30th Parliament · 1st Session
Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 3 p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Speaker and the House of Representatives in Parliament assembled. The petition of the undersigned of Australia respectfully showeth that many Australians are concerned at the presence of Indonesian regular and irregular troops in East Timor, in defiance of United Nations General Assembly and Security Council resolutions and at the apparent equivocal policy of the Australian Government, of publicly supporting self-determination for East Timor but privately reassuring Indonesia of its “understanding” and continued economic and military aid.
We your petitioners do therefore humbly pray that the Australian Government:
And your petitioners as in duty bound do ever pray. by Mr Beazley, Mr Fry and Mr Hurford.
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 three service cadet forces have great value in the development of the youth of Australia.
That the disbanding of the cadet forces will disperse accumulated expertise and interest of those involved, and in some cases negate the efforts of many people over many years.
Your petitioners therefore humbly pray that the Government will reconsider its decision and that the Government will reinstate the cadet forces.
And your petitioners as in duty bound will ever pray. by Mr Bonnett, Mr Braithwaite and Mr McVeigh.
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 Donald Cameron, Mr Moore and Mr Scholes.
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 undersigned persons believe that-
The $300 limit on income tax deductibility in respect of personal residential land and water rates is unrealistic and is a discriminatory income tax penalty.
Your petitioners therefore humbly pray that the Government will take steps to see that the aforesaid limitation is removed entirely or substantially increased.
And your petitioners as in duty bound will ever pray. by Mr Connolly.
Television Service at Jurien, Leeman and Cervantes, Western Australia
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Australia (Electors of the Division of Moore) respectfully sheweth that:
Whereas in the coastal areas of the Shires of Dandaragan and Coorow there are now three rapidly developing townships, namely, Jurien, Leeman and Cervantes;
And whereas these towns are poorly provided with recreational facilities, receiving, in particular, only intermittent and unpredictable television transmissions from the Perth metropolitan area;
Your Petitioners therefore humbly pray that steps be taken to improve television reception in the area by the establishment there of a television booster station.
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 in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth-
That the new Government during the recent election campaign, promised lower taxation and more money in people’s pockets.
Your Petitioners therefore humbly pray-
That the House of Representatives will take immediate steps to prevent the introduction of Television and Radio licence fees, the imposition of a tax levy for the Medibank and the introduction of higher charges for drugs dispensed under the Pharmaceutical Benefits Scheme.
And your petitioners as in duty bound will ever pray. byDr Klugman.
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 existence of a system of double taxation of personal incomes whereby both the Australian Government and State Governments had the power to vary personal income taxes would mean that taxpayers who worked in more than one State in any year would-
Your petitioners therefore humbly pray that a system of double income tax on personal incomes be not reintroduced.
And your petitioners as in duty bound will ever pray. by Mr Morris.
– I direct a question to the Minister for Health. Has the anti-smoking campaign reduced the incidence of cigarette smoking in Australia? Is the Government concerned to reduce the incidence of cigarette smoking? Futhermore, is the Minister aware of the fact that alcoholism is a major health problem in this country? If so, what actions have been taken to reduce the incidence of this disease in Australia?
– The Government is concerned about the incidence of cigarette smoking. A survey has indicated that 61.6 per cent of Australians do not smoke, which is a relatively small increase from a survey that was taken over 2 years ago. Although 750 000 people have given up cigarette smoking the survey also indicates that 33 per cent of girls aged between 16 and 19 years are smoking 10 cigarettes a day and approximately 23 per cent of boys are smoking that number of cigarettes a day. Although the anti-smoking campaign has been effective in certain age groups it is clear that there is still a very real problem amongst the younger people in this country. The Department of Health leaves no doubt in anybody’s mind that cigarette smoking is a very serious cause of lung cancer and coronary heart diseases. In fact the Department claims that 1 1 000 people die in a year as a direct result of cigarette smoking.
The honourable member for Riverina raised the question of alcohol. One man in every twenty and one woman in every one hundred are suffering from alcoholism in Australia. I suppose it is one of the most serious health problems in this country. It is the fourth major public health problem. Honourable members may be interested in some statistics which were handed to me by Dr Mickleburgh of the Australian Capital Territory. He claims that excessive alcoholism is the major cause of the occupancy of one in 5 hospital beds, one in 5 battered children, one in 5 drownings and submersion cases, two in5 divorces and judicial separations, about half the serious crimes in the community, half the deaths from road crashes, half the deaths from pancreatic diseases and two of 3 deaths from cirrhosis of the liver, reduced resistance to a wide range of illness as yet largely unmeasured -
– I rise to order.
– Losses to industry from work absences, accidents -
-Order! The Minister is giving -
– He is giving a medical opinion.
-Order! The Minister will resume his seat.
-Is the Minister making a second reading speech or is this a question without notice?
-Order! I call the Minister for Health.
– As a consequence of the Australian Health Ministers Conference in 1975 a working party was set up to examine and to look at ways and means of trying to influence the incidence of alcoholism in Australia, particularly amongst Aborigines. That working party will be reporting to the 1976 Australian Health Ministers Conference in June.
– I address my question to the Attorney-General. Will the honourable gentleman say whether he has any suspicion of breaches of the banking foreign exchange regulations by Mr Alexander Barton involving tens of millions of dollars? If he has, why has he not initiated police investigations such as those he initiated against the Labor Party’s advertising agency, based on his own suspicions?
– There may well be suspicion on this particular matter. If the honourable member has any information I would be very glad to receive it.
– I am not in the police force any more.
-I realise that. May I say that gives me a great deal of comfort. However, if the honourable member has any information he might pass it on to me. The honourable member can rest assured that the Government is concerned about the Bartons. There was a decision of the court of appeal in Paraguay last weekperhaps it was earlier this week; I am not sure of the date. Unfortunately the court dismissed an appeal in which extradition was being sought. The fact is that further steps will be taken. I do not have the precise details at the moment. I can give them to the honourable member if he wishes them. Further steps are possible which may result in assistance being given to the Bartons being returned to Australia. I am aware that inquiries are also being made elsewhere in the world. The honourable member can rest assured that the matter is well and truly in the AttorneyGeneral’s mind.
– Has the Prime Minister any comment to make on a Press report in the Australian of 3 March 1976 that a survey commissioned by the Federal Government is to ask people whether they think the Australian Broadcasting Commission should be abolished?
– I know of no such survey. From my own knowledge I cannot guarantee that nobody from some department or even from the Australian Broadcasting Commission itself has commissioned some kind of a survey. But let me reassure this House, the ABC and those who have a concern for the ABC that the thought of abolition of the ABC is very distant from this Government’s mind; I am quite certain that it will be a flourishing, useful and worthwhile organisation long after the end of the life of everyone in this chamber.
– I also ask the Prime Minister a question based on a newspaper report- this time the Canberra Times and on this occasion this morning’s Canberra Times. The -report is that he spoke to 2 journalists last Wednesday evening and that subsequently reports appeared in the Press alleging that $500,000 in Arab funds had already been transferred to Australia for election purposes. Will he say whether he did in fact make such a statement to any journalists about the transfer of funds? If so, what was the source of the information on which he based that statement to the journalists and what steps did he take to check its accuracy before speaking to the journalists?
– I have no intention of commenting on questions -
Opposition members- Ha, ha!
– Honourable gentlemen opposite may not laugh for too long. I have no intention of commenting on conversations that took place, or may not have taken place, in my office. That is a method of selective questioning which, by a process of denial or affirmation, enables a person to ascertain the nature of any kind of a conversation; and there is a principle -
– Why don ‘t you tell the truth?
-Order! The honourable member for Melbourne will withdraw that comment.
– What comment?
-The honourable gentleman knows the comment to which I refer. I do not want to worsen the situation by repeating it.
– What was the comment? I think it is reasonable to ask: ‘ What was the comment?’
– I- raise a point of order, Mr Speaker. Did you hear the comment when a member referred to you as a mug?
-He may have been right about that. The statement that the honourable member for Melbourne made was ‘Why don’t you tell the truth?’ and I do not think that is fitting parliamentary language. I ask the honourable gentleman to withdraw it.
Mr Innes-Well - (Honourable members interjecting)
– Who said that?
– Order! The House will come to order. I cannot hear the honourable member for Melbourne. The honourable member for Melbourne will address the Chair and only the Chair. I ask the honourable member for Melbourne to withdraw.
– I will withdraw the remark about telling the truth, but I would ask the Prime Minister -
-Order! The honourable gentleman will resume his seat.
-Mr Speaker, the point at issue is that I will not be put in the position of having to answer questions concerning discussions that may or may not have taken place in my office. I would be surprised if my predecessor would have allowed himself to be put in that position.
– My question is directed to the Minister for Defence. Does the Minister recall the Clausewitz dictum that the most important element in defence is self-defence? Is it a fact that the dark and wide glasses which the Minister wears disguise glowing testimony that the Minister has, with typical dedication and devotion to duty, been practising this art? Can we believe that the partner with whom the Minister has been practising was last seen hurriedly disappearing along the corridors of power, with the Minister- if I may use a phrase which he has frequently used- in hot pursuit?
– I would have been happier if I could have been spared this question; but, seeing it has been asked, I suppose that I should tell all and show all. I have what the doctors describe as ecchymosis of the left orbital. I understand it, on more familiar terms, to be a black eye. It has been a most distressing and embarrassing experience. I am bound to tell my friend, the honourable member for Wakefield that, but it has not been entirely without compensation. I would never have thought it possible that such a myriad of colour could gather together on one face. I am puzzled; I do not know whether it is the rising sun or the setting sun. I should tell the honourable gentleman how it happened. I was having breakfast at Tiflfanys. There were 2 ladies there from Iraq. They started to fight over me. I was lacking in all sense of discretion. I started to intervene. The moral of the story is this: Never let 2 ladies fight over you. That is the most plausible story I can give to the honourable member for Wakefield. If he can think of anything better I would be even further in his debt.
-Will the Attorney-General indicate to the House the approximate percentage of investigations carried out by his Department and the Commonwealth Police which are initiated by the AttorneyGeneral the first law officer- without prior advice and recommendation from his Department? Am I right in concluding that the Attorney-General initiated inquiries into the Labor Party’s advertising agency without much prior advice and recommendation? Did he receive advice or recommendation from or consult with any person outside his Department before initiating the inquiries in question?
-I am unable to give the percentage that the honourable member seeks in the first part of his question. I do not keep figures of that character in my mind, nor do I believe they are kept. As to the rest of the matter, I explained yesterday that I received certain information and what happened in relation to it. I do not propose to add anything further.
– I direct my question to the Minister for Primary Industry. Has the Jackson Green Paper on manufacturing industry recently been released? If so, is it highly critical of the abattoir and meat processing sections of the meat industry? Are there approximately 100 meatworks operating in Australia, 70 of which hold export licences? Did the committee reporting to Mr Jackson inspect only 3 works in Australiaone in Brisbane, one in Victoria and one in New South Wales? Does the Green Paper suggest great changes in the abattoir side of the industry? Is the Australian Exporters Federal Council concerned with the findings of the report as damaging to the meat industry? Is it true that over the past 8 years over $ 100m has been spent in Australia on updating our abattoir and meat processing sections? Are our meatworks regarded internationally as being efficient and up-to-date? In view of the adverse nature of the report will the Minister thoroughly examine the Green Paper and take the necessary steps to correct the adverse assessment which has been made?
– I think the statistics relating to meat exports and the standard of export works throughout Australia speak for themselves. The honourable member knows full well from his own association with abattoirs in northern New South Wales that there has been a very marked improvement in the standard of killing facilities not only in that area but also in every State in order to meet specifically the requirements laid down by the United States Department of Agriculture. There have been throughout Australia very marked improvements in the handling of meat for human consumption. As a result I do not believe any criticism that has been levelled by Mr Jackson or others in respect of those standards to be justified.
Having said that, I think it is equally true that where meat is not needed for consumption over a longer period of time involving transport across oceans or between continents perhaps in some way we have overimproved our works. One of the things that concern me is that perhaps in order to meet the killing standards for other markets we are now imposing unnecessarily on Australian consumers and producers a higher price than would otherwise be necessary. I will take note of the observations of the honourable member and ensure that whenever possible those who are our customers do not feel that we are not meeting the standards which they rightly require.
– I ask the Treasurer: Is the Reserve Bank of Australia the authority responsible for the enforcement of the Banking (Foreign Exchange) Regulations? Was any allegation or information regarding the transfer of overseas funds in connection with the last election campaign forwarded by the Reserve Bank to the Attorney-General, or the Attorney-General’s Department, or the Commonwealth Police, before the Commonwealth Police were involved in this matter?
– I am not aware of any allegations that have come directly from the Reserve Bank of Australia. Naturally the matter will be put under notice for a response to the honourable gentleman in the appropriate way. Therefore he will understand that I am referring only to the question of any direct contact between the Reserve Bank and myself. I make no comment on other matters which have been the subject of recent statements by other Ministers.
– My question is directed to the Attorney-General. He will be aware of numerous newspaper reports today concerning the alleged safety of a Mr Fischer, an Australian citizen currently in Singapore. Has a request for police protection come to the notice of the AttorneyGeneral from a Mr Fischer or from any person alleged to be involved in the Iraqi donation scandal? Considering the serious nature of the investigations, will the Attorney-General consider sympathetically requests from any person alleged to be involved who is concerned for his safety, so that the investigation can be completed with all witnesses being able to give their evidence?
– Yes, a request has come to my notice. Needless to say, I would take into account any request of a character that required protection of a witness.
– I ask the AttorneyGeneral a question. What information came to him which led to the police investigations into the alleged Iraqi donations scandal?
-I indicated yesterday, in answer to the honourable member for Oxley, that I did not propose to give the detail of the information. I explained why. I do not know whether the honourable member for Hindmarsh was present. I indicated on that occasion- and I still indicate- that when information of that description comes it is not in the interests of justice or in the interests of investigations that it be revealed. Therefore I do not propose at this stage to reveal what it was.
– Is the Minister representing the Minister for Social Security aware that the maximum amount which pensioners are able to earn while still retaining full eligibility for pension entitlements was fixed at $20 a week in September 1972 and has not been increased since then despite massive levels of wage inflation in the last Vh years? Will the Minister take steps to increase the amount which pensioners may earn while still retaining full pension benefits?
– I am aware that the exemption rate has not been increased beyond $20 since September 1972. At that time a pensioner was able to earn, before his pension was reduced, $ 10 a week. In the case of a married couple, the amount had increased, I think, from $17 to $34.50. For each child in the care, custody and control of the pensioner, the pensioner is able to earn $6 a week extra without affecting the rate of pension he receives. The Government is well aware of the serious problem that inflation has caused and the serious problem that the former Government caused for people in that situation. There is no doubt that inflation rose from about 4.7 per cent to no less than 16 per cent or 17 per cent at one stage. As a consequence of the inflationary problem the Government is putting measures in train to overcome the fundamental economic problems, and provide a more sound basis for improvements in social welfare. The income security review group is presently examining all aspects of the Australian income security system and will undoubtedly make recommendations to the Government as soon as policy options are available to it. We would hope that, with the control of inflation and with a proper review of the present situation, the people will be relieved of the problem that we have inherited from the former Government.
– My question which is directed to the Minister for Foreign Affairs arises from a personal explanation made by the right honourable member for Lowe after question time yesterday concerning a newspaper report that William McMahon and Andrew Peacock spoke at a meeting of Middle East representatives at Mr Reuben Scarf’s home. I ask the Minister when he attended that meeting. Has he attended other meetings at Mr Scarf’s? Did he speak at such other meetings about his Party’s policy on the Middle East?
-My recollection is that during the election campaign of 1974 I addressed a meeting of members of the Arab community in Sydney, as I addressed meetings of members of the Jewish community, explaining the Liberal Party’s policy on the Middle East. 1 may be wrong in this regard, but as I recall from the introductions that were made that day, all- at least the majority- were Australians of Arab extraction who had indicated, it was put to me, some concern with the policy of the coalition parties on the Middle East. It would appear that the way in which I explained that policy did not abate their concern. Members of the Press were present. All of these factors make it rather a contrast to the breakfast, of course. I understand that the members of the Press who were present were mainly Australians. This meeting occurred during the election campaign of 1974 and not of 1975. 1 understand, though I was unable to read the dialect, that some of the articles were critical of the policy that I espoused that day when it was reported in the newspapers. It is interesting to note that, although it was an open meeting and although the Press was there- that is, the ethnic Press at least- I was not invited back in 1975 to explain that policy at all, though I was invited by members of the Jewish community to explain during the election campaign of 1975 our policy on the Middle East.
– I ask the Minister for Defence whether he has seen the article in yesterday’s Australian Financial Review in which it was stated that a 38 000-man Australian Army was aimed at. Can the Minister indicate the validity of this report and inform the House whether an increase in the size of the Army would mean a reduction in the amount available for equipment for the Services?
-Yes, I did see the report. In the 20 years that I have been in this Parliament I have never claimed, to have been misreported. On this occasion I do not claim to have been misreported. I can recall, vividly, some occasions when I regret that I was reported. The report was based on what I may, with respect, describe as a misunderstanding. Last week during the course of an interview I was asked what was, having regard to prevailing circumstances in Australia, the optimum size of the Australian Army- in other words, what was the most desirable level. I referred to a report known as the FarrandsHassett report which was prepared by 2 very distinguished Australians, the present Chief of the Defence Force Staff and the Chief Defence Scientist, Dr Farrands. One of the theses argued in that report was that to facilitate maximum use of all military skills and to have access to all military skills a figure of 38 000 in the Army would be regarded as most desirable.
The gentleman who interviewed me when he turned in his copy, for reasons which were to me quite unintelligible, omitted to make any reference to the Farrands-Hassett report. I lodge no complaint about it. That story subsequently was taken up and, again with respect, a gloss given to it with the result that it appeared as though I was arguing, as of today, 3 March 1976, for the immediate establishment of an army of 38 000. That is not the Government’s policy as it is presently understood. We are seeking to ensure that what we regard as a significant shortfall in equipment is the problem that is attacked first. Nevertheless I can assure the honourable gentleman that it does remain the Government’s intention to respect that objective and as a consequence we propose, in the present 5-year defence program, to try to secure a figure of 34 000 by 1978.
-I direct my question to the Prime Minister. Has the Prime Minister seen reports that the rate of growth of money supply has been reduced as at the end of January? I ask this question of him as he is the person responsible for the economic policy of his Government. Therefore, does he believe that the Government’s policy of floating Australians savings bonds to sop up a supposed excess of liquidity, with a consequent increase of interest rates, such as building society interest rates -
– Who wrote this?
– I did. Come and have a look at it. Does the Prime Minister believe this was the correct policy in terms of the latest statistics available or was the Treasury advice to him once again incorrect and accordingly his policy needs revision?
– The honourable gentleman mentioned certain reports about the volume of money in the community. I have seen some such reports. The honourable gentleman asked me a question about a matter of policy as though one person is responsible for it. One of the differences between this Government and its predecessor is that there is a general collective responsibility embracing the whole Ministry and that I, as head of the Government, obviously carry responsibility for all policies but it is a collective responsibility. One of the things about the previous Government was that there was not even an individual or a collective responsibility. We had a situation in which the former Prime Minister would say that this was somebody else ‘s fault: This was the Deputy Prime Minister’s fault or the fault of the Minister for Trade. Which other Ministers did he sack? He sacked a couple of Treasurers and other people. The responsibility embraced in this Government is a collective one to uphold a proper system of Cabinet government. The policy we followed as a result of advice from the bank, the Treasurer, the Treasury and other departments has been correct in the interests of the recovery of the economy and having in mind the enormous damage done by the irresponsibility and the lack of any responsibility by the former Prime Minister over, the previous 3 years.
-I ask the AttorneyGeneral: Has the Chief Commonwealth Electoral Officer received from yet another independent candidate for the last Federal elections an allegation -
– I raise a point of order, Mr Speaker. I may be incorrect, but is it not our custom to take one question from one side of the House and then a question from the other side of the House?
-The honourable gentleman is out of order in the sense that there is nothing in the Standing Orders to require questions to be called from alternate sides; but in fact that is the practice and in fact the Speaker is fallible. I realised after calling the honourable member for Hughes that I had made an error. I ask the honourable member for Hughes to continue his question.
-I ask the AttorneyGeneral: Has the Chief Commonwealth Electoral Officer received from yet another independent candidate for the last Federal elections an allegation that his Liberal opponent paid him a sum of money to influence the elections? To whom does this complaint refer? Will it be referred to the Commonwealth Police for investigation? Will further proceedings be instituted if it appears that the Electoral Act has been contravened.
-Yesterday the Secretary of my Department brought to my attention a letter which had been written to my Department by the Chief Electoral Officer. That letter enclosed a reference letter, I think it was, from the private secretary of the Leader of the Opposition and attached to it was a form of statutory declaration. That statutory declaration contained certain allegations. I do not recall the precise name of the person concerned, but I am sure that honourable members can find out from the Leader of the Opposition. I shall give it to him if he wishes it; I just do not recall it at the moment. The advice has been given to the Chief Electoral Officer that investigations should take place. Needless to say, if the investigations reveal that any offence occurred, proceedings will be instituted.
– Can the Minister for National Resources confirm reports published today that the Government has approved the development of the Hail Creek coal project in the Dawson electorate? Can the Minister outline the Government’s requirements on Australian equity in the project and can he say what progress has been made in reaching agreement on the equity question in relation to other proposed coal developments in the Bowen Basin?
– Discussions have been going on with the various coal mining interests in the Bowen Basin. It is the aim of this Government to revive interest in these companies after 3 years of sheer frustration and everything coming to a standstill. It is the desire that these mines should proceed so that the economy can get the benefit of these very large scale projects, but that they proceed on a basis that will not jeopardise existing coal mining operations in Australia and that we endeavour to obtain the highest possible Australian equity participation. I am pleased to say that as far as Hail Creek is concerned agreement has been reached between participating interests in meeting the requirements of the Government. One of the Australian participants withdrew and was replaced by Conzinc Riotinto of Australia Ltd. That tended to greatly reduce the Australian beneficial equity participation in the project. In discussions with CRA I have asked that by the time the project comes into production, which could be 2, 3 or 4 years timemost probably 4 years time- the Australian equity be as high as 60 per cent. CRA which is the company involved in being able to restructure the arrangement, has said that it will use its best endeavours to see that 60 per cent Australian equity is obtained in this great project. So the basic work for a study of the project can now be undertaken which will mean that the project can proceed.
The other 3 projects in the area which are Nebo, Norwick Park and Blair Athol have company structure arrangements which have a very high participation of foreign ownership. In all of these cases I have spoken to the companies and said that we want at least 50 per cent Australian participation. I am very encouraged by these discussions in that the companies believe that they can obtain 50 per cent Australian equity or even higher. In the case of Blair Athol, there may be some other arrangements necessary because it is a steaming coal operation and the chance of its being a profitable operation is much less than in the case of the other 2 coking coal projects. But I think that all of us must be greatly relieved that this operation can now proceed and meet our national desire of having a high Australian equity participation in it.
-I direct my question to the Prime Minister. Where there is apparently this collective responsibility in the Cabinet which the Prime Minister has just mentioned, what guarantee has my State of South Australia that its point of view will be heard, leave alone its vital interest taken notice of and protected, in relation to its motor industry and other vital areas such as that, when indeed there is no representative from South Australia in the Cabinet and only a very junior voice in the lower Ministry?
-The honourable gentleman does not understand how these matters work. I understood that I used the word ‘Ministry’. If I used only the word ‘Cabinet’, which is not my recollection, that is wrong. But obviously if a matter concerns a particular Minister’s State, that Minister will be present at any discussions concerning that particular State. The honourable gentleman would be well advised to have a close look at the present motor car plan which was introduced in the administration of his time, but of which he was not a part. So I do not blame him in particular for the unfortunate results of that car plan. But it would result in body pressings being imported by virtually all the major manufacturers in Australia instead of being made in Australia. That would lead to very significant unemployment in Geelong. It could affect the employment of up to 1400 people in the motor industry in South Australia. The honourable gentleman, I am sure, realises that the motor industry has a significance for the industrial development of South Australia in a sense out of proportion to its size because of the industrial base of that State. It is a very significant part of the total industrial involvement of South Australia. But how a motor car plan could be embraced which was quite directly going to lead to very significant unemployment throughout the motor industry, I find it difficult to understand.
– I address my question to the Minister for Health. Is it a fact that Medibank does not cover all procedures classified as ‘cosmetic devices’? I have noted a report in the Australian of 3 March concerning an Anthony Vandermolen, a 4-year old boy suffering from toxacara which has caused the loss of an eye. Is it accurate to say that the existing policy of Medibank does not cover tragic circumstances such as this?
– As soon as I heard this report this morning I contacted my department and my department contacted the New South Wales Health Commission. Discussions have taken place during the morning. We have found that the boy, Anthony Vandermolen was treated at the Sydney Eye Hospital which is a recognised
State hospital for the purposes of our Medibank cost share arrangement.
-Well, Australia’s. Advice has just been received as a result of these discussions that the hospital has a continuing responsibility to the child for the provision of an artificial eye and the New South Wales Health Commission is arranging for the boy to continue to receive the services of the hospital without charge, including the provision of an artificial eye. As far as I know the parents have not yet been told but an attempt was made to reach them just after lunch. So from Anthony Vandermolen’s point of view the case has been happily resolved. Medibank does pay for this service and the agreement with New South Wales provides in these circumstances for the cost to be shared between the 2 governments, the Commonwealth Government and the New South Wales Government.
– You were wrong again.
– I was wrong this morning because I did not know the full facts and I think that a lot of people were not sure what the arrangement was in respect of this hospital. There are some hospitals that would not be covered by this arrangement. What we did not know from the Press reports was the hospital at which the child was a patient. However, it has all been happily resolved and I am sure that the parents and the boy will be very pleased.
– I preface my question to the Foreign Minister by recalling, as I did yesterday, that last Wednesday the Prime Minister said that our Tokyo Embassy was instructed to issue visas to 2 Iraqi citizens and that they were met on their arrival in Sydney on 8 December by a representive of the Department of Foreign Affairs. I did not expressly ask and accordingly in his letter to me yesterday the Foreign Minister did not expressly answer the question as to where the visas were issued. I now ask: Is it a fact that the visas were issued on the tarmac at Mascot by his Department’s representative?
– I will answer the question. This is a very technical area but the fact is that visas do not admit people to Australia. One has to have an Entry Permit to enter. The visa is required for travel to Australia. There are agreements with carrier companies to make sure that people travelling to Australia have valid visas. There are certain exemptions in respect of people who are not required to have valid visas. These 2 gentlemen, I am informed, who were not exempt from the requirement to have visas, travelled to Australia without the necessary visas. However, to get into Australia they needed an entry permit.
Some people, such as diplomats or representatives of foreign governments, travel on diplomatic passports and are exempt under the Migration Act from the need to have entry permits. I am informed that, although they travelled on diplomatic passports, these 2 gentlemen by saying that they were here to visit relatives and not on official business removed themselves from that exemption. However, I am informed that they were met by an officer from the Department of Foreign Affairs and were accorded the courtesies usually extended to people such as diplomats or representatives of foreign countries who are not required to have entry permits.
– I address my question to the Prime Minister. What was the event which initiated the commencement of inquiries into what have been described as breaches of the foreign exchange regulations of the Banking Act?
-The honourable gentleman will recall that earlier I indicated that because of inconsistencies concerning the stated reasons for 2 Iraqis visiting Australia certain inquiries had in fact been instituted. It was the nature of those inconsistencies, coupled with allegations that a loan had been offered or, rather, a loan had been accepted, that led to the instigation of the actual inquiry. There are a great many contradictory factors about this particular matter. The Leader of the Opposition likes to ask questions about these matters but he does not like to answer questions about these matters. For example, why would the Federal Secretary of the Australian Labor Party, Mr David Combe, ask him 3 days before the end of a critical election period to have breakfast with 2 people whom presumably he had not met before? Or had he met them before? These people said they were coming into Australia to establish consular facilities but when they got here they knew nothing about that; they were coming to visit relatives. Is the Leader of the Opposition a relative or is he just a friend? If he is not a relative the actual reason that these people finally gave for coming here is not accurate either. They came here for a breakfast. Why?
The President of the Australian Labor Party suddenly finds it necessary to return home. He was going to the International Labor Organisation Conference, as I understand it, an important body to which he has devoted a great deal of attention. If some reports that have been published are correct, he at least confirmed that an offer of $500,000 had in fact been made. According to public reports, another significant figure in the ALP, Mr Egerton, also confirmed that he did not really know what was going on. He said that if any one wanted to know what was going on he ought to ask the Leader of the Opposition, because there is a Leader’s fund, as he called it, which the Leader of the Opposition had always impressed on the Executive, the Caucus or the public it was his personal prerogative to do with as he pleased. Has any question been asked about that? There is the other nice phrase, of course. When Mr Hawke was asked whether a certain matter was important or not, he said: ‘Well, you don’t have a special Executive meeting about a storm in a teacup’.
- Mr Speaker, I raise a point of order. From my position in the chamber I cannot ascertain whether the Prime Minister is reading from the papers that he is looking at. If he is reading from those papers in reference to his answer I ask that those papers be tabled.
-The honourable member for Shortland asks for the tabling of the documents if the Prime Minister is reading from them. The right honourable gentleman would be not obliged to table them, even if he were reading from them, if he said they were confidential.
-Mr Speaker, I am not reading from any document. I have one or two notes on a piece of paper in front of me. I said that the President of the Labor Party has indicated that a special Executive meeting of the Labor Party would not be called merely over a storm in a teacup. There are a great many questions unanswered by the Leader of the Opposition. Those questions ought to be answered not only in the interests of the Labor Party and those who once thought it was a Party concerned about people but also in the interests of Australia. It is an utterly obnoxious principle that any political Party could accept any funds from anyone from overseas.
– I direct a question to the Prime Minister. I understand that it has been the policy of his Government to stimulate the private sector. He would be aware that there is an under-use of resources in the non-housing sector of the building industry. In fact there is a very difficult economic slump in that area. Why does the Government not proceed with the $80m office accommodation program that was proposed by the Whitlam Government to build office accommodation at selected centres in Sydney and Melbourne and also at regional growth centres such as Geelong, Albury-Wodonga and BathurstOrange to stimulate the private non-housing sector of the building industry?
-The honourable gentleman’s logic seems to be strangely out of tune. There is already a good deal of unused office accommodation in Australia. I suppose it is his idea of good government to take more funds from the taxpayers to build more office accommodation which under the present circumstances would not have a direct use and a direct purpose. One of the great tragedies of the previous administration was that it could never understand that its grandiose plans for spending money had to be paid for by someone. One of the ways in which they had to be paid for was by increased taxes which the previous administration consummated with great skill because the tax reforms of the last Budget provided a relief of about $35m in this financial year and collected an extra $2,600m in this financial year. I have to give credit to the Treasurer of the time for being able to sell that as a great reform. It was a great example of sleight of hand. The ambitions, the dreams of politicians and of governments, have to be paid for in one way or another. I think some politicians would have been infinitely more responsible than they had been if they themselves had had to pay some of the price of their plans. Of course, I suppose in one way they are paying a price because they have been dismissed by the people of Australia.
– Pursuant to section 125 (8) of the Conciliation and Arbitration Act 1 904-1975 1 present the report of the Australian Arbitration Inspectorate for the year ended 30 June 1975.
– For the information of honourable members, I present the text of the following international treaty adopted by the International Labour Conference at its 30th session in 1947: ILO Convention No. 81 concerning labour inspection in industry and commerce. With the approval of the Executive
Council, the Australian Instrument of Ratification was lodged with the Director-General of the International Labour Office on 24 June 1975.
Pursuant to Article 25 of the Convention a declaration was appended to the Instrument of Ratification excluding Part II, concerning labour inspection in commerce, from Australia’s acceptance of the Convention. This reflected the fact that Australian law and practice were not in compliance with Part II.
Pursuant to section 42(3) of the Health Insurance Commission Act 1973 I present the first annual report of the Health Insurance Commission for the period to 30 June 1 975.
– Pursuant to section 23 (2) of the Australian War Memorial Act 1962-1975 I present the annual report of the Board of Trustees of the Australian War Memorial for the year ended 30 June 1975 together with financial statements and the report of the Auditor-General on those statements.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in addition to Mr Speaker, ex-officio, Mr Abel, Mr Donald Cameron, Mr Holten, Mr Innes, Dr Klugman and Mr Les McMahon be members of the House Committee.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in addition to Mr Speaker, ex officio, Mr Armitage, Mr Baillieu, Mr Bryant, Mr Garrick, Mr O’Keefe and Mr Wentworth be members of the Library Committee.
Motion (by Mr Sinclair)- by leave- agreed to:
That Mr Lionet Bowen, Mr Donald Cameron, Mr Hodgman, Mr Jacobi, Mr Jarman, Mr Lucock, Mr Nicholls, Mr Scholes and Mr Viner be members of the Committee of Privileges, five to a form a quorum.
Motion (by Mr Sinclair)- by leave- agreed to:
That Mr Bungey, Mr FitzPatrick, Mr Hodges, Mr Martyr, Mr Millar, Mr Wallis and Mr Antony Whitlam be members of the Publications Committee.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in addition to Mr Speaker, the Chairman of Committees, the Leader of the House and the Deputy Leader of the Opposition, ex officio members, the following members of the Standing Orders Committee, five to form a quorum, namely, Mr Anthony, Mr Bryant, Mr Fife, Mr Giles, Dr Jenkins, Mr Keith Johnson and Mr Scholes.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in accordance with the provisions of the Parliamentary Proceedings Broadcasting Act 1946-1974, in addition to Mr Speaker, ex officio, Mr Donald Cameron, Mr Corbett, Mr Graham, Mr Scholes and Mr Antony Whitlam be members of the Joint Committee on the Broadcasting of Parliamentary Proceedings.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in accordance with the provisions of the Public Accounts Committee Act 195 1-1973, the following members be appointed members of the Joint Committee of Public Accounts, namely, Mr Armitage, Mr Connolly, Mr Dobic, Mr Innes, Mr Lusher, Mr Martin and Mr Short.
Motion (by Mr Sinclair)- by leave- agreed to:
That, in accordance with the provisions of the Public Works Committee Act 1969-1974, the following members be appointed members of the Parliamentary Standing Committee on Public Works, namely, Mr Bungey, Mr James, Mr Keith Johnson, Mr Kelly, Mr Les McMahon and Mr Millar.
– I have received a letter from the honourable member for Kingsford-Smith (Mr Lionel Bowen) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The serious permanent damage caused to the program for the development of early childhood services.
I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)
– One of the great attributes of the Australian Labor Party Government was that it introduced into this nation a very effective early childhood welfare program. The Opposition now submits that serious permanent damage has been caused to that program. Originally the program suffered a lot of objections both inside and outside this House, perhaps on the basis that there was no need for it and perhaps on the basis that it was a matter better left to the States. But the evidence compiled over a period of time clearly showed that whilst some State governments had made reasonable efforts in this regard others had made none at all or very few. A survey conducted by the previous Government showed clearly that at least 400 000 children under the age of five were in urgent need of care. At least one quarter of the 1 500 000 children under the age of five were in need of child care.
The previous Government then commenced a program with statutory support in the form of the Children’s Commission which that Government established. Honourable members who were in the Parliament last year will remember well the opposition which the establishment of the Children’s Commission met from honourable members who are now on the Government side. Its establishment meant that there would be new initiatives and programs for the care and welfare of young children. The opposition was based on the spurious, perhaps excessively legalistic premise that it would be better for the State governments to handle these matters and that funds should be provided to them by way of section 96 grants. The previous Government was able to show that it should not vacate the field and that it was essential that every Australian government interested in child care should invent and assist new programs for child care development.
It is against that background that I point out to honourable members the serious damage which has been done by the announcement- innocent as it may appear to be- by the Minister Assisting the Prime Minister in Child Care Matters (Senator Guilfoyle) as follows:
There have been many queries over the effect on children’s services of the Federal Government’s announced cut of $9m to the original Budget allocation of $74m for the Children’s Commission.
That statement purports to say: ‘It will not cause much inconvenience. It will mean a delay in initiating, establishing and improving programs for early childhood care. ‘ The Minister said:
I want to assure all those involved in providing childhood services that all existing commitments will be met this financial year.
That is not the true position. Surely it is elementary that if the Government makes a cut of S9m in a program for which $74m has been allocated it will cut the existing commitments. The Government might try to justify it on the basis that that commitment was to an existing program, but it would have a commitment, I submit, to those who need and who already asked for a child care centre to which the Government has already indicated they would be entitled. So those programs will not be implemented. I turn to the following classic statements by the Minister:
As far as new projects are concerned this financial year, only a limited number will be approved because of the Budget restrictions-
That in itself is true but it is a direct contradiction of the statement that existing commitments will be met. It means that a very large number of proposals that were to be financed, which in the main called for new structures, will not be implemented. It means that children under the age of five in those areas will not have child care facilities. Nobody in Australia can justify the retardation of child care programs for children in need. One cannot say to the child under five: ‘It will be all right. We will have the program available for you in two or three years time.’ The development of children does not stand still. Their immediate needs must be looked at. Honourable members should bear in mind that this is an area of urgent need, as has been indicated by a very extensive survey and evidence submitted. The Government just cannot ignore the need by saying that there is a budgetary problem. Looking at the matter of priorities, why should women and young children be expendable? Why should they be first to suffer under the Budget cuts? The amount being cut from the Budget is $360m. Surely the cut of $9m for the Children’s Commission ought to be the last to go.
Let us look at the other palliatives offered to the public as a reason for the cuts. Very little was made of the cut in child care but a lot was made of the advantages to industry by the establishment of an investment allowance. An analysis of that situation on a fiancial basis shows that some companies will be helped by a subsidy of $ 1 8 in $100 on their investment expenditure.This allowance involves a budgetary appropriation of some $110m. Looking at the priorities I ask: Would it not be fairer and far more beneficial not to give as much in this allowance and instead to maintain the child care program? You can buy a new machine, a new lathe or a new tractor next year, but you cannot replace the care that young children may miss this year.
We have this rather specious argument put by the Minister that although the Act was passed in
June last year it was not proclaimed and no commission was appointed by the Whitlam Government. Let me put on the record the reason no commission was appointed by the Whitlam Government. A commission was not appointed because we could not get the Appropriation Bills passed in the Senate. The appropriation for child care was a large sum of money. It involved some $47m, I think, for the children’s commission, but because we could not get the Bills passed due to obstruction in the Senate we could not establish the commission. We could not create the commission before the appropriation was approved. I am now a bit mystified to think that money can be deemed to have been expended without the commission being established. There was no delay on our part in trying to establish the commission. Our advice was that we could not establish the commission until such time as the appropriation had been passed. We now find that although- the appropriation has been passed the commission has still not been established. This creates a fear in my mind that the commission will not be established because again there is the suggestion that there is to be a review of the whole of the Government’s considerations and recommendations. I am prepared to predict that the Government’s review will mean that’ no need will be seen for a children’s commission, that it will be left to the States. We do not deny that the States have a role to play in this field. They have an effective role and a welcome role. They have an initiative role; but we want to be able to complement and supplement the States role and perhaps offer alternative ideas on the basis that child care in all the States should be of the maximum advantage to the children.
The analyses that I have done clearly indicate that the cutbacks announced by the Minister will mean the spending of a miserable $800,000 from November to June next. The minimal estimate for a new service is $50,000. This could mean that only 16 new programs will be funded up to June next year. Already there are 600 applications for child care facilities and the best that we can offer now is sixteen.
The Budget allocation for New South Wales, for example, is $260,000. This would allow at best in New South Wales 5 new services of a capital nature. The New South Wales consultants’ committee has already recommended, I am advised, new projects worth $ 1 m. Now it is said that there will have to be a cutback because of lack of money. It will be of particular interest to Country Party supporters to know that the Wellington pre-school will not be established. The people in the Wellington area have already waited 2 years but this project is now to be removed from the program. Of course any new applications will not be considered at all.
In government the Labor Party promised- to fund integrated services. We invited all the existing child care centres to extend their services for full child care and we promised that we would fund them to the extent of 75 per cent of their costs as from 1 January. I say now that this will not be done. Either those services will not be integrated or the parents themselves will have to pay the additional costs. As far as I am aware there will be a mere $40,000 available for New South Wales to provide additional services. There are about 500 existing centres in New South Wales which the Labor Party in office wanted to extend into full child care centres. In my electorate La Perouse has a very great need for child care facilities. The people there were anxious to have services extended but this will not be possible now. I could go through a whole list which would clearly illustrate that there are going to be massive cutbacks- whatever word you use, it means no progress- in child care development programs.
I have advice that there are 50 areas in New South Wales which were going to be able within the Labor Government’s program for the establishment of child care or pre-school centres. These areas go right across the political spectrum. Every one is in need. The areas include Blacktown, Riverwood and country centres like Tweed Heads. There are 50 such areas in which virtually nothing will be done. There are 500 preschools where, as I mentioned earlier, there is a great need for financial assistance. In every electorate there are people interested in the care of children, whether they be in Mittagong, Macksville, Bathurst or Bendigo. Clearly people in need are not going to get this financial aid and as a consequence child care facilities are not going to be established or extended. Does this reduced program not make ridiculous the offer now made by the Premier of Victoria to increase the subsidy for kindergartens up to $30,000 for capital expenditure? It is a very welcome offer but there will be no money with which to guarantee the cost of running child care programs that might be needed in areas in which kindergartens are established.
Surely, irrespective of politics, Government supporters can see that cutbacks of this nature mean permanent serious damage to the child care program for which there is a very fundamental need. There are many people in country centres waiting for money to be allocated. They include representatives of religious interests, be they Catholic, Jewish or what have you- all well meaning people who expect to be funded in this program but this is not going to happen. For example, the Parramatta synagogue is in jeopardy from the point of view of establishing a child care centre. I have already mentioned the Wellington Shire Council. I could mention any number of areas in which I am told projects will not be funded. I could read through a list of them but honourable members would be aware of them. I ask them to have a look at the areas in their own electorates which are the subject of applications for financial assistance, for integrated child care services or the establishment of new services. Honourable members can tell their constituents these projects will not now be funded. The money is not there.
I understand that the Minister is going to make a statement about this matter. When it is made it ought to be a clear statement setting out the applications that have been rejected. If such a statement is not made I will issue one myself which will clearly indicate the applications that were rejected. Out of 50 applications from pre-schools for assistance perhaps 20 will be accepted. Five hundred integrated services will not now be integrated or the parents will have to pay the increased costs. A large number of projects, particularly in New South Wales, which the people concerned think will be funded will not be funded at all. This is a tragedy for rational and reasonable development of a welfare program for the benefit of all Australians.
We can have our political differences but we should not have them in the field of child care. We want to guarantee the community orientated programs. They are the ones that we want to foster. To suggest to the community that these programs could be started and now to take away from them that initiative is a damage that one can never repair. It is on that basis that the Opposition has brought forward for discussion this matter of public importance. I urge all members of this Parliament to give their support and ensure that this cut is not made. I speak not on any political basis but on the basis that the community has put forward these programs. They have been put forward by well-meaning people for the benefit of children and you could not get a better priority than that.
– I have heard people say that one wants a hide like a rhinocerous before one even contemplates becoming the leader of a major political party in Australia. If that is a qualification then surely the honourable member for KingsfordSmith (Mr Lionel Bowen) qualifies. He has stood up in this Parliament and tried to tip the bucket over the Fraser Government because of- to use his own words- ‘the serious permanent damage caused to the program for the development of early childhood services’. I listened with great curiosity and interest to the honourable member. I listened to his specious arguments in support of this matter of public importance, on behalf of an Opposition that brought the Australian economy into a state of ruin in its 3 years of government. When it was in government it brought about the highest constant inflation rate in Australia’s history, the highest unemployment rate since a former Labor Government’s dreadful efforts in the 1930s and the highest budget deficit on record. Economic mismanagement brought about great suffering in vast sections of the Australian community. The people knew full well what the previous Government did for them. They showed their response on 1 3 December last year when they threw out the socialist government because of its disastrous economic record and its lamentable failures.
The honourable member for Kingsford-Smith talked about the 600 applications. He said that the best we could do was to meet the cost of only 16 applications. He said that we approved only sixteen. The Labor Government consistently lifted the expectations and hopes of the Australian people and consistently dumped them. There was no way in the world, with the economic situation as it was- with a $4, 700m deficit -in which this Government or any other government could have met the ambitious forecasts that were made at the time the Children’s Commission Bill was debated. The Fraser Government is concerned about the welfare of children. Although the former Government introduced the legislation in May 1975 and it received royal assent on 11 June 1975, the Act was not proclaimed. So no commission was appointed. Then there was the double dissolution. On coming into office we inherited a far worse economic situation than we had at first thought. So the Government had to put in train certain ways and means of trying to cut government expenditures in certain places. It established the Bland committee of inquiry to review government administration. The Government is awaiting the report of the Administrative Review Committee before deciding its attitudes to the future administrative arrangements for the childhood services program. The Bland committee is expected to report by the end of May. The Interim Committee for the Children’s Commission, which was operating when this Government took office, is continuing in the meantime to administer the childhood services program.
So it is wrong to try to give the impression to people generally that this Government has dumped the childhood services program. That statement was incorrect. The Prime Minister (Mr Malcolm Fraser) appointed Senator Margaret Guilfoyle as Minister Assisting the Prime Minister in Child Care Matters. The Interim Committee is reporting to her. The reference to the Bland committee in no way implies lack of commitment by the Government to the childhood services program but rather a desire to see the most appropriate administrative machinery developed. There was a reduction of funds for the childhood services program by $9m. This was announced by the Minister not very long ago.
– The poor little kids.
– It is all right for you to make an emotional statement. Clearly if the Labor Party had been in government, if by some miracle Labor had been returned on 13 December, it too would have found that the well was dry. The Labor Government had bled it dry. The honourable member referred to the poor little kids. What about their parents? We have had the highest level of unemployment on record. Many of the people who are unemployed are parents. The poor little children! The Labor Government was put out on 13 December because it made a mess of its own administration. It lifted the expectations of the Australian people to impossible heights and dashed them one by one.
To bring into the House a matter of this nature at this time shows the ineptitude and the stupidity of an Opposition that is tearing itself inside out. To try to put some rationality into this debate let me read from the Press statement of the Minister Assisting the Prime Minister in Child Care Matters. It reads:
She said that the Federal Government was giving top priority to providing child care in high needs areas with the remaining finance available for new childhood services programs this financial year.
It was true that a large proportion of the $65m available for childhood services in 1975-76 was already committed to pre-school projects.
But recurrent funding, in the form of 75 per cent of salaries of agreed pre-school staff, would be paid from 1 January 1976 where the pre-schools had agreed to extend and integrate their services.
In deciding to provide this assistance to pre-schools which agreed to integrate, the previous Government was anxious to make full use of a vastly under-used capital resource- preschool buildings- rather than spend large sums on new buildings.
We agree with this policy of linking up existing services for children and bringing them together by making maximum use of Australia ‘s pre-school buildings.
I think I need to make this point clear: The Prime Minister has given an undertaking that all commitments already approved by the Commonwealth for the remainder of the year are being fully met. This is evident from the Press statements issued on 4, 6 and 1 7 February.
New centres which start before any formal approval of funding from the Commonwealth Government should not rely on automatic approval being given after they have started. Therefore the Prime Minister counselled that the safe thing to do, if they are dependent on Federal funding, is to make sure that approval is provided before they start operations and open their doors. I think he said that there may have been in the 5 centres in dispute a week or so ago an assumption that funds would be available. He said that certainly there was no approval from the previous Administration or from this Government. The Prime Minister said that in examining the 5 centres which it is suggested are in difficulty the Government will certainly be looking at those which are in most need and which are in needy areas where there is a particular requirement for child care centres. Grants for child care services for the remainder of this year will be announced and will continue to be announced by the Minister for Social Security (Senator Guilfoyle). At the time the Prime Minister made these statements, a number of applications were under review.
Clearly the former Government did not see the urgency in this matter because it did not proclaim its own legislation. It had time to do so. The legislation received royal assent on 1 1 June 1975. This Government has inherited an Interim Committee, is operating with this Interim Committee, is continuing with the program that was in train, and is honouring the undertakings where approvals had been granted. It was announced that there would be a $9m cut as part of a general necessity to reduce government spending, where it was possible to reduce it without bringing untold hardship to the people concerned.
Yes, we have inherited a very serious situation. No incoming Government would like to inherit the situation by this Government. We have had to take decisions. I have had to take unhappy decisions in my own area of responsibility- health. I have inherited a pretty unhappy situation so far as the economy is concerned. Speaking of health, I am pleased to say that there is close cooperation with the Interim Committee for the Children’s Commission in relation to areas within my own portfolio responsibility, particularly the community health program. A significant number of health services for children are being supported under that program at State request. In particular I would mention the early childhood development complexes in Victoria where both health and education services are contained.
I want to make it perfectly clear to honourable members in this House that the Government is committed to the welfare of children and is concerned with their problems. We are also concerned with the total, overall economic position that confronts this country, because until we get the foundations of the economy soundly based there is no way in the world that we will be able to extend the services that are necessary to meet the basic needs of the average person. It was Sir Winston Churchill who once said, I think in 1938, that one of the great paradoxes of socialist governments is that from the day they assume office they tend to erode the foundations upon which private enterprise functions and thus destroy their own capacity to implement their ambitious social welfare programs. How appropriately that comment could be made against the former Whitlam Government. Its social welfare programs had plenty of merit, but in trying to implement them the former Government practically destroyed the whole foundations and the fabric of the Australian economy, which would have rendered impossible the discharge of even the most paltry assistance to areas of need.
So it will take us some considerable time to rectify and to put into proper place the Australian economy so that it does generate wealth, so that wealth is available to be directed to the areas of need. The Prime Minister has consistently said that that will be the objective of the Fraser Government. I can assure honourable members that every man who sits on the Government benches is committed to ensuring that people in need in this country will have resources available to assist them.
-The hypocrisy that flows through the arguments from honourable members opposite certainly has to be heard to be believed. When talking about the fact that there were insufficient funds to carry out programs that were designed and implemented by the previous Government, I just wonder what sorts of priorities the Government has looked at when it has examined the issue of child care.
There are 2 actions which really sum the attitude of the Government and which really lay bare its cynicism and its hypocrisy. The first was the reintroduction of the superphosphate bounty and the second was its attitude to the investment allowance and the $9m axed from the Budget for the Children’s Commission’s child care projects. On the one hand the Prime Minister (Mr Malcolm Fraser) will spare no expense in feather-bedding his already wealthy cronies, to the extent that I think 2 1 per cent of the farmers receive 80 per cent of the superphosphate bounty, and the Prime Minister himself is the recipient of something like $6,000 a year.
On the other hand, he is happy to dash the hopes of thousands of parents and children throughout Australia. In the short time he has been in office the Prime Minister has time after time trodden on the hopes and the aspirations of the defenceless. Almost every cutback in expenditure he has introduced has been aimed at the weakest and least protected groups in our communitythe pensioners, the Aborigines, the migrants, the people who are trying to re-establish themselves by means of retraining schemes, the unemployed, and now the children. What is proposed is not just a cut in expenditure. What is at stake is not some bureaucratic master plan, not some abstract program drawn up by some academic theorists. These programs represent the living, breathing hopes and the involvement of thousands of parents and children.
We talk about the philosophy spelt out by the Prime Minister a few days ago, but answers given to questions asked of the Minister for Social Security (Senator Guilfoyle) in another place have contradicted that time and time again. I challenge the Government to tell us when it is going to come clean. When is it going to say in which areas the cuts are to be made, and by what criteria are they to be made? Senator Grimes asked the Minister for Social Security whether she would give a detailed statement on cuts to the proposed Children’s Commission expenditure. He went on to ask:
Will the Minister also clarify her statement that there will be a slowing down of approved programs?
To that question the Minister replied:
All the projects for which approval had been given- to the extent of $65m- will proceed. We are talking about the fact that the advisory committees in the various States of Australia have innumerable applications, totalling something like 600 . . .
We have been told by the Minister for Health (Mr Hunt) that only 5 projects were involved. But what about the other 595 projects? What consideration will be given to them? It is obvious that what the Minister in another place has been saying -
– They are applications. They are not approved yet.
– Let us talk about approved applications. The Government says on the one hand that all applications will be met. Then, on the other hand, we have Senator Guilfoyle telling us that funds will be provided to the extent of $65m. The amount of $9m has been axed from the amount being made available. Senator Guilfoyle was questioned further by Senator Melzer, who asked where the cuts would be made and on what criteria they would be made. Senator Guilfoyle said that she had received from the States particulars of the projects that would be slowed down as a part of the Budget strategy which will be applied to this area. If that is the case, what about the rest of the projects? There is a whole stream of projects, as the honourable member for Kingsford-Smith (Mr Lionel Bowen) -
– Six hundred.
– No, I am talking now about the projects that were approved under the Labor Administration. There is insufficient money left, obviously, to fund the remainder of those projects. I challenge the Minister and the Government to come clean, to stop beating about the bush and to tell us what cuts are going to be made, where they are going to be made, and which projects are going to be axed. Further to that, when the previous Administration spelt out the principle of supplying 75 per cent of the recurrent costs in respect of salaries, it was to be applied on the basis of particular criteria to ensure that the day care institutions or kindergartens would be extended to cover the overall area of child care. Now I challenge the Minister for Health again to come clean and tell us what criteria are to be used in supplying the funds to pay the salaries and wages under those circumstances. If the criteria we put forward were met what money would be made available for further projects?
It was said that we of the Labor Party had moved away from the community and established central control but there is nothing further from the truth than that statement. We did involve communities. People came forward and indicated local projects needed in their communities. That is the basis on which the criteria ought to be established. There should be no Taj Mahals set up as kindergartens to accommodate very few children for a brief period of time. The maximum amount of child day care ought to be met from the funds that are available. If the Government proceeds along the lines referred to by the honourable member for Kingsford-Smith there will be savage cuts in areas where these facilities are most needed.
Honourable senators in another place, try as they may, cannot get answers to the questions we have posed. I understand, as the honourable member for Kingsford-Smith said, that a Press statement is to be issued. The Minister for Social Security has an obligation to the Australian community and to people interested in child welfare to spell out the answers to the questions. For instance, we do not accept that the pre-schools accommodating play groups or mothers clubs are integrated in the way intended by the Labor Government. If they are integrated it should mean that there is sessional and full time care. The guidelines should be more specific. Most areas will have some need for full time care. Preschools and groups seeking funds should satisfy the Interim Committee for the Childrens Commission that the needs of the community have been investigated fully.
There should be a rational use of resources. For example, in a community where there are several pre-school centres, not all need to provide full day care but every community must have some full day care facilities provided. Parents who work shift work need centres that are open while they are at work and some areas will need centres open 24 hours a day. There is a whole range of areas of need and it ought to be fully examined. We should not get the run around, and neither should the community get the run around that it is getting from the Government at the moment. If the Government is going to axe $9m as it announced it should tell us which areas are affected and announce the criteria on which projects in each of the States are to be selected. In regard to the small portion to be covered by the $ 1.75m in the slowing down process, the Government has an obligation to spell out clearly and unequivocally the extent of the scheme and the projects which are going to be axed in each of the States concerned which represent the balance of the money that has been made available. The Government is obliged to do this for the Australian people. There has been enough hedging already. The Government ought to get down to business and tell us the truth.
Order! The honourable member’s time has expired.
-The Labor Party Opposition has failed to make out a case in support of the matter that the House is debating. It is nonsense to suggest that there has been any serious or permanent damage caused to the early childhood services program. If there has been any damage caused to it and the work of the Interim Committee for the Children’s Commission that damage has been caused by the policies of the previous Labor Government. It was that government that caused the highest unemployment in Australia for 30 or 40 years and it was that government that caused an acceleration of inflation. Those 2 factors together in themselves have done damage to any child care program that any government, State, Commonwealth or local, chose to undertake.
The Fraser Government, on coming to office, tackled the fundamental problems facing the Australian community, namely, to bring order where chaos now exists in the economy, to provide an economic climate where people can find employment, and to provide an economic climate where the stresses on the families of the nation are reduced so that mothers who wish to care for their children at home are able to do so. Today many mothers in the Australian community find that because of the pressures of taxation and the impact of the constant escalation in the cost of living they need to seek employment and therefore need access to substitute mother care for their children. If the economy were in better shape, if the tax burden on the incomes of their husbands were relatively reduced, they would be able to provide childhood services for their own children. In making that statement I am not denying that there are areas of need.
The Opposition, in support of its argument in this debate, suggested that there had been serious cuts in the child care services program. Let us look at the Labor Party’s record on the allocation of funds. In 1973-74 the Labor Government allocated 80 per cent of the funds then available to pre-school education. In the next year it allocated 70 per cent of the funds to that area. Pre-school education is important and there is need for more to be done in this area. There is a need to provide the children of a larger number of families with increased opportunities for and access to pre-school education. However, when a nation is upgrading the services that it provides for its children it needs to do so in a balanced and rational way. It has been impossible to have that balanced development with the sort of approach that the Labor Party had to this problem.
Opposition speakers suggested in their arguments today that the Government should indicate what programs and what commitments will be cut. No commitment will be cut. Every commitment by the previous Government will be undertaken and fulfilled by this Government. It is stretching logic to the extreme to suggest that, because public applications for assistance are called and 600 or more are received, and there is to be a slowing down of the program due to the economic stresses of the time, those 600 applications or more should be regarded as a cut in a commitment. The Prime Minister (Mr Malcolm Fraser) and the Minister Assisting the Prime Minister in Child Care Matters (Senator Guilfoyle) have given assurances that every program in respect of which a commitment was made, every application in respect of which a commitment was made by the previous government, will be honored.
– It is not true. Read the Senate Hansard.
– It is true. No commitment, will not be fulfilled. It is true that in a limited number of instances the speed of fulfillment has been slowed down but this relates to a small number of cases. What this Government will do will enable much more to be achieved in the provision of care and education for the pre-school age children of this nation. It will assist community organisations, local government and State government to do more. The principal way in which this assistance will be provided will be in containing inflation. How many honourable members of this House are associated with or know of genuine hard working community groups in their electorates which are seeking to raise funds to provide a kindergarten, a preschool centre, a child care centre, a play group or some other form of family day assistance only to find that $500 raised the year before last will purchase this year only the equivalent of $300 worth of goods.
The rate of inflation is so high that community groups, which necessarily invest their raised funds in savings bank accounts and investments of that nature, quickly find that the resources they have raised decline in value so rapidly that they get further and further behind rather than bringing the project to fruition out of their own efforts. We will enable community groups which wish to help themselves to help themselves. If they raise funds those funds will, with inflation under control, cease to lose value at the rate at which they have been losing it over the last 3 years.
In conclusion I want to emphasise a factor about this whole issue. When we look at the matter of child care services and pre-school education it is terribly important that as a nation and as a government we should have a philosophy relating to the position of the family in the community. The Australian Labor Party in office did not believe in the family. So much of its legislation put on the family pressures that created a need for child care services where families were previously able to provide and wished still to provide those services for their children. The Labor Party’s philosophy was to provide child care centres for every child when the best care that the great majority of children can receive is care from their own mothers. In developing a continuing program to fulfil the needs within the community the Government now in office will recognise the needs of families. It will enable young families to purchase homes and to make those purchases at times so that those families can have a normal home situation.
This Government has pledged that it will look at the special problems imposed by the tax structure upon the single income family. It has also indicated that it will show concern for the family by enabling young school leavers to find jobs rather than to have their first experience out of school being on the dole. The Opposition has failed to make out its case. It was the Opposition when in government that destroyed the aspirations of families and those children who need child care, by creating a huge pool of unemployed in the country and by fanning the fires of inflation so that the value of the services that a government could provide out of the Budget resources available in real terms did less for the community than those resources should have achieved.
The discussion is concluded.
Debate resumed from 26 February on motion by Mr Lynch:
That the Bill be now read a second time.
- Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate is resumed on this Bill I should like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Loan 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 both Bills to be discussed in this debate.
– Is it the wish of the House to have a general debate covering the 2 measures? There being no objection, I shall allow that course to be followed.
-These Bills are merely machinery measures. The Opposition is not opposing them. They are necessary to ensure that a prospective deficit in the Consolidated Revenue Fund can legally be financed. The Loan Bill 1976 authorises the raising of loans to finance defence expenditure. Through this device defence expenditure which would otherwise be a call on the Consolidated Revenue Fund is financed from loan raisings in the Loan Fund. The effect of the Bill is to transfer up to $700m of defence spending from a fund which is short of cash, the Consolidated Revenue Fund, to another one which is not so short, the Loan Fund. It does not authorise any expenditures in its own right. It does not involve a change in monetary policy, nor in debt management policy. In other words the Bill is not a piece of economic legislation; it is required for legal and accounting purposes. Similar Bills have been enacted by the Parliament for the same reasons almost annually for decades.
The Loan Bill (No. 2) 1976 is to serve a similar purpose. It seems that even after the transfer of $700m of defence spending to the Loan Fund, the Consolidated Revenue Fund will still be in deficit. Loan Bill (No. 2) authorises borrowings to cover that deficit and payment of the proceeds into the Consolidated Revenue Fund. However, precedents for this measure are rare. The Treasurer (Mr Lynch) mentioned 2 in his second reading speech- one in 1914 and the other in 1931. My own researchers have not turned up any more precedents than the 2 that were mentioned. I note, in passing, that the 1931 case at least was rather messy. The Bill was passed after the end of the financial year, so it would seem that the requirement of meeting the deficit before the end of the year was not properly met.
Like the Loan Bill 1976 this Bill also does not authorise any additional spending and does not imply a change in any other aspect of economic policy. As I have said, the Opposition will not oppose these machinery Bills. But indeed there are some things that should be said while these Bills are before the House. Firstly, in his second reading speech the Treasurer said:
Many honourable members will, no doubt, recall that the previous Government introduced legislation into Parliament in August 1975 designed, at the time, to serve similar purposes. I refer to the Loan Bill 197S. In the event, that Bill was not passed before the dissolution of Parliament -
What a glorious understatement that is. There is certainly no doubt at all that we on this side of the House recall the Loan Bill 1975 and the disgraceful conduct of the then Opposition. The Bill was introduced on 20 August, the day after the Budget. It passed all stages in this chamber a week later. It then went to the other place, the House of obstruction. There it suffered a terrible fate. The Treasurer’s most senior colleagues in that House used all their experience and cunning to delay the Bill. They portrayed it as something sinister, even as something reprehensible. Eventually they decided that it was a key Budget Bill and they deferred it. I doubt that this Parliament has ever seen so much fuss about a routine matter. I doubt that so many irrelevant questions have been asked on any other subject. I doubt that so many senior senators have ever displayed so much ignorance in debating a machinery Bill like this- a Bill almost identical to similar Bills introduced almost annually for decades, as I said earlier.
What an amusing scene it will be to see the man who spoke loudest and longest in that sorry Vh months’ long saga read a speech in the Senate similar to that made by the Treasurer in this place. I look forward to hearing him describe the Bill as a traditional measure and a routine machinery matter. But indeed the present Treasurer must not go without some censure for his part in the deceitful saga to which I have referred. I shall quote from the speech that he made on the Loan Bill 1975. 1 know that he is not in the House. He mentioned the reasons to me and I accept them. But at the same time he must expect that in his absence I would say these sorts of things about the speech that he made. Indeed, before reading excerpts from his speech I should like to make the point that on similar occasions in Opposition he would have been making some play of why the Treasurer was not in the chamber. I do not intend to do that while I have this job of shadow Treasurer. I know that the job of Treasurer is a very demanding one and that there are a lot of people to see, but I hope that the Minister for Post and Telecommunications and Minister Assisting the Treasurer (Mr Eric Robinson), who is gracing the table at the present time, when he is shadow Treasurer opposite me very shortly I hope, would not make a lot of the Treasurer not being in the House. I refer again to quotes from the then shadow Treasurer’s speech on the Loan
Bill 1975. This is the sort of sentence that I take from that speech:
It is a device which explicitly avoids the need for Loan Council agreement in order to fund the Government’s deficit.
Do honourable members notice the emotional word ‘ device ‘ in this speech?
– Surely not to get around the Loan Council. That is disgraceful.
– I know that the previous Treasurer, the honourable member for Oxley (Mr Hayden), who did such a good job in the position is speaking those words with a certain amount of irony. Indeed this Bill does get round the Loan Council and so it should. As I have said, it is a machinery measure and this is the way in which it has been done for decades. Although the present Treasurer, when he was shadow Treasurer, might have liked to have made something out of that, I am not going to act so irresponsibly as to do so. Here is another quotation from the then shadow Treasurer’s speech. He said:
The Treasurer in his Budget Speech -
He is referring to the honourable member for Oxley who has just interjected - gave no substantive indication of the direction monetary policy will take during this financial year.
Such a machinery measure is not supposed to be an occasion for this. Indeed the present Treasurer himself has given no indication of the course of monetary policy during the financial year. A third quotation is: . . . I specifically asked the Treasurer to indicate to the House the planned growth rate in the money supply and the general manner in which he proposed to finance the deficit.
I throw that quotation to the Treasurer, perhaps through the Minister Assisting the Treasurer, and ask them to inform the House of the sort of question that they put in a similar debate. A fourth quotation reads:
This debate therefore provides an opportunity for the Government to give a broad statement to the House, a statement on the monetary impact of this Budget.
Certainly the present Treasurer’s own speech does not do that. I perhaps would say responsibly that a machinery measure such as this need not provide such an occasion. The Treasurer has mentioned that he may be making a general statement on the economy shortly. I hope that he will give me some notice of that and not spring it on us with about 5 minutes notice. A fifth quotation reads:
Quite frankly, the Treasurer cannot have it both ways.
Once again he is referring to the honourable member for Oxley-
He cannot, as he has done on the one hand, simply assert that the Government has no intention of printing money to pay for the deficit.
Once again I throw that at the Treasurer and suggest that had he behaved responsibly as shadow Treasurer on this measure, I would not have needed to point out his inconsistencies as I am obliged to do on this occasion. But what were the consequences of delaying the Loan Bill 1975? A loan Bill of this type cannot be retrospective. Once defence expenditure has been charged to the Consolidated Revenue Fund, it cannot then be transferred to the Loan Fund by means of a Loan Act such as the Government is now seeking to have approved. If the Bill is not passed early enough, the Consolidated Revenue Fund could still be left in deficit. That is what has happened this year. The simple, standard, orthodox procedure was delayed for so long by an obstructionist Opposition that it could no longer do the job. It has had to be supplemented by another Bill- the Bill we are also debating now- the Loan Bill (No. 2) 1976- and by an accountant’s fiddle with the National Welfare Fund balances. We raise no objections to the transfer of the National Welfare Fund balances to the Consolidated Revenue Fund. If we were as irresponsible as the present Government was in Opposition, we could make something of this fiddle. But we are not going to act irresponsibly. The balances and indeed the fund itself have been largely irrelevant since that scheme was sabotaged by the Menzies Government in 1952. Nor do we raise any objections to the Loan Bill (No. 2) 1976. 1 consider it unfortunate that through it, the States have been brought into the internal housekeeping of the national Government. I concede that under the circumstances there was no alternative, but I trust that every effort will be made to avoid a recurrence in future years of what is happening now.
The Treasurer made great play on the fact that the Loan Bill 1976 is not open ended. He said that this is an important contrast between the Loan Bill 1 975 and the Bill that we are debating now. I must say that that is a bit of semantic nonsense. The present Bill sets a limit of $700m. That happens to be an amount which is more than defence spending is likely to be in the rest of the financial year. In practice, the limit of $700m will not be a constraint. The real constraint will be the amount of defence spending that is done. The same constraint applied to the Loan Bill 1975. Although our Bill did not contain a figure, it did contain a constraint. It was not open ended in any way. In this respect we were following a precedent set by the right honourable member for Lowe (Mr McMahon) in 1968. The precedent set by the right honourable member for Lowe has been followed in most loan Bills since that time.
I have said earlier that these Bills do not in themselves affect the Government’s economic policies. Nevertheless, they are essential machinery measures which must be approved if the Government’s policies are to be put into effect. Without the passage of these Bills, the Government would not have the legal authority to finance the 1975-76 Budget deficit. The Government could not implement either its fiscal or its monetary policies. We are now in a rather strange position. We have a new Government and that Government is loudly proclaiming in the media that it has rejected Keynesian economics and adopted a totally new economic policy. But the totally new economic policy has not been debated in this House. I have said already that I trust that the Treasurer will soon do the right thing and bring forward a full statement of his policy which we can debate in this place. The Minister Assisting the Treasurer has nodded and given some indication that that will be happening.
In the meantime, I should like to take the opportunity to make a few comments on the policy as it has been revealed to date in the media and in question time. The Government’s policy is a policy of credit squeeze. The Government is desparately squeezing the public sector. It is also squeezing the money supply. There is nothing new in such a policy; it has been used many times before by the Parties that are now in government. We all know what the result will be. Cuts in spending mean cuts in jobs. A squeeze on money means a squeeze on jobs as well. It is the stop part of a stop-go policy. The theory is that when the economy is not performing well you stop it from performing at all, then after a time you start it going again in the hope that everyone will have learned their lesson and the whole thing will perform better. Of course you can be lucky. If you are not, you simply stop the show again. This is what is called the ‘castor oil policy’ and that is what is happening right now. It is the old stop-go philosophy. It is, as naive as the philosophy of the anarchist revolutionaries who believe that the most constructive thing they can do is to destroy society so that something new will arise from the ashes. They say that it cannot be worse than the present system as they ignore the suffering caused by their bombings and murder. Similarly, this Liberal-National Party Government is ignoring the unnecessary suffering and the waste that it is causing, all in the interests of this false doctrine that somehow this will make things better.
This Government has done more than just ignore the suffering it is causing by generating an increase in unemployment. It has made the obviously absurd claim that its policies will bring a return to full employment. What blatant dishonesty that is. I challenge the Treasurer to place before this House projections of unemployment over the next 18 months prepared by the Treasury on 2 assumptions- firstly, excluding the effects of measures taken by the Government since it came to power and, secondly, allowing for those effects. If he will not bring such figures forward, I suggest that he and the Prime Minister (Mr Malcolm Fraser) should cease talking nonsense about restoring full employment. Let them admit that their policy is a short, sharp shock policy and let them admit that they are deliberately acting to increase unemployment at this time. I have already talked in this House in these terms in the Address-in-Reply debate and in a debate on a matter of public importance which I initiated last week. My questions to the Ministry generally during the short period of this new Parliament also have been along these lines. The House will be hearing more from me and my colleagues on this subject of the unnecessary waste of men and resources caused by this Government’s ill-founded policies.
Our economy was steadily recovering from illhealth. That recovery now has been jeopardised by the Fraser Government’s extraordinary castor oil theory of economic policy. The castor oil theory is: ‘Let us have some strong medicine; let us go around smashing all the light globes we can find, in spite of deceitfully coming to power on the promise of turning on the lights again’. I repeat that the Opposition is not opposing these measures, because this Opposition is responsible in sharp contrast to the Opposition in the last Parliament. The very people who deceived the public by raising one red herring after another in relation to this measure when it was introduced by the Australian Labor Party Government at the end of last year now have to eat their words and look the fools, the deceiving fools, they are in proposing the same measure themselves in this Parliament.
-We have just heard a load of rubbish from the Opposition spokesman on economic matters. If ever there was an Opposition ill-advised to make the sort of statements that he made, there could not be one more so than the present Opposition. I mention some of the remarks he attributed to the Treasurer (Mr Lynch). He referred to this Loan
Bill having been introduced last year and not passed, to a glorious understatement made by the then Treasurer and to the disgraceful conduct of the then Opposition. However, I point to the disgraceful mismanagement of the Australian economy by the then Labor Government which led to the highest inflation and the highest unemployment ever and to a stagnation of business investment which is at the core of the malaise of the economy. In those circumstances we, who were then in Opposition, make no apology for doing everything we could to question the objectives and economic strategy of the then Government and we did so in the context of the Loan Bill 1975 and in other contexts. To the then Government, what did a deficit matter? That was the sort of attitude it adopted. Money! What was money? If it was short of money it just printed more and pumped it into the economy to the disadvantage of Australia. So, of course we questioned and held up so far as that was in our power the Loan Bill 1975 because of the totally irresponsible economic management of the Australian economy by the then Government.
The honourable member for Adelaide (Mr Hurford) said that the present Treasurer as Opposition spokesman had referred to the Bill as a device to avoid Loan Council approval. Let me stress that there is no way in which we are seeking to do that. The Treasurer stressed in his speech on the Loan Bill (No. 2) that the borrowings proposed under that Bill required the approval of” the Loan Council and that preliminary negotiations in relation to approval had already taken place. What hypocrisy by the Opposition! Who is the honourable member, coming from that side of the House, to talk about trying to go around Loan Council approval? What about the infamous proposal of 13 December 1974 to raise $4,000m for ‘temporary purposes’, the using of that phrase to avoid having to seek Loan Council approval and the proposed raising of those funds against a promissory note that would ‘lave put the Australian people into hock to the tune of $ 19,899m? How can the Opposition talk about not seeking Loan Council approval? The honourable member leading in this debate for the Opposition also referred to a request by the then shadow Treasurer for a statement by the Labor Government on its views on the increase in the money supply. He said that that statement had not been forthcoming from this Government. In fact there have been indications in respect of that matter, and the proposed increase in the money supply, I can assure him, is of the order of 16 per cent for this financial year. These are some of the specious points that have been made by the honourable member leading for the Opposition in this debate.
It is important to impress on the Parliament that the basic need for these Bills springs from an all-time record deficit in the Government accounts which is now running at the rate of $4,500m, plus or minus. How did that deficit come about? It came about because of the massive build-up of government expenditure under the previous Labor Administration. Perhaps the best way that I can illustrate the magnitude of that build-up is by saying that in 1972-73, which overlapped the change of government in 1972, total expenditure was of the order of $ 10,000m, or $ 10 billion as the Americans would say. There had been a gradual build-up in Commonwealth Government spending over the 72 years since Federation to $ 10,000m. Then after 3 years of Labor rule, the proposed Budget expenditure for this 1 975-76 financial year was $22,000m, or $22 billion as the Americans would say, and the expenditure is still running at that level despite our best efforts to date to restrain it. I repeat we had a gradual build up to $ 10,000m from Federation to 1972-73. Then in 3 years we had an acceleration, more than a doubling of that figure, to $22,000m. The financing of this of course was basically from the increase in taxation including an increase in personal taxation from $4,000m in 1972-73 to over $ 10,000m. That was a 2^-fold increase in that short period. Because government spending ran even beyond that, the deficit which is our present concern was $2, 800m in 1 974-75 and this year is currently $4,500m.
It is easy to attract a charge from the members of the Opposition- perhaps not only from members of the Opposition- of too great a preoccupation with the deficit as such. Let me make it clear that that preoccupation springs from our overall economic strategy which is to reduce inflation, to get the Australian economy moving again, and to provide meaningful, gainful employment for all Australians- to restore full employment. Our concern with the size and the financing of the deficit, which are currently before the House, is part and parcel of our economic strategy to achieve those objectives.
The need to restrain the deficit and properly to fund the deficit comes from 2 considerations. Firstly it comes from the developing situation in which there was a rapid, massive build up in government expenditure. For the benefit of the honourable member for Oxley (Mr Hayden), I am not talking about the actual level of expenditure but the massive, rapid build up in expenditure, which has created a counter-productive effect on employment. We had a growing momentum of spending financed by the harvest of taxation from both individuals and companies. This was increasingly at the expense of productive activity in the non-government sector of the economy- the private sector comprising Australian business, large and small. To put it in its simplest terms, honourable members need to appreciate that while one can perhaps see a direct effect of additional government spending in stimulating activity, there is an indirect effect in the opposite direction. The honourable member for Adelaide (Mr Hurford) referred to simple Keynesian economics. There is always a tendency for the followers of great thinkers and writers to become more committed to certain views than the original thinkers or writers.
– Were many of your students like that?
– You of course were never one of them but I could nominate quite a few others who are in critical positions in the running and management of this country. We have to recognise that this momentum of expenditure, financed by taxation and this deficit spending, has its impact on the non-government sector. It was recognised by Keynes himself and there have been significant studies to attempt to quantify this impact. I could refer for instance to a study, a model, of the economy which was made by the Wharton school. It indicated that a process could be generated in which $ 1 of government spending for goods and services ‘crowded out’, as the phrase goes, $3 of private spending. The most direct way perhaps in which this process can be seen is in the impact of the taxation system, which feeds on the business sector. The impact is reflected in individuals’ wage claims and inflation generally but it also falls on the business sector in terms of the high taxation of profits, which could be referred to as phantom profits, those simply arising out of the phenomenon of inflation itself and its effect on the valuation of stocks. Companies get involved in the payment of taxes on what is, in effect, nonexistent profits. The impact of this process is to bleed- there is no other word for it- the business sector and undermine its very capacity, let alone its confidence, to invest, develop and expand in order to provide meaningful and gainful employment for Australians. It is a true dictum that today’s profits are tomorrow’s investments and jobs of the day after tomorrow. We have to restrain the momentum of the process I have described.
The particular impact on business firms was one of the subjects of inquiry by the Mathews
Committee. That Committee was set up by the previous Government in 1974. It was headed by Professor Mathews, and included Mr Jolly of the Australian Council of Trade Unions, and other worthy citizens. It reported in May 1975 but its recommendations were set aside by the then Treasurer, the honourable member for Oxley, in the 1975 Budget. It is often said that because of the way the economy went wrong the previous Government must have got some very bad economic advice and, indeed, that those who advised the Government ought to be put in a submarine and taken down to great depth in the ocean, the object being to see whether deep down they were as stupid as they appeared on the surface! In my opinion, it was not a matter of the quality of the advice the then Government received- the Mathews Committee advice would be a case in point- but of the Government’s willingness to accept that advice. The advice of the Mathews Committee was clearly contrary, especially in relation to companies, to the ideological thrust of the then Government’s thinking, and the Government would not accept it. It was not just a question of wilful disregard for the advice. The thrust of the then Government’s ideology was that the Government is paramount, that it should do all, and if the private sector gets in the way it is dispensable. So I stress that the objectives of this part of our policy are to restrain the momentum of this process of government spending financed by ever higher levels of taxation with its debilitating effect on the private sector. This is a critical and central part of our overall strategy to curb inflation, to get Australia moving again and to provide the meaningful, gainful employment of Australians.
The other aspect involved is the method of funding the deficit which is specifically the matter before the House. In this respect the Treasurer in his second reading speech said:
In line with the Government’s overall economic objectives, we will, in undertaking the borrowings required, continue to seek to achieve further sales of securities to the public, especially the non-bank public, to the extent that this can be done without impairing sound recovery of activity in the private sector.
That is the action which these measures seek to legalise. The Government has already been active in this field. It has made loan issues, the best known component being the issue of Australian Savings Bonds which were a great success and succeeded in raising a very substantial amount of money. Let me just say that it is sometimes said that these measures mopped up funds. It is more correct to say that the effect is to slow down the growth in the money supply. After all the money, having been raised, is used to finance the Government deficit. Therefore, the money is re-injected into the economy. The impact, therefore, is to slow what would be an otherwise more rapid growth of the money supply. This measure and the accompanying measures were pitched in such a way as to achieve our target growth in the money supply in accordance with our objective of containing the inflationary potential from the buildup of the money supply. The above are the purposes which these Bills among others serve.
Order! The honourable member’s time has expired.
-As I sat here listening to the honourable member for Berowra (Dr Edwards) I thought to myself: ‘What a wonderfully interesting speech’. Then, all of a sudden I had this sudden experience of shock, much as one experiences when one finds one is travelling by the wrong train. It was a very interesting speech but it did not have much relevance to the topic that is before the House. I would like to thank the honourable member, nonetheless, for the sudden interpolation at a point in his speech of a sort of discursive discourse on what he was saying especially for my benefit, although I must say it was very difficult to distinguish the quality, at . that point, of the style of speech from the speech overall. But I want to assure the honourable member that I was having neither more nor less success in following him than anyone else in the House and I think by and large we were all having more of the latter and too little of the former.
Perhaps I can move to the topic before the House- the Loan Bills. I must express concerngrave concern- that the Loan Bills are in the House. In case anyone thinks I am being particularly partisan in expressing this sort of concern let me quote a source which no one would dare to identify as the sort of source which would care to be identified too much with me. I refer to the honourable member for Flinders (Mr Lynch), the current Treasurer who spoke during the debate on the Loan Bill 1975. 1 am sure that he is not a man who changes his mind too easily or too quickly. I know that the Attorney-General (Mr Eliicott) is prone to giving second considered opinions on topics after discussions with the Prime Minister (Mr Malcolm Fraser) and after leaving the rarefied atmosphere of our capital cities. But I am sure that the Treasurer is made of much sterner stuff. The present Treasurer spoke last year at a time when, I thought, a particularly erudite Treasurer was trying to convince the then Opposition of the foolishness of its action in impeding certain things that the Government at that time wanted to do.
-Who was that?
– I would not care for the honourable member to assault my modesty. The honourable member for Flinders on 27 August 1975 said of the Bill:
It is a device which explicitly avoids the need for Loan Council agreement in order to fund the Government’s deficit. During the debate on similar legislation in this chamber last year the Opposition parties emphasised their concern in quite clear terms.
Well, here we are now and the 2 Loan Bills before us are presented as monuments to the humbugging of the Australian people and of this Parliament by the then Opposition. It is a continuation of that humbugging when one reads what was said last year and what was said this year by the current Treasurer in his speech when introducing these Bills- the contrived concern and spurious suspicion which were sprouted about last year in an effort to mislead and unsettle the Australian community.
Let us look at some of the perceptive observations of the current Treasurer. He says now in his speech, as a throwaway line and very casually and without that deep mellow ring of concern that epitomised everything that he said last year:
Such borrowings do not require Loan Council approval.
So I assume now it is not so much the procedure, it is not so much the intent behind these Loan Bills as the Party which happens to be in government at a particular time and we having been in government for 3 years had had a fair share of government after 23 years of opposition and it was appropriate to abuse, misuse, distort, destroy and subject to the most grave violence the constitutional and parliamentary conventions and procedures of this country to grab at office resolutely but corruptly.
Let us look at some of the clever comments, the bons mots of the Treasurer. In his second reading speech he said:
However, it soon became very clear that the prospective overall deficit and the deficiency in the Consolidated Revenue Fund had been grossly understated.
I think that we ought to dwell on that comment for a few minutes because I am increasingly suspicious that the Treasurer is as dense as many of his backbenchers suggest because the simple reason why the deficit had increased was explained often enough to him by the then Treasurer when we were in Government. It was not so much a matter that expenditure had increased as that average earnings had not increased as rapidly as had been projected.
There was as a result a reduction in the rate of revenue collections from personal income taxation. That brought problems in its wake, but Oil the other hand it was a more successful result in terms of overall economic management than the general outline of the economic performance as was set out in the Budget last year. But I sincerely trust that the current Treasurer is not suggesting by implication, as he said quite directly and frequently when he was in Opposition, that we were doctoring the books, that we were cooking the figures with the Budget, because the figures were drawn together by the Treasury after a very careful calculation. I have been a consistent defender of the integrity of the people in the Treasury, from Sir Frederick Wheeler, the Secretary of the Treasury whom I found a grand and honourable public servant, all the way down to the most junior people with whom I dealt. Those people do not cook the books. They do not fiddle with the figures. There is a very simple explanation for the deficit increase. It has been explained often enough before.
Let me move on. I would not accuse the current Treasurer of cooking the books but he is certainly indulging in a little bit of card trickster double handed shuffling when he says things like this:
First, we propose to supplement Consolidated Revenue Fund receipts, and thereby reduce the size of the prospective Consolidated Revenue Fund deficiency, by paying into that Fund unrequired balances held in the National Welfare Fund Trust Account.
I sincerely hope that the Treasurer is not still applying his piggy bank mentality to economic management and public financing. All that is happening there, as is generally happening in these public finance transactions, is a shuffling of figures in a book-keeping style to the extent that money is not raised from the non-bank public in loan raising and there is very largely a shuffling of figures and treasury notes, to the extent that the Reserve Bank is used by the Government to fund its transactions. All of these rather complex procedures which are involved in processing money through the various accounts boil down to one thing- a shifting of figures from one column to another column. That is all that has happened on this occasion.
The Treasurer is suggesting that this is some significant contribution in the fight against inflation. That is nonsense. It is a clear case of attempted deception. I repeat that it is nothing more than a shuffling of the figures in the books. In another part of his speech the Treasurer said:
The Bill proposed by our predecessors prescribed no specific monetary limit on the borrowings for defence purposes that could be undertaken under it, that is, outside the jurisdiction of the Loan Council. The Bill I am introducing contains a specific limit of $700m.
That is more humbug. Let me refer to a document which I fortuitously happened to have with the odd one or two which I managed to keep for my memoirs from my previous ministerial responsibility. Questions were submitted to the Government of the day by the then Opposition in the Senate about aspects of the Loan Bill. The answers were given fairly clearly in early September. Therefore, it is dishonest, quite frankly, of the Treasurer to try to imply, as he did in his statement in this House on 26 February, that we failed to give any specific indication of the monetary limit of borrowings and for him to suggest that setting a ceiling of $700m is a virtue in the light of our failure. As those answers pointed out, the Loan Bill for defence purposes referred only to defence outlays in Supply Act (No. 1 ) 1 975-76 which appropriated a total of $660.69 lm. That information was given to the Opposition in the Senate and, of course, would have been conveyed to the then shadow Treasurer who is now the Treasurer.
In an answer to question No 1 7-1 hope that the House does not mind my using this shorthand way of referring to the source of the information that I am now quoting, because it would be available to the present Government from its records from Opposition- this was said:
In other words, the total to be charged to Loan Fund cannot exceed the total expenditures of the Department of Defence to be incurred during 1973-76 after the enactment of this Bill and which have received parliamentary authorisation in the 1 975-76 Supply and Appropriation Acts.
That is a significant factor. There was no substance in the Treasurer’s frequent implications to this House, to the community and to the Press gallery, the members of which did not seem to be too industrious in seeking out the details and the real functions of this system of public financing, that we were trying to use the Loan Bill, as we put it before the House in 1975, as a fiddle to raise money from overseas for purposes other than defence. There was clear, firm advice given to the then Opposition to establish that beyond any doubt.
I would like to move on and refer quickly to a few points which relate to economic management and which are relevant to the present Bill. As I said in this House last week, I frankly feel that it is about time the Government blew the whistle on its efforts to soak up money in the Australian economy. I think it is about time the Government put the brakes on its effort to slash back on the public sector because, to the extent that we have seen any recovery in this country, it has been a very weak recovery and it can be sustained only while stimulation is maintained in the public sector. The recovery will have to develop considerably further and show greater signs of strength before any persuasive case can be put foward responsibly for cutting back the level of public activity. We face this situation in common with other countries. In his comments at the 5th meeting of the International Monetary Fund Interim Committee in Jamaica, Mr Van Lennep, the Secretary-General of the Organisation for Economic Co-operation and Development, said this amongst other things: . . . the national authorities in most of the major countries are somewhat more optimistic than both the OECD and the IMF.
He was referring to recovery in the coming period. After he had assessed the overall situation in those industrialised countries he went on to say:
Domestically, it means that very little progress will be made this year in reducing historically high levels of unemployment.
What he was saying was that internationally the situation is not terribly optimistic, that there is no room for bounding enthusiasm and thinking that we are about to burst into a period of sharp recovery, and that accordingly there is a need for some acute economic surgery.
What is being done in this country at present, if it continues at the rate at which we have seen it occurring in recent months, will undoubtedly lead to the imposition of the economics of asphyxiation as the air supply of fiscal and monetary policy is brutally cut off. That is the course we are on at the present time. Let us look at the situation already for this calendar year, with the amount of money that has been raised by public subscriptions to Government loans and the amount of money which the Government says it will save by cuts in the public sector. The total involved is about $2,700m or about $ 1,300m for the fiscal year to this point- about two-thirds of the deficit.
I think it is about time we had a clear statement of how much of that total amount which has been raised represents net additions to Government sources, because we do not have information about redemptions. More importantly we should know what is the monetary policy of the Government at the present time and to what extent it intends to pursue the policies which it has unleashed in the course of this calendar year so far towards mopping up money. I feel gravely disturbed that suddenly, after the money supply for M3 had been occurring regularly at a rate of about 20 per cent on an annualised basis, month by month, we find, according to a Press release of the Reserve Bank on 26 February that for January M3 on an annualised basis was down to 9 per cent- a much lower rate than the rate of inflation in this country. No one can tell me that does not represent a contraction in money supply. Add to that the very low velocity of money movement in the economy and I think there is a very strong ground for any industrialist, any small businessman, any householder or any worker to be concerned at the direction in which the economy has suddenly been pointed. There are very strong grounds for being gravely concerned and I think there is every justification for now demanding from the Government a clear exposition as to its targets for the money supply this quarter and this financial year, and a clear exposition as to exactly what it is going to do as further steps in its loan raising endeavours. Or has it taken the wise advice of some of its own back bench members who have some feeling and some understanding that the time is now right for blowing the whistle.
I want to raise another aspect and that is the failure of the Government to give this Parliament and the Australian community full details of the sort of expenditure cuts it has imposed. We are glibly told that an amount of $360m is the total effect of the cuts for the rest of this financial year. I asked the Prime Minister’s office to supply me with details and the only information the staff was prepared to supply to me was a stack of Press statements from various Ministers. With a pocket calculator, because I am well aware of the failings of my own ability in simple arithmetic, I worked out that about $280m could be accounted for. Where is the other $80m? It is a significant amount in terms of the total cut which has been spoken about.
I think more significant, however, is the credibility of the Government in terms of being open with the Australian public, open with the media which has yet to demand this sort of information, open with this Parliament which, frankly, cannot function unless it is fully informed on what the Government is doing and supplied with this sort of detail. But more extravagant are the effects of these cuts on a full year basis. Unfortunately I did not pick this up until last week and I picked it up only as a result of some gossipy chit-chat in one of the lobbies of this Parliament when it was pointed out to me that the Prime Minister had said at a Press club luncheon in Brisbane on 13 February that the annualised effects of these cuts would be in excess of $1 billion. I have managed to get the official record which reads:
Economies worth $360m have so far been announced. These will be effected in the remaining months of this financial year. These same economies in terms of annual rates, are equivalent to savings well in excess of $ 1 billion.
I think the public deserves to know in detail what the full year effects are, where the cuts are going to take place and to what extent. A debate earlier today in this place related to child care services. An amount of $9m has been slashed out of child care services for the rest of this financial year. Are we to assume that this means that on a full year basis the amount will be $ 18m or will it be $27m? This has not been made clear. Was the $9m a cut on a 6-monthly basis or was it a cut on a quarterly basis or was it on the basis of 4 months of a year? This applies in other areas too. What is the effect on pensioners, for instance, of the deferment of their pension payments? This House should be entitled to a fully detailed exposition of where these cuts fall for the rest of this year and the effects on an annualised basis.
I repeat that I feel rapidly increasing concern at the direction economic management is taking in this country. It is certainly taking a much more severe direction than we would have countenanced when we were in office or is desirable for the economic health of this country. The illinformed statement of the Prime Minister today at question time implying that the $80m program which we were going to encourage for nondwelling construction- office construction- in Sydney and Melbourne would be some sort of burden on the Budget shows how poorly informed he is as the key decision maker in the Government. We were going to lease that accommodation. Activity was going to be injected into the economy because of undertakings we would get from the private sector and without any obligation incumbent on this Budget this financial year and probably not next financial year either. Those people who sang Happy Days on 14 December I think are sobering up rather rapidly in the light of the harsh reality of the economic policies that are now being applied.
Order! The honourable member’s time has expired.
-The honourable member for Oxley (Mr Hayden) has forgotten one thing. It is quite all right to talk about the minutiae of Government expenditure policies or to talk about precise details as to rates of growth or rates of the contraction in the money supply, but what is sometimes forgotten is that Government spending policies, the rates of the increase in money supply and, insofar as they can be calculated, the rates of change of the velocity of money supply are all designed to serve one purpose and that is to balance an economy so that the benefits of the economy can be distributed as widely as possible. They are all designed to do one other thing also and that is in the process of achieving a position of economic equilibrium- for getting that economic equilibrium- to distribute the burdens as widely as possible. I would regard that as a decent principle of fairness in respect of economic management.
So in respect of these matters I am not going to argue about a projected rate of increase in money supply but merely say that the Government has said that it hopes that M3- I am always fascinated with these terms, Ml, M2, M3 and the rest- on an annualised basis by the end of June would have had an annual increase over the previous year of something like 1 5 per cent or 1 6 per cent. I hope that that increase can be fitted into the other obligations of the Government because when these Loan Bills are looked at, and when the method of financing the deficit is looked at, it can sometimes be forgotten that the deficit in itself is not of its nature an evil so far as economic effects are concerned. I hope that that view is not taken away from this chamber. It is not an economic evil in itself. A deficit can be a saviour of the economy, but the tragedy that has occurred and the tragedy that is with us is simply that a deficit of something like $4,500m was found to be necessary. In the one sentence it is said that that under-employment and that under-utilisation of economy have been such as to warrant a deficit of that nature. So immediately that is said one is face to face with the problems of financing the deficit, the problems associated with these Loan Bills-Loan Bill 1976 and Loan Bill (No. 2) 1976- and the problems associated with 2 other Bills which could well have been debated together with these Bills.
The question is: How is the deficit to be financed with a mimimum of dislocation and a minimum of hurt to Australians who have to live under the economic relationships that we help to determine? How is the burden to be distributed as widely as possible? I would hope that these questions were very high in the Government’s consideration of the deficit.
Sitting suspended from 5.57 to 8 p.m.
-Prior to the suspension of the sitting the point had been made, which is the central point of all these Bills, that the Budget deficit or the total deficit is not an evil thing. The point was simply made that it can be very beneficial insofar as it helps economic activity to occur which otherwise would not have occurred. There would not be a person in this House who would disagree with that proposition. To regard the Budget deficit as an evil thing, ipso facto, would be to forget everything that has occurred in this chamber since the introduction of the famous Bill by Treasurer Theodore on 17 March 1931. We have moved away from those days. The Government’s attitude, as I understand it, is that it is a very great tragedy that a Budget deficit of this size, over $4,000m, has been necessary. That is the tragedy, and that is the tragedy upon which the Australian people made a judgment on 13 December.
Let me divert for one moment, realising that I have 5Vi minutes left, and comment upon the remarks of the former Treasurer, the honorable member for Oxley. Everybody in this House would acknowledge his ability and his devotion to the work of the Treasury when he was Treasurer. I was intrigued by his comments upon a recent bulletin- a Press release, I understandput out by the Reserve Bank of Australia which indicated that M3 was increasing at an annual rate of 9 per cent or 10 per cent. That is a very low rate. I have not seen that bulletin. It was as at the end of January, I understand. My comment would be that M3 is not all that meaningful because, unless one adds other very liquid sources of funds to M3, one does not get a real idea of the volume of money. Using M4- it is like running a series of Mercedes cars- and adding into those funds readily available sources such as those which are available in building societiesdeposits of building societies and shares in building societies- from publicly released figures it can be demonstrated that by December M4 was increasing far more rapidly than was the more narrowly significant M3 which does not take into account that other very liquid source of funds. Insofar as the Government is having what is called a mopping-up operation of surplus funds which are available in the community, I presume that it had its eyes more on M4 than on M3.
Let me return to the Bill. The deficit must be financed. The deficit in the Consolidated Revenue Fund must be financed. The amount of the deficit projected in the Consolidated Revenue Fund has increased greatly. If one looks at last year’s Budget Paper No. 4, Estimates of Receipts and Summary of Estimated Expenditure, and looks at the table of the estimated transactions into and out of the Consolidated Revenue Fund, one finds that there was to be an amount chargeable to the Loan Fund- in fact a deficit- of $1,1 52m. From the
Treasurer’s statement, unless other action had been taken that would have increased to about $3,000m. I do not say that that is evil either. This Bill has 3 accounting measures which are directed towards looking at that deficit. The first is to make certain funds for defence purposes chargeable not from the Fund but from outside the Fund. That is basically it. The amount which can be charged for defence purposes will not be able to satisfy the legal requirements of the Consolidated Revenue Fund- as has been the case in the past-for the simple reason that these days not enough money is spent or is projected to be spent on defence. We have the paradoxical situation that if we had a far greater projected defence effort these other measures may not be necessary to the extent to which they are. That is not a criticism.
The second measure is one which I mention in passing and for which no legislation is required. It is the transfer of funds from the National Welfare Fund to the Consolidated Revenue Fund. I have looked back on the debates of over 20 years ago. The honourable member for Melbourne Ports (Mr Crean) had something to say in those debates, for which I commend him from the perspective of history. I hope that in transferring funds from the National Welfare Fund to the Consolidated Revenue Fund no opportunity is taken to give a false idea of what the deficit would actually be. I am sure that that would not be the case. Transfers between funds do not make up the deficit. The deficit would consist of Consolidated Revenue Fund deficits and Loan deficits as well as other deficits. I hope that that opportunity would not be taken. While looking at that in an accounting manner, one should not forget that it has an economic significance. Insofar as the funds which go into the National Welfare Fund were originally revenue, they have been invested in treasury bills at some modicum of interest- one per cent or so. Insofar as those funds have been transferred by redemption from treasury bills into the Consolidated Revenue Fund, there is an effective subsidy on those funds, to the extent to which there is a differential between treasury bill rate returns and what otherwise would have to be paid by the Government on funds which it would obtain from the community. So there is an effective subsidy on those funds, although it is rather small. Nevertheless, that is not the matter of monetary or economic significance so far as this Bill is concerned.
The matter of significance is simply this question: How is the deficit to be financed, in terms of loan activities of one kind or another? It can be done in a number of ways. They have different and differing monetary and economic effects. While the deficit may be very significant and very important, it should not be allowed to mesmerise our views of current economic events.
– Hear, hear!
-Everybody in this House would have that view. Certainly the Minister Assisting the Treasurer (Mr Eric Robinson), who is at the table, would have that point of view. He would look at these matters always in terms of economic facts. Full employment in a free society without inflation is what it is all about ultimately. I am reminded of the story which was current during the depression years and which is an adaptation of one related by a very great economist who has been mentioned often in this chamber. During the years of recession and depression people were worried. Now in these years of slumpflation and negflation to use our words, they are worried about the deficit. That economist said: ‘You do not want to worry about the deficit. You could get Bank of England notes, put them down an old mine shaft, get all the rubbish from the local village, put it on top of the banknotes, and then pay the unemployed to dig out the notes’. That would have been good economics, but it might have upset some people who at that time had different views about deficits.
So I come to the last point, which is this: What are the sources of funds which are to be utilised to fund the deficit? Some questions can be asked, and some questions would be required to be asked of the Government. To fund the deficit some burdens will be created. The difficulty is to fund the deficit. Some money will need to be contracted from the system. The difficulty is that there will be a hike in some credit rates or interest rates which are paid for money. All of us would like to know the sources of those funds. So I leave these thoughts with the House. There are various ways in which the deficit can be funded. After all, we are talking about $ 1,800m or so which would be required. We have $3, 000m on the statement of the Treasurer (Mr Lynch); we have $470m-odd from the National Welfare Fund; and $700m will be available under the defence loan procedures.
So we are talking about $ 1,800m, which is a very great deal of money. From what sources are those funds to be obtained? As far as I can see, that quite clearly is the ultimate question to be answered. Are they to be obtained from the Reserve Bank? If they are to be obtained from the Reserve Bank, in what form are they to be obtained from that source? Are they to be obtained in the form of treasury bills or by transferring marketable securities to the Reserve Bank in one way or another. Both of those solutions could ultimately cause very different attitudes to the rate of increase of the money supply. I diverge to say this : Money supply, after all, is not the whole determinant of economic activity. There are some people who think that money supply is like an automatic carburettor: If you wind it down everything comes down nicely; if you wind it up, everything goes up nicely. It is like the person who thought that he could put on condition and put on weight merely by loosening one or two notches in his belt. It does” not work that way. Nevertheless, what would be the attitude in respect of the Reserve Bank as a source?
I ask this other question: What would be the attitude in respect of the trading banks? Are they to be utilised as a source of funds? If they are utilised as a source of funds, what overall restrictive requirements would be put on the trading banks in respect of funds which they supplied in that manner? The third way in which the money could be obtained would be from the non-bank public- apparently those people who contributed to the very recently floated savings bonds. I now ask these questions: What are the household savings which are to be tapped for purposes of contribution to the bonds? What were the household savings which were tapped for contribution to the bonds previously? They are all important questions. They are not the most important questions, but they are all important questions if one observes the principle, which this Government observes, that when a burden is to be put upon people- either a fiscal or a monetary burden- to bring economic disequilibrium under control, that burden ought to be distributed and shared as widely as possible and advantages ought not to be given to those who would obtain, shall we say, flybynight benefits from what is proposed.
I put those questions in passing to the Minister Assisting the Treasurer. I know that he will devote his mind very actively to them in his reply to the comments which have been made on these Bills, especially after the honourable member for Mackellar (Mr Wentworth) speaks. I disagree with the shadow Treasurer when he tries to say that these are just accounting measures and they have got little economic significance. They do have very great monetary significance.
– But that is only in the present economic circumstance. I am not a Friedmanite, as some of your colleagues are.
-I hope I misunderstood the shadow Treasurer, but I still think he used the words to which I have referred. I indicate once again what my concern is in distributing the burden. I have referred to the utilisation of building society funds, in addition to others, in order to indicate what is happening to the money supply and which money supply is being contracted. When the last series of savings bonds were floated there was some evidence, I believe, of a greater contraction of building society funds- I just use this as one source- from some States where building societies constituted a very large proportion of economic activity than there was from other States. In New South Wales there has been a turnaround of well over $ 100m. I understand that in Queensland there has been a turnaround of $35m to $40m. In other States lesser amounts were involved. All I am saying is that insofar as the interest rate structure of funds which are available to the public differs from one part of Australia to another and from one collection of financial institutions in one part of Australia to another, I hope that the Government monitors the changes and the contributions that come to the loans which will have to be obtained from one part of Australia as compared with another. This is intimately bound up with the first proposition which we stated, that is, in order to bring inflation and to bring negflation and to bring inflation with unemployment under control, the burdens need to be distributed. Burdens there are.
I conclude on the point on which I began: This Bill is about the deficit and the way in which the deficit which exists in the Consolidated Revenue Fund is to be financed. If it is to be financed, that has to be achieved by a number of measures. I am quite sure that those measures would be monitored very closely both as to the availability of funds to people from different parts -of Australia and the height of the interest rates in those funds in one part of the country as compared with another. I believe that that is only fair, and that is the kind of situation in which the people will co-operate in a battle against inflation. The Government’s measures are quite correct. I put aside whatever comments have been made with respect to similar measures last year. I have not dwelt on those at great length. I remind the House of an old saying to the effect that the horse that really pulls the dray is ill-treated, and if the dray is to be pulled to a position of fairness and economic equilibrium we want the burden to be known, and we want it to be distributed as widely as possible, not only among what are euphemistically called households but also among financial institutions in different parts of the Commonwealth.
– I hope that the Minister Assisting the Treasurer (Mr Eric Robinson) will convey to the Treasurer (Mr Lynch) my appreciation that at last the Treasurer is speaking economic sense rather then the economic nonsense that he and his colleagues in another place talked when a similar measure was before the House 6 months ago. The previous Treasurer, my colleague, the honourable member for Oxley (Mr Hayden) has already indicated that seventeen or so questions were asked primarily in another place. If I may say so, the people who answered the questions and who claim to know what they were talking about ought to have known the answers without having to seek the information.
The honourable member for Lilley (Mr Kevin Cairns) referred to the fact that this measure is about the deficit. With all respect, I would suggest that it is about the deficit that was rather than the deficit that is or the situation that will be from now on. I draw his attention to what are known as the Niemeyer statements. The honourable member may even be more fortunate than I and have a statement which is a month later than mine. The statements show that to the end of January 1976 the actual deficit was $4,045m. I still believe that the figure of $5 billion which is being quoted in relationship to the deficit is grossly exaggerated. I believe that it is going to be closer to $4 billion than $5 billion. One of the reasons why this Government will be able to claim credit for savings is the paralysis that took place in this country from the time when the Budget was introduced until it was passed. Certain things that could have been done were not, and naturally enough the annual expenditure from many departments is going to be less than was projected. It is going to be less because desirable things that could have been done will not have been done. I refer to such matters as child care, which was mentioned here in the House today.
I believe that this Government got into office simply by making loud noises about things like unemployment and inflation. I am the last to deny that each of those exists, perhaps at a higher rate than we would like, but nothing that this Government has done so far will remedy the situations in any sense. No measure yet taken by this Government in itself is going to have any impact upon either inflation or unemployment. I hope that both of them begin to abate. I think that if one discounts to some extent the last increase in the consumer price index because of the impact of certain indirect taxes, inflation is declining rather than rising. I believe that over the next 6 months the employment situation also will begin to improve. However, if both improve it will not be due, in any degree, to anything that this Government has yet done.
One of the editors of a newspaper referred the other day to the fact that this was the first time that a government had been elected without having to produce a program. I suggest that that editor is too young to know that the only potential governments that have to produce programs when seeking election are Labor Party governments. When we were the Opposition at election time we were always faced with this question: ‘Where is the money to come from?’ We have a very illuminating indication in the Bill before us of just how much mysticism or mythology surrounds this situation. If I may I will take just one example that is referred to in the second reading speech on this Bill by the Treasurer. He referred to the National Welfare Fund. My friend the honourable member for Lilley (Mr Kevin Cairns) mentioned this earlier. I am going to present some factual information from the last report of the Auditor-General for the year ended 30 June 1 975. The Auditor-General has to report each year on the operations of the Fund and in that report he said:
The National Welfare Fund was established by the National Welfare Fund Act 1943 as a Trust Account for the purposes of section 62A of the Audit Act. Moneys standing to the credit of the Fund are applied under the National Welfare Fund Act in making such payments as are directed by any law of the Commonwealth to be made from the Fund in relation to health, social services and other welfare services.
I would like to begin by asking the Minister Assisting the Treasurer, how closing the Welfare Fund off in the way suggested by the Government can be said to be serving the legal purposes of the Fund which are supposed to relate to health, social services and other welfare services. From a purely book-keeping point of view I have no objections to the closing oK of the Fund but in my view it is to be closed off for purposes that are not legal, considering the reason for the Fund’s being established.
Broadly, the National Welfare Fund was built up in years when we collected more in taxes than we were able to find purposes to spend, so in one sense there now is a logic in doing the oppositewhen we have more expenditure than revenue we simply transfer. I say that it is a mere bookkeeping operation that makes no jot of difference whatever to the Budget deficit or to the kind of ominous portents that somebody sees in the Budget deficit. I do not see the portents in the Budget deficit as it was; I see them as I think my friend the honourable member for Oxley suggested: What is going to happen in the next several months in order to bridge the deficit that has occurred already? The Government at least has to act in the opposite way and has somehow to reduce the volume of money.
It is easy for honourable members in Government to come in and say what an awful house and so on that they inherited. The Australian economy, while it was not as healthy as it ought to be, was by no means as bad as the Government and its supporters like to make out, and it will get worse unless those people begin to apply much more practical remedies than just to live on the inheritance of large unemployment and more inflation than they would like. I said during the course of the election campaign that Australia is not alone in the Western world in having inflation higher than it would like or unemployment greater than it would prefer to see. These matters are endemic at the moment to all Western capitalist economic systems. I must say that I have been nauseated by the spate of speeches in this House- I will not say that they were maiden speeches because not all of them were maiden speeches- bestowing such great virtues on something called private enterprise. Good old private enterprise is so good that the first thing that the Government has done is to give it an artificial stimulus, a subsidy called the investment allowance. Why cannot good old private enterprise which does not want the interference of government, do without the investment allowance?
– Because you tried to tax it out of existence.
– The honourable member for Macarthur is a maiden no longer; he is now in the ruck. I am not too sure that market forces, as he wanted to interpret them, worked out in quite the way he thought. It is nice to blame the Government. I happened to attend a church service on Sunday morning. I was walking down Collins Street and saw a notice on one of the windows saying: ‘Closed forever. Thank Gough’. It is easy to suggest that there was nothing wrong with the business, that all that was wrong was the terrible Labor Government that the Australian people had. I suggest there is going to be no decline in the rate of business failures as a result of anything that this Government has done so far.
– Most of its members are mugs.
-Well, many of them are. It is nice to be able to blame somebody else for the failures. I suggest that in the measure before us we have a very interesting case study about how large scale government finances itself. I suppose it is a truism that most of what governments require they have to get from taxes, but insofar as there is a difference, and the differences can be circumstantial according to time, there are times when it is wise to spend more than you get. Governments are a bit luckier than most people in that they can do it. Individuals do not last too long, unless they find a benevolent banker, if they spend more than they get, but a nation as a whole can do so. If a government is able to bridge by loans the difference between what it spends and what it gets in taxes you can get a circumstantial shift in the pattern of the economy.
I notice that there is coming into the economic jargon now- I heard an honourable member on the Government side mention this in the course of this debate- something that is called ‘crowding out’. It is a sort of suggestion that if governments go too far in what they spend, every million dollars that they spend reduces the total activity by more than that million dollars because private firms, presumably had they not been taxed, would have spent it more extensively, more wisely and with some multiplier effect. With all respect, these things are theories rather than realities. If there is evidence of economic decline or unused capacity- it is not easy to measure economic decline- I do not think anybody can say yet that capacity is unused because of a failure on the part of consumer demand rather than anything else. Maybe the greatest stimulus to consumer demand is more Government expenditure on welfare or the reduction of taxes. But there is no certainty about any of it.
Iii the last month or two I have had a little more time to catch up on my economic reading than I had when I had the onerous job of being a Minister of the Crown. I must say that economic literature is no more enlightening in 1976 than it was in 1970, and I doubt whether it is really any more enlightening than it was in 1930, as far as that goes. It is a matter of trial and error rather than a matter of certainty. I hear people who, to say the least, ought to be uncertain, saying so much with such great certainty. I sometimes wish I was as sure of anything as the Treasurer seems to be about everything. I suggest that this is a great difficulty. The problems that face Australia are not easy of solution. I suggest that they are compounded because we have the sort of Federal system we have. 1 do not want to argue that at the moment. I hear all sorts of suggestions that somehow we are persuading the States that by giving them back what they had before they are somehow going to be better off. Candidly, I do not think the States care much how the cake is cut; they are more concerned about the share they get as against what goes to the Federal government.
I think a lot was left to be desired under our Government and under previous governments on this question. But we do not solve the problem by taking over $1 billion worth of debt. It is another piece of book-keeping. Let us not get bamboozled by book-keeping. I am not one who has ever been opposed to growth; I think there could be arguments about the directions of growth. What everybody is striving for is real improvements in the gross domestic product. Real improvement in the gross domestic product means using our available skills, manpower, materials and machinery to the maximum advantage. I suppose the commodity that is almost in the greatest supply is money. It is not always easy to apply it properly in the places to which it ought to go.
I suggest that the difficulty in Australia at the moment is a lack of confidence on the part of the great private enterprises. When I was on the other side of the House I used to say that people would be sorry in 1976 about decisions they could have taken but did not take in 1975, 1 believe that basically is still the situation. Private enterprise has its praying sessions to itself and extols its virtues but it always has the hand out and wants the Government to do something for it. What is not always asked is whether what is done for private enterprise is done at the expense of someone else? To have done the sort of things that the Government is now proposing to do with the Income Tax Act as first priorities would not be my priorities. I think Australia could have lived longer without the superphosphate bounty and without the restoration of the investment allowance. I think in restoring it the Government ought to have been a little more selective as to where it is restored and the conditions on which it is to be given.
Should any firm get an investment allowance on new plant if its net depreciation is greater than its installation of plant? I submit that these are questions that the Government needs to examine much more closely. As our friend from Queensland has said, this debate is mainly about book-keeping. I was a little intrigued to hear the Treasurer being critical of our measure because it was open ended. He said he was specific about the sum in the first Bill. But then he introduced a second Bill, Loan Bill (No. 2), that contains no limit at all. To my mind it is an exercise in semantics when the end in the first Bill is closed but an open ended proposition is left in the second Bill. The only reason the end of the first Bill has been closed is that the sum of $700m, as was said by the honourable member for Adelaide (Mr Hurford) is greater than the Government will be likely to need for the remainder of this year. The sum can be devoted only to defence expenditure. But Loan Bill (No. 2) can divert expenditure unlimited. I am not suspicious of the Government’s intent as it was of ours. I have the greatest admiration for the capacity of the people in the Treasury. I worked with them for a long time and I pay them tribute here.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
-The Loan Bill 1976 is being supported by both sides of the House. In introducing it the Treasurer (Mr Lynch) spoke mainly of the deficit and its impact on Government policy. Before I come to that main theme. I wish to make 2 subsidiary points. Firstly, the Treasurer said:
The borrowings . . . have to be within the limit of borrowing authority approved for the Commonwealth by the Loan Council.
At its meeting last June the Loan Council approved a program for the Commonwealth. That program is secret. I have not been able to find out what it was. It has never been published. I am told that it has not been revealed. I put a question on notice about it which so far has not been answered. I should like to know what that program is.
The second point I make is in regard to the National Welfare Fund which was mentioned by my friend the honourable member for Lilley (Mr Kevin Cairns). I do not think there is any real practical effect of this transfer. It does have a dress impact in that it may enable the deficit to be manipulated a little and to be shown to be a little less. There is very little of a practical nature in that. But I think that on the considerations which were advanced initially, I think with some sense, by the late Mr Chifley when he was Treasurer and set up this separate fund, although it has not had practical import in recent times I am a little regretful that it is being abolished now. I hope to return to that when I have more time.
I return to the main theme which the Treasurer adumbrated in opening this debate. The Opposition created the economic mess, and it is a real economic mess. The Opposition has shown now that it has learnt nothing and it wants to forget much. But I think we can dismiss the Opposition which by its incompetence put us into this trouble. I think we can all agree with the Government ‘s objectives of economic recovery, full employment, greater productivity, the elimination of waste and extravagance from the Budget, the encouragement of private enterprise and giving private enterprise a greater share of the available resources of the Australian economic machine. We should all agree with that. But I must say that I for one disagree, at least to some extent, with the methods that the Government is taking towards these very desirable objectives. I feel that to some extent those methods that the Government has adopted may be counterproductive and will not help to achieve the very desirable things that the Government is aiming at. There is as yet, no substance in recovery. There was no recovery under the Labor Government. This theory that if the Labor Party had been voted back into government it would have brought the Australian economy back is a figment of the imagination. Naturally there was some surge of confidence after 13 December. This has brought confidence and is bringing a certain degree of recovery but so far there is insufficient substance in the recovery. I for one fear that under the present economic policy of the Government that recovery may be retarded and may even be reversed to some extent.
I am not crying doom and disaster, but I am saying that in my book it is not good enough that the Australian economy should be left for long in the shambles in which the Labor Party put it. I say that as yet there is no substance in the recovery. We want to increase consumer spending. But do we encourage consumer spending by saying, as we do, that we need so much sacrifice and restraint and that things have to be cut down? There is the capacity for consumer spending in the savings bank accounts and the other moneys at call which the ultimate consumers have. One hopes that these moneys would not be allowed to go into flash inflation but could be spent gradually so that the economy would consume more and give more employment and better conditions to business throughout Australia. When that consumer spending increase occurs- I say this in passing- it is essential that we do not allow it to be extinguished in a flood of imports. Quick and effective tariff action will be necessary when consumer spending in Australia starts to go up, otherwise the flood of imports will extinguish the fires of recovery here in Australia. I will not have time to develop that theme now but I think that it is an essential part of the recovery that we want.
We need 2 things now. We need an immediate tax reduction and we need some kind of stimulation of the economy through public spending directed mainly towards helping private enterprise to expand. We should stimulate private enterprise through valuable public works. There are many of those which could be carried out. They are all preferable to spending $500m a year as we are spending now on unemployment benefit which is a hardship to the recipients and a loss to the productive capacity of the economy. These are the things that we want to do. A taxation reduction should have the 2 facets of an immediate full acceptance of indexation of income tax and a plan to reduce inflation in a planned way by lessening indirect Government charges, therefore helping to keep the cost of living down. This should be done in a planned way as the proper and constructive approach to our inflationary troubles.
What stands in the way of doing this? It is one thing and one thing only- the obsession with the deficit. People will say: ‘How can you reduce taxation? That will increase the deficit.’ They say: How can you carry out valuable public works? That will increase the deficit’ and they say: ‘The deficit now stands at this record of $4.5 billion’. I would not cavil at the fact that if we take into account the way in which the accounts are presented the deficit would be $4.5 billion. I am not going to argue about that. What I am arguing about is that the way in which the accounts are presented is fallacious, is misleading us and is at the root of a great deal of our troubles. The deficit has been struck after including $4.8 billion of capital works as current expenditure. I have a table which shows in detail from Budget Papers numbers 7 and 12 how that figure is computed. I seek leave to have the table incorporated in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows)-
– I do not want honourable members to think that this is altogether an unusual deficit in the present circumstances. For example the Federal deficit in the United States at this moment is running at about US$70 billion or say $A50 billion or so. That Federal deficit is computed in quite a different way to ours. Capital works are not brought in to the same extent and in addition there are big State deficits. By United States standards, $4.5 billion is a fairly moderate deficit. This matter is not something which I am now bringing up for the first time. I have spoken of it in the House before. I want to read to the House a passage from the Melbourne IP A Review of April- June 1972. It states:
In Australia 30 per cent of taxes go to education and social welfare. Another 30 per cent are spent on public works. In fact over 90 per cent of the entire cost of capital works in Australia is financed by the taxpayer. In this respect there is a marked contrast between Australia and overseas countries and one of great significance for the economic analyst. It has, however, so far as we know, been ignored in discussions of economic policy at both official and unofficial levels. Over the past decade government capital expenditures have averaged nearly 10 per cent of GNP in Australia compared with only 2 to 4 per cent in most other Western countries. The capital component of Australian public expenditure is also easily the highest in the Western world-about 33 per cent, compared with 21 per cent in the United Kingdom, 20 per cent in France and 1 9 per cent in Canada.
I point out that in this regard, the Budget practices adopted by the Australian Treasurer are at variance with the Budget practices adopted by most other countries in the world. We are odd man out in the way in which we do this. My suggestion that we should divide into capital and revenue expenditure represents a return, not just to normal financial orthodoxy, but to Treasury orthodoxy as understood by most countries in the world. This so called deficit of $4.5 billion does not mean that we are over spending. We are not over spending in terms of our current expenditure; we are putting aside an extra $4.8 billion of capital works. I simply ask that in this regard we do what most other countries do and consider these in separate accounts, as they should be. I am not suggesting for one moment that the $4.8 billion for capital works does not have to be found; what I am saying is that Australia does not have a deficit problem. We have a very real liquidity problem but that is a different thing and it should be tackled by different instruments.
The Treasury in Australia is taking a course which is at variance with that taken by Treasuries in most other countries of the civilised world and this practice has built up over perhaps the last 20 to 25 years. I believe that there has been consistent misbehaviour by the Federal Treasury during that time. We are not overspending. What we are doing is not financing our capital works in the normal way. I believe they can be financed in the normal way. Of course, we can get more from the Australian loan market and we can do it without raising interest rates if we go about it in the proper way. I will not go into those details because, as honourable members know, I have made available in another place details of what I think should be done and I will not have time at this stage to say what those details are.
– By mass coercion?
-No, not coercion. In addition, if we do not get it from the normal market we can get it from what the market has saved and is leaving unspent; that is, the idle deposits in the banking system and elsewhere. Those funds can be made available without causing inflation. It is very easy and facile to say: ‘You cannot do it without printing notes’. That is just plain nonsense. The use of central bank credit does not necessarily involve anything inflationary provided that we are not over spending in terms of real resources. At the moment when we have idle men and idle machinery we are not over spending in terms of real resources and we are not taking anything from private enterprise by spending more in the public sphere. We are giving more to private enterprise because we will be employing private enterprise and getting it going again. Of course, as soon as private enterprise reasonably takes up the slack we should get out and reduce our public expenditure. There is nothing inflationary in this.
It is true that using the central bank through Treasury bills puts more money into the market. That is a normal open market operation which any economist understands. There is not the slightest reason, if we are putting excess funds into the market, that we cannot cancel those excess funds. A very simple device by which it can be done is by raising the statutory reserve deposits of the trading banks. And that is not a credit squeeze. I am not saying that we should raise the statutory reserve deposits in such a way as to reduce the funds at present in the market.
What I am saying is that if the policy of the Federal Government puts more money into the market- an undesirable excess in the market- we should bleed off that undesirable excess, and no more, by raising the statutory reserve deposits or in other ways. This can be done. Any competent banker or economist knows the devices by which this can be done, and it is not inflationary. It is nonsense to say that we cannot increase the deficit without inflating. It is time we came to the end of that suggestion. I believe that this problem -
– I rise to order. Mr Deputy Speaker, is this the correct time for me to move an extension of time for the honourable member for Mackellar?
– I do not want it, thank you.
Mr DEPUTY SPEAKER (Mr Lucock)There is no point of order.
– I do not want an extension of time. This problem is less difficult than is believed by the Treasury. We can reduce taxation now. We can increase valuable expenditure now. Unless we do so the Australian economy at best may be in for a time of retardation and, at best, very slow growth. I do not go along with the policy that was announced in this regard by the Labor Government during its last unregretted term of office. I hope I can influence even the Opposition in this regard.
– I want to respond specifically to some of the points raised in the debate. The honourable member for Adelaide (Mr Hurford) challenged the Government to publish forecasts of unemployment, before and after the economic measures taken by the Government. What did the previous Labor administration do about informing the Parliament on Treasury forecasts? For all the talk of the Opposition now, the former Government which had its chance to do so never took the Parliament or the nation into its confidence. Was it because when Labor was in office, forecasts, if produced, would have shown that inflation was rising and that unemployment was rising? Was it because the Treasury and the Reserve Bank of Australia were telling the former Government that its policies would lead to the sort of catastrophe which occurred under it and which this Government inherited a few months ago?
Regarding that extraordinary speech by the honourable member for Oxley (Mr Hayden), all
I want to say is that if there was anyone in the Labor administration who understood the need to cut the deficit it would have been the honourable member for Oxley. It must be remembered that it was he who tried to reverse the huge spending habits that had developed under the 2 former Treasurers. The honourable member for Oxley implied that huge deficits did not really matter because they merely reflected a reduction in the rate of growth of average weekly earnings. That is the view which he puts now. However, no matter what the source of increase in the deficit is, if it is domestic it has the same impact on the money supply. An increase of nearly $2 billion in the deficit, no matter how it is caused domestically, will add enormously to the money supply, and fuel inflation unless its impact can be offset by the use of monetary policy. In financing the deficit the Government will endeavour to prevent its monetary impact from giving a huge boost to the money supply. Stringent budgetary restraint and our stance on wages are being backed up by effective monetary measures to curb excess liquidity, but there will be no credit squeeze. Financial institutions will be able to underwrite economic recovery. The policy is directed at reaping the full benefits of removing excess liquidity while improving the climate for business expansion and promoting economic recovery. I was a little surprised to hear the honourable member for Melbourne Ports (Mr Crean) make some disparaging remarks about the investment allowance. In my view, its reintroduction is one of the most desirable decisions of the Government since we came to office.
The honourable member for Oxley made great play on the Government’s not announcing the full year effects of the measures taken by us to reduce the Budget deficit. Perhaps I should remind the honourable member that when he announced with a great flourish that in his 1975 Budget he would reduce the prospective deficit from about $5 billion to $2.5 billion he was very careful, if my memory serves me correctly, not to announce many details as to how that would be achieved. The present Liberal-National Country Party Government has announced details of significant cuts in government expenditure and our frankness goes a long way further than any action taken by the previous Labor Administration. I suggest to honourable members opposite that the full year effects of the measures taken by us are considered to be in the national interest and that will become quite clear in a fiscally responsible Budget which will be introduced by the Treasurer (Mr Lynch) in August. I also remind honourable members that the Government inherited a huge deficit when it came into office. It has taken a responsible and honest approach in reducing it. Of course, the Loan Bill 1975, to which the honourable member for Oxley referred, would not have covered the prospective deficit.
I also want to comment on the remarks of the honourable member for Melbourne Ports with regard to the National Welfare Fund balance. In 1952 an amendment to the National Welfare Fund Act provided a standing appropriation for the automatic replenishment of the NWF from the Consolidated Revenue Fund in respect of all moneys paid from the NWF. At that time Parliament made no specific provisions concerning the balance of the Fund. In effect, a clear break was made with the past and a system was introduced whereby all social security payments are in fact met from the CRF even though moneys are channelled through the NWF trust account. Since 1952 social security payments financed from the general revenue of the CRF have amounted to many thousands of millions of dollars. Given the standing appropriation provisions for automatic replenishment of all amounts paid from the National Welfare Fund for social security, the balance of the Fund, of course, has been continually replenished. In these circumstances there is no need for any working balance in the National Welfare Fund and in fact the balance serves no useful purpose.
– I was not objecting to that. I was pointing out that the Auditor-General says in his report that the funds can be appropriated only for welfare purposes. I have no objection to closing it. I am simply asking whether the Government has checked that it is closing the Fund legitimately.
-We have checked it and it is perfectly correct under section 62A of the Audit Act . It is quite proper and appropriate. Finally, I thank those members of the Government and Opposition Parties who took part in the debate. The Opposition had its chance when in government. I came into the Parliament just on 3 years ago and the first Budget I looked at was for, I think, $ 10,000m. After 72 years of federation $ 10,000m was required to fund the national expenditure. Three years later $2 1,000m was required and there was to be a deficit of nearly $5,000m. Is it any wonder that the rapacious approach of the former Government to taxation diminished the national spirit and the nation’s capacity for initiative and development? We have had raging inflation and of course, flowing from that, high and unacceptable unemployment. There is need for these
Bills. No doubt, the Opposition members look forward to when the Treasurer will make a major economic statement. His words of wisdom no doubt will be of great assistance to them.
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 Eric Robinson) read a third time.
Consideration resumed from 26 February on motion by Mr Lynch
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 Eric Robinson) read a third time.
The following Bills were returned from the Senate without amendment:
Australian Security Intelligence Organization Bill 1 976. Conciliation and Arbitration Bill 1976.
Debate resumed from 26 February on motion by Mr Sinclair:
That the Bill be now read a second time.
-The Opposition opposes this legislation. The meat export charge of lc per lb was provided for in legislation introduced in 1973 to recoup partially costs to the Australian Government for inspection of export meat. Also, a charge of 0.6c per lb was provided for in the same legislation as an industry contribution towards the costs of the eradication of brucellosis and tuberculosis. This charge was applicable only to beef and veal, whereas the inspection charge was on all export meat. Over the 2 financial years 1973-74 and 1974-75 the cost to the Australian Government for meat inspection was $45.6m, compared with a revenue collection of $26.4m. The differential of $ 19.2m is a reflection of the downturn in meat exports that set in after February 1974 following a sustained period of buoyant export market conditions. It was during the period of buoyant conditions that the charge was introduced. The effect of the repeal of this legislation is that in respect of meat inspection the cost to the Australian Government is estimated at $20m in a full year. Also, the estimate of forgone revenue from suspending the charge from 1 March instead of the scheduled expiry date in June is of the order of $5. 5m, and $8m including the disease eradication charge.
The Government has chosen to defend this legislation by arguing that the Industries Assistance Commission report on beef recommended the suspension of the charge. Indeed it did; but it placed upon the recommendation 3 provisos, the first of which was- I quote directly from page 35 of the report- that the suspension ‘should not take precedence over other assistance recommendations which are more clearly focused on the needs of specific classes of beef cattle producers ‘. Therefore, the Minister for Primary Industry (Mr Sinclair) misinterpreted the IAC recommendations when he cited them in his second reading speech. The IAC went on to point out:
Since liquidity has been identified as the overriding short term problem, the Commission considers that most short term assistance should be focused on that problem.
But on this we have heard nothing from the Government. The Australian Labor Party is conscious of the fact that when the meat export charge was introduced it represented about 4 per cent of the saleyard price of cattle. In today’s markets the charge represents a little under 10 per cent, which is indeed a significant increase. However, the Opposition believes, as it demonstrated when it was the Government, that financial assistance to the industry is a more appropriate form of assistance than suspension of what we believe to be a legitimate charge. Meat inspection, we submit, is part of the productive process just as slaughtering is and therefore the costs of inspection should be found by the industry the same as with any other facet of beef production.
The IAC also recognises the basis of this view in its third proviso where it recommends that the suspension of the charge be reviewed when export prices improve. So the Labor Party has 2 premises for its opposition to the suspension of the inspection charge. Firstly, the inspection charge is part of the productive process and should be maintained, and secondly, we do not share the Government’s view that the maximum benefit of the lifting of the charge will be returned to producers. This must primarily be the intention of the legislation.
In the first and probably the final instance, the benefit will accrue to exporters. Whether the savings from the charge will be passed back to the producers is quite questionable. There is no evidence that when the Australian dollar was devalued any benefit was returned from the exporter to the producer. In theory, where there is effective competition among buyers and exporters the benefit from the suspension of the charge should flow back to the producers. But in practice it is always a different matter. The IAC itself admitted in its report at page 33:
It has not been possible to determine how much of the benefits of a suspension of the export charge would be passed back to beef cattle producers.
If the exporters were in the end the sole beneficiaries I do not believe it would unduly worry the National Country Party or the Government as a whole. A $28m gift this year to exporters by the Government I am sure would be most appreciated, particularly by the exporters. This would be particularly in contrast to the Fraser Government’s frugal treatment of the needy with brutal expenditure cuts.
It was my experience that when the Labor Party reduced tariffs across the board by 25 per cent in 1973 no appreciable benefit flowed to the consumer. The importers grabbed the lot. In similar terms there is no basis for believing that exporters will be falling over themselves to hand the savings back to beef producers. It is for the reasons I have mentioned that we in the Opposition oppose the suspension of the meat inspection charge.
Another aspect which the Government has not considered is the duplication of inspection services. Presently all States except South Australia have inspection services. We also have a Federal inspection service which was established because countries like Japan and the United States of America require certification by Commonwealth meat inspectors. But no argument can be made for the duplication with State inspectors. Therefore a strong case can be made for the Commonwealth Government going to the States and requiring that the State inspections be dropped. Obviously if this were done there would be savings in the industry which may be passed on. Apparently this matter has never been looked at.
The Opposition supports the Government’s suspension of the 0.6c per lb charge for the eradication of brucellosis and tuberculosis and its replacement with a charge of $1 per head slaughter levy. This is implicit in the legislation. The suspension of the 1.6c across the board suspends both the inspection and eradication charge. The charge of $1 a head would raise about the same revenue as the 0.6c per lb and would be fairer in its application inasmuch as the whole industry would contribute to disease eradication rather than just the export part of it. The only point of variance between the Opposition and the Government in respect of the repeal of the eradication charge is the Government’s belief that it must wait until 1 July to reimpose a charge. The $1 a head levy should, I believe, be imposed forthwith to compensate for the loss to revenue of the 0.6c per lb under suspension by virtue of this legislation. What that means is that between 1 March and 1 July, when the 0.6c per lb eradication charge will be taken off, a sum of $2.5m would flow straight back to the exporters and I do not believe they would hand it back to the producers because the charge is going to be operative again from 1 July. Therefore no case can be made for that.
To summarise, the Opposition has made 2 points. It is opposed to the lifting of the lc per lb on meat inspection. It believes that this charge is part of the legitimate productive process of meat, particularly in respect of meat for export. However, the Opposition supports the lifting of the 0.6c per pound for eradication and its replacement with a $1 a head slaughter levy which would bear upon the whole industry and not just on the export industry. I think that it would be common sense to support such a proposal. As far as I can see there is no justification for believing that the lifting of the $20m revenue that flows from meat inspection would in some way be of advantage to beef producers because no one, including the IAC which I have already quoted, can suggest that the money will be passed back. That is a summary of the Opposition’s objections, and its support for a particular part of the legislation.
– I must admit that it would be difficult to find legislation nearer to my heart than the legislation that is now before us. It is very near to the heart of my electors in Eden-Monaro; it is obviously not near to the heart of the honourable member for Blaxland (Mr Keating) who is the shadow Minister for Primary Industry. There is no doubt that the honourable member did not have his heart in what he was saying. Nevertheless we appreciate the opportunity to have some sort of opposing point of view despite the fact that that point of view is quite hollow and without any sort of logic.
The Bill fulfills an election promise that my Government made in November. It was a very important promise to a very important industry. I remind the House that in 1973 prices went up greatly in the meat trade, right across the world. We were reaching the stage in Australia where people were beginning to look around for alternative products to eat. Prices in the beef trade at least doubled. They also went up in the mutton trade. It was at that stage that some members of this House were touting a quaint sort of export tax scheme. The figure mentioned in the newspapers was something around 10c per lb tax on meat exported. I believe that the reason for the tax was the expectation that the local price would come down. I note that at that time the Joint Committee on Prices, known as the Hurford Committee, talked about this proposition and came out in favour of it. I say thank heavens for the dissenting comments. I would like to quote to honourable members one of the dissenting comments:
It should be remembered when considering the current level of meat prices that sheep meat prices were at very low levels until fairly recently and that, as a result, the sheep industry experienced many years of depressed returns and increasing indebtedness. There would seem to be no justification for Government intervention of a kind which would reduce the ability of those producers to recover from the effects of that period.
A 10c per lb tax would have been absolutely crippling to the meat industry. It would have taken away what at that stage were probably fair profits to the beef industry. Nevertheless the findings of the Hurford Committee were rejected by the then Government which then went to the Coombs Committee report which recommended the beef export levy on the basis which was eventually adopted.
This recommendation was made in June 1973. The levy was imposed in November 1973 at a time, probably by a fluke, when the meat market reached its peak of price. Someone said to me at the time: ‘It looks as though the cow might jump over the moon’. The cow did not jump over the moon and prices from then on began to decline. There was some sufferance of the levy on the part of the public in November 1973 because the size of the levy did not seem to be too great a percentage of the cost of beef in particular. The inspection levy amounted to about 2.5 per cent of the price of a beast, and that did not seem too bad. When the meat export charge legislation was introduced in 1973 the Minister said:
Currently there is a very strong export demand for Australian beef and in these circumstance it is not expected that the charge will be passed back to the livestock producer.
That may have been conventional wisdom and it may have been in part true but I believe that it is questionable because, as it turns out, exporters are in fact price takers. They are the people who have to take the price that people overseas offer. They are not price makers in general. As prices of meat- in particular, beef- began to drop away again it became obvious that they were very much price takers, because within months there was very much a buyer’s market. Export levels dropped off and the levy became part of the costs of the producer.
At that stage too many other industries were being hit by a falling off in demand. It was most noticeable to the people in my area that industries were singled out for special treatment for all sorts of reasons, but certainly this pretence did not include the meat industry. At that stage when the motor industry got into all sorts of trouble it received Government help through the reduction in sales tax. I think at the time all Australians believed that, as a stop gap measure that was probably reasonable. But of course, in keeping with the general policy of the Australian Labor Party Government, no thought was given to the rural industries at a time when incomes were dropping off. The IAC report appeared eventually, on 30 September 1975, after many months of falling incomes in primary industries and in the meat trade at a time when it looked as though the beef industry in particular would suffer a very early demise. Luckily, the IAC report came out in favour of dropping that levy. It said that the suspension would benefit the exporter. It also said that the suspension would benefit the producer. But there was still no action by Labor. Now at least we are seeing action.
I suppose that some points should be noted, in defence of the meat industry, that are not always obvious to people who are not as close to the industry as I am. Inspection costs are not paid for by other industries. The meat industry- as distinct from the fruit industry, the honey industry and several other industries- has had to pay its own inspection costs. It seems to me that meat inspections are a public health benefit and a social charge that, as has been the case traditionally, reasonably comes out of taxation revenue. There are costs in many industries that are passed on to the consumers. There are costs of quality control. Most of us would realise that meat inspections are a form of quality control. But in all cases in other sorts of industries these costs can be passed on by the producer almost at will. Unfortunately, in the meat industry with its marketing setup those costs cannot be passed on and they go back to the producer. I say in defence of the meat industry and of producers that the way we have traditionally paid for meat inspections via taxation is the logical way in which consumers and not producers pay the costs. I think that that makes the industry equivalent to many other industries in that sense.
The benefits from the export industry flow on to the whole country. That, of course, applies to any export industry. But if there are no inspections in the meat industry there are no exports. As I said, the inspection is a social cost which is peculiar to this industry. If we want to keep this industry as an export industry there is a very strong argument for saying that the taxpayer- in this case, the consumer- should reasonably pay. Fortunately the legislation recognises that meat exporters cannot dictate the prices that the product will fetch in the market but rather that they must accept the ruling world price, which depends largely on factors beyond their control. By passing the cost of inspection services back to Consolidated Revenue the Government has again accepted that Consolidated Revenue also benefits from a sound export industry as does the Australian economy as a whole.
Let me digress for a minute. It is typical of the problems of primary industry that the industry receives a bad Press each year when the Budget papers appear. Many costs attributable to the primary industries appear in a Budget whereas costs attributable to manufacturing industries do not appear. As I have said and as I will say often in this Parliament, people do not appreciate that the other charges on them when they buy products of secondary industry- such as the charges which will appear shortly in the quotas being placed on knitted tops- can be equated to the same sort of subsidy as the meat export trade receives by the taking off of the meat export charge and the paying for it out of Consolidated Revenue.
Nevertheless, as the honourable member for Blaxland noted, money is involved. A responsible government such as the present Government will always remember that. I believe that some adjustments must be made in the inspection services because, as the honourable member for Blaxland points out, those inspections cost this country a great deal of money. At the moment a great number of meat inspectors are employed by the Federal Government and a great number are employed by the State governments. This means that meat may be inspected twice, which is unnecessary. We seem to be stuck with that system at the moment. It is quite obvious to me, however, that there must be some rationalisation of the system. As honourable members know, at the moment 2 inquiries are being conducted. I hope that they will pave the way for the rationalising of meat inspections.
The meat industry employs 30 000 people in the pastoral industry, about 40 000 people in the meat processing industry and at least 5000 people in the service industry- the selling industries. There is no doubt that it is one of the most important industries in this country. It is a very big export industry which has always meant a great deal to our external account. The previous Government begrudged the graziers and the people who work on the land a profit. I cannot countenance that sort of attitude. It is for that reason that I have pleasure in supporting this Bill. I know that its introduction is not before time.
Mr FitzPATRICK (Darling) (9.28)-The honourable member for Eden-Monaro (Mr Sainsbury) spoke about the cow jumping over the moon. In my opinion, the legislation before the House represents more a case of the exporter jumping over the producer. I cannot give the legislation my full support because it does not contain sufficient safeguard that the amount saved by the exporter will be returned to the producer once the export levy is removed. Also it gives no guarantee that the removal of the export levy will bring about an improvement in the prices paid for livestock once the export levy is removed. In his second reading speech the Minister for Primary Industry (Mr Sinclair) said that the immediate benefit would be to exporters. Later on he said that it was expected that the maximum benefit would be passed on to the producer. Then he said that the distributors and the retailers had been able to pass on charges which affected them. But the producer has not been able to do this. Further on the Minister said: . . . in lifting this charge the Government is hopeful that to the maximum the benefit will be passed on to producers.
I believe that as the industry is in such a depressed state, words such as ‘expected’ and ‘hopeful’ are not good enough for the beef producer. He is entitled to know what the Government intends to do for him instead of worrying about what charity he is likely to get from the exporter once the export levy is removed. However, I must agree with the Minister that when the export charge legislation was passed in 1973 the world demand for meat was strong and prices for beef were extremely high. Those circumstances are in marked contrast to the present situation in which imports to many of our overseas markets are restricted. In my opinion it is the responsibility of the Government in such a situation to assist the producers, not the distributors and the retailers who, the Minister has informed the House, have been able to pass on the charges.
On many occasions as a member of the Labor Government’s resources committee I attended conferences with the Cattle Breeders Association. On all those occasions the Association pointed out that liquidity was the overriding problem. I have no doubt that the Association made strong submissions to the Industries Assistance Commission that this was the greatest short term problem and the main concern of its members. The IAC report identified this problem and stated that most short term assistance should be focused on that problem. If we examine the Australian Agricultural Council’s report of 14 February 1975 we will see that one of its greatest concerns was that 1.5 million head of stock which would normally be slaughtered in 1974 would not be slaughtered but would be carried on into 1975 and their retention would cause difficulty with the maintenance of breeding stock. On page 7 of the February 1975 report it reads:
In the longer term, Council agreed that Standing Committee should also consider and report on the possibility of developing a beef prices stabilisation scheme in the interest of minimising the impact of fluctuating returns to producers and the consequential effects of such fluctuations throughout the meat chain.
On page 8 of the Australian Agricultural Council’s report of 4 August 1975 it states:
Council considered that the 2 questions of a beef stabilisation scheme and short term assistance measures warranted immediate consideration. It agreed to set up a working party comprising representatives of State agricultural departments under the chairmanship of Mr G. Mackay of the Australian Department of Agriculture to prepare a report for the Standing Committee’s consideration at the earliest possible date. Specifically, the working party was required to investigate and advise on the feasibility of implementing on a national basis a system of minimum prices for all cattle sold for slaughter and to consider other possible measures which would help to stabilise producers’ returns.
It is quite obvious when one considers the Cattle Breeders Association submissions and the Agricultural Council reports that they are seeking some form of assistance that will give direct and unrestricted benefit to the producers. They are not seeking assistance for the distributors and the retailers, nor are they seeking some token handback from the exporter once the export levy is removed. Anyone who is of the opinion that the distributors and the retailers are in need of assistance should put forward a case on their behalf. The distributors and the retailers should not be allowed to cash in on the critical situation faced by the beef producers. Meat inspection is a part of the production process and it is natural to expect the industry to meet this cost. Assistance where it is needed should be given in some other form. The Minister has said that the distributor and the retailer are able to pass on the cost, but the producer is not able to do this. This Bill gives no assurance that the producer will benefit from the $20m of taxpayers’ money expended on the inspection of beef. This legislation is defended by the argument that the Industries Assistance Commission report on beef recommended the suspension of the charge. On page 35 of the report it says:
It should not take precedence over other assistance recommendations which are more clearly focused on the needs of specific classes of beef cattle producers.
In my view all that this points to is the fact that the industry is looking for some form of direct assistance. The Agricultural Council and the IAC have made recommendations that direct assistance plus some form of a stabilisation scheme should be introduced. If we put aside the argument as to whether producers should pay their own inspection costs or otherwise, it is yet to be seen how much of the benefit from the $20m in taxpayers ‘ money will be passed back to the producer. The only evidence I can find in all these reports pointing in this direction was a suggestion put forward by the New South Wales representatives to the IAC investigation that where there is effective competition among buyers and exporters some of the saving will be passed back to the producer. We all know that there is no effective competition at the present time. As a matter of fact the IAC report itself points out that the extent to which the suspension of the export charge would be absorbed by the middleman is not clear. In submissions to the Agricultural Council the New South Wales representatives said that there will be some benefit if competition between buyers and exporters is effective. It seems to me that everyone is doubtful whether any benefit will now back to the producer under the present circumstances when this legislation is passed.
As I said before, if we want to help the distributor and the retailer someone should stand up in this House and put a case for them. They should not hide behind the producer and grab the benefit intended for the producer in such a critical period. I believe suspension of the 0.6c per lb imposed to recover the Government’s costs in the program to eradicate brucellosis and tuberculosis and the proposed replacement of that levy with a slaughter levy of $ 1 per head is a much fairer way of applying a levy and it should be supported. However, I must support the honourable member for Blaxland (Mr Keating). I cannot agree with the Minister and I think the Government should give a clear reason why we have to wait until 1 July before this proposed charge is imposed.
Honourable members will no doubt be intrigued to recognise that the attack once again on profits in the private sector that came from the shadow Minister for Primary Industry fits simply into a pattern of attack to which we have all become very well accustomed. I state right now that I would like to declare an interest in this matter. I own 2,000 50c shares in a meat exporting company and I am a director of it. Its name is Tancred Brothers Industries. It has the honour to have a meatworks in the electorate of the honourable member for Darling (Mr Fitzpatrick). Having declared that interest, let me say that I have an awareness of what is going on in this industry. Such an awareness is noticeably lacking in members on the other side of the chamber. I feel that the shadow Minister could have done his cause greater service if he had read the whole sentence in the Industries Assistance Commission report rather than the first half of it. He said that there was uncertainty about whether any producers would get a benefit. The honourable member for Darling had the integrity to read the whole sentence. I think the significance is in the second part of that sentence. I will read the whole sentence. The first part, which the shadow Minister read only, states:
It has not been possible to determine how much of the benefits of a suspension of the export charge would be passed back to beef cattle producers . . .
He stopped there. The sentence continues: … but evidence from the New South Wales Department of Agriculture suggested that where there is effective competition among buyers and exporters some of the savings would be passed back to the producers.
If honourable members can point out to me a more competitive industry than the beef processing industry I would be grateful for their efforts. In every sense this is a cut throat business. This is a business in which people are competing hard, in the open and against each other with immense determination. This is a business which the competition has been tough. The results of Australian public companies in this area show that. I stress that the company with which I am involved is an Australian public company and therefore has had a bigger belting than anyone else in the last 3 years. Australian public companies compete in the open for cattle and then compete in the open in the selling markets. I stress that there is competition. Because of that competition the benefits and the belting go back to the producer. I suggest that there has been a real belting.
Look at what this wonderful bit of assistance to the meat industry did. Now 10 per cent of the value of the beast is paid as an export levy. It raised something like $20m, I think, last year. We heard from the Opposition how there are better ways to assist the beef industry than by getting rid of this export charge. Let us look at the method it adopted when in government. Having ripped this $20m off the beef industry it then, with its hand on its heart and with a kind look in its eyes, lent that money back as a special, wonderful concession, at a rate of interest. With that sort of help, lending back the money one has ripped off an industry, who needs enemies? The sort of help which the Opposition has given the industry has brought it to the brink of disaster. I suggest very strongly that the impact of this charge which the Australian Labor Party Government introduced could not have come at a worse time. Someone said, in an interesting mixture of words, that this attack on the beef industry was the straw that broke the camel’s back. I do not know who was processing camels, but this report came from the Northern Territory.
I suggest that this levy, which is now being reduced, has been a major factor in the disaster. It is all very well for the Opposition to say that the main thing wrong with the meat industry is simply the closure of markets overseas. This industry could have got on reasonably well if there had not been a disastrous combination of factors working against it. Some of them were overt, determined and deliberate government measures such as the export levy. Others included the more covert attack on this industry, along with every other industry in the nation. I spoke at some length recently about the realities and the real profit terms of the trend of earnings in Australia in the last 5 years.
Let me point out the specifics in this industry. I will speak from experience of the company with which I am involved. Last year in our publicly revealed balance sheet, publicly audited, publicly presented, it was shown that the value of cattle purchased by this company fell by more than half, although the number of cattle purchased rose slightly. There was a halving of what the producers got. However, no worry, the main beneficiaries still benefited. The tax man’s take out of the industry roughly doubled. I refer to taxes of all kinds. So in the situation where the producers got a belting the Government did very nicely, thank you. It got $3.5m in tax of one kind or another. I must say that I am including the pay-as-you-earn tax on employees because employees are concerned with their take home pay. Their pressures for wage rises relate to take home pay. It is the consumer who pays these additional costs. I stress that the costs in this industry have been rising at a far faster rate then export prices. These costs will continue to rise while there is a high rate of inflation.
I believe it is essential for the future of this industry that an attack be made on 2 levelsfirstly, on the overt charges imposed on the industry by an unsympathetic and antagonistic government. I presume honourable members opposite remember the occasion on which the then Prime Minister went, 2Vi years ago I think it was, to Shepparton and advised some very cheerful farmers there that they had never had it so good. One must admire the man. In two years they have never had it so bad. This kind of determined attack is aligned with a massive and disastrous assault on the economics of this industry, arising from inflation. I submit that unless there is a massive rise in export prices there will be continuing disaster in this industry. I submit that the home consumer will have to pay more for his or her meat in future if the current level of returns to primary producers is to be maintained. This is a dreadfully serious problem.
Costs of production are soaring. The main reason for rising costs in the industry is taxation. It is the fastest rising segment of the cost structure of the beef producing and processing industries. I believe that the sooner this continuing, rapid and disastrous rise is brought to an end, the better. I support this Bill very strongly. I believe it does one major thing. It gets the Government off the industry’s back. It should never have been there in the first place.
– I support the honourable member for Blaxland (Mr Keating) in opposing this Bill. I want to make two or three fairly brief points. The first concerns the question of the cost of inspection not being included at the point of production. I had hoped the Government would have advanced some logical, rational sort of argument why it should not be included in the cost of production. No speaker opposite has attempted to do so. Why should the cost of inspection be not included in the cost of production, the same way as the cost of droving, killing, refrigerating or anything else is included? The Government is not consistent because it agrees that the cost of disease eradication should be carried by the industry. The Government takes a completely illogical view of the cost of inspection and says that it should not be carried by the industry. I refer to the Green Paper which was produced for the Australian Labor Party Government and which was commended very widely by all sections of primary industry for the wisdom of its broad policies. It spelt out very clearly that the meat export inspection charge should be a part of the total cost of production. The Green Paper continues:
It should be carried by the industry as a whole and passed on to the consumer-
It is not carried by the producer; it is passed on by the producer- as a legitimate cost factor, just as killing and refrigeration are regarded as production costs. There is no logical reason why such costs should be met out of government revenue, rather than being paid for by the user. Why should a particular input receive special consideration in this way?
Such is the irrationality of the Government’s approach to this question. The other main matter of concern in relation to the lifting of this charge is this: If the resultant benefit went to the producer we would have no bitch at all; but it is quite obvious that there is no way in which it can go to the producer, even though the Government expresses a rather pious wish that it may go to the producer or the hope that it will go to the producer. Many producers who send their cattle to the yards quite often do not know whether the cattle will become export cattle or will be sold on the domestic market. Some killing works are devoted entirely to the export market, of course; but quite a few are engaged in both the domestic market and the export market. How can the producers get that money back when they do not know when they sell their cattle in the yard whether or not the cattle will be exported?
Of course, the lifting of the charge will benefit one section of the industry only, and that is the wholesaler. It was interesting to see our friend, the honourable member for Macarthur (Mr Baume), shedding crocodile tears for the poor wholesaler. Really, when one looks at the facts one realises that there are no grounds for worrying about the wholesaler. He is doing pretty well. That becomes clear if one looks at these figures that I have before me. These figures were produced by the New South Wales Department of Agriculture and they show the break-up of the consumer dollar and the way in which that break-up changed between 1971 and 1975. These figures will be quite enlightening, particularly to the housewife when she learns where her dollar is going. In 1971 the farmer was getting 61c of the consumer dollar which was paid for beef; the wholesaler was getting 7c; and the retailer was getting 32c. In the first 6 months of 1975 the farmer’s share dropped back to 30c. So his share was cut in half. The wholesaler at that time was getting 24c, which represents a mere 350 per cent increase in his share of the consumer dollar. Yet this man opposite is shedding crocodile tears for the wholesaler.
– What were his costs? You are talking about total revenue. What about his costs?
– I am quoting his share of the consumer dollar. The honourable member does not like hearing it, does he?
– Before costs and before tax.
– I have some more figures which relate to the honourable member’s company, and those figures will be interesting too. So the wholesaler’s share of the consumer dollar increased by 350 per cent. In 1975 the retailer received 46c. There is some justification for that because the retail end is very labour intensive and there have been heavy increases in wages. I have quoted the increase in the wholesaler’s share, and he is the man who handles not just a few beasts but hundreds of thousands of carcasses. Yet he has received this massive increase in his share of the consumer dollar. These figures were produced by the New South Wales Department of Agriculture. I have the figures here. I defy the honourable member to contradict them.
– They are pre-costs; that is all.
– All right, let us get down to costs. Let us talk about some actual figures. I have here 3 lots of figures, and interestingly enough one of them relates to the firm in which the honourable member has shares, namely the Tancred Bros Company. In 1974 Tancred Bros made a profit of $112,000; in 1975 it made a profit of $213,000.
– On a turnover of $70m.
– The company paid a dividend.
– We would have got 3 times as much by putting the money into Commonwealth bonds.
– The honourable member was shedding crocodile tears over the fact that the turnover was down. Sure it was down. The company was buying very cheaply and making double its profit on a much smaller turnover. So what humbug and contradiction is this?
– What earning rate is that on capital?
– I raise a point of order, Mr Deputy Speaker. Could we hear the speech of the honourable member for Fraser without interruption, please?
-I think that the honourable member for Grey has a point. The honourable member for Macarthur has made his speech. I suggest that the honourable member try to contain himself, having made his speech, and listen with care and attention to the honourable member for Fraser.
-The sales of Tancred Bros dropped from $7 1.2m to $5 1.7m. Although the volume of sales dropped, its profit almost doubled from $112,000 to $213,000. So it is not doing too badly. I refer now to our other friends, T. A. Field Holding Ltd, the people who owned Lanyon Station and who wanted the Government to pay $30m for it as urban land. I think it is worth about $2m; our Government paid that company something like $3m out of generosity. It wanted $30m. In 1974 T. A. Field made a loss of $444,000. That was a very bad year. But in the next year it made a profit of $736,000. So my friend opposite is not a bit concerned about the producers. Those figures show quite clearly that the wholesalers are having a picnic at the expense of the producers. The figures are there to prove it. In 1974 Anderson Meat Industries Ltd Made a profit of a mere $6,006. In the first 6 months of 1975 it made a profit of $431,835, which is not a bad start for a company engaged in an industry which is in its death throes, according to what honourable members opposite tell us. I think it is quite clear that it is nonsense to shed crocodile tears for the wholesalers. All this measure is doing, in granting a moratorium by cutting off the charge for the time being and not imposing any additional charge until July, is handing over $8m to the wholesalers. I can quite understand why my friend opposite is so pleased, when he has been given this generous handout by his Government.
The other point to which I wish to refer briefly is related to the fact that honourable members opposite keep saying that the Government has accepted the recommendations of the Industries Assistance Commission report. It has done quite the opposite, of course. The IAC report says that the lifting of the charge should be only on the basis that certain other conditions are met. The report says that the main problems are those of credit and liquidity, and it mentions four other conditions concerning interest rates, carry-on finance, overdraft limits, and limits to be relaxed at the discretion of the rural reconstruction authorities. At the bottom of page 45 the report states: … the meat export charge on beef be suspended, but with the provisos that the suspension of the charge:
The Government is doing quite the opposite of what is recommended in the Industries Assistance Commission report. So it is utter humbug for the Government to say that it is adopting that report. It is doing no such thing; it is doing just the opposite. Whereas the report says that it should do a certain thing last, the Government is doing it first and neglecting other things which would be of real benefit to the producers. It is picking out this measure because it helps the middle men, the friends of the Liberals, the big meat barons.
The other matter to which I want to refer briefly is health standards. This is another plank or very strong policy point expressed in the Green Paper. The Green Paper states that the policy should be to ensure that health standards for local consumption are as high as those for the export market. It is an unfortunate fact of life that quite often our meat inspection for the domestic market indicate very high levels of salmonella infection which can have quite devastating effects on the consumer. We have standards for local consumption that are different from those which apply to the export market. I do not know why the people of Australia should have to accept a lower standard than do our customers in America or in Japan. I do not know whether our intestinal fortitude is such that we are supposed to be able to resist all these wogs. Why should we not have the same standards? That is what the Green Paper sets out. It states, that that is what we should aim to do. Why should we have a second rate product just because we do not have high inspection standards, just because inspection standards are imposed on us by export conditions and because we do not upgrade those conditions for our own domestic market? What I am saying is that we should have export standards and they have to be paid for by the user, but we should try to extend those standards over the whole of the market and not apply them just to the export market. If that were done, of course, we would avoid the problems to which our other friend referred, namely, that we have different standards. We have State standards and we have Commonwealth standards, and sometimes we have overlapping and duplication. This area concerns the health of the people and I think the Commonwealth should set standardshonourable members on the Government side would call this centralism- and maintain them on the same basis for both the local market and the export market. I see no reason why we should be expected to accept a lower standard.
I repeat that we would support this proposition if we thought the benefit would go to the producers but there is nothing to indicate that they will get one cent out of the lifting of that charge. All that is happening is that the Government is penny-pinching. It is hitting little people, disadvantaged people, to try to save a few bob to reduce the Budget deficit but it hands out $8m to people who can get along very well without it. The producers certainly need it and should get it. There is no way in which they will get it under this proposition and on that ground the proposal should be rejected.
– I join in this debate to support the excellent argument advanced by the Government and to reveal to the Australian people the shallowness of the argument of the Opposition. I believe that never before in this Parliament have we had to listen to such a weak exposition.
– That is saying something.
-As the honourable member for Kennedy said, that is saying something. Anyone associated with rural industry cannot but be alarmed about the spokesman for the Opposition who quite obviously believes that meat is for filling teeth. At least the honourable member for Darling (Mr FitzPatrick) showed to the House that he had both an appreciation of and a knowledge of the industry.
– Why do they not put him on the front bench?
-I agree with the honourable member for Wimmera. The Opposition would do well to promote the honourable member for Darling to the front bench. Whilst we disagree with his thrust and his policy at least he has some knowledge of rural industry, in direct contrast with the person who bears the title shadow Minister for Primary Industry. I suggest to the 3 members of the Opposition who made speeches tonight that they would be very well advised to tear them up and throw them in the rubbish bin. If they do not they will be like the former honourable member for Eden-Monaro; they will be deposited in the trash bin of history. The 3 speeches were typical of the anti-rural syndrome that seems to permeate the Opposition. On 13 December last year the Australian people told the Opposition members that they did not want them to pocket the money which rightly belongs to rural producers. The Australian people do not want a bar of the Opposition’s policies of export taxes on primary production. Rather they want the positive approaches that were indicated by the honourable member for Macarthur (Mr
Baume) and the honourable member for EdenMonaro (Mr Sainsbury)
I was appalled at what was said by the honourable member for Fraser (Mr Fry), who was worried about the profit motive. He was terribly suspicious that someone was not going to pass on a dollar to someone else. I am concerned about his attitude. His friends in the Labor Party must deplore his rejection of the profit motive which, in the case of one company- a company with which the honourable member for Macarthur had some association and to which he referred in his excellent speech- provides jobs for many thousands of people. The honourable member for Fraser says: ‘You cannot make a profit; I do not want the people to have a job’. What type of Labor man do we have in this House when the honourable member denies people an opportunity to make a profit so that they can create jobs for people who want to work? I leave honourable members with that thought. I am concerned about such an attitude. The honourable member expects an enterprise with a turnover of $50m and operating on 0.4 cents per cent profit to operate at a loss. He forgets that if these people did not provide more employment and more jobs they would be three or four times better off in investing in Commonwealth bonds. The honourable member says that they should invest in Commonwealth bonds and not give a mate a job.
I want to expose the argument and attitude of the honourable member. I was appalled at his failure to differentiate between meat inspection services, the principle behind them and the principle behind the eradication of brucellosis and tuberculosis. I suggest to the honourable member in a spirit of helpfulness, so that he might improve his knowledge, that the differentiation is quite simple and is easy to understand. The principle benefit of meat inspection is associated with public health and as such the cost of maintaining the public health must be borne by the whole community, not by the producers or the meat works operators. The whole community should pay. That is an excellent principle if we want the public health of the Australian people to remain at the optimum level.
On the other hand, disease eradication benefits the producer so the producer should pay.
I want to quote from Hansard of 1 1 September 1 973 where the previous honourable member for Riverina was reported as introducing the Meat Export Charge Bill. He said:
The major part of the cost of export meat inspection has been met from Consolidated Revenue since 1927 and it has become a large item of expenditure in the Budget. The measure was originally introduced to onset low export prices and has been maintained ever since. This is in contrast to the present situation in which world demand for meat is particularly strong and prices are at high levels.
Those were the words of the then Minister for Immigration when he introduced a Bill which was aimed at pocketing for the use of the Commonwealth Government funds which rightly belonged to the Australian producers. Prices for export cattle and cattle for local consumption declined quite rapidly in 1974. In February 1974 yearling beef was 90.8c per kilogram. In February 1976 the price was down to 40.4c per kilogram. Ox beef dropped from 80c to 26.9c and cow beef dropped from 67.9c to 3 1.2c per kilogram. The Labor Party had 2 long years in which it could have redressed the imbalance and corrected the inequities but true to its opposition to rural people and people dependent upon rural industries for a livelihood it failed to do anything.
– It wanted a special tax on us.
– The previous honourable member for Eden-Monaro who was in favour of that got the special tax. The Labor Party failed to implement the findings of the Industries Assistance Commission. The honourable member for Fraser could not even correctly quote from the report, but I will do so. On page 45 the Commission stated:
The meat export charge on beef be suspended, but with the provisos that the suspension of the charge:
should not take precedence over other assistance recommended,
should not prejudice the brucellosis and tuberculosis eradication campaign, and
should be reviewed when export prices return to higher levels or when the Government considers the export inspection charge policies following the Commission’s report on Financing Promotion of Rural Products.
That is exactly what we are doing. That is exactly what the Minister said in his second reading speech. He is doing all those things. The honourable member for Fraser could not even quote the report correctly. The Opposition was not truthful on this matter. It did not indicate the real truth of the proposition to the Australian people. The Bureau of Agricultural Economics in one of its recent reports advised that 56 per cent of specialist beef producers ran deficits as far as their net farm incomes were concerned in 1974-75 as compared with 1 4 per cent in 1 973-74. This indicates that the beef producer in Australia is in desperate financial straits. What can he do to overcome this? He cannot do a lot unless he has positive encouragement from the Government such as we are giving in this piece of legislation.
Only 8 per cent of world beef production enters world trade. Prices for beef on export markets are sensitive to conditions in major beef importing countries. The total value of the beef industry in Australia in 1972-73 was $ 1,022m, declining to $569m in 1974-75. That is indicative of the position which has caused great hardship to many primary producers.
The matter of meat inspection levies is one on which I believe we must have a balanced outlook. I think it is wrong for hygiene requirements to be placed on meatworks at such a cost that is contributes to the high cost of meat on the plate of the Australian housewife. We must have a sense of proportion. I hope that when the dust settles on this piece of legislation the Minister will be able to include in the payments that are refunded to the meat works operators and owners, the cost of the overtime which is applicable to meat inspectors. That appears to me to be an anomaly and it needs rectifying. I hope the Minister will give attention to that problem which is one for industry itself to help solve.
I want to comment on the final thoughts expressed in the Minister’s second reading speech regarding the eradication of tuberculosis and brucellosis. It is an excellent example of what can be achieved by governments, Commonwealth and State, working in harmony and in a spirit of mutual co-operation. Each year the National Sub-committee for the Eradication of Tuberculosis and Brucellosis meets and works out how much will be allocated for these purposes for the ensuing 12 months. It is good to see that the States have had a continuing interest and responsibility in the matter, because of the impetus that they give to it by agreeing to increase their own contributions each year by 10 per cent. I believe that tuberculosis and brucellosis can be eradicated only by a long term approach. I suggest to the Minister that he adopt a policy of triennial funding rather than funding on an annual basis. This would allow the States and the appropriate authorities to plan well ahead rather than living on a hand to mouth basis. Any shortfalls in expected revenues from one area could be carried over to the next year.
The Industries Assistance Commission in its report- the Opposition obviously has not read it- indicated its concern that by 1983 we should be provisionally free of brucellosis. The Commission adopted this date because of its great concern that when brucellosis is eradicated from the United States of America that country may not be willing to import quantities of meat from countries which have not eradicated the disease. I understand that Germany, which is not a large import country for Australia, already refuses the entry of meat from an area which is not free of brucellosis. I hope that the Commonwealth and States can get together and work out a suitable scheme of compensation for brucellosis payable on the basis of a 75 per cent contribution by the Commonwealth Government and 25 per cent by the States.
I conclude on this note: The Opposition seems to be concerned and suspicious- I suppose that is probably the product of mischievous mindsthat this $20m which will be the savings resulting from the legislation, will not find its way back to the pockets of the producers. I assure the Opposition that the free enterprise system and its mechanism do not operate in the market place on that basis. Competition is the life blood of that free enterprise- the direct opposite of socialism. Such things happen under the Opposition’s system. It will not happen under the free enterprise system. That $20m will be returned to the pockets of the Australian producers to help them to live up to the quality of life which they rightly expect. I assure members of the Opposition that their thrust by trying to highlight this has contributed nothing to the debate or to the restoration of the beef cattle industry; rather has it assured the Australian primary producer, and the beef cattle producer in particular, that the Australian Labor Party had not changed; it still has an anti-rural syndrome.
– in reply- I will not detain the House for long. Firstly, I want to apologise to the honourable member for Blaxland (Mr Keating) and others for not being in the chamber when the debate began on this measure. Unfortunately I had a number fo people waiting to see me and I stayed to see them before I came into the chamber. Quite a number of contributions have been made. As yet I have not caught up exactly with what each honourable member said but I shall examine the comments. I assure each honourable member who spoke in the debate that his comments will be looked at within the Department of Primary Industry.
I understand that the honourable member for Blaxland made a number of comments. He is generally opposed to the concept of any cancellation of the levy at this stage, particularly as regards disease control. I think it is worth recalling however, that part of the difficulty of an industry such as the meat industry is its returns. As I understood the policy of the Australian Labor Party in government, it was to try to cut down the degree to which an industry needed to be dependent on government for support. It was with that in mind that the inspection charge and the disease eradication charge were seen as a means by which the industry could help to offset necessary services at a time of high profitability. Our concern on this side of the House is that the rural industries, and indeed all industries and all sections of the community, should not be left to decay and very nearly to die before government comes in to give them some assistance.
The reason for our cancelling these charges is not that we do not see that at some future stage when the industry is profitable the burden of paying charges should be imposed on it. But to impose these charges at this time is only to penalise growers and probably make many of them totally unprofitable and force them out of the industry, at which point they will become even more dependent on government. It concerns us that there are so many cattle producers, not only in the beef industry but also in the dairy industry which is in such a critical plight, who are at this stage contributing 1.6c per lb levy which in the course of the period has meant a significant contribution to Government funds. Yet it has also meant that the producers’ returns are reduced by that amount.
I understand that the honourable member for Blaxland suggested that all the money may not be passed back to the producers. This, of course, is of concern. There is no guarantee that the various people along the chain from the meat exporter back to the producer will not absorb some of the charge. However, the reason put forward for the lifting of the charge was to minimise the risk of the charge not being passed back to producers. On each occasion I have spoken on the measure I have emphasised that we look to those who at the moment might be able to take the benefit of the charge- that is, the exporters- not to use it in an export promotion, not to absorb additional wage charges for other imposts through it, but to pass it back to the producer so that the industry itself can survive.
We have decided that the $1 a head which I understand the Labor Party supports should be imposed from 1 July. We see that it is necessary that disease eradication be maintained. That sum of money of course will be used for that purpose after 1 July. In the interim, we have said that we will provide from the general revenues of the Government, funds to insure that there is no cutback in disease eradication for that too, we believe to be quite critical. Indeed we are rapidly running into an international marketing position where unless we can insure that our herds are disease free, we will be prejudiced in selling into a number of export markets.
Individual members have raised a number of other matters. I understand that reference was made to some of the other recommendations of the Industries Assistance Commission report. On the loan question, action has been taken. At this stage, discussions are underway with the States both with respect to the nature and the character of the loans. There are funds of about $20m available in 3 categories for beef producers. We hope that as a result of some adjustment which may be necessary in the availability of those loans, that the industry will be maintained through the loan recommendation of the IAC. I expect announcements to be made on that matter very shortly. With respect to the actual volume of money, however, it would seem that because of the high interest rate that was previously payable on the Development Loan Fund particularly, not very much of that money has been used.
With respect to the emergency assistance where interest rates were 2 per cent in Queensland and 4 per cent elsewhere in Australia, while those funds have been used to a greater degree, the difficulty has not been in the adequacy of money so much as the limits imposed and the terms of eligibility. It is these matters which are being examined in conjunction with the States. In addition, with regard to the implementation of a compensation scheme for brucellosis and tuberculosis, we are in discussion with the States in accordance with the separate IAC report. I hope that we might be able to come to an agreement and that as a result, the compensation scheme for reactors in those areas can be announced shortly.
The honourable member for Darling (Mr FitzPatrick) has made reference to the stabilisation scheme. Many stabilisation schemes have been raised. It has been very difficult to find any that can overcome the very real problems of the high cost of the storage of meat which is a perishable commodity. It is extraordinarily difficult to find any scheme that at this stage of the marketing prospects in particular would be effective. Accordingly, while there is some sympathy in some sections of Government for a stabilisation sheme, I personally have not been convinced that any of the many proposals I have looked at at this stage would be effective. The honourable member for Fraser (Mr Fry) referred to some of the problems with regard to dual inspection. He mentioned the difficulties and contrasts between domestic and export standards. I understand that there are generally 60 per cent of other livestock slaughtered in Australia. In other words, in the overall kill in Australia, most cattle are killed in works that today are covered by export inspection standards -over 80 per cent of cattle and calves and, I understand, in excess of 60 per cent of other livestock.
There is quite a real problem in some duplication in inspection standards. The balance of livestock are slaughtered in works that are under State control. We are trying to move as quickly as possible to a single inspection service. However, I do not want to see a single inspection service introduced if it will in any way prejudice either the availability of local kill works, if it means that the availability of slaughter facilities for producers is reduced, or if it will in any way lead to higher costs or less efficiency in the slaughter of livestock. So for all those reasons, we are not just automatically moving into the field but are proceeding on discussions which were first initiated when the Liberal Party and the Australian Country Party were in government prior to 1972. I only hope that under our regime, more progress can be made than was achieved over the last 3 years of Labor. I commend the Bill to the House.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Sinclair) read a third time.
Rural Industries-National Census- Barton Companies -Services in Rural Areas
Motion (by Mr Sinclair) proposed:
That the House do now adjourn.
-We often hear from members on the other side of the House that the Labor Party carries an anti-rural bias. Whilst I wish to refer to rural matters, it is not my intention to touch on the Bill which we have been dealing with tonight- the Meat Export Charge Amendment Bill. I always consider it a big advantage to Liberal Party and National Country Party members to have very short memories because when we are dealing with rural matters, I think that a short memory salves a few consciences. Honourable members opposite then do not have to look back a few years to see what happened in our rural industries over the last 6 or 7 years. Whilst my interest in rural affairs probably stems only from when I was elected in 1969 and a period prior to that, at least I can go back to that time. I think that I have a bit of an idea as to what has happened in my own electorate with regard to rural industry.
If we go back to that period when, because of our political attitudes and so forth we had alienated what was one of our best wheat markets, we find that the farmers with bumper wheat harvests had nowhere to store them. They could not sell the wheat. It was lying around on farms in any container that would hold wheat. The farmers were in real strife. I know in my own electorate I saw wheat stored in plastic bags, I saw it stored in old water tanks, and stored in anything that would hold wheat. This situation occurred mainly because of the attitude taken by the previous government to what is now one of our best wheat markets. That of course was the No. 1 reason- the failure to recognise Red China at that time. Of course the Government at that time certainly did the wheatgrowers of Australia a bad turn. How did the wheatgrowers get out of this particular problem?
I know the problem of overproduction had to be solved in one way. The Government introduced wheat quotas. I know that some people have said: ‘Oh, the States introduced the wheat quotas’. But because of the Federal finance made available to the Wheat Board, the Federal Government had a fair say in what was done with the quotas. The way in which the quotas were introduced in an across-the-board fashion brought many new ground farmers and many small farmers also to their knees. I have personal friends who went to the wall because of the debts they had. At the time, they had to produce a certain amount of wheat to cover their liabilities. The introduction of the wheat quotas was the finish of them. So that is how the Government solved that particular problem.
Of course, at the same time the wool industry was in a great deal of trouble. I think the growers were receiving 28c or 29c a lb for wool. The Government tried to resolve a lot of these problems. I think one of its faults has always been that it tried to solve a lot of these problems by ad hoc decisions, not long term decisions, just short term decisions. Of course this has never worked. Perhaps we could look at a few of those decisions that were taken. It was decided to pay out $30m to woolgrowers. The Government laid down certain conditions. One of the conditions was that the income of the woolgrower in the year in which the subsidy was to be paid out had to be not more than 92 per cent of his income in the previous year. This may seem all right on paper but it did not take into account the position of the individual farmer. I know of one particular woolgrower who endeavoured to increase his clip in the second year- the year the payment came out- but because of the lower prices, his income did not increase at all but dropped slightly. When I say slightly, I mean by not quite 8 per cent. He told me that he owed $60,000 on his property. But when he applied for the subsidy of up to $1,500 that was available at that time, what happened? His income in his second year was 92.17 per cent of his income in the previous year. So he got nothing. What riled him was that the grower next door who had a family farm with no debts on the land- I am not saying that he did not have other debts- received the full benefit of the allocation of that money. The wool deficiency payment scheme was introduced at that time. The records show that it was at 36c per lb at that time. I understand that the National Country Party at that time wanted it raised to 40c per lb but the Liberal Party, which it was often said was under the influence of some wool brokers in Sydney, agreed to 36c. After taking into account inflation and other factors honourable members should compare that scheme with that which operates at present.
Because of the problems that these 2 industries were in many people looked to other areas where the prospects were a little brighter. They looked at the beef industry. The then Government encouraged people to increase their beef herds but people increased them to such an extent that our beef cattle numbers at present are far above what our markets can take. For example, I was intrigued not so many months ago by what had happened in my electorate because it was obvious that there were a great many more cattle in the’ area than there has been in previous years. It is not normally a large beef cattle area but the number of cattle in my electorate between 1970-1975 increased 3lA times. I would say that that situation has been repeated in a number of rural electorates throughout Australia with the result that when the downturn came in the beef industry, although I acknowledge that we had a period of good sales there were too many cattle and we were left, as we are now, with them on our hands.
It does appear that in too many cases the Liberal and National Country Parties looked not at the long term solution to a lot of these problems but at a short term solution with the result that in this instance we saw a big increase in our cattle numbers. We had the markets for them for a short period, but when those markets closed up on us we were caught. The Labor Party Government was left with this legacy. When it came to power at the time the levy we are discussing tonight was introduced the market was still buoyant, still good. Then the bottom fell out of it because of action taken by the European Economic Community, Japan and the United States of America and we found that the beef industry was in real trouble. One would have to admit that the problem was that there was no long term planning or a proper assessment of what the market would stand. Consequently when there was a closing up of these markets we were left with cattle unsold, as we are at present.
When the Labor Party came to power one of its first actions was to inititate a Green Paper on the rural industries. That Green Paper was produced not long afterwards and I feel laid a basis for long term planning in our rural industries. Another thing that happened in the first period of the Labor Government’s term of office was that for the first time in many years it increased the first advance payment for wheat. It then increased it again to, I think, $1.60-1 forget the precise amount for the moment. That payment had remained unchanged over the years despite the fact that although inflation has been a little higher in the last 3 years there was a certain amount of inflation in most of the years when the $ 1 . 1 0 payment applied.
The Labor Government also established the Industries Assistance Commission to supply it with solid, long term information as to where and how assistance to industries should be given. At the time of the former Government’s dismissal from office in November last a number of these proposals were being discussed. It is all right to say that a report came out in July and that the Government had not come to a decision on it by November, but many government reports are held awaiting discussion. I remember one report on the ship building industry that was held for so long that it laid an egg. Because these IAC reports become public documents, which was something that did not happen under the previous Liberal-Country Party Government, and are immediately released, everybody wants the recommendations contained in them implemented straight away. I have not heard anybody screaming out for the implementation of the recommendations in the IAC report on nitrogenous fertilisers.
When the Parliament was dissolved that was the position with regard to the IAC. Much has been said about the superphosphate bounty. Certainly we removed it and at the time I was not in favour of that.
– You removed it.
-I thought I would remind honourable members that the previous LiberalNational Country Party Goverment removed it on 2 occasions, once in the early 1950s and again in the 1960s.
– That is not correct. What about that?
– In conclusion, I feel that with the long term policy of the Labor Government and the assistance that we were getting from IAC reports, we had a firm basis for planning in our rural industries and we would have got away from the ad hoc decisions that were made in the past by those who are presently in power.
– We have just listened to the long tall Texan speaking on behalf of the Australian Labor Party and in 10 minutes he fully covered that Party’s rural policy. He spent the last 10 minutes criticising this side of the House for its attitude on rural matters. However, it is not my intention to speak on rural issues this evening although it is appropriate to point out that the lone ranger on the other side of the House is the only country man left there. However, he would not have the problems with which farmers who grow wheat and raise cattle and sheep have to cope. It is obvious that another century will pass before the people in the country once again place their trust in the Labor Party if that is the best contribution it can make on rural matters. Looking at the Labor Party now and what it did to the rural sector it is little wonder that the people in country areas embraced, with one or two exceptions, the members of the National Country Party and the enlightened members of the Liberal Party. We know that the honourable member for Grey (Mr Wallis) was once a greengrocer in Whyalla but just because he sold peas and beans I do not know how he considers that he has the right to come in here and speak on the rural industries.
It is not my intention to take my full 10 minutes. Last week in the Brisbane Courier Mail there was a letter written to the Editor by someone who signed himself ‘ “Concerned” Wynnum ‘. The letter said:
I noticed with interest the advertisement calling for casual staff to help the Government’s 1976 national census on June 30.
Does this mean the general public will be subjected to a repeat of the last census taking, where persons from our immediate areas were assigned to collect our census forms, having full access to all the information contained in it?
It’s no comfort that the form collectors are pledged to secrecy, or liable to a fine, in order to protect our privacy.
Surely it couldn’t be too difficult to assign the form collectors to areas outside their own immediate locality.
I say ‘Hear, hear!’ to the sentiments being expressed by ‘ “Concerned” Wynnum’. In the past I have taken a particular interest in the question of privacy and I believe that information collecting by the Bureau of Census and Statistics can lead at times to an invasion of privacy. We were all pleased when the previous Government, after repeated calls, particularly from me, for some protection in this area agreed that the form of future questionnaires relating to household surveys were to be laid on the table some months before the documents were actually used on the public to enable honourable members in this chamber to look at the forms and ascertain whether an invasion of privacy would result from their use.
Let me come back to the subject raised by the writer of the letter to the editor of the Courier Mail Advertisements are placed inviting people to become census collectors. They sign a form and take a pledge that they will not tell anybody about the information they have collected. A small percentage of these people- only one in 5000 is needed to constitute an invasion of privacy- are nothing but sticky beaks and nosey parkers. The only reason they are interested in becoming a collector is so they can knock on Mrs Smith’s door and say: ‘Righto, I want all this information’. As I said, there is probably only one of these people in every 5000. 1 believe that the Government and those conducting the census have a distinct obligation to ensure that the average individual is protected from the disclosure of private information. This can be achieved by doing exactly what the writer of the letter to the Courier Mail suggested. In other words collectors should operate outside the area where they live so that there is less likelihood of knowing the people on whom they call and knowing all about their business.
I cite an incident that occurred in the suburb of Murarrie in my electorate. I am not saying that the collector concerned was a sticky beak or a nosey parker. A couple of people in that area rang me complaining that one of the locals had been appointed as a census collector and they resented, and I say rightfully so, that Mrs Smith was going to come into their home- I use the name ‘Mrs Smith’ only for the purposes of explanation- and collect information. As a neighbour she would be provided with an opportunity of finding out all about their business.
The writer of the letter to which I referred earlier is one of the enlightened constituents of the honourable member for Bowman (Mr Jull). I hope he does not mind my carrying this issue further in this chamber. Finally I hope that the Minister and officials responsible take note of this matter. I remember once going to a flat where one of those trusted census form collectors had stacks and stacks of forms he had collected on behalf of the Australian Bureau of Statistics. They were all around the lounge room. The collector was sharing the flat with another young person. Both of those people had a number of friends and visitors coming to that flat from time to time, and it would have been very easy for any of those visitors to have picked up some of the forms and started looking at the information, which was the private business of citizens of this country. I hope that when the 1976 census is taken the collectors are instructed, and instructed properly, that they have an obligation to protect John Citizen’s right to privacy. They have to sign a declaration that they will not divulge the information collected but they also have an obligation to ensure that they are not careless in the handling of the information they have collected.
-I want to speak about nosey parkers in my brief remarks. I would have hoped and would have been happier had the honourable member for Griffith (Mr Donald Cameron) condemned the use of nosey parkers in the financial affairs of the Australian Labor Party. I think the Australian community would have been more interested and would have applauded the honourable member for Griffith more for speaking on that subject than on the subject on which he has just spoken. I think it is unfortunate and tragic that the good name of the Commonwealth Police should be denigrated by giving them the unsavoury, dirty work of the Liberal-National Country Party coalition and having them do such distasteful work as has been bestowed upon them by a man whom I held in high respect until very recently. I refer to the Attorney-General (Mr Ellicott), who directed the Commonwealth Police to carry out the unsavoury work of the Government. What appals and disgusts me with the actions of the Government is that it has made very little effort to bring to book the company directors of Alexander Barton & Son. This matter has been given little publicity. Twenty-nine companies in this group crashed and small shareholders were put into financial ruin as a result of this vulture Barton having skipped out of the country with $33m unaccounted for. Some years ago the H. G. Palmer company defrauded its shareholders of considerable millions, but the amount was insignificant compared with the amount of money that the Barton companies got away with. All the directors of H. G. Palmer were charged, but because of Mr Barton’s self-declared allegiance to the Liberal Party and his membership of that Party very little publicity has been given by the media of this country to his criminal- I am conscious of the meaning of that word- activities. Mr Bovill still freely struts the streets of Sydney. I understand he has never been interviewed by the police. He was managing director of one of the Barton companies that crashed and went into liquidation and screwed the small shareholders who had invested their money in the company. The whole reason for this state of affairs is that the crooked stock exchange in this country, particularly in New South Wales, does not want to be cleaned up. Company directors, who are usually supporters of the Liberal Party, do not want the company law amended.
– Go on.
– I will be a bit personal with the honourable member in a minute. I will deal with him. I will stop him in his stride. I will tell on him. I know something about him. I say to him: ‘You just be quiet. I will deal with you’.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The House will come to order. I suggest to the honourable member for Hunter that the Chair might stop honourable members in their stride if they answer interjections.
– I am not used to interjections in the cultural life in which I walk.
– I appreciate that the honourable member for Hunter is surprised by the interjections. I note the gleam of enjoyment sometimes in his eyes.
– I am afraid that you have formed the wrong opinion, Mr Deputy Speaker. John Osborne Bovill still roams the streets of Sydney. He once stated to the Press that he does not care if he never sees Barton again. I can well understand that, because if Barton is ever brought back to Australia and if he talks or, to use the vernacular, sings, he will sink the Liberal Party overnight. It will be a greater scandal than Watergate. He has been operating in cahoots with and enjoying the protection of his Liberal Party colleagues and influential friends in high places. Nearly all the Barton companies were formed and had their articles of association written up in the office of Mr McCaw who at the time- I produced evidence in this Parliament some time ago- was the Attorney-General in New South Wales. The papers were drawn up in the office of McCaw, Johnson and Co. Now Mr McCaw enjoys the exulted rank of a knight. He is now Sir -
-No, it is not Henry.
– No. He is now Sir Kenneth McCaw. Mr Deputy Speaker, I think you would be astonished and appalled by what I am revealing. I would not like to think that you subscribe to such goings-on. I have never heard aspersions cast at companies in which I understand you hold a directorship. I am very pleased to be able to say that I have never heard anything of a doubtful nature about the companies with which you are connected.
What I want to say now may astonish members of this House- although it takes a lot to astonish some of them, particularly on the other side of the House. The New South Wales Corporate Affairs Commission today is investigating companies in respect of which $196m is being held up. Some of the company directors involved are having many sleepless nights at this time because of the shadowy goings-on in which their companies have been involved. A colleague of mine in the State House has been agitating for some years to have the Companies Act amended so that all prospectuses will indicate all the interests that company directors have; but the influence of the company directors in the present New South Wales Government in particular prevents this amendment to the company law. Obviously, if the directors showed on prospectuses their interest in other companies and the fact that they were buying up other companies, people would wonder why they were doing this and might ask whether it was because of some crooked dealing that was going on in the companies that were being swallowed up and absorbed by the new companies that were being formed.
– Pep it up.
– I wish the honourable member would cut that out. He has grown up now. That caber-tossing will drain his brain if he practises it long enough. If the company law was amended so that the prospectuses had to contain this information, it would prevent much of the crookedness which goes on. I believe that the name of Australia and of the stock exchanges of Australia must have a very low rating overseas because of the malpractices that have been going on in our stock exchanges over the years.
In conclusion I want to praise the actions of the Australian Federated Union of Locomotive Engineers, which today has placed a black ban on the Murdoch Press. I would consider a similar ban by the members of the telecommunications union employed by the Australian Postal Commission quite fair and reasonable, because not only is the Murdoch Press running the Liberal Government of this country but it is endeavouring to run the Opposition in respect of who shall be its leader. I can assure honourable members that only over the dead bodies of 90 per cent of the Labor Party members of this House will we be told by the Murdoch Press who should lead us as an effective Opposition. We will not be dictated to; nor will we be frightened. We will stand solidly behind our’ Leader in the crisis which has now blown over because Mr Fischer, I understand, has stated in Singapore that money was never mentioned at any interview he had with the Labor Leader and that he is going to issue writs against the Murdoch Press. I hope he is successful.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
– I wish to raise tonight a matter that is of very grave concern to most people throughout rural Australia, namely, the gradual deterioration of basic rural services. I believe that it is a sad reflection on many of our governments that it is many decades ago now that we saw the expansion to most of our rural areas of all our important public facilities such as railways and water and power supplies; yet today, at a time when we have all the mental power and scientific knowledge available to us, we are seeing so many of these basic and essential services either removed or gradually reduced in their effect upon our communities.
I wish to raise one specific issue to emphasise this particular difficulty. In my electorate there is a branch line of some 50 miles from the town of Dimboola to Yaapeet. This banch line supplies the Victorian Railways Department with well in excess of $ 1 m of freight income each year. Some $641,000 of this is from wheat and the rest is from other grains and superphosphate cartage. Yet at the present time there are proposals to shut down three of the major stations, even though the line was completely renewed just last year. One of those stations is Jeparit, which we all recognise as the birthplace of a very famous Liberal Prime Minister. It is also proposed to close down the station at Rainbow and the goods section at Dimboola. The Victorian Railways Department intends to cart from the area only profit-producing freight and not to return to that area the goods that are so necessary if the area is to survive. I believe that there is no justification at all for the Railways Department to operate its affairs in this manner. Railways must be regarded as an essential instrument of national development and as such must be operated in this way. If this proposal goes ahead it will mean that the businesses of individuals in my area will suffer a serious set-back. It is not only a matter of service but also a matter of employment opportunities. There are some 10 to 15 families along this 50-mile section of railway line who will have to either move or go into other employment. Of course, their future is not very bright in view of the present employment opportunities in rural areas.
We have seen many governments over many years attempt to decentralise this nation in one way or another. Unfortunately, most attempts by artificial stimulation through governments have been unsuccessful. We have seen this in the last few years in particular, where decisions by one government have been completely reversed and the effects of those decisions have been changed by new governments and new policy initiatives. Of course, the across the board tariff decision does not need any explanation; nor does the effect that decision has had upon many of our decentralised industries. If decentralisation is to work I am quite sure that it will do so by bringing to rural communities, provincial cities and towns throughout Australia equality in public services, both in standards of service and in cost. If the prosperity of rural Australia is to continue- for the sake of Australia as a nation I am sure it must- it is absolutely essential that our governments of all calibres and all natures look at the deterioration in our public services.
I have mentioned the railways. In the 2 minutes left to. me I want to mention the effect that a change in policy has had upon our telecommunications and postal facilities. I draw attention to the enormous cost that some of our rural people are being asked to pay simply for the facility of a telephone. Scores of constituents in my electorate are being asked to pay anything from $500 to $3,500 for a telephone connection. I believe that while these sorts of conditions exist this country cannot expect to see decentralisation advance on any scale. I am particularly concerned at the fact that without suitable transport and communication facilities the area about which I am speaking will be seriously affected not only in terms of productivity and its economic value to this nation but also in terms of the huge social problems which will be created and which will require the expenditure of much larger amounts of” money for the Government to correct them.
Question resolved in the affirmative.
House adjourned at 10.59 p.m. TREATIES
The following papers were deemed to have been presented on 3 March 1976, by command of His Excellency the Governor-General:
Cite as: Australia, House of Representatives, Debates, 3 March 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760303_reps_30_hor98/>.