one times the change in the consumer price index but the contributorfinanced element of a pension will not be increased unless the contributor at retirement used his accumulated basic contributions to the fullest extent possible to purchase pension.
Administration of the new scheme, other than investment and management of the Superannuation Fund, will be the responsibility of a Commissioner for Superannuation to be appointed by the Governor-General. Investment and management of the Fund will be the responsibility of an Investment Trust comprised of a full-time chairman and 2 part-time members, all of whom will have appropriate experience in investment or finance. One of the part-time members will be a contributor or pensioner selected after consultation with contributor and pensioner organisations. The investment powers relating to the Fund are being widened to include investments such as shares and real property. Provision is also made for a tribunal to be constituted under regulations to review decisions of the Commissioner.
National Schemes- Offsetting
The Bill makes no provision for offsetting benefits that might become available to pensioners in the future from the prospective national superannuation and national compensation schemes. The question of offsetting and the manner in which it might be done in relation to this and the Government’s other superannuation schemes is something to be dealt with when the details of one or both of the national schemes are finally settled.
Introduction of the new Scheme
Introduction of the new scheme will require a division of the assets of the Superannuation Fund as at 30 June 1975 between pensioners and contributors. The determination of the amount that should be transferred from the Fund to the Government in respect of existing pensionersthe full liability for whose pensions after 1 July will be accepted by the Government- the basic contributions that should be credited to contributors at the commencement of the new scheme and the surplus amounts if any that might be available as supplementary contributions for contributors or for disbursement to pensioners are matters that are covered in general terms only in the Bill and will be dealt with in more detail in regulations. The regulations will also include special provisions in respect of existing contributors.
I mentioned earlier the administrative problems caused by the complex nature of the present superannuation arrangements. Because of these problems the records of the Superannuation Board are substantially in arrears and it will be a considerable time before the division and allocation of the fund as at 30 June 1975 can be completed. Suitable provision will be made in the regulations for interim arrangements that will apply to persons retiring during the period of transition.
Turning now to costs, on the basis of contributor and pensioner data as at 30 June 1972 and using the assumptions adopted by Mr Melville and Professor Pollard in their report to the Government last year, a comparison of capital values of benefits under the present scheme with capital values of benefits under the new scheme shows an overall increase of 13.7 per cent. A significant part of this increase reflects the marked improvement under the new scheme in the position of those existing contributors who, for medical reasons, have been required to be members of the Provident Account. On the other hand, the improvement in benefits overall for existing pension scheme contributors is shown to be 4.8 per cent and for existing pensioners 3.6 per cent. The comparatively small overall increase for existing contributors to the pension scheme illustrates the extent to which improved benefits are offset by the change in the updating formula that will apply to them. Further information is provided in the explanatory memorandum that has been circulated to honourable members.
Notwithstanding the overall increase in benefit levels it is estimated that net expenditure from the Consolidated Revenue Fund in 1975-76 on account of the new scheme will be about $5m less than would be the case if the present scheme were to continue. This reduction reflects the initial impact of the lump sum payments of accumulated contributions into Consolidated Revenue to purchase additional pension.
The Superannuation Act Amendment Bill 1975 amends the Superannuation Act 1922-1974, which will be kept in force in part to provide continuing authority for the payment of existing pensions. It applies to spouses’ and children’s pensions that are payable or may become payable in the future under that act the levels of benefits provided in the new scheme and applies also the wider eligibility provisions of that scheme. The amendment Bill also provides special superannuation arrangements for persons who have transferred or will transfer before 1 July 1975 from State and private employment as a result of the Australian Government’s assuming additional responsibilities.
The Defence Force Retirement and Death Benefits Bill 1975 makes a number of essential machinery amendments to the principal Act to take account of changes being effected by the Superannuation Bill and to ensure that arrangements already in existence continue in force. They deal with persons whose contributions to the superannuation scheme have been deferred on their becoming eligible members of the Defence Force Retirement and Death Benefits scheme, the preservation of rights provisions as they relate to persons transferring from one scheme to the other and, in accordance with past practice, the ex-officio appointment of the Commissioner for Superannuation, in lieu of the President of the Superannuation Board, as
Chairman of the Defence Force Retirement and Death Benefits Authority and of the Defence Force Retirement Benefits Board. The opportunity has been taken also to include in the Bill some formal and miscellaneous amendments, including those arising from the enactment of the Remuneration Tribunals Act 1973-74.
In the last two or three weeks there has been a degree of ill-informed, inaccurate and misleading comment on the new scheme. It need not have been ill-informed; the scheme has been developed under the public gaze and details have been freely available since last December. It is neither possible nor desirable for me to indulge now in detailed rebuttal of some of what has been written. I have already taken action to rebut the worst of it and, for the rest, the facts about the present and new schemes speak for themselves. But there are some brief general comments that I want to make.
The Government is putting forward this scheme in its role as a responsible employer, concerned for the well-being of its employees not only during their working lives but also in their years of retirement. The scheme is not ungenerous, neither is the present scheme; the new scheme will take its place amongst the leading superannuation schemes in Australia, but it will still not lead the field. There is, for reasons that have been well documented, an urgent need to replace the present scheme. The outside experts, Mr Melville and Professor Pollard, from whom the Government obtained independent advice, agreed that it should be replaced. They commended the design of the new scheme and supported the basic approach as an answer to the complex problem of superannuation for Australian Government employees. The Government considers superannuation to be a right of all employees. The level of superannuation on a person’s retirement should be related to the kind of standard he or she has been able to establish during his or her working life. The scheme provided by this Bill should achieve that objective. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
Bill presented by Dr J. F. Cairns, and read a first time.
As foreshadowed in my second reading speech on the Superannuation Bill 1975, I now introduce the Superannuation Act Amendment Bill 1975 that makes certain necessary changes to the Superannuation Act 1922-1974 consequent upon the introduction of the new superannuation scheme for Australian Government employees and certain other changes. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
Bill presented by Dr J. F. Cairns, and read a first time.
– I move:
As foreshadowed in my second reading speech on the Superannuation Bill 1975, I now introduce the Defence Force Retirement and Death Benefits Bill 1975 that makes certain necessary changes to the Defence Force Retirement and Death Benefits Act 1973-1974 consequent upon the introduction of the new superannuation scheme for Australian Government employees and certain other changes. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
Bill presented by Mr Barnard, and read a first time.
The purpose of this Bill is to establish the office of Defence Force Ombudsman and to define his powers and functions. Honourable members will recall that it was announced in the policy speech of 1972 that the Labor Government would create an office of military ombudsman. On 6 March 1975, my colleague, the Attorney-General (Mr Enderby), introduced the Ombudsman Bill 1975 to establish the office of the Australian Ombudsman and, as may be expected, the provisions contained in the Defence Force Ombudsman Bill follow very closely those in the Ombudsman Bill. However, there are some significant differences between the 2 Bills and I wish to confine my remarks largely to explaining these differences.
The function of the Defence Force Ombudsman will be to investigate complaints made by members of the defence force, former members of the defence force or their dependants with regard to any action in relation to a matter of administration which arises from the fact that a person is serving or has served in the defence force. The Defence Force Ombudsman is also given power to investigate any of these actions even though a specific complaint has not been made to him. The jurisdiction of the Defence Force Ombudsman covers not only actions which may be taken by the defence force or the Department of Defence but those which may be taken by other departments and authorities. Thus the jurisdiction of the Defence Force Ombudsman will encompass a very wide range of matters affecting a serving member, an exmember, or their dependants.
Because there are adequate review and appeal provisions already in existence, the Defence Force Ombudsman will not be authorised to investigate matters arising out of disciplinary action taken against a member of the defence force. While it is the intention that complaints arising out of a person’s service in the defence force will come within the jurisdiction of the Defence Force Ombudsman, some matters will no doubt arise which are common to all Government employees. Provision has therefore been included in the Bill for the Defence Force Ombudsman to refer matters to the Australian Ombudsman for investigation if the Defence Force Ombudsman considers that they could be more effectively investigated by that office and if the Australian Ombudsman agrees.
Honourable members will appreciate that the relationship between those in command and those under command in a disciplinary force such as the defence force is a very important and particular relationship. Because of this, provision has been made in the Bill requiring a serving member of the defence force to attempt to have his complaint dealt with by the Services authorities before submitting the matter to the Defence Force Ombudsman. The Defence Force Ombudsman is, however, given a discretion to deal with a matter which has not been so submitted if he considers that there are special circumstances justifying the member from refraining from so submitting bis complaint. A further protection for the serviceman is a provision permitting a matter to be referred to the Defence Force Ombudsman if the member of the defence force has not received an answer to his complaint within 28 days of submitting it to the Service authorities or if the member is not satisfied with the decision given. Provision has been made in the Bill for the Defence Force Ombudsman to report to both the principal officer of the defence force and the principal officer of the department or authority concerned in the matter that he intends to investigate. This provision will ensure that the defence force is aware of matters affecting its members. The powers of the Defence Force Obudsman in connection with his investigation of a matter are similar to those contained in the Ombudsman Bill. That is, he will be able to require persons to give information regarding the matter under investigation, and he will be able to make the same type of reports to the authorities concerned, to the Prime Minister and to Parliament as the Australian Ombudsman. In addition the machinery provisions relating to the appointment of the Defence Force Ombudsman and his staff are the same as those of the Australian Ombudsman. Honourable members will recall that in November 1 973 the Prime Minister (Mr Whitiam) announced that it was proposed that Mr D. O. Hay, the former Secretary to the Department of External Territories, would be appointed as Defence Force Ombudsman when the necessary legislation had been passed. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
– Pursuant to subsection 7 (7) of the Remuneration Tribunals Act 1973-74 I table a determination by the Remuneration Tribunal in relation to the position of Chairman (full-time) of the Australian Shipping Commission.
Bill presented by Mr Lionel Bowen, and read a first time.
– I move:
In 1973 the Prime Minister (Mr Whitlam) announced Government approval of certain improvements in the long service conditions of Australian Government staff. Some of these were implemented in December 1973. The remainder were deferred pending examination by Aus.tralian and State Ministers of a possible national long service leave scheme. Ministers have met on a number of occasions, but the matter is a complex one and no finality has yet been reached. This Bill covers the deferred changes which would not prejudice the possible development of a national long service leave scheme. The changes include those agreed to by the previous Government before the 1972 elections, together with other changes initiated by this Government. As indicated by the Prime Minister when he announced the Government approvals, the changes will be effective from 1 January 1973.
Passage of the Bill will mean that a single Act will cover the long service leave conditions of permanent and temporary staff of the Australian Public Service and of Australian Government authorities, thus providing a uniform code. For this reason, the separate long service leave provisions for permanent officers under the Public Service Act are being repealed. Permanent officers will be covered by the general legislation. I will now move on to explain the more significant provisions of the Bill. In clause 1 5 the Bill provides for an increased rate of long service leave accrual from three-tenths of one month a year to 3 months for the first 10 years service and one-half month a year thereafter. Service prior to 1 January 1973 will attract the existing rate of three-tenths of one month per year of service but such service will count towards the 10 years service necessary to qualify for the higher accrual rate of one-half month per year. This is the first occasion on which a Government has approved an increase in the rate of accrual since the inception of the legislation governing long service leave for Australian public servants in the Commonwealth Public Service Act 1902.
Currently part-time Australian Government staff are not eligible for long service leave and part-time service is not recognised for long service leave purposes. In many cases, part-time employees are employed on a regular basis. The Government does not consider that this discrimination can be justified. Accordingly the Bill gives long service leave benefits to part-time employees, and provides for recognition of prior part-time service in calculating long service leave entitlements. Clause 16 of the Bill permits prorata payment in lieu of long service leave after one year’s service in lieu of the existing 4 years on cessation due to age retirement, ill-health, retrenchment, and death. It has been decided not to proceed with the provision announced on 3 April 1973 for payment in lieu of long service leave on cessation for any reason after 5 years service. It would be in advance of legislation in the States and could be prejudicial to the possible development of a national long service leave scheme. The legislation has long permitted recognition of prior service with authorities of a State. Service with local governing bodies, for example, shires, municipalities and councils, has been excluded for temporary employees but included in some circumstances for officers. To achieve uniformity, the Bill provides for general recognition of service with local governing bodies.
In December 1973 the legislation was amended to eliminate all long service leave penalties associated with misconduct or dismissal. As an extension of that amendment, the Bill provides for long service leave to be a right, but with the timing and length of grants of leave continuing to be determined on the basis of staffing needs. Consistent with this, clause 20 of the Bill provides for payment to the estate on death where no payment is made to the dependants of an officer or employee. Current legislation permits payment on death only to dependants. The proposed amendments represent a full review of the long service leave conditions of Australian Government staff. They are the most extensive single set of amendments in the history of the legislation. They are aimed at achieving equitable treatment for staff of the Australian Government. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
Bill presented by Mr Lionel Bowen, and read a first time.
– I move:
That the Bill be now read a second time.
In my second reading speech on the Long Service Leave (Government Employees) Bill 1975 I mentioned that the Public Service Act long service leave provisions were to be repealed and permanent officers in the Australian Public Service were to be covered by the Long Service
Leave (Government Employees) Bill. The Public Service Bill 1975 repeals the Public Service Act provisions for officers.
Clause 4 of the Bill provides for payment in lieu of recreation leave to be made to the estate of a deceased officer where no payment is made to dependants. This is consistent with similar long service leave provisions in the Long Service Leave (Government Employees) Bill. There are some other minor amendments of a consequential nature arising from the proposed passage of the Long Service Leave (Government Employees) Bill. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
Bill presented by Mr Lionel Bowen, and read a first time.
– I move:
That the Bill be now read a second time.
The purpose of the Bill is to provide for the affairs of the Housing Loans Insurance Corporation to be administered by the Australian Government Insurance Corporation.
The Housing Loans Insurance Corporation, or HLIC as it is commonly called, was established by the previous Government in 1965 to assist people to obtain homes at reasonable rates of interest and on low deposit. It does this by insuring lenders against the risk of loss on housing loans of up to 95 per cent of the value of the dwelling. With this insurance, lenders can make low deposit housing loans with the same confidence as loans made to borrowers providing substantial equities.
Since its establishment, the Housing Loans Insurance Corporation has assisted 168 000 families obtain homes by insuring loans totalling $2,040m. In 1973-74, 47 per cent of the loans it insured were made to people whose incomes were equivalent to or less than average weekly male earnings. In June 1974, the Corporation’s assets totalled $ 15.5m, mainly representing a general reserve for future and contingent liabilities of $7m, and premium income applicable to future years of $8m. Its staff of 37 serves clients through offices in each State capital and Launceston.
The effect of this Bill is to preserve the Housing Loans Insurance Corporation as a separate corporate entity within the structure of the Aus.tralian Government Insurance Corporation. It has operated on a non-profit basis since its inception. This will be to the continuing benefit of persons seeking to secure finance for homes in adequate amounts and at reasonable rates of interest. Since its establishment, the Corporation had reduced the general body of its premium rates 3 times and they now stand among the lowest in the world within the field of mortgage loan insurance.
I now turn to the main concepts to which the Bill gives effect. The provisions of the principal Act relating to the constitution of the managing Board are repealed and the Australian Government Insurance Corporation Board will be charged with the management of the business of the Corporation. Provision is made for the existing staff of the Housing Loans Insurance Corporation to be employed by the Australian Government Insurance Corporation on terms and conditions of employment not less favourable than those which they presently enjoy. As a consequence, the Bill repeals the specific provision for the engagement of staff under the principal Act. The Bill requires the Board of the Australian Government Insurance Corporation to keep separate books of account and records of the activities of the Housing Loans Insurance Corporation. These will be subject to audit by the AuditorGeneral. The existing financial provisions in the principal Act are therefore repealed.
The ultimate effect of the Bill will be that, while the Board of the Housing Loans Insurance Corporation will disappear and while it will not have its own separate staff, the separate corporate personality of the Corporation will be retained, even though it will be integrated for administrative and economic convenience into the structure of the Australian Government Insurance Corporation for day to day management.
The special provisions of the principal Act which have made the Housing Loans Insurance Corporation an effective instrument in our national housing policy will be retained.
I feel it would be inappropriate to allow this occasion to pass without placing on record the Government’s deep appreciation of the service which has been rendered to the community by those persons who have served on the Board of the Housing Loans Insurance Corporation and are serving on the Board at present, and I trust that similar opportunities for them to serve
Australia will be found in the future. To this we should add the recognition of the contribution of the staff of the Corporation whose rights, as I have pointed out, will be protected under this Bill. I commend the Bill to the House.
Debate (on motion by Mr Adermann) adjourned.
1 ) That, unless otherwise ordered-
the time allowed for the cognate debate on clause 48 shall not exceed 5 hours. At the conclusion of that time, or such earlier time as the debate may conclude, the Chair shall put, without further debate, questions on any proposed amendments to the clause which have been circulated by any Members and which are capable of being put and any other questions necessary to conclude consideration of the clause; and
That the foregoing provisions of this resolution have effect notwithstanding anything contained in the standing orders.
The Family Law Bill has crested great interest throughout the community and in both Houses of the Parliament. Before proposing the reasons for this motion, therefore, perhaps I should indicate the history of the legislation to date. On 17 July 1974 leave was granted to introduce the Bill in the Senate and the second reading was moved on 1 August 1974.
On 16 August 1974 it was referred by the Senate to the Legislation and General Purpose Standing Committee on Constitutional and Legal Affairs.
On 28 November 1974, the House of Representatives received a message from the Senate transmitting the Bill for concurrence and the second reading was moved and adjourned until 1 1 February 1975.
Subsequently, on 9 April 1975 the second reading of the Bill was carried.
I have had these details of the progress of the Bill through both Houses compiled by the Clerk of the House and, for the benefit of the House, I seek leave to have them incorporated in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
– In the Senate the second reading was debated for 12 hours 20 minutes and there were 28 speakers. The Committee stages in the Senate occupied 15 hours 33 minutes and the third reading debate took 28 minutes, a total of 28 hours and 21 minutes for the Senate discussion, excluding the deliberations of the Committee to which it was referred. In the House of Representatives the second reading debate occupied 17 hours 24 minutes. A total of 63 speakers participated in the second reading debate. A total of 1 7 hours 50 minutes in all was involved.
To summarise, in the Senate and the House of Representatives the Bill has been debated for a total period of 46 hours 1 1 minutes, made up of 29 hours 44 minutes for the second reading debates, 1 5 hours 34 minutes for Committee stages, 28 minutes for the third reading, and a total of 9 1 speakers have participated to date. It will be apparent therefore that the legislation has been under public and parliamentary scrutiny for a very lengthy period. In this time full opportunity has been given to the public and to members and senators to make known their attitude to the legislation.
In view of the nature of the legislation it is important, firstly, that honourable members be given reasonable opportunity to present their point of view and to suggest, if necessary, how the legislation might be improved and, secondly, for the Bill to be debated and decided on as soon as possible. This, of course, presents in this House very practical problems. Under the Standing Orders of the House, in Committee honourable members may speak for 2 periods of 10 minutes each on each question. This means that if every honourable member or the vast majority of them exercises this right, which is quite possible, it would be reasonable to assume that the legislation will take a very long time to be debated even with extended and constant sittings. It is also true to say- and I make no suggestion of it being done- that if some honourable members so desire, the Bill could be delayed indefinitely under present Standing Orders. I have expressed the view on other legislation that our Standing Orders are ill-equipped in this age to provide the time necessary for extensive debates of this kind. That is another matter, however, but it is one that the Parliament must certainly look at with a view to updating and streamlining the procedures whereby legislation is handled in this House and in the Committee stages, if the full debates that are required on legislation of this kind are to be given effect.
The legislation is a Government Bill but members are, naturally, free to vote as their conscience dictates. The Government believes, however, that if the legislation is to be fully debated in this House certain changes in regard to the length of speeches must be made. That is the reason for the proposals outlined in the motion. This is more apparent when it is considered that there are 123 clauses in the Bill and that 150 amendments have been circulated already by members on both sides of the Parliament.
I assure the House that there is no desire on the part of the Government to curtail debate on the Bill. Already in this House 63 speakers have spoken on the second reading of the Bill, dealing in most cases extensively with clause 48. The proposal that I have outlined will provide for about another 60 speakers and will not prevent the voting on the proposed amendments. The limitation of 5 hours on clause 48 alone appears to be reasonable in all the circumstances.
It will be noticed that this limitation of time for debate refers only to clause 48. Other clauses will be proceeded with in the normal way except for the limitation of the speaker’s time. The decision to postpone standing order 107 relating to urgency motions and general business has no ulterior motive. Its only purpose is to expedite discussion on this important Bill which it is believed, by honourable members on both sides of the House and by many sections of the community, should be brought to finality without delay.
I suggest in all sincerity to honourable members on all sides of the Parliament that they should support this motion and give the proposal a go. I believe that if all honourable members cooperate there should be no difficulty in having adequate debate and full expression of opinion on clause 48 and other sections of the Bill. I may remind the House that during the debate on the Medical Practice Classification Bill 1973 and during the Joint Sitting of the Parliament, somewhat similar arrangements applied. The cooperation of members on both sides of the House on the issues involved on those occasions allowed for adequate debate and brought great credit on themselves and the institution of Parliament.
I hope that similar co-operation on this important and far-reaching Bill, which is being debated on non-party lines, will also bring similar co-operation and credit to the Parliament and its members and, at the same time, allow the Bill to be disposed of in the interests of all concerned at the earliest possible date.
– I am tempted to call for a quorum but I shall not do so. The reason I feel tempted is that I would like honourable members to hear my opening remarks on the motion moved by the Leader of the House (Mr Daly). I believe this motion needs to be considered in the same way as the Family Law Bill itself. True it is a procedural motion, but it is a procedural motion that cuts to the quick the legislation that it is designed to contain. It is a piece of legislation which, to my mind, is of tremendous importance to the community and to the nation. I have been fascinated to hear the Leader of the House refer to the statistics of the time taken for debate. I point out to him that I would hope that the same consideration will be given to other matters of equal implication to the community. Unfortunately of course, that is not so.
As the Leader of the House said, 91 speakers to date have expressed a point of view on this important legislation in the 2 Houses of Parliament. He might recall that there are 127 members in this chamber and 60 members in the other place, so less than half the members of the Australian Parliament to date have had any opportunity to talk on the legislation. There are still 96 members who have not spoken on it. It is in that general context that I think we need to consider the motion which has been moved by the Leader of the House and which is designed to restrict debate and not to provide or facilitate an opportunity for debate.
The Opposition has no objection to paragraph ( 1 ) (a) (ii) which suggests that we should initiate debate on clause 48 of the Family Law Bill. We see that as being quite proper, very reasonable and, indeed, most desirable in the consideration of this legislation. My remarks are not directed to that part of the motion. Indeed, were that part of the motion to be submitted independently, we would support it. Let me say to the House that we are completely in accord with the idea of initiating debate on the Family Law Bill at clause 48 which is, after all, the core in a consideration of the legislation and indicates the nature of the changes which the Family Law Bill itself proposes.
However, if one moves to other parts of the motion one will see that it contains quite fundamental things to which the Opposition must express its opposition. I should like to refer firstly to the suggestion that each member speak for only 5 minutes on each clause on only one occasion. This is the first time, so far as my research has been able to determine, that in the Australian Parliament, the House of Commons or in the
American Houses of Parliament a contribution by members during a debate has been restricted to that period of time. The Leader of the House is creating a precedent- a precedent of denying the right of speech and the opportunity for members to speak. Not even half the members of this Parliament have had an opportunity to speak to the Family Law Bill. So much for the concept of open government. So much for the concept of adequate opportunity for consideration of legislation. Five minutes is inadequate for a member who feels deeply and sincerely on many of the matters in this Bill to express adequately his arguments for or against them.
A member does not have to speak for the full period granted to him. The period set down is the maximum. I would submit that it is quite within a member’s prerogative to use less than that period. Indeed, thanks to the winning ways sometimes exercised by the Leader of the House, on many occasions members on both sides have succumbed to his wishes and have used less than half the maximum period of time allotted to them. There is no reason why that cannot happen in respect of the Family Law Bill. Why prescribe a maximum speaking limit of 5 minutes? I believe that it is a disgrace to this institution and its members. If members wish to speak for up to 10 minutes- after all, 10 minutes is not longthey should be given the opportunity to do so. Some members in this place are not known for their brevity, but at least within a 10 minute period those members would have some chance to express their attitudes to and thoughts on matters of such tremendous substance. I regard that proposed change in the motion moved by the Leader of the House as totally objectionable. I accept the principle that a member should speak only once. But I think that the 5 minute limit is really quite objectionable. It is most regrettable that members are not going to be given an opportunity to develop their arguments.
I refer as an example to clause 48 which is a tremendously vital clause in the Bill. Even to recite the words contained in clause 48 would take more than two of those 5 minutes. If one wished to amend clause 48- the Leader of the House has said that there are 153 amendments to the whole Bill- one would be in a position where one would not be able to read through the amendments. What nonsense it is. In fact, once again the Leader of the House is making complete nonsense of the proceedings of the Parliament. I believe it is most regrettable that a 5- minute restraint should be imposed.
Secondly, there is a problem in relation to paragraph ( 1) (a) (iii) in which it is stated that the time allotted for the cognate debate shall not exceed 5 hours. We do not see that, in itself, as being objectionable, but we think it is most unfortunate that more time should not be allowed than that proposed in sub-paragraph (ii). If the Minister at the table feels that the debate has gone long enough he can cut out the debate in the normal fashion- by the gag- at the time he feels appropriate. After all, that is the way by which the Government can ensure that legislation is not permanently frustrated.
The Opposition sees sub-paragraph (hi) as the way by which the Leader of the House is seeking to overcome the frustration that he felt by the defeat he had in Caucus when he first suggested that the Parliament meet on Monday. There is nothing fundamentally wrong with allowing a 5-hour debate on clause 48. I think 5 hours is probably more than enough, providing the Government allows individual members to speak for the period of time that they wish and certainly up to the 10 minute period. So we object to sub-paragraph (hi) and see it as a device used by the Minister to avoid his embarrassment if he were to use the gag. Indeed I think it is because he does not know whether his own members would follow him that he thought he had better propose some form of a time limit. He thinks that in this way he will be able to avoid the embarrassment that he would naturally suffer if his own members were not to support him. We understand his embarrassment. We understand that he cannot really control the ranks of the Party behind him. But we do not think he ought to take it out on us by proposing a motion in this form in order to hide his own embarrassment. We accept the 5-hour constraint. We do not believe that the limitation to 5 minutes is valid; we think it would be far better if the speaking period were 10 minutes.
I turn now to sub-paragraph (b) of the motion. I am delighted that the former Speaker is in the House. He has upheld the principles of the Standing Orders and the general traditions of this Parliament. It is most unfortunate that for the first time in the history of this Parliament, so far as we can find, standing order 107 is to be suspended. All the members of this Parliament need to recognise what this means. Standing order 107 provides for the discussion of matters of public importance. It is difficult for members of the Opposition or back bench members of the Parliament to canvass issues which are of concern to them. The Leader of the House will say: ‘Oh, but you have an adjournment debate’. An adjournment debate is not broadcast. An adjournment debate is a restricted debating opportunity. Without wishing to forecast future debate in this chamber on a matter that is on the notice paper, let me say that there is a suggestion from the Leader of the House that some restriction be placed on the time for which honourable members may speak even in the adjournment debate. That is the next of the chapters of the constraint of opportunities for debate by members of this Parliament. Standing order 107 provides an opportunity for a member of this place to propose to you, Mr Speaker, that a definite matter of public importance be submitted to the House for discussion.
This Leader of the House, this great advocate of democracy, proposes to suspend the opportunity for members of this chamber to talk on matters of public importance until the Family Law Bill has been disposed of. It would not have been our intention to raise a matter of public importance on Monday. We, too, have gone along with the idea that, this being a non-party measure, it would not be appropriate for us unduly to introduce matters of public importance if that would preclude debate on the measure. But to deny the opportunity to raise a matter of public importance until the Family Law Bill has been disposed of is absolute nonsense. It might be reasonable to dispense with this opportunity on Monday; but the honourable gentleman is saying: ‘If we cannot contain our own members and if we cannot get the vote through, we are dashed if we are going to allow the members of the Opposition to raise any matters that are of importance to the nation until such time as I have things within my own Party in control again’.
We think it is important that there be adequate opportunities for debate on the Family Law Bill. We believe that the measure could appropriately come forward next Monday as the Government has proposed. We concede that perhaps there should be some changes in the Standing Orders, in the order of debate. We would accept that members should speak only once in the Committee stage. Reluctantly we would even accept the 5-hour constraint. But to suggest that there should be no further discussion of matters of public importance until the Family Law Bill has been disposed of and to suggest that only 5 minutes be allowed for a member to discuss matters in the Committee stage is to deny members of this Parliament the opportunity adequately to exercise their responsibilities.
The other point that emerges from subparagraph (b) of the motion is that it is proposed that Government Business shall take precedence over General Business on each sitting day until the Family Law Bill has been disposed of. So, not only will members of the Opposition be denied the opportunity to discuss matters of public importance, but the motion will mean that if the Family Law Bill is not disposed of by next Thursday there goes General Business day. Those of us in the Opposition and those back benchers on the Government side who wish to canvas and to raise matters in a manner legitimately provided for under our Standing Orders- there are too few opportunities for private members- are to be denied that opportunity. Until the Family Law Bill has been disposed of, Government Business is to take precedence on Thursday mornings.
I see this motion of the Leader of the House as a complete denial of the rights of individual parliamentarians. It is most regrettable that because the Leader of the House has been rolled in Caucus he finds it necessary in some way to try to get his own back on us. I see it as essential that a matter of this kind, relating to legislation which will be given a free vote, also be given a free vote. I think that no more than half a dozen members of the Labor Party are in the House, but that is about par for the course. I wish members of the Labor Party would accept the proposition that a free vote should be given on this procedural motion also. I think it is quite important in respect of legislation on which 153 amendments have already been advised to the Parliament, which is of tremendous importance to this nation and which covers a matter of fundamental importance to the country- the whole concept of the Australian family- that there should be an adequate opportunity for debate on it. The Leader of the House said that there are 123 clauses in the Bill. That is so much more reason for adequate debate. But the debate is to be frustrated because of variations of the Standing Orders just to meet the convenience of the man who for the time being is the Leader of the House.
Because there are so many matters of objectionparticularly the 5-minute constraint, the elimination of discussions of matters of public importance and the giving of precedence to Government Business until the Family Law Bill has been disposed of- the Opposition intends to vote against this motion. We support the proposal contained in paragraph (2), which refers to the precedence to be given to debate on clause 48 of the Bill. We do not object very strongly to the 5-hour constraint for debate on that clause. But we regard the other measures within this motion as just another example of the Government denying members of the Opposition and back bench members on the Government side of the
Parliament an adequate and fair opportunity to canvass matters which are of importance to their electorates and to the nation as a whole.
-During his speech the Deputy Leader of the National Country Party (Mr Sinclair) referred to a motion relating to the adjournment debate. I think it would be unfair if I allowed that comment to pass without pointing out that the motion is a recommendation of the Standing Orders Committee, which is a committee representative of all parties represented in this Parliament. The motion stands in the name of the Leader of the House (Mr Daly) because it is not possible for me, or the previous Speaker, as Chairman of the Standing Orders Committee to move resolutions in this House. I also point out that the Leader of the House was not present at the meeting of the Committee when the decision was taken.
– With your leave, Mr Speaker, I point out that I was not present either; neither did I receive a notice of the meeting, although I am a member of the Standing Orders Committee.
– The honourable member was not a member of the Standing Orders Committee at the time the motion was discussed, so I would not have expected him to get a notice. The Leader of the National Country Party (Mr Anthony) was a member of the Committee at that time.
– I shall address myself for only a few moments to one of the points made by the Deputy Leader of the National Country Party and honourable member for New England (Mr Sinclair), namely, the 5-minute rule concerning the proposals for amendments. This rule will make proper discussion utterly impossible. I remind the Deputy Leader of the National Country Party that, as far as I can see, there are only 150 proposed amendments. I thought he said that there were 153.
– I was quoting the Leader of the House.
-I see. If one looks at the proposed amendments one will see that it would be impossible to read the substance of some of them within the 5 minutes proposed. For example, one of the multitude of amendments proposed by the honourable member for Mackellar (Mr Wentworth), new clause 94A., would take 5 minutes merely to read without proposing any arguments in respect of it. That applies to many of the amendments that have been proposed. This problem will not apply to clause 48, as the Leader of the House has proposed that 5 hours of debate be allowed on that clause; but significant amendments, of which there are a great number, will be impossible to argue within the period allowed.
Mr Speaker, I raise something which will concern your own administration of the House during the debate on the Family Law Bill. Special arrangements will have to be made because of the very fact that 150 amendments have been proposed. But, as many amendments have been proposed to the same clause- I see some clauses in relation to which 3 or 4 amendments are proposed- I ask for your guidance Mr Speaker, as to whether standing order 176 will apply? It is the one which deals with the framing of amendments in the way in which they are framed in this House, which is a rather negative way compared with the way in which amendments are framed in the other place. Standing order 1 76 states:
When the proposed amendment is to omit certain words in order to insert or add other words, the Speaker shall put a question ‘That the words proposed to be omitted stand part of the question’ . . .
Once that is resolved in the affirmative, further amendments -
-Order! I shall dispose of your question now. Standing order 178 provides that an alternative question may be put. The question is a matter for the Chairman of Committees, not myself. He will be completely in charge of the debate.
-Thank you, Mr Speaker. I was hoping to bring to the attention of the House the suggestion that during the debate or even before the debate some arrangements be made to determine whether standing order 178 will apply. It would appear to be far more sensible in the circumstances if it were to apply.
– Let me interrupt the honourable member. We have had considerable discussions on how the questions will be put. They will be put in a manner which does not disadvantage the mover.
-Thank you, Mr Speaker. I am rather assured by those remarks. There is one further matter that deserves to be considered and it is in relation to the second part of the motion moved by the Leader of the House (Mr Daly). He pi oposed that clauses 1 to 47 be postponed until clause 48 is dealt with. One of the proposed amendments to the Bill is clause 47a. Whether it is accepted or rejected, clause 47a will affect very pertinently the attitude to clause 48. I do not think that this is sufficient reason to oppose the motion moved by the Leader of the House, but unless clause 47A is considered in relation to clause 48 a decision could be made which would not be made in view of all the circumstances which would intimately affect the carriage of clause 48 in its present form or in an amended form. I hope that when the time comes that matter also will be considered.
I reaffirm my first proposition, which stands and which ought to stand. On reading through the amendments one realises that it would be utterly impossible to consider many of them within a time span of 5 minutes. Many of the amendments contain 200 or 250 words. Some of them contain even 300 words. To run through 250 or more words of an amendment, to ascribe a meaning to them and then to argue on them within a space of 5 minutes would do a very grave injustice to the Bill. Above all, it would prevent any satisfactory exploration of minds and exercise of judgments by honourable members on this measure. So I ask the Leader of the House to consider very carefully that part of the proposition put forward by the Deputy Leader of the National Country Party which is directed to the 5-minute rule.
– Let me say at the outset that I regret that the honourable member for New England (Mr Sinclair) has turned this debate into a political debate. After all, this is a non-political question. It is a Government Bill, not a private member’s Bill, but there is to be a free vote on it. On matters such as abortion reform and on other matters of a social nature it has been the practice of the Government to allow a free vote, but so that the votes may be taken procedures have been laid down and endorsed on party lines. There is nothing unreasonable about that. Let me tell the honourable member that the Government does not desire to restrict debate on this Bill. When all is said and done, nearly 50 hours have been devoted to it, as honourable members know. I do not doubt that every honourable member who wanted to speak at great length on clause 48 of the Bill did so at the second reading stage when no gag was applied. Restriction of speaking time on this issue was a matter for voluntary individual decision. So despite what the Deputy Leader of the National Country Party of Australia has said, there has been no restriction on the right of honourable members in this place to say their piece.
It is true that the Government intends to suspend standing order 107 because it believes that this is a measure of great importance and one that should receive precedence at this stage. I understand from honourable members from all sides of the Parliament that there is a terrific public clamour for this Bill to be settled one way or the other. It is all right for the honourable member for New England to say that no matter of public importance will be raised, but I do not think that he has much control over the honourable member for Mackellar (Mr Wentworth) and others who might rise. I understand that honourable members on that side of the Parliament are not tied to the party line and can do as they like. The honourable member for New England spoke of my being rolled in Caucus. That is better than being rolled in the Liberal caucus. There your head goes too. I, however, am still around.
I do not want to frighten honourable members but I love this place, and Monday sittings do not worry me in the slightest. In fact I am one who will work a 7-day week any tick of the clock and enjoy every minute of it. So very shortly when we are here at 11 o’clock on Friday night honourable members will know why I am the only one laughing. The Deputy Leader of the National Country Party said that I was trying to curtail debate on the adjournment motion. I was not present at the meeting of the Standing Orders Committee when these changes were discussed but I know that a unanimous decision was made on this matter and it was supported by, amongst others, the Leader of the National Country Party (Mr Anthony). All I can suggest is that the honourable member have a chat with him occasionally so that he can bring him up to date. We do not like to see disunity on these issues among honourable members opposite.
It is interesting to note the reformation of the honourable member for New England. In all the time he was on this side of the Parliament his Government never brought on a business day. Adjournment debates were held at 2 o’clock or 3 o’clock in the morning when the previous Government got around to them- once every Pancake Day. No Government ever subjugated an Opposition more than the one of which the honourable member was a senior Minister. As to the proposal to suspend standing order107I can only say that this proves the old axiom that there always has to be a first time. On this occasion it is done with the best of intentions. No matter what charges may be levelled by honourable members opposite in respect of the reasons for this, it is to give every honourable member who wants it the opportunity to speak on this Bill. Sixty more honourable members will be able to speak on this measure. Quite frankly, if honourable members cannot make their position clear in 5 minutes they will not be much more impressive over the next 5 minutes. I will go so far as to say that every honourable member who speaks on this clause will have spoken extensively on the Bill previously. Sixty members will be allowed to speak on it. That will bring the number up to considerably in excess of the number I mentioned earlier.
This Bill has been before a Senate Committee. It has been debated at length in the Senate. It has had a lengthy debate here. There is no reason for saying that there has not been adequate discussion. I will go so far as to say that practically every honourable member of this Parliament now knows how he is going to vote on the amendments and everything else. But that does not stop honourable members from having their say if they so desire. To try to hold the matter up and allow honourable members to speak for 10 minutes each- the Deputy Leader of the National Country Party said that he did not disagree with a limitation of 5 hours- would merely reduce the number of speakers. The Government is treating this Bill as an urgent Bill. The public requires a decision. Members of the Parliament require a decision. No doubt the Senate desires to consider any amendments that may be brought forward. I think that every fair-minded member of this Parliament will realise the intentions behind the motion- to bring this Bill forward, to debate it, vote on it and reach a decision at the earlier possible time. That is the Government’s only purpose. I will take into consideration what the honourable member for Lilley (Mr Kevin Cairns) said as the debate unfolds.
That the motion be agreed to.
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative.
That so much of the Standing Orders be suspended as would prevent a Minister moving the following motion in a committee of the whole House at the commencement of the consideration of the Australian Government Insurance Office Bill 197S: ‘That the Bill be amended by omitting the word “Office” (wherever occurring) and substituting the word “Corporation”. ‘.
As indicated by the Prime Minister (Mr Whitlam) during question time yesterday, the Government proposes to alter the name of the proposed Australian Government Insurance Office to the Australian Government Insurance Corporation. This will avoid possible confusion in the minds of policy holders as to the government insurance body with which they hold their policies. Several States have bodies with a name similar to that which was suggested for the proposed Australian Government Insurance Office. For example, there is the Government Insurance Office of New South Wales. Consequently, such confusion could have occurred. To effect such a change in the Bill would result in many excess questions being proposed during the Committee stages of the debate, thus wasting time. Therefore, I have moved this motion which is procedural in nature and merely clears the way for an omnibus question to be put deleting the word ‘Office’ wherever it occurs in the Bill and substituting the word ‘Corporation’. This further motion would be proposed during the Committee stages of the Bill. . Mr LYNCH (Flinders-Deputy Leader of the Opposition) (3.30)- The Opposition Parties do not speak against the motion which is before the House. We recognise and understand the reasons which the Leader of the House (Mr Daly) has introduced in moving this motion. All I want to put on the record is simply this: It is a very clear reflection of the Government’s precipitate haste in introducing this legislation that the Government has not even had the capacity to correctly name the Australian Government Insurance Office. I think this is typical of the manner in which this Bill has been introduced. But because of the potential confusion which the original name would certainly have caused we do not intend to vote against the motion in this House.
Question resolved in the affirmative.
Debate resumed from 23 April on motion by Mr Stewart:
That the Bill be now read a second time.
– The Australian Government Insurance Office Bill highlights this Government’s doctrinaire expansion of public enterprise. It was drafted without consultation with the insurance industry. It in no way conforms to the criteria set out in the second reading speech of the Minister for Tourism and Recreation (Mr Stewart). It is a further addition to Government expenditure. It offers no new benefits to the general community. It will lead to a further reduction in the funds available for private sector investment. It is patently unnecessary in view of the numerous companies- both private and State government- already involved. At best this legislation can be described as a form of misguided benevolence; at worst it can be seen as a vehicle for the ultimate takeover and control of Australia’s insurance industry.
The Opposition will move for the deferment of the Bill. We believe that there are strong grounds for a fundamental review of the Government’s plans. Consistent with this Government’s practice there has been no proper consultation with the insurance industry or with the private sector in general about its plans to enter the industry. On 19 February 1975 the industry was informed by the Minister for Repatriation and Compensation (Senator Wheeldon) that the insurance proposal would be delayed until the Government introduced its national compensation scheme. On 7 March the Treasurer (Dr J. F. Cairns) told the industry that he was not aware of any recent plans to push the legislation ahead with high priority. Only days before the legislation was introduced on 23 April, the Government announced the establishment of consultative committees to facilitate consultation with the industry. In other words the Government’s procedure was to make firm decisions first and consult after those decisions had been introduced in legislative form into the Parliament. The first meeting of the Insurance Industry Consultative Committees was held at 2 days’ notice on 7 May- 2 weeks after the Bill was introduced or one week prior to this debate.
In addition, the House obviously needs an opportunity to examine this Bill in the context of related legislation in respect of national compensation, superannuation and the licensing of insurance brokers. The first proposal is now subject to Senate inquiry- not due for report until 30 June- while the other two have not yet been introduced. Why is it then that the Bill is being pressed by the Government as a matter of urgency? Why is it that the Government cannot understand the need for a co-ordinated approach to this aspect of its legislative program?
These are not the actions of a Government which is prepared to work effectively with the private sector. They in no way reflect the conciliatory and co-operative approach which the Prime Minister (Mr Whitlam) has outlined in his public statements. The Opposition believes firmly than any constituent group in the community is entitled to make its views known prior to Government decisions. This is the procedure allegedly adopted on environmental matters, on welfare matters and on matters concerning the trade union movement. Why is it that the business sector- in this case the insurance industryis not treated in the same way?
This is not a Bill to be treated lightly. It seeks to involve the Federal Government in one of Australia’s most significant financial industriesan industry which plays a major role in the development of the private sector of the Australian economy. The insurance industry has, in the words of the Government’s interdepartmental committee, experienced ‘a difficult period since mid- 1973’. That is surely a classic Public Service understatement. The principal reasons for this have been the heavy claims arising from storm loss, increased taxation and the problems of overall inflation. Inflation has reduced the industry’s access to funds, increased the cost of claims and inflated general operating costs. This has led to a decrease in investible funds for the private sector and a reduction in bonus payments to policy holders. But we are not just considering an industry with an economic and financial function. Millions of Australians now rely on the life insurance industry for their long-term security and the welfare of their families. There are approximately 8 million policy holders- large and small- who have a vital and direct interest in the industry. Most of the large life offices are purely mutual. Those which are not allocate, in the aggregate, a high proportion- 97 per cent -of their surplus for the benefit of policy holders. In total, 99 per cent of the surplus allocated by life offices goes directly to provide bonuses for policy holders. In a very real sense the role of the life office is that of trustee of the funds of its policy holders. Any legislation which has such far reaching potential for economic and social change deserves the closest scrutiny and the fullest prior consultation. There are many aspects of the Bill before the House which give cause for serious concern. I will advert to them in the course of this debate.
As I have emphasised, the Bill cannot be viewed in isolation and must be considered in the context of the proposed national compensation scheme, the national health scheme, the national superannuation plan and the possible reintroduction of the national investment fund. The first three of these schemes have been estimated, by Professor Downing, to require funds equal to around 10 per cent of the gross domestic product. This would be equivalent to an annual rate of expenditure of around $6 billion as at the end of this financial year. It would represent an annual expenditure equal to 40 per cent of the $15 billion in funds now invested by the Australian insurance industries and superannuation funds in various assets. Quite clearly this would represent a massive impediment to the formation of capital for private enterprise.
I want to make it clear in the course of this debate that the Opposition holds no special brief for the private insurance industry. We recognise the need for regulation and control of the industry as provided in the Insurance Act and the Life Insurance Act. We acknowledge the already substantial public involvement in the insurance field provided by State government insurance offices. Our concern is based primarily on the threat, entailed in the Government’s proposals, to the future of Australia’s free enterprise system. Today’s editorial in the Melbourne ‘Age’ sums up, in an objective and intelligent manner, the views held by many Australians. I quote from part of that editorial: … the Federal Government’s intrusion into the insurance field now does raise serious questions and carry disturbing implications. The foremost question is whether we really need a national insurance office. It is not enough for the Government to respond, as one Minister did at first, with a casual ‘Why not?’. Insurance is a business concerned with the assessment, spreading and carrying of risk, and with the prudent investment of huge sums of money. As such it is ideally suited to private enterprise, which has generally conducted it efficiently and beneficially. This is not to say that private enterprise insurance is above criticism or beyond the need for public controls, but there may be better correctives than competition directed from Canberra.
The ‘Age’ continued in the following terms:
Thus, the plan for AGIC seems to be based more on Labor ideological prejudices and unbounded ambitions than on any clear-cut national necessity. Even if AGIC should not be condemned for being as potentially dangerous as its vehement opponents fear or pretend; even if it would compete without unfair advantage over private enterprise or undue risk to taxpayers; even if it were to perform a useful social function, there is still a strong case against establishing it now. At a time when business confidence is at a low ebb, when fears of greater unemployment are already rife and ‘ when serious inflation is aggravated by excessive Government spending, to embark on yet another Government enterprise, to commit yet more public funds and nurture yet another nest of bureaucracy, is political and economic madness.
A major deficiency which exists in the availability of insurance cover in Australia is that relating to non-commercial risks. I refer in this regard to national disaster insurance. The Opposition believes and recognises that such forms of insurance are a necessary governmental responsibility. We will support responsible measures taken by the Government, or by the Government and the industry in co-operation, to provide insurance cover for losses which are not now recoverable by commercial insurance. In a very real sense, the Queensland flood and Darwin cyclone disasters have highlighted the deficiency which now exists. There is, therefore, a national need for Government involvement in the field of national disaster insurance. But, the legislation before the House goes far beyond the boundaries of national need. In fact, it uses in a totally cynical way the concept of national need as a lever to justify Government participation in all forms of commercial insurance- general insurance, life insurance, superannuation and reinsurance.
In introducing this Bill the Special Minister of State set out the objective of the Australian Government Insurance Office in the following terms:
The AGIO in the field of commercial insurance will encourage fair- and I stress fair- competition and development of a superior service to the ordinary householder and home owner in Australia.
The provisions of the Bill before the House are demonstrably inconsistent with that objective. Clause 38 provides for an unlimited guarantee by the Government in respect of all the Office’s liabilities. This surely gives the Office an unmatched advantage over all competing insurance companies. Clause 37 provides that the Treasurer may guarantee borrowings by the Office and the payment of interest on the amounts borrowed, thereby, of course, foreshadowing the concept of preferential interest rates. No private insurance company has such guarantees. Clause 37 also authorises the Treasurer to appropriate funds for the Office from Consolidated Revenue at any rate of interest or on any terms and conditions which he may determine. In other words, the Government can advance capital to the Office without limitation and without any relationship to the availability of capital to the private insurance industry. Is this the so-called ‘fair competition’ to which the Minister referred in his second reading speech? Of course it is not. It is clear evidence of the unlimited commercial advantage that this legislation confers on the Office. The legislation would permit the Australian Government Insurance Office to operate indefinitely at a loss subscribed to by the Australian taxpayer. It would permit the Office to offer cut rate services to policy-holders because the services would be subsidised by the Australian taxpayer. This is not the commercial proposal argued by the Government in the second reading speech of the Minister.
The Office is to be provided with further competitive advantages. It is specifically exempted from the provisions of the Insurance and Life Insurance Acts which apply to all private insurance companies strict requirements as to solvency, asset valuation, unpaid premiums and the provision of information. This exemption is contrary to the interdepartmental committee’s report and its recommendations. The Minister for Repatriation and Compensation announced on the Australian Broadcasting Commission program not to the national Parliament- that is typical of the attitude of the Government towards the national Parliament- that the Government would be prepared to review the exemption. This decision is simply again a stark reflection of the haste in which the legislation was formulated and the inaccuracy and misleading nature of the second reading speech. But there are many other important legislative exemptions about which the Minister has made no specific comment. The Office will not be subject to the requirements of State companies legislation. Once again, this is contrary to the recommendations of the interdepartmental committee. In all probability the Office would not be subject to the provisions of the Trade Practices Act- a requirement once again specifically adverted to in paragraph 6.10 of the interdepartmental committee’s report.
As the Government is aware, the Trade Practices Act does not apply to its own instrumentalities. It cannot be asserted unequivocally that the office would not be an instrumentality. Legal opinion argues that the degree of doubt is substantial and that it can be effectively removed only by an amendment to the Bill. How can the Minister possibly argue that the Australian Government Insurance Office will be competitive when there is substantial doubt that it will come within the ambit of the principal agency established to ensure fair competition- the Trade Practices Commission? The same argument applies equally to the jurisdiction of the securities legislation. As the Bill before the House now stands, the Office would, in all probability, be free of the provisions in respect of dealings in securities which will be imposed on the managers of private sector funds by the proposed Corporations and Securities Industry Act.
The Office also would have a material financial advantage in that, under clause 45, it would not be liable for tax in respect of any activities incidental to insurance, such as investment, in the same way as private companies. It would not be liable for stamp duties. It would not be liable for fire brigade levies. Exemption from fire brigade charges would represent, as those who know this industry will know, a major advantage. The insurance industry, by way of such levies, contributes around 75 per cent of the running costs of fire brigades in every State of Australia. The total contribution in this regard by private insurance companies during 1974 amounted to about $66m. Although the Government has made great play of the proposition that the Office is to operate on a commercial basis, clause 34 provides that the Treasurer has an absolute right to determine its return on capital. It is well within the Treasurer’s competence to set a low rate of return- a rate below that which a commercial enterprise could tolerate- which would enable the Office to operate with unrealistically low premiums or with unmatched benefits. The House cannot simply accept the Treasurer’s assurance that an artificially low rate of return will not be determined in respect of the Office at some future date.
It would be possible for the Australian Government Insurance Office to achieve a significant cost advantage over its private sector competitors by utilising operational facilities of Federal departments and instrumentalities. For instance, the office, staff and agency facilities of the Australian Post Office could be used for insurance purposes, thereby reducing overheads.
– What about the State Government insurance offices?
– Practices of this nature apply in respect of a number of State Government insurance offices. I thank the honourable gentleman for his manic interjection. The Bill provides that the Auditor-General can dispense with any part of the Office’s audit. In other words, unless the Auditor-General certifies that all services tendered to the Office from government instrumentalities or departments have been provided on a commercial basis, their real cost could remain hidden.
There are many other aspects of the legislation which confer competitive advantages on the proposed Australian Government Insurance Office. I have adverted to sufficient of them to expose the falsity and misleading nature of the claims made by the Minister in his second reading speech. But in my view the most misleading aspect of the Government’s case is its bland assertion that in its view there is a need for greater competition within the insurance industry and that this objective is best achieved by government entry into the industry. I remind honourable gentlemen opposite that at the present time there are 45 life insurance companies and 260 general insurance companies. In other words, there are more than 300 companies already involved in an industry which clearly is intensely competitive and a significant industry which has been subjected to a series of major attacks by this Administration during the course of the past 2
Federal Budgets. If the Government could substantiate a case for greater competition within the industry, simple economic logic would dictate that any anti-competitive elements be removed by the application of the Trade Practices Act or amendment to the Life Insurance and Insurance Acts. The fact that the Government has not chosen this course of action exposes this legislation for what it is- a doctrinaire attempt to extend public enterprise.
The general public may be tempted to ask: Why should this course of action not be taken in the national interest? What use is a private insurance industry? The compelling answer is that insurance fulfils a necessary or essential social need; it provides financial protection against unpredictable losses and a means for individuals and families to provide for their own long term economic security. It also fulfils a fundamental role within the private sector of the economy: It attracts capital and, with the exception of certain government constraints, allocates that capital to efficient and productive ends. The industry is the major source of long term development capital for Australia’s economic development. Its investments represent more than 10 per cent of total private capital formation. The industry, not including superannuation funds, has assets of around $11 billion- equal to more than 20 per cent of the total assets of Australian financial institutions. In plain terms, the Government’s involvement in this industry entails the transfer of investable funds from the private sector to the public sector. This legislation therefore is not just a matter of concern to the insurance industry, it is of the utmost importance and significance to the private sector as whole.
At the present time there is a very serious investment slump within the private sector. At a time when the Government should be taking decisive action to stimulate investment, it is introducing legislation which will have the specific effect of further reducing the level of available long term finance. This legislation represents the bankruptcy of the Government’s economic thinking and the pre-eminence of ideology over pragmatic economic decision making.
– Now spell that out.
-For the information of the honourable gentleman from Tasmania, during 1974 real private investment declined by 13 per cent. I should have thought that the honourable gentleman, coming from Tasmania and knowing the precarious state of its economy because of this Government’s economic maladministration would certainly have been aware of the disabilities which that decline in private investment has directly entailed in Tasmania. Statistics released yesterday show that actual investment, seasonally adjusted, fell by 1.6 per cent during the March quarter. In all likelihood this reflects a fall, in real terms, of about 5 per cent for the latest 3-month period. This, of course, so far as the Opposition Parties are concerned, represents a very serious situation. Inconceivably the Treasurer (Dr J. F. Cairns) stated yesterday that an investment downturn was, and I use his own words, ‘a myth’. That comment is the height of irresponsibility and demonstrates his fundamental misunderstanding about the vital role of investment in the private sector’s resource creating process.
Current liabilities have accelerated relative to current assets. Debt equity ratios have widened and short term borrowings have expanded in place of longer term financing. A fundamental requirement, of course, for future productivity increases and high levels of employment is the availability of long term capital on reasonable terms. The essential characteristic of this significant industry- the insurance industry- and in particular the life assurance industry, is its capacity to generate and provide the very long run finance which is so necessary in the current economic context. If outmoded equipment is not replaced, and if technological improvements cannot be funded, our economic capacity will be eroded.
Previous governments, in order to maintain adequate levels of capital formation, have sought to encourage the insurance industry by way of tax incentives. The present Government has taken a contrary approach. It raised taxes in respect of life insurance companies by 3 separate mechanisms in the 1973-74 Budget. It increased the tax liability again in the 1974-75 Budget. This provided additional revenue to the Government but it reduced bonus payments to policy holders by about 15 to 20 per cent. More importantly, in national terms, it reduced the level of investable private capital. Why is it then that this legislation is being promoted by the Government at a time of a serious investment slump? Why is it that the legislation is being rushed through the Parliament at a time when business confidence is at an all-time low? The Australian Government Insurance Office can only further depress investment and business confidence in this country.
No good purpose is served by the criticisms levelled by the Minister in his second reading speech as to the direction of the industry’s investment funds. Investment decisions respond, as they should do, to the requirements of return on capital. The Minister particularly referred to the increase in life office funds invested in property from 8 per cent in 1963 to 18 per cent in 1973. The Opposition is as concerned as the Government by such trends, such investment distortions, especially in office construction. We stated our intention at the time of the May 1974 election campaign, to refer the general matter for investigation and report to the Industries Assistance Commission. But our approach is demonstrably different. We recognise that a significant element in investment distortion is inflation, that this is a trend not peculiar to the investment of insurance funds and that the Government has fiscal measures at its disposal to influence the direction of private sector investment.
Again, there is no constructive purpose to be served by the hysterical political comments which have been made by the Minister for Repatriation and Compensation (Senator Wheeldon) and his colleagues in recent days. Apparently an industry- its employees or its shareholdersprepared to stand up and protest about a Government program with which it disagrees is somehow engaged in a sinister plot to pervert the democratic process. As I mentioned earlier, the Opposition will move to have the Bill deferred. A deferment until the Budget session in August would provide an opportunity for the Government to consult with the industry and enable a full public debate to run its course. I make it clear that a Liberal-National Country Party Government would not seek to enter the commercial insurance industry. I move:
The Opposition hopes that, after proper consideration, the Government will be prepared to withdraw this Bill and concentrate on measures to ensure that adequate compensation is available for losses arising out of national disasters.
– I second the amendment.
-I rise to support the Australian Government Insurance Office Bill 1975. Governments, both Federal and State, have constitutional and legislative obligations in the area of insurance. The Australian Government has a national responsibility to ensure that the community has maximum access to, and protection from, as wide a range of insurance coverage as possible. This Bill is structured to achieve just that. Government penetration will have reverberations throughout the industry and the community. It is important that this step- the setting up of a corporation- ought to be examined, argued and debated in a rational and objective manner. If one is to gauge anything from the campaign of opposition being waged by certain sections, particularly those with vested interests in the status quo, frankly it is that this national forum is to be the only arena where the matter can be debated with an absence of hysteria or intimidation.
The Federal Government can extend this cover of security in a number of ways and for very cogent reasons. Firstly, it can do so by legislative act subject to section 5 1 of the Constitution. This is not an exclusive power; we share it with the States. Secondly, it may become directly involved. This is not unique, although the Opposition would try to convey to the public the idea that it is. Thirdly, we can have government direct involvement, supervision, control or regulation of the insurance industry, which I believe to be obligatory for the following reasons: With the increase in the number of policy holders, and its extension to all classes of society, insurance has become an institution in the service of the public- a fact which has become obvious over recent years. The need for protection of insured and victims must surely take precedence over the motive of commercial gain. Fourthly, and perhaps the most telling argument in support of the setting up of this corporation, is that the one important asset that the public corporation has over the private sector is that its activities, the class of insurance that it underwrites, its contractual obligations, the wording of its policies, the way it deals with and resolves claims made upon it and the areas within which it deploys or invests its funds, are all subject to public scrutiny. All these activities are subject to public scrutiny and public accountability, and above all require vindication by the public and by this Parliament. If honourable members opposite are not aware of this I can assure them that the public is. There are thousands upon thousands of ordinary policy holders and people in this country who have been literally forced, coerced and intimidated by insurance companies to reach settlements at a lesser figure than they ought to accept. The pub.lic corporation that we are setting up must take account of all its activities before the public. A private company, as a corporate body, is only in fact responsible to its shareholders. When is a director of a board of any company obliged to stand before a national forum and justify his company’s activities for good or bad? The one avenue that a policy holder has to test a private company’s accountability is through litigation. The proposed corporation’s accountability is to the public and to the Parliament.
Let me make the fifth point. It is quite false and utterly misleading to claim- as private insurers have tried to put over this country in recent weeks- that both private insurers and State government insurers have met fully the needs of insurance demands in this country. Let me take the State component first. Quite obviously there is a deficiency in the State government insurance offices, obviously because of constitutional, legislative and geographical limitations. Secondly, and importantly 4 out of the 6 States have been forced by political machinations by Tory governments to operate within restricted parameters of franchise. They are in fact permitted to operate only in the deficit or sink end of the insurance market and not in the profitable areas. In other words, they are restricted to general insurance and not life assurance.
– You are talking about Victoria.
– That is an interesting interjection. In Victoria they are restricted to 2 classes of general insurance and the Tory government in Victoria refused to extend the franchise to its own office in that State. There are only 2 State government insurance offices in Australia that have full and open franchise, namely those of New South Wales and Queensland. Both the Tory governments in those States have made sure that their State insurance offices get only a limited access to the life market. The State insurance office in Queensland gets 19 per cent of the premiums paid and the State insurance office in New South Wales gets 9 per cent.
Under this legislation for the first time at a national level and on a national plane, there is to be real across-the-board competition. It ought to be realised that Australia is unique. It has vast distances and its large populations are located in a very few urban areas. Although we are prone to natural disasters, which will continue to devastate this country, we have a situation in which many people and businesses are unable to obtain adequate insurance cover. The insurance industry has been and is still deficient in many areas. Only 10 per cent of the people whose property was devastated in the Brisbane flood were covered by flood insurance. There was completely inadequate cover. One ought to take account of the fact that since the floods which devastated not only Brisbane but also much of the rest of the eastern seaboard some large insurers are refusing to underwrite this type of insurance, particularly in north Queensland. Equally disturbing in recent years has been the withdrawal of many general insurers from country areas. To make this situation worse, many large general insurers are terminating agency agreements in country areas, which reduces still further the ability of country people to get adequate cover. Of course, the plea is that insurance activities in this field are no longer profitable. It is argued, after all, that insurance companies are in business to make a profit for their shareholders. But this commercial philosophy is no consolation to country people. In effect the private sector says that if a particular class of insurance is unprofitable the insurance industry should simply refuse to underwrite it, whether or not the people want it, industry wants it, trade wants it or commerce wants it.
The tendency of private insurers to withdraw from so-called unprofitable insurance will continue despite the call for a need for such classes of insurance to be underwritten. Further, there are limited markets of certain types of risks that insurers are loath to underwrite. A case in point is the mining industry. Difficulty is also being experienced by heavy haulage and transport operators who cannot find coverage. This is a serious situation, especially if one adds to it the insurance cover that cannot be obtained for natural disasters which affect crops or livestock, or for damage caused by land slip or flood. This type of insurance cover is vital if this nation is to progress at all.
Finally let me have a look at the track record of some sections of the insurance industry. Frankly it has not been very good. In recent years the industry has almost reached the stage of destroying much of its standing and credibility.
-A bit like the Post Office, I suppose.
– Perhaps the right honourable member should listen for another 5 minutes. We ought to examine why governments not only in this country but throughout the would in recent years have been literally forced to take both legislative action and direct involvement to give the community the security that it needs. Over the last 5 years in this country tens of thousands of policy holders have suffered needless hardship, anxiety and financial loss, all the result of the collapse of no fewer than 20 insurance companies. It ought to be noted by the House that the companies collapsed prior to the introduction of the Insurance Acts of 1973. How and why did this happen? It happened firstly because the industry failed to regulate itself. The root cause of that is its very competitive structure. Secondly, the companies failed because of blatant, unscrupulous manipulation and sheer managerial incompetence. Over the last 3 months this country has witnessed the collapse of the Northumberland Insurance Co. Ltd. Again this is a company that collapsed because of sheer incompetent management. It placed all of its assets in the Cambridge investment company, a speculative company. When that company went bankrupt so too did Northumberland.
In recent weeks I have had 4 employers in my office who regrettably took out policies with Northumberland. So far as South Australia is concerned, there is no nominal defendant provisions in that State’s workmans’ compensation legislation and Northumberland never reinsured its workers compensation parcel to the level that it should have. I had to tell these people that it looks as though- and this matter has been dealt with in the Equity Court in New South Walesthe employers themselves, who are only ordinary small businessmen, will be up for the total liability. What ought to be made plain to members on the other side of the House and to the nation generally is that there is no room at all in the insurance market for speculators, manipulators or the incompetent. The proposed corporation will ensure the rights of policy holders, in that their guarantee, security and protection will be assured, and that is a lot more than a high proportion of companies in the insurance industry have done over the last 5 years.
I want to deal briefly with the Insurance Act of 1937-1 973 which I had a lot to do with bringing into this Parliament in 1973. Basically that Act is structured for solvency. It is an Act of supervision; it is not an Act of regulation or control. I pass this warning: Whatever we do by way of legislation, unless and until there is a lot of integrity and honesty built into the insurance industry I would not place all that much trust in this Act. It has a long way to go yet before policy holders will get anywhere near the security they deserve.
I want to make one reference to a case in the United States of America. If one has any knowledge of the provisions of the Securities and Exchange Commission in the United States, one will know that they are as wide and as restrictive as anywhere in the world. But only last year that country witnessed what has been described in ‘Rydges’ as the greatest investment scandal in history. The Equity Fund Life Insurance defrauded some 100 000 people and the rake off involved some $100m. As I said earlier, it is quite dangerous to assume that we can bring all the stability which is possible into the insurance industry by legislative action. The other constructive step to be taken is direct involvement. It has been part of the Australian scene in one form or another almost since Federation. State government insurance offices are operating in the insurance field in all States. This Government has been heavily involved in a number of very important areas of insurance for many years. But what I find singularly odd are the arguments being bandied about and the cliches like socialism and nationalisation.
It is very interesting to note that in New Zealand the Government has been involved in full franchise insurance. It has been involved in life insurance since 1869, in general insurance since 1905 and in natural disaster insurance since 1944. Yet the private insurance industry in New Zealand has lived and survived with this and gone from strength to strength. I think we ought to put aside the cliches and get down to some cold hard facts. It is essential that we examine the insurance needs in 1975 and future years, not the might-have-beens of years past. There is a crucial need for reform, for initiative, for innovation and for revitalisation through out all areas of insurance. Competition is the key factor at which we ought to look. One thing which the Corporation will do is to reform in the following areas: Firstly, the formulation of a series of standard policy clauses to protect policy holders from deception, fraud and exploitation; secondly, examine the need if any for the abolition of arbitration clauses; thirdly, the discrimination against females in sickness and accident policies and in employment opportunities; fourthly, adequate laws are badly needed to govern the standard, training and monitoring of both brokers and agents; and, fifthly, simply, accurate advertising.
An area in which I think the Government ought to directly involve itself is reinsurance. I have raised the question of marine hull insurance and reinsurance in this House on a number of occasions. As a result of that at least we got 20 per cent of the marine insurance market in Australia instead of 100 per cent being lodged overseas. Almost all direct insurance companies have been forced to seek reinsurance cover overseas. In recent years a number of overseas owned reinsurers have set up offices in Australia but no Australian-owned company of any size has emerged in the field. On present indications I doubt whether any will. For instance, Qantas
Airways Ltd last year had a total insurance bill of $5m. This year the Australian National Line had to pay insurance of $2m. Where will that be placed? Largely, it will be placed overseas. The Corporation, when it is set up, could inject a new confidence and structure into the Australian direct insurance market by offering to take up a share of the risk on a reinsurance basis. I am not suggesting that the Corporation take all the risks offered or that it fail to spread its own work. The time has come when we, with our strong financial resources, can obtain a large proportion of the risks underwritten in this country. With reinsurance the practice throughout the industry is generally to lay off part of the risk with other insurers or through treaty facilities.
In all other respects in the financial sense this country seems to have matured to adulthood, but in reinsurance and in some areas of direct general insurance we are very much an underdeveloped country. It ought to be realised that the largest factor in the United Kingdom in relation to invisible earnings is insurance. Most of its marine insurance and reinsurance is sold in Australia and elsewhere. Obviously there is plenty of room to expand into areas where, currently, the problems with insurers is that they have no interest in or connection with Australia other than one based strictly on cash. To me it seems deplorable that over the years the large volume of reinsurance that has gone overseas to the detriment of the Australian market has involved hundreds of millions of dollars. The Corporation could play a very decisive role in ensuring that this vast amount of money is recirculated in the Australian market. The intervention and support by the Corporation to share these risks which otherwise would be placed overseas would be of tremendous benefit in 2 ways. Firstly, it would undoubtedly provide a degree of stability and access to Australian insurers. Secondly, it would result in a substantial saving in foreign exchange and improve our balance of trade.
I point out that some government involvement and support is undertaken in both France and India with considerable success. I make the following observations to the Government to consider: If the Corporation contemplates creating a reinsurance branch it must first ensure that it has the facilities to reinsure its own portfolio, probably on an excess of loss basis. No doubt this would have to be negotiated overseas. The Corporation would not be able to accept large amounts of reinsurance without having its portfolio protected against a catastrophe, unless of course it is underpinned from Consolidated
Revenue. Finally, I warn the Government that the proposed Corporation will have to watch that it does not become a sink for the insurance rubbish which is not wanted by either the private insurers or the State government commissions. I support the Bill in the firm belief that this measure will give the community the coverage and security to which it is entitled. I commend the Minister, the Government and the Bill to the House.
– We have been listening to the honourable member for Hawker (Mr Jacobi) giving forth the propaganda upon which the Government is trying to base its justification for intruding into the insurance field in Australia. His basic argument seems to be centred on the premise that existing insurance companies in Australia are dishonest, or incompetent, or that some of them have been involved in fraudulent practices. Therefore, the honourable member says that the only answer to this situation is for the Government to move into the field. We could apply that argument to any area of commerce. In other words, we ought to have a totally socialised community and then there would be no troubles whatsoever. All would be perfect. That is really the basis of the argument which the honourable member puts forward. If there is incompetence or improper actions by companies then it is our job to bring down rules and regulations by way of legislation to try to protect people within the community, not to buy out enterprises or to establish enterprises and run them ourselves. The Government should not think that it can do a better job than private enterprise because it knows it does not have the same efficiency, dedication or drive as private enterprise.
We have an Insurance Act. It was revised in 1973. It has provision to cope with the circumstances which the honourable member mentioned. If it does not provide sufficiently then why does the Government not amend that legislation as a means of countering the situation? But no, the Government is not interested. We know why. It is not interested because an objective in the platform of the Australian Labor Party is the socialisation of industry and there is specific mention of the insurance industry. The Government should be honest and state that. It should not try to fool the Australian people as to its intentions.
Today the question we need to ask ourselves is whether there is justification for an Australian Government Insurance Corporation at a time of savage inflation due in no small way to excessive government spending. At a time when bureaucracy is spreading like a bushfire we must wonder whether the Government has taken leave of its senses in wanting to push ahead with this proposal.
Even if there is any evidence that Australia needs a Government insurance corporation- I have yet to see that there is any- could there be a worse time for bringing it in than at the moment? There could not be a worse time for the Government to embark on a new phase in its program to gain greater control over the private sector. This is at a time when there is urgent need for stimulation of that sector of the community and for the encouragement of private enterprise to try to get us out of the quagmire into which this Government has got us. What does the Government do? It dashes all hopes of the private sector. Confidence is urgently and desperately needed in our community today if we are to have full employment, job opportunity and all that goes with it.
This legislation, with all its implications for the private sector, will deal yet another blow to the flagging business morale of the Australian community. But this government does not care. It is more concerned with political dogma; it is more concerned with its own ideology. That must be the predominating thought of this Government and to heck with people being unemployed and to heck with businesses running down and finding great difficulty surviving. This Government just pushes ahead. It is devastating the confidence and morale that the private sector needs today.
In the eyes of the Government and the Labor Party, apparently it is a crime for anyone to fight to protect himself against Government proposals which he believes will hurt him and the community as a whole. When the Government sets out to do things which a sector of the community believes will be damaging and which that sector tries to fight, the Labor Party retaliates with every device it can find, no matter how unfair or unethical those tactics may be. The Australian insurance industry can expect to be the target of a massive campaign of denigration by the Government and by the Labor Party. This campaign has already been launched by Senator Wheeldon, the Prime Minister (Mr Whitlam), the Treasurer (Dr J. F. Cairns), the Minister for Services and Property (Mr Daly), the AttorneyGeneral (Mr Enderby), Mr Hawke and others. It has all the hallmarks of the Medibank campaign which saw doctors, private hospitals and health funds denigrated and abused by the Government and the Labor Party.
This is the standard tactic of the Labor Party when it wishes to discredit anyone or any organisation which stands in the way of its plans to extend Government influence and control over a sector of the economy. Any effort by the insurance industry to protect itself, its policy holders and the private sector against a marauding socialist government will be blasted by whatever means the government can find. The public must be warned that the Government is trying to put the most attractive face on these proposals by bringing forward this Australian Government Insurance Corporation. However, the Labor Party’s platform and the evidence of its actions since it has been in government make it clear that the Government’s intention is to get its hands on massive funds which the insurance industry now invests in a wide range of industrial, commercial and community development projects.
The insurance industry is by far the major source of investment funds in Australia, and there can be no doubt that the Government wishes, in accordance with its Party platform, to get control of these funds. To achieve a socialist objective these funds must be marshalled for Government purposes. Part of the Government’s campaign against the insurance companies has involved allegations of a secret alliance between the Australian Mutual Provident Society and my Party with claims that the Society has contributed financially to my Party’s funds. Both allegations are untrue, but this is typical of the sort of accusation we get from this unprincipled Government. The Society has openly and properly discussed the AGIC proposal with all Party members, not just those of the National Country Party. I think it is fair to say that the Society might have confidence in us being prepared to put up a fight for it because we are fighting for the interests of 3 million policy holders in this country. The Government is prepared to use whatever methods it can, however shabby and however deceitful they may be, in its campaign against the insurance industry. I make no apologies for trying to defend these policy holders whose interests are deeply affected by this Government’s plans. I make no apology for drawing attention to the serious consequences for Australian development of the Government’s intention to gain control of the large investment funds which the insurance industry provides.
The Government’s protests against insurance companies using policy holders’ funds to fight for the interests of those policy holders would carry more conviction if there were some acknowledgment of the way in which taxpayers’ money is being used by the Government for its own propaganda purposes, such as we saw with the Medibank campaign. We would have more confidence if there were some acknowledgment of the way in which some trade union officials have used union funds for Party political purposes without the knowledge or approval of rank and file members. The Government has a lot to say about alleged secret alliances. Why does it not come out into the open and tell us about its secret moves on the private sector? That is what this whole argument is about. But the Government has not yet come out openly and told us what it intends to do for the private sector. It wants to remove it and replace it with Government involvement. It is setting out to do it surreptitously by gaining control over the investment funds which the insurance industry provides to the private sector.
It is all very well for the Government to protest that its intentions are honourable and that it does not have designs on the insurance industry or the private sector, but I think we would be well advised to assess the Government’s intentions not in the light of what the Minister says but in the light of what the Party’s official platform says. The Labor Party’s platform says that the insurance industry and many other industries should be nationalised. The whole strategy of the Government is quite clear. It is based on offering the Australian people more and more in the way of welfare and making them more and more dependent upon government. It is an attractive offer to many people, particularly unthinking people. They do not understand that it is destroying their own self sufficiency, it is destroying the economic foundations of the country and is fuelling the fires of inflation as it boosts Government expenditure to excessive levels. They do not understand that this whole strategy means that an attack is being launched on the private sector, the productive sector. They do not understand that this strategy has led to the weakening and undermining of the whole private enterprise structure on which our prosperity and all our welfare programs are based. They do not realise that if we allow the productive base of our society to be damaged by this Government, we are allowing our chances of a better standard of living and real advances in social welfare to be damaged also.
The Government’s ultimate objectives are clear. If the Government can undermine the insurance industry and its investment activities, not immediately but ultimately, then it can itself win control over a major part of investment in Australia. This would give the Government an enormous advantage in pursuing its long term objectives. The man who said that we should be most on guard for our liberty when a government poses as a beneficient one knew what he was talking about, and that is exactly the case now where this Government is pretending that this measure is to the people’s advantage, when really it ultimately will jeopardise their liberty.
I am told that the total of funds under the control of life officers and superannuation managers is more than $12 billion which is invested in an enormous range of business, manufacturing, mining, farming and community services and facilities. There is a further $3 billion managed by general insurance companies with most of it invested in the same way. So honourable members can see what an immensely significant factor the insurance industry is in the private sector and in the national economy. What is worrying the insurance industry and what worries me and ought to worry every thinking person is the threat that is posed to this industry by the Government’s proposals and the consequent threat to an important sector of investment funds, the insurance industry. There is real concern in the insurance industry that the Government’s proposals could virtually decimate the funds it has- funds which are invested in productive enterprises and in a wide range of community services. This decimation would come about through the Government bringing in new schemes to take care of the needs of the community at enormous expense to the taxpayer and in a way that would put the existing insurance offices in a hopelessly handicapped situation.
The Government is planning to move into traditional areas of insurance in a massive way. I am speaking not just of health insurance or the Australian Government Insurance Corporation, but of other areas as well. There is to be a national compensation plan, a national superannuation plan, a Government housing insurance scheme and significant changes in the superannuation scheme for the Government’s own employees. There is to be a channelling of life office funds into projects sponsored by the Australian Industry Development Corporation. Of course, none of these moves by the Government should come as any real surprise. These are the predictable actions of a socialist administration. They are actions covered by the Labor Party’s platform, which has as its opening statement the Party’s commitment to socialism and which refers to nationalisation of a range of activities including, specifically, insurance.
What the private sector is faced with is a Government incursion into the main uncommitted source of investment funds available to that sector- that is, into the savings of about three million Australians who have invested in insurance and superannuation funds managed by the life offices. The insurance industry sees itself as being almost in an embattled, beleaguered position. It has seen its ability to pay policyholders attractive bonuses reduced by this Government’s high taxation of life offices. It has seen uncontrolled inflation, brought about largely by this Government’s inept actions, slash into the value of policyholders’ savings and investments. Now it sees the Government embarking on plans to enter fields which have long been catered for by the private sector.
Housing insurance is to be provided at premium rates which existing insurance companies will be hard pressed to match because they will be competing against an insurer enjoying special privileges. The national compensation plan, as proposed by the Government, would pay large pensions irrespective of wealth and could make the need for existing forms of life insurance largely disappear. The need for other forms of insurance such as workers compensation, motor vehicle third party and personal accident and sickness insurance also could largely disappear. Instead there would be a national scheme financed by the taxpayers. The funds which the insurance companies now direct towards investment throughout the private sector would not be available from that source.
Professor R. I. Downing has estimated the total cost of the Government’s national health, compensation and superannuation schemes at $4,900m a year, of which $2,800m would represent additional expenditure. It is not hard to imagine what all this means in respect of additional taxation to the Australian and also the rate of inflation that this community has to suffer and will suffer. But I question the need to destroy what is already being done in these fields and to sacrifice existing arrangements. I question the need to destroy the incentive which encourages individuals to care for their own needs as far as possible. I question the need for action which could well lead to serious disruption of investment and of industrial and other development through the cutting off of funds now provided by the insurance industry.
Our whole approach to the very vital and fundamental questions involved in all these matters is guided by our belief in a number of basic things. We believe that the free enterprise system is far better than the socialist system. We believe that freedom of the individual to make his own choices is important. We believe that every individual should have access to adequate provision for his future needs, preferably through his own efforts but, where necessary, through the efforts of the community as a whole. We recognise that there are shortcomings in existing arrangements for some kinds of insurance, and that these shortcomings can and should be remedied to provide adequate sickness, accident and retirement benefits.
But we do not believe that existing arrangements have to be disrupted, or massive new bureaucratic mechanisms set up, to do these things. We believe that a natural disasters fund can be established and should be established using the existing private and State government insurance offices, instead of setting up yet another Federal Government organisation. We believe that the taxation system should properly recognise the importance of encouraging people to save and to invest their savings. We believe that basic to every other aspect of our consideration of these matters is an all-out attack on inflation, which is itself basic to our whole economic problem. And we believe that the role of the insurance industry in helping people to make their own provision against future need and in marshalling funds for the private sector is very important and should be safeguarded.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The right honourable gentleman’s time has expired.
– I must say that I am astonished by the nature of the attack that has been waged in this House today by the Deputy Leader of the Opposition (Mr Lynch), who spoke for the Liberal Party, and the Leader of the National Country Party (Mr Anthony) against the creation of a new insurance office which will operate, if one may say so, as a ‘pigmy’ among the 50 or so life insurance offices and 200-odd general insurance companies that already exist in Australia. Oddly enough, there are already half a dozen State Government insurance offices operating in the field.
I want to look at some of the statistics that surround this very interesting field of insurance. I want to talk mainly about general insurance rather than about life insurance. In Australia at the moment premiums for life insurance policies aggregate about $2,000m annually. It costs more than $500m annually to mobilise that $2,000m of premiums. As far as general insurance is concerned, the aggregate of premiums is $ 1,500m. It costs nearly $400m to collect that $ 1,500m of premiums. I submit, to begin with, that the insurance industry is not a very efficient industry; it is a tremendously expensive industry. Of course, the paying of those expenses limits the benefit that can become available to the policyholder. Also, one must be surprised at the rather monolithic attack that has been launched collectively by the insurance companies.
I want to say a little about the field of general insurance in particular. I draw to the attention of honourable members- I am sure not too many of them have seen this- a document which was issued on 29 April, a few days ago. It deals with the foreign ownership and control of general insurance business in Australia. I shall refer to the highlights which are stated on page 7.
-What is it?
– It is a publication of the Statistician issued on 29 April 1975. It deals with the situation at the end of June 1973 relative to foreign ownership and control of general insurance business in Australia. It showed that the aggregate level of foreign ownership of general insurance business in Australia was 45.7 per cent So at least half of this great industry that members of the Opposition are displaying so much sympathy for is not Australian at all; it is foreign. Of the 45.7 per cent foreign ownership, direct foreign ownership comprised 41.4 per cent. This was almost entirely direct foreign ownership of the foreign part. Foreign control was highest by the United Kingdom at 31.6 per cent. Two-thirds of the foreign ownership is United Kingdom ownership. One has to think only of the names of firms which include words like ‘Great Britain’ and ‘Norwich’ and so on to see the identification. Of the 55 per cent Australianowned general insurance 20 parts of that fifty-five are on account of government insurance. In other words 40 per cent of the Australian area is already government controlled. What is wrong with another government department?
I shall give honourable members some rather interesting figures in a moment as to the expenditure rates as between the government and other Australian insurance companies and foreign companies in terms of the premiums collected. I think the figures give some food for thought for the Opposition. Instead of being the rabblerousers behind the rabble members of the Opposition should consider these facts. I have never known a more astonishing thing than what has happened in the last few days. I repeat that the Government is not nationalising insurance. In the area of general insurance it is 20 per cent nationalised already if you like to look at it in that way. I think it is to the benefit of Australia that that is the case; otherwise the foreign participation would have been even greater.
Let us have a look at the particular areas that are foreign dominated, as my colleague the honourable member for Hawker (Mr Jacobi), mentioned. In marine insurance, 77.7 per cent of the total business done in Australia is done by foreigners. For fire insurance the figure is 65 per cent. Why should two-thirds of the fire insurance business that is transacted in Australia be conducted by foreign companies? There might have been a reason in the early days when Australia was a series of colonies instead of as it now is, a nation, when perhaps we did not have sufficient accumulation for this sort of business to be done locally, but why in 1975 does any foreigner need to tithe and toll in Australia to insure a house? This is one of the most lucrative forms of insurance. How many honourable members from built-up areas have known of fires in Brighton, in North Sydney, in Middle Park, in the last several years? It would be an interesting exercise to add up the annual premiums paid by people. I suggest that they are excessive in terms of the risk that is supposed to be covered.
Personal accident insurance is 59.2 per cent foreign controlled. Again, why does this business need to be undertaken by organisations not owned in Australia? Householders’ comprehensive insurance is a relatively new area. At least it is modern in the sense that it has developed in the past 20 or 30 years. More than half of that insurance is foreign controlled- 5 1 per cent. Workers compensation insurance is 45.9 per cent foreign controlled. At least this Government is the first to acknowledge that the purpose of workers compensation is to compensate workers, not to fatten lawyers or to occupy the courts in deciding the degree of negligence on the part of parties to accidents which are inevitable in an industrial society. No person injures himself wittingly. It is a social event and it ought to be acknowledged as such. The same thing applies to those wretched motor cars that overcrowd our inadequate roads. The accidents are due largely to the number of vehicles in relation to the road space rather than to any negligence or deliberate intent on the part of the driver of the car. Yet more than one-third of that insurance business is undertaken by companies based outside Australia.
I draw particular attention to figures which I think are worthy of study by honourable members. They show that in 1972-73 foreign companies paid out claims of $360m to policy holders. The expenses associated with paying that $360m were $22 lm. The government area of insurance paid out claims of $252m and expenses were only $35m- one part in seven as against 2 parts in three for overseas companies. I suggest that there is a certain amount of overcompetition in this area of business. The amount paid out by Australian-owned insurance companies, as distinct from the government insurance companies, was $29 lm and expenses were $ 1 39m. In other words, the expenses for the Australian business were only about half of what they were for the overseas business. I submit that it is time that we looked a little more closely at this. Why is there the variation in expense ratio, with 14 per cent for government insurance and nearly 3 times that figure for non-government? I submit that it is an area where competition has run mad. It is inefficiency. It is not competition.
I suppose everybody is entitled to protect his means of livelihood, but it takes 30 000 people to collect these premiums. I think there ought to be a much more efficient and effective way of doing this sort of tiling. This is one of the virtues we see in government competition in this part of the area. I think that is what some of these firms are a little frightened about- that their golden days have gone. After all, most of the sorts of things that people insure themselves against are incidents arising out of the sort of society in which we live. We have had plenty of examples recently of what virtually are uninsurable areas. For instance, nobody will insure against a drought in the metropolis nor against a flood in a drought area. But these events can happen and when they do happen they are often not within the realm of what are called insurable risks. The expense has to be met somewhere else. I think there was a lot of chiselling in respect of some of the claims arising from the Queensland floods, but in many cases houses simply were not covered against that kind of risk. Had cover been available probably the premiums would have been so inordinately high that people would not have been insured. Occasionally we have to meet a national disaster or a natural disaster- sometimes the terms are interchanged. They are things that nobody can predict. Who would think that the wind that 990 times out of 1 000 would miss Darwin would descend upon it with such devastation in a matter of hours. That is not a risk one could insure against. It is an event that when it occurs has to be met as this was, mainly by the Government collectively on behalf of the people involved.
I think the same is true of workers compensation and motor car accidents. They are not the sorts of areas that are better covered by what the
Opposition likes to call private enterprise. They are most inefficiently done that way. They are most inefficiently done when, instead of being the subject of simple procedure, they become the subject of legal argument. I think that my Leader before he became Prime Minister pointed out on a number of occasions how much of these claims did not go to meet the circumstances of the victim but were absorbed in costs out of all proportion to the benefits that were supposed to be bestowed. The Government’s view is that compensation is better provided on a public basis than on a private basis.
Fears have been expressed about what will happen when what I have called this new pygmy descends among the giants. I think that people ought to be a little more rational in their approach to this matter. One more insurance company is beginning its way in an area that in my view is already over-supplied with private companies. At least I pay tribute to those government organisations that they have been successful enough, despite the lack of encouragement in some cases, to acquire two-fifths of the business that remains in Australian hands in the general field. It is to their credit. Long may they flourish and may their relative share increase. One should look occasionally at the mechanisms we have for insuring the various social risks that occur in the community. We have policies covering fire; householders; comprehensive; marine- that is perhaps a bit different from the rest but nevertheless I agree with my colleague that Australia is now big enough to take a greater proportion of this insurance- motor vehicle, workers compensation and personal accident. As I say, because of the nature of the society in which we live most of those areas of insurance are necessary. I suppose that robbery and theft arise out of not solving some social problems, but because they exist we endeavour to insure against them. How one determines what is the right premium in relation to the risk involved is somewhat dubious.
Anyone who looks at the costs in relation to the benefits in the area of general insurance cannot be satisfied that the industry is conducted efficiently. I repeat that the latest figures, for 1972-73, show that there were total claims of $903m but total expenses of nearly $400m to meet that, and $100m went in commission and agents’ charges and over $200m went in management expenses. I suggest that when the expenses amount to something close to half of the claims there is something wrong. Something needs remedying, and maybe the solution is a bit more competition if not a bit more intervention.
In the field of life assurance- which to my mind has no great problem at the moment- I doubt with all respect that a government office will make great inroads very quickly into life assurance. In my view it can make quite a definite pattern in the other areas fairly quickly. As I mentioned, it would have a much lower expense ratio. Where would life assurance in Australia be today unless it were buttressed by the taxation concession? Looked at purely as an investment it is a most inefficient form of investment. If it were not for the return a person receives, discounted by the tax he does not have to pay in making the premium, I doubt whether people would take out life assurance. One of the things that life assurance interests do not acknowledge is that life in the next 25 years will be harder than it has been in the previous 75 years. An enlightened community ought to acknowledge that those who have wrought for it in the years of their strength are entitled to a remuneration or an income when they retire. It ought not to be just a chance contribution to an insurance company where the benefit is the greater to a person the higher his income is. That is not the way in which modern societies approach these things.
Australia is one of the last Western countries to have a national superannuation scheme. I think it is to our shame that we are the last. I for one resent rear guard sort of action. I noticed the other day that the Chairman of the Australian Mutual Provident Society complained because so few people participated in the recent board election. He was dismayed at the apathy of the millions of people who could have voted but who did not. All it does is draw attention to the rather monolithic institution that the industry is now. It is socially buttressed by the tax system and at least it ought to acknowledge some social obligation and not be in the forefront of the rear guard in opposing progressive reforms in this country.
– I have long had a personal regard for the Minister for Overseas Trade (Mr Crean) but when students of economic history come to read the speech he made today, along with those of other Government spokesmen in recent months, they will find this a most confusing period to study. They will see that the Government does not understand the delicate mechanisms with which it is tampering and they will see in each of the speeches, including the one just completed, a mass of selfcontradictions. We have heard today from the Minister for Overseas Trade that competition in the general insurance industry is running mad.
He is quoted quite widely as having on 13 December 1973 said: . . . there are already operating in Australia a large number of insurance companies which appear to be adequately meeting the country’s insurance requirements. In these circumstances and given the important role played by these companies in the social and economic life of Australia, there is a need for an assessment of the costs and benefits which might flow from the establishment of new companies.
Yet we hear today that yet another new company is planned- and planned with Government backing.
The Minister for Overseas Trade referred to the fact that 20 per cent of general insurance in Australia is already nationalised. He used the term in relation to the State government insurance offices. The State government insurance .offices are heavily subsidised, and undisguisedly subsidised, by the State governments. It is very difficult to compare them with private insurance companies because they are not subject to the same stringent accounting requirements of the Companies Act. It is difficult to find the ways in which they are operating compared with private industry. Nevertheless they are demonstrably inefficient. They are demonstrably unable to compete. We have a whole series of situations in which they are deliberately restraining their premiums to uneconomic levels in order to provide what they call a service. It means that in the areas of compulsory third party insurance, for example, non-car owners are subsidising the insurance of car owners. Is that what the community wants? It is a very important point.
I do not wish to spend my time answering the previous speaker. I support what has been said by the Deputy Leader of the Opposition (Mr Lynch) and by the Leader of the National Country Party of Australia (Mr Anthony). I support their reasons for seeking to have this matter deferred. There are many matters of great complexity in this Bill. First of all I record my support also for the notion of natural disaster compensation. Clearly we have to have a system of compensation for earthquakes, floods and cyclones. What is at issue is the form of administration of the compensation. We see plans put forward by the Government and other plans put forward to the Treasury in October 1974 by the industry. Opposition members have not had sufficient time to study them nor have we seen the Government’s plans clearly outlined. We require the next few months to look at them.
Secondly, I have searched the Minister’s second reading speech in vain to find any real justification for the establishment of the Australian
Government Insurance Corporation. Having listened to the debate this afternoon, including the remarks of the Minister for Overseas Trade, I still cannot find anything more than the assertions of what the Corporation can do and why it must be in the hands of the Government. We have been told that there will be lower insurance premiums. As I have said already, they will be subsidised at uneconomic levels. They are not competitive in any way. People ought to understand that, if they are not paying in premiums directly, the tax- payers as a whole will be paying for them. We ave been told that there will be better service. Those of us who have studied administration and industry know that in a situation of entrenched job security, especially at managerial level but really at all levels, there is no great incentive to make that extra effort to provide service to get the custom and efficiency and to keep costs down. Indeed, the whole essence of competition is to keep costs down.
The Minister for Overseas Trade was correct when he said that in the general insurance industry we have competition gone mad. That is a condition which has been known to the industry for years. That is why the industry approached the McMahon Government to get the Insurance Acts from which originally this AGIC was to be excluded. Now we see in one of the amendments to be moved by the Government that a certain section of the Acts- I have not had time to look at it- will not apply to the renamed Corporation. It is important that the industry has undergone willingly in conjunction with the McMahon Government and the Whitlam Government a process of rationalisation to try to reduce the number of competitiors. But certainly it is economic madness to talk about introducing another entity, government sponsored, into the field which will receive government interest free capital grants on interest free terms or low, noncommercial interest terms and endless Government backing, at least in a psychological sense.
We have heard it asserted that this Australian Government Insurance Corporation, as it will now be called, will provide more and cheaper housing loans. As far as one can tell, it seems that this will be done through what was known as the Housing Loans Insurance Corporation. This Corporation was established by the LiberalCountry Party Government. It has been a huge success. The Prime Minister praised it as recently as this week. This Corporation really is to operate as before but now under the umbrella of the new AGIC. I would also like to make it clear that I am philosophically opposed to this AGIC. I am philosophically opposed to the notion that a government body with this kind of backing and with all the advantages that go with it, no matter what the legislation may ultimately say, will have the opportunity to invest in private enterprise and have the opportunity to buy up private companies, extend its tentacles and then give the Government an undue power to influence and control the economy. This has been alluded to to some extent by the Leader of the National Country Party. It is a most important point in terms of principle. This is where the major division between the Labor Party and the Opposition parties lies. It is actually a philosophical difference and it is a perfect illustration of the division between us.
We also find that the whole proposition is really commercially unsound. It ill behoves this Government with its record of economic mismanagement to talk about the way in which its instrumentality will run in competition with the private sector which, as we have already heard, is so highly competitive and which is suffering so much from inflation, taxation and pay outs for natural disasters that it is in serious trouble. But here we have another blow at that industry. It is the height of irresponsibility for the Government to establish yet another body with all the threats to the private sector that that has. The experience of nationalised industries in the United Kingdom has been that such industries are never allowed to run at a profit, whether they operate under the Labor government or the Conservative government. They are never allowed to run at a profit because their tariffs and charges- in this case, premiums- are too geared to political decisions. It is always unpopular to increase the charges of statutory bodies. They are too geared to political decisions. This will be the situation here, no matter what autonomy the Bill says the board of this AGIC will have.
As I have mentioned already, the State government insurance offices have restrained their premiums to uneconomic levels. That is why they have a near monopoly in the field of compulsory third party insurance. Whilst the Government may claim that it has a mandate to establish this body because its establishment was contained in the policy speech of the Labor Party at 2 elections and has been in its platform for a long time, honourable members opposite cannot tell me that the people of Australia voted for the Labor Party on the basis that it would establish an Australian Government Insurance Office. They cannot tell me that they voted for its implementation at a time of extreme ill in the economy. The cost is reason alone for the
Government to reconsider the actual impact of this measure.
The Minister for Overseas Trade says that it is a pygmy among insurance companies, but it is the potential that we are all. concerned about, especially at this time. It is not just the Opposition that is saying this for some political advantage. The editorials of newspapers all around the country are saying similar things. Marches have been held in Adelaide. The people who took place in these marches are not all employees of insurance companies. They are people who are concerned by this further example of meddling in an economy by a Government which really does not understand the way in which the economy functions. If one looks also at the Bill itself and the second reading speech of the Minister for Tourism and Recreation (Mr Stewart) one sees a tremendous number of disparities between the Bill and that speech. There are a tremendous number of areas which have been given a lot of public airing. I shall not refer to them now but I will do so in the Committee stage of the debate. They are areas which, even on the face of the Bill itself, show that the AGIC will be competing at a great advantage and will not be competing fairly with private companies. The way in which the Minister for Repatriation and Compensation, Senator Wheeldon, who is the Minister in charge of the Bill, has agreed to accept some amendments has indicated this. This is also indicated by the way in which at a Press conference the Minister did not understand some of the questions that were put to him, questions that were fundamental to the insurance industry. Finally, he had to have some Dorothy Dix questions directed to him in the Senate in order to make his position clear. All these things are matters of grave concern to the general public. We have a Minister and a Government which does not understand the industry with which it is tampering and the ramifications which that tampering has for the economy as a whole.
Even if the legislation is cured so that, as far as legislation can go, we have maximum competition between the private companies and this new Corporation, we still have the psychology of the policy holders that it will be a government backed body and we have the psychology of the entrenched managers who will be appointed that really they do not have to make a profit; they are not accountable to anybody and they do not have to pay a dividend; really, they cannot be sacked because, after all, they are public servants or the equivalent thereof; anyway, the Government would always bail them out. There would be unlimited capital funds and unlimited access to borrowings if, in fact, the Government controlled both Houses of the Parliament.
In the Committee stage of the debate I shall refer to some of the other unfair aspects of this Bill. Another matter that is of great concern- it has been referred to by the Leader of the National Country Party and the Deputy Leader of the Opposition- is the cumulative impact of the package of measures that this Government plans for the insurance industry. We have the national compensation proposal, national superannuation and the Commonwealth Public Service Bill, which has been introduced into the House today, with all the potential that it has for flow-on to the private sector. What a time to introduce such a measure. We are talking about indexation of wages and restraint within the community, yet we have these kinds of measures being introduced into the Parliament for discussion. This is a serious matter for the whole community.
In effect, we find that this Bill is being introduced at a time of over competition within the insurance industry. This has been acknowledged in the debate by speakers from the Government side. It is being introduced at a time when the Insurance Acts rationalisation is taking effect and at a time when the insurance industry, like all other industries but by its very nature especially, is feeling the effects of inflation. It is feeling the effects of increased taxation from this Government. It is feeling the effects of recent natural disasters. It is feeling and perceiving a massive transfer of funds from the private sector to the public sector. These funds are being transferred from a relatively efficient area to a demonstrably incompetent area. All these matters are reasons why this Bill ought to be deferred. It ought to be examined carefully. It shows all signs of haste in preparation.
I illustrate that with one dramatic example by referring to clause 14. It is worth dealing with clause 14 at this stage because it is one of the great fears- perhaps the most serious fear of the general industry. Clause 14 states:
I stress the word ‘Office’. It does not state ‘industry’ - … in accordance with sound commercial principles, enter into a particular class of contracts of insurance, or enter into a particular class of contracts of insurance on particular conditions, and the Board shall comply with any such requests.
In his second reading speech, the Special Minister of State said:
If insurance against a particular class of risk cannot be made available on a commercial basis and if the Government is of the opinion that such insurance should be available in the national interest, the Minister may prescribe that the Australian Government Insurance Office provide it. The Government will guarantee any losses incurred in undertaking such national interest insurance.
What is important in reading clause 14 is that on the face of the statement by the Minister it would appear that, wherever insurance of a particular class or subject to certain conditions could not be conducted by anyone in the industry on sound commercial principles, then and only then will the AGIC come into the act and provide that insurance, subject to certain favourable tax advantages. When one reads the Bill one sees that there is no reference to ‘the industry’; it is only whether the ‘Office ‘ or what is now the ‘ Corporation’ will be in a position to provide this.
When one looks at the first sub-clause of clause 14 one sees reference to certain conditions. One wonders whether it will be a case of the Minister saying to the Board: ‘Can you write a certain class of insurance subject to certain conditions?’ It does not take much imagination to think that a Minister might ask the Board to impose conditions which it knows could not be complied with according to sound economic principles or sound commercial principles as it would be uneconomic for the private sector to take on that class of insurance or insurance subject to those particular conditions. So, the AGIC, which would find it uneconomic to do so, would say: ‘We cannot do it’. The Minister would then say: ‘Very well, this is a national interest matter. You can get it with all the benefits which go with it, including freedom from State stamp duty and so forth’.
The clause goes on to provide for a procedure by which the Minister and the Board communicate with each other. Sub-clause (3) of clause 14 provides that if the board has told the Minister that it cannot write a particular class of insurance subject to certain conditions the Minister can declare by regulation that it is in the national interest. These regulations, while the Opposition has a majority in the Senate, may be rejected. So, if a proposal is not bona fide in accordance with the spirit of the Minister’s second reading speech, the Senate certainly can reject the regulations. But, if ever the day comes when the present Government has control in the 2 Houses, the insurance industry has a great deal to fear and so has the rest of the country because of the power that this provision would give to the Government over the private sector.
Looking at sub-clause (3) further one sees also that this regulation prevails notwithstanding what is said in clause 13 which is the clause which makes it clear that the Board has a great deal of autonomy. This is the important aspect. By the provisions of sub-clause (3) of clause 14 there is little autonomy indeed. Finally, I turn to sub-clause (5) of clause 14 which provides:
A reference in this section to conditions in relation to contracts of insurance includes a reference to conditions with respect to the amount of the premium to be charged or the percentage of the amount of the loss to which the insurance is to extend.
So, it is not a case, as the second reading speech of the Minister which I quoted earlier implies, of a particular contingency which we are considering; it is the case of any conditions which the Minister cares to lay down in respect of premiums to be charged or the percentage of the amount of the loss to which the insurance is to extend. This is a very serious inroad. If that was done in haste, it certainly ought to be withdrawn. If it was not done in haste, it can be regarded only as devious and it is another justification for having the matter examined more closely.
One wonders whether, on a closer examination of the legislation than we have had in a fortnight, one would find many more faults of that nature. One can say only that the Government has been told many, many times that it has moved too hastily in too many areas. This is yet another example of its eagerness to get through a massive reform and to set up a new lot of bureaucracies, meddling with a private sector which in fact has served this country very well and which has increased the living standards of all Australians as a result of its investments. One can always argue whether productivity should have been higher and whether different and more productive investments should have been made; but there is no argument that a government could possibly invest, prosper and increase the productivity of this country better than the private sector. It was said in 1972 that LiberalCountry Party governments had become out of touch with the people after 23 years. One can say only that this Government has achieved that in 2 years. It has created an unbelievable amount of economic and social chaos in that time. If this Bill is not deferred and given the closest scrutiny, we will have an even more serious state of economic and social chaos on our hands. Therefore, I support the amendment moved by the Deputy Leader of the Opposition.
– It is very much to be regretted that an insufficiency of information in the Australian media has made it possible for some employees of the insurance industry to be worried by stories about this legislation and the intention behind it which have no basis whatsoever in fact. It is very much to be regretted that this opportunity has been used by some people in senior positions in the insurance industry and elsewhere to campaign not in the legitimate interests of the insurance industry, but against the broad program of the elected Australian Government. I hope to have time to say something more about that at a later stage.
I should not launch into this debate this afternoon without saying at the outset that the Australian Government rejects nationalisation of the insurance industry either directly, which could not be carried through without a referendum, or indirectly, by stealth, as some insurance spokesmen have suggested. The Government is committed to the maintenance of a mixed economy in which private and public enterprises co-exist and compete freely and fairly with one another, as has been the case for many years with TransAustralia Airlines and Ansett Airlines of Australia and with the Commonwealth Bank and the private banks. This Government regards the existence of monopolies in either the private sector or the public sector as against the public interest. It rules out nationalisation of the insurance industry as monopolisation under another name.
It could not be argued that all was well economically with the Australian insurance industry. The number of cents in every premium dollar which is eaten up by operating costs has been rising steadily throughout recent years. In 1968 it was 22.51c in every dollar, in 1969, 22.91c in every dollar, in 1970 23.29c in every dollar, in 1971 24.5c in every dollar and in 1972 24.52c in every dollar. This means that $1 in every $4 that Australians pay for life assurance is needed simply to keep the colossal administrative structure of this industry on its feet. It is spent, as we now know and as most Australians now know, although they had little inkling until this week, on political campaigns undertaken without the consent of their policy holders or it is taken up with contributions- whether in cash or in kind is immaterial- to political parties such as the National Country Party of Australia.
If we look at the annual reports of particular companies operating in the insurance industry the position is shown to be even more disturbing. In 1973-74 the Sun Alliance Insurance Co. spent 33c of every premium dollar it was paid on commissions and expenses. The Commercial Union Insurance Co. of Australia spent 36c and the QBE Insurance Co. 38c. The commissions and expenses for State government insurance offices totalled only 6c in the premium dollar for Victoria, 8c for New South Wales and 20c for Queensland. The honourable member for Balaclava (Mr Macphee), who can always be relied upon to make a reasoned contribution to these debates had some reservations about the comparability of those figures. Of course there are difficulties in comparing statistics of this kind but no difficulty in definition of category will account for the enormous discrepancy which is exposed in the figures I have given.
This Government is concerned about the extent to which the Australian general insurance industry is owned and controlled outside this country. Overseas insurance companies, as the Minister for Overseas Trade (Mr Crean) was telling us a short time ago, transact 77c in every dollar of this country’s reinsurance business. I gather that the honourable member for North Sydney (Mr Graham), who is trying to interject, regards that fact with indifference. That is not the case on this side of the House. People on this side regard it as deplorable that a business which so pre-eminently lends itself to conduct within Australia should be so overwhelmingly conducted outside Australia. As I said, overseas companies transact 77c in every dollar of our reinsurance business. Overseas companies receive 77.7 per cent of every dollar paid by Australians on marine insurance, 65.2 per cent of our fire insurance premiums, 52.9 per cent of our personal accident insurance and more than half our household comprehensive insurance. All told, the locally controlled free enterprise general insurance companies- the people who are primarily responsible for the agitation against this Bill- conduct only 34.7 per cent of Australia’s general insurance business. That is the amount all these companies have to share among themselves, whereas the 15 largest overseas companies alone take 32. 1 per cent of our business. The share of the 15 largest overseas companies is almost as much as the total share of the Australian companies of the Australian general insurance market. Of course the extent of overseas control would be even greater if overseas companies had not so successfully offloaded on the State government insurance offices so much of the less profitable aspects of insurance business, most notably third party motor insurance. One important reason for establishing the Australian Government Insurance Corporation is this Government’s firm belief that the occasion of the introduction of new forms of insurance activity such as crop insurance and natural disaster insurance -
- Mr Deputy Speaker, this is a very important debate. I notice that there are very few members on the Government side of the House. I draw your attention to the state of the House.
-Ring the bells. (The bells being rung)
– Quorum present.
- Mr Deputy Speaker -
-Order! I have not called ‘quorum present’. (The bells continuing to be rung)
-A quorum is now present.
– I appreciate the attempt made by the Leader of the House to maximise the time for my speech which the Opposition is so studiously trying to minimise. I was saying when I was interrupted by the honourable member for Stirling (Mr Viner) that one important reason for establishing the Australian Government Insurance Corporation is this Government’s firm conviction that the introduction of new forms of socially essential insurance such as crop insurance for Australia’s farming community and natural disaster insurance to cope with emergencies such as the Brisbane floods and the Darwin cyclone should not become the occasion for overseas companies capitalising the profits and socialising the losses of the general insurance industry as they have done with such overwhelming success in the past. This Government rejects the view of some insurance industry spokesmen that the profits of insurance are the prerogative of the free enterprise insurance companies and that the losses should be the prerogative of the Australian taxpayer.
If this Government and, through it, the Aus.tralian taxpayer are to have the burden of insurance in all its unprofitable and, I say again, socially essential forms thrust upon them they ought to be free to offset as much as possible of the cost by competing for profitable insurance business with the private companies in the same fair way as the Commonwealth Bank competes for profitable business with the private banks. Nobody seriously suggests that the Commonwealth Bank is a device for what has been described and is being described again as nationalisation of banking by stealth. I do not believe anybody, whether an employee or of an insurance company, a policy holder or a citizen at large, should allow himself to be deceived into believing that the situation would be different in the case of the Australian Government Insurance Corporation and the private insurance industry.
There can be no doubt that many of these stories are being put about for strictly Party political purposes, or for sectional purposes, in some instances at least, by people who do not themselves believe what they are saying. Mr Deputy Speaker, you would be aware that only a day or so ago the conservative ‘Sydney Morning Herald’ identified the director of the campaign against the Australian Government Insurance Office, Mr Nick Renton, as ‘ a member of the Victorian State Council of the Liberal Party and a former general secretary of an insurance company operating in Australia and wholly Swissowned’. What more perfect combination of the qualities which have inspired the campaign against this new measure could one get than in the person of Mr Renton- a State Council member of the Liberal Party and a former general secretary of an insurance company operating in Australia but wholly Swiss owned. An article in the Melbourne ‘Herald ‘ gave us further information on this gentleman, Mr Renton. It identified him as not merely a member of the State Council of the Liberal Party but a former Liberal State executive member and a former Liberal parliamentary candidate.
One of the intriguing things about this whole debate has been the extent to which the National Country Party has been willing to align itself with opposition to the Australian Government Insurance Corporation, even though the establishment of this Corporation is the best hope that the farmer of this nation has ever had of obtaining insurance for his crops. Canada, France, Israel, Japan, South Africa, Sweden, the United Kingdom and the United States all provide crop insurance. In the case of Japan, South Africa and the United Kingdom, it is provided on a private basis. In addition, Japan, Norway, New Zealand, Spain and the United States provide insurance against property damage arising from natural disasters. Government members cannot see why this country should do less for its farmers whose livelihoods are constantly at the mercy of the elements, or for householders in areas endangered by potential natural disasters than all these other nations which are certainly no more affluent than our own.
It is a commentary on the way influence can be misused in this community that the National Country Party should have been bought off by the insurance industry from supporting the establishment of an Australian Government insurance office which would provide the crop insurance for the farmers it purports to support, the crop insurance which they have needed for so very many years and which they have been denied by the industry which the National Country Party now so vehemently supports. It is a commentary on the misuse of influence that the National Country Party should have allied itself with forces resisting the provision of natural disaster insurance through an Australian Government insurance office. In the last 9 months alone premiums for third party motor insurance in New South Wales have increased by more than 100 per cent. In this morning’s ‘Australian Financial Review’ we were put on notice that premiums for workers compensation insurance are to rise by 50 per cent on 9 May after rising by 15 per cent in January. How is the Australian taxpayer to cope with the increasing cost of these forms of social insurance, current or proposed, unless he secures some sort of offset from the more profitable forms of insurance, which the whole thrust of argument from honourable members opposite maintains should be left to the private insurance companies.
The insurance industry has encouraged its employees and agents to send a number of petitions to this House. Among other things, the petitions include the prayer that:
As employees and agents of existing insurance offices, your petitioners fear for their jobs and their future prospects if Parliament proceeds with the legislation.
Employees of the insurance industry have good reason to know that if there is a threat to their jobs or futures, it comes not from this Parliament or this Government, but from the industry itself. In August 1974 Underwriting and Insurance Ltd laid off 8 employees. In September the Northumberland Insurance company laid off 40 employees and the Commercial Union Assurance Co. of Australia Ltd laid off260 employees. In November the Switzerland Life Assurance Society Ltd laid off 3 employees, the Ajax Insurance Co. Ltd, 20 employees, AFG Insurances Ltd, 40. In January, CGA Fire and Accident Insurance Co. Ltd, 4, the New Zealand Victoria insurance company, 25. In February, the Lombard Insurance Co. Ltd in South Australia laid off 14 employees. Further retrenchments must be regarded as being foreshadowed by insurance office losses which have risen from $640,000 to $2. lm in the case of QBE Insurance Group Ltd, from $2.4m to $5.9m in the case of the Commercial Union Assurance Co. of Australia Ltd and from $1.8m to $10m in the case of the Royal Insurance Co. Ltd. It is not the Government’s intervention, but the way in which the industry has managed its own affairs which has brought about the retrenchments which I have summarised and the ones which industry spokesmen themselves foresee. When the executive director of the Life Offices’ Association of Australia, Mr Renton, to whom I have already referred, told the ‘Australian Financial Review’ on 28 April that the Australian Government insurance office would require expert staff who could be found only from the existing industry where there is a shortage of experienced and qualified people, the Australian Insurance Staff Federation pointed out that general insurance companies had retrenched over 430 staff in the last 6 months alone, most being experienced staff with long service.
Mr DEPUTY SPEAKER (Mr MartinOrder! The honourable member’s time has expired.
-As one who has been interested in the whole business of insurance- both general insurance and life insurance- for most of the time I have been in political life, I would like to make some fairly strong comments about the Bill now before the House. I first ask: ‘Is there a need for a Bill of this kind- a Bill to establish an Australian Government Insurance Corporation?’ I mention to the House that there are 45 life assurance companies in Australia and probably a few more than 260 general insurance companies. I have long taken the view, which I shall elaborate on in a few moments, that it seemed to me that 260 general insurance companies was far too many for this country, but the Treasury did not agree with me.
Let us look at this problem from several points of view. One aspect relates to the degree of Australian ownership and control, or foreign ownership and control of these 2 sections of the industry. I take the more important of them, life assurance. As ought to be known by honourable members there are 5 major life assurance offices, or 4Vi if one likes to put it that way. Australian life offices have control of 72 per cent of the assets. One of the offices is partially controlled with Australian assets of 8 per cent, and the other 4 are mutually controlled. This brings total Australian ownership and control to 80 per cent. No one can complain on that ground that anything ought to be done about life assurance offices. Let us look at general insurance. Australian ownership is 55 per cent and direct foreign ownership is 41.4 per cent or 45.7 per cent of both direct and indirect ownership. No one can say that this means there is a monopoly of ownership and control by foreign corporations in this area of activities. In other words, with regard to this aspect of foreign ownership and control there is no ground for bringing down this Bill.
Let us look at another matter on which there has been more confusion than I could ever have believed possible in a House as well informed as this one normally is. Let us look at where the insurance gaps are. With regard to the problem of national disasters where it is alleged there is a gap, I believe there is an answer which everyone ought to know about. I well remember- I hope there arc one or two honourable members from Tasmania in the chamber who will remember also- bringing down a Bill in this House on 20 April 1967, in which we took a totally different approach to damage on a national scale caused by fire to that taken before. It was a totally different approach before. It related to the problem that occurred when there was a devastating fire in Tasmania. The Liberal-Country Party Government at that time passed a Bill appropriating $ 14.5m- very nearly the whole of the cost of the damage that was caused.
I also well remember making a speech in this House on 27 November 1968 in which I said that the Government at that time had decided to take a totally different approach to the damage caused by natural disasters. I said:
From a minimum amount the Government has now provided substantial sums in order to permit the States to get on with the job of combating national disasters. In the last 3 years we have supplied about $70m . . .
I went on to say- I believe this to be tremendously important:
We have no fixed rules to determine the way in which we will give assistance.
I believe that was the right approach because the geographical spread of Australia is so great, the climatic conditions can be so different and the circumstances in which a disaster occurs and the amount of the damage can be so different.
Therefore at that time we decided that it would be far better to handle this matter not through funding but on prescribed rule through direct government subventions tailored to meet the specific need in order to take the main burden of the responsibilities off the people and the corporations involved. I then said: . A new approach permeates the thinking of the Commonwealth today. It must be obvious to the House that the Prime Minister (Mr Gorton) has taken a personal interest in fire relief in New South Wales.
I then discussed the question of organisational problems and came down more heavily in favour of handling the matter on the basis that one should know the facts and then decide policy on each specific set of facts.
I give an illustration of some of the foolish arguments that have been put to us about whether or not there has been any failure by the private companies in regard to natural disasters. We are told that damage in the Darwin disaster amounted to $500m, of which $270m would be taken up by the private insurance organisations. I know that supporters of the Labor Party could say: ‘Ah, why has not the other $230m been covered?’ A simple reason is that government property was involved and the Government likes to look after this property itself. It does not want the private insurance companies to take from it the money that would be paid in premiums. That is the complete explanation in respect of Darwin.
Honourable members opposite talked of what happened in Brisbane. Anyone who knows anything about the general insurance business knows that there were flood prone areas in Brisbane which could not be covered by normal insurance unless high premiums were paid. I believe that the Government again could have easily stepped in in an area like this. I understand that even today local councils in these flood prone areas are not prepared to take appropriate action to prevent or discourage building in flood prone areas.
I move to another area in which the Government believes that something should be done, namely, the insurance of livestock and crops. I must admit immediately that I have an indirect personal interest here. I can get insurance but the regrettable fact is that one must pay a lot for it. If the Government likes to introduce a subsidy scheme for insurance of livestock and crops- and bless its heart and soul if it does- let it do so.
I believe that the national interest insurance should be handled in the way that we handled it with tremendous success; so much so that at the end of 1972 and for the previous couple of years we did not hear very much about who would pay for fire, flood, storm and other acts of God. It was known that the Liberal-Country Party Government would pay and that the responsibility would be taken off the shoulders of other people.
– And the acts of God have been worse since Whitlam.
– That was not an act of God; it was an act of the devil. Let us now consider the enormously important question of losses made by insurance companies. It is true that one or two small insurance corporations have gone bung. But let us have a look at the losses that have been made by the State government insurance offices in the last couple of years. Someone in his wisdom today got in touch with me and asked whether I had the latest figures concerning those losses. I was not certain whether he was a friend or foe but I took him at word value. He gave me figures for the losses made by the Government insurance offices for the last year. The Government Insurance Office in New South Wales lost $29m. In Victoria the loss was $10m on workers compensation and motor vehicle insurance alone, In the case of Queensland- and this is understandable because of exceptional circumstances -
– That is all they can do, too.
– Oh, do keep quiet and be a good boy. Queensland lost $25. 3m. As I said, this loss was due to very exceptional circumstances. If we had been in Government we would have taken the responsibility there as I believe would have any sane, sensible and humanitarian government. Tasmania, as one would expect, had a loss of only $293,000. The third point I raise concerns the continued building up of a massive and powerful bureaucracy in Australia that one day or other will dominate the community. Do not take these words of mine and mine alone. I quote what was said by Dr Cairns, the present Treasurer, when he spoke at the International Socialist Conference in Adelaide on either Sunday- it might not be Sunday to him but to those of us of some religious persuasion it was Sunday -
– It was Monday to me, and I was there.
-Well, it is never on Monday for me, as it is most days of the week. Dr Cairns talked about the dangers of a bureaucratic society. Yet, as I shall mention in a few moments, he was the main architect of the so-called ‘Terrigal Escapades’ or series of escapades relating to the new policy. However, before speaking on that, I refer to the interdepartmental committee that was set up by the Labor Party. Bearing in mind that there will be health insurance and national compensation, the Committee recommended that:
It would seem advisable for the AGIO -
Or now the AGIC- to avoid personal injury and sickness insurance and life insurance until it is clear what gaps are left to be covered by insurance.
Last gallup polls show that only 17 per cent of the Australian people thought that the establishment of such body as the AIGC was desirable and that only 6 per cent knew that the Government had any intention of entering into the industry.
If this is not total proof that such a body is not necessary, I do not know what more honourable members opposite can expect. Every intelligent supporter of the Government- there are many intelligent honourable members on the other side- who thinks clearly, sensibly and decently will join us and vote with this side of the House on this matter.
One has to look for some other reason and what the motivation was behind the support of honourable members opposite for this measure. It is true that the Prime Minister (Mr Whitiam) in his 1974 policy speech stated that his Government would introduce an Australian Government insurance office. But that is not the point. You, Mr Deputy Speaker, would know better than I that this matter is contained in a report of the thirty-first meeting of the Australian Labor Party which took place in that entrancing, indulgent fleshpot of Terrigal. A move was made to have item 24, which dealt with national insurance, deleted from the platform. It was successful. This is the item which provided for safeguards when any insurance office was to be established. The item states:
The establishment of an Australian Government Insurance Office actively competing with private companies in all States in the Held of life assurance . . .
It was decided to emphasise clause 4 to what is now clause 5 which provides:
With the objective of achieving Labor’s objectives, establish or extend public enterprise, where appropriate by nationalism -
An ism reminiscent of fascism and communism- particularly in the fields . . . of . . . insurance.
Who moved that motion? It was no one else but Dr Jim Cairns himself, the author of ‘The Quiet Revolution’ and the man who undoubtedly is pledged to the maximum of his capacity while he is in his present position to socialise Australian industry.
If we want to know to what purpose the funds to be diverted from the private sector are to be put we have to turn back to what was said by the celebrated Treasurer. I do not want to know the man. He has had to put up with so much criticism because as the scribe said they did not understand what he was saying. Nonetheless, I think I was able to understand when he was asked the question: ‘Do you envisage the money that would have to be diverted from Mr Connor’s projects to go to the minerals authority?’ Without any reservations at all the Treasurer replied: ‘Yes. It is going to get the priorities’. This is despite the fact that Mr Hurford, the Chairman of the Economics Committee, said that this was a lot of nonsense and that they ought not to get the money. Those honourable members can argue it out among themselves. All I am doing is pointing out the facts and indicating what the motivation was.
There is another point I want to speak about here because I think it is so critically important. At this moment in the history of this country the Australian Labor Party is positively acknowledging the point of view that the percentage increase of the gross national product taken by wages is moving from somewhere about 6 1 per cent or 62 per cent to 70 per cent, with profits falling from about 16.5 per cent to, I believe close to 7 per cent. Something must be done to permit funds to be diverted back to the private sector of the economy and away from the public sector of the economy. This would be known by those who have a brain in their head, although I cannot see many honourable members on the other side of the House whom I can put in that category, with the possible exception of the Special Minister of State (Mr Lionel Bo wen) who is sitting at the table. Having looked at the diversion of resources we must know that in the 1 972-73 Budget the Government diverted resources from the private sector to the public sector of about $2, 800m. In the last Budget the Government ran that figure to nearly $4,000m.
What does this mean? What is the Government doing now? It created a depression in this country. It created unemployment of a kind which we would never have believed to be possible when we were in Government for a period of a little more than 21 or 22 years. The Labor Party created inflation of a kind which was intolerable. If Treasury had advised that inflation was going up by 9 per cent it would have frightened the daylights out of us. Now we have to sit and look in anguish while the men opposite get it as high as 16 per cent and, next year, it will probably move to 20 per cent or 25 per cent.
But, Mr Deputy Speaker, let me put this to you: It is true that the diversion of the resources from the private sector to the public sector has been one of the great causes of our misadventures. It has been one of the biggest blunders in economic policy that I have ever known. Now by the operations of this Government in introducing 4 Bills- I mention only the Australian Government Insurance Corporation Bill but there is also the Health Insurance Bill, the National Compensation Bill and the National Superannuation Bill, if they go through- an enormous amount of money in addition will be diverted from the private sector to the public sector. I want to give the House some figures. They are my own. I take full responsibility for them, although I have had some guidance. I believe that we have to look at these figures in 2 ways. Consider the first three Bills, the one relating to workers compensation and the ancillary measures relating to the national health scheme and also the national superannuation scheme.
Professor Downing, known for his attachment to the Labor Party, although lately he has been rather muted and a little cautious about the way in which he has expressed himself, said that the costs of those schemes would be $2,800m. The cost will have to come from the assets of the life and general insurance offices and superannuation funds and from other sources within the private sector. The life offices have assets valued at $8,400m, superannuation funds have assets of $2, 500m and the general insurance industry has assets of $3,100m. This is a total of $14,000m. If we take only 10 per cent of that total- and that must be the basic minimum- then we see a diversion of resources of $ 1,400m.
The Labor Party caused our present discomfiture by adopting budgetary and financial methods which it did not understand. Honourable members opposite brought down the credit squeeze because they did not know how to read the bulletins of the Reserve Bank of Australia relating to the money supply. Even if somebody told honourable members about the money supply and the various definitions of Ml, M2 and M3, there was not a bloke on the other side of the House who would do anything but look, not like a stunned mullet, but like a cow on its death visit to the abattoir.
So, Mr Deputy Speaker, do not think that I have any compassion for the actions of the Government and for what its members have done to the Australian people. If the Government diverts these assets away from the private sector to the public sector, what will the consequences be?
Without any doubt this will deprive private enterprise of the ability to borrow money for any debentures, for shares, for mortgages, to contribute money to Australian Government securities and in local government securities. I believe that the Government has created enough disasters. But I impress upon the House that if we want to see disaster compounded by disaster- conditions growing worse and worse while the Labor Party remains in office- then let us pass this Bill.
I will not vote for it. I will vote against it because I believe confidence has to be restored, and the sooner the business community knows that this Bill will be chucked out and that the community will not be deprived of access to the money markets for its development programs the better.
I mention one other fact to support my argument. We find that new buildings and construction are down at an annual rate of 8.4 per cent this year and that new plant and equipment will be down 5.2 per cent. This is a positive indication of the fact that if we want technological investment and investment in capital plant and equipment to go on to ensure the growth of the economy and the diversion of the resources to the private sector we must reject this Bill.
Mr DEPUTY SPEAKER (Mr Martin)Order! The right honourable member’s time has expired.
Sitting suspended from 6.2 to 8 p.m.
– Speaking before the suspension of the sitting for dinner in opposition to my Government’s Bill to establish the Australian Government Insurance Corporation, the right honourable member for Lowe (Mr McMahon) directed attention to natural disasters. In so doing he highlighted one of the great reasons for this Bill. He may remember saying 8 years ago:
As Minister for Primary Industry I had a survey carried out to ascertain whether a national disaster fund on an insurance basis would be effective . . . We were advised by the best technical experts that we could muster that such a scheme was impracticable. Neither I nor the Department of the Treasury has carried out any detailed investigation since I became the Treasurer.
Nevertheless, in response to a question by me later in that year a project was commenced by the Treasury to acquire information and undertake research on natural disaster relief schemes overseas. The right honourable gentleman could not specify any progress in answers to me in 1967, 1968 and 1969; nor could Treasurer Bury in 1970; nor Treasurer Snedden in 1971 and 1972. The last Liberal Treasurer, in fact, stated in December 1971:
The provision of assistance to those adversely affected by natural disasters such as bushfires, floods and droughts is primarily the responsibility of State governments which are in the best position to assess the need for, and provide, such assistance … the Commonwealth has always been prepared to assist, on humanitarian grounds, in financing expenditure on emergency relief of personal hardship and distress . . . Commonwealth assistance . . . does not normally extend to the cost of restoring private assets damaged by natural disasters, it being regarded as the responsibility of the individual to provide against such losses by way of insurance. These arrangements have worked, and are working effectively.
Such Liberal attitudes must have infuriated the householders who suffered in the Brisbane floods 15 months ago. Through no fault of their own, through lack of action by governments, thousands and thousands found themselves without adequate insurance protection.
In the Government’s re-election campaign in April last year, I stressed that we would set up the Australian Government Insurance Corporation to which the Australian Labor Party had long been committed in order to compete in all forms of insurance and to provide, in particular, the widest possible cover for homes at the lowest possible premiums. The present Bill is a redemption of that undertaking of a year ago. So, what is the reaction of the Liberal Party? The Deputy Leader of the Opposition (Mr Lynch) moved that further progress of the Bill be deferred until the Budget sittings. I suppose that to a Government which delayed for 4Vi years after the matter was brought to its attention by my questions another half-year is not to be taken into account. What does it matter if there is another natural disaster in the meantime? Effective insurance, we are told, is available to people. From Liberals, delays are to be expected; but the National Country Party has led the opposition behind the scenes to this Bill.
The Bill provides that if insurance against a particular class of risk cannot be made available on a commercial basis and if the Government believes that such insurance should be available in the national interest, the Minister may direct the Australian Government Insurance Corporation to provide it. The Parliament is entitled under the Bill to override the Minister in any such case. This approach will allow new forms of insurance against the destruction of crops and livestock, a vastly improved service for the man on the land. Yet this is what the Leader of the National Country Party (Mr Anthony) and other National Country Party members are ready to oppose. We know that the Australian Mutual Provident Society sponsored a meeting with 8 National Country Party members of this House on the 16th of last month. What an extraordinary alliance against the interests of the farmer, the man on the land- the first and the greatest victim of national calamity!
I invite honourable members to consider just 3 examples of recent natural disasters in the electorates of National Country Party members who were shown to be in league with the insurance interests which hitherto had neglected the interests of country people. The honourable member for Riverina (Mr Sullivan) was present at the meeting. Has he forgotten that there were serious floods in his electorate in October 1974 and bushfires in December, which required the intervention of the Natural Disasters Organisation? There was no insurance available. Has the honourable member for Wide Bay (Mr Millar) forgotten the hazards and damage caused to farmers by the floods in the Maryborough area in January last year? There was no insurance available. Has the honourable member for Cowper (Mr Ian Robinson) forgotten the flood damage in his electorate in late 1973? Again there was no insurance available. The Government has already taken substantial steps to assist those stricken by natural disasters.
– Why do you need a government insurance office to do that?
– Don’t you want to keep the economy going?
– I wish you would show a little more tolerance to ex-Sydney university professors of economics.
-Order! I suggest that the Prime Minister continue his speech and that other honourable members cease their conversations.
– I hate to think what would have happened in Darwin after cyclone Tracy if my Government had not established the Natural Disasters Organisation. Since its formation, the Organisation has also been involved in coordinating Australian Government support to assist States fighting floods and bushfires. The 3 branches of the defence force have been given the positive role of assisting the civilian community wherever disaster strikes. This role was amply fulfilled in Darwin, and during the extensive floods in eastern Australia and the major bushfires in south-western New South Wales last year.
In addition to this operational support, the Government has given substantial financial support to States to aid the victims of natural disasters. To give legislative effect to my Government’s undertakings, the Parliament passed the New South Wales Flood Relief Act and the Queensland Flood Relief Act last year. These Acts provided for payments to the States concerned of up to $5&m and $66m respectively in reimbursement of eligible expenditure incurred by them during the period ending 30 June 1976. It will be seen that, however willingly these efforts are undertaken, they represent a substantial and growing burden on the taxpayer. In 1973-74 our total outlay for disaster relief was $28.8m. This financial year we appropriated in the Budget $46. 9m. Since then we have had to appropriate $13m for the disaster in Tasmania and $67.7m for the Darwin disaster. This financial year the Parliament has had to appropriate $ 127.6m for natural disasters. It can be seen how much the private citizen has had to bear because there is no insurance to cover his personal losses and governments have not yet undertaken to cover all personal losses in such natural disasters.
Let me give the extent to which these matters have increased. Only 20 years ago, in 1954-55, the amount which the Federal Parliament appropriated for natural disasters was $1,206,000. Ten years ago, in 1964-65, the Parliament had to appropriate only $100,000. This year it has appropriated $ 127.6m. In the interests of the general taxpayer it is essential that more of these costs be met by insurance. As for the individual who suffers loss, he bears it because at the moment there is no insurance company prepared to assist him. The facilities are not available. I emphasise that the decision to establish the Australian Government Insurance Corporation was not simply a response to the natural disasters of 1974, though these events hastened our action.
The Australian Government Insurance Corporation will operate in fair competition with other insurance companies. My Government has conferred with representatives of the insurance industry, and has responded to their representations by explicitly guaranteeing that the AGIC will be on an equal legislative and financial footing with other companies. All legitimate and reasonable objections of the private companies have been met. Their only remaining concern is fair competition from a vigorous new competitor in the field.
These are 2 particular areas in which the Corporation will provide much needed competition. The first is household insurance. In this field it is not uncommon for quotations for insurance to vary widely not only between the State government and private offices but also between private companies. People are clearly not aware that some offices offer cheaper premiums than others. This suggests that there is considerable scope for healthy competition. The AGIC will provide it.
The second field in which competition is needed is in reinsurance. Australian companies have provided little competition for the predominantly foreign-owned companies providing these facilities. Every year hundreds of millions of dollars worth of reinsurance business is placed overseas, causing large funds to be lost to Australia. Reinsurance undertaken by the AGIC will ensure that in the longer term a much greater share of this money is retained in Australia where it can be used for the benefit of Australian industry.
In addition to insurance services for the general community there is a range of insurance services which can be provided for government instrumentalities, including advice on the needs of insurance cover for government undertakings. The insurance business of some government instrumentalities is now put in the hands of private offices with the final contract usually being placed with large overseas insurers. I see no reason why the Australian Government should not provide some of its own insurance services in the interests of efficiency and to promote a higher level of Australian owned insurance services.
The Constitution gives this Parliament a wide power over all aspects of insurance except for State insurance not extending beyond the limits of the State concerned. Under this power the Parliament has enacted a number of important Acts regulating the insurance industry, the most recent being the Insurance Act 1973. Previous legislation of this Parliament relating to insurance, including legislation enacted by the previous Government, has gone beyond the mere regulation of private insurance companies. Indeed, previous legislation established government corporations to engage directly in specialised kinds of insurance. There was the Export Payments Insurance Corporation, first established in 1956 and replaced last year by the Export Finance and Insurance Corporation. There was the Housing Loans Insurance Corporation established in 1965 to provide insurance in regard to housing loans not readily available on the private market. There is, then, clear constitutional authority for this Bill and there are precedents already for the creation of a national insurance corporation by this Parliament,
As honourable members will know, for years, for 2 generations, the War Service Homes Division which is now called the Defence Service Homes Division has provided insurance. The only people in the Brisbane floods who were covered by insurance were those who had war service homes. Over the years, the war service homes scheme has been profitable and the premiums are the lowest available anywhere in Australia.
-The Minister for Housing and Construction interjects that sometimes premiums available under the defence service homes scheme are only one-eighth of those charged on similarly valued properties by private companies. The next lowest insurance premiums available are those paid by the Commonwealth Savings Bank borrowers. These, of course, are Federal schemes. Does anybody cavil at them? Would anybody restrict or cancel them now? Of course the Federal Government has had the power to do these things and there are tens of thousands who have benefited from initiatives in the past. The present initiative will crown all those previous initiatives.
The provision of insurance services by governments in Australia is not a recent innovation. The first State office was open as long ago as 1914, with all States except South Australia establishing offices by 1926. South Australia set up the last State office in 1971. At present, all States write workers’ compensation. Queensland, in fact, has given the State Government Insurance Office a monopoly in that field. Comprehensive and third party motor vehicle insurance is written by all State offices. Fire and marine insurance is written in 5 States; life insurance in 2 States, New South Wales and Queensland. The latter States also have reinsurance business. In total the States write about 20 per cent of general insurance business and about 21 per cent of life insurance business. It is clear that government involvement in commercial forms of insurance is nothing new. The wonder is that Federal governments have for so long failed to provide wider insurance services.
One other aspect of what the AGIC can achieve is very much in the mind of the Government. The Corporation will provide opportunities for women employees which will set an example to the whole insurance industry. In terms of employment in the AGIC women will have the same rights and opportunities as men. In addition, the Government will encourage the AGIC to extend to women the same opportunity to take out policies as men now enjoy.
I turn to the issue of overseas control. Honourable members will know that the matter of foreign ownership and control of Australian resources has been examined by the Senate Select Committee on Foreign Ownership and Control appointed in 1971. The private insurance industry- both life and general- presented submissions to that Committee. The Life Insurance Commission and the Australian Actuary, in evidence to the Committee, showed that the number of Australian owned or controlled life companies actually fell from twenty in 1946 to thirteen in 1971, while the number of foreign owned or controlled companies increased in this period from two to thirty-five. By December 1973 the number of foreign owned life offices had again increased and the numbers stood at twelve Australian owned and thirty-six foreign owned. In a study of the industry just released, the Australian Bureau of Statistics disclosed that 37 per cent of life insurance business is foreign owned and that 46 per cent of general insurance premiums paid in 1972-73 went to foreign organisations operating in Australia.
Foreign interests, therefore, hold a significant degree of ownership and control in the Australian insurance market. In the general insurance market, in particular, foreign controlled companies have the lion’s share of the more lucrative business. The Government believes that not the least advantage to come from the Australian Government Insurance Corporation will be an increase in the degree of Australian control of the industry.
The Government makes no apology to the insurance industry, public or private, for actions and policies in the public interest. There is in the view of my Government an overriding need to provide better insurance services to the Aus.tralian people, services which are more acceptable and complete as to conditions and prices. It will offer this service not only to the man in the street but also to the business community. There is also the need to provide insurance services exclusively to meet the particular requirements of government business undertakings. The Aus.tralian Government Insurance Commission will be an Australian community insurance service, managed by Australians in the interests of Australians.
– We have just heard from the Prime Minister (Mr Whitlam). It does not do the honourable gentleman credit simply to select one of the two issues with respect to the Australian Government Insurance Corporation which suit his particular argument. Like the second reading speech of the Special Minister of State (Mr Lionel Bowen) the remarks made by the Prime Minister sound plausible; they sound even acceptable; but he avoided the entire thrust and the . entire ideology upon which this Bill is based.
The Prime Minister made no attempt to inform the Australian community that the insurance industry has made a creditable contribution to the Australian economy, with 45 life offices- many of them in a mutual capacity- and 260 general insurers. The industry provides a great deal of competition, a massive contribution to private investment throughout the country and indeed a valuable contribution to government and semi-government borrowings and financial requirements throughout the country.
The Prime Minister spoke of natural disasters. I do not think that any honourable member for Queensland or New South Wales needs the Prime Minister to remind him of the tremendous loss of property which occurred in the recent floods in Queensland and northern New South Wales. We are all aware of the substantial damage caused by the recent cyclone in Darwin. This Bill is but a smokescreen to hide the real intent and real thrust of the Government. Of course we need to have some improvement in the capacity to cope with natural disasters in Australia, but has any consideration been given by the Government to discussions with the industry? Has the Government been prepared to study the New Zealand scheme in which there is a real relationship between the Government and the private insurance industry in that country? Has the Australian Labor Party Government been prepared to look at the experience in some of the States of the United States of America where a real spirit of co-operation betwen the private industry and the government has meant a very valuable cover for these types of disasters? Indeed this Government has found it very difficult to have any relationship with the industry other than in the last few weeks.
I hope the nation understands that the real objective of the Bill is to implement the Labor Party’s platform, part of which is the nationalisation of industry. One of the key industries which the Labor Government seeks to nationalise is the insurance industry. The Labor Party and the Prime Minister did not come clean before the 1972 election. The Labor Party and the Prime Minister did not come clean before the 1974 election. It is a shame that here tonight when the Bill is being discussed there is still not a member of the Labor Party who is prepared to come clean and tell the nation what is the real intent of this piece of legislation. Where will the funds be used? The funds will be used to finance the socialist objectives of this Government. Whether it is for the Australian Industry Development Corporation, the Petroleum and Minerals Authority or some other bureaucratic instrumentality which the Government has the capacity to think up, that is where the funds will be used. If they are not used there they will be used to try to gain some influence and control over private industry.
When we talk about natural disasters I can think of nothing greater than the disaster of this Government having nominees on public companies throughout Australia. That is one of the intents of this legislation- more control and more Government nominees. Surely some reasonable members of the Labor Government will be prepared to study history in Australia, not only nationally but also in the States, where these sorts of public enterprises have rarely proved successful. In the main there have been substantial losses which have been paid for by the taxpayers of this country. Where is public support for this sort of corporation? Where is the cry from the public that we need it? All the indications are that there is a great deal of concern within the Australian community regarding this proposal of the Government. Not only people involved in that industry but also many other members of the community have demonstrated very clearly in the last few weeks that they are opposed to this intrusion into private enterprise. The Government should not underrate the concern. It will do so at its peril. It is very real, and the indications of the concern are there for all to see.
In 1972 the Australian Labor Party inherited an economy full of confidence, a buoyant economy, a nation which looked forward to its destiny. In 1973 that spirit of confidence had moved into uneasiness. As we move into 1975, fear, distrust and despair have taken over the economic outlook for this country. Firms will not invest. One of the problems with employment opportunities in Australia today is that firms simply will not invest because they fear and distrust the Government. That is why capital investment is down. Will any honourable member opposite argue against the case that capital investment is substantially down? All this Bill will do is further erode that confidence. The retreat of Terrigal was but superficial. The ideology remains, and this Bill reflects it so well. Socialism versus free enterprise- that is what it is all about. That is how the Australian nation sees it and that is how the people will judge it.
It is not only a question of socialism versus free enterprise. Is anybody in the Labor Government prepared to guarantee that the competition will be fair? We have heard comments and assurances from Ministers but will anybody remain convinced that this corporation, if it comes into being, will not receive assistance from government departments and that all the restrictions that are placed upon the private industry will be placed upon the corporation? The Opposition remains unconvinced, as indeed does the nation. The Labor Government will also be very unwise to overlook the fact that there happen to be 3 million insurance policy holders in this nation. They do not want experiments. They have had enough of the Government’s experiments, because they realise how costly they have been. Most of the Government’s experiments have led to inflation and unemployment. Inflation has already eroded the value of people’s savings in the community and has eroded the value of their policies. There is a very deep awareness of that. The Government has not sought to keep deductions for insurance policies in line with inflationary costs. Because of the problems it has created, every policy holder in this nation has received smaller bonuses since Labor came into office. What any person looking for insurance in Australia can look forward to under Labor are smaller bonuses and increased premiums. Ask anybody. Ask any business man who has anything to do with private superannuation funds and the particular problems he has looking after valued and loyal employees because of the eroding of the value of private superannuation funds throughout the country.
I wonder why we have to have this particular Bill on top of all the other problems the Government has created- problems with people financing homes, problems with people financing businesses. We now see that the Government wants to impede the future security of Australians. It continues to add disincentive and a state of despair throughout the community. Of course this particular piece of legislation cannot be seen just in isolation. It is not the only initiative the Government has in mind with regard to its socialist policies. One also has to look at this costly Bill in line with the compensation Bill and the superannuation Bill. The Prime Minister spoke about relieving the taxpayer. Who pays for Government expenditure other than the taxpayer? Who will foot the bill for this corporation with the losses it is bound to make and with the sort of nominees the Government will put in charge of it? It will be the taxpayer.
There is no reason to believe that this corporation will be any more successful than any other venture which the Labor Government could undertake. I hope that responsible supporters of the Government will give some concern to the Budget which they will have to consider in Caucus within the next few months. The Opposition believes that if the Government goes ahead with this proposal- we will try to prevent it because we need time to study it- there will have to be an allocation in the Budget to set up the original capital for such a corporation. I suppose that really we should not be so surprised that this Bill has come before the Parliament because the Government has been weakening the industry in the last 2 Budgets by taking away some tax incentives for the insurance industry. When the Government takes them away from the mutual life offices it takes them away from Australians. So we have had this softening up process and now we are to have the increased burden in the 1975-76 Budget of yet another large bureaucratic office set up by this Government.
One would hope that Government members would set that aside and that they would have some idea of priorities. One would hope that they would be concerned that their first problem to consider is inflation and that if they are to make some reasonable attempt to reduce the rate of inflation throughout Australia they have to look at their Government expenditure. The Government owes it to Australians not to have a continuing erosion of their savings in every form. The policies that the Australian people hold in the private insurance area are their savings. The Prime Minister answered a question this morning regarding employment opportunities. He said that the proposed Australian Government Insurance Corporation will give greater employment opportunities to people in the insurance industry. Apparently, he believes that the way to create greater employment opportunities is to transfer people from the private sector to the public sector, just as he mentioned in relation to Medibank. That is the way the Government creates employment opportunities. I will tell the Government what it must do if it wants to create employment opportunities: It will have to restore confidence, and if it wants to restore confidence it does not go ahead with headstrong schemes such as the Australian Government Insurance Corporation, particularly in the present economic climate.
I would hope that responsible members of the Australian Labor Party Government will vote for this amendment, probably for no other reason than that they hold marginal seats and want to save their skins at the next election. I should think that probably a number of them would really want this amendment to be passed. Those honourable members opposite who are politically aware realise the groundswell in the community and probably thank the Opposition for the responsible attitude that it will take. The Government has allowed only 2 weeks in which to deal with this matter. What an extraordinary approach for a government that had the hide at its Federal Conference at Terrigal to say: ‘We understand that private investment is essential for a country’. But this Government can give only less than 2 weeks for discussions with the private sector of this industry on matters of supreme national importance. It is obviously quite hypocritical of the Government to suggest that it has even embraced the concept of free enterprise.
I would hope that some honourable members opposite would have enough good common sense- that is what is needed in this Government today, a little less socialism and a little less impetuosity- to realise that they have the responsibility to manage the economy of this country. They should realise that the people have had enough of experiments and that they should stop this particularly hasty approach to this obsession that some honourable members opposite have with respect to socialism. What we need to get this country back on the rails is a little cooperation between the Government of the day and the private sector of the community that has built this nation. By this amendment we are giving the Government an opportunity to get off the hook. I ask honourable members opposite to join us in supporting the amendment, which will show that at least when faced with the facts of life they have the common sense to embrace them. I support the amendment.
– I speak in support of the Australian Government Insurance Office Bill and in opposition to the amendment that has been moved by the Opposition. The honourable member for McPherson (Mr Eric Robinson) speaks about co-operation. I sincerely hope that in his Party room next Tuesday morning he will speak to his senator colleagues and remind them that there is a need for co-operation if this Parliament is to work properly. This whole debate has been very interesting, albeit that the facts have been twisted. Information has been distorted and one must look at the reasons why this has happened. Very large sums of money have been mentioned in the debate this afternoon and this evening as being the capital of the insurance companies. The Minister for Overseas Trade (Mr Crean) made the position quite clear. Amounts running into thousands of millions of dollars have been cited.
– You kid yourself.
-I will deal with the National Country Party later in my speech. With that sort of capital investment involved by the private insurance companies, there seems to be a little over reaction or an over-kill sort of attitude when we are talking about an insurance office that is starting out with a capital of $lm. The honourable member for Gippsland (Mr Nixon) should not start counting to see whether a quorum is present in the House.
– He stopped counting at nine.
-He cannot count to more than nine, he has a finger missing on his left hand. With that sort of capital already invested, it seems that the insurance companies are overreacting. I might remind the House that I am a policy holder with the Australian Mutual Provident Society.
-I took out the policy 20 years ago. I did not know what was going to happen now. I might have to cancel that policy. The Leader of the National Country Party, the right honourable Mr Doug Anthony, said that high taxation is destroying the ability of private insurance companies to pay bonuses. But no honourable member has said so far in the debate that there is a rule under the provisions of the Income Tax Act that requires 30 per cent of the profits of insurance companies to be invested in Australian Government securities. It looks to me as if 30 per cent- one-third- of the insurance companies’ profits are non-taxable.
-Who wrote that?
-I do not know who drew up the Income Tax Act. Perhaps the honourable member is able to tell me. I wonder how many other companies in Australia enjoy a position in which one-third of their profits is not taxed. We have heard talk about the high taxation of insurance companies. We ought to examine the spin-offs that the insurance companies enjoy.
It has long been known that the campaign funds of the National Country Party come from commissions paid to the Party on sales of insurance by its members to their fellow farmers. How many farm gates do honourable members see as they drive around the country bearing a sign saying that the person who resides in the house is the agent for such and such an insurance company? I have been told and I believe that it is reliable information that something in excess of $60,000 a year- perhaps a member of the National Country Party can correct me on thiscomes into the campaign funds and coffers of that Party out of trading in insurance.
– No, that is not right. It is $80,000 a year.
-The honourable member for Barton reminds me that it is $80,000 a year. Probably that is only in New South Wales. So it is very obvious why the National Country Party has been so violent in its attack on the Australian Government Insurance Corporation. We have heard a lot said about the drain-off of funds for investment. Where have the funds of the present insurance companies gone? I believe that the greater bulk of them has gone into erecting concrete Weeties boxes.
– Concrete mausoleums.
-Yes, concrete mausoleums in every one of the capital cities of Australia, for speculative purposes. Most of the buildings that they have erected- office blocks in the capital cities- are still untenanted and half of them are vacant. The reason for that is obvious. Erecting buildings like that is the same as buying land for speculative purposes. The honourable member for McPherson said that this venture will be no more successful than any other Australian Government venture. He did not bother to elaborate which of the Australian Government ventures are unsuccessful. It seems to me that without any support or special benefit, every commercial venture in which the Australian Government is involved is running as successfully as, if not more successfully than, those which are operated by the private enterprise system.
To listen to the Leader of the National Country Party we need to transport ourselves back in time to about 1947 and 1948. One could go back further. I notice that the honourable member for Gippsland thinks this is very amusing. I invite him to read the debates that took place when the Labor Prime Minister, Mr Andrew Fisher, introduced the Commonwealth Bank into Australia or when there was a threat by the Chifley Government to ensure that the banking system in Australia had some rationale. I invite him to read those 2 debates that took place in about 1913 and 1947. The arguments that were advanced on these occasions were advanced again this evening in this House now that it is mooted by the Australian Government that it will enter into the field of insurance, an area that is not denied to the Federal Government by the Constitution. In fact, the Constitution almost invites the Australian Government to enter the field of insurance.
I am always surprised by the actions of the National Country Party. Looking at various areas of insurance, I am surprised again. Most Australian farmers export the commodities that they produce. As Australia is an island, of necessity these exports must be carried by sea. Australian farmers do not consign their goods by ship and let those goods go to sea without seeking to cover the risk; they take out marine insurance on their goods. This form of insurance is known by a term that I do not quite understand. It is called an invisible.
-There are lots of things that you do not understand.
-That is not surprising. If I were as dumb as the honourable member is, I would understand much less than I understand now. This ‘invisible’ is a cost against what the farmer will receive for the product that he has produced and is seeking to sell. So, if the Australian Government Insurance Corporation does what the Opposition tells us it will do- that is, operate on a non-profit basis- this will mean, of necessity, lower premiums on goods shipped overseas. I would have thought that this was money in the farmers ‘ pockets and that the members of the National Country Party, the great champions of the farmers in this country, would rise up to support such a proposition.
What have we found in the House today? An amendment to the second reading motion has been moved by the honourable member for Flinders (Mr Lynch). He has been deserted by his National Country Party colleagues. They have not stood up and said that, if the Australian Government Insurance Corporation can insure at a lower premium than that charged by the Swiss based insurance companies on the commodity that the farmer produces and sends overseas, the farmer is marginally better off. No! Members of the National Country Party are still thinking about the $80,000 that they get as a kick-back from the sale of insurance in their own area. That is far more important to them. (Quorum formed.)
It is very interesting that present in the House at the moment are 5 members of the National Country Party and 7 members of the Liberal Party. That shows the interest that those Parties have in this measure. Yet, the honourable member for Gippsland takes delight in calling a quorum. The only intelligent speech he ever makes is when he stands up and says: ‘Mr Speaker, I draw your attention to the state of the House’. It seems to me that greater attention ought to be paid to this legislation by those who sit opposite and who use their voices to oppose it. They have indicated that they will use their brutal weight of numbers in another chamber to hold this great measure back from the Australian people. It is a measure which the Australian people obviously want and demand.
Let us not forget the types of insurance that are not offered by existing Australian insurance companies in the free enterprise, private enterprise system, which is the sacred cow of those who sit opposite. When the former Liberal-Country Party Government introduced conscription in this country and, against their will, hundreds of young Australian men were conscripted into the Army, the insurance companies immediately refused to insure those men. Let us not forget all the other areas in which -
– That is not true.
-It is true.
– It is not true.
-It is true. I suggest that the honourable member get off the telephone and talk to me when he has finished speaking on the telephone. It is important that this measure be carried. There can be no diminution in the funds available for investment. To say that there will be is to suggest that the Aus.tralian people will no longer invest their funds in insurance companies. Quite frankly, when one looks at the return that they receive now on their capital investment, one could not blame them. The bonuses which are paid by the life insurance companies are very low; they are down to an average of 2 per cent per annum, which is a rate of return that one could expect from any Australian savings bank. One could not blame the people for not investing with these insurance companies. But to suggest that, because the Australian Government is entering into this field, there will be a diminution of funds available for investment is, I think, to try to take Australians by the Achilles heel and hang them upside-down. That argument must be rejected on the basis that it is not true, as the capital outlay in respect of the Corporation will be a miserable $lm which means that, in the first place, it cannot be a very big office. The same sort of funds will be available. The Australian Government Insurance Corporation will operate under exactly the same circumstances and conditions as apply to the existing companies, and the Bill provides that.
The amendment moved by the honourable member for Flinders states: … to enable the provisions of the Bill to be more adequately considered, the House is of opinion that further progress of the Bill should be deferred until the Budget sittings.
How long do Opposition members need to consider the proposition? They can read the mechanics of it in the Bill. They know the philosophy of the proposition of the Australian Government to engage in all fields of insurance. How long do they need to consider the matter? Why will their consideration over a period of 10 weeks be better than their study in the weeks that have been available to them already? The insurance companies of this country wrote to me more than a week ago to tell me what a bad measure this is. They have had time to consider it. They have had time to look at it and to tell me what a bad measure they think it is. On the Opposition side of the House are people who allege that they are professional politicians. They say that they can read. The time that has been available to them to date is longer than the time that has been available to the insurance companies of Australia. Yet, the insurance companies have written to me to tell me that they think this is a bad piece of legislation. How stupid the members of the Opposition make themselves look when an amendment such as this is moved? Such an amendment must be rejected out of hand. If honourable members opposite cannot sit down, think about this matter in the course of a week and come forward with something far more concrete than this amendment, they can call me ‘Rhubarb’.
This matter certainly deserves careful consideration. I cannot be convinced that those intelligent gentlemen who sit opposite have not carefully considered the Bill. I have had time to do that, and I received the Bill no earlier than they did. With my rather limited intelligence, I was able to come to a conclusion about the legislation. I think that it deserves support. That to me seems to be a pretty reasonable sort of thing to do. Those opposite, in the time that has been available to them, could not form an opinion on it. They have had a party meeting since. Why do they not come out and tell us the decision of their party meeting? It was taken on a secret ballot which nobody bothered to count. They decided to reject the measure. Will they tell us that? They had a joint party meeting last Tuesday morning at which they took this decision. But they come in with this humbug and say: ‘We have not had time to consider the matter’. Of course they have had time to consider it. They have rejected it. Tell us that now.
-Order! I tell the honourable member for Gippsland that whilst the honourable member for Burke may have invited that comment, anyone who makes that comment will be dealt with.
-I am always grateful for your protection, Mr Speaker. I am one of the poor people in this House who really need protection.
-Order! Even though the honourable member may not need protection, he may get it.
-Thank you, Mr Speaker. I conclude my very worthwhile contribution to this debate by saying that the Australian people know that the views of the 300 entrenched insurance companies, of the Opposition and especially of the National Country Party of Australia which has been most vocal in saying that this measure is not wanted by the Australian people, are wrong. The measure is one of those that the Australian people have thought about and have had put before them, and not only at the election in May of last year. Elections have been held pretty frequently in Australia and I think they will be more frequent in the future than they have been in the past. Somebody today quoted to us part of the Australian Labor Party’s platform. It is said in our platform, which is not a secret document but is something- (Quorum formed).
– The honourable member’s time has expired.
– The honourable member for Burke (Mr Keith Johnson) said that he did not need your protection, Mr Speaker. I think that some people in the House might suspect that he needs more of your protection than he believes. He indicated that he had given careful consideration to this legislation, but if he had he did not make it apparent to this House. If his speech was an example of the consideration that has been given to this measure by the Government and by the Government’s supporters it amply supports the Opposition’s case for delay of the measure.
The Government has not demonstrated a need for an Australian Government Insurance Office. There are 260 insurance companies which competeand the competition is often fierce- and adding one further company with all the privileges that are built into this legislation by deliberate Government intention would not serve the industry well and would not serve the clients of companies well and most certainly would be most disadvantageous to the Australian taxpayers. To want this Bill deferred is not to argue against the objective of establishing proper national disaster provisions. That is something that the Opposition certainly supports. But the national disaster and national interest provisions in this legislation are wide open. They are so wide that they demonstrate a need for them to be worked out in detail, preferably in co-operation with the industry, so that the Government and the industry can co-operate to see that certain national disaster areas can be properly covered to the advantage of the people who might be involved.
But that is not what this Government seeks to do. The national interest provisions that the Government has written into the legislation provide that the Minister may dictate any terms and conditions in any area of insurance and can drive any company in the industry out of business in respect of any particular class of insurance that the Minister decides. It is quite plain from the legislation that under clause 14 the Minister can ask the Office- not the industry, the Office, the AGIO- whether it can provide services to certain areas under certain conditions. If those conditions are not competitive for the AGIO the area may be classed as a national interest area and special provisions can be made, special subsidies provided and the rest of the industry driven out of business. If that is the Government’s idea of fair and free competition it is certainly not our idea of fair and free competition. It gives rise to the thought in the industries concerned that this is a measure designed to take over the insurance industry with all the consequences that would flow from that.
The Government has suggested that because there are State government insurance offices there should be an Australian Government Insurance Office. I would have thought rather that if one were to want a government insurance office the fact that there are State government insurance offices would be an argument against the establishment of an Australian Government Insurance Office. However, those State government offices operate under heavy losses. They do not offer better terms than other insurance companies or if they do and where they do it is because of subsidies, and often hidden subsidies at that, that are guaranteed by State governments. They are not subject to State companies Acts and there are many circumstances m which if the State government insurance offices had to operate under the same conditions as other companies they would be sent into liquidation. That does not bode well for the Australian Government Insurance Office.
The States do not indicate in general terms the extent of subsidies but I am advised that last year the loss of the Queensland State Government Insurance Office was about $24m. With the way in which the present Government hands out dollars and runs the printing presses- $2,000m this year, $4,000m or is it $6,000m next year; we do not yet know- we could well imagine what the losses would be if there were an Australian Government Insurance Office. And it would all have to be paid for out of increased inflation or out of the pockets of taxpayers. One way or the other the people of Australia would suffer as a result. I believe that it has been demonstrated that the State government offices do not operate as efficiently as private enterprise insurance companies where there is real competition within the insurance industry.
What is happening in this area is important not only to the insurance industry. That is why there is so much concern, not only amongst the Opposition parties but in the community at large. There will be a great impact upon private industry if this legislation goes through in the form in which the Government originally introduced it. There will be a very serious impact on industry across the board. Let us take just one or two examples. Professor Downing has indicated that if the national compensation scheme, the national health scheme, the national superannuation plan and the National Investment Fund were all reintroduced they would require funds equal to around 10 per cent of the gross domestic product. That would be equivalent to an annual rate of expenditure of around $6,000m, and that represents an annual expenditure equal to 40 per cent of the $15 billion in funds invested in Aus.tralian insurance industries and in superannuation funds. Quite clearly the Government needs additional funds to support and to finance the grandiose and very often impractical plans that are put forward from time to time.
Sometimes there is an element of merit in a number of the Government’s proposals but when they are all put together, when they are all costed- a number of them are never costed- they represent an impossibility for the Australian economy and an impossibility for the Australian taxpayers. To add under the present circumstances, ill thought out as it is, an Australian Government Insurance Office is something which I am certain the people of Australia do not approve at the present time.
It is not possible, as the Government might want us to do, to look at the Australian Government Insurance Office in isolation. It is necessary to look at it in conjunction with national compensation, national superannuation and Commonwealth Public Service superannuation, because there are flow on effects and there are impacts throughout the rest of the community and private industry from all of these schemes. A new Commonwealth Public Service superannuation scheme has recently been introduced. That can have flow on effects which would be very serious for industry. The scheme needs funding. Why will the Government not indicate what extent of the Commonwealth salaries bill will need to be allocated to the Commonwealth Public Service to fund it in a proper manner as would be the case for the private scheme? The answer to that is plain. The Government believes that the taxpayers’ funds are inexhaustible. If they are not inexhaustible the printing presses can be rolled faster. Indeed, the Government can buy additional printing presses and print more notes. So it does not really mind. Restraint is needed, but where restraint is needed we find the opposite from the Government- pace-setting in one area or another in a way that is leading to a madness in the Australian economy as a result of the policies of the present Government. The Australian Government Insurance Office would certainly add to the burdens and penalties of the taxpayers. Unfortunately what has happened in the State government offices tends to support that to a very significant extent.
The Special Minister of State (Mr Lionel Bowen) and the Government pretend that this Office would operate in fair competition. Let us look at the fair competition as originally proposed. The Office is not to be subject to the Trade Practices Act; therefore, it will be open to exclusive dealings. It is not to be subject to monopolisation provisions, consumer protection provisions, fair advertising or to the corporations and securities legislation providing adequate control over investment funds. At least there is no legal certainty that the AGIO will be subject to these matters. That again shows the intent of the present Government. It no more wants fair competition than does the man on the moon, and it has no intention of providing fair competition. It has a great intention of providing a take over of private industry, private enterprise, making more and more people and more and more parts of the economy dependent upon the whim and dictates of a socialist Government in Canberra.
We have other examples of unfair competition. Private companies in trouble could be taken over by the Australian Government Office, but they could not be taken over by private companies because of the solvency requirements of various pieces of legislation, of the Insurance Acts, which would not apply to the Australian Government Office. That is another unfair advantage. I have already mentioned the national interests clause which could be operated against the interests of the most competitive, most efficient and most solvent insurance company. It is designed to destroy the solvency of that company so it could be put in a position to be taken over by the Australian Government Insurance Office. That again is a substantial reason for delay.
It is under the national interest clause that the Government pretends that national disaster situations will be dealt with, but national disaster situations need to be dealt with in a manner that provides co-operation between the industry and government. The industry is willing to provide that co-operation. The Government is only prepared to provide the dictation and take over. That is something that the Opposition will not support for one moment. The AGIO would also be excluded from State companies Acts. That is another unfair advantage. That provides time and trouble and public exposure of what happens. This Government was meant to be an open government. It is a government which said: “There cannot be any secrets. Everyone must know what we are doing’. It is the most secretive government of all. Does anyone ever get any information out of this Government on any matter of importance? What companies have had special subsidies from this Government to keep operating when they are in difficulties as a result of the special problems that have been imposed by the economic policies of the Government? If we are to have an Australian Government Insurance Office that is free from the necessary provision relating to public exposure we know very well what it will get up to and what the Minister shall determine it should do. Part of its charter will be to destroy private enterprise, to destroy individual initiative in Australia and to take more power for this power-mad Government in Canberra.
The AGIO will also be exempt from Commonwealth Insurance Acts. If one wants to control insurance I believe that the way to do it is through the Insurance Acts. If additional provisions and protections are required they ought to be achieved through modifications to the Insurance Acts but that does not suit the Government. The Government wants to take over. The responsible Minister in the Senate says that he will amend the Bill so as to make the AGIO subject to the Insurance Acts. This has far reaching consequences and shows that Senator Wheeldon has prepared this Bill in great haste without proper preparation. The fact that he has changed his mind on such a fundamental point adds to the reasons which have already been advanced by the Deputy Leader of the Opposition (Mr Lynch) and the other speakers who sought deferral of the Bill until the Budget session so that all aspects of the Bill can be considered in detail.
Clause 14 of the Bill gives the Government Insurance Office power to decide that those classes of insurance which it cannot undertake on a commercial basis are in the national interest. It may then undertake the business with tax advantages and government guarantees not available to insurance companies. The Government pretends that this is fair competition. However, if competition were to be fair, then it would be able to do this only if no insurance company could handle such business on ordinary commercial principles. Worse still, the Minister could ask the AGIO to enter into contracts on insurance on terms which no company could handle commercially. The AGIO would then be able to handle it with tax advantages, government guaranteestaxpayers’ guarantees. It is time people forgot these phrases- ‘government guarantees’, ‘government funds’, and ‘government support’because every cent has to come from the pockets of Australian taxpayers. The illicit deceit and duplicity of this Government have been caused by its support of inflation and by policies which one might well say are deliberately designed to provide inflation so that the Government can get the extra dollars apparently needed to finance its own mad schemes and at the same time kid the people of Australia that they do not really have to pay for them. Their standard of life is reduced and lowered as a result of inflation as much as it would be reduced and lowered by an honest act of government which instead of establishing inflation had the courage to raise taxes to cover the funds that were required, but we are not used to that kind of behaviour from this Government. We will not find that kind of behaviour from this Government.
The Bill provides the new Government Insurance Office with a grant of $800,000 to be interest free. What other company can get $800,000 interest free? There is provision for the Treasury to make further grants on which it would not be obliged to charge commercial rates of interest or any rate of interest at all. What other company can get funds from the Treasury at no rate of interest at all and repayment presumably waived until the next century or the century thereafter? The Government is planning to have the Government Insurance Office take over the Housing Loans Insurance Corporation for $200,000. However that Corporation has reserves of $7m. What other company in Australia, insurance or otherwise, can get $7m for $200,000? Is that meant to be fair competition? It is fair competition in the terms of this Government, but it is not the kind of competition that will be supported or allowed to be supported by the Opposition.
These are some of the unfair advantages which the Government Insurance Office would have. It is no wonder that the industry is convinced that the Office is part of a package of proposals aimed at nationalising the industry and bringing the huge capacity of the industry to invest in private enterprise under the control of the Government because it needs the funds to support Government ventures. The tragedy of this is that it will lead to more and more unemployment, because it will provide greater and greater starvation for the private enterprise sector, the great employer of Australians. The weight of the Government in the last 2V4 years has been against private enterprise. I instance the national interest clause in this legislation and the squeeze on investment that has occurred over the last 2 years. This legislation is a major part of the increasing impact, the threat, of that squeeze. We know what has happened over the last year through inflation, through rising taxation, through the wage policies of the Government, through the pace-setting principles of the Minister for Labor and Immigration (Mr Clyde Cameron). We know what has happened through the Government’s expenditure policies- a $2,000m deficit this year. The Australian insurance office is an unjustifiable additional example of the Government’s own expenditures. The Prime Minister (Mr Whitiam) says that private enterprise has nothing to fear from this legislation. Two more years of the policies of this Government would be a disaster for private enterprise. That might be an impersonal term; it would be a disaster for hundred of thousands of Australians who depend for their livelihood, well being and employment on the private enterprise sector. That would be the result of the Government’s policies
The Prime Minister has criticised the industry for advertising to protect the interests of its clients. He says that it is ‘wrong, immoral and illicit’. Let us look at what this Government does. The Prime Minister goes to an executive meeting of the Amalgamated Metalworkers Union of Australia. He gives that union commitments about the Conciliation and Arbitration Act. He tells the union that the provisions of the Act will not be applied, and he collects a cheque for $25,000.
-Order! The Honourable gentleman will not debate matters relating to the Conciliation and Arbitration Act.
-Mr Speaker, that money was a donation to the Labor Party.
-Order! I suggest the honourable gentleman not argue with my decisions, and continue with his speech. The honourable gentleman is raising superfluous matters which have nothing to do with this Bill.
- Mr Speaker, I pass from that point. I respect your ruling. The Government is spending taxpayers’ funds to advertise Medibank, legal aid, tax cuts- and now we are told it is going to spend taxpayers’ funds to advertise inflation. It is going to spend taxpayers’ funds to advertise the merits of the Australian Government insurance office. Did the taxpayers know that the Government was going to do that? Was that in the mandate? Was that in the Labor Party policy? With respect, Mr Speaker, did you tell your electors that? Mr Speaker, I suggest that neither you nor any member of the Government side told his electors that their funds would be used for that purpose. If it is illicit for companies to protect the interests of their clients, it is far worse, it is illicit and immoral, for the Government to spend taxpayers’ funds for those purposes I have mentioned. Let us look at the service the companies have provided. They paid out $260m through reinsurance for cyclone Tracy, of which $120m has already been spent. What has the Government done? We cannot find out. It has contributed a mere pittance beside the efforts of the insurance companies. We have seen the vagueness of the national interest clause. Again that points to the need for delay.
The Opposition’s amendment is certainly justified. We know that the provisions, or the suggestion for a Government insurance office, were in the platform of the Labor Party, just as were the provisions for nationalisation of other things. But people said: ‘They do not mean it, they are reasonable men’. Nobody says they are reasonable men any more. The coats have been taken off, and the people can see them. But that was also in other circumstances. People had not then seen the $2,000m deficit. If a Government insurance office had been a part of the platform of the Labor Party before, there is no mandate for it now. There is no mandate for legislation in the form in which we find this legislation before the House. The provisions in the mandate and the platform and the policy were vague and indefinite. This proposal is precise in its determination to take over private industry. In its present form we shall not have a bar of it. Because we want to see proper national disaster provisions worked out with the industry we move an amendment for referral, and we hope that the industry and the Government will come to proper arrangements for national disaster provisions which do not threaten the lifeblood of Australia in the process.
-The references by the Leader of the Opposition (Mr Malcolm Fraser) to clause 14 of the Bill indicate only one thing: He does not understand the Bill, he does not understand the clause and he does not want to understand the Bill. It is part of the usual tactic of the Opposition to create a smokescreen of confusion for the Leader of the Opposition to do as his predecessor did- to delay, to defer and to frustrate the activities and initiatives of this Government. It is true that he is the latest hope of those opposite. I do not know how long he will wear the belt, but there is another long parliamentary recess coming up and who knows, there could be another change during that recess.
The Leader of the Opposition referred with great feeling to taxpayers and to taxpayers’ funds. I have not heard him express himself in those terms before, showing any concern for the average Australian. Rather there has been an attitude from those opposite and from the Leader of the Opposition of: ‘Let’s get what we can for our boys, the champions of free enterprise’. I am amazed that the so-called champions of free enterprise opposite, who are supposed to believe in free competition are so alarmed and show so much despair when it is suggested that there will be one more insurance company. Even the Western Australian State Government Insurance Office under a socialist Premier is guaranteed, it is backed by all the resources of the State of Western Australia, not by $lm but by aU the resources of the State of Western Australia. It claims in the ‘West Australian’ last week that it offers the greatest security to pOliCy holders and offers the most comprehensive policies. It claims to offer the fastest service and the most competitive service. That is a State Government insurance office. I do not know how the Opposition can reconcile its views to an Australian Government insurance office with those of the Western Australian State Government insurance office and the Queensland State Government insurance office. Over the past few weeks we have seen in Australia the most vicious, inaccurate and immoral campaign that has ever been waged against an Australian Government. In the living memory of more than half the population of this nation never has there been such a campaign designed to mislead, designed to create hatred and division in our community and designed and orchestrated by men in an industry which claims that it is the industry to which the public should entrust its funds and in which the public should place its trust and have confidence. No one can dispute that the present campaign being waged against this Bill is a political campaign, the cost of which is being borne by policy holders throughout Australia- -policy holders who have not been consulted, whose permission has not been obtained for the use of their funds for a political campaign against this Government. The National Country Party, whose members are interjecting, would naturally oppose the Bill, because it has its finger in the honey. Irrefutable evidence that it is a political campaign being financed from POliCy holders’ funds is contained in a letter sent to members of the National Country Party of Australia on an AMP letterhead by the Life Offices’ Association. The letter concludes with these words:
That with the assistance of the National Country Party members, the industry would be able to arouse a ground swell of public opinion - (Quorum formed). I appreciate the action of the National Country Party in drawing attention to the fact that the truth hurts them when it is pointed out to the people of Australia. The letter continues: which would either force the Government to drop its proposal for an Australian Government Insurance Office and severely amend its proposed National Compensation plan or force it from office.
The Australian Mutual Provident Society was once 1 a proud name linked with the early development of the Australian insurance industry. The present directors of the AMP Society have despoiled that once proud name. Never again will it regain the prestige it once held. Never again will the Society be able to claim title to being Australian. Never again will its name be a name in which policy holders and Australians will be able to place trust.
The Australian Government Insurance Office Bill 1975 provides for the establishment of an Australian Government Insurance Office with a modest capital of $800,000 and the entitlement to an advance of $1 million from the Treasury at the long term bond rate. It will be one more insurance office in Australia and will operate in fair competition and on just terms with the other 300 insurance companies already in business in Australia.
The costs of the present political campaign against this Bill and the Australian Labor Government for which policy holders will pay, would be sufficient to establish 2 Australian Government insurance corporations of the magnitude provided for in this legislation. Not only has the campaign been extravagant, hysterical, dishonest and deceptive, it has been amateurish and contradictory. I refer to an article in the ‘Australian Financial Review’ in which Mr Nick Renton, the Executive Director of the Life Offices’ Association of Australia, referring to the AGIC, stated: . . . will require expert staff who can only be found from the existing industry, where there is a shortage of experienced and qualified people.
The Australian Insurance Staffs Federation was surprised at Mr Renton ‘s statement that ‘there is a shortage of experienced and qualified people’. The Federation pointed out the distressing fact that the general insurance companies have retrenched over 430 staff in the last 6 months, most being experienced staff with long service. The Federation is also aware that more staff are to be retrenched. So much for Mr Renton ‘s statement on the scarcity of skilled staff. This is one of the most callous acts that the Life Offices Association has undertaken so far. It is trying to create in those who are in the industry the greatest fear of all- that of unemployment- without regard to the effect it has on the bread winners of the family or the dependants of the families employed in the industry. Was Mr Renton really saying that those 430 dismissed people and those to be dismissed shortly are incompetent and unskilled? I leave them to be the judge of his words.
The Australian Mutual Provident Society’s pre-printed message cards to Federal members urging a ‘modifying of this Government’s social welfare programs’ are in reality a campaign urging a reduction in unemployment and sickness benefits, age, invalid and widow pensions, a postponement of the abolition of the means test for age pensions and an attack on all less privileged people who receive any kind of social welfare assistance from this Government. I have no doubt that organisations throughout Australia representing these people will take note of this attempt by the AMP Society, a company which only 2 days ago announced its highest income ever.
Who are the people appearing in the television ads which are being paid for out of policy holders’ funds? The viewing public is not told of their background or whether they have a vested interest in opposing this legislation. I want to mention one well known face that has been appearing regularly in the television propaganda advertisements, one who has not had the courage to identify himself or state his vested interests. I refer to a former senior Minister in successive Liberal-Country Party governments who at one time was mooted as a budding Prime Minister of this country, namely Sir Alan Fairhall. Pages 1 94 and 784 of the current edition of ‘Business Who’s Who in Australia’ shows Sir Alan Fairhall as a director of the life assurance company Commonwealth General Assurance Corporation Ltd whose parent company is the Zurich Insurance Company. Sir Alan Fairhall is also listed as a director of CGA Fire and Accident Insurance Co. Ltd, Ampol Exploration Ltd, Newbold General Refractories Ltd, the Newcastle Gas Co. Ltd, Thiess Holdings Limited and Thiess Toyota Pty Ltd. Surely ordinary fairness and decency demands that such a personage should disclose his personal interest in the campaign in which he is participating against this Government and against the establishment of an Australian Government insurance office that will, after all, belong to and serve the Australian people. Or are we to believe that Sir Alan Fairhall does not hold any shares- not even directors shares- or receive any directors fees from Commonwealth General Assurance Corporation Ltd or CGA Fire and Accident Insurance Co. Ltd?
Let us look a little further at some of the literature being distributed by the insurance industry at the expense of poliCy holders. I received my copy of a booklet by post, again at policy holders’ expense. I refer to the glossy red and white 13 page publication entitled: ‘The AGIOCompetition, regulation and nationalisation’. On the outside cover in red print, bright and bold, the publication states: ‘Prepared for the general insurance industry by the Council of Fire and Accident Underwriters of Australia 210 George Street, Sydney’. But on the inside back cover of this expensive booklet the printer is shown as Cambridge Press Pty Ltd, 289 King Street, Newcastle.
– Who runs it?
-Wait for it. Information I have received reveals that the principal of Cambridge Press Pty Ltd is none other than the son of Sir Alan Fairhall. Surely the policy holders of the Commonwealth General Assurance Corporation Ltd are entitled to know that a director’s son is publishing material for a political propaganda campaign for which they are paying and in which a director of their company is participating. Surely they are entitled to know how their money is being spent and with whom it is being spent. Still, I suppose, like the ad for Prudential says: ‘The man you can trust’- or rather, I would say: ‘Can you trust?’
I have also seen some of the pro-forma letters being distributed by the AMP Society. I have received a few of the prepared letters that are being sent to members of this House. I have answered them aU in detail setting out the facts of this Bill, and in a few instances I have rung the writers as well. Last Monday I spoke to one writer from a life assurance company in Newcastle. After a lengthy conversation in which we discussed political views- and I respect his- he told me that he now had a much clearer understanding of the proposed AGIC and that if its motor vehicle premiums were lower than those of the company with which he had his policies he would be transferring his policy to the AGIC when it was established. More importantly, he told me that staff in his office were concerned at the nature of the propaganda campaign being waged by the insurance industry, that they had held a meeting in their office that morning and that they had resolved that they would advise their head office that their company should withdraw from the campaign.
I have sympathy for the staff of insurance companies because they also are being misled by the directors. It is clear that they have been directed to campaign against this Government, which is a serious denial of civil rights. I admired this man’s principle and I told him so. But no doubt he and his colleagues also had the wisdom to see that the welter of untruths being circulated against the AGIC could only seriously damage the credibility of insurance companies, particularly the credibility of insurance representatives in the industrial region of Newcastle, when the facts of this Government’s proposals became known to the public.
I would like to mention a genuine letter that I have received from a constituent. I propose to read it to the House because I am certain that it represents the majority view of the public who have seen the television advertisements. I did not know this man previously but I have since contacted him. He is happy for me to read his letter into Hansard. His letter states:
Australian Government Insurance Office Dear Sir,
With all the vocal opposition to the advent of the above and a lot worse, as we all know in these cases, the blatant lies and innuendos used in these campaigns, we as a group feel that we must make our voices heard.
Discussion with quite a few people in this area indicates a pretty widespread support for the principle and fact of government insurance, i.e., honest mutual non profit, and we would like you to know of this.
We trust that amid all the pointed and pointless discussion raised about this issue, that our action will in some way strengthen your resolution in your actions for a better community.
Yours sincerely, R. Oxenford
The address of my constituent is 52 Lewers Street, Belmont, New South Wales. The Aus.tralian Government has been accused of not consulting the industry on the provisions of this legislation. The charges are completely untrue. It has long been Australian Labor Party pOliCy to establish an Australian Government insurance office. On 4 April 1975 the Treasurer (Dr J. F. Cairns) announced the establishment of 2 consultative committees, one for the life assurance industry and one for the general insurance industry. At the time the Treasurer said:
The committees have been established to enable the Government to seek advice on matters relevant to current or prospective legislation on Government policy proposals which have significant implications for the insurance industry.
Matters for consultation include implications for industry of the proposed national compensation scheme, AGIO, natural disaster insurance.
His Press release listed the membership of each of the committees. I seek leave to have that list incorporated in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
General Insurance Committee
Mr R. J. Lamble General Manager of NRMA Insurance Ltd.
Mr K. H. McLeod, General Secretary of the Australian Insurance Staffs Federation.
Mr D. G. Pettigrew, Managing Director of the Sun Alliance Group in Australia.
Mr R. A. Sinclair, General Manager for Australia of the Royal Insurance Group.
Mr J. K. Staveley, Managing Director of AMP Fire and General Insurance Co. Ltd.
Mr J. G. Wallace, General Counsel for Lloyd’s in Australia.
Mr I. West, an Executive Member of the Australian Insurance Staffs Federation.
Mr J. H Winter, General Manager of the Australian Reinsurance Co. Ltd.
Life Insurance Committee
Mr K. T. Blarney, General Manager of the T & G Mutual Life Society Ltd.
Mr R. W. Champion, a Consulting Actuary.
Mr L. J. Cohn, Deputy General Manager of the National Mutual Life Association of Australasia Ltd.
Mr J. T. Corbett, General Manager of South British United Life Assurance Co. Ltd.
Mr S. M. Crabb, member of the Federal Executive Committee of the Australian Insurance Staffs Federation.
Mr D. Menzies, General Manager of the Commonwealth General Assurance Corporation Ltd.
Mr P. W. Reilly, General President of the Australian Insurance Staffs Federation.
Mr P. C. Wickens, General Manager of the City Mutual Life Assurance Society Ltd.
-After the initial meeting of the committees the Treasurer said that ‘the meeting had been cordial and very useful’. Last Sunday the Minister for Repatriation and Compensation (Senator Wheeldon) convened a special meeting in Canberra of the committees which the life offices declined to attend. These are the people who want more time to talk. When they were summoned to Canberra last Sunday for a meeting of the consultative committee, they declined to attend. The general insurance industry and staff were represented. The meeting was a productive one at which all parties gained a better understanding of the issues involved. Following the meeting the Minister announced that, principally as a result of representations from the Australian Insurance Staffs Federation, the Aus.tralian Government Insurance Corporation Bill would be amended to make the Australian Insurance Corporation subject specifically to the Life Insurance Act 1945-1973 and the Insurance Act 1973. At the meeting he undertook to keep other matters under review as and when they were brought to his attention by interested parties.
It needs to be known that the approach of the general insurance companies so far to some extent has been constructive, in contrast to the role of the life offices which has been characterised by hysteria, misrepresentation and intimidation. The hysterical response from certain well known sections of the life assurance industry is designed to protect their entrenched monopolistic position. They do not want even the most minimal competition which could come from an Australian Government Insurance Corporation. I have found no evidence that the State governments consulted the industry before establishing State government insurance offices. However, the Premier of each State was sent a copy of the interdepartmental committee report on the Autralian Government Insurance Corporation on 6 May 1975. The suggestion from the New South Wales Premier that the proposed Australian Government Insurance Office should be called the Australian Government Insurance Corporation has been adopted. Each member of the 2 consultative committees was forwarded a copy of the IDC report on 6 May 1975.
In conclusion I point out that what spokesmen for the industry fail to realise is that there is a market for the type of insurance service which government insurance offices provide and there is a separate market for the more elaborate personalised service which some private insurance companies provide. I wish honourable members opposite would realise this. They are supposed to be the champions of free enterprise. The positive approach, and the approach one would expect the industry to be following, is to concentrate on that share of the market where the private sector has competitive service and advantage and not to embark on a political campaign which is likely to alienate at least half its policyholders. I support the Bill and oppose the amendment.
-Mr Deputy Speaker -
Motion (by Mr Nicholls) put:
That the question be now put:
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative.
That the words proposed to be omitted (Mr Lynch’s amendment) stand part of the question.
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative. Question put:
That the Bill be read a second time.
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative. Bill read a second time.
Message from the Governor-General recommending appropriation announced.
– I move:
That the Bill be amended by omitting the word ‘Office’ wherever occurring and substituting the word ‘Corporation ‘.
Honourable members will recall that this amendment is at the request of the Premier of New South Wales. The Government has agreed that it would be more appropriate to refer to the proposed body as the Australian Government Insurance Corporation. This will remove any confusion which might have arisen between the name of the Australian office and the offices in the States.
Question resolved in the affirmative.
Clause 1 (Short title).
– It would seem appropriate that this legislation which establishes the Australian Government Insurance Corporation should make reference to the fact that it is a Corporation which is designed to compete fairly with existing insurance companies. It would seem to me appropriate that in clause 1 there should be a statement which pervades the entire Bill making it clear that the spirit of the Bill is that the Corporation will be in fair competition with insurance companies. I would have thought it would be appropriate for an amendment to have been moved by the Government to make the clause read in conformity with that spirit.
– This Bill which proposes the establishment of the Australian Government Insurance Corporation is causing honourable members on this side of the chamber considerable concern. The honourable member for Balaclava (Mr Macphee) in the second reading debate-
The DEPUTY CHAIRMAN (Mr Martin) - Order! The honourable member is allowed to debate only the title of the Bill in clause 1 .
– I have not come to that.
The DEPUTY CHAIRMAN- As long as the honourable member restricts his remarks to that aspect he will be in order. Once he departs therefrom he will be out of order.
– That is right, Mr Deputy Chairman, but a rose by any other name. As far as the Opposition is concerned the AGIC is something which justifiably fills the hearts of people in the free enterprise world with fear. In an earlier speech an honourable member on the Government side referred to so-called false campaigns being waged by insurance companies. That by its very nature is-
– I rise on a point of order. Mr Deputy Chairman, the clause before the Committee is very brief and direct. I do not think that the honourable member can confuse its contents. I submit that his remarks are not relevant to the clause.
The DEPUTY CHAIRMAN- Order! I uphold the point of order and draw the attention of the honourable member to the fact that only limited debate can take place on the clause relating to the title of the Bill.
– I understand that. I am simply talking about the name of the Bill. Contrary to the point of order raised I believe that the very name of the Bill is in itself reason for debate. As I said, there is justification for fear in the hearts and minds of people who believe in the free enterprise system. Those organisations which have put their money into fighting the passage of this Bill have every democratic right to fight against it. They have every right to fight against the name of this Bill which is cited as the ‘Australian Government Insurance Corporation Bill 1975 ‘. Contrary to the views the honourable member for Shortland (Mr Morris) expressed some time ago, the Government never ceases to spend money to promote Bills such as this and -
The DEPUTY CHAIRMAN- Order! The clause is not pertinent to the amount of money which the Government spends. That has no connection with the title of the Bill.
– I will wind up my remarks, Mr Deputy Chairman. What I am trying to say is that free enterprise has every right to fight against this Bill because it recognises, despite the assurances of the Governnment, that it is out to destroy private enterprise.
Clause agreed to.
Clause 2 (Commencement).
– It might be remembered by honourable members that during the debate on the second reading I gave good reasons why I believed that it would not be proper or appropriate, and was certainly contrary to the best interests of the Australian people and of Australian industry, that we should not establish an Australian Government insurance office. It did not matter what its name might be. Even if the Government gives it the grandiose title of ‘Australian Government Insurance Corporation’ it will not help me to change my mind about the establishment of such an office. In fact, it makes me more determined than ever to give good reasons why this office should not be established.
During my speech on the second reading I pointed out some of the reasons. Mr Deputy Chairman, you were in the Chair at the time and were good enough to show a little generosity in delaying the suspension of the sitting for dinner. After the House resumed I did not speak for the minute and a half that I might have done, but I thank you, Mr Deputy Chairman, for your generosity. Nonetheless, I gave good reasons why I felt the office should not be established. First of all, the people do not want it. That reason on its own ought to be -
– I rise on a point of order.
– Oh, look, please son; I have been generous with you. I do not want you to sound like you look.
- Mr Deputy Chairman, much as I enjoy the contributions of the right honourable member for Lowe I draw your attention to clause 2 which states:
This Act shall come into operation on a date to be fixed by Proclamation.
I submit that the matters being canvassed by the right honourable member for Lowe were matters for debate on the second reading and they are not pertinent to this clause.
The DEPUTY CHAIRMAN- Order! I uphold the point of order to the extent that the debate is limited to the date to be fixed by Proclamation or matters pertaining thereto. The right honourable member for Lowe is straying from that clause slightly. I realise I have been very tolerant
– Frankly, I never liked disagreeing with either the Chairmen or, for that matter, the Speaker of the House. I do not believe that you, Mr Deputy Chairman, have been properly advised on this matter. I will adhere to your ruling if you insist on it. A Bill of this sort should not be introduced at any time- whether immediately or at a time to be prescribed by regulation.
The DEPUTY CHAIRMAN- You would be in order on that basis.
-There are 5 reasons why this Bill should not be agreed to. I believe that the Australian people support those views in every single respect. For that reason, I will vote against the clause.
Clause agreed to.
Clauses 3 to 7-by leave- taken together.
-During the second reading debate it was unfortunate that the gag had to be applied to someone who knows something about the life assurance industry, someone who has made his living as a salesman in that field and someone who had the welfare of the policy holders of the company for which he worked at heart. It is quite obvious that the Government does not want to hear the points that I want to raise. There is no way that this Government can escape the wrath of the people.
– Nor do the Liberal Party. They would not let you talk. You could not even get a guernsey.
– I do not want to take the Minister on at this stage. The Australian people . Will vent their wrath on the Government if this legislation is allowed to go through the Parliament. Insurance companies have always kept clear of politics. They have a real responsibility and that is why they have kept away from politics. After all, the POliCY holders are the insurance industry. There are 3 million policy holders in
Australia and 9 million policies. It is a very responsible role that life . assurance companies play. If the life assurance companies fear that government intervention into the field of insurance jeopardises their POliCy holders and the dividends by way of bonuses, they have every right to let the Australian people know the sinister method being applied to nationalise the insurance industry.
– I take a point of order. Mr Deputy Chairman, as much as I have pleasure in listening to the honourable member for McMillan I draw your attention again to clauses 3 to 7. 1 submit that in this case also the matter being canvassed- the general nature of the legislation and the general background to it- is not pertinent to the specific clauses before the Committee which deal with the composition of the Board, the activities of the Board and its method of registration.
The DEPUTY CHAIRMAN (Mr Martin)-I do not uphold the point of order. Clause 6 in particular is fairly embracing.
– I thank you for your ruling, Mr Deputy Chairman. I know that the Special Minister of State (Mr Lionel Bowen) is much more generous than the honourable member for Shortland (Mr Morris) on this occasion. With the Government’s announced intention to enter the insurance field by setting up this Australian Government Insurance Corporation, as it is now to be called, there is one overriding concern currently exercising the minds of many Australians. They are asking where all these changes are leading us. Since 1972 we have seen a tremendous increase in the Public Service, which is now a huge force operating the changes of policies from the free enterprise operation into a socialist centralist bureaucratic machine. I emphasise the word ‘machine’ because soon there will be no one in this country who will have a soul to call his own. Everyone will be dependent on the Government once the insurance companies are taken away from the free enterprise business operation. I am becoming more and more allergic to the Government’s attitude. In fact I am a little like my neighbour who kicks his dog every time he sees him because if he is not coming away from making mischief he is on his way to make it. I feel inclined to do the same thing sometimes.
So many subtle changes are taking place that it is impossible to see anything emerging except complete control over every facet of our lives Nationalisation is just around the corner with the Government’s entry into the general insurance and life assurance fields. The entire industry is now under challenge from 4 legislative measures- the national compensation plan, the national superannuation plan, the Australian Industry Development Corporation and National Investment Fund, and the Australian Government Insurance Corporation. The Government’s proposals will affect 3 million policy holders in Australia. Most people are not aware of the true significance of the proposals. I believe it is a back door method of nationalisation of our monetary system. It will certainly make it very easy for the takeover of the banks. In 1949 when the former Chifley Government decided to nationalise the banks it was a very sensitive nerve centre of the general public, and the nationalisation of banking was defeated on that occasion not only by the people outside but also by the people who worked within the banks. Since that time we have been lulled into a sense of false security. The nationalisation of life assurance- which in itself is a self-help social security system- could well be used as the backdoor to complete nationalisation and Government control.
I take this opportunity to espouse the value of life assurance and the guarantees it supplies to the private business sector and for the protection of private individuals. This socialist maniacal Government, hell bent on destruction of private enterprise, overlooks this great and important role. It overlooks the insurance industry’s contribution to the Treasury of this Government. It overlooks the protection of life savings. The great majority of the 9 million life policies in force are with mutual offices. These are in fact co-operative societies and are owned by the policy holders themselves. They have no shareholders and are administered solely for the benefit of the owners of the policies. All profits are passed to policy holders.
In recent days we have seen and heard a most dastardly attempt to discredit members of the National Country Party with incredible accusations of intrigue. Members of this famous socialist Government led by the Prime Minister (Mr Whitlam), who has contempt and ridicule for anyone who would dare to protect the Aus.tralian public from his socialist onslaught, have suddenly realised that the Australian community has a backbone and real guts. The people will repel this Government’s intrusion into the life assurance field or any attempt to nationalise this country completely. What a lot of nonsense it is to say that we would refuse insurance for natural disasters. Of course we would not refuse insurance for natural disasters.
– Of course you would.
-We would not. The speech of the Minister, reiterated by the Prime Minister, cited the disasters of Brisbane and Darwin. The problems associated with natural disaster insurance have been clearly recognised by the industry. In order to lay greater stress on the importance of cover against such contingencies it recently took the initiative following the Brisbane floods and, with the agreement of the Prime Minister, examined the whole area of natural disasters in consultation with Government representatives. As a result, a submission has been made to the Department of the Treasury suggesting a wider framework of insurance against these disasters. So it is completely wrong for the Government to say that the industry has taken no steps towards combating the problem of natural disasters.
If its suggestions were adopted there would be no necessity to establish a completely new organisation to provide this form of protection, and further duplication of services would thus be avoided. Such an implication is quite misleading and to a large extent untrue. It does little credit to the Government’s presentation of its case. In the case of cyclone damage normal insurance cover is available and insurers collectively are now in the process of paying some $2 80m to policy holders as a result of that availability. The major difference between that sum and the $500m estimated as the total cost of cyclone Tracy is represented by damage to Australian Government property which was not insured. On the other hand, it is true that there was a substantial degree of under insurance in Darwin, especially among house owners. Flood insurance, too, was available to a limited extent in Brisbane. It was not available everywhere because there are many locations in that city where flood is not an insurable risk in the normal sense.
I want to register my disapproval for this measure. I see it as an intrusion into the private enterprise field of business. I see it as an intrusion into the rights of the individual who has a right of free choice to protect his life’s savings and his welfare in his declining years. I would not mess around with this measure. I would throw it out. We have already made progress with the formula for national disaster insurance. So, let us dispense with this mockery of the Government’s when it says that it is caring for the welfare of Australians. I have never heard so much rot in my life. The Government by this measure is ensuring the complete social destruction of Australians and making a mockery of democratic government.
Bill returned from the Senate without amendment.
Bill received from the Senate, and read a first time.
– I move:
That the Bill be now read a second time.
The Darwin Cyclone Damage Compensation Bill 1975 provides the legislative authority for the payment of compensation in respect of loss or of damage to property arising out of the cyclone which passed through Darwin on 25 December 1974. The total cost of compensation is currently estimated at $58m. These moneys have been made available under 2 separate appropriations -an initial amount of $2 5 m under Appropriation Bill (No. 5) 1974-75, and the remaining $33m under Supply Bill (No. 1) 1975-76. Both Bills were introduced into the House on 8 April 1975. Separate appropriations were required, as it would not have been practicable to disburse the full amount before the end of this financial year. Moneys to pay compensation for death and personal injury suffered by persons as a result of the cyclone were provided for in Appropriation Act (No. 4) 1974-75.
The current estimate of $58m was derived from a nation-wide survey by the Department of Repatriation and Compensation of households and organisations which were in Darwin on Christmas Day 1974. Honourable members will recognise that a survey taken soon after the disaster cannot be expected to be completely accurate. For example, some people may have forgotten some possessions which were lost, or placed too low a value on others. Despite a major advertising campaign, advice and assistance by departmental officers to those responding to the survey, in Darwin, in the States and in some provincial centres, there is room for error. However, I can assure honourable members that the Department of Repatriation and Compensation has gone to great pains to provide the best estimate available.
I stress the importance of early passage of this Bill, as over 4 months have elapsed since Darwin was struck by cyclone Tracy. Although a great deal has already been achieved in rehabilitating the city and its people, very much more remains to be done. Many people are separated from their homes in Darwin and their usual employment; many are in difficult circumstances. The suffering these people have undergone is immeasurable and many now face an uncertain future. In view of this, the Department of Repatriation and Compensation is already engaged on the major task of inviting, collating and assessing claims for compensation.
It is a tribute to the Australian people that they have responded so swiftly and generously to the plight of their fellow citizens in Darwin through relief appeals and volunteer work. It if fitting that they expect an equally swift and generous response from their Government. I am advised that any attempt to present in greater detail, in this Bill now before the House, how the $58m is to be distributed would considerably delay payment of compensation which in so many cases is essential to some degree of rehabilitation. Further, detailed legislation in this matter could in many cases inadvertently bind those whose task it will be to apportion compensation to decisions which may not be in keeping with the real interests of justice and equity. This is not meant to imply the absence of principles whereby these moneys are to be distributed- as broad principles will be used- but rather the need for a high degree of flexibility and discretion if this operation is to be just and effective.
The survey undertaken by the Department of Repatriation and Compensation shows that approximately 50 per cent of the damage to property was not covered by insurance. Apart from suggesting serious deficiencies in the insurance arrangements in this country- I say that notwithstanding the fact that the insurance industry has given valuable assistance to the Department of Repatriation and Compensation in Darwin, and, as I am advised, its rapid response to settling the claims of its clients- the magnitude of the damage points to the Australian Government as the only possible source of adequate financial aid. The fact that Darwin is located in an Australian Territory places on the Australian Government the extra responsibilities which would normally be borne by a State government.
The proposal for compensation in respect of property in Darwin is to pay 50 per cent of uninsured loss and damage. Property which was underinsured will attract compensation but only in regard to that part of the value of the property which was not insured. The effect of a 50 per cent payment will be to compensate the uninsured to a reasonable degree, but at the same time to put persons who did carry some insurance cover closer to recovering their full losses. I do not believe that these principles will provide a disincentive for people to insure in the future, and the Government has been mindful of this in putting this proposal forward. Compensation is to be based on the market value of items on 24 December 1974. Eligibility for compensation will be determined solely on the basis of uninsured loss or damage having occurred. No means test is to be applied. Assessment, determination and payment of claims is to be the responsibility of the Department of Repatriation and Compensation. Examiners in the office set up by the Department of Repatriation and Compensation in Darwin will apply uniform criteria to all claims. Where the full amount of a claim cannot be allowed, claimants will be so advised, and invited to furnish proof of possession and loss or damage. Meanwhile, they will receive early settlement of a portion of their claim. Where further evidence is produced cases will be reviewed and adjustments made where appropriate.
Upper limits to amounts of compensation have been established which, I believe strike a balance between worthwhile compensation for the individual and organisations on the one hand and the responsible expenditure of public funds on the other. There is an upper limit of $25,000 payable for loss and damage to private dwellings and any loss and damage occurring on the property of a primary producer. The word ‘dwelling’ will be interpreted broadly and will encompass boats and caravans where these were used as a primary dwelling. There is an upper limit of $50,000 payable for business premises, plant, equipment and stock. There is an upper limit of $5,000 for personal possessions, including motor vehicles, furniture and fittings.
The sense of these proposals is to recompense people partially for what they have lost. They are not aimed at the reconstruction of Darwin or the resettlement of those who were resident there on 25 December 1974 in their former circumstances. The reconstruction of Darwin is a separate endeavour being handled by my colleague the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson). Resettlement is a decision for individuals themselves to make and my colleague the Minister for Social Security (Mr Hayden) has been active in providing assistance in this regard. The compensation proposals have been very carefully considered by an interdepartmental committee and by the Government. They are a departure from previous Australian Government initiatives in response to natural disasters. Unlike previous disasters, Darwin is a unique situation.
As I have already mentioned, it is situated in an Australian Territory for which the Australian Government is responsible.
Geographically, it is isolated, with no nearlying city of any size from which its residents could receive support or to which they could be relocated after the disaster. Thousands had to be evacuated from the city, some without choice, many of whom have as yet been unable to return. The almost total destruction caused by the cyclone was of a kind unknown in Australia. It was in every sense a major disaster even by international standards. As such, this situation calls for unique measures. I commend the Bill to the House.
Debate (on motion by Mr Ian Robinson) adjourned.
Bill presented by Mr Lionel Bowen, and read a first time.
Mr Lionel BOWEN (KingsfordSmithSpecial Minister of State) ( 10.20)- I move:
That the Bill be now read a second time.
The main purpose of this Bill is to authorise the establishment of the Purchasing Commission. The principal functions of the Commission will be to advise the Minister on the policies, procedures and practices which should be followed in regard to procurement and disposals, and to operate a central procurement and disposals organisation to meet the needs of a wide range of departments and authorities. The setting up of such a body was recommended in the Report of the Committee of Inquiry into Government Procurement Policy which was tabled in Parliament last month. I take this opportunity to express the Government’s thanks to Sir Walter Scott and to the members of his Committee for their very valuable report. The provisions of this Bill closely follow the recommendations of that Committee. The Committee’s analysis of deficiencies in the present procurement arrangements is contained in Chapter 8 of its report while its specific recommendations are set out and explained in subsequent chapters. The shortcomings listed by the Committee included the inflexible and fragmented nature of the present arrangements, the absence of regular reviews of principles and procedures, the need for research and training and the absence of proper consultation with industry. Accordingly the Committee has made a series of recommendations designed to upgrade the purchasing and procurement function and to set up a central body to achieve the necessary co-ordination.
One of the first tasks of the new Commission will be to undertake a detailed and comprehensive review of the Government’s procurement activities based upon the 39 recommendations of the Committee of Inquiry. At the same time, the Commission will be taking over, progressively, purchasing activities at present distributed across a wide range. I might mention that the actual purchasing operations will be carried out by a highly decentralised and flexible organisation with offices in all Australian States and at several overseas locations. The Commission will be responsible for all stages of the procurement process in some areas such as in the supply of common use items required by a wide range of departments and authorities. These items are now mainly purchased by the Australian Government Stores and Tender Board, the staff of which, together with the purchasing and associated staff of the Department of Manufacturing Industry, who currently undertake defence purchasing, will form the nucleus of the Purchasing Commission. Further, it is expected that some departments and authorities will have need of a full procurement service from the Commission ranging from the specification of goods required through to inspection and acceptance. In other areas- and I refer particularly to departments and authorities requiring specialised equipment in such fields as defence, telecommunications, transport and health- the departments or authorities will continue to be in a position to define their requirements and specifications and to undertake, by arrangement with the Commission, such activities as the inspection and storage of their goods.
Throughout this Bill care has been taken to safeguard the rights and responsibilities of user departments and authorities. For example, clause 12 provides that the Commission may not make an acquisition for a department or authority without a written request from the body concerned to do so. Furthermore, the Commission will be required to consult with, and have regard to, the views of the user at all stages in the procurement. It Will be clear from these provisions that the Government expects the new Commission to provide an efficient and responsive service to its clients as well as to give effect to such important objectives as economy in purchasing and the development of purchasing methods which will result in obtaining the best value for the taxpayers’ money. If a dispute arises between the Commission and a user department or authority over the correct award of a tender on grounds of technical suitability of the goods, the user’s views are to prevail, although the Commission will have the right as indicated in clause 13, to state its views formally and publish them in its Annual Report. I draw attention also to clause 14 which makes special provision for the procurement of major and technically complex equipment. Under this clause arrangements may be made for the appointment of special project teams, on which both the Commission and the user authority will be represented, to handle such projects. The Scott Committee considered that arrangements along these lines would be helpful in achieving the closest collaboration and harmony as between the Commission and the user authority.
As recommended by the Scott Committee, the Government has decided that the specialised procurement activities currently being carried out largely for other departments and authorities by the Department of Housing and Construction in relation to works and associated services, by the Department of Services and Property, for land and buildings, and by the Department of the Media for printing, publishing and advertising services, should continue to be carried out by those Departments; at some later stage after the Commission has been in operation for some time, the position can be reviewed. Provision has also been made in clause 11 to exempt the procurement of goods for subsequent resale of the same goods in the course of a trading activity. This will safeguard the position of bodies such as the Australian Wool Corporation and the proposed Australian Overseas Trading Corporation. Clause 10 of the Bill provides the mechanism for the Commission’s progressive assumption of its operational responsibilities. The Commission will obviously not be in a position, at the outset, to take over some of the purchasing and disposals activities envisaged for the longer term and clause 10 empowers the Minister to make any necessary exceptions. The clause also gives the Commission some flexibility in permitting departments or authorities to carry out activities which would otherwise have to be handled by the Commission.
The Commission’s powers are set out in clause 6. Apart from the general power to undertake the functions specified in clause 5, the Commission is given power to enter into agreements in its own name and to undertake procurement on its own behalf. It is proposed that the Commission should also have power to collect relevant statistical and other information, to undertake or arrange research into aspects of procurement and, in consultation with the Public Service Board and educational institutions, to promote the training of Government officers in procurement matters. Clause 7 provides that the Commission is to keep itself informed of the procurement activities of departments and authorities and is to draw attention to any cases where the Government’s policies and procedures are not being carried out.
Under clause 8, the Commission will be required to keep the business community generally informed of its procedures and methods. The Commission will consult with business groups on the need for changes in Government procurement administration and will, as far as possible, provide information on forward planning of procurement. The Advisory Committee on Procurement provided for in clause 36 will be an important forum for discussion between the Commission and industry representatives. The main purpose of this Committee is to give advice to the Government on procurement matters and operations as seen from outside the Commission. The Bill provides that members of Parliament may be appointed to this Committee. I propose to invite 2 members of Parliament- one from the Government and one from the Opposition- to serve on this Committee. I draw particular attention to clause 17 which empowers the Minister to give directions to the Commission. This provision will ensure that the Commission operates at all times in full accordance with the Government’s policies.
Parts III andIV of the Bill contain the usual machinery provisions concerning the constitution and meetings of the Commission and the Commission’s staff. It will be noted that, in addition to the Chairman, there are to be at least 2 other fulltime Commissioners and that further Commissioners may be appointed on either a fulltime or a part-time basis. The Chairman is to have the powers of a Permanent Head and the Commission’s staff will be subject to the Public Service Act. Part VI of the Bill provides for appeals to be made to the Ombudsman. The Scott Committee had recommended that a special tribunal be established for this purpose but this recommendation was made before the Government had decided to appoint an Ombudsman for such purposes. I have already referred to the Commission’s annual report which is provided for in clause 43. This report, along with any other reports requested of the Commission, will be tabled in the Parliament.
-Order! It being half past ten, in accordance with the order of the House of11 July 1974I propose the question:
That the House do now adjourn.
– I require that the question be put forthwith.
Question resolved in the negative.
-The annual report will not only provide information concerning the Commission’s operations but will also review any other developments of public interest in this field over the year concerned. I am circulating an explanatory memorandum which provides more detailed information on the clauses in the Bill. I commend the Bill to honourable members.
Debate (on motion by Mr Ian Robinson) adjourned.
Motion (by Mr Lionel Bowen) proposed:
That the House do now adjourn.
– I rise to speak to the motion for the adjournment of the House to indicate my concern and the Opposition’s concern that the Government is setting out to destroy yet another primary industry. The principles that were applied by the Industries Assistance Commission to the brandy and cherry industries have now been applied to the mushroom industry. I am sure that the honourable member for Angas (Mr Giles), who was involved in those 2 industries, will share my concern when I say that a lack of understanding has been shown by the IAC for the principles involved in small industries, which have once again been ignored. The Government has decided to follow the report of the Industries Assistance Commission. The Special Minister of State (Mr Lionel Bowen) said that the industry should do what it best can, without caring to examine the exact consequences of the recommendations made by the IAC. The report brought down on 10 December states:
The Commission foresees no major impact on the mushroom growing industry as a result of its recommendations. There will probably be a minor expansion of the market for fresh mushrooms for processing as a result of the imposition of duties on dehydrated mushrooms, but the effects of this will be slight in comparison with the expected continued natural growth of the market for flats for incorporation in a sliced in butter sauce pack.
I draw the attention of the House to the fact that despite these comments by the IAC the position is that since the production of this report imports have doubled. The current level of” imports of mushrooms of all forms is running at the level of the current Australian production. This has occurred during the last 2 years. The Australian industry applied to the Temporary Assistance Authority for protection. It was refused this protection. In its case before the Temporary Assistance Authority the industry stated its efficiency, its economic production and the difficulties that it faces following the 25 per cent reduction in tariffs and revaluation measures by this Government.
What will happen to this industry? The report mentions that about 700 people are employed in the industry, and 400 of those people are in the electorate of Mitchell. The Government is putting 400 people out of work. No consideration has been shown for the individual whatsoever. This academic approach of the IAC has been applied right across the board to many industries. I condemn it. There is no practical assessment of the industry. There is no assessment of what other countries which are producing the same sort of product may do. What about tariff barriers in other countries. What about the provision to prevent export of Australian products? The academic exercise is conducted purely on the Australian scene. The decision is made by the IAC and that is the end of another industry; and in my electorate another 400 people are out of work. Do not worry about it, the Government Will certainly not benefit directly from such a decision because those 400 people and others like them will ensure that this Government Will not be the Government following the next election. Actions of this sort- these off-the-cuff decisions and the buck passing- cannot continue. A decision is too difficult, so the Government kicks the matter to the IAC. The Government refuses to make a decision. It intends to refer the whole wool industry, I believe to the IAC. The matter is too difficult to handle- kick it to the IAC; bury it there; pass the buck. Anything that is too difficult, give it to the IAC. It is a great way of making decisions.
In the case of the mushroom industry it is particularly interesting to note that there were 2 Commissioners. The second Commissioner, Associate Commissioner Cossar, presented a very strong and compelling case for better protection, strengthened protection, for the mushroom industry. The Government chose to ignore and to override completely the excellent report of Mr Cossar in this case. Half the report contains Mr Cossar’s views. The report states:
Mr Cossar expects further deterioration in the current year. The total employment in the production of mushrooms is 700 and approximately 400 of these employees are concentrated in the Baulkham Hills- Windsor area of New South Wales . . . Mr Cossar considers that the main threat to the progress of the Australian mushroom growing industry is the greatly increasing imports of canned mushrooms in the brine which have increased from 890 kl in 1970-71 to 2,494 kl in 1973-74 and that the small increase in assistance recommended in the report will do little, if anything, to arrest this rate of increase. The ad valorem equivalent of the specific duty is at present approximately 17 per cent but was slightly higher until the devaluation of the Australian dollar in September 1974.
I have made constant representations to the Government on this matter. I made representations in June and October last year and in March, April and May this year. I sent telegrams and wrote letters to the Minister for Agriculture (Senator Wriedt), the Prime Minister (Mr Whitiam), the Special Minister of State, the Minister for Manufacturing Industry (Senator James McClelland), the Treasurer (Dr J. F. Cairns) and the Minister for Overseas Trade (Mr Crean). None of those Ministers has seen fit to assist a vital Australian industry. I think it is incredible. Imports have increased. Despite the statement in the report, production is falling. The Australian producer is going to the wall. Mr Lawson of Lilyvale Mushrooms said today that the cutback by the PMU organisation in his intake represents roughly half of the company’s production. They are having to put increased quantities of fresh mushrooms on the market because of this reduction. Over the past 2 to 3 weeks fresh mushrooms have been sold at a loss.
– Evidence of real market disruption.
-My word. We will see glut conditions and the finish of the industry. The Opposition has shown a real understanding of the position, which is quite different from the academic approach of the Minister and the economists in the IAC. Mr Lawson also said that canned mushrooms are also produced at 5 per cent below cost. In addition he advised that he had suggested that the mushroom industry be researched. I disagree with him in that regard. It has been researched and researched. What has happened over the last 12 months following the TAA report, following the reference to the IAC and following the procrastination of the Government? Importers have filled warehouses with mushrooms. The figures speak for themselves.
The figures for imports are running at the same level as those for total Australian production. This indicates that the importers were aware of the situation. They, used this hiatus when the Government refused to look at the industry and make a decision to stock their warehouses. It appears to me that the whole of primary industry faces a very serious future. The mushroom industry is the first industry considered under the present IAC conditions. Other industries will be considered in the same offhanded way. The citrus industry, the vegetable producing industryin fact every industry that has been referred to the IAC- will be considered in this offhanded way. They will be the subject of an academic approach, not a practical approach, and the primary industries of this country will be put to the wall by the Government’s inability to make decisions.
– On 19 February the honourable member for Bendigo (Mr Bourchier) raised the question of tenders for the pumping apparatus for 4 sets of pumps for the Googong Dam. He was very anxious at that time to make out a case to the effect that a company in his electorate should be awarded the contract. Apparently he was taking the view that it should be awarded the contract in any circumstances.
– Did you let him know you would be speaking?
-Of course I let him know. It is very difficult to accept such a contention, particularly when one has regard for the fact that the honourable gentleman would not be in a position to know anything about the relative merits of the tenderers or their capacity to perform the work. So I took the view that it was an unwarranted interference with the tendering process when the honourable member engaged in the unprecedented and, in my view, unseemly process of touting for one tenderer in the situation that I have described. I must confess that in the period that I have had responsibility for these things nobody else has approached such a matter in such a way. It is not to say that the virtues of particular tenderers have not been put to my Department and indeed to myself, but for one to contend that for the reasons enunciated by the honourable member for Bendigo- they were about Australian employment- that a contract had to go to a particular tenderer seems to me an unreasonable proposition.
The fact of the matter is that tenders have been called and contracts have been awarded. In fact I wrote to the President of the Australian Pump Manufacturers Association, Mr A. G. Scott, on 13 May and advised him to this effect:
I refer to your letter dated 22 April, 1975. By now you will have received my letter of 5 May, 1975 advising you that the lowest priced tender submitted by Allpumps Pry, Brooklyn, Victoria, for supply of four pumpsets for the Googong Pumping Station, A.C.T., at a total cost of $326,500 has been accepted.
The fact of the matter is that 4 tenders were received and they ranged from approximately $262,000 to about $459,000-in all a differential of $196,598. It seems to me to be quite unreasonable for the honourable gentleman or anybody else to contend that you should necessarily take the lowest tender or the highest tender or to say you just had to take a particular tenderer because he happened to have the virtue of employing people in a particular electorate. So this company has been regarded by my Department as the most satisfactory tenderer with the best price. Taking into account the combination of those 2 things the advising departments mulled this whole thing over. There is a system which was set up by the previous Government and which has been in operation for many years under which all the departments concerned take into account various considerations- such matters as trade, employment and even foreign relations. Having done that they come to a conclusion as to who should be awarded the tender. In this case the departments of Customs, Labor and Immigration, Manufacturing Industry, the Treasury, Overseas Trade and my own department were involved.
There are many considerations here. The honourable gentleman seems to take the view that in every situation a tender should be awarded to Australian companies, but that is not done in Australia and has not been done in Australia over the years. Fortunately it is not done in other parts of the world in that other countries do not exclude Australian companies. Many Australian contractors benefit very considerably as a result. I do not know whether the honourable gentleman is aware that there is a content of Russian pumping equipment in this tender and in some of the other tenders that were received. I gather that the honourable gentleman takes the view that in no circumstances should we ever use an Australian company which utilises Russian equipment to any degree. I put it to the House that that is a most foolhardy, reckless and irresponsible stance to take. If one examines the trade figures between Australia and the Soviet Union it will readily become apparent that there is a need to correct the glaring imbalance that operates at present. Of course* the imbalance is very heavily in favour of Australia.
The honourable member for Bendigo comes from a rural electorate. I have no doubt that he would have regard for the best interests of the rural people who live and work there, particularly those engaged in the wool industry. I want to indicate to him the extent to which he can impair his and his constituents’ prospects by taking such a reckless and foolhardy attitude of excluding Russian trade from this country or excluding an element of Russian participation in construction tendering processes. The value of wool exports to the Soviet Union during 1973-74 was $147m. The total value of exports to the Soviet Union in 1973-74 was $154m. The imports from the Soviet Union to Australia in that year were valued at $5.9m. We readily see the enormous imbalance that operated in 1973-74. Let me cite the imbalance of trade in Australia’s favor in each of the last five years, starting with 1969-70: $48m; $60m; $80m; $123m and $148m. Clearly one could not continue to export goods in 1973-74 to the value of $148m and to import goods worth only $5.9m without having some regard for the sensitive balance and relationship about which the Department of Overseas Trade is so concerned and about which it is being so practical and effective. For Australia to declare that it would exclude Soviet tenderers from the kind of situation that I have described would be the height of folly. I suppose that I have used some harsh words in the several exchanges that I have had with the honourable member for Bendigo, firstly on 19 February and then today in response to a question which he raised with me.
– Is the Minister aware that Russia has placed an order for beef from Australia and will become a customer for beef?
– I know that represents a prospect which will only make the imbalance of trade even greater than I have described. What I want to say to the honourable gentleman is that I can understand his having regard for the prospects of a manufacturing industry in his own electorate. But I think we can cheapen the whole process when we come touting for them in such an ungainly way on the floor of the Parliament. There are other honourable members who raise with me in an appropriate and delicate way extenuating circumstances with regard to tenders. I believe the honourable member would have preserved the protocol and all the practices that have been operating over the years if he too had followed that well established course. For my part, having regard to all the circumstances, the reputation of the tenderer, the fact that his tender is the lowest, I am satisfied that the awarding of the contract to that tenderer is beyond reproach in every way. I refuse to acknowledge the need to exclude companies which have some overseas content in the tender that they submit.
-I am not awfully conversant with the subject matter upon which the Minister for Housing and Construction (Mr Les Johnson) speaks. I will dismiss it by saying that the Minister, having taken 10 minutes to try to justify his decision, whatever it was, I think he probably protesteth a little too much. He did not sound awfully convincing to me, no matter what the facts of the case are. I rise tonight to put the view of the Bishop of the Murray in South Australia and the Archdeacon of that diocese and also to put the view of one or two churches in the same area. It appears that what has happened is that the advisory panel of the Australian Broadcasting Commission in South Australia may well have- that is as far as I can go- put forward a suggestion that would limit the amount of time spent on religious broadcasts in South Australia. The Archdeacon of that diocese has written to me wanting to know whether I can find out whether this is correct or not. I do not expect the Minister representing the Minister for the Media to be able to answer that question, but perhaps he could treat my remarks as a form of inquiry and comment on them later. The Minister may be able to throw some light on the position. The Bishop says in his letter, in effect that Australia is not a wholly secular society. He quotes from a public opinion poll which was evidently held quite recently that 84 per cent of all Australians believe in God, and in excess of 60 per cent believe Jesus Christ to be the Son of God. I have not seen the results of that poll, but that is one of the arguments that the Bishop uses to counter the claim that Australian society is a secular society. Perhaps I should get back to the statement that has been circularised, whether correctly or not. The Archdeacon states:
It has been asserted that the reason for this move is that ‘the community is secular, and that religion should, on merit, earn its place m the common ground of public significance and debate, rather than from an accession of privilege ‘.
I would not personally seek a privileged position in relation to time spent on the media- in this case broadcasting- by any section of society, but in passing I would not be honest if I did not say that I admire the point of principle taken by so many strong adherents to the Church in many areas of Australia. The Bishop goes on to say, on figures cited during last winter in South
Australia, more people attended religious services on Sunday than attended football matches during the day immediately preceding Sunday. I do not quite know how these figures have been ascertained, whether it is by using League official figures in South Australia which of course would be far higher than for the other form of football played in New South Wales and Queensland, which does not match, in spectator appeal, the southern code of football. But if that measurement is correct, again that is strong evidence of the fact that Australia is not a wholly secular society. I am in the rather invidious position of having said that given the right opportunity I will make inquiries on behalf of the writers of these letters. I should like to know whether the Minister has any comment to make. I realise that this matter is meant to have emanated from an advisory panel of the Australian Broadcasting Commission in South Australia. Perhaps the Minister can make some inquiries and even give an assurance that, if the ratings for religious broadcasts are up to the mark they should be, he will see that there is no dimunition of the time spent on religious broadcasting in South Australia or indeed in any other State.
Question resolved in the affirmative.
House adjourned at 10.56 p.m.
The following answers to questions were circula
asked the Minister representing the Minister for Manufacturing Industry, upon notice:
– The Minister for Manufacturing Industry has provided the following answer
asked the Minister representing the Minister for Foreign Affairs, upon notice:
Did the Australian Commissioner to the International Whaling Commission in 1974 vote ‘No’ at the technical committee stage of the proceedings to a quota of 725 on the Antarctic Fin Whale with 6 area divisions, and ‘Yes’ at the same committee to a quota of 1000 with the same area divisions, thus voting the death of another 275 Fin Whales which are classified as an endangered species by the International Union on the Conservation of Nature and Natural Resources.
– The Minister for Foreign Affairs has provided the following answer to the honourable member’s question: ‘The Australian Commissioner to the International Whaling Commission voted to reduce the annual catch quota for Antarctic Fin Whales from 1450 to 1000 allocated between the 6 area divisions as advised by the I.W.C Scientific Committee. Australia had not supported an earlier proposal to reduce the catch quota to 750 as it clearly did not have wide acceptance, in fact only four affirmative votes out of fifteen.
Australia voted on this matter after other nations accepted an Australian proposal to introduce a long term management program for not only Fin Whales but all whale stocks throughout the world.
The Scientific Committee has since been examining the Australian proposal which provides for the automatic application of a moratorium on any whale stocks, including Fin Whales, if and when they are reduced to certain defined levels. It is anticipated that the management program will come into operation next year.
This could have the effect of applying a moratorium to the taking of Fin Whales in the Antarctic one year earlier than previously planned and thus reducing the total number which could previously have been taken over the two years.
Like other member countries of the I.W.C, Australia accepts the advice of the I.W.C. Scientific Committee which consists of the world’s leading scientists who specialise in whale population dynamics. This Committee is no doubt aware of the views of other conservation authorities such as the International Union on Conservation of Nature and Natural Resources which have a wider range of activities. ‘
asked the Prime Minister, upon notice:
– The answer to the honourable member’s question is as follows:
Arbo-encephalitis (Question No. 2385)
asked the Minister for Health, upon notice:
What research is being conducted into a vaccine against Australian arbo-encephalitis, and with what result.
– The answer to the honourable member’s question is as follows:
I am unaware of any research being carried out in Australia into a vaccine against Australian arbo-encephalitis. There has, however, been research overseas into the development of vaccines against this and other closely related strains of encephalitis virus. It is not yet practical to use these vaccines as their safety and effectiveness against Australian arbo-encephalitis has not been demonstrated.
The development and testing of a vaccine is a long and difficult process. It is considered preferable, at this stage, to control the disease by mosquito abatement programs and through research into the bionomics of the vector species.
Research of this type is being carried out in Darwin and Alice Springs and also at the School of Public Health and Tropical Medicine, University of Sydney. It is envisaged, also, that officers of my Department and research personnel from the John Curtin School of Medical Research, Australian National University, will be conducting a research program in the Murray Valley during this year.
Other research related to the epidemiology and aspects of control of the disease is being carried out at the Queensland Institute of Medical Research, the John Curtin School of Medicine and the University of Western Australia.
asked the Minister for Health, upon notice:
Does his Department intend to provide information brochures, for all international air travellers arriving in Australia, to explain to them the reason for aircraft disinfection and general quarantine requirements so that their greater co-operation can be assured.
– The answer to the honourable member’s question is as follows:
Yes. My Department is in the course of arranging for this information to be provided to all travellers from overseas arriving in Australia.
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
The Company did not reply until November 1973. The new data were evaluated and referred back to the Australian Drug Evaluation Committee at its 59th meeting in August 1974. The Committee considered that none of the deficiencies in clinical data which had been identified at the 44th meeting had been satisfactorily remedied.
Although Lioresal had been available in Australia for clinical trial purposes for a number of years, no detailed data had been submitted on the results of these trials. This fact was communicated to Ciba-Geigy and to the Australian Society of Neurologists in December 1974. The additional data have now been received and are currently being evaluated.
It is anticipated that a submission as unsatisfactory as that for Lioresal will not be repeated by Ciba-Geigy in the future, since the parent company in Basle has recently set up a special section to ensure that data appropriate to Australian requirements for safety and efficiency (and those of other countries) will be provided.
asked the Treasurer, upon notice:
– The answer to the honourable member’s questions is as follows:
asked the Treasurer, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Agriculture, upon notice:
– The Minister for Agriculture has provided the following answer to the honourable member’s question:
Milk Reconstitution Plant at Phnom Penh (Question No. 2463)
asked the Minister representing the Minister for Foreign Affairs, upon notice:
– The Minister has provided the following answer to the honourable member’s question:
Cite as: Australia, House of Representatives, Debates, 15 May 1975, viewed 22 October 2017, <http://historichansard.net/hofreps/1975/19750515_reps_29_hor94/>.