29th Parliament · 1st Session
Mr SPEAKER (Hon. G. G. D. Scholes) took the chair at 10 a.m., and read prayers.
– 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 humble petition of the undersigned employees and agents of the Australian insurance industry respectfully showeth:
That the insurance industry is already faced 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 Connolly, Mr McKenzie and Mr Macphee.
To the Honourable the Speaker and Member 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. byMrBrury.
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:
Eliminate private insurance for Australians.
Have a serious effect on the private sector of the economy by the passing over of further funds to be controlled by the Government through its instrumentalities.
Provide no better plan for the establishment of a national disaster fund than that provided by the insurance industry in its submission to the Treasury in October 1974.
And your petitioners as in duty bound will ever pray. by Mr Hyde.
To the Honourable the Speaker and members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That whereas the natural environment of Fraser Island is so outstanding that it should be identified as part of the World Natural Heritage, and whereas the Island should be conserved for the enjoyment of this and future generations,
Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:
And your petitioners as in duty bound will ever pray. by Mr McKenzie, Mr Mathews and Mr Ruddock.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectively sheweth:
That we wish to protest most vigorously at the proposed increases in postal and telephone charges.
Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to:
Diminish the size of the increase or, if possible, leave charges as they are.
And your petitioners as in duty bound will ever pray. by Mr Hunt and Mr Nixon.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens and foreign students respectfully showeth: That the undersigned most strongly agree with the changes proposed to the tertiary education scheme in the submission to the Committee to review the scheme presented by the Australian Union of Students, and see the following specific changes as being immediately necessary:-
And your petitioners as in duty bound will ever pray. by Mr McKenzie and Mr Ruddock.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That the increased price of the Hansard subscription will place it beyond the financial reach of most people;
That it is basic in a Parliamentary democracy that electors have easy access to records of the debates in their Parliament;
That making Hansard available only to an elite who can afford it is at odds with the concept of open government.
Your petitioners therefore humbly pray that the Government will reduce the cost of the Hansard subscription so that it is still available at a moderate price to any interested citizen.
And your petitioners as in duty bound will ever pray. by Mr Drury.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth-
Your Petitioners therefore humbly pray that the House urge the Government to seek information from the Soviet Government concerning Leonid Plyushch.
And your petitioners as in duty bound will ever pray. by Mr Fry.
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 McKenzie.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth-
That we object to the A.B.C. television and radio programs for the following reasons:
Your petitioners therefore humbly pray that the House urge the Australian Broadcasting Commission to maintain proper standards of decency and good taste in television programming and news broadcasting.
And your petitioners as in duty bound will ever pray. by Mr Newman.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
Your petitioners therefore humbly pray that the House takes steps to-
And your petitioners as in duty bound will ever pray. by Mr Nixon.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned students of Macquarie University, North Ryde, NSW and citizens of Australia respectfully showeth:
That many areas of the Sydney region are inadequately serviced with access to broadcasts of ABC radio station 2JJ by virtue of the transmitting equipment used by that station being not powerful enought for good quality reception in some areas, or of any reception in others.
Your petitioners therefore humbly pray that the House will take all possible action to bring this matter to the attention of the Government, that by legislation, regulation or administrative fiat the station may be provided with the necessary facilities to adequately service the whole Sydney region.
And your petitioners as in duty bound will ever pray. by Mr Ruddock.
– I ask the Acting Treasurer a question. Is he apprehensive about prospective rises in unemployment over the next two or three months? If a rise occurs, will he introduce supplementary measures to deal with the situation?
– I am sure everybody in Australia ought to be concerned about the levels of unemployment.
– Why are you not concerned?
– I am.
– Why do you not do something?
– I do not know why, for the good of your reputation, you do not retire. I do not think anybody can estimate what the levels of unemployment will be in the next two or three months. I am optimistic about the prospects in the next two or three months and as explained when I have been asked before, if unemployment does increase naturally enough measures will be taken to look after those who are unfortunate enough to be unemployed. I made a plea yesterday that I hope will be taken up. I wish that that section which calls itself private enterprise would show a little more confidence in the future. I think that I said in the presence of the honourable members yesterday that that section will be sorry in 1976 for decisions that it did not take in 1975.
– Is the Minister for the Environment aware of the concern of councils and citizens in relation to the damage being caused by wave action in Botany Bay and also their concern about installations for the new port development in Botany Bay?
– Yes, I am aware of the concern. I could hardly help being aware of the position, especially given the forceful submissions on the subject put to me by the honourable member for Cook himself, the honourable member for Barton and other representatives of the area. I also took the opportunity last week to have a meeting to discuss the position with Mr Bernie Clarke of the Botany Bay Planning and Protection Council. I must confess that I hardly feel myself to be in the position to make any judgment on the submissions which have been put to me. It is not even clear at this point whether the direct environment protection powers available to me would be applicable in the Botany Bay situation, although the Commonwealth does have an obvious interest there through Towra Point and its involvement in the proposed harbour and airport developments.
However, even conceding that much, I have to add that the arguments put to me justify at the very least very great concern for this area. It is a highly developed part of New South Wales. It is densely populated. Development will affect a great many more people, if the environmental impact is as serious as has been suggested, than many other developments which at the moment are causing greater general concern. I believe that close attention must be paid to it. At the invitation of Mr Clarke and local members I have agreed to visit Botany Bay next Monday. I will be accompanied at that time by the members of Parliament to whom I have referred already and also by some of my ministerial colleagues, including the Minister for Defence, affectionately known among his friends as the honourable member for St George. I am hopeful also that the Minister for Manufacturing Industry and perhaps others will join us.
I have also invited the relevant Ministers of the New South Wales Government in the hope that they will be able to participate in the inspection and give us the benefit of their interest. They are unable to join us at the time that we have suggested but I am pleased to have had their cooperation to the extent of offers of relevant officers of the State departments being made available to assist us. It is very clear that this is one of the areas in which, if we are to be helpful, it will be only on a basis of Commonwealth and State co-operation. I think that the seriousness of the position on the face of it would certainly justify that course.
-I direct a question to the Prime Minister. We noted his comment the other day that he loves the country and is loved in it. Therefore, will he repent and reconsider the savage erosion of the tax averaging system for primary producers introduced in this Budget? I point out that previously for tax averaging purposes the primary producer’s net taxable income was that figure after all concessional deductions were taken into account. Now the figure excludes concessional deductions and is a much higher figure. This reacts against beef producers, particularly in a time of crisis, and represents another bashing of primary industry. Will the Prime Minister repent and reconsider?
-Of course, I will observe and support the lines of the Budget. All these matters were considered very carefully. The present Government had to abolish many of those methods which were designed to assist primary producers but which over the years had failed in that purpose. When we came into office the forms of assistance which primary producers were receiving, with very few exceptions, depended on the amount of production by each individual producer. The assistance by the Australian taxpayers through the Australian Government was per unit of production. Accordingly, we had the quite absurd situation that the bigger one was as a producer the more assistance the taxpayers were giving and the smaller one was as a producer the less assistance the taxpayers were giving. In other words, those who needed assistance least got most assistance and those who needed assistance most got least assistance.
My Government, accordingly, brought about a basic reassessment of the assistance which taxpayers were expected to give to primary producers. As is well known we have enlarged the jurisdiction of the old Tariff Board by establishing the Industries Assistance Commission which is entitled to receive- as the Tariff Board was not- applications for assistance from the Australian taxpayers. Any primary industry group, whether it is in a particular product or a particular region, is entitled to apply for assistance. The applicants are assisted by the relevant departments. The applications now can be examined and reported upon by the Industries Assistance Commission. The reports of the Commission are published promptly. They are considered by the Government much more promptly than was the case with the consideration of reports of the Tariff Board by our predecessors. In addition, this Government is determined to see that the opportunities which are available to Australians are as nearly as possible brought up to an equal standing. We want to see that the people who live in the country are enabled to receive some of the benefits which people in the city alone have received up to now. The whole thrust of this Government’s policies has been that where governments provide services those services should be of equal accessibility and of equal quality in the remotest country area as in the longest established and most fortunately situated part of the capital cities. Of course I love the country and am loved in the country. There could be no better demonstration of this than that tomorrow, I will be making my fourth visit to the electorate of the Leader of the National Country Party of Australia, at his request and in his company.
- Mr Speaker, I raise a point of order. I ask for your ruling about the relevance of the answer to the question. That question dealt with averaging but that matter was not mentioned at all in the answer.
– The Prime Minister ignored the question.
-Order! If the honourable member for Gwydir wants to run the House I suggest that he do so; otherwise he should remain silent while I am addressing the House.
– That is a good idea.
– Order! I suggest that the honourable member for Kennedy do the same. Any matter in relation to relevance or any other departure in answer to a question can be drawn to my attention by taking a point of order during the answer to the question. Certainly, the Chair cannot ask that a Minister change his answer, on the basis of relevance, after it is completed.
– Can the Prime Minister say whether the Government has given exhaustive consideration to alternative methods of raising revenue?
Mr WHITLAM I certainly can assure the honourable member that the Government gave the most exhaustive consideration to the methods of raising revenue in the present domestic and international economic situation. This was done on the basis of consultations with officials going over many months and with academic people who made their services available. Then, of course, Ministers spent very many days on this matter. Some Ministers in particular, for instance those on the Expenditure Review Committee, had to spend many further days in making these investigations. I am comforted to notice that the revenue measures which the Government has introduced in this Budget are in fact supported by the Opposition. I must confess that when listening to the Leader of the Opposition on Tuesday night I thought he was opposing, and if he had the opportunity he would reject or cancel the revenue measures which the Government has brought in in this Budget. That was the distinct thrust of his remarks. I gained the impression that he was displeased.
Accordingly, I made the inference, which I believe a very great number of other honourable gentlemen made, that he was advocating the repeal and cancellation of those measures. Of course after the Deputy Leader of the Opposition made an audit he had to issue a clarifying statement yesterday. I suppose a harsher critic than I would say that he issued a correction of his Leader. But it now appears that in fact the Leader of the Opposition would retain the increased postal charges and telecommunications tariffs, that he would retain the increased duties on cigarettes and beer, that he would retain the increases on motor spirits and on potable spirits, and that he would retain the coal export levy. I am happy indeed to have this universal support, this ecumenical endorsement, of the Government’s Budget. All the revenue measures to which we have devoted so very many days and weeks of consideration and in respect of which, in their first reaction, the Leader of the Opposition and the Deputy Leader of the Opposition came out with some particularly vitriolic blasts, are now endorsed and accepted. I do not know what we are arguing about. One has to look at the wording of the statements of the Leader of the Opposition particularly carefully because if one has one’s statements drafted by a man like Michael Baume one cannot be surprised if one ends up with a faulty prospectus.
– I direct my question to the Prime Minister. How long does the Prime Minister intend to have Australia stand aside while people continue to suffer and die in Timor? Is there no way in which his policy of nonalignment can be applied more in a way which will allow Australia to help the people of Timor find a solution to their problems? Does the Government feel concerned in any way that Timor might become communist controlled?
– I thought I had made it quite plain on earlier occasions, on Tuesday and Wednesday of this week in particular, in the House that the Government is concerned that Portugal itself might have an extremist government, that is, that in the course of a couple of years it should go from a fascist to a communist government. The Australian Government is also concerned at the appalling effect that the political situation in metropolitan Portugal has had on Portugal’s colonies, particularly Angola, but now, of course, in our own neighbour of Portuguese Timor. The Government has done all that it can reasonably do. Do honourable members suggest that we should put troops into Portuguese Timor? Do honourable gentlemen suggest that we should offer an army and a police force to Portugal? Portugal has not asked us. Is the right honourable gentleman suggesting that we should afford a proxy army and a proxy police force in Portuguese Timor?
– You will wait and do nothing, will you?
-We are doing all that we are asked to do and that we can do. At the very moment, actually, a Royal Australian Air Force aircraft has just taken off from Darwin for the seat of government in Portuguese Timor- the island of Atauro. It is taking a brigadier and a major from the Portuguese army whom we have been asked by the Portuguese Ambassador to help to take to the seat of government. There were some misgivings from the civil aviation people as to whether they could give a clearance for an aircraft to go to Atauro. In those circumstances we decided that a Service aircraft should go. We are complying with a request by a friendly power, Portugal, to help her in carrying out her duty in her colony. We want to do all we can to see that there is an orderly decolonisation and a proper self-determination in Portuguese Timor. If honourable gentlemen are in any doubt as to what the Australian Government has done I am prompted, of course by the question, to give some more facts. I suppose if I give them there will be cries that I am taking up too much time in question time. Nevertheless, in view of the wideranging and offensive allegations the right honourable gentleman has made as Leader of one of the 2 Opposition parties I shall give the facts.
Throughout the period leading up to the events which have followed the show of force by the Timorese Democratic Union on 10 August the Government has been very much aware of the difficulties which were likely to accompany the decolonisation process in Portuguese Timor. The Government, of course, has welcomed the change in Portuguese colonial policy which has occurred since April last year. We welcome the decolonisation program for Portuguese Timor, known as the Macao program, which was promulgated on 10 July.
-Mr Speaker, I rise on a point of order. We are most interested in getting information because we did not get it from the Prime Minister’s statement the other day. Will he incorporate this factual document in Hansard now? This procedure would save the monologue.
-Order! The honourable member for Kooyong will resume his seat. What he asks is a matter for the Prime Minister’s discretion.
– I choose to proceed with the statement so that people outside the House and in it can hear it Allegations are made in the form of a question so they will be replied to in the form of an answer.
- Mr Speaker, the Prime Minister just used the language ‘of a statement’. Are we to interpret that this is a statement open to debate?
-Order! This is an answer to a question.
– I thought the Prime Minister said he would proceed with the statement.
-With the answer.
-‘ With the statement ‘, you said.
-Order! The honourable member for Kooyong will not debate the matter. He is engaging in semantics.
-The Macao program looked to the election of a popular assembly in October 1976 to decide upon the future political status of the territory. Australian officials paid 3 visits to Portuguese Timor between July 1974 and July 1975. Through these visits and close contact with the Portuguese Government we have remained well informed of developments. The breakdown in civil order in Timor was sudden but was not entirely unexpected. There was, for example, a foretaste late in June when there was a minor confrontation between UDT and Fretilin for several days in Dili. In any event the Government was fully aware of the tensions that were unavoidable within a political structure that had been established almost overnight after the Portuguese Government change in April last year and after 400 years of Portuguese refusal to allow any form of political expression by the people of the territory.
The process of decolonisation of Portuguese Timor was thus very delicate and the prospects were always that it would run into difficulty. Quite apart from the fact that Australia had no right to involve herself in the process it could not have been helped by outside interference. Since the fighting broke out on 10 August the Australian Government has followed developments very closely, maintaining close contact with the Portuguese and Indonesian Governments. Australia remains uninvolved in any formal sense but this is not to say that the Government has turned a blind eye to events. The Government has assisted with a multi-phased evacuation process: 272 evacuees, including 15 Australians, arrived in Darwin on the MacDili on 14 August; 31 evacuees, including 16 Australians, were airlifted out of the towns of Dili, Same and Baucau on 18 and 19 August. A Royal Australian Air Force aircraft was used on 19 August. This evacuation was arranged by 2 officials from our Department of Foreign Affairs who flew by chartered civilian aircraft to Dili on 16 August. Apart from assisting with the evacuation these officials were able to report on the political situation in the territory. A total of 1149 persons, mainly Portuguese and Timorese, arrived in Darwin on the 25th on the Lloyd Bakke. About 800 persons, mainly Portuguese, Timorese and Timorese-Chinese are on the MacDili which began its second trip back to Darwin on the 27th. One Australian was airlifted out of Baucau on the 25th. In terms of numbers the major evacuation exercise was carried out by the Lloyd Bakke
In response to a request from the Portuguese Government on the 21st the Department of Foreign Affairs began a search for available means of transport to evacuate Portuguese and other foreign nationals from Timor. By the 22nd it had become clear that the safety of the airfields in Timor precluded any civilian charter flights. The Department of Foreign Affairs established a special task force to handle this question on the 22nd. The first job was to locate vessels which the Portuguese Government might charter for evacuation purposes. In consultation with the ship’s agents in Australia the Department was able to help the Portuguese Government in chartering the Norwegian registered Lloyd Bakke which at the time was 300 kilometres south of Dili.
– I raise a point of order. Mr Speaker, Standing Orders permit me to request that the document from which the Prime Minister is reading be tabled. That I do.
– Order ! The honourable gentleman is out of order. The honourable gentleman cannot request that a document be tabled until the person using the document has finished quoting from it. The honourable member cannot deprive another honourable member of a document which he is in the process of using.
– I am speaking to a point of order, and that is that under Standing Orders I am entitled, after he has completed his speech, as you have suggested, to ask that the document be tabled.
-The honourable member did ask the Prime Minister to table the document.
– What I am putting to the House is that the Prime Minister has taken an extraordinary length of time to make a statement in response to a very important question. Honourable members are interested in this matter. My colleague the honourable member for Kooyong has asked whether the Prime Minister is prepared to make a statement. If he is not prepared to do this, in order to stop the abuse of question time would he be prepared to have the balance of the document incorporated in Hansard so that question time might continue?
-Order! The matter is one solely within the province of the Prime Minister, as I ruled on the point of order taken by the honourable member for Kooyong. On the question of the tabling of documents, it is not my intention to allow requests for documents to be tabled while they are being used as this would deprive the person concerned of the opportunity to use them further. When the Prime Minister has sat down the honourable member may ask for the document to be tabled.
-The Lloyd Bakke reached Dili in the early hours of the 23rd. The 1149 evacuees arrived in Darwin on the morning of the 25th. The Departments of Foreign Affairs and Labor and Immigration sent representatives to Darwin to assist local authorities in arrangements for the reception of the evacuees. The Minister for Northern Development, Dr Patterson, was also present at the arrival of the Lloyd Bakke. No praise can be too great for the unstinting manner in which the Darwin people, still working under conditions of extreme hardship, prepared to accommodate the sudden influx of evacuees.
The Australian Government also facilitated communications between the Portuguese authorities and the Hong Kong registered MacDili which was also diverted to Dili for evacuation purposes. It is currently sailing towards Darwin with about 800 additional evacuees. It has now been decided that most of the evacuees remaining in Darwin- some 800- should be moved from Darwin before the arrival of the MacDili. They will be flown out of Darwin in charter aircraft pending a decision whether they wish to travel on to Portugal or to apply to remain in Australia. The Australian Government has also helped the Portuguese Government arrange for the charter of Qantas 747 aircraft which flew evacuees from Darwin to Lisbon on 15 and 26 August. Some 500 persons were involved in these 2 flights.
The Marine Operations Centre in Canberra has provided valuable communications links with the vessels involved in the evacuation process. Extensive use has also been made of the radio facilities of the control tower at Darwin airport for contact with the airfields at Dili and Baucau. Two destroyers, the Vampire and Vendetta, were to have begun exercises off northwest Australia this week.
– I rise on a point of order. This extraordinary reply has little relevance to the simple question I asked, which can be answered yes or no. I asked: ‘Is the Government concerned about Timor coming under Communist control? ‘
-The answer has relevance to the question that was asked, but I suggest that the Prime Minister curtail his answer. It is becoming extraordinarily long.
– The destroyers were ordered to leave Fremantle on 22 August- a few days early- to be available for emergency evacuation if it was considered appropriate to use them in circumstances where commercial aircraft had not been found in time. The destroyers are within 24 hours sailing time of Dili. They continue to be available should need arise for evacuation purposes. The Government has assisted with the prolonged evacuation process and is assisting with the visit to Timor of the regional representative of the International Committee for the Red Cross, Mr Pasquier. It is hoped that Mr Pasquier will be able at least to be in Atauro by the end of the week. The Government will be very sympathetically disposed towards any humanitarian aid recommendations. Recommendations from an interdepartmental committee on this matter are to be studied by the Government shortly.
The Government is aware of the private chartering from Darwin of a vessel bound for Timor with medical supplies and a number of medical personnel. The Government places much importance on the mission headed by Dr Santos, who hopes to conduct talks with Timorese political groups on Atauro Island. The Government has agreed to assist members of Dr Santos’s mission in arranging air transport to Atauro. The Portuguese Government, through Notes addressed to the Secretary-General of the United Nations since 23 August and through a visit to New York last weekend by Dr Santos, has been exploring means of inviting the attention of the United Nations to the Timor question. No clear proposals have yet been put forward and no form of United Nations machinery has been suggested.
The Government is sympathetically disposed towards the United Nations as an instrument available to the international community in cases of emergency, but the Government would be unable to react until a concrete proposal is on the books. It clearly rests with Portugal, as the country responsible internationally for Portuguese Timor, to make any formal approach to the United Nations.
It appears that the Portuguese are thinking in terms of a ‘good offices’ committee. This may be a good idea, but it is not yet clear when or how the membership of the United Nations would endorse it. We thus await clarification from the Portuguese of their intentions. The United Nations Decolonisation Committee- the Committee of Twenty-four- has not met to discuss recent events in Timor, but Dr Santos has discussed possible action with members of its Bureau. Australia is a vice-president. The Bureau does not think that Committee action would be possible without the prior establishment of a ceasefire. There appears to be no likelihood of an ASEAN initiative. The Indonesian Government has expressed its willingness to assist in the evacuation exercise. Indonesian ships are standing off Dili for this purpose. The Indonesian consul in Dili has been under great pressure, remaining behind after the departure of the Portuguese. The last of 3 appeals addressed this week by the Portuguese Government to the SecretaryGeneral of the United Nations has spoken of the need for international intervention to effect a ceasefire. The Indonesian Government, which over the past year has expressed repeatedly its intention not to intervene in Timor, may thus be turned to as the only force capable of restoring calm in the territory.
– I ask that the document be tabled.
– I will table the document.
-The document is tabled.
– My question is addressed to the Minister representing the Minister for Social Security and Minister for Repatriation and Compensation. Has the Minister’s attention been drawn to the advertisments appearing in the national Press, inserted by the life insurance companies, against the Government’s proposal to establish an Australian Government Insurance Corporation? Has the Minister been approached by representatives of the insurance industry or their agents, seeking the withdrawal of the National Compensation Bill?
– I have seen the unprincipled and offensive advertisements inserted by the organisations which the honourable member mentioned and relating to the Government’s insurance legislation. I have not personally been approached as the Minister representing the Minister for Repatriation and Compensation in connection with the withdrawal of the National Compensation Bill, but I understand that the Minister may well have been. It is interesting that the honourable member should have asked this question this morning because, quite mysteriously but quite appropriately at this time into my possession has come a document. It deals particularly with both matters that the honourable member has spoken to me about. It is a document sent out under the heading ‘Life and General Insurance Committee’. The address is given as Tasmania- 40-44 Murray Street, Hobart- and a telephone number is given. The document says:
Protecting Free Enterprise Insurance
It is dated 22 August and it says:
Strenuous and magnificent efforts by members of the Insurance Industry throughout Australia over recent months have come to fruition in the defeat of the Bill to establish an Australian Government Insurance Corporation.
Although we can all justly take pride in these efforts they would have come to nothing without the support of the Liberal-National Country Party in the Parliament-
This relates to the second part of the honourable member’s question: . . . and at some time in the future it is possible we will again be looking for this support should National Compensation and National Superannuation be re-introduced by the Government.
It shows the interest. It goes on.
In the meantime, the Liberal Parry in Tasmania has asked for the support of the Insurance Industry in the campaigns of endorsed Liberal candidates and I have promised this support.
There is more to come. It says:
On Saturday, 30 August, the party has asked for forty volunteers to door knock with literature for Michael Hodgman in the Denison Electorate.
Again, magnificently, it says:
I have promised this support. It will cost you approximately three hours of your time and I feel confident your support is forthcoming.
This same letter has been forwarded to twenty five responsible people in our Industry asking for the same commitment and asking them to bring one other person with them to assist with this task.
Here is a chance for a few honourable members opposite, except some of the bachelors. It goes on:
The other person can be a member of your office staff-
I hope honourable members opposite do not take any of those being paid for by the Government - . . . your wife, your son or daughter of voting age.
It could well have mentioned anybody silly enough to follow this kind of advice. Then it says:
Your commitment is most important
Please advise me NO LATER THAN 28th August, your intention to assist and advise also the name of your associate.
Helpers are requested to report to Liberal Party Headquarters-
Listen to the name of the street - 30 Patrick Street-
Would that not make Michael Baume happy? It goes on: . . . between 9.00 a.m. and 2.00 p.m. on Saturday, 30th, where they will be directed to the area in which they are to operate.
Yours sincerely, Brian McInerney Chairman
That shows the hysterical and hypocritical campaign of these people. These letters are all sent out at contributors’ expense without any reference to them and without any appreciation of the importance of the legislation. It is a disgraceful misuse of the funds of the contributors to the insurance companies, particularly when it is considered that the Government that they are maligning pays them $ 1 5m a year rent out of the taxpayers funds, 30 per cent of the total rent paid. They are prepared to destroy the Government that is practically keeping them going in industry. I thank the honourable member for the question. It has allowed me to expose the misuse of funds and the need above all else for this Parliament to legislate to make available to the public the source of the interests and the finances behind those who sit opposite in this Parliament.
-Has the Prime Minister heard that the Waterside Workers Federation in the Northern Territory, which hitherto has given at least moral support to the Fretilin, has dissociated itself from the Fretilin Party because of reports coming out of Portuguese Timor? Has he heard the reports of the Australian Broadcasting Commission to this effect this morning? I ask him again: Is he concerned at all at the possible establishment of communist control in Portuguese Timor so close to Australia?
– I heard the ABC news at a quarter to seven and with slightly less intense interest at a quarter to eight this morning, and I do not remember hearing any such item.
– Darwin ABC.
– I do not listen to the Darwin ABC. I have been communicating with Darwin quite a lot in the last few days and weeks, as would be clear from the answer I just gave. The Government’s wish is that the people of Portuguese Timor should have the government which they desire. We want to see an end to the situation where rival factions are destroying each other and the chance of decolonisation in an orderly manner and self-determination in a proper manner in that territory. In our view it is for the people there to decide what sort of government they want. I said yesterday that the people of metropolitan Portugal made it clear that most of them wanted a government such as those in many western European countries and in Australia and that they did not want a communist government. That may well be the wish of the people in Portuguese Timor. I wish that the Macao agreement had been given a chance to operate.
– My question is directed to the Prime Minister. By the way, Mr Speaker, I do not have any assets in Italy. The only asset I have there at the moment is my wife who is on a visit. On the question of assets, is the Prime Minister aware that the owner of an 8000 acre property at Nareen in Victoria, is advocating the restoration of the superphosphate subsidy whereby the property would attract approximately $17,000 a year, placing it in the top 50 recipients of the subsidy? Would the restoration of the subsidy cost $30m of taxpayers’ money to subsidise the owners of properties such as at Nareen, and did not Commissioner Robinson of the Industries Assistance Commission say that such restoration was merely a token gesture? Would the Prime Minister look beyond the self-interested pleas of large property owners when reviewing the Industries Assistance Commission report?
– There is only one acquaintance of mine who would fall within the description that the honourable gentleman gives and, I suppose that, like many people similarly fortunately situated, he would benefit from the restoration of the superphosphate bounty. This is a matter upon which primary industry organisations are being given an opportunity for comment by my colleague the Minister for Agriculture, who has given them the report of the Industries Assistance Commission, not only Commissioner Robinson’s admirably cogent and rational report but also the rather less convincing ones of his 2 colleagues. If the honourable gentleman seeks my own personal view at this stage, I must say that without the benefit of having a debate or discussion on it I can think of better ways to spend $30m because unquestionably the whole of this subsidy, as I said in answer to an earlier question this morning, helps most those who need help least and helps least those who need help most. This sort of subsidy by the taxpayer according to the unit of production or consumption goes right against economic rationality not only at the present time but in any economic time.
– Why do you not read the IAC report?
– I have.
– Read it again. You do not sound as though you have.
– Indeed I have. I will be giving everybody the opportunity to read the reports and to compare the logic of Commissioner Robinson with the rather pathetic efforts made by the two others. I express no particular view.
Opposition members- Oh!
– All the large landowners on the other side of the House who are able to spend some of their spare time in Parliament are among those who would benefit most from the restoration of such a subsidy. The $30m can be much better spent in the country in other ways than on the restoration of this archaic and unbalanced subsidy.
– My question is addressed to the Prime Minister. It has been reported that media reporters have been refused permission to go to East Timor. Is this true? If so, who has refused permission? Given the nature of the alleged brutality and killing in that territory and given the territory’s immense strategic importance in Australia’s future, especially if the territory becomes a communist state, will the Government not only permit but also co-operate in landing representatives of the Australian media in that territory? This should serve the Government’s purposes also, because its information is limited by the absence of any Australian consul or other direct representative and the Government must rely on second-hand information. I can assure the honourable gentleman that there are many competent Australian journalists who would be prepared to undertake the risk to observe the conditions at first hand and report to the Australian people.
– I have not seen such reports. There is not an Australian consul in Timor because the Government of which the honourable gentleman was a senior member brought the Australian consul home after there having been a consul there for about 20 years. It was his Government that withdrew the Australian consulate from Timor. No requests have come to my notice for Australian media representatives to be taken to Portuguese Timor. The only form of transport which the Australian Government has been able to arrange has already been mentioned by me in answer to an earlier question. The Australian Government, at the request of the Portuguese Government, was able to arrange shipping to go to Portuguese Timor. I do not know if any representatives of the media asked to go on those ships. I would understand that they would be free to go on the ships if the owners took them. The only aircraft which the Australian Government has been able to send there is a Royal Australian Air Force aircraft. I am not aware of any request by the media to go on it. I should have to give very serious consideration to using Service aircraft for the carriage of media representatives.
I believe a television team- not from any of Mr Murdoch’s channels but from Channel 9 in Sydney, I believe- is going on one of the ships which I mentioned in my earlier answer. I mentioned that the ship was taking medical supplies. I believe it is chartered by Mr Clyde Packer. It may be that he is interested in taking medical supplies to Timor, but purely incidentally he is taking a television crew also.
– My question, which is directed to the Prime Minister, deals with the plight of Australian citizens in strife-torn Portuguese Timor. The Prime Minister is aware that I have made representations in respect of this matter on behalf of a Dr Grady and a Mr Berry, the honourable member for Braddon has made representations on behalf of Randall Riseley and other members of this House have made representations also. In view of the widespread concern by Australians, can the Prime Minister inform the House about the position of Aus.tralian citizens at present in Portuguese Timor? What action has the Government taken to ensure that the welfare of these citizens is protected?
-The honourable gentleman and several other honourable gentlemen have been in touch with me about this matter so perhaps I should give the information which the Government has about all the Australians on Timor of whom it knows. When fighting broke out in Timor some 34 Australians were in the territory. The Department of Foreign Affairs sent 2 officers on 15 August to Timor by charter aircraft to make arrangements for the evacuation of the Australians. The officers sought by aU available means to tell the Australians in Timor that evacuation nights would be taking place, to advise the Australians that they should avail themselves of the chance to leave and to warn them that if they declined the Government might not be able to do any more to help them. One officer stayed in Dili until 19 August. The other returned to Darwin in the charter aircraft to coordinate arrangements there. He brought 5 evacuees with him.
A further flight on 19 August by a Royal Australian Air Force DC3 took out 1 1 Australians and 14 other nationals. Most of the Australians who stayed in Timor, some 12 in number, declined to join the 2 evacuation flights. Subsequently 2 Australian babies- I think they were aged 7 and 17 months- were evacuated on the vessel Lloyd Bakke and are now in Darwin. The Government arranged a special flight on 25 August to bring out an Australian pilot named Ruddock. Another Australian, Miss Susan Ingram, is in the vessel MacDili which left Dili with evacuees yesterday. We are aware of 8 Australians who are still in Timor. Mr and Mrs Favaro, who are still understood to be in their hotel which borders on a Fretilin controlled area in Dili, declined the RAAF evacuation flight and there has been no contact with them since. They have a private aircraft. Mr Kruger, an invalid pensioner, who is still believed to be in Dili, wants to remain there. Mr Riseley, who was to have left in the aircraft that went to Baucau on 25 August, was prevented from doing so by UDT forces. Yesterday we were able to confirm by radio with Baucau that he was safe and well. He declined the RAAF evacuation flight. Mr and Mrs Sidell are believed to be at Tutuala on the eastern coast of Timor. Mr Sidell, a pensioner, apparently has a heart condition which he considers would make it unsafe for him to attempt to leave Timor. The Foreign Affairs officers who went to Timor sent a message to Mr and Mrs Sidell about evacuation and a reply was received saying that they were safe and wished to stay.
Messrs Berry and Grady had been working in the highlands but were cut off by fighting there and were unable to reach Dili for evacuation.
The Foreign Affairs officers tried to get a message to them but they are not sure if they succeeded. These 2 men are now in Fretilin held territory and we have tried and are still trying through Portuguese channels to make direct contact with them. However, we received a message yesterday through the Baucau airport control tower saying that both are being held in custody there but are well. We have since received a radio message relayed through an Indonesian ship that apparently some Australians in Dili are seeking help with evacuation. We are seeking to confirm this and will follow it up.
– Will the Prime Minister table the additional document?
– I direct a question to the Minister representing the Minister for Agriculture. Canned beef is being imported into Australia from the Argentine, Brazil and France as evidenced by these visual canned exhibits purchased in Brisbane on 30 July 1975 and readily available through other outlets in Australia. Does the availability of imported beef products reflect the Government’s total disregard for the problems of cattle producers? Will the Minister take up the matter with the Minister for Agriculture to ensure that imports of canned beef into Australia cease immediately?
-About 6 years ago I made exactly the same speech in this House and probably I produced the same cans. The previous government allowed the importation of canned beef from South America. Concern was expressed by the cattle industry about the possibility of disease being introduced into this country. Canned beef is manufactured under strict hygienic conditions and there should be no possibility of the introduction of foot and mouth disease or other exotic diseases, but some thought there was that possibility.
– Why do you not do something about it now instead of just talking?
-Why does the right honourable member not keep quiet? I will take up the matter with the Minister for Agriculture, as the honourable member suggested to ascertain the facts in regard to what quantity is being introduced into Australia and what pons and conditions are associated with these imports.
– I direct a question to the Minister for Defence. Yesterday his attention was drawn to a symposium on defence being organised by a group of retired defence force officers. Can he say whether this rush of interest among people, some of whom have been retired for many years, reflects any significant change in the defence situation of the nation?
– The first point that the Government would like to make is that it welcomes public debate on the issues confronting Australia in the defence area. One of the strange things is that many of the participants in this Defence Council held very high office during the early 1960s, when Australia’s defences were down. At that stage they were strangely silent or, as the honourable member for Mackellar tried to imply yesterday, strangely silenced. We hope that the discussions that will be held will be objective. However I think that there are certain grounds for concern. For instance, one of the participants is Air Vice-Marshal (Retired) I. D. McLachlan. He is the Australian representative for the Northrop Corporation. As honourable members will be aware, it is this Corporation against which allegations have been made in the United States of America concerning corruption and bribery on a large scale in its operations in the Middle East. Of course, it is only incidental that the Northrop Corporation is interested in the replacement for the Mirage aircraft to which the Australian Government is giving consideration.
Another representative on the Defence Councilagain a retired gentleman- is Air Marshal Sir Alister Murdoch. He happens to be on the board of Philips Industries Ltd. Philips Industries Ltd has under its control the manufacture of a wide range of equipment with military sales potential. This equipment ranges from computer software to communications equipment, from radar and fire control systems to patrol boats. It is quite obvious that these gentlemen have more than a passing interest in defence matters. But I want to assure honourable members that this Government will not be stampeded by yesterday’s Colonel Blimps. We have within the Department of Defence and within the Australian Services to-day’s men, men who have the experience and the expertise and who are in a position in 1975- not in 1965- to tender advice to this Government. It is on the basis of that expert advice that this Government will formulate its defence policies.
- Mr Speaker, I raise a point of order. Could I have your permission -
– Order! I suggest that the honourable gentleman wait until I call him before he addresses the chamber. I call the honourable member for Mackellar.
– Thank you, Mr Speaker. Could I have your permission to thank the Minister for answering today a question which he refused to answer yesterday -
-Order! That is not a point of order. The honourable gentleman will resume his seat.
– I direct a question to the Minister representing the PostmasterGeneral the former Postmaster-General. Is the Minister aware that the Australian public has been stunned by the severity of the recently announced postal charge increases? Will the Minister confirm that on 1 September the Australian postal rates Will become by far the most expensive in the world and that the almost 300 per cent increase in less than 3 years in the cost of posting a letter is further proof of this Government’s ability to screw up everything it touches?
-The position is that following the Vernon Commission report it was made clear that half the capital requirements of the postal service should be obtained from revenue. That report was tabled in this House. The recent Budget provides for increases in charges so that half the capital requirement will be so obtained. As indicated by the Prime Minister this morning the Opposition, of which the honourable member is a member, also silently approves of the increases on that commercial basis.
– We do not. We have said that publicly. The Minister should speak for himself.
-I know the National Country Party of Australia never wants to be part of the Opposition. The facts are that the Opposition has to abide by the economics of the Vernon Commission theory which quite properly explained that the taxpayers cannot go on subsidising certain sections of postal users. It is true that if there are losses which have to be met by the taxpayers, that is a subsidy to certain people. The idea of the Vernon Commission was to make it clear that the Post Office should be a selfsustaining financial unit. In this Budget some $4 17m is provided by way of contribution towards capital cost of postal and telecommunication services. The big issue in postal services is the need of people to get a service. They will pay for service. The user requires a guarantee that he will get an efficient service. The new Australian Postal Commission which comprises a wide representation from aU sections of the communitybusiness, commercial and users- has seen fit to impose these charges. It is in accordance with those criteria that the Government has endorsed its request for those charges which are now applying.
-Yesterday, the Leader of the Opposition (Mr Malcolm Fraser) asked me a question about the level of unemployment in the Geelong area. I now wish to give information which I subsequently obtained from the Minister for Labor and Immigration (Senator James McClelland).
-Is leave granted? There being no objection, leave is granted.
– It is true that in the Geelong area the rate of unemployment over the last 10 years or more has been higher than the national average. It is incorrect however, to suggest that the current rate of unemployment represents some 10 per cent of the workforce. The current rate is very high at 7.5 per cent. I believe that no good purpose is served- in fact, some damage is done- by overstating the present difficulty. The current rate throughout the Commonwealth of Australia is 4.2 per cent. In Geelong it is 7.5 per cent. In July 1966 when the unemployment rate throughout the Commonwealth was 1.2 per cent the rate of unemployment in Geelong was 3 per cent. In 1969 the rate throughout Australia was 1 per cent and the rate in Geelong was 2.2 per cent. That trend continues for every year from July 1 966 up to the present time.
The other part of the question raised by the Leader of the Opposition relates to the Government’s decision to enter a partnership for the manufacture of 4-cyUnder engines in Australia. The Leader of the Opposition asked whether this would not have a further adverse effect on employment in the Geelong area. I am advised that this suggestion is quite erroneous. The Ford Motor Company of Australia Limited and General Motors-Holden’s Pty Ltd do not now manufacture 4-cyUnder engines in Australia. No other enterprise is so manufacturing. Therefore, the position is that the manufacture of this type of motor engine will create employment in the Adelaide area but in no way will reduce employment opportunities in the Geelong area. True it is that the Government’s decision following the Industries Assistance Commission report to allow a reduction in the component parts of motor vehicles from 95 per cent manufactured in Australia to 85 per cent will perhaps cause some relocation. But in that regard 2 things must be borne in mind. First of all, the IAC report envisages a marked expansion of motor car manufacture in Australia over the period to 1979. That should take up some of the slack which might be occasioned by this reduction in the percentage of Australian made component parts. The other thing I want to say about this matter is that the re-sourcing or the change of sourcing of component parts in Australia is not left entirely to the whim or to the decision of the manufacturers. That alteration can be made only with the approval of the Government.
- Mr Speaker, since the Minister was good enough to reply to the question today to which he was not able to reply yesterday, would I be able to say something about one part of the answer?
-Only by leave.
– I ask for leave.
-Is leave granted? There being no objection leave is granted.
– I thank the Minister for Housing and Construction for his answer. On the information available to me from the motor industry, in one significant part the answer is just not accurate. The 85 per cent local content rule for the motor industry which now applies under this Government, as it is carried through, will model by model lead to the pressings, the skins, being imported from overseas. In Geelong over 3000 of the 6000 to 7000 Ford Motor Company of Australia Limited employees are involved in the pressings, skins, dies and everything involved with that. Model by model, as imported skins come to be used- this would not happen just with Ford: I understand it would be the total motor industry involving the outside skins of the cars- that part of the Ford operation would shut down. That would mean an additional 3000 unemployed from Ford, Geelong, as a result of the Government’s 85 per cent rule. I regret that these matters have to come out in this way. No doubt, Mr Speaker, you would have an interest in the debate.
– It is unfortunate that I cannot reply to the honourable gentleman.
– Might I, with leave, have one minute to reply?
-Is leave granted? There being no objection, leave is granted.
Mr RIORDAN (Phillip-Minister for Housing and Construction)- That statement is pure conjecture. It does nothing more than undermine confidence. Whether the Australian motor manufacturing industry will re-source -
– They are going to. It is not conjecture. They say they will.
-The Leader of the Opposition says that. Many important economic decisions have to be made before that decision is carried out or finally made. I believe that the statement by the Leader of the Opposition that 3000 jobs would be lost, which yesterday he made out to be so on the basis of the decision to manufacture a 4-cylinder engine, is inaccurate. I do not believe the honourable member serves the interests of Australia and of the economy by making statements which are, at best, arguable and in the nature of conjecture.
– For the information of honourable members I present the first main report of the Australian Government Commission of Inquiry into Poverty conducted by Professor R. F. Henderson, dated April 1975. In addition I present an outline of that report prepared by the Commission of Inquiry together with a statement by the Minister for Social Security (Senator Wheeldon) on the report.
– I have received advice from the Prime Minister (Mr Whitlam) that Senator M. G. Everett, Q.C. has been nominated as a delegate of the Australian Parliament to the Australian Constitutional Convention in the place of the Honourable Senator J. R. McClelland, resigned.
– I have received advice from the Leader of the Government in the Senate (Senator Wriedt) that he has nominated Senator Primmer to be a member of the Parliamentary Joint Committee on the Australian Capital Territory to fill the vacancy caused by the death of Senator Milliner.
Discussion of Matter of Public Importance
– Order! I have received a letter from the honourable member for Warringah (Mr MacKellar) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The immorality of the Government’s decision to deny the right of free speech and expression to specific Vietnamese refugees in Australia.
I, therefore, call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)
– I call the honourable member for Warringah.
– As this is general business day I move:
That business of the day be called on.
That the business of the day (Mr Daly’s motion be called on.
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative.
That this House condemns the Prime Minister for misleading the Parliament and the people on the Opposition economic program.
Yesterday during question time the Prime Minister (Mr Whitlam) deliberately misled this Parliament in his attempt to discredit the Opposition’s economic strategy. Yesterday the Prime Minister added to the long list of deliberate distortions and half truths which have become a feature of his public comments. How many times is the Prime Minister going to resort to deliberate falsehoods to advance his own political objectives? In 1972 he promised that the Australian Labor Party Government would reduce interest rates whenever possible and would build its social programs on an economic growth rate of between 6 per cent and 7 per cent a year. What is the truth? Australia has the highest recorded interest rates since Federation and the most serious decline in economic growth since the post-war period. In 1974 the Prime Minister regained office by telling the Australian people that Australia was the only country where inflation and unemployment were under control. What is the truth? Inflation has accelerated to 1 7 per cent a year and unemployment has spiralled to nearly 300 000 people. This year the Prime Minister told the Australian people that no improper actions had been taken over the loans affair and that he would make a full disclosure. What is the truth? Improper actions did take place and the Government suppressed the truth behind an iron door of secrecy.
This Prime Minister apparently has no intention of coming clean with the facts on any matter involving the economy of this nation. This Prime Minister persists with a deliberate campaign to blame overseas influences for the present economic crisis. What is the truth? The International Monetary Fund’s July report and the Organisation for Economic Co-operation and Development placed the blame where it rightly lies, with the policies of this Whitlam administration. The Australian Treasury has made the same point in statement No. 2 of this year’s Budget. Yesterday was a further episode in this train of events. The Prime Minister apparently borrowed a copy of the initial Press statement of the Treasurer, Mr Hayden, and gave his own interpretation of that statement to the Parliament- an interpretation designed deliberately to mislead this House. At least the Treasurer had the good sense to leave the country but uncharacteristically this Prime Minister finds himself still in the country- on one of his rare visits here- defending the absurdity of his absentee colleague’s calculations.
Let me deal specifically with the Prime Minister’s particular assertions. The Prime Minister claimed that the Opposition’s policy to implement one aspect of the Mathews Committee report immediately would cost $900m. That was a deliberate misrepresentation. Our proposal, clearly spelt out by the Leader of the Opposition (Mr Malcolm Fraser) on Tuesday night, is that the Mathews stock valuation system should be implemented at a rate of 50 per cent of that recommended. But the Prime Minister chooses completely to ignore this fact. If the Prime Minister had read the Mathews Committee’s report he would have seen that the stock valuation proposals had been estimated to cost $1008m in 1975-76. Half of this amounts to approximately $500m, the basis of the Opposition’s estimate. We are, of course, well aware that the Mathews Committee based its estimate in this regard on an increase in stock values of 22.5 per cent. In our judgment, on present statistical trends, this may have been an overestimate. It is likely that aggregate stocks will increase at a rate closer towards 18 per cent and that the overall cost of the Mathews stock valuation system would be less than $ 1,000m during 1975-76. Nevertheless we have chosen, as a matter of financial prudence, to base our cost on the Mathews Committee’s original estimate. The fact is that, given the formula set down by the Leader of the Opposition, based on the 50 per cent rate of stock valuation and company taxation at 45 per cent, the net cost of our proposal during 1975-76 would be a maximum of $380m. How can the Prime Minister claim that the cost is $900m? Either this Prime Minister has once again deliberately sought to mislead this Parliament or he is simply unable to undertake the elementary mathematical calculations required.
Perhaps the Prime Minister intends to dispute the partial adoption of the Mathews Committee’s stock valuation system. Let me save him the trouble. I refer to paragraph 53 of the Mathews report wherein it is stated:
The Committee recommends that the stock of sales valuation adjustments and the depreciation allowance adjustment be introduced wholly or partly in respect to the 1974-75 income year.
For the Prime Minister’s benefit I repeat the words ‘wholly or partly’ stated in the Mathews report. The Prime Minister obviously realises that the implications of the Mathews proposals are completely contrary to the socialist objectives of his Labor administration. The Mathews proposals- the most far-reaching reforms since the war- provide to Australian individuals and to Australian companies the most foolproof system yet devised against the use of inflation by governments as a dishonest and arbitrary form of silent taxation. They provide the first real hope that the Australian community has had to protect itself against the rapacious transfer of resources to the public sector which has occurred in the last 3 years and which has been characteristic of the misconceived mismanagement of the Labor Government. It is no wonder that the Prime Minister has refused to accept the recommendations of the inquiry which he himself instituted. Perhaps the Prime Minister has failed to read the conclusion of the Mathews Committee set out in paragraph 54 in the following terms:
It believes its failure to make the proposed changes will have both inflationary consequences through its effect on the wage system and a seriously depressing effect on the level of business activity.
Perhaps the Prime Minister is prepared completely to disregard the views of the major employee organisation, the Australian Council of Trade Unions, and the major employer organisations which have called for the implementation of the Committee’s report.
I turn now to the Prime Minister’s absurd allegation that the introduction of a 40 per cent investment allowance would cost $300m during 1975-76. Let me put that lie, that assertion, to rest straight away. The fact is that it will cost nothing during the present financial year. We have stated clearly that the 40 per cent investment allowance would apply to plant and equipment installed from July 1975. As the Prime Minister should know from what the Leader of the Opposition said last Tuesday this, of course, would affect assessable income in the 1976-77 tax year. This Prime Minister and this Government apparently are incapable of understanding that there is no point in applying the allowance retrospectively to plant and equipment already installed last year.
Nothing done by the tax mechanism this year can alter the level of investment last year. If the Prime Minister had devoted any time to this matter he could have turned to statement No. 4 of the Budget papers. I doubt that he has read any of those papers. Statement No. 4 specifically says that the allowance of double depreciation on new plant has a zero cost during 1975-76. Why is it that the Government’s proposal is to be without cost during the present tax year and yet our proposal, according to the absurd assertions of the Government, is to be implemented with a cost during the course of the same year? Once again this Prime Minister and this Government have either failed to read our proposals, have failed to understand them or, in fact, the Prime Minister has set out deliberately to mislead this Parliament and this country as, in fact, he has consistently misled this Parliament and this country concerning matters of economic management.
If the Prime Minister has deliberately misled the House this Parliament and the people at large should ask: Why has he chosen to be so destructive of our investment proposals? The fact is that these proposals, widely acclaimed today by the media and the non-government sector of the Australian community, represent the only long term, forward-looking and constructive proposals- the only certain incentives- which have been put forward for the private sector by any political party or group of parties in this national Parliament. The proposals put by the Opposition parties represent the only definitive program which matches concern for the private sector with, at the same time, an unequivocal commitment as to policy actions.
The Prime Minister also completely misrepresented our proposals for the rural sector. Yesterday he told this House, on the basis of some misconceived calculations presumably prepared by the personal staff of the Treasurer- as I have said, the Treasurer is absent from the country, and I can well understand why- that our rural concessions would cost $50m during 1975-76. He might be interested to know that those concessions that he cites as costing $50m we allow for in our budget at a figure of $94m. This includes an allowance of $60m for the reintroduction of the superphosphate bounty, the suspension of beef export levies and the provision of unemployment benefits for beef producers in dire economic circumstances.
An additional feature of our policy was also completely omitted and disregarded by the Prime Minister. We propose to reform the tax on the retained earnings of private companies. I refer here, of course, to the bedevilling problem in the economy at present for the small business community. We have a positive commitment to assist and support the smaller enterprises and smaller entrepreneurs. We shall provide encouragement because, unlike this present administration, we believe that small businesses in Australia require incentive and encouragement, particularly in the present economic crisis. Thus small business men and women who are listening to this parliamentary debate might wonder why it is that the Government has not provided an answer to the increasing problems of those small enterprises still in operation. They might wonder why it did not seek to assist the many businesses which have been forced to go into liquidation during the totality of this Government’s maladministration.
Our program, as I have sought to emphasise, is not set in the time frame of a program today for tomorrow. It is forward looking and constructive. It seeks to put these proposals, as they should be put, in that time frame which looks ahead for a period of 3 years, because the economic recovery now required as a direct consequence of the selfimposed financial dilemma and the self-imposed economic straitjacket brought down by this Government is one which, of course, will take time to achieve. That is why we look ahead not just to one single document which I doubt that this Government can maintain even during the course of the short term of the months ahead. The program, therefore, in a 3-year time frame includes the total cost of the Mathews recommendations. Nevertheless, the cost of concessions to the corporate and rural sectors does not exceed $500m for 1975-76.
Surely the Prime Minister is capable of distinguishing between costs to revenue for one year and cumulative costs over a period of 3 years. A long term economic plan, a program that looks beyond the Budget, is of course a program that is completely beyond the comprehension of this Government. This, after all, is a government which has changed its economic strategy every 6 months. This is a government which has been prepared to have 3 different Treasurers in a single year. Would there be any democracy in the Western world of which that comment could be lamentably made? Of course, the answer is no. It is no wonder that there is no confidence in the administrative capacity and the management of the Labor Government. It is no wonder that this Labor Government now stands discredited and divided. It is no wonder that this Prime Minister, who rightly is under attack here for what he personally said to the House and for the degree to which he personally has misrepresented the facts, characteristically is not here to face the music. Who does he send in to bat? He has sent in a man I admire. Former Treasurer Frank Crean, sacked by the same man, is now sent in to bat for the discredited views, policies, distortions, misrepresentations and lies that he has put -
Mr DEPUTY SPEAKER (Dr Jenkins)Order! I think the Deputy Leader of the Opposition realises that the term ‘he’ is offensive. I suggest that he withdraw that word.
– I take your advice, Mr Deputy Speaker. I know that you, in your inimitable wisdom, must draw attention to these things. But I recall with a sense of nostalgia the same statement being made by this Prime Minister during the course of an election campaign. No doubt you will be very familiar with that too, Mr Deputy Speaker.
-Order! I remind the honourable member that I asked him to withdraw that word. He has not done so as yet. So I must persist.
– I withdraw the word in favour of ‘distortions and the misleading manner in which the Prime Minister has put -
-Thank you. The untruths of the Prime Minister -
– Extreme untruths.
-The extreme untruths. I turn to the question of the deficit. On Tuesday night the Leader of the Opposition stated quite clearly that our strategy was based on no increase in the deficit during 1975-76; but yesterday the Prime Minister again characteristically asserted that our program would mean a deficit of $1.8 billion more than that estimated by his own Government. That was a deliberate misrepresentation.
The Leader of the Opposition made it perfectly plain on Tuesday night that our program was based on no increase in the deficit this year. For the Prime Minister’s benefit, I repeat that. The program which we have set out could be achieved by reductions in government spending. After 3 years of the Labor Government, outlays will have moved ahead by well over 100 per cent, on some programs more than twice as fast. The programs administered by the Department of Urban and Regional Development have increased in cost by almost 200 per cent in just 2 years. Expenditure on basic services in the Australian Capital Territory has virtually doubled during the same period. No government, State or Federal, or business organisation can increase its commitments at these rates without undue and extreme wastage and unnecessary administrative extravagance.
Let there be no doubt- I am certain that the Australian public is in no doubt- that this Government has been wasteful and extravagant with funds provided by the taxpayers of this country. It has splurged those funds without restraint and without responsibility. We believe that at least $1 billion should be carved off government spending this year. We have no doubt that this could be done. In essence, this means that spending would move ahead at a rate of 5 per cent less than that suggested by the Treasurer. Such a rate would be more closely aligned with the present rate of inflation.
On Tuesday night the Leader of the Opposition outlined the areas in which he would have cut spending. I will not repeat those areas here at the present time; I merely say that when one looks at the increases which have taken place one sees that this in fact is bureaucracy gone mad. We recall that in the May election campaign the Prime Minister described our policies as economic vandalism. Yet he chose subsequently to adopt a policy of taxation reduction himself. The Government may well use its numbers today to overturn the motion before the House. But the Australian public has become tired of this Prime Minister and his team of exhausted volcanoesdiscredited, lacking punch, lacking policy, rejected by the Australian people and manifestly unable or unwilling to put forward the solutions required to set this country right once again.
-Order! The honourable member’s time has expired. Is the motion seconded?
– I second the motion and, with your approval, Mr Deputy Speaker, I will speak immediately after the next speaker.
– In normal circumstances I find the Deputy Leader of the Opposition (Mr Lynch), who has just spoken, to be a very kindly man; but today he seemed to speak with simulated indignation and he used extravagant words, one of which he had to withdraw. If he had reflected a little, I think he might have said that the Prime Minister (Mr Whitlam) failed to understand. For reasons that I propose to give, I think there is every reason for the Prime Minister’s failure to understand the exactness of the propositions because they were not exact or explicit and in some instances were costed rather carelessly. I want to refer to several of them. I think that in one or two instances assumptions could be drawn validly from the statements made by the Prime Minister. At least the lengthy Press statement that was issued the next day clarified what had not been too clear the night before.
The first thing that I would like to say is that I think it is a little cheap to try to score off the absence of the Treasurer (Mr Hayden). At least the Treasurer had the courtesy to stay to hear the speech of the Leader of the Opposition (Mr Malcolm Fraser). Like every other Treasurer for the last 10 years or so, the present Treasurer has now left to attend the annual meetings of the International Monetary Fund and the World Bank. Therefore, I think it is a little gratuitous to say the least, to say that the Treasurer has fled the country almost in fear. Again, I think that is a travesty of the situation.
I am not sure whether I understand what the Leader of the Opposition was saying the other evening but it seemed to me that he agreed about the perspective of the deficit. We argued about this yesterday. He thought that it had to be approximately $2,800m. I want to refer to his estimate. He proposed to reduce expenditure by about $ 1,000m and, presumably at the same time, to keep the same parameter to reduce taxation or to give concessions of about the same magnitude. I hope that that is a fair interpretation of what he intended. This game of making catalogues about one’s opponents’ estimates is a very old one from which I was a sufferer when I sat on the other side of the House. When any proposal was put up, what were called carefully costed estimates came out the next day. In my view, many of them were quite dishonest and distorted. Candidly, I do not think it is a game worth pursuing. I think the job is to attack the Budget, not to put up a shadow budget which has no effect anyway. The Opposition’s job is to attack what is there. The Opposition does not have the expertise to write shadow budgets properly. It will make mistakes.
– That is not true.
– I asked the right honourable gentleman this morning why he did not keep quiet. He is becoming a querulous chatterer. As I said before, he does the shreds of his reputation no good in consequence. The Opposition- least of all the right honourable gentleman- does not have the expertise. The right honourable member no longer has the dignity of a shadow minister.
I have obtained some information to which I hope the House will listen tolerantly. It is as exact as I believe things can be when we do not necessarily agree with each other’s words. I think there is a fair bit of polemics in the amendment that I am about to move. I regard this as a legitimate enough place in which to do it. The statement which the Deputy Leader of the Opposition made the other evening makes it clear- it was not clear in the speech- that the $500m additional relief this year in personal income tax is to be given by means of a first step towards indexation and that the latter would not be in addition to the $500m. The speech of the Leader of the Opposition was not entirely clear on the point.
In relation to the Mathews company tax proposal the Leader of the Opposition says that he would ‘implement the recommendations of the Mathews Committee on company taxation’. Mathews’ preference was to apply both adjustments to 1974-75 incomes, which would affect tax payable in 1975-76. 1 might stress that some of these matters are highly technical and people could be excused for making wrong estimates about them. The Deputy Leader of the Opposition’s statement makes it clear that the Opposition’s proposal is to commence with half of the stock adjustment on that basis, but not to start the depreciation adjustment immediately. That was not explicit in his leader’s speech the other evening. On that basis the cost this year would be half of the cost of the full stock adjustment. The Deputy Leader of the Opposition puts it at $500m. That would be at the lower end of the range implied in the Mathews report. The figure could be $50m higher if the other end of the range were chosen, but this does not seem worth arguing about. The proposal would leave the company tax rate at 45 per cent and save the $120m which the 2’A per cent reduction would cost.
I turn now to the investment allowance. I find it a little odd that what the Opposition is holding out as a great concession will cost nothing. A 40 per cent investment allowance would have a full year cost of about $300m. The Deputy Leader of the Opposition says that it would apply to plant installed from July 1975- the Leader of the Opposition did not specify the commencing dateand in that event there would be no cost in 1975-76. The date was not mentioned. Again I failed to understand because it was not clear. It is still not clear whether the investment allowance would be in addition to the double depreciation proposed in the Budget- maybe someone will clarify that. The latter has no revenue cost in 1975-76. Leaving aside current year revenue considerations, it is noted that full implementation of the Mathews recommendations plus a 40 per cent investment allowance would cost $ 1,600m to $ 1,800m in a full year, and double depreciation another $75m. By comparison, the total we collect for company tax is only $2.25 billion.
On private companies the nature of the proposal is not explained and there is therefore no way of checking the $10m cost estimated for it. It seems likely that it would operate by easing or removing the need to pay out as dividends a ‘sufficient distribution’, thereby reducing personal tax on dividends. Normally that would not have a marked effect on revenue in the year the dividends were paid, or not paid. One wonders therefore whether a $10m cost in 1975-76 implies a quite substantial full year cost involved in the proposal. In 1972-73- the latest year for which figures are available- required distributions of private companies were about $450m. Personal tax on the dividends could be at rates of up to 65 per cent. Again I submit that the proposal was put up by people who do not know too much about what they are saying.
Let me refer to some other items in the statement of the Deputy Leader of the Opposition. I think he will understand that I do not have time to cover all of them. Maximum savings associated with zero Public Service growth, etc., are likely to be no more than half that estimated by the Opposition. Zero Public Service growth itself would yield savings of about $20m. It is wrong to claim a $75m cut in the Treasurer’s Advance as a reduction in outlays. There is no provision for Treasurer’s Advance in budgeted outlays. I think the Opposition ought to know that. ‘Other expenditure economies’ are estimated to generate $480m, or almost half of the total economies, but the examples quoted by the Leader of the Opposition would yield a maximum of only about $1 15m in 1975-76 and that would require cessation of growth centres, urban rehabilitation and area improvement programs.
Finally, if one accepts the explanations and estimates of the additional financial commitments tendered by the Deputy Leader of the Opposition in his Press release- I think the precise figure was $984m- but adjusts his estimates of reduced financial commitments in the manner indicated above to accord with realistic identified savings, the maximum being $485 m, the net additional commitment implicit in the Opposition ‘s proposals is about $500m in 1975-76. So the figures are wrong. I submit that the Prime Minister (Mr Whitlam) is entitled to fail to understand. Certain matters were not spelt out. At least to be fair to the Deputy Leader of the Opposition, I think his document helped in the spelling out, but it was not quite so precise as he thought it was. I move:
One is used to political stratagems in this House. I am sorry that the Deputy Leader of the Opposition has taken valuable time out of the Budget debate to move this motion. I hope he will remember who were the authors of the kind of amendment I am moving as a counter to it. I think he brings the parliamentary process into disrepute when he adopts this kind of strategy. He has all of the next 2 weeks to clarify all his own statements and to expose what he calls the fallacies in the Budget, and likewise we have that time in which to answer the speeches that are made on the subject.
– Why did Whitlam rush in then?
– There are plenty of people who rush in, and usually they are not very concerned about whether it is a place where angels fear to tread. I think that sometimes on both sides of politics a lot of words have been uttered that would have been better left unsaid. In my view this debate is simply taking away valuable time from honourable members who perhaps can express more clearly and confidently what they want to say than can some others in high places.
-What a mess the Australian Labor Party has made of this country and of its economics and finance, and what an unbelievable mess both the Prime Minister (Mr Whitlam) and the Treasurer (Mr
Hayden) have made in their analysis of the speech on the Budget made by the Leader of the Opposition (Mr Malcolm Fraser) in this House on Tuesday. I believe that the first things that have to be looked at are the mistakes that have been made by the Government both as to fact and as to the estimates of practicable savings made by the Leader of the Opposition, supported by the shadow Treasurer, Mr Lynch. There are some grotesque errors.
The Opposition produced a figure of $984m as the cost of our proposed additional financial commitments. The Treasurer’s version is contained in a statement which he has issued of which I have a copy. First as to facts. In that statement there is one item- indirect taxes and coal exports levy- which we have not costed. The Treasurer’s costing is $720m. The simple fact is that we never said that we would make these additional expenditures. It is true that the coal levy was criticised, and it deserved to be criticised, firstly, because it is an unnecessary and wrong tax and, secondly, because it will create a lot of unemployment and will destroy many of the coal industry producers in New South Wales and other States. Obviously whoever compiled the Treasury figures did not know what he was doing and did not know the facts when he was making recommendations on the tax itself. So there we save $720m.
The next item in the Opposition’s proposed additional financial commitments relates to the Mathews’ stock valuation. I do not want to pursue that because my colleague, the shadow Treasurer, has already done so. On this item there is a difference of $400m between our proposal and the Treasurer’s version. There is no doubt on our proposed policy we are right.
The next item is the investment allowance. If ever there was an illustration that the present Treasurer does not understand public accounts and public financing here is that illustration. Who pushed him on the wrong track I do not know, but I have been expecting something like this ever since I heard he was to be the new Treasurer in a long succession of failures, including the Minister for Overseas Trade (Mr Crean), who has just sat down. On the Treasurer’s figures there is a miscalculation which the Treasury must admit now. There could not be any appropriation for an investment allowance because it affects only future investments and not investment which has already taken place. They should go back to school again and also read the Mathews report. They would be enlightened by both the elegant nature of the presentation of the case and also the persuasive nature of the arguments. The difference between our proposal and the Treasurer’s version on this item is $300m, so already on the 3 items I have mentioned we can take $ 1,420m off the estimate made by the dear Treasurer and dear Mr Whitlam of our proposed additional financial commitments, which the Treasurer and Prime Minister estimated as $2,350m. What a mess. What an unbelievable mess. You could not believe it. If you lived in a world of fiction permanently you could not believe it unless you lived in this House under a Labor Government. This is the delusion we all have to put up with.
I now come to the reduced financial commitments as proposed by the Leader of the Opposition. I must emphasise the items under this heading, even though my colleague and friend, the shadow Treasurer, has already done so. I would like to amplify. The first item is zero Public Service growth. I well remember that early on when the Liberal Party was in government we reduced the Public Service by 10 000 and got greater productivity- a considerable increase. If the Government is sincere and believes in helping this country I do not believe it can object to our proposal for zero Public Service growth under conditions such as exist today. In any case, its estimate of the saving that would be brought about by implementing this proposal is wrong. We say that it would save $150m, and we know what we are doing. The Government does not.
The next proposed reduction relates to the sale of Pipeline Authority works. I have been advocating this for a long time. Honourable members opposite agree with us for once in their calculations of the saving that would result. What a wonderful thing it is when they can agree with us even when they are sitting temporarily on the Treasury benches. In relation to two other items we find a difference of opinion. The Government differs with us as to the savings to be gained from other expenditure economies. The Government puts on it a figure of $1 15m, and we put on it a figure of $480m. Why did we do that? We say that we will cut out uranium exploration, cut back urban and regional development, wind back national capital expenditure and abolish the Australian Government Insurance Corporation, which if it ever comes to life will destroy this economy and will open up the way for an authoritarian form of government. Other economies we propose amount to less than 2.2 per cent of total Government outlays after the specific economies we have mentioned are taken into account. Again the Government has made an error as to facts.
I come to an analysis of the Estimates. I have a fairly good knowledge of public account estimating and looking at estimates that have been prepared by the Treasury and by other departments. At least few can deny the number of times I have looked at them in succeeding Budgets. Of course, people can argue a little bit about their qualifications as compared with those of other people. I do not want to go into that and I do not want to be personal. I have in front of me the latest quarterly estimates of national income and expenditure. They are for the June quarter. The percentage change in the main aggregates is shown on the last page, in seasonally adjusted terms. They contradict everything that was said by the unfortunate Treasurer when he answered a question in this House on Tuesday. I will not go through all of his statements. But I shall mention a few items.
First look at gross national product. The tables do not show the grandiose figure the Treasurer mentioned but show only an increase of 2.9 per cent for the whole year. As I said, that is the percentage change in main aggregates at 1966 prices. It is there for everyone to see. Mr Deputy Speaker, you can have a copy if you would like to look at it, and so can the Treasurer when he returns from his binge overseas. This is a disgraceful performance. With no increase in productivity, and in seasonally adjusted terms a 2.1 per cent increase in GNP, how can we afford wage increases that run at well over 20 per cent and provide a built-in inflationary pressure which the Government has not tried to explain?
The position with wages and salaries is similar, but I have not got the time to amplify that.
I shall refer, however, to gross operating profits, because here I believe an explanation is necessary. Gross operating surpluses of trading enterprises fell 20 per cent in the September quarter, rose 24 per cent in the December quarter, fell again 14.06 per cent in the March quarter and then rose again in the June quarter. If one analyses all the figures one will see that the Government has left out of consideration -
Mr DEPUTY SPEAKER (Dr Jenkins)Order! As it is now 2 hours after the time fixed for the meeting of the House, the debate on the motion is interrupted.
Motion ( by Mr Daly) agreed to:
That the time for discussion of general business be extended until 12.45 p.m.
– Now let me turn to one of the areas that is of enormous importance. We have said that we agree with the fundamental analysis of the basic economy by the Government. There ought to be a slowing up in government expenditure to permit the private sector and the producing sector to expand and by that means to reduce unemployment and inflation and to get on with the job of increasing production at least to the extent of 5 Vi per cent per annum.
No second business can cope with severe inflation if it can be proved that the amount of profits will not permit business to invest or makes continuing in business worth while. Failure to observe these rules is the complete explanation for so many business failures today. The Government’s statistics I have mentioned show that the net income of corporations was $4,755m in the relevant period. Tax on this was approximately $2,000m and stock valuation adjustments represented $ 1,820m, thus bringing real profits down from $4,755m to $935m. There is not much left out of the $4,75 5m
Going further into the Budget papers there is revealed a deficiency of $ 157m in respect of undistributed profits. This shows that corporations after divided payments were in fact operating at a loss. The most recent accounts of Australian Consolidated Industries Ltd show that on the basis of current value accountancy indexation, it is living on capital and disposing of so-called profits out of the capital of the company.
This shows the import of Labor Party policy and why investment was 0.1 per cent in a full year, as shown by the documents produced by the Australian Bureau of Statistics. Is that a record of which any government ought to be proud? It is a record of failure. The Government ought to be ashamed and ought to get out.
I warn the Treasurer that the bells are tolling. The bells already have tolled for 2 former Treasurers, and others including the former Minister for Labor and Immigration. The bells will toll for the present Treasurer if he does not realise that it is wise to be exact in what he says as the Treasurer because there is no single position where truth, accuracy and certainty are needed more than they are in his position. He will be the next one, the poor unfortunate brute. He put the Prime Minister in an unfortunate position when the Prime Minister read out the statement which the Treasurer gave him. None the less the bells will toll for him. He has seen his predecessors rumbling on the tumbrils towards political execution and believe you me, he is on that path now. However, the bells toll for another man, the Prime Minister, and if he were a man of conscience he would get up and get out now.
I now want to look at the 2 sets of proposals, the proposals of the Government and the proposals put forward by the Leader of the Opposition with the incredibly accurate assistance of my colleague the shadow Treasurer. I said initially that we agreed with the Government’s philosophy. The Government wanted to transfer assets to the private sector. This is the essential condition of success. The rewards that go to capital have to be readjusted in its favour and the rewards that go to labour have to be slightly cut down to permit the achievement of the golden objectives of prosperity for all that all of us say we believe in.
The Labor Party’s proposals do not give any incentive to the private sector of the economy, which includes producers and commerce generally. In fact Government expenditure increased.
Now look at the Fraser-Lynch proposals. Every single one of them is designed to help industry and provide incentive. There is personal income tax reductions which is an incentive to those who work hard and succeed. Then there is the Mathews’ stock valuation. I established an institute at the Australian National University in public accountancy and similar matters and I am glad that Mr Mathews was appointed. This report is one of the best reports I have seen.
Our proposals include an investment allowance and for the farmer we propose superphosphate and beef industry levies. Private companies are to be given assistance and beef producers are to be given increased eligibility for welfare payments. Every one of these proposals is designed to ensure that we get on the road to progress again.
Can the 2 sets of proposals therefore be compared for performance rather than for the actual promises they contain? No, they cannot. We all know the present Government’s performance is disgraceful. The longer it stays the worse it gets and it is incapable of reforming. Ours are practicable and would be the basis of success. We will see in the course of the next few weeks how confidence has gone, and how it would be restored by the proposals of the Leader of the Opposition.
The business community will not react favourably to the Budget of the Labor Party. Confidence cannot be restored by this Budget without immaculate, perfect and intensive effortsheroic effort- by the private sector. Unless that is done Labor will lead us into more unemployment, ever so much greater inflation as days go by with productivity falling and the take-home incomes of the average Australian not rising as we all want, but falling to levels which could be regarded as totally unacceptable, even disastrous.
– I support the amendment so ably moved by the Deputy Prime Minister (Mr Crean). It ‘commends the Prime Minister for his concise and explicit outlining of the fallacies contained in the poorly constructed Opposition economic program and condemns the Leader of the Opposition and the Leader of the National Country Party for their failure to approach the economic problems of this country in a responsible manner’. If any motion referred to the Opposition today it was the one which was moved by the Deputy Leader of the Opposition (Mr Lynch). We have just listened to the right honourable member for Lowe (Mr McMahon). He is not even a member of the shadow Cabinet; his economic advice is constantly disregarded. The only time the Opposition allows him to speak in this Parliament on economic matters is when nobody on the opposite side of the House is prepared to defend the economic policies of the new Leader of the Opposition (Mr Malcolm Fraser) and the Deputy Leader of the Opposition.
In addition, the right honourable member for Lowe is not even listed among the shadow Treasurers. Everybody knows that the Treasurer in that far distant day when there may be another Liberal-National Country Party government will be the Leader of the National Country Party. We have a deputy shadow Minister here. The aspirant at the table, the honourable member for Curtin (Mr Garland), does not even show promise although he reckons he is better than all of them. I am reminded of a statement which appeared in today’s newspaper in regard to the right honourable member for Lowe. It was made by Sir Robert Askin, who is almost a saint in the ranks of the Liberal Party of New South Wales. In today’s leading Liberal organ the Sydney Daily Telegraph, Sir Robert is reported as saying:
I think it is ridiculous when old men like Gorton and McMahon go around talking about nothing- they should give the young blokes a go.
I endorse Sir Robert Askin ‘s remarks. Being a young man myself I endorse also his approach to this problem. Everybody knows that the Budget proposals put forward by the Opposition were irresponsible. They would cause increased inflation and unemployment. The policies put forward by the Leader of the Opposition would have increased the deficit by $ 1,800m, taking it to just on $4,600m. The Opposition says we should cut down expenditure. It would make interest rates rise which would cause companies to go broke and increase unemployment. The Opposition’s tax relief proposals would cost $2,3 50m, not $ 1,000m as was said.
It was a big man’s Budget containing $500m in tax concessions alone to the huge industries of this country. It did not take into consideration other expenditures. What about the $10m that the Opposition spokesman on defence has promised to restore school cadets? What about the promise of the shadow Minister for Foreign Affairs for another $20m or $30m for Papua New Guinea? What about the abolition of the means test that has been promised in the year 1975 for everybody over 65 years of age in this magnificent production paid for by the oil combines and others which shows the way ahead under a Liberal-Country Party government. In that production those Parties promise to abolish this year the means test for every person over the age of 65 years, which would cost about an additional $240m. Where was that mentioned in the Fraser Budget? Why was this not told to the Australian people? This is only one of many such instances.
On every page of the Fraser Budget the Opposition is undertaking to spend a couple of million dollars, let alone the $240m I mentioned a few moments ago. Therefore the Leader of the Government was completely right when he said that the Fraser Budget was a false and misleading document designed to trick the people of this country under the guise of being responsible budgeting. This was indicated this morning in a question which was asked of the Prime Minister. I thought the Leader of the Opposition had given up drinking beer, he was so crook on the increase in beer prices. I thought all honourable members opposite had given away their scotch and soda because of the prices. I thought they were going to make certain that they never smoked again. But now we find that they are quite in favour of these proposals.
The Leader of the Opposition implied, when making his speech the other night, that they would abolish our proposals in respect of these commodities and that he would therefore give to the Australian people another $1,1 91m in concessions. He implied that he would not proceed with the increased beer excise which would give the Government an extra $234m, the increases in the excise on spirits which would give an extra $12m, the increase in the excise on tobacco which would give $75m, the increase in the tax on crude petroleum which would give an extra $2 80m, the export duty on coal which would give an extra $120m, the increase in company tax which would give an extra $75m and the increase in income tax which would give an extra $395m. Does the Opposition agree with all these proposed increases now? Do our modest friends in the National Country Party now agree with these proposals, that Party whose Leader significantly did not want to support the Liberal Party attitude on this matter in Parliament today, whose name does not appear on the list of speakers on this issue and who would not be associated with the debate? It has been clearly implied in this Parliament that the Leader of the National Country Party was not consulted on many matters associated with the Fraser Budget.
I ask honourable members opposite: What was going to happen to all this increased expenditure? Why was an explanation not included in the statement made by the Leader of the Opposition on Tuesday night? It was for the simple reason that members of the Opposition know that had the policy expressed by their Leader in Parliament on Tuesday night been introduced it would have meant doubling the present deficit. Why would his proposals not represent an awful Budget? The adviser on the Fraser Budget was Michael Baume, a partner in Patrick Partners, a firm which today is involved in probably the greatest scandal on the Stock Exchange in the history of this country. An article in the Sunday Press claims that on Budget night Michael Baume sat with the Leaders opposite and wrote the speech on the Budget for the Leader of the Opposition. Michael Baume ‘s budgeting has sent Patrick Partners broke. They owe $2.6m and the partners may be expelled from the Sydney Stock Exchange. These are the kind of people that the Liberal Party wants to run the country.
The Sunday Press article states that Mr Michael Baume is 44 years old, a company director and an endorsed Liberal candidate for Macarthur at the next elections and that he joined Patrick Partners in 1969. The article continues:
In recent weeks however, Mr Baume has been closely involved with Mr Fraser on economic policy.
Let us hope for the sake of the country, if in some far distant time the Opposition does get into Government, that Mr Baume writes different budgets from those which he wrote for Patrick Partners. The Sunday Press article goes on to say:
Two weeks ago he attended a confidential meeting with leading businessmen and senior Opposition members in Melbourne to review the coalition ‘s economic strategy.
The National Country Party does not know what is happening. Its members have to be told this to wake them up. The newspaper says:
On Budget night Mr Baume worked in Mr Fraser ‘s Parliament House office, drafting statements for the Opposition Leader attacking the Government ‘s Budget proposals.
I think Mr Baume wrote the speech which the Deputy Leader of the Opposition made today. The newspaper article claims that Mr Baume was also helping to write the Budget speech that the Leader of the Opposition delivered in Parliament on Tuesday night. It adds:
But a number of Liberal backbenchers, and several senior frontbenchers, are concerned at the political repercussions of Mr Baume ‘s role as an economic adviser to Mr Fraser at this time.
It goes on:
Patrick Partners, the biggest stockbroking firm in the country during the mining boom, is fighting to stay out of bankruptcy.
It went into receivership on July 27 with liabilities exceeding the estimated value of assets by $2.6m.
If you have a man like that writing the Opposition’s speeches on the Budget, and he has been writing the prospectus and other things for Patrick Partners, why would not this Fraser Budget be a misleading Budget for the Australian people? Hidden in the Opposition’s Budget are those increases about which they are not telling the people. Hidden in it are some of the sinister designs and what you might call plans which probably sent Patrick Partners broke in days gone by.
The Opposition should remember that we on this side of the Parliament believe in responsible government. We know that the National Country Party is only half in agreement with the policy of members opposite. The National Country Party was not consulted on the increased postal charges but its members say that they are accepting them. From the way that members of that Party have been moaning and groaning about the bush we thought that they were going to disallow the increases. The situation is that they were not prepared to fight an election on the Government’s Budget because the people of Australia, throughout the length and breadth of the country, know that it is a responsible Budget.
I feel that this has been indicated this morning by the motion that we have moved and by the speakers that the Opposition has put up to debate that motion. The Opposition put up a speaker who was Treasurer so far back that he is hardly remembered and whom the Opposition does not even consider to be worth a vote as a member of its shadow cabinet. Heavens above, there are enough members in that shadow cabinet! The Opposition has almost run out of members to put m it. Already there are 3 1 members of it and everybody who disagrees with the Leader of the Opposition is put there to keep him quiet. Yet the gentleman who just spoke, the right honourable member for Lowe, cannot get into that motley mob that makes up the Opposition’s shadow cabinet.
I believe that the motion we have moved deserves to be supported. We have put up a responsible Budget. Honourable members opposite seek to mislead the people. They have been exposed by the Treasurer (Mr Hayden), the Deputy Prime Minister and the Prime Minister. The people can well judge our Budget by its ultimate success and by the prosperity that will come to this country. I see no purpose in wasting the time of the House any further and I move:
– That is an unfair, undemocratic practice by this harsh Leader of the House.
-Would the honourable member resume his seat.
– It is a disgrace.
-Would the honourable member mind resuming his seat? The question is that the motion be put. All those of that opinion say aye, to the contrary no, the ayes have it.
– I raise a point of order, Mr Deputy Speaker. Why is only one Labor member in the House during this important debate?
-That is not a point of order. The original question was that the motion be agreed to, to which motion the Minister for Overseas Trade has moved, as an amendment, ‘That all words after “House” be omitted with a view to substituting the following words: “Commends the Prime Minister for his concise and explicit outlining of the fallacies contained in the poorly constructed Opposition economic program, and condemns the Leader of the Opposition and the Leader of the National Country Party for their failure to approach the economic problems of this country in a responsible manner”. ‘ The question is that the words proposed to be omitted stand part of the question.
- Mr Deputy Speaker, I just called for a division on the gag.
-There was no division called for on the gag.
– There was. I raise a point of order, Mr Deputy Speaker. You said that last time, Mr Deputy Speaker, and we had the same harangue.
– No division was called for on the gag.
– I raise a point of order, Mr Deputy Speaker. I do not wish to argue against your ruling, but a multitude of voices from this side of the House said ‘no’ when you put the question.
– I indicate 2 points again. There was not a request for a division.
– You did not ask for one.
– I repeat that there was no request for a division. But I shall put the question again to enable that procedure to take place. I repeat that that opportunity was not taken advantage of in the first instance. I put the question: 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 Crean’s amendment) stand part of the question.
The House divided: (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the negative. Amendment agreed to. Motion, as amended, agreed to.
Mr Speaker, you and the House will have noticed that this notice of motion was given on 15 October 1974. Since that date Cyclone Tracy has struck Darwin and most of us have seen the devastation and the suffering of its citizens. That has really put a different aspect on the matter of government spending in the Northern Territory. It has demanded that a colossal amount of money be directed towards the reconstruction of Darwin. A Darwin Reconstruction Commission was formed. The Bill for the establishment of that Commission passed through the House and we debated it very hotly. We felt that the Minister for Northern Australia (Dr Patterson) was being given too much authority in this matter and that the local people should have had more say. Be that as it may, this Budget has appropriated almost exactly the amount of money that the Darwin Reconstruction Commission had hoped to receive for the rebuilding of Darwin. I can say only that I hope the organisation of the rebuilding of Darwin goes a lot better than it has until now. I know that there are some houses under construction. I saw them only a fortnight ago in the northern suburbs. There were not very many. I do not want to pour cold water on the efforts of a lot of very sincere people. But I must say that far too many southern experts have been imported and that there is far too much red tape with regard to the Darwin Reconstruction Commission.
I would be backed up in my remarks by what was said in the Northern Territory Legislative Assembly about a week ago when the Opposition members- that is the 2 independent members; of course, as we know there are no Australian Labor Party members in the Assembly- demanded the demolition of the DRC. The majority Party insisted that the Commission should be made to work and that it should be made to work through the existing authorities- the Department of Housing and Construction and the local builders and contractors. So I hope that this course will take place.
The reconstruction of Darwin is tied up with this motion because the transport situation in the Northern Territory just after the cyclone was chaotic. Nothing in the way of reconstruction material was moving towards Darwin. Goods being transported were held up at Newcastle Waters and for weeks nothing passed that Newcastle Waters flood. The north-south railway line also was cut on numerous occasions. Of course, the Darwin Trader is on the Darwin run to transport material by sea. But that ship does not run at regular intervals. As such it is not a tremendous amount of help in this situation.
The main thrust of this motion is to impress on the Government that the lines of surface communication to Darwin and the Northern Territory generally are very slender and flimsy. At any time they can be cut for as long as five to six weeks. I refer not only to the Stuart Highway which goes south from Alice Springs to Port Augusta but also to the continuation of the Barkly Highway as it goes through Queensland. Very often when the north-south road into the Territory is cut the one to Queensland is also cut. I would like this Government to treat these matters as urgent. The Northern Territory covers about one-sixth of Australia, mind you, with tremendous potential in uranium, iron ore, gold, copper, oil and gas. You name it- it is there. But the Northern Territory has a very slender chance of being supplied or of supplying these materials to southern markets because of the situation about which I am speaking.
The railway line which goes from Port Augusta to Alice Springs is supposedly the lifeline of the country. It causes a tremendous amount of trouble. It is old and out of date and the concrete in the viaducts and crossovers is fretting away. South Lake Eyre is lapping at the line. It is fortunate that a north-east wind did not arise earlier this year as it would have carried the whole lot away. I know some steps have been taken to prevent this, but nothing would have prevented it. A new railway line is to be constructed from Tarcoola to Alice Springs. I ask the Minister for Northern Australia to tell me what construction has actually taken place and how much “of the $51,900,000 which is found in division 957, sub division 5 of Appropriation Bill (No. 2) is to be allocated to the construction of this line. I point out that it was voted 3 years ago when we were in government. It was officially commenced when the Prime Minister (Mr Whitlam) went down there earlier this year and pushed a button which caused an explosion. What work has happened since then I just do not know.
It is essential that work on this line be continued as quickly as possible. I ask the Government why it has insisted on charging such excessive freight rates from Port Augusta to Alice Springs on a cost recovery basis- the Minister for Transport (Mr Charles Jones) seems very keen on insisting on this- when the old railway line via Marree and Oodnadatta is inefficient and uneconomic. We are the ones who have to put up with this. Yet Tasmania enjoys a special concession for freight. I take it that is provided for in this Budget where $4m-odd has been allocated to assist with freight to Tasmania. The Government cannot tell me that Darwin in this sort of situation, with railways and roads washed out, is not an island, and it is a hell of a long way further away from the centres of population than Tasmania is. Yet there is no allocation in this Budget to assist with sea freight to Darwin, and sea transport will be used while the railways and roads are out, as they assuredly will be again. In speaking of this I urge the Government- in fact I demand- to have a look at the possibility of giving freight to Darwin the same assistance as is given to Tasmanian freight. While I am on the matter of communications out of Alice Springs to South Australia, that is out of the Northern Territory to the southern States, 1 notice that in this Budget $3.275m has been allocated -
-Order! The time allocated for precedence to general business has expired. The honourable member for the Northern Territory will have leave to continue his speech when the debate is resumed. The resumption of the debate will be made an order of the day under General Business for the next sitting.
Bill presented by Mr Crean and read a first time.
( 12.45)- I move:
The purpose of this Bill is to authorise the payment of capital grants to the States in 1975-76 totalling $430,333,000. This amount represents the grant component of the State governments’ Loan Council programs for 1975-76 and is equal to one-third of the total programs- a slightly higher percentage share than in 1974-75. The Bill also provides for the payment of capital gains in the first 6 months of 1976-77 up to an amount equal to one-half of the 1975-76 amount pending passage of similar legislation in that year. Payments authorised under this Bill may be made from the Consolidated Revenue Fund or from the Loan Fund, and appropriate borrowing authority is included. These grants represent a continuation of arrangements initiated in June 1970 under which the Australian Government provides a portion of the State governments’ Loan Council programs in the form of interestfree grants in lieu of what would otherwise be borrowings by the States. The savings to the States in debt charges resulting from these capital grants are substantial.
At its meeting in June 1975, the Loan Council approved programs for the State governments totalling $ 1,291m consisting of a basic program of $ 1,281m and a special permanent addition of $10m for New South Wales in recognition of that State’s relatively low per head share of Loan Council programs when compared with other States. The programs agreed to for both South Australia and Tasmania are, however, $6m lower than they would otherwise have been, as they take into account the savings that will be made in the States’ capital works programs as a result of the proposed transfer of South Australia’s non-metropolitan railway system and of Tasmania’s railway system to the Australian Government as from 1 July 1975. The basic program for 1975-76 of $ 1,281m represents an effective increase, that is after adjustment for the effects of the railway offsets, of 20 per cent over the 1974-75 basic program. When account is taken of the special permanent addition of $ 10m for New South Wales, the increase in the total 1975-76 program over the 1974-75 basic program, becomes 20.9 per cent. The figure of 20 per cent represented the Australian Government’s best, albeit very approximate, estimate of possible cost increases in the capital works field in 1975-76. In other words, the intention was to maintain the programs at roughly the same real level as in the previous year.
The 1975-76 State Government Loan Council program is made up of borrowings totalling $860,667,000 and capital grants, to be provided by the Australian Government, of $430,333,000. At its June 1975 meeting the Loan Council also approved an increase of $ 1 32. 1 m, or 20 per cent, in the basic borrowing programs for State authorities classified as ‘larger’ authorities for this purpose. In 1974-75 these were semigovernment and local authorities whose individual borrowings for the year exceeded $500,000. For 1975-76 the Loan Council agreed to increase this amount to $700,000. There is no overall limit on borrowings of authorities whose individual borrowings amount to $700,000 or less in that year.
The ‘larger’ authorities total program of $809.7m also includes special permanent additions of $10m for New South Wales on the same basis as the permanent addition to its State Government program to which I have already referred, and $7,075,000 for Queensland under arrangements agreed at the June 1968 Loan Council meeting in respect of the termination, at 30 June 1975, of the issue of variable interest stock by that State’s Southern Electricity Authority. Further details concerning the Loan Council programs of the States and their authorities for 1975-76 may be found in chapter III of the Budget paper ‘Payments to or for the States and local Government Authorities 1975-76’.
Turning to the details of the Bill, clause 3 authorises the payment of grants to the States totalling $430,333,000 in 1975-76 and clause 4 authorises the Treasurer to make advance payments in the first 6 months of 1976-77 at the same annual rate as in the current financial year. The amounts for each state are set out in the schedule to the Bill. Under clause 5 of the Bill, payments may be made either from Consolidated Revenue Fund or Loan Fund and clause 9 provides for the necessary appropriation of these funds. The extent to which the payments will be met from Loan Fund will depend on borrowings during the year, which cannot be estimated in advance. Clauses 6 and 7 of the BUI authorises the Treasurer to borrow funds in the period from the commencement of the Act to the end of December 1976, up to the total of the amounts of the grants payable in 1975-76 and in the first 6 months of 1976-77. This borrowing authority will be reduced by the amount of any borrowings made before the commencement of this Act, under the authority of the States Grants (Capital Assistance) Act 1974, which may have been used to finance grants made in the first 6 months of 1975-76.
The payments which it is proposed be authorised by this legislation are, of course, but one element in the total scheme of Australian Government assistance to the States and they need to be considered in that context. The total picture in relation to assistance to the States in 1975-76 will be discussed in the second reading speech introducing the States Grants BUI 1975. It should suffice to say here that the Government is convinced that an objective examination of the matter would show that the State governments and their authorities have been treated most handsomely indeed in the Budget. I commend the BUI to honourable members.
Debate (on motion by Mr Wilson) adjourned.
BUI presented by Mr Daly, and read a first time.
– I move:
The purpose of this BUI is: To provide for optional preferential marking of ballot-papers at Senate elections. This BUI is presented as the first in a series of 6 Bills which the Government has decided to introduce in its continuing efforts to bring about the much needed electoral reforms contained in the Electoral Laws Amendment Bill 1974. As honourable members will be aware, the Electoral Laws Amendment Bill was first introduced into this House on 13 November 1974 and was passed by this House on 25 November 1974. It was refused a second reading by the Senate 3 days later. The Electoral Laws Amendment BUI was then passed a second time by this House on 10 April 1975, but was unacceptably amended by the Senate on 14 May 1975. The Senate subsequently insisted on its amendments which in effect stripped the Bill of its vital measures and emasculated it in such a manner that the original identity of the Bill was virtually destroyed. The amendments made by the Senate were unacceptable to this House and the Electoral Laws Amendment Bill was laid aside on 3 June 1975.
It would be both tedious and superfluous for me once again to list all the proposals contained in the Electoral Laws Amendment Bill. That Bill was designed to introduce vital and long overdue reforms to our electoral system, a system which although the envy of several overseas countries, is far from perfect. The Government continues to place great importance on the achievement of substantial electoral reform, despite the persistent obstruction it has encountered at the hands of the Opposition parties. We are determined to pursue these vital reforms, step by step, until successful. For that reason, the Government has chosen to divide the proposals contained in the Electoral Laws Amendment Bill into 6 separate Bills, each capable of standing on its own and being enacted independent of the other 5 Bills.
As with the parent Electoral Laws Amendment Bill itself, the proposals contained in these 6 Bills, taken as a whole, are designed to implement improved voting facilities; to provide more realistic and less cumbersome voting procedures which will assist electors to exercise their franchise effectively by the recording of valid votes; to permit a speedier finalisation of election results and to reduce the scope for electoral malpractice in any guise. The Government is hopeful that these non-partisan objectives will yet receive the support of the Opposition parties. They are in no way designed to favour a particular political party, a particular type of candidate or a particular type of elector.
This first Bill, the Electoral Bill (No. 2) 1975, is designed simply to provide for the optional preferential marking of ballot papers at Senate elections. The Opposition parties react hysterically to any mention of optional preferential voting, and yet they themselves have introduced it on a number of occasions. They introduced the procedure for Advisory Council elections in the Australian Capital Territory and they also selected the optional preferential procedure for the people of Papua and New Guinea. Optional preferential voting is also used for elections for the Australian Capital Territory Legislative Assembly, Northern Territory Legislative Assembly and the South Australian Legislative Council.
As honourable members are aware, under the existing preferential system, each voter, irrespective of his or her individual wish, is compelled to rank in order of preference all the candidates on a Senate ballot paper, even where this requires the sequential numbering of 73 squares, as was the case for the 1974 Senate election in New South Wales. Surely it must be recognised that this imposes a most difficult burden, sometimes an impossible burden, upon the voters and leads to a ballot paper being rendered informal even though the voter inadvertently fell into error at the stage of marking a preference which may never have been required in the count. (Quorum formed).
Furthermore, the existing law compels an elector to express a preference for candidates about whom he has no knowledge, or towards whom he may be positively hostile. Faced with such a meaningless, undemocratic requirement, many electors either intentionally or unintentionally fail to correctly mark all necessary squares on the ballot paper. The consequence is that their ballot papers are rejected as informal and their votes are wasted. At the last Senate elections on 18 May 1974, the informal vote, Australia-wide, averaged 10.77 per cent. In New South Wales, where there were 73 candidates, the average informal vote was as high as 12.31 per cent. I seek leave to incorporate in Hansard for the benefit of honourable members, a statement provided by the Chief Electoral Officer showing the percentage of informal votes recorded at the 1974 Senate election in each State and in each electoral division throughout Australia.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
– I thank the House. Of course there will always be a number of electors who fail to record a valid vote irrespective of the voting system. Nevertheless, this regrettable fact should not be used as a pretext for failing to reduce the number of citizens who, unwittingly in many cases, are currently being deprived of a basic democratic right because of the complexity of our preferential system, which becomes increasingly absurd as the number of candidates for whom they are required to show preferences increases. This Bill, therefore, proposes that an elector be required to mark his order of preference on the Senate ballot paper only up to the number of candidates to be elected. In other words, in a normal periodic Senate election the voter, in order to cast a formal vote, would be required to mark bis ballot paper consecutively from 1 to 5, in his order of preference for the candidates. In an election following a dissolution of the Senate the voter would be required to indicate his order of preference for only 10 candidates, be there 73 or 173 candidates on the ballot paper.
- Mr Deputy Speaker, I do not want to be difficult and I appreciate that if the Minister required only a short time in which to complete his second reading speech the sitting would go beyond 1 o’clock, but as the Minister has 5 other Bills accompanying this Bill I cannot see the point in the Minister proceeding now.
– The Opposition called for a quorum.
– The Minister was interrupted by the calling of a quorum- a proper procedure under the Standing Orders- and there is no point of order.
– I appreciate that this is not a point of order, but it is after 1 o’clock and the House, under the Standing Orders, suspends for lunch at 1 o’clock.
- Mr Deputy Speaker, the reason why honourable members intervene is that the Country Party in particular does not want electoral reform. I will take my time to complete this speech now, since honourable members opposite are acting in such a way. I was hurrying until a quorum was called. I will now take my time.
Let me stress, however, that any voter may choose, and this is where the option comes in, to indicate his further preferences for as many of the other candidates as he so desires, and should his preferences be required to determine the result they would be counted. Accordingly, supporters of any political party who wish to exchange preferences with the supporters of another political party contesting the election will be free to do so. How can the Opposition Parties object to this proposal? (Quorum formed). It is obvious that members of the Country Party and of the Liberal Party do not want electoral reform. The Opposition Whip deliberately sent members out of the chamber to prevent them from listening to this speech.
It may be argued that the optional preferential system of marking the ballot papers does not in practice have any significant effect on informality and that the system operative for Senate elections in the 1920s demonstrates this point. The fact is, of course, that the system we propose is considerably less restrictive than that applying for Senate elections between 1919 and 1931, under which electors were required to express preferences for double the number of candidates to be elected, plus one. On any reasoned view, experience at the 1974 Senate elections must surely have demonstrated, to even the most ardent advocates of a full preferential system, that the compulsory marking of preferences for all the candidates in Senate elections can no longer be tolerated. There is no evidence to show that optional preferential marking of the ballot papers would change the result of Senate elections; nor is it the Government’s intention that such should be the case. We present this measure- an eminently democratic and nonpartisan reform- as a single Bill in the hope that the issue will not be clouded by irrelevant argument but will be dealt with by this Parliament responsibly recognising the merits of the system from the public and electoral points of view. I commend the Bill to the House and place on record my regret at the attempts of the Opposition to destroy the purpose of the Bill.
Debate (on motion of Mr Wilson) adjourned.
Sitting suspended from 1.8 to 2. 15 p.m. ( Quorum formed)
– by leave- The defence of Australia rightly occupies a high priority in the thinking and planning of the Australian Government. It is a priority reflected in the defence outlay in this year’s Budget. The amount of this year’s defence outlay- some $ 1,800m- represents a proper and just acknowledgement of the importance of maintaining a meaningful defence capability; it is a carefully thought out response to the needs of the defence community, taking into consideration the necessary containment of public expenditure in the current economic climate. It is based on a realistic assessment of the international situation and not on a resort to deliberately generated appeals to fear and panic which in the long run can only distort the nature of our defence preparedness. Unlike the wasteful expenditure on foreign adventures undertaken by our predecessors, this is a defence budget designed explicitly and expertly for the defence of Australia and its direct interests. It demonstrates beyond aU doubt Australia ‘s intention to defend herself and her vital interests.This concept of continental defence is reflected throughout the details of expenditure.
Defence capability is a matter of well trained men, modern equipment and adequate support. We must ensure that the defence force, its equipment and its logistic, industrial and technological support provide an adequate base from which to expand in a timely fashion should the need arise. Costs of defence manpower, both Service and civilian, have been rising very rapidly. At the same time, largely because of the failure of the previous government to take sound equipment decisions in its last years of office, the resources devoted to capital items in the defence vote, namely equipment and infrastructure, have been falling. As a result of these 2 trends the proportion of the defence vote devoted to capital items had fallen to a quite unacceptably low level.
The present government has already moved to reverse that trend in 2 ways. Firstly we have controlled manpower growth and indeed made substantial manpower savings particularly in the civilian sector in our period of office. This has been in support areas where we have brought to bear a fresh organisational approach and sharper business management. Secondly, we have initiated a new program of major equipment acquisitions. The first series of decisions was announced last year by the then Defence Minister, Mr Barnard, namely negotiations for the purchase of 2 patrol frigates for the Royal Australian Navy, now known as guided missile frigates, and the purchase of 8 Orion long range maritime patrol aircraft for the Royal Australian
Air Force and 53 Leopard tanks for the Army. It was made clear that these were only the initial steps to ensure that our Services have the modern conventional equipment they need, and that further decisions would be made each year as part of the five-year rolling program of the Defence Department.
Uninformed critics of Australia’s defence have sought to question the morale and capacity of our defence forces. These people have misinterpreted and distorted figures to imply that the forces are not adequate for their task. These charges cannot be sustained. At the 30 June the permanent volunteer forces totalled 69 154. This was an increase of 1700 or 2.5 per cent over the previous year. The Army reached the highest volunteer strength ever maintained in peacetime at 31 514. All signs indicate that the standing of the defence forces is high and the armed Services are regarded as a worthwhile career. During the last year recruiting has been particularly satisfactory. There were 9388 enlistments in all categories. Applications for entry into officer training colleges remained high. From 1971 to 1975 the number of applications to enter the Royal Military College Duntroon has increased by 30 per cent. Re-engagement rates for other ranks during the last financial year were 70 per cent for Navy, 74 per cent for Army and 82 per cent for the Air Force. These compare with reengagement rates of 44 per cent, 69 per cent and 66 per cent respectively, for the year 1971-72. Nothing could more conclusively prove the validity of the Government’s policy of a justly rewarded, all-volunteer Defence Force.
The free movement of officers back into Clvilian life has not impaired the efficiency of the Services. Not one of the 3 Service chiefs of personnel has advised that resignations have prevented his Service from carrying out its functions fully. Furthermore, officer resignations have not significantly reduced the level of experience or expertise in the Services. The present proportion of officers to other ranks is higher than ever occurred under the Liberal-Country Party Government. All objective data therefore indicates that our nation is well served by a skilled, highly motivated defence force. The size of our aU volunteer Services reflects the great improvements in pay and conditions since this Government came to power. As I indicated earlier, more attention must now be paid to giving the Services the equipment they need to develop new skills and become familiar with new technologies. The emphasis from now on must be on the more efficient use of manpower. Pending the completion of a major review of ground force capability, the size of the Army will not be increased during 1975-76. This year a further 120 soldiers will be released from duty in Papua New Guinea under the localisation program. The recently announced decision to end the School Cadet Corps will free a further 330 Regular Army personnel and 35 civilians. I seek leave to incorporate in Hansard my statement of 26 August concerning the disbandment of the Army Cadet Corps.
– Is leave granted? There being no objection, leave is granted. (The document read as follows)-
The Government has decided to disband the Army Cadet Corps by December 1975.
I fully appreciate that the abolition of school cadets, which have been in existence for over 100 years, will come as a disappointment to many of the boys concerned, their parents and their schools. However, the decisions will be accepted by those who are genuinely concerned with the need to protect our national interests by ensuring that Defence resources are not used for activities which do not contribute to our defence capability.
I have made this decision on the recommendations of the Army who have assured me that the cost-effectiveness of cadet training cannot be justified from the viewpoint of its contribution to the defence of Australia. This is especially the case since the Government has taken action to increase the effectiveness of the Army Reserve and since emphasis on military type activities for the school cadets has been reduced in favour of adventure training.
The Army cadet corps is an expensive scheme directly costing the Army about $9m in a full year, employing some 330 Regular Army personnel and 33 civilians. There are, in addition, substantial indirect commitments not included in this cost. These indirect costs have been estimated to represent about 100 man years of effort or at least another $lm. The scheme reaches only S per cent of boys in the relevant age groups, i.e. 33 000 out of some 630 000. It is available to only 16 per cent of schools with male enrolments.
It has been argued by some that the school cadets should be retained for their value as youth training. A survey conducted by the National Youth Council of Australia at the request of the Minister for Tourism and Recreation found that cadets were amongst the least popular forms of youth activity amongst all age groups studied. My colleague the Minister for Tourism and Recreation recently indicated that he does not support the retention of cadets as a means of youth training. Furthermore, my colleague the Minister for Education has advised that if the cadet corps did not exist, they would not be introduced today for educational reasons.
The Army School Cadets were conceived as a military activity; the only justification for continued funding by the Defence Department is their military value.
The Government has taken the advice of its senior military advisers in reaching its decision.
The Defence Force Development Committee- the most authoritative source of advice available to a Minister for Defence on Defence capability matters- has formally advised ‘that abolition of the School Cadets would have no adverse effects on capabilities but would release Service manpower for other purposes’.
The Report on the Army Cadet Corps prepared by the Committee of Inquiry (Millar Report) into the CMF stated: ‘the military value of cadets is small and does not of itself justify the present annual allocation of funds and Regular Army manpower. ‘
These comments were endorsed by the Chief of the General Staff and the Military Board: ‘the cost and effectiveness of cadet training cannot be justified from the viewpoint of its contribution to the defence of Australia.’
The military value of cadets was assessed by the Millar Report as only: ‘the level of achievement reached at the end of their cadet experience is about the standard reached in 2-3 weeks of full time training in a Regular Army recruit training system.’
– The strength of the Army Reserve is now almost 20 000. The Citizen Military Force’s component of the Reserve is being re-organised and revitalised as a result of the Government’s decision to accept in principle the recommendations of the Millar Committee, which are aimed at improving the standard of training and conditions of service in the Army Reserve. The CMF component of the Army Reserve will increase by 1000 this financial year. This more efficient use of defence personnel is paralleled by strict economies in civilian manpower, which will see a reduction of 230 employees in the coming year. These steps have succeeded in reducing the proportion of the defence vote allocated to manpower from 6 1 per cent in the 1973-74 financial year to 56 per cent in this Budget. This increased efficiency has contributed towards the Government’s dramatic increase in the proportion of expenditure devoted to equipment in this Budget.
There are other matters to which I have given particular attention. I have given particular attention to increased training exercises. By careful management of resources it has been possible to provide this year for increased levels of Service activities- in steaming time for the Navy and in mileage for Army tanks and fighting vehicles. These increases will in turn increase scope for training exercises and other activities and contribute to the maintenance of high levels of Service skills. Our primary responsibility must always be the security of our own territory and linked with this the surveillance and patrol of surrounding maritime areas. The effort devoted by the Royal Australian Air Force to aerial surveillance of the Australian coast was more than doubled from the beginning of last year. It has since been supplemented by extensive naval patrols off Queensland and north-west Australia. We need to build up the self-reliance of our forces so that they have a better capability for independent action. Logistics has been a neglected area, primarily because of our past dependence in combat situations on the logistic support of others. We must build up our own capabilities.
Expenditure on capital equipment in this year’s defence outlay covering continuing payments on equipment approved last year and in earlier years, as well as initial payments on proposals approved this year, will be $182m. This represents approximately an 80 per cent increase on the spending on equipment last year, which was $102m. The first major decision in this area is to build a modern transport ship. The Royal Navy has an excellent and well-proven class, the Sir Bedivere landing ship logistic. We plan to build an improved version in an Australian dockyard. This amphibious ship will have a displacement of 6000 tonnes and Will provide a long range lift capability of some 2000 tonnes. It will be capable of discharging men and equipment, including tanks and other heavy items, across the beach or by cargo helicopter carried on board. It will be able to operate in undeveloped areas, such as the more remote parts of the Australian coast and off-shore islands. There has not hitherto been a capability of this kind in the Aus.tralian defence force, or in the civil fleet. This versatile ship could also be used for civilian emergency tasks such as rescue work and the evacuation of refugees.
There are several other new decisions in the maritime area. We have 4 Oberon submarines and two more are being built in the United Kingdomunfortunately with delays beyond our control. The capability of our 6 submarines will be greatly enhanced by new fire control systems which are to be ordered this year from the American firm Singer Librascope. In antisubmarine warfare, Australian defence science and industry are developing a new active sonar, called Mulloka, especially for operation in Aus.tralian waters. Subject to successful sea trials of a prototype, this new sonar will be produced and fitted in the Navy’s 6 River class destroyer escorts.
In addition to these improvements, the destroyer escorts Will be equipped with new electronic warfare equipment. For effective training with this new equipment, aircraft must be fitted with electronic systems that can simulate a threat and be flown against the ships. I shall be announcing shortly the letting of a contract for electronic systems to be fitted into two HS-748 aircraft which were acquired for this among other purposes. Still in the maritime area but looking more to the future, there are 3 further proposals which are being actively developed.
The efficient surveillance of our coastline requires the deployment of patrol boats.
As announced previously, we intend to introduce a new class to supplement, and eventually replace, the existing fleet of 12 Attack class patrol boats. Some months ago we circulated the characteristics sought for the replacement class with a widespread invitation to ship builders in Australia and overseas to register interest in design and construction. We are looking for improvements over the Attack class in range, speed and sea-keeping qualities. The responses to our invitation to register interest are now being examined closely and I expect shortly to let tenders for project definition studies that will enable us to decide on the precise type and characteristics of the new patrol boats which we should construct.
Studies are also in progress to assess the later requirement for a higher capability patrol craft, possibly missile fitted, that Will complement the destroyer force in the 1980s. The previous Government had decided to proceed with the constuction of an underway replenishment ship, but with some imprecision on design characteristics. The estimated costs had risen sharply by August 1973. The Government decided to postpone construction of this ship as there was no need to commission a new ship until at least 1 980 when HMAS Supply is due to be paid off. We decided that a less sophisticated and less costly ship would be more suitable to Australia’s needs. Tenders have been called for the submission of a design for a new ship and I expect to make a decision on the particular design next year.
Finally in the maritime area, I am pleased to report that earlier this month I inspected the guided missile frigate project in the United States of America and discussed its progress with the United States Secretary of Defense and his officials. We now await a United States Department of Defense decision- expected shortlywhich Will provide us with the necessary information on which to determine our position. To provide our forces with a more independent capability there is a need to rectify some deficiencies in operational equipment in areas where Australia has fallen behind. For many years, Army has had to make do with an air defence capability based on the Bofors gun. I have decided that this capability, which dates back to World War II, will be updated by the introduction of the Rapier surface-to-air guided weapon system. The choice of an air defence missile system for Army has been a lengthy and arduous process but I am now satisfied that the selection of Rapier is right in the Australian context.
Rapier is operational, is highly mobile and can be readily transported in Hercules and Caribou aircraft and by the medium-lift Chinook helicopter. Trials have indicated that it is a highly effective system.
The Army’s Centurion tanks are out-dated; they were ordered by the Chifley Labor Government in the 1940s. The Government took a decision last year to acquire 53 German Leopard tanks. Examination has led to a decision to acquire an additional 34 Leopard tanks. These 87 modern high performance tanks will provide Army with a significant capability to maintain and develop skills needed in armoured warfare. Army mobility will be further enhanced by the purchase of new trucks to replace the present Landrover vehicles, which are due to be phased out beginning next year. The initial order will involve more than 2000 trucks, which will be procured in Australia at a cost of some $14m- a valuable contract for Australian industry.
Turning now to air transport, I am pleased to announce a significant addition to the heavy airlift capability of the Air Force. The RAAF presently has 2 squadrons of Hercules transports. The older of these, the C130A aircraft, are due to be phased out in 1978, and will be replaced by a squadron of medium range transport aircraft. Together with the existing C130E squadron, this will give the Air Force an effective strategic and tactical air-lift capability, both for the necessary support of the Services and in national tasks of a civil nature. I shall be announcing the type and numbers of the new aircraft later this year. The further priority need for the RAAF at this time is to modernise its radars. The RAN air station at Nowra has a similar need. It is proposed to acquire eleven new radars to replace existing lowperformance equipments that are reaching the end of their economic lives.
I am ensuring that the scope for participation of Australian industry in the projects under consideration is being fully explored, so that industry can make a positive contribution to employment. In particular, it is planned that the heavylift ship be built in an Australian dockyard, and that industry make a large contribution to the manufacture of the light trucks. The Australian electronics industry will be involved to some extent in the radar projects. There will be local involvement in production work for the mediumrange transport aircraft, the medium tank and the air-defence weapon, but in these projects more emphasis will be placed on offsets. I have dealt with areas of manpower and equipment. Details of the third important component of the defence vote, namely defence facilities, are given in a document which I ask the permission of the House to have incorporated in Hansard.
– Is leave granted? There being no objection, leave is granted. (The document read as follows)-
The Government is cognisant of the need to develop Defence infrastructure at this time, particularly since so much Defence activity continues to take place from sub-standard accommodation including temporary structures built during the Second World War.
The Government is also mindful of the need to develop further the improved conditions of service initiated by my predecessor and particularly to maintain a vigorous program of providing houses for Service people. A total of $40m has been allocated for expenditure m 1975-76 on Service housing under arrangements with the State Governments. The new program planned for commencement in 1975-76 under those arrangements constitutes 533 dwellings and it is expected that over 1000 additional dwellings will become available this financial year. $77.6m is planned for expenditure on capital works including major projects such as the Naval Dockyard at Williamstown, a Royal Australian Corps of Transport Centre at Puckapunyal, the Land Warfare Centre at Canungra, developments to the RAAF Base at Amberley, new storage facilities at RAAF No. 2 Stores Depot at Regents Park, the West Australian Naval Support Facility at Cockburn Sound and the Australian Joint Warfare Establishment at Williamtown (N.S.W.).
It is planned also to set up an integrated Naval Supply Centre at the Zetland property acquired last year from the Leyland Corporation. This will be a very large and efficient storeholding. Also planned for construction is a new transmitting station near Darwin, and a new Office and Utilities Building within Victoria Barracks, Melbourne. This building will accommodate people now working at Albert Park and thus assist in the plan to vacate that portion of Albert Park occupied by Defence activities and to return the Park to the people of Melbourne.
In all Defence facilities programs very close attention is now paid to environmental considerations to ensure as far as possible that solutions found are acceptable to all parties with genuine concern.
- Mr Speaker, in the last, dying years of the Liberal-Country Party Government, the essential needs of the defence forces of this country were ignored or neglected, largely as a result of false perceptions of Australia’s national interest. The Labor Government, on the advice of its senior military and civilian defence planners, has the task of shaping the defence force to sharpen its capability to provide a strong and valid defence of Australia, and to demonstrate beyond all doubt Australia’s intention to defend herself and her vital interests. This year’s defence budget demonstrates clearly our determination to carry out this task. I present the following paper:
Australian Defence- Ministerial statement, 28 August 1975.
Motion (by Mr Daly) proposed:
That the House take note of the paper.
-I begin by thanking the Minister for Defence (Mr Morrison) for his courtesy in making available to me last night a copy of the statement he has just read to the House. Nevertheless, I tell him that meditating upon his statement last night did not improve the quality of my sleep and neither did the meditation improve the quality of his statement. I would feel under an obligation to congratulate the honourable gentleman on having made his first statement to this House as Minister for Defence. Nevertheless, I would feel under a kindred obligation to point out to him that it will be my plain determination to ensure that it is his last statement to this House as Minister for Defence.
I would hope that the maturity of this nation is of such a character that we have moved quietly but nevertheless perceptibly towards being able to embrace a bipartisan policy upon defence matters; but alas, the statement which has been delivered to the House by the Minister, far from encouraging a bipartisan attitude to defence, vigorously discourages it. I ignore the massive immodesty of the honourable gentleman’s perorations. I put to one side the exuberant dependence he has upon his imagination for the facts. I remind the honourable gentleman that the startling ungenerosity of language that he has used in this House this afternoon, and indeed this morning, takes those of us who serve in the Opposition most consciously away from the idea that it would ever be possible to have a bipartisan approach to defence matters.
That is desperately sad not merely for any political party in this country but for the whole nation, because the startling fact of life is that for this country our whole defence environment has changed. During the first debate in this Parliament on defence matters in 1901 a very distinguished member of the Parliament, Sir George Reid, observed to this effect: The strength of this nation and its interests will always be protected by the glory and the strength of the British Empire. Then, of course, for many years we did depend upon the corporate strength of the British Empire and then we did depend upon Britain and the United States of America. But if the Guam doctrine or- need I mention it- the Nixon doctrine amounts to anything, surely it amounts to a plain declaration that this nation must seek to fend for itself. The term which the honourable gentleman has used, ‘continental defence’, is not a term that upsets me in the least, but I do implore him and I do implore those who use it to be conscious of the fact that continental defence does not simply mean that we start to defend this country at the edge of the territorial sea. The fact of life today, as far as this nation is concerned in defence matters, is that the doctrine of self-reliance is assuming a greater degree of relevance month by month, day by day, and indeed hour by hour. I am concerned to find that the Government adopts the approach it has to defence. I remind this House that it has not had the opportunity of having one day’s debate on defence matters in nearly 3 years. To use the language in the Minister’s opening paragraph: Does defence occupy a high priority in the thinking and planning of the Australian Government? If it is a high priority that we have not had one day’s debate on defence matters, goodness only knows what a low priority would offer.
The honourable gentleman this morning turned upon 2 very distinguished former officers of the Services of this nation. I say to him with some warmth on the matter that his traducing of them reflected not upon himself or upon his office; it showed that he did not understand the fact that to seek to smear or indeed to slur upon the reputations of brave men is not welcome in this country. He used the term ‘Colonel Blimps’. I throw it back in the teeth of the Minister. It is a contemptible assertion that he made in this House this morning. I will warrant him this: At every opportunity I get on any platform in this country I W111 remind the audience of what the Minister for Defence said about 2 very distinguished officers with very distinguished records of service to this country.
– He should apologise.
– He should apologise, as the honourable member and gallant member for Farrer says. The Minister said:
It is a priority reflected in the defence outlay in this year’s Budget.
I challenge that. Defence expenditure as a percentage of gross domestic product reflected in this year’s Budget is down to 2.5 per cent. Honourable members on both sides of the House will recall the undertaking given by the Australian Labor Party when in Opposition. The Prime Minister (Mr Whitlam) declared that the Australian Labor Party’s target in defence spending would not fall below the level of 3.2 to 3.5 per cent of gross national product set by the Liberal-Country Party governments in recent years. That is another undertaking which has been repudiated in very stark terms. I find it agreeable that the percentage of defence vote upon equipment is up, but it deserves to go up further. This year it will be of the order of an estimated 9.4 per cent. Last year it was 5.3 per cent. In the last year of office of the kidney of politics that I support, 1971-72, it was 11.5 per cent. In 1972-73 it was 1 1.8 per cent. It dropped down to 5.3 per cent and now it has been taken up to 9.4 per cent.
What is irritating about the Minister’s statement this afternoon is the vagueness of it. Let me remind the House of some of the observations. He said that we are on the verge of registration of interest for patrol boats. Does the honourable gentleman recall that his predecessor said of patrol boats in the last speech that he made in this Parliament in April of this year that a decision would be taken with respect to patrol boats in the very near future? The former Minister hoped to have been in a position to announce that. Now the matter has been taken further, albeit by a very small margin. We are now to the stage of registration.
The Minister has given us a sturdy assurance that studies are in progress for a high capability patrol craft. What on earth does that mean? When will the result of those studies be available? Tenders are being called for the submission of a design for a combat support ship. When may the Parliament expect to get something a little more explicit on that? Then the Minister said that while he was in the United States of America he had discussions concerning the guided missile frigate. He said that as to the replacements of those Hercules aircraft that are out of date, the type and numbers will be announced later. Further and finally on the question of vagueness the honourable gentleman said that there was a proposed acquisition of 1 1 more radar units. One asks the question: When will this come to light?
In the few minutes left at my disposal I want to refer to one clear area of activity to illustrate the approach of this Government towards defence matters. It concerns the question of the patrol frigate. I acknowledge that I may be exposed to the charge of being prejudiced in the Navy’s favour, having had the honour of being its Minister. But it is simply not true. I am concerned at the desperate run-down in the state of the Royal Australian Navy. Let me remind the Minister of what his colleague the Treasurer (Mr Hayden) said during the course of his Budget observations. The Treasurer said:
Last year we approved the acquisition of a number of major items for the Services, including . . . patrol frigates.
That was put in the past tense- ‘we approved the acquisition ‘-yet yesterday in reply to a question the Minister said that the status of the agreement dealing with patrol frigates had in no way been changed. The memorandum of agreement dealing with the patrol frigates or guided missile frigates, call them what you will, has not been changed. To suggest, as the Treasurer did, that this is a matter of accomplishment- that it is done, finished or carried out- is to distort the picture; it is double-speak. The 2 ships, in any eventuality, could hardly be described as making a fleet.
I ask the Minister whether he will give the House some indication of when we may expect a decision regarding these ships. Let me remind the House of the bases upon which the Government can get out of this proposed agreement. One is if the United States Navy patrol frigate program is suspended, and there is very considerable doubt about that.
– That is right.
– The Minister agrees with me. I am indebted to him for his frankness.
– We learnt from your mistakes on the Fill.
-At least we have the Fl 1 1 aircraft I have the greatest of doubts whether we will get the guided missile frigates, and if it had been left to the Minister and those who assisted him we would never have had the Fl 1 1. Would we be in a position today to seek to vindicate, in any shape or form, the doctrine of self-reliance? The doctrine of self-reliance in the hands and mouths of the honourable members who support the present Government has no relevance at all. They take it as a doctrine to be propounded on occasions on which they want to encourage some political support; but, as far as it being an article of faith for those who sit in the Parliament and encouraging it to be an article of faith for every person in the country, that is asking just too much altogether.
There is much that the Minister said by way of other observations, with which one would find sympathy if one could see some action on the part of the Government. I instance, without being definitive on the point, what the Minister said with reference to logistics in this country. I put this not by way of harsh definition but by way of simple inquiry. If we were to find some aggressor landing in the Pilbara region or elsewhere in the north-west of Australia we would be faced with the most significant of logistical problems. That is acknowledged by everyone. Even if we had one division at our disposal we would be faced with it taking up to 3 months to get across to meet what may be a threat to part of this country. There is no all-weather road, for example, from Broken Hill to Darwin. The Minister makes these vague references to the problems associated with logistics, but he tells us very little of the corporate thinking of the Government on how it proposes to solve those problems.
I appeal to the Minister and to all those who sit behind him. This nation deserves to have a sustained debate upon defence matters. It is an insult to this Parliament and to the people of Australia that the honourable and gallant member for Bass (Mr Newman) has not had an opportunity to take part in this debate. There are honourable gentlemen on both sides of the House who would have welcomed seeing this debate run on for at least the rest of the day. However, the Minister takes the view that the arrangement has been made and therefore this debate will peter out. What the Parliament is entitled to expect from the Minister is something better by way of definitive policy than he has offered to us today. The tragedy of the Minister’s statement does not lie in its mere vagueness and it does not lie in the fact that it has sought to insult people. It lies in the fact that the Government apparently has no sense of consciousness whatsoever as to the completely new gathering of responsibilities which confronts this country. The fact is that the Government does not understand that the doctrine of self-reliance is of very great relevance to this country and is growing in intensity as each day goes by.
Motion (by Mr Keating) proposed:
That the debate be now adjourned.
A division having been called for
– May I make the observation that this was an agreement that was entered into -
Mr DEPUTY SPEAKER (Dr Jenkins)Order! A division has been called for on the question’That the debate be now adjourned ‘.
The House divided. (Mr Speaker-Hon. G. G. D. Scholes)
Question so resolved in the affirmative.
Bill presented by Mr Daly, and read a first time.
(2.58)- I move:
This Bill, the second in a series of six Bills containing proposals originally encompassed by the Electoral Laws Amendment Bill, provides for the optional preferential marking of ballot papers at
House of Representatives elections. The basic feature of the optional preferential system, embodied in the Electoral Bill (No. 2) 1975 which I introduced earlier today, whereunder electors should be compelled only to express a preference for the number of candidates to be elected, is also inherent in this Bill. Although far fewer candidates stand for House of Representatives elections than for Senate elections, the underlying principle that electors should not be compelled to vote for candidates for whom they have no preference still applies.
Under the optional preferential system proposed by this Bill a voter at a House of Representatives election must indicate his first preference for one candidate and may indicate his further preference for some or all of the remaining candidates, as he so desires. The exchange of preferences between candidates will not be impeded in any way and this practice will no doubt continue. To the extent that preferences beyond the first shown on the ballot papers are required to determine the result of the election, such preferences will be counted. What is more important however is that a ballot paper would not be rejected outright because the voter failed by inadvertence or otherwise to indicate an order of preference for all the candidates. This, of course, is the case under the full preferential system, despite the fact that the majority of House of Representatives seats are decided on the count of first preferences.
Let me stress, as I have done on other occasions, that optional preferential voting is not a ‘first-past-the-post’ system masquerading under another name. It is true that if all voters deliberately refrained from expressing any preferences beyond the first preference, the result under optional preferential voting in an election for a member of the House of Representatives would be the same as in a first past the post system. However, this is a hypothetical proposition which has not eventuated in elections under the optional preferential system in Australia in the past, nor is it likely to eventuate in the future. The results of elections of the Australian Capital Territory Legislative Assembly, the Northern Territory Legislative Assembly and, more recently, the South Australian Legislative Council, indicate that a majority of electors voting under an optional preferential system will express preferences beyond the minimum number required to cast a formal vote.
There is another important aspect which I wish to stress. Under the optional preferential system proposed by this Bill a candidate cannot be elected unless he has received more than 50 per cent of the votes in the count at the stage he is elected. It is recognised of course, that some votes may become ‘exhausted’ during the distribution of preferences in a Division where it is necessary to exclude a candidate- or candidatesand further preferences are not shown on the ballot-papers concerned. However, the saving in informal voting which must result from the acceptance of ballot papers which, although bearing a first preference, do not indicate preferences for all candidates, can be expected to offset votes which become exhausted. It can be said that the optional preferential procedure ensures that meaningful preferences are distributed whereas the present system can lead to the election of a candidate with a manufactured majority based on what may well be preferences randomly assigned by the voters.
Like the Electoral Bill (No. 2) 1975, this is a non-partisan reform which is designed to introduce a system of voting which provides for the maximum flexibility and democratic freedom of choice for the voters while maintaining the essential elements of a full preferential system, should the voters choose to indicate preferences for all candidates in the election. I commend the Bill to the House.
Debate (on motion by Mr Garland) adjourned.
Bill presented by Mr Daly, and read a first time.
– I move:
This Bill is designed to bring about a fundamental and widely sought change to the Commonwealth Electoral Act. It seeks to amend the Act by inserting a new part to provide for the printing of the political affiliations of candidates on the ballot papers for both House of Representatives and Senate elections; and providing for the printing and exhibition of a list setting out the names of the candidates and, where applicable, the names of the respective parties by which the candidates are endorsed. As a necessary corollary to this reform, it is proposed that political parties be registered in order that the ‘bona fides ‘ of a political affiliation claimed by any candidate may be properly authenticated. Honourable members will readily appreciate the importance of making adequate provision so that the Chief
Australian Electoral Officer can ensure that correct and genuine party affiliations are shown in respect of the candidates.
The Bill proposes that an application for the registration of a party name may be lodged with the Chief Australian Electoral Officer who would be required to keep a register called the Register of Names of Political Parties. Provision is made in the Bill so that the Chief Australian Electoral Officer may refuse an application for the registration of a name in respect of a party in specified circumstances, for example, if, in his opinion, the name is the same or is likely to be confused with the registered name of another party. The Bill also sets out the criterion which a party must meet in order to have the affiliation of its candidates shown on the ballot papers. In general terms, to qualify, parties must endorse candidates for not less than one-quarter of the number of vacancies to be filled in the State at a Senate election or, in the case of a general election of members of the House of Representatives, onequarter of the number of divisions in the State. In respect of casual vacancies in the Senate, or byelections for the House of Representatives, the party must have met this test at the last preceding Senate election or general election of members of the House of Representatives, as is appropriate.
This Bill would be unnecessary and irrelevant if we ‘did not recognise political parties as part of the Australian electoral system. However, they are so recognised and it cannot be denied that a large number of the electors vote for the candidate representing the political party of their choice. We intend therefore by this Bill to assist the electors to knowingly record their votes, particularly in circumstances where they are uncertain of, or unable to ascertain, the political affiliations of the candidates appearing on the ballot paper. In registering parties and printing political affiliations on ballot papers we are joining the following countries: Argentina, Austria, Canada, Chile, Costa Rica, Denmark, Gambia, West Germany, Greece, India, Ireland, Italy, South Korea, Luxemburg, Netherlands, Nigeria, Norway, Peru, Portugal, Sierra Leone, Sweden, Switzerland, Turkey, United Kingdom and the United States of America.
No basic civil liberties are infringed by this proposal nor is there anything curious or ominous about showing the political affiliation of the candidates on the ballot papers. Indeed, it is an eminently fair and effective means of assisting and informing the electors and we believe it is a much needed reform which would meet with widespread approval. I commend the Bill to the House.
Debate (on motion by Mr Eric Robinson adjourned.
Bill presented by Mr Daly, and read a first time.
– I move:
The purpose of this Bill, a further Bill incorporating proposals contained in the Electoral Laws Amendment Bill, is to provide for: Closing of the poll at 6 p.m. in lieu of 8 p.m.; drawing for positions of candidates on the ballot papers at House of Representatives elections; increasing the amount of deposit required for nomination at both House of Representatives and Senate elections; changing the formula governing forfeiture of deposits at House of Representatives and Senate elections; and revising penalties for electoral offences in line with present monetary values. Some of the provisions of this Bill are very similar to the proposed amendments to the Parliamentary Electorates and Elections Act (New South Wales) which the New South Wales Premier, Mr Lewis, recently announced, and which include, among other proposals: Closing of polling at 6.0 p.m. in lieu of 8.0 p.m.; order of candidates names on ballot paper to be determined by lot; and increasing the amount of deposit required for nomination at Legislative Assembly elections.
The proposed variation in the conditions governing forfeiture of deposit at House of Representatives and Senate elections, and the new schedule of electoral offences and punishments, are matters which met with substantial agreement when the Electoral Laws Amendment Bill was before the House and I do not feel that there is a need for me to deal further with these aspects in respect of the present Bill. However, the proposal to increase deposits for House of Representatives and Senate candidates merits further brief comment. The essential purpose of the proposal to increase deposits is to reduce the number of persons who might be tempted or influenced to nominate for either Senate or House of Representatives elections for obstructive or frivolous reasons. This occurred in the 1974 Senate elections when an individual publicly admitted that he had sponsored a number of candidates in order to deliberately obstruct the Senate elections in New South Wales. In fact I understand only time prevented him from nominating about 140 candidates. It is anticipated that if changes of this kind are not made up to 250 candidates could contest the next Senate elections in New South Wales as a result of action which may be taken by people similarly intentioned. Let me stress that this proposal is not designed to reduce the number of genuine candidates or to discourage candidates from nominating. The 1974 Senate elections in New South Wales, when there were 73 candidates, and to a lesser extent the 1 974 Senate elections in certain other States, gave a clear indication of what might happen in the future unless a sufficient deterrent is introduced to operate against frivolous candidature or candidature designed to infringe upon, or obstruct, the democratic process of election. Obviously, the present deposit amounts are clearly inappropriate, given current monetary values.
Nor is there anything radical about the proposal to amend the hours of polling. The poll at Queensland State elections has closed at 6 p.m. since 1915. The Premier of New South Wales recently announced that he intends to introduce this reform shortly in his State. Many local government polls also close at 6 p.m. Any argument that this proposed measure would disfranchise farmers or adherents of certain religious faiths, or generally inconvenience people who vote late in the day, is not persuasive. Postal vote facilities are available to electors who, for the various reasons specified in the Electoral Actincluding religious reasons- will be precluded from voting at a polling booth on polling day. Absent voting facilities enable electors who are outside their subdivision on polling day to vote at any other polling place in the State. These faculties, together with the availability of modern day private and public transport, are adequate to enable electors to conveniently record their votes, and effectively eliminates the need to keep the polling booths open until 8 p.m. A by-product of the earlier closing hour is that the scrutiny can commence 2 hours earlier with the result that the counting trend for which the nation is waiting is known much earlier in the night of polling day. Irrespective of what time polling booths are closed, there will always be people who vote at the last minute or attempt to vote too late. This is a condition of human nature and cannot be overcome by legislation.
Another long overdue reform contained in this Bill relates to the drawing for positions on the ballot paper in House of Representatives elections. Drawing for positions already occurs in respect of Senate elections and is becoming increasingly commonplace for elections in organisations, political and otherwise. There is no logic in denying this commonsense proposal in respect of elections for this House. The socalled ‘donkey vote’ does exist and it does give advantage to the candidate who enjoys the top position on the ballot paper. This situation, which becomes more significant in a closely contested election, would of course still obtain even where a draw was conducted to determine the order in which the candidates’ names appeared on the ballot paper. However, the draw gives all candidates an equal chance of securing the most favoured position, whereas the present system consistently favours the candidate whose surname begins with a letter higher in the alphabet than the surnames of the other candidates.
There is nothing even remotely radical or sinister about the proposals contained in this Bill. On the contrary, the measures we propose are straightforward, eminently rational, nonpartisan and deserving of the support of every member of this Parliament. I commend the Bill to the House.
Debate (on motion by Mr Peacock) adjourned.
Bill presented by Mr Daly, and read a first time.
: I move:
This is another Bill in the series of Bills derived from the Electoral Laws Amendment Bill designed to implement long overdue reforms to the Australian electoral system. The Bill provides for: The establishment of mobile polling facilities at hospitals and institutions; the retention of franchise rights for persons in the service of the Crown or a public authority outside Australia; a prohibition on sitting members of other legislaturesincluding those of the Territories- from nominating at House of Representatives and Senate elections; a declaration relating to a recent change of name and the printing of a former name on the ballot paper; and a prohibition on the use of offensive or unacceptable names for enrolment and candidature purposes. The Bill also makes a number of fairly minor amendments to the Commonwealth Electoral Act of a formal or consequential nature. I ask leave of the House to incorporate these amendments in Hansard. They are the same as previously.
Mr DEPUTY SPEAKER (MrArmitage) Is leave granted? There being no objection, leave is granted. (The document read as follows)-
Adding definitions for ‘broadcast’, ‘broadcasting station’, ‘televises’ and ‘television station’; providing for a substitute Assistant Returning Officer at a place outside Australia when the original appointee is temporarily absent; providing for the Minister to engage persons to assist the Distribution Commissioners and to fix the remuneration and allowances to be paid to Distribution Commissioners and persons engaged to assist; by substituting ‘Given name’ in lieu of ‘Christian name’ in respect of enrolment and voting; substituting ‘Status of a British subject’ for ‘British subject’ in respect of qualifications for enrolment, voting and candidature; enabling the Electoral Registrars to correct the roll by altering the address of electors in the case of renumbering or re-naming of any building, thoroughfare, locality, etc. without an application from the electors concerned; substituting ‘8 kilometres’ for ‘5 miles’ as the requisite qualifying distance in order to apply for a postal vote; changing from 21 years to 18 years the qualifying age for appointment of Presiding Officers and Assistant Presiding Officers; providing a defence against prosecution where a candidate unwittingly makes a donation to a club or association etc. within 3 months of polling day; amending the provisions relating to misleading representation of a ballot paper; providing redress for candidates against misleading propaganda distributed to voters; limiting the provisions concerning the signing or authorisation of newspaper articles on the occasion of an election to the period ending with the close of the poll in lieu of the period ending with the return of the writ; requiring an announcement on a broadcasting or television station to be made in a clear and undistorted manner and removing the need for the address of the author to be broadcast or televised; changing to metric measurements the standard measurements in relation to size of electoral posters; enabling the posting up or exhibition within a hall used in connection with an election or referendum an electoral poster irrespective of size; changing to metric measurement the distance relating to canvassing near polling booths; limiting the application of the offence of disorderly behaviour at lawful public political meetings to meetings held on or after the date of the issue of the writ and before the close of the poll (in lieu of the date of the return of the writ).
– As the honourable member for Curtin (Mr Garland) pointed out in this House on 10 April 1975, many of the amendments contained in this Bill were originally embodied in legislation introduced by a Liberal-Country Party government in March 1971. When the provisions contained in this Bill were being dealt with as part of the Electoral Laws Amendment
Bill there was general agreement with them. I would expect this Bill to be readily agreed to by this House. Consequently, I shall confine myself to elaborating briefly on the more important provisions of the Bill, without engaging in superfluous repetition of what was said by me and other speakers on previous occasions.
The establishment of mobile polling booths in hospitals is a vital reform, one which would permit polling officials, in the presence of scrutineers, to take the ballot boxes and voting material to bed patients, thus enabling such patients to record ordinary or absent votes. This facility would be a significant step forward in making it easier for the aged and infirm to register their votes, while at the same time removing the need for canvassers and political party organisers to invade the hospitals, convalescent homes and institutions, as they do at present.
Another worthwhile proposal in this Bill is designed to enable a person who is qualified for enrolment and who is posted overseas in the service of Australia, a State or a public authority- or his or her spouse- to enrol in respect of the overseas address. While it may be argued that this proposition although worthwhile is a little too restrictive, the Government believes that further extension of this privilege is unnecessary. To turn to a further reform proposed in this Bill, the Government believes that, given the present ineligibility of members of State parliaments to stand for election to the Australian Parliament, it would be appropriate for a member of the legislature of the Australian Capital Territory or the Northern Territory to be placed in the same category. Accordingly, the Bill provides that no person who is at the date of nomination, or was at any time within 14 days prior to the date of nomination, a member of the Legislative Assembly for either the Australian Capital Territory or the Northern Territory, shall be eligible for nomination to the Australian Parliament.
It is also proposed that where a person changes his name within the 12 months prior to nomination, the person shall be required to state the former name in the nomination paper, which will then be included on the ballot paper. Members will be aware that in the past candidates have changed their names just prior to an election for the specific purpose of having the name placed above other candidates on the ballot paper in order to gain some political advantage in the election. This provision will not apply to a change of name by marriage.
A further proposal deals with the situation where a person seeks to enrol under an unacceptable name. This term includes a name- not being the person’s original name- which is offensive, obscene, frivolous or likely to be interpreted as a slogan or as advocating a political objective or policy. In the 1974 Senate election a number of persons enrolled under such names, including ‘White Australia’ and ‘StopAsianImmigrationNow’. The BUI makes it clear that a person is not entitled to be enrolled by an unacceptable name and consequently would be precluded from nominating under such name. Honourable members can imagine the position if either of the candidates using the names I just mentioned was elected to the Senate.
The 5 main provisions to which I have referred, together with the minor amendments previously supported by the Opposition, will lead to improved voting facilities for electors, will remedy defects in our electoral practices, and create a more democratic and efficient electoral system. I commend the Bill to the House.
Debate (on motion by Mr Peacock) adjourned.
Bill presented by Mr Daly, and read a first time.
– I move:
This Bill, the last in the series of Bills incorporating proposals previously contained in the Electoral Laws Amendment BUI, provides for: A speedier finalisation of election results, by introducing an earlier deadline for the return of postal votes and by providing for the return of postal votes direct to the respective returning officer; prohibition on the listing of names of persons who apply for postal votes, except in certain specified circumstances; restriction of postal vote application forms to be used at an election or referendum to those specified by notice in the Australian Government Gazette; postal voting faculties for prisoners who have retained their franchise entitlements; discretion to appoint a licensed or registered surveyor as a Distribution Commissioner in lieu of the Surveyor-General of the State concerned; and other minor amendments to the existing electoral law.
As honourable members are well aware, the present electoral system involves intolerable delays in finalising the election results, particularly when a large number of postal votes is admitted to the scrutiny as was the case in the 1974 House of Representatives elections when almost 5 per cent of the total votes recorded throughout Australia were postal votes. For the information of honourable members I seek leave to incorporate in Hansard details of the number of postal votes admitted to the scrutiny at the 1972 and 1974 House of Representatives elections.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
– In order to remedy this situation, it is proposed, firstly, that an earlier deadline be fixed for the return of postal votes and, secondly, that postal votes be returned direct to the relevant returning officer, rather than through an assistant returning officer, some other returning officer or a presiding officer, as allowed under the existing law. At present, a period of 10 day’s grace after polling day is allowed for the receipt of postal votes by the relevant returning officer. This practice hinders any attempt to speed the count, especially for Senate elections. It is therefore proposed that postal votes be returned so as to reach the appropriate returning officer not later than the close of the poll.
There is a growing tendency for party workers to take advantage of the existing provision which enables a person to examine the postal vote applications in the office of a divisional returning officer, to compile a list of electors who voted by post at the election and to use this list to forward postal vote applications to the persons concerned at the next election, without knowing whether those persons are still eligible to vote by post. The Government proposes to inhibit such malpractices by preventing party workers from examining lists of names of postal voters, except when this is necessary for an inquiry into an alleged or suspected contravention of the Act or for a petition to a Court of Disputed Returns.
It is also proposed to give the Chief Australian Electoral Officer power to vary the form of postal vote applications at each election, in order to prevent the dubious practice of stockpiling par.tially completed forms. Under this proposal the Chief Australian Electoral Officer will specify by a notice in the Gazette the postal vote applicanon forms which may be used at an election. It is proposed too that provision be made enabling a person who is serving a sentence of imprisonment to apply for a postal vote, provided that such a person is still qualified for enrolment. It might be noted that no person who has been convicted and is under sentence for any offence for one year or longer is entitled to enrolment.
I now turn to another area of reform dealt with in this BUI. It has not always been possible to obtain the services of the Surveyor-General of a State or an officer having similar qualifications for the purpose of redistributing a State. Therefore, it is proposed to provide that one of the Commissioners shall be a registered surveyor. This Will enable greater flexibility for the purposes of future redistributions. There are some minor provisions in the Bill which require no elaboration here. These amendments, taken collectively, Will either improve or update our existing electoral law.
The Government believes that the reforms contained in this Bill will not only considerably streamline postal voting procedures, but will also reduce the possibility of electoral malpractices which have sometimes been an unfortunate byproduct of the existing postal voting facilities. I commend the Bill to the House.
Debate (on motion by Mr Peacock) adjourned.
BUI presented by Mr Beazley, and read a first time.
– I move:
The purposes of this BUI are to make special long service leave provisions for those New South Wales and South Australian teachers who were employed in the Australian Capital Territory and in the Northern Territory respectively in 1973 and who elected to join the Commonwealth Teaching Service before 1 January 1974; to enable provision to be made for the employment of teachers at technical colleges in the Aus.tralian Capital Territory; to alter the name of the Service to the Australian Teaching Service; and to make other amendments to the legislation arising from the provisions of enactments which have been made since the teaching service legislation was last amended.
In relation to the long service leave conditions for the teachers who transferred from New South Wales and South Australia to the Teaching Service, the effect of the BUI will be to preserve the long service leave conditions which the teachers would have enjoyed under State legislation which was in force immediately prior to their joining the Teaching Service and, where appropriate, treatment of future service as if it were State service for the purpose of that legislation. While preserving the eligibility of the teachers for long service leave in accordance with the conditions which were operative under the appropriate State law at the time they joined the Teaching Service, the Bill permits them to have their long service leave entitlement assessed in accordance with the Australian Employees’ Furlough Act, including future amendments to the latter Act. The Bill does not confer any eligibility for any improvements which might be brought about by changes in a State law which came into effect after the teachers concerned had joined the Teaching Service. The benefits which the Bill confers are limited to a particular group whose position was affected by the Australian Government’s decision to accept direct responsibility for the provision of primary and secondary education in the Australian Capital Territory and in the Northern Territory. It is similar to the legislation which was introduced in 1973 by which special superannuation arrangements were made for this group of teachers.
A second purpose of the Bill is to allow the Commissioner of the Teaching Service to make available teachers to the technical colleges established in the Australian Capital Territory. Within the Australian Capital Territory, technical education has been provided by an arrangement between my Department and the New South Wales Department of Technical Education. In the main, the full-time technical teachers employed in the Territory have been employed by the New South Wales Department. As part of the decision to establish an Australian Capital Territory Technical and Further Education Authority, the Government has decided that the teaching staff of the technical colleges in the Territory should be employed under the Teaching Service legislation. The Bill makes provision for this by a variation to the definition of an Australian Government school and by providing that a prescribed authority may be one which is established for a public purpose in accordance with the provisions of an Act, regulations made under an Act, or a law of a Territory.
In considering the other amendments necessary to the legislation, the Government has taken the opportunity of reviewing the title of the Teaching Service and, in accordance with its general policy, has decided to vary the title of the Teaching Service to the Australian Teaching Service. The Bill makes provision for this. Other changes introduced by this Bill relate to sections 8, 30 and 37 of the principal Act. These sections are being varied to take into account the provisions incorporated in the Remuneration Tribunals Act 1973-74. Division 5 of Part III is repealed to take into account the provisions of the Maternity Leave (Australian Government Employees) Act 1973. I believe this legislation should be given speedy passage by the House.
Debate (on motion by Mr Peacock) adjourned.
Bill presented by Mr Enderby, and read a first time.
This Bill amends the Excise Tariff 1921-1974 in accordance with Excise Tariff Proposals No. 1 (1975) introduced into the Parliament on 19 August last. The changes, which operate from 8 o’clock in the evening on Tuesday 19 August 1975, give effect to the Government’s Budget measures within the excise field. Increased duties are imposed on beer, potable spirits and manufactured tobacco products and new duties of excise imposed on stabilized crude petroleum oil, liquid petroleum obtained from naturally occurring petroleum gas and liquified petroleum gas obtained from unstabilized crude petroleum oil or from naturally occurring petroleum gas. A summary of the changes is being circulated. I commend the Bill.
Debate (on motion by Mr Peacock) adjourned.
Bill presented by Mr Enderby, and read a first time.
This Bill enacts the export duties imposed on coal exported from Australia. The new duties are in accordance with Customs Tariff (Coal Export Duty) Proposals 1975 which I tabled on 19 August last. The rate of duty imposed on high quality coking coal is $6 per tonne, while coal other than high quality coking coal will bear a duty of $2 per tonne. The duties, which operate from 8 o’clock in the evening on 19 August 1975, give effect to the Government’s Budget measures in relation to coal exported from Australia. I commend the Bill.
Debate (on motion by Mr Peacock) adjourned.
Bill presented by Mr Enderby, and read a first time.
– I move:
That the Bill be now read a second time.
The purpose of this Bill is to amend provisions of the Customs Act 1901-1975 in relation to the duties imposed on coal exported from Australia. Section 114 of the Customs Act is being amended to require an exporter of coal to furnish information prior to exportation to establish the duty status of the coal to be exported in order that adequate arrangements can be made for the protection of the revenue. The amendment to section 133 of the Customs Act makes provision to permit an exporter of coal to make application to the Administrative Appeals Tribunal for review of decisions made by a collector concerning the classification of coal.
The provisions of section 152 enable alterations to be made to agreements for the sale or delivery of goods duty paid if any alteration takes place in the duty collected affecting those goods before they are exported. Honourable members will recall that in his Budget speech the Treasurer (Mr Hayden) indicated that the Government did not wish the export duty to be passed on to overseas buyers who have recently agreed to pay higher prices. The amendment to section 152 contained in this Bill withdraws the provision for increasing contract prices to take account of the new duty. The amendments will operate from 8 o’clock in the evening on 19 August 1975. 1 commend the Bill.
Debate (on motion by Mr Peacock) adjourned.
Debate resumed from 20 August on motion by Mr Whitlam:
That the Bill be now read a second time.
– May I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on the Papua New Guinea Bill I suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Papua New Guinea Independence Bill, the Papua New Guinea Loans Guarantee Bill, the Papua New Guinea (Staffing Assistance) Bill and the Social Services
Bill (No. 2) as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the 5 Bills to be discussed in this debate.
-Is it the wish of the House to have a general debate covering the 5 measures? There being no objection, I will allow that course to be followed.
-The Bills before the House are the final historic legislative instruments in the transfer of power to Papua New Guinea. They provide, by their passage through this House and the Senate, the removal of the legislative framework relating to Australian administrative and legislative authorities over Papua New Guinea. We are therefore within a few weeks of the watershed in relations between the territory and the administering authority. Our thoughts on this occasion ought properly to be on Papua New Guinea and her future rather than on indulging in any form of self-congratulatory remarks.
However, that rather proper hope and aspiration that I have in regard to this legislation is qualified to some extent. Whilst I endorse the Bills and the Opposition supports them, I have to note that I was somewhat disappointed that the Prime Minister (Mr Whitlam) in his speech on this legislation spent so much time on selfcongratulatory language about the role of the Australian Labor Party in allegedly decolonising Papua New Guinea and that by his incorporation in Hansard of lengthy statements from 1970 he proffered the oft-quoted view that it was he, as the then Leader of the Opposition, who really brought about this decolonisation. It is a view that I challenge. It is a view that is incorrect. It is a view that, when the history and the records that are available about this period of time are made available to the public, will be seen to be an illinformed interpretation, though an oft-quoted one in the last 5 years.
The reality is that the first really effective steps towards self-government and independence were taken in 1970. Let me say how pleased I am, although he does not sit with us on all issues, that the right honourable member for Higgins (Mr Gorton) is with us in the House today. It was he who perceived the need to make these changes, in a somewhat dramatic way, speeding up the process and transferring more authority to the Ministers and the Assistant Ministers in the former United Party Government in Papua New Guinea in 1970. 1 have always thought that his role and the role of the former Minister for Territories and then later Minister for External Territories, my predecessor in that position, have been underrated. Certainly the steps taken by the right honourable member for Higgins ought to be seen in the proper perspective of the proper hastening of moves in a smooth and orderly manner towards self-government and independence. Regrettably the Prime Minister made no mention of that fact in his address last week.
I think I can say that my speeches throughout 1972 constantly reiterated the positive goal of independence. As members of the LiberalCouncil Party Government, we put the theme; we set the scene in conjunction with the Government of Papua New Guinea; and we planned with that Government the transfer of the functions which has brought about this position today. Indeed, if I may say so in using the first personal pronoun, I was fortunate enough to participate as Minister for External Territories in the first of the series of constitutional talks between Australia and Papua New Guinea in July 1972. They were, after all, the first government to government talks ever held between the 2 countries. After the impetus of the transfer of activities in 1970 providing more responsibility and decision making for the Ministers in Papua New Guinea, those talks in 1972 were the first government to government talks ever held between our 2 countries. The series of meetings in July and August 1972 was the beginning of a series of transfers of administrative and legislative authorities that has culminated in this legislation today.
– You had 20 years before that to do something about it.
– That is right.
-That is a regrettably fatuous remark by the Minister for Aboriginal Affairs (Mr Les Johnson), exacerbated by the former Minister for External Territories and present Minister for Defence (Mr Morrison), who is sitting at the table. I could contrast the administration of the Labor Government after the war. I could talk about the development of Papua New Guinea from 1950 or 1960 onwards. I remind honourable members that there are more than 500 different tribes, speaking in excess of that many languages, in Papua New Guinea. The amount of development that occurred was tremendous and it was brought about in a manner that permitted us to discuss in a proper and detached manner the move towards independence today.
There are few, if any, examples of administered areas moving towards independence which have reached the stage of independence on such close terms with the administering authority. The major factor in this relationship was the steady progress and then the proper acceleration at the proper time brought about by the previous Government. Of course there were faults. His.torians will record them. Commentators today will besiege us with them. Point to any form of government in the world, any relations between human beings, where there are not mistakes. But taken overall, the resultant transfer towards independence is, in my view, something of which Australian governments can be proud and not something to be sneered at on this historic occasion. With the possible exception of the relationship between Britain and Fiji- I do not think even that is pertinent to this case- I would think that there are no other countries in the world that can say that they were on such close terms, following such earnest preparedness for independence, as Australia as the administering authority and Papua New Guinea as the territory.
As I said, throughout 1972 I made speeches which indicated that we were planning towards this day. Regrettably, the speech of the Prime Minister, apart from a welcome credit for what I did in Papua New Guinea, did not underscore the role of the Liberal-Country Party Government sufficiently. For example, on 3 March 1 972, one month and one day after being sworn into the portfolio of External Territories, in addressing the University of Papua New Guinea on the occasion of its graduation ceremony, among other things I said:
The Government believes it should help Papua New Guinea towards self-government. It should not just sit back and wait for it to happen.
About a month later, speaking in the Bowman electorate I said similar things. I said:
The Government believes it should help Papua New Guinea towards self-government. We should be remiss if we sat back and just waited for it to happen.
I said such things in a variety of speeches. Bearing in mind the incorporation by the Prime Minister at the end of his speech of some of his previous statements, I seek leave to have incorporated in Hansard at the end of this address a speech on future relations between Australia and Papua New Guinea delivered by me to the New South Wales Branch of the Australian Institute of International Affairs. I have received the approval of the Leader of the House (Mr Daly) for this and I assume that the Minister for Defence has no objection.
– Quite right.
-Is leave granted? There being no objection, leave is granted.
-I should like to quote from one paragraph of that speech to underline further not merely the concern that we had that there should be Australian attention to the move towards self-government and independence but that as far back as 1972 I was aware that there ought to be proper and adequate planning for the post-independence situation. No one likes to stand here and quote himself, but the reality is that during this period I was the Minister for External Territories. So, I have to do it, just as I assume the Prime Minister might have been impelled by the same motivation when he incorporated his own speeches and statements the other day. I quote this statement because it was made on behalf of the Government in 1972. I said:
It is necessary to distinguish between Australia’s relations with Papua New Guinea and Papua New Guinea’s own foreign relations. We have to determine our relations with Papua New Guinea with proper regard to Australia’s own national interests. We should expect Papua New Guinea to do the same. In particular, we should not expect Papua New Guinea to look to us to decide what her national interests are. Nor as I have said earlier should we expect that Papua New Guinea’s national interests will not over the years, as they are better defined and as Papua New Guinean political leaders become more conscious of them, more and more diverge from Australia’s. There will undoubtedly be a residual common interest. If mutual respect accompanies it, if we can succeed in avoiding gratuitous insults to Papua New Guinea’s nationhood and sovereignty, then that residual common interest will be of great importance.
My reason for quoting that is that we come to the stage where Papua New Guinea- albeit she has had her own Foreign Relations and Defence Minister and has had her own staff at missions abroad- will now in law as well as in fact be conducting her own foreign policy and conducting it as it suits her interests and not necessarily Australia’s interests. That is something for which we planned, something we have to understand. If we are to avoid misunderstandings in the future it will be well to recall that we were giving consideration to this matter some years ago.
These 5 Bills, small though some are, in toto are historic pieces of legislation. The Papua New Guinea Independence BUI basically repeals the Papua New Guinea Act. It is the end of the formal association whereby Australia ceases to have any sovereignty over Papua New Guinea at midnight on 15 September thus enabling the Papua New Guinea Constitution to have effect on 16 September, that Constitution not being dependent on any legislative authority from Australia under this legislation. Secondly, the Papua New Guinea BUI transfers to Papua New Guinea the administration of the Pocklington Reef Islands, a matter announced by the Minister for Defence in 1974. Thirdly, the Papua New Guinea Loans Guarantee Bill provides the guarantees for loans entered into by Papua New Guinea prior to the date of independence- guarantees from the Aus.tralian Government until the maturity of such loans. Fourthly, the Papua New Guinea (Staffing Assistance) BUI introduces new staffing aid arrangements and provides for the elimination of the Australian Staffing Assistance Group, which covers approximately 2700 members. They will be encouraged to work not within the ASAG but rather directly for the Papua New Guinea Government. Finally, the Social Services Bill (No. 2) amends the Social Security Act to enable former residents of external territories to qualify for social services if they come to Australia to live. In other words, residence in a territory other than Norfolk Island, which at present is the subject of a royal commission, will count as residence within Australia to satisfy residential qualifications for Australian social services.
I reiterate, we are not opposed to these Bills for they bring about the sort of goal and aim that we shared with the Papua New Guinea Government under the leadership of Michael Somare and which this Australian Government has carried on. Our duty to the United Nations- and it was that- .Will be executed at midnight on 15 September. We Will have formally executed the United Nation mandate to advance Papua New Guinea politically, economically and socially. Throughout the constitutional process toward independence I have stressed that both the move to self government, which was agreed during our period in government, and this last step to independence were primarily motivated by decisions of the political leadership of Papua New Guinea and responded to by ourselves. It was not a decision imposed by the Australian Government.
So we come to the stage where what will be the primary importance in our relations is during the post-independent scene- from 16 September onwards. I have constantly reiterated in this House that there ought to have been more planning of those post-independence relations, that the move to independence ought not to have been a sudden break, that we should not have reached the date when suddenly both governments look at one another and say ‘How are we to relate with one another’, and that there should at least have been more evidence of the planning of this post-independence relationship between
Papua New Guinea and Australia than has been given in this House in the past.
I concede that in many instances it may be wise not to enter into a formal arrangement regarding those post-independence relations. It might be wiser to wait until Papua New Guinea is independent and executes her agreement to those relations or to whatever formal arrangements are to be entered into as an independent country so that there can be no accusation that she was coerced into those agreements before independence was reached. If this situation has been adhered to it has my full endorsement, but what I am troubled about is that leading up to that there might not have been within Australia the planning for those agreements to be entered into. That planning I would have hoped would have been carried out.
– I can assure you that there has been planning.
-I am aware that in the area of trade a great deal has been done. I assume that in the area of defence quite a considerable amount has been done. But little has been said publicly. In other areas, as I have reiterated time and again here, I have no evidence of the planning that ought to have been done being put before us. I do not wish to be churlish on this occasion. The overriding thought that preoccupies one on this occasion is not to think back so much -both the Prime Minister and myself have probably spent too much time doing that thinking back over our administrations and congratulating ourselves for what we have done- but what Papua New Guinea is going to do. We should be looking forward to her role as an independent country, taking her own role as a sovereign State in the world and as a member of the United Nations as separate from us as any other country. No longer is Papua to be a mere territory of Australia, no longer is New Guinea to be under the mandate of the United Nations. Papua New Guinea is to be a separate entity. There is a limit for all countries as to just how independent they can be one from another. The spirit of interdependence, particularly at a grievous economic time for the world, emphasises the need for countries to relate and co-operate together. There is no doubt that we will be the major provider of aid to Papua New Guinea. I would have hoped that the long term aid arrangements would also have been determined prior to independence. Regrettably that is not so.
In a speech that is a little more churlish than I had hoped- but as a result of some of the remarks that were made last week- I nevertheless give endorsement to the Bills and give endorsement overall to the administration by Australia of Papua New Guinea. I regret that members of the Australian Labor Party have too frequently in my view indulged in a degree of self congratulations that it is just they alone who ended the colonial role. In law that may be so, for in government they passed legislation providing for self government; but that legislation was planned by us. In law they are providing legislation in this House today for that independence; so in law it may be so but in fact it was a movement established and planned by us. However such arguments are not merely fatuous; they can indeed be dangerous. I have never believed that merely taking the role of the liberator was enough. What was and is more important is that the new nation has more than an even chance of survival. I am certain that it has because of the calibre of the leadership at present in Papua New Guinea. In the longer term it will be partially because of the relationship which we have developed with her. The talent of the Papua New Guinea leadership will take it a long way towards an effective independent state. The dearth of Australian assistance, however, may jeopardise that possibility. Nevertheless few if any administering powers have done as well. It is not just for Australian politicians to take the credit. Without Australian public servants and members of the Administration in Papua New Guinea and without the ability particularly of the Papua New Guinea leadership- the Papua New Guinea people supporting that leadership- we would not be viewing the satisfactory solution in this movement towards independence that we are today.
With all my reservations about the lack of preparedness for the post independence relations I wish nevertheless to conclude with congratulations to the Government of Papua New Guinea for the way in which it has received the powers that have been transferred. I express the wish that in its independent period as it looks to Asia, the Pacific or elsewhere, and that through the stresses and strains that it feels in the conduct of either its own domestic affairs or its international relations, it will look to Australia. Factors of geography and occasions of history ought to make us close. I hope that it is not merely verbiage today when I say that for we must wish them well in what is probably an endless adventure that they will embark upon on 16 September. They do so with the wholehearted support of both sides of the Parliament. Earlier I obtained leave to incorporate in Hansard a speech entitled ‘Future Relations Between Australia and Papua New Guinea ‘. I now do so. (The document read as follows)-
Address to the New South Wales Branch of the Australian Institute of International Affairs, Sydney, 8 June 1 972
I am very pleased to address the Institute of International Affairs tonight on future relations between Australia and Papua New Guinea. This is an important and timely subject. Australians need to adjust to the likelihood that Papua New Guinea, more quickly than many people expect, will cease to be a dependent Territory under Australia’s ultimate legal responsibility. Instead it will be our nearest independent neighbour. In the eyes of the world and particularly the nations in the Pacific, Papua New Guinea, with its 216 million inhabitants and its economic potential, will be a nation of consequence. I am taking this opportunity to offer some observations of future relations between our countries. In doing so I hope that informed discussion will be stimulated.
Recent political development in Papua New Guinea has seen the country moving rapidly to self-government and independence. Even now our relations with Papua New Guinea are being, and for some time have been, conducted with an eye to the development of Papua New Guinea as an independent nation.
Australian policies in Papua New Guinea and formal relationships between the two countries derive from the United Nations Charter and the Trusteeship Agreement between Australia and the General Assembly of the United Nations. Through these the Commonwealth Government accepted the obligation to promote the political, social, economic and educational advancement of Papua New Guinea and its progressive development towards internal self-government and ultimate independence in accordance with the freely expressed wishes of its people.
The Government’s policy is to help and encourage Papua New Guinea towards these goals. Self-government is a stage of political development short of independence in which Papua New Guinea Ministers will have full authority over a wide area, but not the full area, of government. There is no set rule for defining the powers over which a government needs to have full authority before it can be formally declared to be self-governing. This is matter for agreement between the Commonwealth and Papua New Guinea Governments. Normally control over defence and foreign affairs remains with the Metropolitan Government until independence.
The transfer of all powers at independence will mark a watershed in our relationship with Papua New Guinea. At this time our United Nations obligations will be discharged and Papua New Guinea will take its place as a member of the international community. A new set of relations based on respective national interests and taking into account political and geographical factors affecting both countries, will need to be established. The terms of this relationship will, I hope, be planned and some elements of it negotiated between our governments before the actual date of independence. We would be remiss if we found ourselves completing the independence of Papua New Guinea without adequate preparation for the post-independence period.
Independence should not represent a sudden break from one status to another. The Commonwealth has long held the view that there should be a smooth and orderly transition which establishes Papua New Guinea by the time of independence as a state able to manage its own affairs with a government responsive to the wishes of the people. There is a need to plan ahead to avoid the hangover that so often follows the intoxication of an emotional independence celebration.
The record of the Commonwealth in achieving a smooth and orderly transition is impressive. The Papua New Guinea Act was amended to empower the Minister for External Territories, at his discretion, to hand over functions of government to elected ministerial office-holders. In 1970 the first transfer of functions took place. It was more extensive than many people realise and took Papua New Guinea more than half way to self-government. The transfer included education (except tertiary), public health, tourism, cooperatives, business advisory services, workers’ compensation, industrial training, posts and telegraphs, internal revenue including taxation, price control, coastal shipping, civil defence, corrective institutions, conversion of customary land, leasing of land and town planning and urban development.
In the areas of government where the Commonwealth thus retains responsibility up to self-government and perhaps afterwards- for example defence and international relations- it will not exercise these residual responsibilities exclusively. Indeed, for some time now the Australian Government has been seeking the views of the Papua New Guinea Government on all important policy matters. It may be that the Government of Papua New Guinea would likely to be more closely involved in the exercise of some or all of the powers still retained by Australia, perhaps by the use of non-official spokesmen in the House of Assembly or by the creation of Parliamentary Subject Committees in these areas. Should this be the case the Australian Government would welcome such a request. Such a request could be discussed when talks are held between the Commonwealth and the Papua New Guinea Government later in the year. The effect would be that the Papua New Guinea Government would be involved well before independence in the full spectrum of government and not just in those areas for which it has final responsibility. This would facilitate the orderly and peaceful transition to which I have referred.
Papua New Guinea will, I am confident, avoid the dangers of excessive nationalism partly because Australia has not opposed the movement to independence and partly because Papua New Guinean leaders are not pre-occupied with independence to the exclusion of other goals. As I understand it they realise the importance of formulating and reaching an agreed consensus on the goals which the nation should pursue and the way in which it should pursue them so that it can put its independence to good use in the interests of its people. The National Development Programme which is to be prepared for the period 1973-78 will give expression to these goals and will constitute a firm framework within which they can be pursued.
In recent times most newly independent nations have undergone only a brief period of self-government before gaining full independence. It is imperative that this experience be kept in mind when decisions are being made about Papua New Guinea. It is imperative also that these decisions bear the full stamp of approval by the elected representatives of the people of Papua New Guinea, for these decisions will play a crucial part in future relations between Australia and Papua New Guinea.
I do not expect that the discharge of our international obligations at independence will result in a total reorientation of our relations with Papua New Guinea. True, we will no longer be legally responsible for the economic, social, political and educational advancement of the country, but our links are such that independence, arriving as a result of an orderly transition, at a time mutually agreed upon need not mean sudden severence or destruction of existing relations and the need to re-build from the ground up.
While Australia will remain important to Papua New Guinea, we should not seek to build an exclusive relationship based on a mistaken belief that past assistance places Papua New Guinea under an obligation to us. Looked at from Papua New Guinea’s point of view, Indonesia, Singapore, Malaysia, the Philippines and Japan, as well as the island nations of the Pacific, will have important places in the eyes of Papua New Guinea governments. Other governments will be seeking to assist Papua New Guinea. We will do well to recognise this. Not to do so might adversely affect both our and Papua New Guinea ‘s relations with third countries.
I cannot anticipate that there will be no divergences of interest after independence and that Papua New Guinea will not grow away from Australia. It may turn to other models of government, administrative organisation and even economic organisation.
Independence will not change some underlying factors affecting our future relations. Geography is one of them. Papua New Guinea is our closest neighbour and on independence will be our closest foreign neighbour. It is only natural that both our countries should want to be friendly with each other, because the actions of each are bound in important respects to affect the interests of the other.
Another factor in relations between Australia and Papua New Guinea is Australia’s aid contribution. The Commonwealth has given assurances that large-scale aid will continue after independence if it is requested. An important question for consideration by Australia, and for discussion in due course with the Papua New Guinea Government, will be the nature of aid which will continue after independence, and the extent to which the special position which Papua New Guinea now occupies as an aid recipient will continue. At present economic aid to Papua New Guinea forms a major part of Australia’s foreign aid, and is more than half Papua New Guinea’s total budget.
Few independent countries, even developed countries, are really wholly independent of other sovereign states. Dependency may take the form of trade ties, reliance on capital for investment, lack of vital raw materials, the need for defence arrangements or the need for technical assistance.
If there are to be changes in Australia’s aid pattern after independence these need to be considered and agreed to before then. Some of the questions to be answered include; the extent to which financial aid should be fully on a project basis, or whether as now some of it should be devoted to supporting an annual or multi-annual program of expenditure, whether there should continue to be oversight of project aid, whether Papua New Guinea products will continue to have preferential access to the Australian market, and whether Commonwealth assistance by way of guarantee of Papua New Guinea’s international loans and through encouragement of investment will continue. Until such time as Papua New Guinea becomes a full member in its own right of international bodies which provides assistance to developing countries, such as the IBRD and the IDA, Australia will continue to act as guarantor for Papua New Guinea. This will be the case even for loans entered into now and extended beyond independence.
In my view, it could not be contemplated that the formal termination of Australia’s obligations to Papua New Guinea under the UN Charter when Papua New Guinea becomes independent will mean that Papua New Guinea will cease to occupy a somewhat special position in Australian eyes. At the same time the Australian Government has made it clear that it looks to Papua New Guinea to progressively increase its financial self-reliance by raising the level of its domestic revenue. In this connection Australia’s aim in Papua New Guinea has been to maintain or increase the pace of economic development so as to increase the country’s financial self-reliance and build up its capacity to pay its own way and reduce its dependence on outside aid. We will continue to do this, but despite our best efforts Papua New Guinea is likely to be heavily dependent on foreign aid after independence.
Existing trading arrangements have long facilitated Papua New Guinea’s access to the Australian market. Papua New Guinea is Australia’s fifth largest export market and Australia provides Papua New Guinea with its largest market for her exports. An important factor in this latter situation is the special treatment which Australia grants imports from Papua New Guinea on items such as coffee, rubber, desiccated coconut, plywood and veneers, passionfruit juice and pulp, peanuts and a range of timber products. These arrangements provide an assured market for Papua New Guinea produce and assist economic development.
The continuation of this system and agreement on measures to broaden it after independence could help to encourage further private investment in these industries in the interests of mutually beneficial commercial relations. Already there is substantial Australian investment in Papua New Guinea and undoubtedly there are ample opportunities for Australian businessmen to participate in new ventures in Papua New Guinea with Papua New Guineans as equity partners, managers and employees of new enterprises.
At present the Australian Government is conducting a comprehensive review of Papua New Guinea defence, including the size and shape of the local defence forces, the nature of the command and defence organisation to be developed, and ways and means of promoting closer contact and understanding between Australia and Papua New Guinean defence authorities.
The Commonwealth will give every assistance to ensure that the establishment of Papua New Guinean forces is kept at a level suitable to the people of Papua New Guinea and Australian support in matters of defence will continue. In the meantime, the PIR and the Papua New Guinea Division of the Royal Australian Navy are being steadily prepared, including the necessary personnel, organisational and administrative requirements, to meet the needs of Papua New Guinea.
I have mentioned before the possibility of assistance to Papua New Guinea from other countries or sources. The Australian Government has already taken steps in this direction by arranging for Papua New Guinea to obtain loans from the World Bank and by promoting its membership of the Asian Development Bank. Other countries may well wish to direct some portion of their overseas aid towards Papua New Guinea. The Government of Papua New Guinea would no doubt wish to examine such proposals.
I presume its attitude would depend on all sorts of factors which it would weigh-up at the time. Obviously one of these factors will be the terms and conditions of such assistance. But personally 1 see no reason why Papua New Guinea should not welcome assistance from other donors. There might even be occasions when Australia and another country might undertake to assist a Papua New Guinea project together. Certainly some of Papua New Guinea’s natural resources have such a potential that their development might best be financed by such an arrangement.
There is an increasing tendency in this sphere of international aid for a number of countries to join together in a consultative group to place their assistance to a particular under-developed country on a well-planned basis. It is not impossible to imagine such an arrangement being made for an independent Papua New Guinea. Obviously the Australian attitude to taking part in this sort of development would have to be determined by the Government of the day.
As well as economic aid and defence relationships, there is already a significant and developing relationship between Australia and Papua New Guinea in manpower and training- not to mention the very close personal relationships which exist between many hundreds, indeed thousands, of Papua New Guineans and Australians.
To the extent that Papua New Guinea needs and asks for our continued assistance, we will endeavour to provide it. The Papua New Guinea authorities have left us in no doubt that they need and welcome Australian skills and enterprises.
We will also assist Papua New Guinea to train its own people to take responsibility both in government and private enterprise. The greater pan of this training effort must be undertaken in the country itself and Australia has already given its aid and support to the development of the University of Papua New Guinea, the Institute of Technology, the Administrative College and numerous other institutions of learning and training within Papua New Guinea itself. We have in addition, in co-operation with the Papua New Guinea authorities, launched a special priority training effort in Australia to help bridge the gap between needs and demands for skilled and experienced people.
In this context as well as imparting needed skills our objective is to foster a warm regard for Australia and Australians. We will need to establish relationships at independence, based on complete equality and mutual respect and understanding. This will be done against a background of close involvement built up over the years. More visits between the peoples of the two countries, more exchanges, will help in developing this understanding.
We will continue to look at new ways and means by which Papua New Guinea can be assisted by Australia in these and other fields. I would hope that in our relationships with Papua New Guinea we do not cling too much to formality. I would hope that we do not establish, on independence, a massive aid structure that gets in the way of those concerned to get on with the job.
On the Australian Government side, the main Commonwealth departments and statutory organisations should have capacity to provide short-term manpower advice on quite an informal basis. Ministers and Heads of Departments in both Papua New Guinea and Australia should be ‘on visiting terms ‘ for discussion of mutual problems.
Other Commonwealth departments should be geared to provide services on a contract basis and likewise private enterprise should gear itself to be able to respond quickly and informally to Papua New Guinea requests.
The closer Papua New Guinea moves towards independence, the greater the need for it to produce trained men and women expert in foreign relations. This year there are seven Papua Guinean trainees undergoing courses in Australia. This number will be increased in the future.
I have tried to give you some idea of the main issues which I see playing a role in our future relations with an independent Papua New Guinea. Much of what I have said has yet to be resolved by the Government of Papua New Guinea in consultation with the Australian Government. However, I would like to repeat that the attainment of independence will not alter Australia’s intention if called upon to further assist the development of Papua New Guinea and to continue aid and maintain sufficient numbers of trained Australian personnel in the country until Papua New Guinea is sufficiently self-reliant to stand firmly on its own feet.
It is necessary to distinguish between Australia’s relations with Papua New Guinea and Papua New Guinea’s own foreign relations. We have to determine our relations with Papua New Guinea with proper regard to Australia’s own national interests. We should expect Papua New Guinea to do the same. In particular, we should not expect Papua New Guinea to look to us to decide what her national interests are. Nor as I have said earlier should we expect that Papua New
Guinea’s national interests will not over the years, as they are better denned and as Papua New Guinean political leaders become more conscious of them, more and more diverge from Australia ‘s. There will undoubtedly be a residual common interest. If mutual respect accompanies it, if we can succeed in avoiding gratuitous insults to Papua New Guinea’s nationhood and sovereignty, then that residual common interest will be of great importance.
It will I hope be clear to you that in my view Australia should seek a long term relationship of a special quality, a relationship between two independent countries which is based on friendliness, informality, mutual respect and understanding and a breadth of contact, not just one confined to diplomatic channels- a relationship which recognises the depth of our common national interests and which will be enriched by the loosening of legal ties.
-I call the Minister for Defence.
- Mr Deputy Speaker -
– Does this close the debate?
-No, I am not closing the debate. For those with a sense of history the Papua New Guinea Independence Bill, is an historic event. For those with a sense of justice, for those who believe in the exercise of political rights by all people irrespective of race or creed it is a moment of achievement. As the Papua New Guinea Independence Bill simply states:
On the expiration of the day preceding Independence Day, Australia ceases to have any sovereignty, sovereign rights or rights of administration in respect of or appertaining to the whole or any part of Papua New Guinea.
The Bill also states: . . . on 16 September 1975 Papua New Guinea is to become an independent sovereign state by the name of the independent State of Papua New Guinea, having a constitution established, adopted and given to themselves by the people of Papua New Guinea acting through their Constituent Assembly.
The Bills we are now considering bring to a close a chapter of Australia’s history that is as long as Federation itself. Nearly three-quarters of a century ago this Parliament began its direct involvement in the affairs of Papua New Guinea. I suppose that this is one of the occasions on which those of us who have been associated with the movement of Papua New Guinea through self-government and on to independence may reflect on the things that have happened to us in our administration. I would like to recall a statement that was made 30 years ago by Mr Eddie Ward, a Minister for External Territories. On 4 July 1945 in introducing the Papua-New Guinea Provisional Administration Bill he had this to say:
This Government is not satisfied that sufficient interest had been taken in the Territories prior to the Japanese invasion, or that adequate funds had been provided for their development and the advancement of the native inhabitants. Apart from the debt of gratitude that the people of Australia owe to the natives of the Territory, the Government regards it as its bounden duty to further to the utmost the advancement of the natives, and considers that that can be achieved only by providing facilities for better health, better education and for a greater participation by the natives in the wealth of their country and eventually in its government . . .
So today we are seeing the very last step in the promise that was made some 30 years ago by a former Labor Party Minister for External Territories.
I do not wish to dwell on the past, but I want to raise some of the problems- and they are problems- that will confront the relationship between Australia and Papua New Guinea. I believe that it is the very closeness of our relations that can create problems. The Australian Government recognises that Papua New Guinea will continue to occupy a very special position in Australia’s policy but we do not see Australia as seeking or asserting an exclusive relationship with Papua New Guinea. There is an old Malaysian proverb which says that even good friends must keep their distance. Papua New Guinea will want to find its own place in the international community. It will want to determine its own relations with Australia, with due regard to its own interests, and Australia will want to do the same. There could be conflicts of interest, but the test of our friendship will be the amicable resolution of those conflicts.
I regret to say that there has been a difference of opinion that has been exploited for very narrow political purposes. I do not want to be churlish on this occasion but I believe that the Opposition was excessively churlish in seeking to exploit a situation of only a couple of weeks ago when Australia quite properly had to make a decision in terms of its entire Budget and as part of that decision on parts of that Budget. One of our concerns- and these are the areas that any 2 countries will get into a difference of opinion about, and I think it is important that any responsible member of this House should seek not to exacerbate such differences- is that we have provided and will continue to provide Papua New Guinea with a very substantial and very significant amount of aid. No country receives more aid per capita than Papua New Guinea.
One of the areas of difficulty has been in interpretation of a very generous offer that the Australian Government made to Papua New Guinea in 1 974 when we said that we would provide $500m over 3 years. We expressly pointed out that $500m would be aid in one form or another over the 3-year period commencing in 1974-75. I want to make it very clear to the House and to the people in Papua New Guinea who have been deliberately misled by the intervention of the Opposition on this issue that we have maintained that promise. In fact, to date- in 2 years of the 3-year period- we have provided two-thirds or $38 1.3m worth of economic and social aid. In addition to that, of course, there is defence aid which is not included in the figure of $500m. What I want to point out, and what I want to make clear, is that we regret that there has been a misunderstanding between our governments over this matter. We have always considered the $500m to be an all-up sum for social and economic aid in one form or another. With the permission of the House I seek leave to incorporate in Hansard a letter from the Prime Minister (Mr Whitlam) dated 28 February 1974 to the Chief Minister of Papua New Guinea which spells out very clearly the nature of the commitment of Papua New Guinea.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
My dear Chief Minister,
I am writing to you on behalf of the Australian Government in relation to Australian aid following upon our talks at Kirribilli House on 18 February.
You will recall that our discussions were held in the context of assurances which I had given on several occasions during 1973 as to the continuance of Australian aid to Papua New Guinea in the period after independence.
At our talks you referred to the importance of these assurances to Papua New Guinea in the early years after independence. I wish to confirm that from independence a united Papua New Guinea will continue to have first call on Australia’s expanding external aid program in future and, in particular, that Papua New Guinea can count on continuing to receive substantial amounts of aid from Australia over the next three years to underpin its new Improvement Program and to assist Papua New Guinea in the early years after independence.
Of course Ministers of both our Governements recognised during our discussions that there were many factors which would have an impact on Papua New Guinea’s need for aid in the immediate future. I have, however, discussed with my colleagues your request for some quantification of Australia’s assurances. In view of the imminence of independence I am writing now, on behalf of the Australian Government, to inform you that on the basis of present indications a united Papua New Guinea can proceed on the assumption that Australia will provide a total of at least $500m of expenditure on economic and social aid in one form or another over the three year period commencing in 1974-75.
I would stress that this figure merely reflects an assessment of what it is possible to anticipate at the present time. As in the past, the actual amounts of aid to be provided to Papua New Guinea in each financial year will continue to be determined on an annual basis in the light of prevailing circumstances in Papua New Guinea. You will recall that you and your Ministerial colleagues confirmed at our talks that for your part you regarded increasing financial self-reliance as a vital goal and would be developing policies to achieve this.
You may take this letter as a statement of the Australian Government’s position in regard to the continuance of Australian aid to Papua New Guinea.
Yours sincerely, E.G. WHITLAM
-I understand that the Chief Minister of Papua New Guinea, Mr Somare, said in the House of Assembly last week that the honourable member for Kooyong (Mr Peacock) had assured his Government that the employment security payments were never considered as aid by the Liberal-Country Party Government when in government. If Mr Somare was correctly reported, and if the honourable member for Kooyong in fact gave him that assurance, I regret that the honourable member is apparently trying to make short term political capital and is indulging in cheap grand-standing over the situation. His assurance is certainly not borne out by the facts. In a statement that he issued as Minister for External Territories on 27 October 1972 he said that both the then Australian Government and the Papua New Guinea Government had accepted the Simpson report, the report which gave rise to the employment security scheme, in principle and, with minor exceptions which do not concern us today, the whole of the reports recommendations.
I would like to refer to some of the recommendations contained in the Simpson report, which was accepted by the honourable member for Kooyong and by the Chief Minister at that stage. s Paragraph 102 (1) (d) refers to payments of emoluments to former Commonwealth employees in Papua New Guinea and says: … it would be reasonable that such payments be taken into account for fixing the level of Australia’s future aid to Papua New Guinea.
Further on in the cost considerations, in paragraph 108, it says:
As I have said elsewhere in my report, it would be reasonable for the Commonwealth to take into account in fixing future aid to Papua New Guinea the costs involved under the employment security and future staffing arrangements I have recommended.
So the statement made by the honourable member for Kooyong in supporting the recommendations of the Simpson report is very clear.
Moreover, the government of the day, of which the honourable member for Kooyong was the Minister for External Territories, in laying down its Budget for 1972-73 included the total sum of $ 143m- I am taking this from Table 3, expenditures on aid to Papua New Guinea- an item entitled ‘termination and retirement benefits of overseas officers formerly employed by the Papua New Guinea Government’ for the sum of $2. 8m. I mention this because it is a matter of regret that short term political advantage was sought to be made out of exploiting the situation. I might say as the person who was responsible for the offer of $500m at Kirribilli House meeting in 1974 in the presence of the Prime Minister, the Treasurer, the Australian Minister for Foreign Affairs, the Chief Minister of Papua New Guinea, the Minister for Finance of Papua New Guinea, and the Minister for Foreign Relations of Papua New Guinea as he then was, when I put forward that figure of $500m it was very clear in my mind, on the basis of the precedents that had been established by the previous Government, that the employment security scheme that the payments were included in the aid. So that is the background. That is our very firm belief. It is a firm belief based of facts that had been provided in the aid programs of the previous government and also in the statements that were made by the previous government, and certainly in statements made by us.
We come now to a point at which Australia is no longer a colonial power. I suppose we can look back a little at the people- not just the politicianswho have striven to make this possible, to provide the people of Papua New Guinea with the opportunity to measure their own steps, to decide their own fate in their own way. I mention an old Persian saying that only your own fingers can find the itch. Every country will go about finding its own itch in its own way. We may think that they do not do it terribly effectively. Equally they may think that we do not find our itch effectively. But it is a vital part of the role of mankind to be able to make his own mistakes in his own way, if that is the way it goes, but certainly to try to find his own destiny in a way that suits his judgment.
As of the expiration of 1 5 September Australia will no longer be a colonial power. I believe that this is a very significant moment for all of us as Australians and particularly for those of us who have played a part in the evolvement of an independent state of Papua New Guinea. I would particularly like to mention a number of Australian public servants who over the years as members of the Papua New Guinea Public Service have dedicated themselves to working for the good of a people of another country. I suppose that this always smacks of paternalism and that in many ways there was a large element of paternalism about our colonialism. There is always an element of paternalism about colonialism. But this vast line of people was dedicated to the objective of bringing about economic and social developments in Papua New Guinea for the benefit of the people of Papua New Guinea.
It is impossible to name all of them. I think that I can say on behalf of both the Government and Opposition that we thank them for their contribution to the vitality and viability of a Papua New Guinea entering into independence. Personally I think that I can associate the honourable member for Kooyong with this- I would like to thank a gentleman who is in the House this afternoon for his continued dedication. I refer to Mr Alan Kerr who has followed through from the Department of External Territories to the Papua New Guinea Office of the Department of Foreign Affairs and who has worked closely with me over the last 18 months. I thank him for his dedication and for his deep and abiding interest in the problems of Papua New Guinea. I thank also those who left in the normal effluxion of time; John Greenwell who is now in the Attorney-General’s Department; Miss Douglas who is still in the Papua New Guinea Office; and a lot of people who have put their all into making all these things come about. This House has a debt of gratitude to pay to the public servants who have acted in this way for so long.
We are moving through the list of Bills. I am very glad that the Opposition has seen fit to support the Bills. I believe that all of us wish the people and the Government of Papua New Guinea health and strength in undertaking the enormous task of being responsible for their own government and their own administration.
– I wish to support the shadow Minister for Foreign Affairs, the honourable member for Kooyong, Mr Andrew Peacock, on the remarks which he made during his speech. I wanted to speak in this debate today because I believe that it is an important- in fact one might say almost a momentous- occasion. On 16 September Papua New Guinea, our nearest neighbour, will become an independent nation. I am surprised from looking at the list of speakers that apparently the only honourable member on the Government side to speak on this subject is the Minister for Defence (Mr Morrison). I am sorry that he has endeavoured to make political capital out of such an occasion.
Australians have a particular place in their hearts for Papua New Guinea. During the 1939-45 war many Australians gave their lives fighting the Japanese invaders in Papua New Guinea. They turned the tide, threw the Japanese out and saved not only Papua New
Guinea but also Australia. I first visited Papua New Guinea in the early 1960s and, since becoming a member of this Parliament, have visited that country on numerous occasions. I have grown to like the people I have met and have learned to know. I have visited and talked to children in schools and was surprised at first to see that they knew as much as or more than thenAustralian counterparts about the various systems of government. I” believe that this augurs well for the future political stability of Papua New Guinea.
I stood at dawn one Anzac morning at Alatau at Milne Bay where the first Australian soldier was shot in that area by the Japanese. I could not help but think that had he and the many others who lost their lives in Papua New Guinea been alive today they would have lived over half a life span and would have contributed much to the development of our own country. As it was, they contributed in another way.
As a result of the 1 939- 1 945 War, Australians and Papua New Guineans have a link of respect and friendship which was forged with the blood of the New Guinea campaign. Never let us as a nation forget this. Australia has done a great deal for Papua New Guinea in the short time available to bring it to independence. Australia can hold its head high among the nations of the world in this regard. Even though the Minister for Defence has described us as a colonial power, we were not a colonial power in the true sense of the term. If we were such, we were a very benevolent colonial power. What we did in Papua New Guinea, we did in the interests of that country and its people and not in our own direct interest, although of course it is in our interest to have a stable and viable nation as our nextdoor neighbour.
We can be proud of our record. True, there have been Australians in Papua New Guinea- I have met some of them- of whom we would not be proud, but they have been very much in the minority. The Australian official, be he Administrator or kiap, was there essentially to help the Papuan and the New Guinean learn to live with the twentieth century. He has done a magnificent job. In a few weeks time Papua New Guinea will become an independent nation. All Australians will wish it well. Papua New Guinea has been most fortunate in having as its Chief Minister, and very shortly its Prime Minister, Michael Somare, a dedicated leader who has done much to prepare his country for the role it must play in the community of nations. I congratulate the shadow Minister for Foreign Affairs, the honourable member for Kooyong, on the good rapport that he has set up with the future Prime Minister of Papua New Guinea. I think that when the Opposition comes back into government our relationship with Mr Somare will be an excellent one.
There are and will continue to be a number of problems which face Papua New Guinea as it becomes an independent nation. One is economic. The Australian Government does not feel able to give Papua New Guinea more than a $2 10m allocation from the Australian Budget this year. The Minister for Defence has made excuses or given reasons, according to which way you look at it, for this allocation. As Australia’s grant includes $49m for the employment security scheme for expatriate Australian public servants who are losing their jobs because of Papua New Guinea’s independence, it is even less than it appears. It is indeed regrettable that the grant is not larger. Much remains to be done in that country if it is to continue to grow and to prosper. There are very strong humanitarian reasons for increasing our overseas aid to Papua New Guinea, and one cannot help contrasting the attitude of the Australian Labor Party to overseas aid now that it is in government with its attitude when it was in Opposition. I hope that those people who took part in Action for World Development during the 1 972 election campaign when the Liberal and Country Parties were in government Will take note.
The Papua New Guinea Government faces problems of a serious nature during its formative years. I do not believe that there is a real threat of secession by Papua, but the position with Bougainville may prove to be quite different. Bougainville, with the Conzinc Riotinto of Australia Ltd copper mine at Panguna, is now a wealthy island, and one can understand the people of Bougainville saying: ‘Why should we contribute to keeping the rest of Papua New Guinea?’ If Papua New Guinea is to grow to nationhood it must do so as a strong and united country. With so much to be spent on development, it is likely that Papua New Guinea will have little left over to provide for its defence. Australia may well need to offer special assistance and training in this regard. It is only a matter of months ago that this Government and its then Minister for Defence were telling us: ‘Don’t worry. There is no threat to Australia for at least 15 years.’ How hollow those words sound today, with a CiVil war raging close to Australia ‘s shores in Portuguese Timor! Many people believe that the Union of Soviet Socialist Republics has Supplied arms to the pro-communist Fretilin movement in Portuguese Timor in the hope of obtaining bases in the area if Fretilin is successful. Portuguese Timor is frighteningly close to Papua New Guinea. It is also frighteningly close to Australia. With a left wing government in Timor, the USSR might well aim to extend its influence into Papua New Guinea. Any moves in this direction would need to be watched carefully by both the Australian Government and the Papua New Guinea Government.
What of Australia’s future relationship with Papua New Guinea? Australia stands in a special relationship to that country. It is of the greatest importance to Australia that we have a strong, friendly, economically viable Papua New Guinea as our neighbour. We must still be prepared to stand by with help, assistance and expertise if we are asked for them. We must continue to channel a large percentage of our overseas aid to Papua New Guinea. We must build up trading relations between our 2 countries. Papua New Guinea exports should be given most favoured treatment in Australia. For many years we have been pouring money into Papua New Guinea but have continued to buy such imports as tea from India and Ceylon and coffee and cocoa from South America, and one could go on and on. I would to see Australia take positive steps to let imports from Papua New Guinea which do not compete with Australian products enter Australia free of duty. I put this proposition to the Deputy Prime Minister, or the ex-Deputy Prime Minister- it is difficult to keep up with them at the moment- the honourable member for Lalor (Dr J. F. Cairns), at one time. He promised to look into it, but I have heard nothing further from him. Not only would this sort of action be of substantial help to the Papua New Guinea economy, but it would draw the 2 nations even closer together. The more trade we have, the closer we will become.
I commend the governments of Australia, both present and past, for what has been achieved in bringing Papua New Guinea to nationhood and independence. No doubt there are many problems ahead for Papua New Guinea, and they probably Will be great problems. I believe that there is immense goodwill and great affection in Australia towards the new independent nation to our north. I am sure that I am expressing the view of all Australians when I say that we wish Papua New Guinea well in the future.
-Mr Deputy Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– I claim to have been misrepresented by the Minister for Defence (Mr Morrison). It is a great pity that the debate on this legislation happens to be the most acrimonious debate on Papua New Guinea affairs for some time. The Minister- I ask the House to recall this- accused both the Chief Minister of Papua New Guinea, Mr Michael Somare, and myself of grandstanding and seeking to make mere political capital. What he said relates to Mr Michael Somare as it does to me. He incorporated in Hansard a letter from the Prime Minister (Mr Whitlam) which was the basis of bis remarks about guaranteeing Papua New Guinea $500m. I quote -
- Mr Deputy Speaker, I raise a point of order. May I suggest that the honourable member point out, as he is required to do under the Standing Orders, where he was misrepresented.
– I think the honourable member for Kooyong was getting around to it.
-Yes, I was. The basis of the attack by the Minister was the incorporated letter about giving $500m to Papua New Guinea. The letter said, among other things, that Australia would guarantee $500m for expenditure on economic and social aid for Papua New Guinea. The Minister for Defence accused me of saying that moneys funded under the employment security scheme should have been separate from the amounts of aid granted to Papua New Guinea. I stand by that statement. I instituted the Simpson inquiry when I was the Minister. I put the report to the Cabinet. I am the only person in this House at the moment, other than the advisers, who can speak with authority. I know the discussions that occurred with representatives of the Treasury, and I know the discussions that occurred between Mr Somare and myself. If the Minister likes to regard golden handshake payments as economic or social aid to Papua New Guinea, then it is the most twisted definition of aid ‘ that I have ever heard.
Mr DEPUTY SPEAKER (Mr MartinOrder! I think the honourable member is getting away from his personal explanation.
-I am about to conclude. That money goes to Australian expatriates who are returning to Australia,’ it does not go to Papua New Guinea. Upon retirement those people retire with moneys funded to them under the employment security scheme. It should never be considered as aid to Papua New Guinea. It comes through their pockets back to Australia. To associate me with a program which incorporates any aid to Papua New Guinea is not only deceitful but also is totally wrong. In attacking me the Minister attacks the Chief Minister of Papua New Guinea. He and I liaised in 1972 on this question and agreed on the form of presentation of the statement the Minister read. In that statement those factors are taken into account, but they are not claimed to be economic or social aid. I ask that the Minister withdraw the remarks he made in this Parliament about both me and the Chief Minister. Those remarks were wrong, deceitful, misleading and inaccurate in claiming that that aid given by this Government should incorporate payments under the employment security scheme.
Mr MORRISON (St George-Minister for Defence)- I wish to make a personal explanation.
-Does the Minister claim to have been misrepresented?
-Yes. In regard to the expenditure on aid to Papua New Guinea in 1972 when the honourable member for Kooyong (Mr Peacock) was Minister for External Territories and in support of my contention that these payments were included in aid, I would like to quote very quickly the explanation / / given at the time for the inclusion in the aid program of an item entitled ‘Termination and Retirement Benefits ‘. The explanation was:
Payments of salaries and allowances in respect of members of the Australian Starting Assistance Group will be increased by $8.6m in 1973-74 reflecting-
– That is during your period in government. You are contrasting actual expenditure for the previous year with when you were in government, 1972-73,
-In 1972-73 $2.8m was allocated. The explanation continues: . . . reflecting in part the increased financial responsibilities of the Australian Government arising out of the adoption of most of the recommendations in the Simpson report regarding employment security for expatriate officers of the Public Service in Papua New Guinea. (Quorum formed)
– I endorse the comments of the honourable member for Kooyong (Mr Peacock). I agree with him that it is most regrettable that the debate on this subject should have been clouded as it has been with the acrimonious argument about the nature of Australia’s grants to Papua New Guinea. I also endorse the comment of the honourable member for Kooyong that it is not justifiable for Australia to include in its aid grant a sum of money which will largely be spent by Australians in Australia. I think that when we are talking about the quantity of Australia ‘s aid that we have nothing great to brag about with respect to our contributions to Papua New Guinea or our foreign aid program as a whole. I also endorse the original remarks of the honourable member for Kooyong when he gave credit to the right honourable member for Higgins (Mr Gorton) for his role when he was Prime Minister. It was an important role and not the least of the important decisions he made was the appointment of Mr Les Johnson as Administrator of Papua New Guinea. This was a major factor in the peaceful transition to self-government and then to independence.
Another major factor, as will be seen by historians, in the transition was the rapport which was developed between the honourable member for Kooyong when he was Minister for External Territories and the Chief Minister of Papua New Guinea, Mr Somare. It was a major factor in bringing about the peaceful atmosphere in which the transition took place. This is not an occasion, however, for major congratulations to persons in this Parliament or in the administration in Canberra. As the honourable member for Kooyong pointed out, it is certainly not an occasion for congratulation of the Labor Party. I recall very vividly living and working in Papua New Guinea in 1965 when the then Deputy Leader of the Opposition, the present Prime Minister (Mr Whitlam), went to a seminar at Goroka and was highly provocative as far as the people of Papua New Guinea were concerned when he said that he would be shocked if Papua New Guinea did not have independence by 1970. That reckless statement caused enormous perturbation throughout the Territory. The fact is that the Labor Party has always wanted to overlook the history of Australia ‘s involvement in Papua New Guinea. Whether on hindsight we now think it was an appropriate relationship is quite irrelevant to the responsibilities which governments have and which alternative governments have. It was a constant theme in Labor Party proposals for Papua New Guinea that it was an embarrassment to have so-called colonial rule. It was the prime motivation for expediting the program for self-government and independence rather than any thoughts of the welfare of Papua New Guinea.
There was a statement made earlier by the Minister for Aboriginal Affairs (Mr Les Johnson) by way of interjection criticising the slow rate of progress made by previous LiberalCountry Party government. In my opinion there was much to criticise about some of the previous decisions, but it certainly was important to see historically that the policy of Mr Hasluck, now Sir Paul Hasluck, was a POliCy of gradualism. It was soundly based. The discussion which has to some extent gone on in this debate has overlooked that fact. The Minister for Defence (Mr Morrison) said that there would continue to be on the part of Australia substantial and significant amounts of aid to Papua New Guinea. So there should. The Minister also said that this represents the largest proportion of our foreign aid grants. So it should and so it should continue to be. The adequacy of our total foreign aid is quite a different question but, regardless of total aid, our aid to Papua New Guinea must be quantitatively high.
I agree with the Minister who said that we expect Papua New Guinea to form other friends. Of course it Will and it will get other sources of aid. So it should. We in Australia must expect that there Will be a period in which Papua New Guinea will follow the experiences of other colonial or semi-colonial countries in forming friends away from its former colonial master but in time I think it is fair to expect that our relationship with Papua New Guinea will be one of a special nature. The Minister made some play of the significance of Australia not being a colonial power any longer. I have mentioned the curious history that has surrounded Australia ‘s involvement in Papua New Guinea. I do not think even the judgment we would make with hindsight would justify the beating of a very hasty retreat and certainly would not justify any attitude of the future which would in any way downgrade our moral and material responsibilities there.
If names are to be named- the Minister did mention some- one ought to note the irony of the fact that in today’s newspapers there was reported the death of Sir Donald Cleland who was for 14 years the Administrator of Papua New Guinea. He was part of a long Une of administrators, going back to Sir Hubert Murray.
I think it is most fitting that in this Parliament we pay tribute to the Australian men and women who were on the field staff. Having stayed and worked with them over a 3-year period I may say that these people often worked with enormous handicaps inspired by Canberra- not always from the ministerial side, but certainly from the bureaucratic side. The recent difference between Australia and Papua New Guinea which has been the subject of debate between the Minister for Defence and the shadow Minister for Foreign Affairs has been most regrettable. It is a shame that the matter has clouded this debate. There ought not to be a repetition of that in any further dealings between the 2 countries. We do have that special relationship and that moral obligation.
All that we can do today is to send our best wishes and the best wishes of the Australian people to Mr Somare and his Government. Papua New Guinea and Australia are lucky that it was Mr Somare ‘s coalition which came to power and that they did not remain in opposition. Had they done so, regardless of the sensitivity of the now shadow Minister- the former Minister- it would not have been possible to have brought about this same peaceful transition with this speed. In 1964 when the first House of Assembly was established some of those who are now in the Cabinet were then emerging as young leaders. Some of them were then in the Cabinet. But the country, with its huge problems certainly is in the best possible hands. All Australians will wish the people of Papua New Guinea well and will expect that wish to be backed by appropriate Government assistance at all times.
-I should like to associate the National Country Party with what I see as a very important part of the development of Papua New Guinea as an independent nation. I think it is interesting to look back at the origins of Australian association with the move that will be finalised by the passage of this legislation through the Australian Parliament. In opening the twenty-sixth Australian Parliament on 12 March 1968 the then Governor-General, Lord Casey, included in his appeal the following statement on the future of the Territory of Papua New Guinea:
The destiny of Papua and New Guinea is to become a selfgoverning country developed for independence if and when it is clearly demonstrated by the majority of the indigenous population that this is what they wish. My government’s basic policy for Papua and New Guinea is therefore to develop it for self-determination. Whether some subsequent special relationship with Australia is worked out, and what such a special relationship might be, can only be worked out in the future between the then Government of a selfgoverning Papua and New Guinea and the then government of Australia. But my government believes that the development of Papua and New Guinea as a seventh State of Australia is fraught with difficulties, and that statehood as against selfgovernment is not likely to be the outcome of development.
I do not wish to refer further to that statement by Lord Casey but, before turning to some of the historical associations that Papua New Guinea has with Europeans and with Australia, I did want to advert to 2 parts of that statement. The first is his reference to the necessity for a subsequent special relationship to be worked out by the then government of Papua New Guinea and the then government of Australia. Essentially it is in that area that I think the debate this afternoon needs to be concentrated. However, before adverting to the products of that special relationship and its prospects I want to look at some of the past and some of the developments of the past.
The history of Papua New Guinea before European contact is interesting. Papua New Guinea was known to the outside world, particularly in India, China and Malaya, well before Magellan entered the Pacific. There the plumes of the birds of paradise were coveted. Papua New Guinea is the world ‘s second largest island, and as such and because of its location in the South Pacific it was frequently raided for slaves by traders in the very early days of European contact. It was first seen by Portuguese Jorge de Meneses in 1526.
– Do we have to listen to this?
– I do not mind whether or not the Minister wants to listen to what I am saying. It has been quite apparent that the Minister at the table has no interest in the past or the present. In the deplorable exercise of the presentation of the present Budget the Government has established a most peculiar special relationship. It reflects little credit on the man who for a short time remains a member of the Ministry that he denigrates anybody who tries to look at the past as well as the future.
– Let us get up to 1 972.
-I should be very happy to discuss the matter with the Minister at any time when he might be sensible. The main contact with Papua New Guinea came between the 16th and the 19th centuries with the Dutch traders. The first attempt at colonisation was by John Hayes in 1793. So from the very earliest time there was a contact which was really based on trade. It is on that aspect that I wanted to talk about the association of my colleague, the former Minister responsible for the Territory of Papua New Guinea- the Minister for External Territories, the honourable Ceb Barnes- for it was during his time as Minister that the association of commercial development with political development became paramount. I believe that he, together with Sir Paul Hasluck, was instrumental in enabling the very marked and rapid development of Papua New Guinea to the point which we have reached with this measure in this House today.
It is important that we recognise that in the succession of those 3 Ministers- Sir Paul Hasluck, his successor, Mr Ceb Barnes, and then Mr Andrew Peacock, the present member for Kooyong- the groundwork was laid for a very worthwhile special relationship with Papua New Guinea. Of course, it was also promoted by men such as Mr Hubert Murray and Sir Donald Cleland who, as my colleague said a few moments ago, died yesterday. Both of them as Administrators and those many other distinguished Australians who served in Papua New Guinea as Administrators, plus those many other distinguished civil servants who went from Australia to serve in the then Territory, helped to contribute towards an understanding between our countries which one might have thought would have served us well in the future. Unfortunately, the economic policies and the neocolonial policies of the present Government tend in many ways to detract from what might otherwise have been quite a promising relationship which would have enabled, in my view, the development of peace, harmony and understanding. Whether that will continue because of what appears to be the necessity for Papua New Guinea to look other than to Australia for assistance will depend very much on what happens over the course of the next 6 months. But I see aspects in the past and in the associations of the past that need to be looked at.
It was in the development of responsibilities after World War I that Australia really became more closely identified with what was then the German colony of New Guinea. It is history that the Versailles Treaty and the League of Nations passed on the Territory of New Guinea as a mandated territory and then, in 1946, as a United Nations trust territory. Australia ‘s sovereignty there ends completely in less than a month, but our responsibility does not end then. Until now Australia has been a colonial power. It has acted reasonably responsibly: It has been more than reasonably responsible in many areas and, tragically, less than reasonably responsible over the last 2V4 years. Perhaps we could have done more in many areas but there have been problems- there have been wars and there have been economic problems within Australia.
Since our first official contact with Papua in 1888 we have advocated an independent government for Papua. The Constitution of the new colony provided even then for an Executive Council and a Legislative Council. The Legislative Council was not formed until the early 1900s.
Australia has served Papua New Guinea in all fields of responsibility and administration. We have served in commerce, as miners, agriculturalists, administrators, military servicemen and servicewomen. Many Australians developed a particular contact with the country- as educationists and aid workers. In return quite a contribution has been made by Papua New Guinea people to Australia- as fellow workers, as military colleagues and in the development of careers through Australian schools and educational institutions. Our responsibility for the welfare of the new nation changes after independence on 16 September. But the fact that the responsibility does not end then predominantly concerns me. It was for that reason that I drew particular attention earlier to that part of Lord Casey’s speech which concerned the development of a future special relationship between Papua New Guinea and Australia. I refer briefly to an article which appeared in this week’s issue of the Far Eastern Economic Review, which is headed ‘Papua New Guinea: Less to Spend ‘.
But far graver, both financially and politically, is the cutback in Australian aid. Papua New Guinea has suffered as part of the Australian Government’s across-the-board cuts in public expenditure. According to Canberra, the aid grant of $2 10m for 1975-76 represents an increase of 15 per cent on the previous year. But it includes defence expenditure, which has not previously been included, and substantial superannuation payments to Australian public servants ‘localised ‘ in mid-career- which Papua New Guinea has never accepted as a component of aid. The Australian grant for social and economic development comes to $ 153m- up $5m over the previous year but $36m less than Port Moresby had requested in a submission which, it claims, was pared to the bone. Taking the rise in Australian public service salaries of 28 per cent last year, together with an Australian-Papua New Guinean inflation rate of about 20 per cent, Australia’s aid grant for the year is calculated to provide Papua New Guinea with 29 per cent less aid for social and economic purposes than last year.
On the eve of independence, the Government of Michael Somare says it is stung by a sense of betrayal.
It is in that sense of betrayal and the sense of frustration that so many in Papua New Guinea must feel that one must express concern in this last formal act in passing away from the Aus.tralian Parliament responsibility for the future development of Papua New Guinea. It is important because in statements in this House in the last few days we have seen the Prime Minister (Mr Whitlam) washing his hands of all real concern for that other neighbouring colony, that other far more subjugated colony of the past, the colony of Portuguese Timor. If there is a prospect as a result of military action there, whatever strife and other devastation is occurring, of the ultimate establishment of a Russian naval base in that area- and this all occurring at the time of
Papua New Guinea’s imminent independencethen it is of very real concern to the Australian people. It is a real concern that those objectives that Lord Casey so effectively pronounced on 12 March 1968 be remembered, because when we have Ministers such as those in the present Government, two of whom are sitting on the front bench opposite me today, one who has demonstrated his lack of concern about transport policies for Tasmania to say nothing of the rest of Australia, and other whom I believe has equally -
– That is a lie.
Mr DEPUTY SPEAKER (Mr MartinOrder! I would ask the Minister for Transport to withdraw that interjection.
– I withdraw, Mr Deputy Speaker. It is an untruth.
– The Minister who has just submitted by way of intervention a remark relating to his 65 per cent increase in freight rates for Tasmania can stand on his own record for it is one of which any responsible Minister ought to be ashamed.
-Order! I think the Deputy Leader of the Country Party is straying from the Bill. If he does not stray from the Bill there will be fewer interjections.
Mr SINCLAIR I agree. The point I was making is that it is necessary that there should be responsibility in government -
– I raise a point of order. We have assisted the transport industry in Tasmania to the extent of $9m this year.
-Order! There is no point of order. That matter is not before the Chair.
– That is why freight rates have just gone up by another 45 per cent. There is, of course, a very real problem in the lack of responsibility by Ministers in this Government and the concern that I wish to express is one on behalf of all Australian people. This certainly is a formal occasion. We totally endorse these measures but we are concerned at the irresponsibility of the Ministers in the present Government at a time when Papua New Guinea is going into independence. With the very real uncertainty of future events in East Timor, with the Prime Minister washing his hands of all concern for what might happen there and with Papua New Guinea going into independence with assertions being made by the Chief Minister about the implications of the cutback in Australian budgetary allocations for what is now the Territory but will shortly not be a territory, then of course, any Australian must be concerned for the future.
On our side of politics we have a great deal of respect for the tremendous achievements that the Government of Papua New Guinea in its final days as a territory has been able to attain. We have a respect for the men who have acted within that Government, the men who have assisted them within the Australian civil service, but we have a real concern for the future and a concern that the Government presenting its Budget for this year has hidden the fact that there is nowhere near sufficient allocation for the real needs for the development of this newly independent country. It is a country whose future must be very closely associated with our own. It is a country which must be developed not only on a premise of providing help for those who as civil servants are to be given a golden handshake; it must also be given genuine aid to ensure that it can develop into a stable economy and can maintain and play its own role in this world in which geographically we are both going to continue to be important members.
In closing I would like to compliment the Chief Minister of Papua New Guinea for his remarkable achievements and those of his Government over the course of the last few years. I would like to wish him and all the members of this about-to-be-independent country well in the future and to ensure them on behalf of those on this side of the House that in government we would intend to support them in every way possible and to develop responsibly that special relationship of which Lord Casey so eloquently expressed his objectives on behalf of a previous government back in 1968.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Morrison) read a third time.
Consideration resumed from 20 August on motion by Mr Whitlam:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Morrison) read a third time.
Consideration resumed from 20 August on motion by Mr Whitlam:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Morrison) read a third time.
Consideration resumed from 20 August on motion by Mr Whitlam:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Morrison) read a third time.
Consideration resumed from 20 August on motion by Mr Whitlam:
The the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Morrison) read a third time.
Debate resumed from 4 March 1975 on motion by Mr Daly:
That the House take note of the papers.
Question resolved in the affirmative.
The following Bills were returned from the Senate without amendment:
Australian National Universities Bill 1975.
Canberra College of Advanced Education Bill 1 975.
APPROPRIATION BILL (No.l) 1975-76
Debate resumed from 27 August on motion by Mr Hayden:
That the Bill be now read a second time.
Upon which Mr Fraser had moved by way of amendment-
That all words after ‘That’ be omitted with a view to substituting the following words: ‘the House condemns the Budget because it does not provide an adequate program to defeat inflation and relieve unemployment nor does it restore confidence in the private sector of the economy’.
-I shall now continue my address on the Budget. With the generosity that characterises members of my party, the National Country Party of Australia, and which characterises members of the Opposition generally, I looked for some aspect of the Budget that could be commented upon favourably. I believe that the kindest thing that can be said about the Budget is that there appeared to be some acceptance and recognition by the Treasurer (Mr Hayden) of the fact that under the economic policies of this Government over the previous 12 months the economy of Australia was heading for disaster. While the Treasurer may have had the desire to slow down the rate of inflation, the Budget as presented certainly will not achieve that end. The difficulties which confronted the Treasurer in compiling this Budget are very largely the result of the reckless incompetence of this Government over the past 21/2 years. I believe that Australians should ask themselves what benefits are in the Budget for them as individuals and also for the nation.
On the face of it, it would appear that there is a slight reduction in personal taxation, but that apparent reduction is largely brought about by the reduction in the over-payment of taxation as previously applied. In fact, this was admitted by the Treasurer himself. When one looks at the net result of pay-as-you-earn taxation, it is fairly obvious that there is no overall benefit for the people of Australia. Let me cite the figures in regard to that system of taxation for the last 2 years. In 1974-75 the pay-as-you-earn taxation receipts amounted to some $6,000m. It is estimated in this Budget that the amount collected will reach $8,683m. I think that that really puts the position on the line in regard to the benefits that are promoted as being of advantage to the taxpayers of this country. The so-called benefits will be offset in many ways. In fact, they will be more than offset. The rate of inflation which will continue and probably increase resulting in increased cost of living will in itself more than eat up these illusory benefits to say nothing of the increased home rentals, transport charges, postal and telephone charges, fuel prices, and so on. I could go on naming items on the list.
I wish to emphasise that increases in fuel charges will hit almost everyone but will be particularly severe on those people living in the outlying areas of the Commonwealth, areas such as western Queensland that I have the privilege to represent. The people in these areas will be hit by the increased cost of transport of goods both in and out of their areas. This will add further to the discouragement of production in those parts of Australia. No nation can raise its standard of living above the increase in productivity without incurring the balancing factor of inflation. This Government has made no attempt to relate this simple basic economic truth to this Budget. It has been pathetically incapable of maintaining industrial harmony, which was one of its election promises. It has been dominated by the left wing trade unions and has been as putty in their hands. As a result, costs to the Australian people have escalated because of production lost through prolonged industrial disputes.
I now wish to refer to the estimates for education. The Government seems to be very proud of this area. Total outlays are estimated to increase by some 14.2 per cent. That in itself I welcome because I believe that we should expand the educational opportunities available to the members of the community. But when this is viewed against an inflation rate which is a good deal greater than that increase in outlays it is obvious that also education will suffer under this Budget. The most tragic part of the education section of the Budget is that assistance to isolated children has been reduced while every one of the other special group allocations has been increased. There is no excuse for this. I believe that isolated children rank as perhaps the most under-privileged section of the Australian community. Their needs have been placed before this Government constantly by the Isolated Children’s Parents Association. As recently as 16 August last a deputation from this Association met the President of the Senate when he visited Cunnamulla in my electorate. Members of the deputation pointed out to him that the increases in allowances for the education of isolated children have not kept pace with inflation.
These people, in common with the rest of the community living in remote areas, are being seriously disadvantaged by the reduction or elimination of postal services and by the Budget generally. Already the collection of mail services can result in round trips of 40 miles or more. These distances will increase as the mail services are reduced or eliminated under the policies of this Government. Therefore, the cost of these mail services to the recipient is substantial and is increasing as fuel costs rise, in addition to the greater distances to be travelled. More and more mail services are being discontinued, shortened or reduced in frequency, thus adding to the burden of providing satisfactory education to outback children. Surely a reasonable education is the birthright of every Australian child. Where the difficulties of providing that birthright are greatest for the parent, surely then the Government should be most sympathetic to them rather than reduce the allocation to them as in this Budget.
I now turn to the plight of small businesses. The non-metropolitan population comprises largely primary producers, small businessmen and the employees of both categories, plus the families of all these people. They are interdependent to a much closer degree than the residents of cities. That is accepted. The utilisation of our natural resources in rural areas is dependent upon the teamwork of businessmen and primary producers. Small businesses are vital to our national economy and especially to the private enterprise section of that economy which provides some 75 per cent of the employment opportunities in Australia. The cost to the Australian taxpayer as a result of the closure of small businesses, brought about to a large extent by the policies of this Government, is not generally realised. For example, it has been estimated that if a small business employing even 8 or 9 people ceased operation it could cost the taxpayers up to $50,000. Small businessmen’s families contribute to the populations of country towns and population is vital to those towns. This is because the degree of population in turn justifies the educational, medical and professional services that are provided. Those services are usually provided in relation to the population served. Small businessmen are being forced out of business because of rising costs brought about as a result of the policies of this Government and the Budget adds further to the burdens of this deserving section of the community.
In the short time that I have left in which to speak I wish to refer to the rural industry that has been shamefully treated by this Government. The beef industry in particular has been brought to its knees. Beef producers are already having to destroy cattle because it is uneconomic to send them to market. Yet this callous, unsympathetic Government still imposes its export tax on meat. This apology for a government still extracts its pound of flesh from the hard pressed beef producer. The Government made a decision to reduce the guaranteed price for wool from 250c per lb to 200c per lb. Its subsequent change back to 250c per lb is consistent with its stop-go policies in every field. Although the Government did revert under some pressure to a guaranteed price of 250c per lb, it did so only after serious damage had been done to the wool industry through the destruction of confidence in the undertakings of the Government.
The preservation of the security of Australia as a free and democratic nation and the welfare of the Australian people, promoted through a sound economic policy with justice to all sections, are the paramount responsibilities of this national Parliament. The Budget that has been brought down by this Government does not do anything towards providing that real and necessary objective in the interests of the nation and in the interests of the Australian people. These vital objectives are not being promoted effectively by this Government. They can best be achieved under the policies laid down by the Opposition and by the budgetary measures outlined in this debate by the Leader of the Opposition (Mr Malcolm Fraser) and the Leader of the National Country Party (Mr Anthony). I support the amendment moved by the Leader of the Opposition.
– I want to refer briefly to the effect of the proposals contained in the alternative Budget of the Leader of the Opposition (Mr Malcolm Fraser) and in the Budget of the Treasurer (Mr Hayden) on the Australian Capital Territory. I do this not from a parochial point of view, because 2 members on the Government side happen to hold the 2 seats in the Australian Capital Territory, but because Canberra is the national capital and it is a place in which every Australian should have an interest. So, when the Leader of the Opposition starts putting up an alternative Budget which aims very vicious blows at Canberra I think the people should be aware of what he is saying. If ever the people were grateful for a Labor Government, it must have been on Tuesday night.
– Why does the Government not go to the people and ask them?
– The people Will have an opportunity to say what they want fairly soon. They must have been grateful for a Labor Government after what the Leader of the Opposition threatened to do to Canberra. He seems to be prepared to sacrifice Canberra to try to make up for some of the goodies which he has handed out to his friends in commerce. That is a rather ridiculous proposition, because the budget for Canberra is relatively small in relation to the whole Budget and it would be the height of penny-pinching to think that the few thousand dollars one could save in Canberra would have any influence on the overall Budget. Let us look at what the Leader of the Opposition suggested. He suggested zero population growth for the Public Service. This means that in the Department of the Capital Territory, where a growth rate of 4.8 per cent had been recommended to cope with the rapid growth of the city, straight away about 300 or 400 jobs would not be avail.able to the young people of Canberra. If we extend that figure over the rest of the Public Service, which had a 1 per cent growth limit another 400 jobs would go to the waU in Canberra because there are some 40 000 public servants here. If the Leader of the Opposition abolished the Department of the Media, the Australian Industry Development Corporation and the Australian Legal Aid Office, a few more hundred jobs would go. Soon we are up in the thousands. These are jobs on which young people in Canberra rely. Thousands of young people Will be leaving the Australian National University and the colleges in Canberra at the end of this year. Under the Fraser proposals no jobs Will be available for them. I wonder what the electorate thinks about that.
The other vicious attack was on the Department of Urban and Regional Development. Cuts there would fall heavily on the National Capital Development Commission. The Leader of the Opposition launched a vicious attack on growth centres. The most successful growth centre in Australia- the place where we have demonstrated the possibilities of growth centres- has been Canberra. If honourable members knock the NCDC they knock the building industry. I am surprised that the Leader of the Opposition, like many of his colleagues, tried to put the public sector and the private sector in separate compartments. This is utter nonsense, as they well know. One is dependent on the other, and nowhere more so than in Canberra. If honourable members knock the Public Service they knock the retail trade, the car trade and the building trade- they knock everybody. Honourable members opposite are suggesting cuts in these areas. This would knock not only the whole of the public sector but also their friends in the private sector, who must have been horrified at the proposition which the Leader of the Opposition was putting up.
– Canberra people have to be aloof from unemployment and everything else.
– They have been, relatively, because they have a good administration which knows how to run the place. The honourable member for Boothby (Mr McLeay) is well aware of the sorts of repercussions that would follow cuts which the Leader of the Opposition would make. The honourable member criticised very strongly the restrained Budget of our Treasurer; so he must have been horrified at the proposition which was put up by his Leader. The Canberra Liberals must have been shattered by it. The local Liberal politicians made their feelings felt in no uncertain manner. I have often wondered why they have been so reluctant to call nominations for the Senate election which could be coming up next year. The Labor Party has 7 excellent candidates for preselection. The local Liberals have been quite reluctant to call for candidates. What is the cause? Are they so shattered by their Leader’s policies which confirm the Liberal Party’s attitude towards Canberra which was demonstrated so forcefully by its rejection of the Public Service Superannuation Bill. It confirms the view of local Liberals that the Party has written off Canberra. It is a problem for the local Liberals. They have already conceded that the second Senate seat for the Australian Capital Territory will go to their former colleague, the right honourable member for Higgins (Mr Gorton). He must be rubbing his hands with glee at the way his former colleagues are running a campaign in his favour. Local Liberals are quite shattered by the whole thing.
Do not let us be negative and look at the terrible effects of the Fraser Budget, let us look at how the Australian Capital Territory fared under the very responsible Budget of the Treasurer, Bill Hayden. Overall expenditure has gone up by 13.5 per cent to $79m. That is not a very large sum when one looks at the $ 1,000m that the
Leader of the Opposition wanted to hand out. There is not much one could really save from that amount. Certainly it is not as much as we wanted. Some very worthwhile social projects will have to be deferred. I refer to the corrective services project. We do not call them gaols in the Australian Capital Territory. We had lined up a very ambitious project which will have to be deferred. Let us look at the matter in some detail. Many new projects will still go on. The social welfare vote has increased from $1.1 79m to $1.595m. It is up by almost $400,000. It includes new projects for a women’s refuge, a handicapped children’s home, a YMCA hostel and additions to the Goodwin Homes. There have been increases in the vote for emergency housing, pensioners’ rent rebates, emergency housekeeping and in the expenditure for orphans and government wards. Would the Leader of the Opposition impose cuts in these areas? Would he regard this as enforced equality, which he abhors so much? The activities of the National Capital Development Commission have been restricted, but many of its big building programs will go on. The Department of the Capital Territory headquarters will go on. The technical college at Bruce will go on. All the new schools will be proceeded with. The sporting complex at Bruce will be completed. Fortunately, most of those things are in my electorate, but there are plenty of schools and new buildings going on in the electorate of my colleague, the honourable member for Canberra (Mr Enderby).
I was very interested to hear last night the honourable member for Riverina (Mr Sullivan) make a quite vicious attack on cultural grants. We are not ashamed of the fact that we have increased the grant to the Canberra Theatre Trust from $120,000 to $143,000. He might be quite happy to live in a cultural desert. I do not know. If he really believes what he said, I am rather sorry for his electorate. Does he carry that belief over into his electorate? Does he go into that? Is he quite prepared to deprive his constituents of cultural grants? There is a big demand for cultural recreation in Canberra. My colleague and I fight very hard to try to meet that demand. It comes from all levels of the community. We make no apologies for increasing the grant from $120,000 to $143,000. All the people, particularly the people from the electorate of Riverina, do not get an opportunity to watch the real live shows in this House. It is a pity they could not have seen the antics of the honourable member for Riverina last night when he was launching an attack on culture for the people. He abhors culture for the people. I am sorry for the people in his electorate.
-Get the right priorities.
Mr DEPUTY SPEAKER (Mr Martin)Order! The honourable member for Riverina has already spoken in this debate. I think he was heard in comparative silence last night and I think we should extend the same courtesy to the honourable member for Fraser.
– Transport in Canberra is no different from transport anywhere else. There is a big deficit in our transport budget, the same as in any other city in Australia. But this deficit has to be related to the cost to the community of the private car. I think one man driving a car- often a six or eight-cylinder car- to work and parking it on a valuable piece of real estate aU day is a most blatant misuse of resources. We should not be encouraging it; we should be discouraging it. That is precisely what our Ministers attempted to do in trying to contain the deficit in public transport. We are not attempting to discourage public transport by imposing savage increases in fares or by reducing services; we are trying to maintain services with a moderate increase in charges. If extra revenue is to be raised it will tend to come from extra parking fees or possibly from extra registration charges. I think that in the long run this pOliCy Will be in the best interests of Australia. Both the NCDC and the Department of the Capital Territory are exploring avenues of improving public transport. They are doing a lot of research and investigation. They are also providing alternatives in the form of well designed cycle tracks. Already in my electorate we have one which is carrying a good deal of traffic and which has been well received by the community.
The Leader of the Opposition of course was not precise about where the cuts would be. We do not know what he would do. Would he abolish the health centres? Would he close down the women’s refuges? Would he refuse to go on with providing cycle tracks or reduce bus services? Would he cut out the Australian Legal Aid Office? We do not know. He did not say. But obviously he has no real feeling or respect for the people of Canberra and he would wield the axe very heavily. Would he want Canberra to be something less than a national capital that everybody respects and admires? Would he want it to be drawn down to the same standard of inefficiency of other cities in Australia? It rather sounds as though he wants to have some enforced equality on the people of Canberra to force them down to a lower standard. It is not on as far as the Labor Government is concerned.
Of course the Australian Capital Territory is not just for the people who live here. Every year about 1 million visitors come to this city from every electorate that is represented in this Parliament. I think we have to maintain a standard and have something worth while for them to come to. The Department of the Capital Territory not only looks ofter the local residents but also a lot of its efforts are extended to provide facilities for tourists. It maintains and runs the Tidbinbilla Nature Reserve and aU the nature reserves and national parks in the ACT. This is greatly appreciated by tourists from every electorate and not just those from Canberra.
– It is the loveliest city in the world.
– And it is going to stay that way. Of course the Leader of the Opposition has expressed a strong dislike for growth centres, possibly because the one in Canberra has been so successful. We have been able to demonstrate here that we can establish cities somewhere other than on the eastern seaboard; that we can establish pleasant urban living facilities in the country; that we can have good education, good health services, good roads and at the same time enjoy the advantages of a rural environment. That is what we have demonstrated here and that is what, given the opportunity, we Will demonstrate in other areas.
-In striking a Budget, the predominant consideration must be the overall national objective. Australia ‘s objective is to build an achieving, tolerant and liberal society. We cannot build tolerance and liberal attitudes if people’s minds are preoccupied by the material issues that affect their lives- prices, employment, personal security. Inflation brings that preoccupation. Nobody can argue sensibly that we now have an achieving society. The Budget strategy should be to restrain inflation and restore achievement.
I turn to the position reached by 1974-75 Budget. Australia’s position as the last Budget ran out is not really arguable. There had been a tidal surge to the public sector. In money terms, it grew 46 per cent in financial 1975. That is a growth in real terms of 26 per cent to 28 per cent. The suction of resources away from the private sector had been like a tropical cyclone, and had left industry, commerce and business a scene of destruction. Employment in the public sector had increased 90 000, while 150 000 jobs had been lost elsewhere. This meant that the violent transfer of resources had actually destroyed some 60 000 jobs. Unemployment had reached 250 000. Prices had risen 16 per cent. Housing had fallen sharply and new home ownership had drifted from the reach of all but the higher income earners and the subsidised. National production had actually fallen. Investment in new productive plant, equipment and factories had dramatically fallen away. Our relative position compared with other Western industrialised countries had slipped- except for Britain and Italy.
What is the trend for 1975-76? In framing the Budget, the Treasurer (Mr Hayden) has adopted an optimistic view of the future. He believes that recovery has started and will continue in the private sector. This has encouraged him to provide for a further real growth in the public sector. More significantly, he has provided 2 measures only for the private sector- continuance of the double depreciation allowance and a Vh per cent company tax cut. Of fundamental importance is the question: Is the Treasurer’s optimism well founded? The mix of statistics with actual experience, had not encouraged confidence. Underlying inflation had been at nearly 20 per cent and funds available for investment within companies more difficult than at any time in most companies’ history. The money supply had been growing rapidly- in excess of 20 per cent. With this rate of pushing money into the economy, it had to be expected that consumer spending would rise. However, a consumer spending burst could not support a recovery. Only an investment resurgence could sustain a recovery. It certainly appeared that the trend of falling investment and worsening unemployment would continue, judged against the fall in profits, the high cost of borrowed money and the incapacity to raise new equity capital on a depressed stock market.
There was a long and heavy line of evidence and logic to support the view that, unless marked stimulatory measures were taken to revitalise the private sector and to control inflation, the situation would worsen. Unknown to other observers, a new batch of statistics had led to the Treasurer’s optimism- The Quarterly Estimates of National Income and Expenditure, June Quarter 1975 (Preliminary). This document from the Bureau of Statistics was embargoed until 8 p.m., 19 August, that is, when the Treasurer commenced his speech. I ask for leave to incorporate part of that release in Hansard.
Mr DEPUTY SPEAKER (Dr Jenkins)Order! Is leave granted? There being no objection, leave is granted. (The document read as follows)- . . . Gross domestic product at constant prices rose by 3.1 per cent in the June quarter and was 2.1 per cent higher than a year earlier . . . Gross non-farm product at constant prices rose by 3. 1 per cent in the June quarter and was 0.4 per cent higher than a year earlier . . . Comparing the full year 1974-75 with the year 1973-74, gross domestic product was . . . 1.8 per cent lower at constant prices, while gross non-farm product was . . . 2.6 per cent lower at constant prices. The growth in wages, salaries and supplements continued to moderate in the June quarter when the increase was only 1 . 1 per cent. The gross operating surplus of companies, which has been extremely variable over the last four quarters, is estimated to have increased by 37.3 per cent in the June quarter following a decrease of 14.6 per cent in the March quarter . . . Other significant features of the June quarter included a recovery in gross fixed capital expenditure on other capital equipment (8.4 per cent at constant prices), some recovery in private capital expenditure on dwellings after falling for several quarters, a continued recovery in private final consumption expenditure (2.3 per cent at constant prices following a rise of 2.0 per cent in the March quarter) and a continued run down of private non-farm stocks.
– I thank the House. These figures showed a marked recovery during the June quarter of gross domestic product and gross non-farm product, a slowing in wage rises, a restoration of profits- to the extent of 37.3 per cent for the quarter- renewed investment and spending without a backlog of stocks to draw from. If true, it was the birth of economic recovery.
This statistical evidence is difficult to reconcile with the more pragmatic evidence of business experience, which still claims and shows cash flow shortage, squeezed profits and little investment activity. Income and expenditure quarterly figures are always revised and no doubt these will be. However, I would not expect such revision to negate what appears to be shown. Not for the first time there is a conflict between the statistical and the practical- between Canberra and the city, and neither can be wholly wrong or wholly right. But does it usher in a trend of recovery or is it merely a quarter’s anomaly? I believe that it would be very dangerous to sit back and leave the private sector to battle on because of these figures. Likewise, it would be dangerous to take a relaxed view of government spending, relying on an interpretation of those figures. The Budget has done both and for these 2 reasons, and others, I believe that it is a very poor economic prescription.
The Budget strategy should be to pull inflation back and restore full employment. This requires formulating an incomes policy and a monetary policy to integrate with the fiscal measures of the Budget. All must work together and are, in every sense, interdependent. Simply stated, the private sector needs relief from the pressures of high cost of wages and borrowed funds. This requires a restoration of cash flow and profits. The wage earner needs relief from higher prices and the tax burden of carrying a luxuriant growth of government spending. The mix should have been fiscal measures of tax relief and incentives, accompanied by tight control over spending in the Budget, a monetary policy holding down the growth of the money available to the economy so as not to feed inflation- both supplemented by Government determination to hold all wage increases within the principles of the indexation decision of 30 April of the Conciliation and Arbitration Commission- and giving leadership in resisting any claims pressed by sheer industrial strength. There .are many current claims and some harmful strikes to be met. All of these are claiming significant wage increases beyond the guidelines of the indexation decision. Therein lies the right incomes policy. If it is not sustained, the wage indexation decision will collapse. The Arbitration Commission alone cannot pursue an incomes policy; it must be fully supported by the Government in budget and monetary policy.
I turn now to consideration of why the Budget is inadequate. The Budget contains errors. Government spending is still too high, at an estimated growth of 23 per cent. The deficit is too big. How is it to be financed? Insufficient attention is given to the problems of the private sector, particularly the serious downturn in investment. The urgent recommendations of the Mathews Committee are completely ignored. As a result the Budget fails totally to tackle the problem of achieving high rates of growth into the longer term future as well as the need to stimulate private sector employment in the shorter term. The Budget has failed completely to ease the burden of personal income tax. Net pay-as-you-earn tax collections will rise by 43 per cent this year after rising by 43 per cent last year and by 34 per cent in 1973-74- a compounded rise of 175 per cent in stage tax collections in 3 Labor Budgets. Growth in government spending at 23 per cent is excessive. It implies an increase in real spending at a time when the need is to reverse the transfer of resources to the government sector which has occurred over the last 2 years- 20 per cent and 46 per cent respectively in each of those years. There ought to have been no real growth- that is growth in constant money terms- in government spending this year to enable the private sector to benefit from any real growth in the economy. Further, Labor in government has not been able to keep spending within its Budget. I ask leave to incorporate in Hansard a table to demonstrate this fact.
-Is leave granted?
– Unfortunately I have not had an opportunity of examining this table or any of the material the right honourable member seeks to incorporate.
– I have made arrangements with the Leader of the House.
– If the right honourable member made such arrangement- I take his word for it- I do not object.
-There being no objection, leave is granted. (The document read as follows)-
– I thank the House. There is no reason to believe that the Government will keep spending within its Budget this year. Last year’s actual spending was ten per cent higher than budgeted and vastly increased the deficit. The Budget clearly gives inadequate attention to the problems of the private sector. Statement 4, at page 107, blandly acknowledges that company incomes fell by 6 per cent in 1 974-75. There is no acknowledgement that much of the profits made were paper profits due to inflation, and not real profits. Recent figures show that real pre-tax profits were halved during 1974-75; the corporate sector showed losses of $480m after tax. After dividend payments, the corporate sector was $ 1,365m in the red. There lies the real cause of the slow down in investment from the private sector, and it is from that cause that jobs have been lost. I seek leave to incorporate the table in Hansard.
– The $120m cut in company tax will not revive business. Although there should be some rises in sales as consumer spending picks up, it will be inadequate to boost company cash flow or to generate new investment. The continuation of the accelerated depreciation allowance is inadequate.
It served no purpose in stimulating investment last year, and there is no reason to believe that it will do so this year. It is not a new provision; it is merely the continuation of one that existed last year. The Budget should have contained the investment allowance that we first advocated in January of this year, that is, the 40 per cent investment allowance on plant and equipment installed by 1 July 1977, and thereafter continuing at a rate of 20 per cent. By neglecting the investment problem and by neglecting the Mathews Committee report, this Budget will impose significant costs on the Australian economy which will have to be borne in coming years. It is a Budget which opts for expensive programs now, not the least Medibank, at the cost of future growth.
I turn now to the Budget and monetary policy. In financial 1975, the money supply grew about 15 per cent and reached a rate of over 20 per cent by June last. Nobody will disagree that inflation will be boosted if this rate is maintained. Yet there is very little chance that the money supply growth can be held below 20 per cent in financial 1976, given the size of the deficit. Page 1 17 of the Budget statements shows that the deficit last year was financed by $2 89m in net loan raisings and by $ 1,689m in treasury note subscriptions, mainly from the banks.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
This year, the Government has a higher deficit to finance and will need to raise approximately $2,000m from the private sector if the money supply is to be kept below 20 per cent. But this cannot be achieved without increases in interest rates- or by Draconian and extremely harmful resort to the Financial Corporations Act. It is even more serious because the Government needs to re-finance $3,500m in government securities maturing over the year- $2,000m in treasury notes and $ 1,500m in bonds. The importance and the potency of monetary policy has been demonstrated only too well in the last 2 years. It has been demonstrated beyond any doubt that an economy cannot be managed by reliance on monetary policies. It must be the right mix between monetary policy and fiscal policy. Yet questions on financing the deficit remain unanswered. Until they are answered the private sector must fear for the future. This Budget implies either a further financial squeeze on the private sector or an excessive growth of money. The first will further cripple companies and employment during the year. The second leads to further inflation and unemployment and guarantees even greater problems emerging later.
I turn now to what the Budget should have done. The Budget should have been built on a much tighter control of expenditure. Last year’s real growth of 26 per cent should have been maintained- not built-upon. Last year’s real expenditure of $18 billion-that is $ 18,000m- should have been increased only by inflation expectation. This I would place at 15 per cent over the year given the budgetary, monetary and wage policies that I have advocated. We entered the year with inflation at about 20 per cent; we should aim to exit the year with inflation at 10 per cent, to give an annual average of 15 per cent.
The propaganda of forecasting an inevitable deficit of $5 billion was brilliant. It enabled the Government to claim and to receive credit for holding the deficit to a mere $2.8 billion- a deficit of $2,800m and the Government claimed and received credit for it. Unfortunately the victory is merely illusory, for its consequences must follow. The impact on the economy will be massive and no amount of talking will change that. There are obvious areas where further restraint of spending should have been made. They were spelled out by the leader of the Opposition and I will not do more than adopt them as sound and realistic.
One area not adequately discussed is health expenditure. This grew by 1 16 per cent- from $ 1,283m to $2,777m. This is a burden which should not be attempted in a single year, especially not this year. Nor should it be allowed by unrestrained growth to dominate budgets in the future. Good sense requires that we impose a charge on the users of the health scheme as they use it. Of course, people must be protected from large surgical and medical costs as they formerly were. However, I do advocate a money contribution by the patient as visits and consultations are made to rationalise usage. Without doubt, it will become necessary. The present difficult economic position warrants its introduction. The health scheme is not free and we should face that fact. The taxpayer is paying. The user should contribute.
One point that should be made about an expenditure slowdown is that if capital investment by the public sector is to be restrained it must be picked up by the private sector. That requires both time and stimulation of the private sector. Therefore, I look to new public projects later in the year that could be made subject to deferral to allow the private sector to regear and to absorb the incentives I advocate. On my basis of last year’s real expenditure of $18 billion plus 15 per cent, I reach the appropriate expenditure figure of $20,505m. This is $1,4 10m less than that proposed in the Budget. From this there would have been capacity to give much greater relief in taxation and private sector incentives than the Budget contains. It would have been a much better result for economic recovery and would have headed towards restoring balance between the public and the private sector. This would have relieved some of the pressure for the increased indirect taxes on fuel and the savage increases in postal services. To the extent that spending was relieved by the collection of contributions from the users of the health scheme, the gap between expenditure and revenue in the Budget would have been narrowed.
The expenditure column of the Budget is too high. So is the revenue expectation too high. Both could have been reduced significantly. In doing so, the deficit could have been reduced to a level, the financing of which would not imperil prices and employment or interest rates and employment. In my opinion, the deficit should have been lower. The Budget could have relieved the tax burden, lowered unemployment, revived the underlying economic dynamism of growth and confidence. It has done none of these things, yet they were crucial. I am disappointed, but therein lies the difference. This is a socialist budget whereas I believe in liberal capitalism.
The community can have no more than it can itself pay for and build. If we attempt to satisfy community expectations beyond our real capacity it will result in inflation and ultimately unemployment. Our idealism will be best reached by building a more successful community and economy. This overall success flows from the success of individuals and private sector enterprises. To be truly successful, therefore, we should create the conditions for risk taking, productivity, better management, the right and ability to plain work harder and to profit. Social welfare is here and will stay, but no one has invented a way in which it does not have to be paid for. That means that those who have, must give. The Budget has failed to let them be better able to give. I support the amendment which condemns the Budget.
-Mr Deputy Speaker, I do not want to be rude, but the speech of the right honourable member for Bruce (Mr Snedden) was just crammed full of meaningless generalities, such as the statements that social welfare must be paid for and that the health scheme is not free. What pearls of wisdom they are! Of course the health scheme is not free. The Government asked the Opposition to agree to the passage of a Bill that would have enabled levy to be imposed upon taxpayers of 1.35 per cent but it rejected such a proposition in the Senate. So the health appropriations are now a part of the overall budgetary appropriations. As such they serve as virtually a reduction in income tax because this service is now provided by us without members of the public having to pay into medical funds.
The right honourable member said that social welfare must be paid for. Of course it must be paid for. The Liberal and Country Parties want the best of both worlds. They want a fortune to be pumped into companies, they want social welfare to be improved and they want government spending to be cut, but when we ask them to get down to the kernel of the matter and provide details as to what they would do they are not able to do so. We had the Leader of the Opposition (Mr Malcolm Fraser) coming into this chamber with a speech that was critical of all the indirect taxes that we have proposed in the Budget and then we had the Deputy Leader of the Opposition (Mr Lynch) slinking in here today with a document saying that the Opposition now supports all the indirect taxes. Let the Opposition make up its mind. The Leader of the Opposition cannot make a speech in this House on the Budget that has any claim to validity if it decries the things that the Government does and at the same time accepts what has been done for budgetary purposes.
The former Leader of the Liberal Party of Australia- the right honourable member for Bruce- talked about deficit financing. He asked how the deficit was to be financed. He said that that question remained unanswered. He knows very well but was not honest enough to say it that we cannot go onto the loan market and sell Commonwealth bonds to finance the deficit because that would drive interest rates up to appallingly high levels. At the moment treasury notes are at about 8.7 per cent. The right honourable gentleman knows full well that we financed the deficit last year by taking in government securities that were not normally available and money that was in the LGS ratio- the liquid assets and government securities ratio- of the banking system, money that was not otherwise lendable. The principle that applies is that if the Government pays for its deficit without reducing someone else’s holdings it is doing something that is inflationary. We accept that fact. So we have reduced the deficit. Honourable members opposite know that the deficit would have been something of the order of about $5,000m in the event of our continuing with our expenditure commitments of last year. That deficit has been reduced to $2,500m. We have not tried to cover that deficit with increases in income tax. We have reduced income tax. We have not only reduced income tax but also scaled it back dramatically. So much for the generalities that the right honourable gentleman tried to pass off as cogent argument.
The whole purpose of this Budget is to consolidate what the Government has done in office by way of its programs and reforms, with fiscal responsibility. It is a compromise between accelerating government expenditure which feeds inflation, and a sharp tightening up in government spending, which would dislocate the economy. We have gone to neither extreme. We have accepted a happy compromise in the interests of” promoting growth in the economy and recovery in the private sector. We have continued in this Budget to consolidate reforms. We have not run out on election promises and scrapped programs. At the same time we have adjusted the taxation system so that the incidence of taxation is lower. We have reduced company tax by a further 2.5 per cent. I might make the point that when we came to office the tax rate for public companies was 47.5c in the dollar. It is now down to 42.5c. In 2 years there has been a reduction of 5 per cent. We have put forward quite heavy pension increases. We will be paying those in November and later again in autumn. As well as that we have included Medibank in the Budget, which covers all Australian people for medical and hospital care. We have also continued to spend on education, which is contrary to what the pundits thought. They thought that we would rip the education allocation to pieces. We have continued a high level of spending on education as it is one of the Government’s priorities.
Much has been said about deficits and how a government should handle its budgetary situation. What the right honourable member for Bruce did not say about last year’s deficit is that we would have had a lower deficit under normal circumstances but contingencies arose. Unemployment sprang up, particularly in rural areas. We brought in the Regional Employment Development scheme to cover that contingency. There was the cyclone disaster in Darwin which resulted in unexpected expenditure being incurred. Are honourable members opposite suggesting that we should have left the people in the streets to look after themselves and not have spent that money because last August we came up with a document that said that the Budget deficit should be such an amount and no more? Of course not. We had to put money where it was needed.
We were unable to contain the deficit at where it normally would have been, without relying on income tax to cover it or by properly financing the deficit by going on to the Australian loan market and exchanging the money held by people in savings banks for Commonwealth bonds. To make Commonwealth bonds attractive enough, interest rates have to be put up quite dramatically. As everybody knows, Commonwealth securities set the pace for interest rates in Australia. If they were to move up appreciably, by a couple of percentage points, interest rates in the banking sector, the general credit sector and the permanent building societies would rise rather dramatically. So the resort to raising money on the Commonwealth bond market was put aside and the Government opted for not putting up interest rates.
Last year was the first year in which the Government’s scheme of mortgage tax deductibility for home owners to reduce the incidence of interest applied. That has reduced significantly the interest rates on homes. It was a conscious policy of the Government throughout the last 8 months to have a general reduction in interest rates. The Government has done that by paying a very low price for government securities. It has meant that there has been a flood of capital to the private sector, and not to the public sector, with the general aim of reducing the rates of interest in the private sector.
A government has very limited options when it comes to its budgetary problems. A 15 per cent cut in Government spending, which was often espoused by the Leader of the Opposition and his cohorts, just does not stand up. It is impossible to cut government spending in many areas. Pensions cannot be cut by 15 per cent. Medibank benefits cannot be cut by 15 per cent. Repatriation benefits cannot be cut by 15 per cent. The salaries of Commonwealth employees cannot be cut by 15 per cent. That means that the areas in which expenditure can be reduced are very limited. The areas in which government spending can be reduced probably represent 40 per cent or 50 per cent of the total spending. So, reductions in those areas would have to be massive to have any effect. It would be very easy to cut expenditure across the board, but it would be cruel to reduce pensions, repatriation benefits or salaries. Why should people in the service of the Commonwealth be subjected to that? It is very difficult for a government to set its priorities.
Last year there was an acceleration in government outlays, and the government decided this year that they would be contained. In last year’s Budget outlays rose by about 46 per cent, which was quite dramatic. In this year’s Budget outlays Will increase by only 23 per cent- half that amount. The Budget outlays will total $22,000m, but normally they would have been about $25,000m. So, the outlays remain at about 30 per cent of gross domestic product. As I outlined to the House before, because of the contingencies which arose and because of the shocking neglect of 23 years of ineffectual government before we came to power, the amount of spending in the social welfare, education and urban development areas in particular had to be massive; the expenditure outlays had to be massive to overcome the anomalies that were present in the Aus.tralian community.
So, in the last financial year the outlays as a proportion of gross domestic product moved up by about 6 per cent. I would argue- I think that most people on this side of the House would agree- that that was too much, that the economy could not stand a switch of 6 per cent in the proportion of gross domestic product going to government outlays. The fact is that the economy took that shock and the outlays moved up from about 20 per cent to 30.5 per cent. This year we have maintained government outlays at about 30 per cent of gross domestic product, which represents an increase of half the increase in government outlays last year. To put it another way, if we were to continue with our expenditures this year as we did last year, the Budget outlays as a proportion of gross domestic product would be about 33 per cent instead of 30 per cent. Frankly that would be just too much. All the economic rationalists and the people with sense on both sides of the Parliament would agree that that is the case. So we are faced with the situation that we want to relieve the burden of income tax.
The Liberals and the Leader of the Opposition speaks as if the progressive income tax scales were invented by us. The income tax scales were set up under a Liberal-Country Party Government in 1954-55 and with some adjustments have continued all the way through. Particularly in times of inflation, the application of those scales imposed a severe penalty upon anyone with an increasing income but not an increasing standard of living. We recognised that fact. At the same time, it was impossible for us to adopt the full import of the Mathews Committee recommendations, not only on personal payasyou earn income tax which it was suggested we index but on companies with regard to stock valuation. In order to do this we would have had to forgo $ 1,000m in revenue and to do that we would have had to chop $ 1,000m out of our expenditures to cover it. Frankly, the Government was unable to see where it could reduce its expenditure any more taking into consideration all the human factors which come into the expenditures of the Government. It was impossible to reduce expenditure. So we were faced with the choice: Did we want another $ 1,000m deficit or did we want to go and sell Commonwealth bonds to cover it? If you accept the fact that we could not sell Commonwealth bonds to cover it and you do not want another $ 1,000m deficit, the plain fact of that situation is that in this economic climate, the recommendations of the Mathews Committee had to be put aside.
We did what we could though with a quite dramatic reform of the income tax system. We have effectively indexed the income tax scale between $5,000 and $10,000. Under the payasyou earn income tax scales of this present Government and the previous Government those in the $5,000 group paid a marginal rate of tax of 32c in the dollar; at $6,000 it was 38c; at $7,000, 44c; at $8,000, 48c; and at $10,000, 52c. We have replaced those rates with an across the board application of only 35c in the dollar. So anyone earning between $5,000 and $10,000 who is complaining that if he works overtime the application of the higher rate of tax would reduce his extra earnings to nothing will find that the 35c in the dollar tax rate applies right through the scale from $5,000 to $10,000. So while we have not completely fully indexed the tax system, we have indexed it where it mattersin the $5,000 to $10,000 group. By setting up this sort of tax system we give ourselves the opportunity of being able to index the taxation system completely when we feel the time is appropriate. At least with this new reformed tax system that becomes possible. I think that that is a major social reform. I say that it is the major social reform of this Budget and it is one of the major social reforms of this Government. Certainly, as the Minister says, it is one of the major social reforms of the last 2 decades.
I believe it is a significant thing that any person who is getting a wage increase- perhaps he is receiving $6,000 a year and is moving up to $6,500 a year- need not fear paying any higher rate of tax. They will pay more tax on the basis that they earn more income, but they will not pay a higher rate of tax. They will still pay only 35c in the dollar. That same system works all the way through the tax scales. It works out that a taxpayer who has a dependant spouse and 2 children and who earns about $160 a week saves about $7 a week or about $350 a year. This is a much more generous system than we had before. The mortgage deductions remain.
I shall discontinue my remarks on tax and refer again to pensions. In November the single rate of pension will rise by $2.75 and the married rate will rise by $4.50.
– The Liberals put it up 50c.
– Yes. In those days of the McMahon Government, the Liberals put the pension up by 50c.
We are providing for an increase of $2.75 in the single rate and $4.50 in the married rate. We have seen increases of this magnitude often over the 2 years of office of the present Government. In fact, pensions have just about doubled in 2 1/2 years of Labor Government. Yet in the climate of cuts in Government expenditure we still find the Labor Party true to its promise to keep pensions at 25 per cent of average weekly earnings and we find pensions going up. While we have had to slow down the phasing out of the means test, the means test for people aged 69 years will be abolished from 1 July next year as the first step in the final abolition of the means test for people aged 65 years and over. So in all those areas we have kept our promises.
The Leader of the National Country Party of Australia (Mr Anthony) and the Leader of the Liberal Party on Tuesday night last delivered their replies to the Budget. They were speeches of doom. Today the Leader of the Opposition poured cold water on the postal increases, the increased excise on cigarettes and beer, the increased excise on motor spirits and on potable spirits and the coal export levy. He denigrated them in his speech recorded at page 523 of Hansard. He said they are terrible things. Today the Deputy Leader of the Liberal Party said that the Opposition would keep these measures. The Leader of the Opposition’s speech says one thing, and in fact the Opposition means another thing.
Look at some of the things which the Leader of the Opposition says that he will do away with. He will do away with the ceiling on Public Service growth, and yet 2 months ago he was complaining because we were not handling pension cheques quickly enough. He does not need staff. He is going to do away with the Public Service ceiling. He is going to sell the Pipeline Authority. It does not matter whether people in the eastern States of Australia get cheap natural gas; that is not the point. He will sell the Authority perhaps to the Australian Gas Light Co. By talking about selling it he is implying that he has discussed it with some corporate concern that wants to buy it. Presumably it would be the AGL, which would charge the people of Sydney and Brisbane through the nose for gas.
He wants to withdraw the funds from the Australian Industry Development Corporation so there will be no more buying back of the farm. He wants a reduction of new housing lending so that young people trying to get a house through the Australian Housing Corporation would find that under a Liberal Government they would not be able to do so. He wants to sell the pharmaceutical corporation that we are setting up to try to contain pharmaceutical prices.
In fact, it is a return to laissez-faire economics. The Liberal Party does not really recognise who or what it has elected as its leader. I think it is just getting now a very nasty taste of the type of character it has elected. Listening to the Leader of the Opposition speak about the Budget is like a trip down the time tunnel. It is like listening to what was put up 25 years ago. In fact, he is advocating 19th century American laissez-faire economics, the economics of Ayn Rand and the like, the economics of the open economy, in which there is no protection for the individual who is not able to get out and fight and struggle. The Leader of the Opposition uses cliches such as ‘enforced equality’. He says that he rejects enforced equality in the economy. That means, as someone said quite eloquently, that if you fall flat on your face he leaves you on your face because it is your right to fall on your face. He does not see that the Government has an obligation to try to help the poor and underprivileged. He would wreck the social welfare system of Australia
He says that he rejects enforced equality in education. He says that privileges should remain. If he were in government there would be no government funding of poor schools in the western suburbs of Sydney and Melbourne to give the child of a poor family a go to get a decent education or to give him free university education. The Leader of the Opposition is against that. He says that he rejects enforced equality, as he calls it, in education. That is what the Aus.tralian people can expect from a Fraser government if ever Australia were in the unfortunate situation to experience that.
I believe that the Budget was a sensible proposition. It is a compromise between competing loyalties- our loyalties to the welfare of the people and our concern for the economy. I believe it is responsible, in sharp contrast to what the Leader of the Opposition offered, and I believe that it deserves the support of the House. I would be very surprised if the Liberal Party could see any cogent reasons why it should reject the Budget In fact, even on its public utterances I do not trunk it would be game enough to do that. It is shame-faced enough to do almost anything, but it should not knock over a Budget which has reduced the deficit to about $2,000m in line with what the debate on the economy in Australia was all about. I think it is a very reasonable attempt on the part of the Government to come up with the right solution for the economy at this point in Australia ‘s history.
Sitting suspended from 6 to 8 p.m.
-Mr Speaker, it is very pleasing to be speaking here tonight; I am sorry that I have dragged you away from the dinner which we both enjoyed with our Japanese visitor.
Because of the economic situation in which Australia finds itself after almost 3 years of Labor rule, this Budget should have been the most vital Budget in the post-war period. When the Whitlam Government came to office in 1 972 it inherited what most people believed was a sound economy. Inflation was running at a modest 4V4 per cent and unemployment at a rate of a little over 1 per cent. Today, inflation in Australia is around 17 per cent and unemployment is running at almost 5 per cent. The aim of this Budget should have been to achieve a turn-round from the downward trend or direction, if honourable members wish to put it that way, in which we have been heading in the last 3 years. If this was its overall objective, I believe that it will not succeed.
The Whitlam Government has been in office for 3 years. It has brought down 3 Budgets, and it has had as many Treasurers. The first 2 Budgets were highly inflationary. It is widely agreed that most of our economic malaise today can be laid at the door of the policies of this Government in that period. However, in this Budget, it would appear that the Treasury has at least been listened to, even though its recommendations have been watered down to suit the internal POlitiCS of the Labor Party. But it is obvious that the damage which has been done over 3 years cannot be undone in just one Budget.
This Budget must be judged on how it tackles the three major problems facing Australia today. Those problems are inflation, lack of business confidence and unemployment. In this regard, the Budget is most disappointing. It is obvious from the speech delivered by the Treasurer (Mr Hayden) that the Budget clearly assumes a continuing inflation rate of at least 16 per cent and wage rises of approximately 20 per cent to 22 per cent. In addition, Mr Hawke, the President of the Australian Council of Trade Unions, has predicted that despite this Budget- or perhaps because of it- by early 1976 the number of unemployed wa have reached 500 000 people, a horrifying 8 per cent of the work force.
Any real stimulus to the business sector which provides three-quarters of all jobs is hard to find in this Budget. It is just not there. The Government claims that industry will be stimulated by the $120m tax cuts. But these tax cuts will certainly be offset by increased costs, increased wages, the higher excise on petrol, and other indirect charges such as the steep rises in telephone and postal rates. These increased charges are in themselves inflationary. The prospect of another massive deficit this financial year can only add to the effect.
Let us look at some of the effects of the Budget. First, let us take the tax cuts. By reforming the income tax scale with the pretence of benefiting lower and middle income earners, the Government is just hoodwinking the Australian people. It is most experienced at doing just that. Taxation has grown in an immense way during the past few years. As the taxpayer’s wage has increased to keep up with rapidly escalating prices, he or she has moved into a higher tax bracket. The proportion of his or her income paid in tax has increased annually. This situation will undoubtedly continue. Personal income tax payments alone last year increased by more than 40 per cent. If we add to this the effects of the increases in postal and telephone charges, the increased taxes on petrol, beer and cigarettes, and other day to day items, it will be seen that even taxpayers who are to receive a reduction on paper in their income tax contributions are no better off. In fact, it has been estimated that, on the average, each Australian family will pay in total tax $ 1 ,200 more in the coming year.
The cost of Jiving for the average Australian will rise sharply as a result of the increase in indirect charges contained in the Budget. They are of course, as I have said, highly inflationary. The value of the dollar which has already fallen to 70c since the Whitlam Government took office in 1972 is, it is estimated, likely to fall to between 50c and 60c in the coming year. The Budget has unfortunately done little to revive confidence and faith in the future. Perhaps the major tiling which the Budget has done is to point out the proposed $2, 800m deficit showing that Australia is still living far beyond its means. It is obvious that the Budget will do little to solve the economy’s 3 major problems of inflation, lack of business confidence and unemployment.
Let us look at what this Budget will do to the average taxpayer if the predicted 22 per cent rise in wages comes his way and if inflation remains somewhere between 1 6 per cent and 18 per cent. Last year the average taxpayer earned around $8,000 and after the usual deductions paid about $1,300 in tax, leaving him with $6,700 to spend. This year his income will rise to $9,700 and he will pay tax of $2,280, leaving him with $7,420 to spend. So on paper he should be $720 better off. But he will need at least a 16 per cent rise in his wages just to keep pace with inflation. So in actual fact he will be worse off. His standard of living will fall. Then one must add on the increased indirect charges. Further proof that the taxpayer will be worse off is shown also by the Budget prediction that personal income tax will rise by more than 34 per cent to $ 10,340m in the coming year.
But it is the young people who will really be hurt by this Budget. Earlier this year they saw the Whitlam Labor Government abolish the home savings grant scheme which, under previous Liberal-Country Party governments, had helped many thousands of young couples obtain the initial deposit for their own home. This Budget pushes these young people’s dreams of ever owning a home further into the never-never. Young newly-married couples with no children who in the past have both worked in the early years of marriage to save for a home, are being offered no incentive and no help to save. Inflation eats into their savings, as does the tax man. Nor can they borrow all that they would like because of the high interest rates. A young man earning $7,000 a year, with no children and a working wife, saving to buy a home will pay an additional $256 in direct income tax as a result of this Budget in the coming year. Like the rest of the community, he will be slugged with the massive increase in indirect taxes. The same increase in tax, of course, hits the single or widowed elderly person on a fixed income. If such a person is between 65 and 69 years of age, he will also have been hit by the Labor Government’s repudiation of its promise to abolish by the end of this year the means test for those people in that age bracket.
– You never did it.
-We intended to, and we would have done it had we won the election in 1972. It would have been done by now. This Government has come under extensive criticism for its past extravagances. One cannot help but feel that the expenditure of $1.2 5 m on the painting ‘Blue Poles’ which is supposed to be flaking; the expenditure of $100,000 to Germaine Greer to make a film on sex or some other topic which I understand will not even be made in Australia; the expenditure of $ 1,400m on Medibank; and the expenditure on the nationalisation of the Gidgealpa pipeline need not have taken place at this time when the economy is in the state to which this Government has brought it. It is a pity that the development of such essentials as housing, education and defence will be slowed down because of these past extravagances. This may not have been necessary if some of the past grandiose schemes of this Government had been deferred.
In my State of Victoria the Minister for Housing, Mr Dickie, has complained bitterly about the low housing allocation and has stated that the Victorian Housing Commission’s building program will have to be cut by two-thirds as a result of the Budget. He has stated that the Housing Commission in Victoria will be able to build only 700 homes between now and the end of the financial year instead of the anticipated 3000. A better allocation might have done something to absorb the large number of unemployed in the building and kindred industries as well as supplying families with badly needed housing. The Victorian Government sought $179m for its Housing Commission’s building program and for co-operative housing in this financial year. Only $98m has been allocated of which just $69m will go to the Housing Commission; $46m of the $69m has already been effectively spent through tenders for new Commission homes.
Now let us look at education. It would be fair to say that the Government’s record in education in respect of the Government school system has been a good one in the past although its policies towards independent schools and the parents of children attending independent schools has left much to be desired. It is a pity that the Government has seen fit to delay for a year the introduction of the next triennial program for educational commissions. Dr K. R. McKinnon, the Chairman of the Schools Commission, has been most critical of this decision and I would like to quote what was said by Dr McKinnon, as reported in the Melbourne Age. He said:
Non-acceptance of triennial planning has sharply eroded confidence, particularly as schools feel they have no real guarantees of financing beyond mid- 1 976.
A new basis for financing beyond that date is urgently necessary both for rational planning and to remove the uncertainty which is causing apprehension and will quickly erode the gains in public confidence achieved in the 1974-75 biennium.
A delay of a year will be far too long.
The report said that Dr McKinnon also warned there could be some accommodation difficulties in Government and non-government schools for the start of the 1977 school year because of the educational provisions in the Budget. The Victorian Minister for Education, Mr Lindsay Thompson, has also warned of the effects of a cut back in funds for school buildings. The report of his comments in the Melbourne Herald of Monday, 25 August, read:
He said the allocation of $9m for the first 6 months of 1 976 was an effective 60 per cent cut back in the allocation recommended by the Schools Commission.
He said the Victorian Education Department would have to find another $12m to meet the cost of contracts already let for the first half of 1976. ‘The last thing we want to do is stop the building of new schools’, he said. ‘But we are left between the devil and the deep blue sea with another $ 12m to find just to meet contracts already let. ‘
It was pleasing to note that defence expenditure was not cut back, although the 10.6 per cent increase is well below that required to keep pace with the rate of inflation. There has been a feeling on the part of service personnel, and I think we are all aware of it as members of this House who keep close contact with service personnel and talk to them, that in respect of equipment they have been neglected since the Labor Government came to office. With a flare up of civil war in Timor and the possible intervention of Indonesia so close to our shores I hope that we will see a more realistic approach being taken by Ministers in the Whitlam Government. We want no more talk about no threat to our shores for the next 15 years. How ludicrous that sounds in today’s situation. The present situation shows how naive that sort of approach really is.
The Opposition has been prepared to state where it believes this Budget is not in the best interests of Australia at present. But we have not stopped at that. On Tuesday night our Leader, Malcolm Fraser, the honourable member for Wannon, gave the Opposition parties’ alternative to the Budget. He called for income taxes to be cut by $500m and advocated tax benefits to business to stimulate the economy and reduce unemployment. Surely inflation and unemployment are two of the biggest problems and factors facing this nation today. Those problems are nowhere near as bad overseas as they have become under this Government. Malcolm Fraser presented a sound and sane approach.
The Budget which was presented last week just highlighted the Government’s quandary. The Government had desired on the one hand to maintain its program to increase social welfare and on the other hand to meet the urgent need to curb inflation and unemployment and at the same time to stabilise the economy. It has fallen between 2 stools. In trying to do both it appears to have achieved neither. The Liberal and Country parties have clearly stated what we would do in these circumstances. The people will have the chance to judge at the next election.
– I rise to speak in this Budget debate because there are a large number of things which need to be said about and to the beneficiaries of the decisions taken by this Government in the framing of the Budget document. More than anything else it is the demands from private enterprise and the capitalist Press which have been responded to in this Budget. Many people are sceptical not so much of the intentions contained therein but of the likelihood of the private sector reacting favourably to them. They are sceptical about the faith that has been put in the disparate and amorphous group called private enterprise to pick up the slack in this economy. The Budget has been well received in the terms of its explicit aims, and rightly so.
What I intend to do here is to articulate the fears that many have about its success, thereby issuing a challenge to the corporate sector. Many people in my Party and in the community at large believe that capital is on strike and that nothing that this Government does will engender a favourable response. The economic climate in which we are and by which we are surrounded at present can be altered only by government directed spending. There are people who believe that business has forfeited its right to generous access to the public purse and that the overtures in this Budget are wasted because the large employers of labour and the contributors to the national product respond not to governments but to something less tangible and rational. A substantial number of people believe that this Government should have pressed on with and accelerated the construction of new hospitals, schools, railway stock, roads and so on so that at least we could provide alternative employment opportunities and in that way revitalise the demand for consumer and capital goods.
What did happen? Let us look briefly at the Budget. The Treasurer (Mr Hayden) specifically stated that his overriding aim had been the restraint of inflation, a policy which went hand in glove with the desirability of fostering recovery in the private sector, and consolidation of the gains made in the public sector. The rate of growth in public spending has been restrained. Education expenditure has increased only enough to remain constant in real terms. Pensions will now be tied to the consumer price index and although health will receive double last year’s allocation and 28 new legal aid offices will be established, the Government staff growth rate and administrative expenditure will be severely curtailed. In the area of receipts there are 4 major items to be noted. The double depreciation provisions for business announced last year have been continued and widened. Company tax has again been reduced by 2Vi per cent and is now at 42Vi per cent. Indirect taxes and other charges have been increased and there have been sweeping reforms of Australia’s income tax system. Overall, the Budget deficit is estimated to be approximately $2, 790m, compared with $2,560m for the year ended 30 June 1975.
This Budget is the result of certain demands that saw the private sector as the saviour of our economic situation. What were those demands? The overriding message has been that public expenditure must be slowed in the fight against inflation. Secondly, and equally important, was the demand for taxation relief for the corporate sector. A typical example can be found in the ANZ Bank Business Indicators magazine of July last, and I quote from that magazine:
Providing the Government has the courage to take a substantial cut in its expenditure a deficit of $2,000m to $2,500m might be feasible. Such a deficit should enable measures to be introduced which would foster an increase in private investment. Among measures that will need to be considered are reductions in company tax and personal income taxes, reductions in sales taxes, allowance for accelerated depreciation . .
The plea from business and the Press alike has been almost unanimous. It has been: ‘Put confidence back into companies’. Business confidence is something about which I shall have more to say later. Suffice it to say here that it seems to me that this delicate flower called business confidence- this fragile little petal of a thing- is surely the Daphne of economics. I believe that Daphne has now become a less than rational old whore. Certainly she is more fickle than ever before. (Opposition members interjecting).
– The honourable members on the other side of the House rush with alacrity to defend their old girlfriend. In any case, the Government acknowledged the importance of putting companies back on their feet after the 1974 credit squeeze. It is a fact that this Government recognised that the corporate sector must contribute more to increasing production, thereby reducing inflation and unemployment. In line with this it has responded to the calls in 2 major areas in this Budget. One can see in both the language and the aims of the Budget and in the strategy outlined that this Government has reacted to the pleas of the private sector. Limiting the growth of Government spending is clearly pro-private sector. The language of the document clearly indicates a concern for business, and the twin measures of double depreciation provisions and a drop in company tax are concrete evidence of this concern. The changes in personal income tax and the obvious multiplier effect in the economy will stimulate business further.
The argument which brought these changes about is old and well worn. Under inflation the cost of reinvestment or replacement capital and expansion is high because past allowances made for depreciation are inadequate. The inevitable result is that there is no investment, productivity falls and costs increase. The upshot of this is that employees are laid off. So the argument runs that business is motivated purely by profit and if the confidence in what the future holds is low, if profitability of investment is not seen as excellent, then business just does not spend. The stock answer is that the corporate sector must be pandered to. I wonder whether in fact the corporate sector’s thinking needs a little changing as well.
The natural corollary of all this is that business needs direct evidence of the Government providing the conditions under which the ventures of business can be profitable. It is apparently not enough that education and social spending has a multiplier effect on the economy. It is not enough that education expenditure guarantees a rosy future for a vast number of industries in this economy, from the building field down. The evidence must be direct, we are told. It is not enough that the aims and objectives of this Government are clear and that private enterprise should make its decisions in this light. There must be taxation assistance and other sops. All right, there have been. We have given in to the private sector and given it everything it has asked for. But the two most important questions are: first, was it worth chopping a huge hole in the Government’s progressive social policies on which a majority of Australians put the Australian Labor Party into office; and, secondly, after all this, will business respond?
The first question raises the issue of all those legitimate demands on the federal purse that have had to be slashed or ignored. These issues many people see as very important and usually involve helping the have-nots and the helpless in this society. I shall return to this question. The second matter of whether business will respond, brings me back to the old whore- business confidence, the Daphne of economics. Some people would argue that this fragile flower should have already responded to our overtures. That she has not indicates that nothing we do, short of the abolition of taxation altogether, will entice her to respond. It is apparent that her long standing rapacious grip on Australian society has diminished. She has lost interest and is claiming that the money is not good enough.
Let me briefly outline the Government’s record with business prior to this Budget. Last September the currency was devalued. In October the credit squeeze was lifted. November saw personal tax relief, company tax decrease and a big boost to the car industry. In December company tax was deferred, depreciation allowances were doubled and import restrictions were increased. I might add that this concession fulfilled everything for which the textile industry asked. The Government has dropped its capital gains tax to encourage industry and to stimulate demand. We have supported the claim of Broken Hill Pty Co. Ltd before the Prices Justification Tribunal, which the Australian newspaper heralded as engendering a great deal more confidence in the business sector. On 8 August 1975 it was reported that the Government would oppose any real improvement in wages or working conditions in the next 12 months because it would add to labour costs. We can add to all this the claim made in a union submission that over the last 12 months we have given to the private sector $3,000m in special aid to assist faltering companies from production cutbacks and to maintain employment.
This record is hardly antagonistic to business, and now this Budget will give more help to the fickle old flower of business confidence. A lack of response now surely brings into question whether we should continue to subordinate our aims regarding the welfare of the people to big business priorities. A lack of response now will prove that the corporate infrastructure is basically unsound. I wonder whether we can continue to allow the corporations to demand that society put the claims of profits ahead of wages. As Michael Harrison wrote in Nation last December:
For how much longer will it be accepted that the executive suite is to be recarpeted in the struggle against recession, while the people are to have their belts tightened against inflation.
The fact is that for months the Government has been holding the hand of big business. The Press, hardly the Government’s organ, and the public relations magazines of private enterprise have openly acknowledged this fact. The major dailies, the mouthpieces of the banks, the chambers of manufactures and Rydge’s magazine have all detected a changing and healthy awareness of the private sector. The Australia and New Zealand Banking Group Ltd has told its readership, for instance, that business need not be fatalistic, that Australia’s past periods of economic growth had taken place largely through private sector expansion and that initiative on the part of business is an essential prerequisite to recovery from the present recession. The document from which I quoted earlier stated that the Government should reduce company and personal tax, reduce sales tax and accelerate depreciation on plant. The document continued:
Any or all or these measures introduced hand in hand with a substantial cut in Government expenditure would provide a strong boost to business confidence and investment.
Rydge’s magazine in March 1975 detected a change in Government attitude to business and in the business climate. On the basis of the utterances of the mouthpieces of the private sector one cannot but be sceptical of their response to this Budget.
Once again by way of rationalising the unpredictability of business confidence we are told that facts are not decisive in business but rather it is opinions which lead to decisions. How unfortunate that this seems to be true. On 7 July this year it was reported that share prices made big gains on national stock exchanges during the so-called loans scandal, yet a response to deliberate courtship by the Treasurer does not come readily. It seems that for some, successful government in this country requires not only a total commitment to the corporate sector but also the attribute of clairvoyance. As I have said, my greatest concern is the social cost of these overtures to business. What of all those legitimate demands for decreasing social injustice? The health, welfare and comfort of the Vh million people in this country who depend on pensions and benefits could have been enhanced if we did not have to hold the hand of big business. Those who are weak in organisation and resources have had to take a back seat to the well organised and the powerful.
Many intended moves towards our commitment to abolish poverty have been modified or shelved to decrease Government expenditure. Many people believe that this Budget should not have seen expenditure cuts almost across the board, that in fact there should have been more positive discrimination in favour of lower income groups, that huge allocations should have gone to deserted mothers and fathers, child endowment, public housing, child care and education. That these allocations have not been as large as desired is the direct result of the belief that private enterprise would take consolation from the fact that the Government was putting the brakes on its own spending. For this reason the
Treasurer has modified or ignored well presented and reasonable submissions from teachers, parents, social welfare groups and pensioner organisations.
Business must be aware of the fact that many hold it responsible for what they see as the castration of Labor’s social welfare program. They should also remember that the plight of the small business in this economy depends on the big fellow ‘s response to this Budget. The corporate sector must begin to re-invest. I believe that the options are fairly clear. The opportunity cost of the Budget cutting back the only growth area in the economy- the public sector- without the slack being taken up is immense. If business does not react I submit that it will forfeit its right to make this nation’s economic decisions, and rather that a government directed and affected decision-making process take over. What business must accept and what the conservative political forces have also yet to accept is that this society has undergone considerable change since the expansion of post-war years.
We now live in what has been called the postwar industrial society. In this society a great deal more power and credibility have been given to the emerging intellectual and scientific groups. Quality of life issues like urban affairs, pollution, education and future oriented political thinking characterise these people’s attitudes. The nation’s affairs and planning therefore must take heed of these sentiments. In a society demanding expenditure in these areas, social and economic relationships change. In the same way the Government’s role alters also. It is of little use that business leaders look at an increasing Government sector and heavy spending in public areas with fear. It is not, as they believe, inherently damaging to private enterprise. It is a fact of life- and it must continue- that business will never again have the exploitative and unequal powers that were vested in it during the 1950s and 1960s. It must realise that its hope, and Australia’s, is in producing a bigger national cake to be divided and not in trying to regain its former portion of the existing cake.
The Government’s activity in this economy need not be seen as damaging to business, but rather it must be accepted that legislators now have an increased role in order to eliminate injustice and poverty and provide for the future of this nation. The present Government occupies the treasury bench because it responded to these future oriented demands from the electorate. Labor’s commitment to dozens of new areas of Federal involvement has attracted the young educated voters of outer Melbourne and Sydney. These people see the need for a shift of resources from private to public areas and as a consequence government in this society and economy has changed. This is a non-reversible and undeniable reality. Where the private enterprise system breaks down governments are duty bound to become involved in the maintenance of productive employment of workers and resources. This may be necessary on a large scale if the private sector does not in its own self interest respond to government overtures.
Unemployment of this nation’s resources will lead not only to the misery of thousands but also possibly to industrial and civil strife. The striking business sector must realise this and it is my submission that if it continues to whinge and expects the Government to be its milking cow, if it fails to take up the challenge of working our way out of this recession, it will be asking for the public sector to upsurp its role. It is now big business which is on trial. The Government has yielded. The ball is now in the court of big business. It must use it. The alternative is socialism, under which the whims and fancies of the too greedy and the too elitist in the economy are eliminated. That is how I see the situation, and it is of no moment to me that honourable members opposite are trying by their words and their actions to undermine confidence and progress at every turn. The Leader of the Opposition (Mr Malcolm Fraser) can nark and predict doom for ever and a day; but that does not alter the fact that this is a Budget for the private sector, and it is time that it reacted.
-The 1975-76 Budget that has been brought down establishes beyond any doubt that this Government lacks either the ability or the determination to come to grips with the unprecedented economic problems confronting this country. The Government, well and truly caught in its own net of fiscal mismanagement and reeling before pubUc indignation, as reflected in recent popularity pOllS, has set out by sleight of hand to persuade the people that this Budget warrants the continuation in office of a government that has brought Australia to the brink of disaster. Whilst pretending great concern for the need to combat inflation and to afford tax relief, the Government promptly increased direct taxes on beer, petrol, tobacco and spirits. That unquestionably will erode any tax savings gained by the ‘nowyouseeit now-you-don’t’ new taxation scheme. This new system is calculated to cost the Government $205m on a true full year basis. Why the taxpayer should be delighted about that, while at the same time being fleeced to the extent of $60 lm in the aforementioned direct taxes, is very obscure.
The inescapable fact is that those costs will compound the difficulties that many Australians have in making ends meet. It would be quite specious for the Government to assert that such items as tobacco, beer and spirits were nonessentials and that individual budgetary problems could be resolved by the discontinuance of their use. The Government knows, of course, that it can anticipate confidently the maintenance of the levels of consumption of those commodities. Were that not so, the exercise would be selfdefeating as a revenue earning device. It is quite extraordinary that this Government, which came into office pretending to be the champion of the so-called little man, shows a savage disregard for the impositions placed upon the relatively modest indulgences of the majority of Australians Certainly, if the wage earner believes that he can fund these personal expenditures from promised tax savings he is in for a disappointment.
The Government’s insistence on exploiting inflation to finance its extravagant social welfare programs will lead inevitably to the movement of income earners to high tax brackets. Indeed, on the figures of the Treasurer (Mr Hayden), wages are expected to rise by 22 per cent, leading to an extra $2,6 12m in pay-as-you-earn tax. If the Australian taxpayers can accept a proposition in which wages and salaries rise by 22 per cent and taxes rise by 43 per cent, clearly there is no call for responsible government. However, that is not the case. At long last there is an awakening in the community to the fact that riding a wave of wages chasing costs inevitably must dump the rider in the shallows and leave him stranded in a backwater of economic disarray. Fewer Australians than ever before are prepared to accept soaring inflation, record levels of interest rates, particularly in home buying, erosion of savings and shortages of commodities and services. They have looked in vain to the Government for a belated plan of action to put value and purpose back into their activities.
Nowhere in the Budget is there to be found any really worthwhile measure to stimulate the private sector. The Vh per cent reduction in the rate of company tax is of little consequence. The companies most requiring assistance are those which in great numbers are currently in a loss or marginal profit situation. The fact of the matter is that in this country today one-third of the 250 000 small businesses are in grave risk of bankruptcy. Just how the Government intends to provide opportunity for the 42 per cent of Australia’s work force employed in small businesses is not apparent in the Budget. These small businesses are going to the wall. Inflation and depressed markets are proving more than they can cope with. Whereas normally business managers on their own judgment may offset temporary downturns by judicious borrowing, they are in this situation of excessively high interest rates precluded from adopting that practice. For those who take the risk there exists no alternative but to increase their costs to service their borrowings. The effect of inflation is self-evident.
– Government supporters do not care.
– As the honourable member for Gwydir (Mr Hunt) points out, Government supporters do not care. The tragedy of the small business is that it is the very spirit of the private enterprise system. It is in this area that the little man, by personal initiative and energy, can elevate himself from the often stifling routine of mundane employment. The benefits of such practice to the individual and to the country are a matter of record. Whilst the Government is obsessed with its objective of cutting down the giants of industry and commerce, it seems totally insensitive to the injury being done to small businesses. The magnitude of the penalty of such neglect is in proportion to the importance of small business.
It may not generally be appreciated that small business constitutes the greater portion of Australian industry. It accounts for 97 per cent of manufacturing, 99 per cent of retailing, 97 per cent of wholesaling and 99 per cent of real estate and business services. In manufacturing, small factories- those employing fewer than 150 persons- account for 42 per cent of the work force in that area, 40 per cent of the total wages and about 38 per cent of total turnover. In the retail and service area, small businesses employ almost one million people. Action initiated to relieve these businesses of payroll tax and tax on undistributed profits would be of great assistance. High on the list of businesses which failed to gain government relief is primary industry, particularly the beef industry. The inclusion in the Budget of an allocation of $ 19.6m for carry-on finance for the beef industry- this was announced considerably in advance of the presentation of the Budget- confirms the Government’s resolve to let the beef industry work out its own dilemma. Refusing to acknowledge that the beef industry’s economic difficulties have passed beyond what might be regarded as the rise and fall of fortune within reasonable business limits, the Government has compounded the industry’s difficulties by failing to take action to offset the crushing effect of the Postal Commission’s increase in postal charges and the attendant increases in telephone rates.
– They amount to a staggering $350m worth, as the honourable member for Gwydir points out. The 80 per cent increase in postal rates must have an enormously adverse effect on costs and thus on the rate of inflation. With dwindling incomes and a heavy dependence on postal and telephone services, beef producers and those engaged in various other primary industries are apparently to be left to wither on the vine. The outrageous increase in petrol prices must surely hasten that process. The fallacy of the Postal Commission setting out to run its service on the basis of profitability in a country as vast and as sparsely populated as Australia suggests a complete denial of its prime obligation, namely, to establish and maintain an efficient system of communication. The crippling charges can only bring into action the law of diminishing returns. The ever-increasing charges will result in an ever-shrinking proportion of users of the services. This in turn will lead to further withdrawal of services and increased charges ad infinitum. Eventually, the perimeters of settlement within Australia will retreat to the major centres of population. Perhaps it is the Government’s intention that we become a food importing nation with possibly New Zealand as the larder of Australia. The country as a whole can only be the poorer for such dereliction.
The time is long overdue when the postal and telephone services should be seen as a basic service funded from non interest bearing taxation revenue. The impact of interest charges on post office financial viability has been great. An annual interest bill of approximately $ 180m has hamstrung the service. The creation of the Australian Postal Commission will not improve services. Certainly it will enlarge the superstructure but otherwise, generally, it will be engaged in an exercise of horizontal arabesque- much movement to and fro but never upwards. There was a time when the Australian postal services epitomised service. The winged feet of Mercury fairly symbolised the speed, efficiency and reliability of the service. The personnel of the Commission still possess the potential to render such a service but they, in common with the Australian population in the broad, have fallen victim to the insidious propaganda of the modern philosophy that only fools work and that there is no dignity or reward in a fair day’s work for a fair day’s pay. Admittedly, they find small encouragement for extra effort under the impact of wildly escalating taxation and Government policies which erode ambition by indulging the indolent.
Before leaving the matter of postal charges I condemn the Government’s complicity in having the Commission announce increased charges in advance of the Budget. Notwithstanding the Commission’s charter the matter of these service charges is very much an integral part of a government’s budgeting. To disclaim direct responsibility for increased charges in this area is to surrender the power of Government to an instrumentality. This, together with the act of conditioning the public to the prospect of a $5,000m deficit and then presenting a lesser evil lays the Government open to a charge of deviousness, a charge which is difficult to resist. On the other hand, the Government must be credited with a boldness and cunning in contriving such a Budget in a situation of self-afflicted adversity. To hinge a Budget on the expectancy that the country will experience a 5 per cent gross domestic product following a reduction of 2 per cent smacks of wild optimism or panic stricken desperation. Recognising that the Treasurer finally conceded in statement number 2: . . . Australia has been comparatively insulated from the oil price rise; and the downturn in world activity also reflected in only muted fashion in demand for Australian exports . . .
One can only draw a comparison between the Government and a pugilist, trading well behind on points, who comes out in the last round aware that his only prospect of success is a knockout. As in the case of the present Government, the pugilist often lacks the wit to realise that he is out of his class. The inevitable result for both the pugilist and this Government is that both will go to the canvas. Let there be no doubt. The public of this country is clamouring for the Government’s blood. More than a little of the public’s anger springs from the deviousness of the Government in producing a Budget cunningly contrived to conceal initially its mischief. For that reason there was an absence of expression of outraged indignation by the public. But in the days following the presentation of the Budget, Budget bugs have been coming out of the woodwork.
It was not immediately evident that the new taxation scheme tampered with the long standing averaging provisions for primary producers. In fact, it does. Under the existing taxation scheme aU concessional deductions, including those for dependants, were applied to establish net taxable incomes. The new scheme excludes almost all concessional deductions from the determination of net taxable income. This practice lifts the level of income for averaging purposes and accordingly attracts a higher taxation rate in the dollar. Admittedly there is a taxation rebate of $540 for every taxpayer whether or not he or she attempts to make a personal effort towards independence by life assurance, education, medical benefits and other self-help activities. The mischief in such an arrangement is that it constitutes a further erosion of personal initiatives and increases the dependency of the person on government handouts. In the end such a dependency increases the vulnerability to government manipulation of society.
The Government has declared its intention to discontinue the Regional Employment Development scheme. We have heard in this House on a previous occasion the former Minister for Labor and Immigration take great credit for the improvement in unemployment figures as a result of his scheme. The figure of 60 000 to 70 000 was advanced as the differential between the pre-scheme era and the post-scheme era. It may be reasonably assumed that if the scheme is discontinued the unemployment figures must rise by at least that number, superimposing the already declining situation in employment. Perhaps now that it is the Government’s intention to review the nature of its funding, a subsequent scheme may be more beneficial in its application. Perhaps having dissipated some of these funds under a RED scheme proposal it may now direct its energies to funding some of the major projects in this country which are currently moribund for the want of finance. I have in mind, in particular, the Bundaberg irrigation scheme with which the Minister for Northern Australia (Dr Patterson) is personally familiar- a scheme which already has a heavy commitment to finance. It is capable of a massive return to the country in primary produce but it is anxiously awaiting financial assistance which could be facilitated by this Government. Quite apart from the question of how far such a scheme might advance, at least we would have the comfort of knowing that it would remain as a memorial of the Government’s conscientious and honest intentions to relieve employment within the terms of its responsibility.
– Do you believe the Government would do that?
– I doubt it, but I hope. In a Budget of $22,000m and with a national debt increase this year of $2,464m, bringing the national debt to a total of $ 17,770m, is it any wonder that the people of Australia are befuddled and confused as to the full purport and application of a monetary system which should be working in conjunction with a conscientious government for man instead of making man a slave to the system? Our problem as a society which is compounded with difficulties for any government is a lack of co-operation and sensitivity of the people of this country. They have fallen victims to the insidious process of recent years by which they have been deluded into believing that in truth they could get something for nothing. It rather surprised and pleased me to hear the honourable member for Casey (Mr Mathews) in the not too distant past refer to the high and excessive expectation of the ordinary Australian who had deluded himself into believing that is was possible to five a champagne existence on a beer income. Now the Government has supported this self-delusion. Until the people of this country, supported by a government recognising the truth of the matter, puts their shoulder to the wheel and accept the fact that we must live within our means, there is little prospect of a happy solution to this problem. I support the amendment to the Budget.
-The honourable member for Wide Bay (Mr Millar) was talking about the personal income tax reforms. He was either deliberately misrepresenting the position- I give him credit here; I do not think he would have done it deliberately- or he simply does not understand the reforms. He said something to the effect that the proposed system would completely ignore dependants for the assessment of net tax. I suggest that he get the papers issued by the Treasurer (Mr Hayden) with the Budget in which there is a full and precise, quite simply written- (Quorum formed). The honourable member for Fisher (Mr Adermann) in calling for that quorum was simply squealing; he did not like the things that were being said about his side of the House and therefore he was trying to cut down the time available to me to speak. I suggest that the honourable member for Wide Bay examine the Budget papers in which there is a clear exposition by the Treasurer of the reforms in the personal income tax system. I am quite sure even the honourable member for Wide Bay could understand it. I suggest he examine that because it is obvious he does not understand the situation. I am sure he would not deliberately misrepresent it.
The Hayden Budget is a responsible Budget. It grapples with the twin problems of inflation and unemployment- the world-wide problem of recession and inflation. It should not be forgotten that it is a world-wide problem. The genesis of the problem in Australia of course goes back to the 1971-72 period under the McMahon Government when there was a dramatic growth in the money supply with the consequent creation of demand inflation. The increase in the money supply was finally arrested in September 1973, 9 months after we took office. We have been suffering since the cessation in the growth of the money supply then from the secondary effects of it.
Before dealing with the details of the Budget I should like to deal firstly with the ‘Fraser alternative’ as it is called. I think the speech of the Leader of the Opposition (Mr Malcolm Fraser) needs some very careful assessment indeed. I have here a Press release by the Deputy Leader of the Opposition (Mr Lynch) in which he gives his sums and shows his adding up. I thought we would have a look at a few of these figures. I turn firstly to the additional financial commitments. I think we should realise that the adviser to the Deputy Leader of the Opposition and the Leader of the Opposition was Mr Michael Baume of Patrick Partners fame.
– Is that the firm that went broke?
– That is the crowd, yes. There is quite a scandal at the moment about it. This is the adviser to the Leader of the Opposition. The whole proposition of the Leader of the Opposition, if one looks at it carefully, is an exercise in hypocrisy and vagueness. As an example of the hypocrisy I give just one example. The Leader of the Opposition, as recorded in Hansard at page 520, states:
How restrained is a Budget which plans a larger deficit than the actual record deficit of the year just passed?
The Leader of the Opposition accepts the deficit established in the Hayden Budget as the basis for his own assessment and his own alternative. On the one hand he is giving the Hayden Budget a kick; on the other hand he is embracing it. Furthermore, as I shall explain later, he made a tiny mistake of $500m which increases the deficit in his proposal by that amount.
Then, of course, we have examples of the vagueness. The Leader of the Opposition said:
Finally, we believe that there is room to make a start on adjustments to the problems created for private companies and small business by the taxation of retained earnings.
I shall deal with this aspect in a few moments. If ever there was a good example of utter vagueness, that is it. There is nothing specific. In the list of sums he turned out, the Deputy Leader of the
Opposition has allocated for that little bit of vagueness an amount of $ 10m. This, of course, concerns the retention of profits by private companiesprofits which would not be distributed to shareholders. Assuming that the shareholders pay an average of 50c in the $1 in personal tax- we are being big hearted in this because most would pay a higher rate than that- the amount of undistributed profits for private companies would be only $20m out of a total of $450m, that being the figure for 1971-72 and the latest available. In other words from a profit of $450m the Opposition would allow the retention of 4.4 per cent. Surely this is a good example of hypocrisy. It is the carrot being held out to private industry.
The Opposition says: ‘We are going to do something for you. We will assist the retention of profits by private companies.’ I again point out that a tax of 50c in the $1 on the $20m retained out of a total profit of $450m amounts to $10m. Of course, the total profit of private companies would be far greater in 1974-75 than it was in 1971-72. In other words the percentage of retained profit that the Opposition would allow would actually be considerably less than the 4.4 per cent proposed. Private industry may imagine that the Opposition’s proposal represents a great handout but I suggest that it should do some arithmetic- a few sums- which obviously the Leader of the Opposition did not do. As I said, this is an example of vagueness and hypocrisy.
I mention next the sums that were done with respect to personal taxation reductions- as shown in the list of additional financial commitments. An amount of $500m is suggested. There is no detailed costing of this item. The Mathews stock valuation proposal less company tax of 2V£ per cent of $380m could be $50m out, but we will not quibble about a mere $50m. Incidentally, the information I am quoting is from a first class authority. I should mention that if one takes into account the Mathews stock valuation less company tax of 2V4 per cent for a full year together with the proposed 40 per cent investment allowance the Leader of the Opposition mentioned, one finds that the total cost for next financial year will be between $ 1,675m and $ 1,875m and, of course, the total tax collections for all companies will be approximately $2 ,250m. In other words, let us say that the cost would be about $ 1,750m. Total tax collections for all companies would be $2,2 50m, but under the proposal by the Leader of the Opposition companies would be paying tax of only $500m. In a full year company tax would be reduced from $2,250m to $500m. Once again I do not think that there has been very sound concentration upon the sums which were done.
I then come to the proposals to reduce financial commitments in order to bring down the deficit to the same figure of approximately $2,800m. The Leader of the Opposition referred to zero growth in the Public Service and to a saving of $ 1 50m. The saving is more likely to be half that figure. According to the Treasury, zero growth in the Public Service which the Leader of the Oppostion mentioned would give a total saving of $20m. Then the Leader of the Opposition referred to wiping out the Australian Industry Development Corporation with a saving, he said, of $75m. That would mean a withdrawing of $50m in loan funds from the private sector. In other words, it would create a greater recession.
The Leader of the Opposition then said that he would save on the $75m Treasurer’s Advance. He just did not do his checking of the Budget Papers, because there is no provision for such a Treasurer’s Advance in the Budget outlays. Then the Leader of the Opposition referred to other expenditure economies of $480m. The examples that he gave would provide a saving of about $1 15m. So in the final analysis there would be a further Budget deficit of approximately $500m. This is the so-called alternative budget of the Leader of the Opposition. I have used the statements in the speech which the Leader of the Opposition made in this House. We should bear in mind that many of these so-called savings in expenditure would seriously affect employment. I shall give some examples. At page 526 of Hansard the Leader of the Opposition is reported as having said:
We would have stopped the build-up of public servants in Canberra by imposing a zero growth limit on the Public Service.
That would reduce employment. Surely the principle is to make as few cuts as possible in expenditure which would reduce employment opportunity. That must be the principle to be followed when drawing up a Budget. There is another very good example. The Leader of the Opposition referred to a wind-up of this year’s capital works. Once again this would have a serious impact on employment. Then he went on to say:
We would have suspended the growth centre expenditures and made special economies in the urban rehabilitation and area improvement programs.
Once again this would have seriously affected employment. In regard to this question of area improvement programs, one of the great reforms that this Government has introduced has resulted in very important developments in my electorate alone. I thank the Minister for Urban and Regional Development (Mr Uren) who was in my electorate only a couple of weeks ago to see some of the great new projects that have been built in the Blacktown and Mount Druitt area. They are of very great benefit to the people. Because this question had been neglected by both the previous Federal Liberal-Country Party Government and the State Liberal-Country Party Government in New South Wales for a long time, it was absolutely essential that this Government give assistance to provide necessary facilities and a better quality of life in these areas.
I have referred to the Baume hoax proposals. Here is another very good example of the types of hoaxes that are being turned out. This paper which was issued by the Leader of the Opposition himself endeavours to show how people under the new taxation proposals will pay more in actual tax. He refers to a single person on average earnings with no dependants and he goes on to show how this person will have to pay more tax. If we look at this matter carefully we see that the Leader of the Opposition refers to a gross income of $7,500 under the old system and to a gross income of $9,000 under the new system. The example is also given of a man with a nonworking wife and 2 children. Once again, the Leader of the Opposition refers to an income of $7,500 under the old system and $9,000 under the new. Of course a person would pay more tax if he received a higher income. But once again, though, one has to read the fine print. This is a hoax. It is irresponsible. I am surprised that the Leader of the Opposition would be talked into putting out a document of that type by Mr Baume and Patrick Partners.
I want to refer to the reforms in the Budget and quote just a few examples of them. Firstly, I refer to the new rebate system, the new graduated system of personal income tax which we have introduced in this Budget. For a man with a dependent wife, a dependent student child and one dependent non-student child with $613 concessional deductions apart from deductions for dependants would save $308 on an income of $6,000 per annum. (Quorum formed) The quorum was called deliberately, of course, to try to waste time. Honourable members opposite are starting to squeal. At the time the quorum was called I was detailing some examples of the tax savings which the average family man would receive under the tax reforms contained in the Hayden Budget. I repeat that for a man with a dependent wife, a dependent student child and one dependent non-student child with $613 concessional deductions apart from deductions for dependants, would save $308 on an income of $6,000 per annum; $251 on $7,000 per annum; $254 on $8,000 per annum; $318 on $9,000 per annum; and $430 on $10,000 per annum. A taxpayer with a dependent wife, 2 dependent students and one dependent non-student child would save $385 on a wage of $7,000 per annum and $375 on a wage of $8,000 per annum. Incidentally, a single man with no dependants and no concessional deductions would make a saving of$100 per annum.
I think I should also mention that the concessional allowance for education expenses has been increased from $150 per student to $250 per student. As the tax rebate is computed by multiplying the concessional deductions claimed by 40c in the dollar, a person who claims the full $250 will make an actual tax saving of $100- a big saving as compared to the past for the average income earner.
Finally, I wish to refer very briefly to the question of housing. The facts are that Mr McGinty, the New South Wales Minister for Housing, claimed that because of the reductions- the socalled reductions- in funds for housing under this Budget he would be able to to build only 650 houses -
-Order! The honourable member’s time has expired.
-Much has been said in this debate about the plight of the country and about the incompetence of the Government. I want to say a little about how we come to be in this position and about the people who have suffered as a result thereof. There has been a great shift in the Australian Labor Party’s thinking. I want to speak about the people it has sold out, the people it has abandoned. There was a time, not so many years ago, when the Labor movement in Australia saw itself as the champion of the underdog and the protector of the underprivileged. Consciously, or perhaps unconsciously, it has abandoned that traditional ideal, which had been an essential part of the movement since its inception in, I believe, 1891.
Why has that happened? 1 think the change came with the present leadership. The Australian Labor Party of Dr Evatt and Mr Calwell was not an electoral success. Somebody- perhaps it was the present Prime Minister (Mr Whitlam)realised that votes were to be won and lost at the centre. He realised that the poor were too few in number and were not, as Professor Henderson has pointed out, very politically conscious. I suspect that a very high proportion of those who do not vote are among the truly underprivileged in our society. It is probable that few of the swinging voters are to be found among those people. They have problems enough, without trying to study new political policy or philosphy. They either vote as they have always voted or else do not vote at all.
The new hierarchy of the Labor Party decided to concentrate on wooing the middle ground. It concentrated on the suburban middle class. The change would have been quite natural to the present Prime Minister. After all, he does not come from the working class. He has a profession. He is a lawyer. He has lived most of his life- his adult life, anyway- in Canberra, which is a city without industry and the wealthiest of Australian communities. He has much in common with the civil service, but not much with the Labor movement and nothing at all with the underprivileged. The Australian Labor Party’s ploy worked very well. It was elected to office twice by the additional votes gained from the relatively well to do. The Labor Party’s courtship of the middle ground was simple. It offered handouts to everybody, not just to the needy but to the needy and the greedy alike. It sought election with a series of policies promising government support for everything. Additional help was promised to enough favourite policies and projects to secure election to office.
The policies to attract the middle class were then put to work with 2 disastrous results. They sapped the initiative of the strong, thus badly damaging the economy to the great cost of its weakest members, and meanwhile very nearly ignored the needy. The greater the number who receive aid, the less there is for those who really do need to receive assistance. Will the Government ever learn that the basic element of poverty is inadequate income and that the income that is available to the poor must of necessity be determined by the size of the economic cake and how the slices are cut and distributed? Governments create very little wealth. AU that governments do is redistribute the wealth that other people create. The government can make me wealthy or it can make someone else wealthy, but it cannot make both of us wealthy unless we produce enough for both of us.
Let us look first at the size of that cake. Last year real growth was negative. The cake got smaller- about 2 per cent smaller- but the population did not stop growing. It rose by 1.3 per cent. So there was less to be divided among more. The average annual increase in gross domestic product over the last 10 years was 4.35 per cent- that is, plus 4.35 per cent. Last year gross domestic product declined by 1.81 per cent- that is, minus 1.81 per cent. Last year was the only negative year of the decade. Collectively we are poor, but we are not equally poor. Where is that socialist dream of the egalitarian society? The Labor movement of other times did not seem to care much if we were aU poor so long as we were equally poor, but now we are not only less wealthy, we are less equal. For the statistically minded, the mean is lower and the distribution wider.
By providing handouts for everybody the Government has sapped the will to produce. By taxing the pants off people it has sapped the will to produce. By encouraging pace-setting wage rises for the well-to-do it has encouraged inflation. Inflation and the transfer of resources to the public sector have injured industry and raised unemployment to the highest level since the 1930s depression. The Government’s policies of handouts for the wealthy have meant fewer jobs for some people. Who are these unemployed? Of 150 000 males unemployed at 30 June, 90 000 were classified as unskilled or semi-skilled. Unemployment catches a few fat cats, but with a negligible number of exceptions one can say that those people who are genuinely out of work always were society’s weaker members and now they are even worse off than they were before.
By overtaxing Australians to provide public services for people who could well afford to pay for these services themselves the Government has thrown other Australians out of work. How are these taxes and the deficits- in effect another form of tax- being spent? They are not being spent on the needy. The Government has set up organisations Uke the Australian Assistance Plan which so far at least has been an organisation for the benefit of itself. It has spent $1.4m on administration and so far has disbursed a little over $3m. Mrs Marie Coleman correctly pointed out in a letter to the Age that the Plan had become a tool of the middle class. I am told that it has been used as a convenient campaigning technique by at least one Australian Labor Party candidate. That is not what we were led to believe the Plan was aU about. Who are the needy? Certainly the poor must be counted among them. The McMahon Government set up the inquiry under Professor Henderson to investigate and report. The Whitlam Government made a great show of widening the membership of the commission and its terms of reference. Perhaps it did improve the inquiry. I am not sure. But it largely ignored the findings. Only two to the 12 recommendations of the interim report have been accepted in full by the Government in spite of fortunes spent in other areas.
I am not saying that the Government should spend more. It should spend a great deal less on Government aid to people but it should concentrate that expenditure on those who need it. They are the weak of our society- the unskilled, the migrants, the big families, the Aborigines, the ill and the injured. The unskilled are without work and without hope. This Government set up a much ballyhooed scheme to train people, but only some people were chosen and they were not the needy. At one stage the wife of a Commonwealth public servant could receive training and very substantial financial support while a man who had a family to support could be rejected for retraining- and many were rejected. When the money ran short, around 6 December last year, married women were excluded whether or not their spouses were employed. Where is the sense of it?
What of families, particularly poor big families? What happened to Professor Henderson’s recommendations for child endowment? Why does the Government opt for a system of rebates that will remove the obligation on all low income earners to pay tax? How many of those with a taxable income below $2,000 are sole breadwinners? How many are earning a second family income? How many are children employed part time- possibly in the family business? How many are single, living in groups, odd-jobbing and surfing? Is it sense to exempt these single people from tax obligations at a time when the family breadwinner with a spouse and 2 children who is earning $135 a week which will be inflated to $ 1 63 by the end of the year which will result in an additional $490 tax payment- nearly doubling his tax- is being slugged? Even in constant dollars there is an increase to the extent of $363 in today’s dollar value. There cannot be a more honest calculation than that. This money would be ripped off those people to provide child minding centres in upper middle class suburbs. Why? The Government intends to persist with this type of public sector expansion at a time when the private sector has excess capacity. On the Government’s own estimate, aggregate employment is to rise by only 1 per cent in the coming year. One per cent growth in employment is less than the annual growth of the work force which is around 1 1/2 per cent. In other words, the Treasurer (Mr Hayden) expects unemployment to rise from its present levels by another half per cent- another 30 000 people.
The sick are often needy but not all the sick need financial help. Medibank replaces a system of hospital care that once discriminated in favour of the poor. Probably the only people who will benefit from Medibank will be some administrators and some doctors who will get far more money for any given amount of work than they do at present. All patients are likely to be worse off. Why is the Australian Labor Party adopting a policy that removes the advantages of the financially needy?
The Prime Minister is essentially middle upper class. He has lived his life in Canberra in academic circles. He knows nothing about trade unionism, poverty or the disadvantaged- nor could he care less. He is interested in power and in academic niceties. In fact, he is the Labor Party’s latin master. The only latin that I remember is ‘et tu, Brute’ which I think I last heard on the lips of ex-Speaker Cope as he left the chair. Why in the name of academic, dogmatic socialism are the underprivileged sold out? It does not matter to the Prime Minister whether welfare policies work so long as all power is in his hands. He does not believe that any man but himself is competent to make decisions about his own destiny. His academic conceit has blinded him to most of the traditions of the Labor movement. I support the amendment to the motion.
– I do not want to comment on the speech made by the honourable member for Moore (Mr Hyde), but one really must understand that there is a world recession of the system under which we live. It is the system that is failing. Every honourable member in this House should be concerned with the unemployment in this country and members on this side are aware of it. But this situation’ does not exist in this country alone. It is the fault of the system. We have to learn to understand the system and to try to find out how to rectify that system. The system under which we live is epitomised by countries such as the United States of America and Great Britain. In the United States there are over 9 million unemployed. In Britain at present there are over 1.25 million unemployed and in France there are 1 million. It is the system which has to be understood. Unless honourable members recognise that, they will never solve the problem.
I want to devote the main thrust of my remarks to the strategy adopted by the Government in drawing up this important Budget. In particular I want to look at what we are trying to achieve with our spending program. This will allow me to conclude by looking at the development of our urban and regional development budget.
The Leader of the Opposition (Mr Malcolm Fraser) in his speech on the Budget on Tuesday night made a number of grossly misleading statements about our urban and regional development programs. I do not want to waste the time of the House rebutting bis false claims. I have issued a detailed statement which covers the matters raised, and I seek permission of the House to have this included in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
Minister for Urban and Regional Development
Wednesday, 27 August 1975
The Minister for Urban and Regional Development., Tom Uren, said today that the Budget speech by the Leader of the Opposition, Mr Fraser, showed a complete lack of understanding of urban and regional development policies.
Mr Uren said that many of the comments on urban and regional development made by Mr Fraser were grossly misleading.
In particular, Mr Fraser’s pledge to abolish spending on growth centres was based on false conceptions.
Mr Fraser claims that growth centres are invalid because there is no growth ‘, Mr Uren said.
This just isn’t true.
In the past three years the annual rate of growth of population in Albury/Wodonga has been 3. 1 percent.
This compares with a growth rate of 0.37 per cent in Victorian rural areas in 1 973-74.
A survey of employers in Albury/Wodonga conducted by a private firm showed an anticipated growth rate in employment of 6.4 percent over the next five years.
There is a wealth of evidence to refute Mr Fraser’s claim that there is no growth in our growth centres.
To give another example, we expect the population of Bathurst/Orange to grow by 4 per cent in 1 975-76.
In the past three years the population of Bathurst/Orange has grown overall by 5 per cent.
If Mr Fraser still thinks there has been no growth, he should look at the growth centre in the South- West Sector of Sydney which we are funding in association with the New South Wales Government.
It is an extremely primitive approach to urban and regional development to deny the presence of real growth in the three major growth centres that we have nominated.
It is quite plain that Mr Fraser has decided to abandon the growth centre program.
He has scrapped the selected growth centres that have been agreed upon between the Australian and State governments.
I emphasise that these are largely initiatives developed by State governments. They are co-operative ventures.
In other words, he has agreed to continue the overcentralisation of Sydney and Melbourne which was vigorously promoted by 23 years of laissez-faire LiberalCountry Party Government.
Unless we develop the alternative of selected growth centres, then we will continue to create chaos through the centralisation of Sydney and Melbourne and other capital cities’.
Mr Uren said that the main aim of growth centre policy was to give people a real choice in selecting where they want to live.
In addition, development at the growth centres- particularly Albury-Wodonga- was moving ahead at a pace which created jobs by involving private enterprise in building and development works.
Mr Uren said that Mr Fraser’s program also advocated the abolition of the Area Improvement Program.
The Area Improvement Program has allocated $18m over 1 3 regions in all States for 1 975-76 ‘, Mr Uren said.
It is a linchpin of the Australian Government’s regional policy.
This concept of regionalism was endorsed at a national conference of regional chairmen and secretaries of Regional Organisation of Councils which met in Melbourne a month ago.
Mr Fraser has himself supported regionalism in a letter earlier this month to the Metropolitan Regional Organisation in Western Adelaide in which he said: “The Opposition is entirely in favour of regional organisations which are formed by local authorities themselves.”
Mr Fraser has said that a saving of $20m could be made in the allocation to the Australian Housing Corporation.
He should know that of the $25m allocated to the Corporation in 1974-75 and which is carried over into the present financial year,$1 6m will be spent on the administration of Defence Service Homes activities.
If Mr Fraser wants to cut back the Defence Service Homes program, then he should say so in explicit terms. ‘
Mr Uren welcomed Mr Fraser’s support for land commissions, urban flood mitigation and the sewerage program.
Mr Fraser has said that he would not interfere with expenditure on these programs which make up a large part of the work of my Department ‘, Mr Uren said.
It is surprising, therefore, that Mr Fraser says he would have made special administrative economies in the Department of Urban and Regional Development.
Mr Fraser said that the staff of DURD grew by 1318 in 1974-75.
In this period DURD grew by only 100 staff to cope with considerably expanded functions.
The proposed transfer of staff from the Department of Services and Property and the Cities Commission to DURD and from the Department of Housing and Construction to the Australian Housing Corporation, does not represent an overall increase in the size of the Australian Public Service.
Here Mr Fraser is guilty of double counting.
In pointing to where spending could be reduced, Mr Fraser said that the cost of DURD’s programs had risen by almost 200 per cent in two years.
This is hardly surprising as the Department started from scratch in 1972. ‘ In this context any spending represents a hefty increase in percentage terms, but in real terms the figure is largely meaningless.’
– I thank the House. Our broad Budget strategy must be to promote the maximum rate of economic recovery, but at the same time we must ensure that the recovery is one which can be sustained. We do not want a recovery that will peter out in 12 months time because of the resurgence of inflation. How to do this has faced us with a very difficult choice, and we have tried to strike the right balance. On the one hand, a tough deflationary Budget with a significantly lower deficit would almost certainly have choked off the present recovery. Government support continues to be essential with the upturn just beginning. On the other hand, the amount of stimulus which the Government can provide through its fiscal policy is basically limited to the problems of financing a large deficit.
The financial implications of a larger Budget deficit would tend to be an over-expansion of the money supply. This would either add to the inflationary pressures in 9 to 12 months time or produce a significant increase in interest rates. Any major increase in interest rates of 2 or 3 per cent or more would be fatal for private investment, for housing, for State and semi-government loan programs and for urban and regional development programs across the board and would extend the problems of a great broad section of the people of Australia, particularly those on low and middle incomes.
Frankly, if it were not for the financial implications I would be inclined to favour a greater stimulus from fiscal policy. I am particularly concerned that resources in the building and construction industry will remain under-employed during 1975-76. As I indicated in Budget Paper No. 9, in urban and regional development there is a good prospect that the present recovery in dwelling investment will continue at a reasonable rate. However, there will be no real increase in public demand. It may be some time before we see a pick-up in private investment demand for other buildings and civil engineering. Yet the Leader of the Opposition wants to cut the capital program still further. Does he stand for a further increase in unemployment.? If there were a further cut in capital works, the result would be further unemployment.
In many respects it might be argued that a larger public works program would have been desirable. This difficulty, however, would have been in addition to the Budget deficit. In these difficult circumstances I consider that the Budget provides the maximum stimulus possible from the fiscal policy at this time. It provides the maximum stimulus consistent with encouraging and maintaining sustained long term economic growth and restraining inflation. However, we will be closely watching the development situation through the year. With my Department I will be on the alert to explore any moves which could speed up the private sector recovery in step with our objectives for urban and regional development.
Having outlined the factors which determine the broad framework of the Budget, I direct attention to its structure. We have made a major effort to restrain the growth of public expenditure. Our policy in this year is to consolidate the reforms which have already been introduced through the major new measures we have taken with the programs of public expenditure in health, education and urban and regional development. Again I believe that we have struck the right balance and that this process of consolidation is proper at this time. What concerns me is the lack of perspective about the role of public spending in promoting the increased welfare of our community as shown in the responses of the Opposition.
Firstly, there is the confusing suggestion that in some way the expansion of public spending under this Government has impeded the output of the private sector. Let me make it perfectly clear that in the last financial year, with resources under-employed- I stress the words ‘with resources under-employed’- the expansion of the public sector can in no way have interfered with the output of the private sector. Over the last 10 years the proportion of spending by the Australian Government to total gross national expenditure remained remarkably stable at about 25 per cent. Last year, 1974-75, much of the increase in public spending against the economic cycle was on increased employment benefits, the Regional Employment Development scheme, finance for housing paid through the banks, some $ 150m paid as special advances, an increase in the expenditure on welfare housing between 1973-74 and last financial year of $200m, the payment of a loan of more than $400m to the Australian Wool Corporation, and the extra money provided to the States for employment purposes. If we discount that sort of spending and if our gross domestic product had grown at its normal growth of about 5 per cent, then the structural shift in resources from the private sector to the public sector under this Government would have been only about 2 per cent. That is to say, it would have risen from about 25 per cent of total expenditure to only 27 per cent. In no sense is that a major shift in resources. It is entirely in tune with the wishes of the Australian people when they voted for our Government and for the major programs by means of which we promised to make good the neglect of 23 years of mismanagement prior to 1972.
In the current financial year the areas in which the Australian Government’s expenditure will increase most rapidly are not in areas of our own direct expenditure; rather they are in the areas of assistance to State and local governments and to individuals through increased cash benefits. In both cases these payments Will increase by 32 per cent, compared with the average increase in the Australian Budget outlays this year of only 23 per cent.
The Leader of the Opposition has not really taken the substantive issue in this Budget. He has not criticised the size of the deficit as being wrong, either in an upward or a downward direction. He has conveyed the strong impression that he accepts the level of the deficit. Despite that, the Leader of the Opposition has labelled the Budget as a colossal deception. There is no deception on our side. I have tried to make clear the facts about the growth in public expenditure, facts which the Opposition has deliberately confused. The Leader of the Opposition is concerned that this Budget Will make people more dependent on the Government. Let me remind the Leader of the Opposition and his colleagues that the vast majority of Australians have always looked to the public sector to provide a wide range of basic community services. This Government inherited a backlog in basic community services, which we are committed to put right and which we Will continue to put right. Perhaps the Opposition is ashamed of the neglect by Liberal governments over 23 years in office to provide the basic urban infrastructure, such as roads, sewerage and urban public transport.
The Leader of the Opposition has described the major reform of the Budget, the reform of the income tax system, as a confidence trick. How can it be a confidence trick for lower income earners and the family man who Will pay less tax? These are the people we are trying to help. There can be no deception when each claimant, whether rich or poor, gets exactly the same rebate for education expenses. Does the Leader of the Opposition really support the old system under which the wealthy with their children at the major private schools could obtain a rebate as high as 67c in the dollar while at the same time lower income earners got only 20c to 25c in the dollar- much less for each dollar spent on educating their children. We might also ask the Leader of the Opposition how long the broad mass of taxpayers should subsidise the wealthy through concessional deductions for insurance payments. These are the basic questions of equality and fairness and it is time that the burdens of tax policy were directed away from lower income earners and the family man, those who really need help in our community. These tax measures have done something to distribute the tax burden in a fairer way, and I welcome them.
I turn now to the role of our policies on programs for urban and regional development. One of the major achievements of this Government is its recognition of a national responsibility for the development of our cities and our regions. As I have tried to make clear in my foreword to Budget Paper No. 9, the Australian Government has always tried to be involved in urban development. It has been involved through the delivery of some services for which it is responsible, through the location of its own activities, and through various other policies, such as its industry policy, monetary pOliCY and foreign investment policy. What we have done as a government is explicitly to recognise these interconnections. Everything is inter-connected, interrelated, in urban affairs. As a result we are working closely with the States to make the process of urban and regional development more effective, more equitable and more efficient. This has required major initiatives, such as the establishment of land commissions and the development of growth centre programs, in order to provide a base for our new approach to urban and regional development. Land commissions, urban land councils and our growth centres have now been properly established in all States except Queensland, and I am confident that we will reach an agreement with that State in the very near future.
This year we are in a position to undertake a large program of works and provide development expenditure so as to increase the supply of urban land. In co-operation with my State colleagues I will soon announce further details of our land programs. Our land development policies Will continue to be supported by our policies for ensuring the basic infrastructure, including sewerage, drainage, roads and the provision of urban transport. An increase in the supply of land, achieved more equitably and more efficiently, is one of the key elements in reducing inflation. Honourable members opposite know that. In the past land speculation has been automatically profitable because of the limits on the supply of land. In this way it has under-pinned and expanded the whole dismal psychology of inflation. The attack we are making on this process is an important aspect of support for the overall Budget strategy. Our urban and regional development strategy is also aimed at improving the standards of amenities in particular regions, especially those areas which when compared with others are deficient in their share of services and opportunities. The problems of these deficient regions arise directly from the way urban and regional development has occurred in the past. The lack of co-ordination of community involvement and of money is a matter of national importance that this Government has recognised.
The area improvement program chimes in with the Government’s regional policies. The Leader of the Opposition would abolish this program. Why? Because it permits the involvement of local government and people at the grass roots. It was established as a way of involving people and organisations within the community directly in identifying, planning and implementing programs to improve the regions in which they live. Yet I repeat that this is one of the programs that the Opposition wants to abolish.
The central areas of our cities are another example of the history of dismal neglect. A significant element in our policy is to pay particular attention to rehabilitating older residential and commercial areas of our major cities. Here our aim is twofold- firstly, to prevent the disruption of a lifestyle of thousands of people, particularly the old and the poor, by forcing them to the outer fringes of our cities; and, secondly, to prevent the added burden that such policies make on new infrastructure and transport. Again this is a program which the Opposition want to dismantle. These programs add up to the first attempt by an Australian government to tackle these problems directly and to do so in co-operation with and with the help of State and local government authorities.
I have expressed the view over and over again that if we are to solve the problems of our urban communities it can be done only in co-operation with the Australian, State and local governments and the people working together. It is through closer co-ordination at the delivery level where the effects of our spending have their impact that an improved urban and regional environment and through it a better quality of life can be realised. Because of this I wish to emphasise again that in the long run our appraoch does not involve enormous expenditures on top of those which have always gone to urban and regional development through the public sector. It is in this context that we are able to accept a certain degree of consolidation in the current financial year following the major build up in 1 974-75.
In my closing remarks I want to draw the attention of honourable members to a most important document. It is Budget Paper No. 9 on urban and regional development. It deals with the real reason why the Department of Urban and Regional Development was set up. It was set up to look at the economy not with a broad brush approach, as the Treasury does, or with what is called the macro-approach, but in more detail. It was set up to look into the real community and regional effect, to get down to the grass roots and to see where the real inefficiencies exist. The Department of Urban and Regional Development has worked co-operatively with State and local government and with the people to try to achieve this objective. Also it has worked strenuously to try to bring about a balanced Budget and to see that wherever possible the right priorities are established.
-Order! The honourable member’s time has expired.
-In many respects it has taken until the speech delivered by the Minister for Urban and Regional Development (Mr Uren) for this House to recognise just how indebted this Parliament and the Australian people are to the speech of the Leader of the Opposition (Mr Malcolm Fraser) last Tuesday night. Leaving aside for one moment the economic value of what he said, in his speech last Tuesday night the Leader of the Opposition gave to political debate a precision and a difference which perhaps we have not seen for many, many years. How often have the political commentators in this country spoken of the pale differences between the major parties? How often have they spoken of me-tooism? How often have they spoken of quantitative differences but not qualitative differences?
Last Tuesday night the Leader of the Opposition delivered an economic philosophy which is in total and stark contrast to the economic philosophy of the present Federal Government of Australia. I was very interested to hear the Minister for Urban and Regional Development, at the commencement of his speech, revive the reference to the system by his close colleague the honourable member for Lalor (Dr J. F. Cairns), the former Deputy Prime Minister, when he was the Treasurer.
The Minister for Urban and Regional Development spoke about the failing system. He was referring of course to the free enterprise system, the system which the present Treasurer (Mr Hayden) acknowledges must be revived if true economic recovery in this country is to be achieved. The Minister says that the system is failing. Any system in a democracy will fail if you set out to undermine it. Any system in a democracy needs help to be sustained. If anybody in this House imagines that the systems under which we live in our system of government are just going to survive irrespective of whether we work to make them survive, then they are totally deluding themselves. No economic system known to the experience of man will survive attempts to undermine it.
The Opposition argues that since the Government came to office in December 1972 its poh.cies have been to undermine the system that we have known for generations and the system which the Government’s own Treasurer, in delivering the Budget, belatedly recognised as the only way to our economic recovery. It is very curious that when one looks through the Budget Speech delivered by the Treasurer one does not find any references to the system fading but one finds plenty of references to the need to stimulate the private sector. One does see statements such as that: . . . where three out of four jobs are in the private sector, there are firm limits on how far the public sector should be stimulated in this recovery phase.
In other words, the Treasurer acknowledges that a recovery in the private sector is necessary. He acknowledges that the only way for an economic recovery in this country is to give proper stimulus to the private sector. What lamentably he faded to_do, having made that acknowledgement, was to provide the recipe for that recovery- to provide the necessary stimulus in the Budget whereby that recovery could be achieved.
It was left to the alternative government last Tuesday night, through the Leader of the Opposition, to provide the recipe for economic recovery in Australia. In contrast to the Treasurer the Leader of the Opposition was honest enough to tell the Australian people just how serious the economic situation is at the present time. He was honest enough to say to the people that unless we are prepared to be courageous enough to make a significant contribution to the recovery of the private sector- the sector of our economy which the Treasurer recognises is essential to our economic health- then economic recovery is simply not going to be achieved. The failure of the Treasurer, having acknowledged the problem, to provide the stimulus is the true failure of this Budget.
During the course of his remarks the Minister for Urban and Regional Development made the almost incredible claim that if the public sector is expanded the private sector will not be affected in any way. He spent quite a bit of time advancing that proposition. It reminded me of a paragraph in the Budget delivered by the former Treasurer- the now Deputy Prime Minister, the honourable member for Melbourne Ports- in September last year. Although I do not have the document in front of me I can remember the words very well. He stated:
The relatively subdued conditions in prospect on the private sector provide the first real opportunity we have had to transfer resources to the public sector.
What the then Treasurer- the now Deputy Prime Minister- was saying in September 1974 was that if the private sector is subdued enough it will be possible to stimulate the public sector. Of course that proposition, which was at the root of the Government’s philosophy and thinking at that time, does not fit in very easily with what the Minister for Urban and Regional Development has just said. The fact of the matter is, of course, that there is an inter-relation between activity in the public sector and the private sector. Unless there is a significant transfer of assets from the public to the private sector of the order outlined last Tuesday night by the Leader of the Opposition we will just not get that economic recovery which all members of the House, I hope, will work towards, and which the Australian people want and are entitled to have. Unless there is a significant transfer of assets we will not be able to solve the present economic dilemma
I do not suppose that any Budget since the end of the Second World War could have attracted quite so much interest and attention as this Budget. I do not suppose that the editorial comments in the various newspapers of Australia and other comments in those newspapers about the Budget have been matched in the political experience of this country during the past generation. I think that is very cogent evidence of the real concern of the Australian people about the problems that we presently experience. I would like very strongly to associate myself with everything that was said by the Leader of the Opposition last Tuesday night. That speech gave to the Australian people a clear choice between 2 philosophies and 2 approaches, a choice that none of us on this side of the House equivocates about or is ashamed of. He declared his faith in the free enterprise system and in the capacity of Australians to make their decisions as to the manner in which they Will spend the money they have earned. He rejected in his speech the proposition that governments have some inalienated right to determine how the Australian people shall spend the money they have earned. Nobody will argue that government services are not essential, but we argue very strongly that what has gone wrong with this Government is that more and more it has tried to tell the Australian people how they shall spend their own resources.
I make one comment about the income tax reforms which have been attempted by the Treasurer. I do not deny that in some areas improvements will occur, although overall the fact remains that under the Treasurer’s proposals, under the tax reforms, there will be a 25 per cent greater take by the pay-as-you-eam income tax system. The real significance of these taxation changes is that a penalty will be put on the thrifty and the provident. No matter how much supporters of the Government quote thenversions of the statistics the fact remains that the type of rebate system that has been introduced in the Budget will discourage many people from making their own provision for their own future. We reject that type of approach because it encourages a mendicant mentality on the part of the Australian people- a handout mentalityand discourages those in the community who want to make their own decisions about the way in which they will spend the resources that they earn.
I would like, in the remainder of my speech, to make a few remarks about an area of the Government’s activities which is of particular interest to me and of great significance to economic conditions in Australia at present. I refer to the Trade Practices Commission which was established under the Trade Practices Act which came into operation a few months ago. The first annual report of the Trade Practices Commission was tabled in this House this week. As the Opposition spokesman on the area covering the Trade Practices Act I would like to record my compliments and appreciation of the report furnished to the Attorney-General (Mr Enderby) by the Trade Practices Commission. To those of us who have a very close interest in the operations of this Commission the first annual report provides an extremely good illustration and handbook of just how the Commission operates. Restrictive trade practices legislation in this country was pioneered by a Liberal-Country Party Government. It was Sir Garfield Barwick, then AttorneyGeneral, who first told this House that wholly consonant with the Liberal Party’s philosophy on free competition there should be restrictive trade practices legislation and indeed it was in 1965 when, I think, the right honourable member for Bruce (Mr Snedden) was AttorneyGeneral that the first restrictive trade practices legislation was passed by this Parliament. In 1974 the present Government passed into law the present Act. That Act has been in operation for only a few months and it is too early to make definitive conclusions as to whether in its entirety it has been a successful piece of legislation.
I make it quite clear on the Opposition’s part that we believe in having legislation which promotes competition. We believe there are restrictive trade practices around Australia and we believe there should be strong and effective legislation to deal with those practices. There are 2 matters arising out of the first report of the Trade Practices Commission that I would like to mention. I referred to one of them last Tuesday when I asked the Attorney-General a question. It is the power that the Attorney-General has under section 90 of the Trade Practices Act in effect to compel the Commission to issue authorisations. The scheme of the Act is that if a practice is declared to be illegal under the Act and is held to be an anti-competitive practice then it is open for any company carrying on that practice to ask the Commission to authorise the continuance of that practice on the ground that it provides a public benefit.
On 3 occasions prior to 30 June the AttorneyGeneral saw fit to direct the Commission, as he has power under the Act to do, to issue authorisations notwithstanding the fact that on two of the three instances in question the Commissioner had determined that the practices being carried on were anti-competitive and in relation to the other one, a proposed merger- I know the interest which the honourable member for Hunter (Mr James) has in these matters- the Commission had not only held that the practice was anti-competitive but it had also determined that it was against the public interest. Yet the Attorney-General, exercising his power under section 90 of the Act and without giving any reasons at all apart from using the statutory form of words set out in section 90, instructed the Commission that it had to issue an authorisation and the Commission, as it is bound to do under the Act, went ahead and issued that authorisation.
I mention this matter because I think it highlights an area of the operation of the Act that ought to be looked at. I think there are very, very good reasons why this type of power should not be given to the Attorney-General. Under the Act the Commission is obliged to publish reasons for most of its findings. Under the Act companies which have to apply to the Commission for clearances and authorisations are obliged to put on a public register information which many of them regard as highly confidential. It is in fact the practice of the Commission, as is demonstrated by its first annual report, to grant confidentiality only in very, very special circumstances. So the whole spirit and operation of the Act so far as the Commission is concerned and so far as companies are concerned are that everything has to be out in the open. That is a proposition with which most honourable gentlemen would agree and I would have thought it is a proposition with which a party committed to open government would agree. Yet we find under this Government that when the Minister who is responsible for the operation of the Act gets involved he does not give any reasons at all. He applies a double standard. He says to the Trade Practices Commission: ‘You can publish your reasons’. He says to the corporations: ‘You make all your information available; you disclose all your business details. But when I make up my mind that I am going to compel the Commission to issue an authorisation I am not going to give any explanation’. I do not think that is good enough, and I do not think this Parliament ought to regard it as good enough. This is an area of the operation of the Act that I think ought to be looked at.
The other area that I should like to mention briefly in the few minutes that are available is the consumer protection sections in Part V of the Trade Practices Act. I do not think that anybody on this side of the House would dispute the fact that in our community there is a need for effective legislation to protect consumers. When Part V of the Act was being debated, the Opposition expressed concern that many of the provisions in it would overlap provisions in existing State legislation, that confusion would be caused to the manufacturer and to the consumer, and that the net result to the community might well be minimal. Some of those fears have proved to be unfounded, but some of them have not. The Opposition is concerned that in the area of consumer protection there should be a complete integration of the activities of the Federal Government and of the State governments. The State governments are close to the market place. They have been operating in the area of consumer protection for a number of years and they know a great deal about the complaints and concerns of consumers.
What worries me about the annual report of the Trade Practices Commission is that there is evidence that in this area it is dealing with issues that ought to be dealt with by State consumer protection bodies. I refer to page 42 of the annual report, where reference is made to investigations involving the following matters: A false representation that a 1965 model car was a 1968 model car and a false representation that a car was an ex-manufacturer’s executive’s car when in fact it was an ex-rental car. I do not think that anybody in this House would dispute that representations of that nature ought to be investigated, and if false representations are made they ought to be dealt with under the law. There are State laws dealing with these matters, and I think it is cause for some concern that the legislation as presently framed allows this overlap and this confusion to arise. I am not suggesting that it is the fault of the Trade Practices Commission. It is obliged to interpret the Act as best it can. But I think there is room even at this early stage for reviewing the operation of the legislation to see whether we can write into it provisions that prevent overlapping and provisions that will ensure that in providing a sensible system of consumer protection for all Australians there will be total integration of the operations of the Federal Government and of the State governments.
-Let me first congratulate the Treasurer (Mr Hayden) on bringing down his first and, I hope, not his last Budget. It was a responsible Budget. The Budget priorities are framed to decrease the rate of inflation which is this nation’s most menacing enemy. The private sector is recovering, and the Budget strategy aims to foster that recovery and also to consolidate the gains which have been made in the public sector under the last 2 Labor Budgets. There is a harsh method of bringing down the rate of inflation, but this Government has not chosen that method. Instead, it has sought to find a middle way. The harsh method would result in higher unemployment, higher interest rates, a sharp rise in direct income tax, a contraction of the money supply and huge cuts in government expenditure. Instead, this Government has acted responsibly and with moderation. Certainly there are some bitter pills to swallow- higher postal and telephone charges and increases in the excise charges on beer, spirits and tobacco products. However, I should point out that if one is ill- there is no doubt that our economy is ill at the present time- some medicine must be taken to cure that illness. These charges are just part of that medicine. Even the Liberal-National Country Party Opposition has admitted belatedly that it would have taken the same course.
What this Government has also done in the Budget is to restrain sharply the rate of growth in
Government spending compared to last year. Certainly, there was a huge increase in necessary Government spending over the last 2 years. The reason for this was the neglect in particular areas by the previous Liberal-National Country Party governments over a period of 23 years. For example, let us take education. Over the past 2 years spending on education by the Australian Government has quadrupled. It has grown 4 times. The effects of this expenditure on education are only now starting to take shape. I have seen the effect of this expenditure at disadvantaged schools in my electorate, particularly in the non-state schools and mainly in the Catholic schools. Prior to 1972 when Labor came to power these Catholic schools were really struggling. They were trying to cope with excessive class loads, inadequate equipment and inadequate facilities. The pupils attending these schools were second class citizens due to these disadvantages. It was not their choice. But thank God since Labor came to power the children who attend these schools are now receiving the same educational opportunities as everyone else. And why should they not? As was announced by the Treasurer in his Budget Speech, the expenditure on education in this financial year will rise by $237m to $ 1,908m which, allowing for inflation, will maintain the pre-existing rates of expenditure.
The state schools system has also made tremendous gains since Labor came to power. These gains will be continued during the coming years while Labor remains in office. There are many disadvantaged schools even in the state school system. They include schools in the inner city areas and schools with a large proportion of migrant children who need specialised teacher training, particularly in English. These problems were recognised by the Schools Commission which was set up by the Labor Government. The necessary funds have been made available and will continue to be made available by this Labor Government.
On the receipts side, the Government has introduced the most sweeping reform of the income tax system. There will be a substantial reduction in the marginal tax rates for most full time employees. The greatest reductions will be in the average male earnings income range which is about $150 a week at the present stage. A tax rebate system has been introduced which will greatly favour the single income family with dependent children. It seeks to bring about a greater amount of equity in the bearing of the tax burden. I add that this has occurred not before time because the tax system up to date has favoured those who have it at the expense of those who have not.
I would like to give a couple of examples of the effects which will How from the Budget which was recently introduced. A married man in receipt of an income of $7,000 a year- not a large sum- with a dependent wife and 2 children will, under this new Budget, pay $427 less in this year- 1975-76- than he paid in the year 1974-75. That represents a tax reduction of over $8 a week which is a substantial increase in his take home pay. I might add that it is of far greater advantage to him to have the tax reduction than to receive an $8 a week wage increase which would have had to bear its share of additional income tax. A similar sized family in receipt of an income of $12,000 a year will pay $817 less tax in 1975-76 than was paid on the income of that family in 1974-75. Expressed in percentage terms, that represents a reduction of 24. 1 per cent in the income tax paid by that taxpayer. One of the greatest benefits which will flow from the tax measures which have been brought down in this Budget will be that it will take out of the tax field altogether over half a million- about 500,000- former taxpayers. Under this Budget they will pay no tax at all during the 1975-76 financial year.
I shall make a few comments in regard to the general state of the economy. It is true to say that one of the greatest problems in the economy at the present time is a lack of confidence in the community. The question must be asked: Is this lack of confidence real and based on fact or has it been engendered by the hysterical ranting and raving of the Liberal-Country Party Opposition, ably supported by a scaremonger Press? How often does one read the banner headlines in the metropolitan Press: ‘Australian Unemployment up; 500 000 Unemployed by Christmas’; ‘Downturn in the Economy’; ‘Harder times ahead’. The Press of Australia has a lot to answer for in the destruction of people’s confidence. If we destroy the people’s confidence we destroy the community. If we follow this destruction to its natural conclusion, the Press and the Press barons can bring about the destruction of this society in which we live. I ask honourable members to remember that it was Lenin who said: ‘Capitalism will eventually destroy itself. I warn these Press Jeremiahs that they can bring about the destruction of our present system of society a lot sooner than they think if they continue with their present tactics.
When people lose confidence and cannot look into the future with confidence they cease spending and commence hoarding. We only have to look around the community today to realise that this is a fact of life. When people cease buying manufactured goods, other than food and necessities, it must have and it does have an effect on our manufacturing industries and resultant employment. Let me give a simple example. A person may wish to replace his refrigerator but, due to uncertainty about the economic future, he decides he will put up with his present refrigerator and leave his money in the bank. I ask honourable members to magnify this effect a thousandfold. The net result is that the manufacturer does not have a market for his refrigerator. He curtails production. Therefore he does not need as many employees to manufacture refrigerators so he sacks his surplus staff, thus creating unemployment. There is also the chain reaction from this created unemployed- I emphasise ‘created’- which goes right through the community creating more unemployment. The available statistics from the Australian Bureau of Statistics on movements in savings bank balances is evidence of this trend. I ask for leave of the House to have incorporated in Hansard details of deposit balances in savings banks between June 1973 and June 1975 on an Australiawide basis. I have made arrangements with the honourable member in charge of the Opposition side of the House.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
Australian Bureau of Statistics
Canberra, A.C.T. 2600
Cite as: Australia, House of Representatives, Debates, 28 August 1975, viewed 22 October 2017, <http://historichansard.net/hofreps/1975/19750828_reps_29_hor96/>.