House of Representatives
20 May 1976

30th Parliament · 1st Session

  1. House of Representatives
  2. 30th Parliament
  3. 1976

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 10.30 a.m., and read prayers.

page 2265

PETITIONS

The Clerk:

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

Aurukun Community: Mining

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

Whereas the Aurukun Associates Agreement Act was passed by the Queensland Government in contravention of a 1968 agreement:

Whereas this Act conflicts seriously with Commonwealth Government Policy on Aboriginal Affairs and on Australian equity in multinational corporations working in Australia;

Your Petitioners therefore note with appreciation the statements already made on the matter by Government members but humbly pray that the Commonwealth Government will also

  1. initiate a Commission of Enquiry into the whole matter
  2. b) insist that no mining take place on the Aurukun Aboriginal Reserve until a full environmental impact study has been made by the Commonwealth Department of the Environment. Housing and Community Development
  3. refuse to grant an export licence to the Consortium until detailed negotiations are held at Aurukun by Consortium representatives with the Aurukun people, the traditional owners of the land and advisers of their choice, and an agreement satisfactory to all has been reached.

And your petitioners as in duty bound will ever pray. by Mr Peacock, Mr Nixon, Mr Connolly, Mr Falconer, Mr Sainsbury and Mr Wilson.

Petitions received.

Overseas Development Assistance

To the Speaker and the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians are concerned at the announced decision by the Commonwealth Government to reduce the 1975-76 Overseas Development Assistance vote by $2 1 million and by the abolition of the Australian Development Assistance Agency.

We your petitioners do therefore humbly pray that the Commonwealth Government:

  1. as a matter of urgency, reverse the decision to cut the 1975-76 Overseas Development Assistance vote so as to ensure that the full amount appropriated by Parliament for Overseas Development Assistance is spent this financial year to meet the pressing needs of those in the developing countries:

    1. reaffirm Australia’s commitment of Overseas Development Assistance being a minimum of 0.7 per cent of GNP. and
    2. establish a fully independent statutory authority to administer Australia’s official Overseas Development Assistance.

And your petitioners as in duty bound will ever pray, by Mr Falconer, Mr Fry and Mr Yates. Petitions received.

Pharmaceutical Benefits: Milk Substitutes

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We. the undersigned citizens of the Commonwelath of Australia by this our humble petition respectfully showeth:

That reduction of the age limit from six years to eighteen months for patients eligible to receive cows’ milk substitutes as a Pharmaceutical Benefit under the schedules of the National Health Act will cause serious financial hardship to many families:

  1. That children allergic to cows’ milk and other dairy products who often include asthmatics and suffers of respiratory complaints depend on Soya Bean milk such as Isomil or Prosobee as a main source of protein:
  2. That the Government’s action is responsible for a 100 per cent increase in the cost of milk substitutes frequently involving parents in expenditure of SIO per week to sustain desirable protein intake for an affected child:
  3. That there is an urgent, humane need to restore milk substitutes to children up to six years of age to the schedule of Pharmaceutical Benefits.

Your petitioners therefore humbly pray that milk substitutes be restored to the schedule of Pharmaceutical Benefits for children up to the age of six years as soon as possible.

And your petitioners as in duty bound will ever pray, by Mr Armitage and Mr Nicholls. Petitions received.

Australian Assistance Plan

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 since the Australian Assistance Plan is making it possible for Citizens to help themselves, thereby ensuring best possible use of limited Government resources, as shown by the fact that over 200 community projects have been initiated or funded through the A.A.P. in the Outer Eastern Region.

Your petitioners most humbly pray that the House of Representatives in Parliament will take immediate steps u> continue the Australian Assistance Plan as recommended in the Report tabled by the Honourable the Minister for Social Security, Senator Margaret Guilfoyle in Parliament on the 4th March, 1976 and your petitioners, as in duty bound, will ever pray. by Mr Jarman and Mr Yates. Petitions received.

Tertiary Education Allowance

To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled: The humble petition of the undesigned students and stuff at the colleges respectfully showeth:

That the Commonwealth Government Tertiary Educational Allowance Scheme be raised from $30 per week to $48 per week.

Your Petitioners therefore humbly pray that the Treasurer. Mr Lynch and the Minister for Education. Senator Carrick will carry out this Petition.

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

Petition received.

Cadet Corps

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 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 Carige.

Petition received.

Woodchip Industry

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

  1. That Australia is not well-endowed with natural forest areas only amounting to 4.5 per cent of the total land area.
  2. That very little of this forested area, is reserved in national parks, most of the remainder being directly (as State forests etc.) or indirectly (as Crown lands, over which forestry exercises timber extraction rights) under forestry control.
  3. That most of this remainder is liable to be totally destroyed by woodchip projects, due to soil erosion, nutrient loss, lire damage to young saplings in artificial forest regeneration projects.
  4. That many forms of arboreal wildlife are thus threatened with extinction.
  5. That grossly inadequate consideration has been given to the process of recycling packaged paper. ft. That it is not in the long-term interest of the Australian people that these forests arc convened into material for short-term use of excessive packaging.-
  6. That it is a severe abuse of democratic rights to subsidise forestry practice with public money without adequate consultation of public interest.

We. your petitioners, therefore humbly pray that you will:

  1. Immediately cancel all current woodchip export licences.
  2. .Immediately provide more funds into research for the recycling of used packaged material.
  3. Ensure that any future applications for woodchip leases he preceded by an environmental enquiry to be conducted by a panel of environmentalists and public-spirited conservation bodies independent of the Australian Forestry Council or an v State Forestry Commission.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Connolly. Petition received.

Income Tax: Land and Water Rates

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. Petition received.

Fraser Island

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 he 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:

That the Australian Government uses its constitutional powers to prohibit the export of any mineral sands from Fraser Island, and

That the Australian Government uses its constitutional authority to assist the Queensland Government and any other properly constituted body to develop and conserve the recreational, educational and scientific potentials of the natural environment of Fraser Island for the long term benefit of the people of Australia.

And your petitioners as in duty bound will ever pray, by Mr Connolly. Petition received.

Trade Union Ballots

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 whereas the Democratic control of organisations registered under the Conciliation and Arbitration Act is csscnTi.il to a sound system of industrial relations.

And whereas Democratic control can only be guaranteed by the opportunity for all rank and file members of organisations to vote in elections for all officials and all Committees of Management and whereas some forces within the Trade Union Movement are attempting to deny rank and file members the right to vote in all Union elections:

Your petitioners humbly pray, that the members in Parliament assembled will take steps to:

  1. Preserve Democracy in Trade Unions by guaranteeing the right of all members to participate in rank and file ballots for officials and Committees of Management.
  2. Resist the pressures from those elements in the Trade Union Movement seeking to deny members the right to vote.
  3. Ensure the widest participation in Union ballots by making voting compulsory in union elections.
  4. Resist the re-introduction of the undemocratic collegiate system of union elections, which enables control and manipulation by minority and extremist elements.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Connolly. Petition received.

Rental of Government Houses, Canberra

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of undersigned electors of the Division of Fraser respectively showeth:

That the rent payable on new government houses is unreasonably high and shows discrimination towards these tenants.

Your Petitioners therefore humbly pray that the rents may be reduced to a level comparable to all other government houses.

And your petitioners as in duty bound will ever pray, by Mr Fry. Petition received.

Social Service Benefits

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The petition of the undersigned citizens of Wide Bay. Queensland respectfully showeth-

That the deferment of pension increases and the abolition of the S40 funeral benefit to pensioners by the new Government, constitutes an act of discrimination against a great number of persons wholly dependent on this income.

That these persons are not exempt from the higher prices charged to offset the 6.4 per cent increase recently granted to wage earners.

That pensioners of all political beliefs have had their living standards lowered by this erosion to their fixed incomes.

Your petitioners therefore humbly prayThat the increase in pension payments be paid retrospective to the 1st week in April. 1976.

That the S40 Funeral Benefit be returned to the list of pensioner benefits.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Hayden. Petition received.

Frequency Modulation Broadcasting Licences

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned students and staff of the University of Melbourne and the Melbourne State College respectfully showeth:

That the establishment of an educational FV1 radio station station serve the students and staff of the University of Melbourne and the Melbourne State College would be of benefit and importance to the members of that community.

Your petitioners therefore humbly pray that the Minister for Post and Telecommunications will oiler a licence for this purpose under section 5 of the Wireless Telegraphy Act.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Innes. Petition received.

Lawley House, Canberra

To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned residents and exresidents of Lawley House. Barton, in the Australian Capital Territory showeth that

  1. An embargo on entry of Public Servants to Lawley House has been in force since the end of February 1976.
  2. The number of residents has fallen as a direct result of the embargo. As an indirect result of the embargo numbers have fallen as residents have left who would otherwise have stayed, because of the implied threat to their security.
  3. Lawley House fills special and important needs which other hostels cannot fill.

Your petitioners therefore humbly pray that the House will ensure that:

  1. the embargo on entry be lifted, and
  2. b ) Lawley House remains open.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Innes. Petition received.

Social Security Payments

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

That distress is being caused to social security recipients by the delay in adjusting pensions to the Consumer Price Index months after goods and services have risen and that many medications, formerly a pharmaceutical benefit, must now be paid for.

In addition. State Housing Authority waiting lists for low rental dwellings for pensioners become never less and funeral costs increase ever greater.

Your petitioners call on the Australian Government as a matter of urgency to:

Adjust social security payments instantly and automatically on announcement of increases in the quarterly Consumer Price Index:

Restore pharmaceutical benefits deleted from the free list:

The States Grants (Dwellings for Pensioners) Act 1974. eroded by inflation, be updated and increased to overcome the back-log:

The funeral benefit be updated to 60 per cent of a reasonable funeral cost. This benefit when introduced in 1943 at 200 shillings ($20.00) was seven times the pension at thai time of 27 shillings ($2.70) per week or more than twice the basic wage of 97 shillings ($9.70).

And your petitioners as in duty bound will ever pray, by Mr Macphee. Petition received.

Pharmaceutical Benefits

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of the Commonwealth of Australia by this oi.r humble petition respectfully showeth that the removal of all laxative drugs from the Pharmaceutical Benefits lists imposes a further financial burden on pensioners.

Your petitioners therefore humbly pray that laxative drugs should be reintroduced on the ‘free list of pharmaceutical benefits for pensioners.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Martyr. Petition received.

Australian Heritage Commission

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:

There is a growing interest and concern in all sections of Australian society for the conservation of the environment, natural and man-made.

That there arc also rapidly growing pressures by powerful forces tending towards the destruction of the Australian heritage.

That it is therefore urgent to appoint the Australian Heritage Commission, which was approved by both sides of this Parliament and to give the Commission sufficient independent staff, resources, and funds.

That Technical Assistance Grants and Administrative Support Grants to community organisations are needed to partially redress the gross imbalance to technical expertise and resources suffered by community groups in pressing the community’s case against the exploiter.

That a proper balance between the Government’s programme of public austerity and the need for action in conservation would be a modest increase in the budget allocations in these areas over that of 1 975-76.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Sainsbury. Petition received.

page 2268

INDUSTRIAL DISPUTE

Notice of Motion

Mr NEIL:
St George

-I give notice that I shall move on General Business Thursday No. 3:

That this House notes the industrial dispute at the naval establishment at Garden Island. It notes:

1 ) that the dispute exists:

2 ) that arbitration proceedings arc taking place:

that the House ought not to concern itself with the immediate dispute before the arbitrators:

that the general question of who controls the Navy, cither the Government or the unions, is a matter of immense public importance.

The House therefore expresses the hope that the Government will take all steps necessary to settle the present dispute and give consideration in the future to staffing all naval establishments with uniformed personnel or persons subject to military law.

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QUESTION

QUESTIONS WITHOUT NOTICE

page 2268

QUESTION

THE ECONOMY: MINI BUDGET ‘BRIEFINGS

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

-Did the Prime Minister take several newspaper editors to dinner last night and brief them on details of tonight’s mini budget? In view of the Prime Minister’s repeated assurances that matters of national importance should be announced and would be announced first in the national Parliament, why did he give information to these editors in addition to that which he thought proper to give to the general public 2 nights before and in anticipation of that which the Treasurer will officially announce in the House tonight? Will he tell the House the names of the editors who were favoured in this way last night?

Mr MALCOLM FRASER:
Prime Minister · WANNON, VICTORIA · LP

– I did have some people to dinner last night. I think everyone enjoyed the occasion.

page 2268

QUESTION

BELLBIRD

Mr FISHER:
MALLEE, VICTORIA

-The Minister for Post and Telecommunications will be aware of the popularity of the television program Bellbird and the opportunity its production offers to Australian performers and producers. Can the Minister advise the House of any proposals by the Australian Broadcasting Commission to change the format of the series from four a week 15-minute programs to a once weekly hour long program? If that is so, are these changes likely to result in inferior viewing times for country people, accompanied by a loss in ratings and the eventual curtailment of the program?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-I well recall a question I was asked a few weeks ago, I think by the honourable member for Prospect, about the radio program Blue Hills. I was prepared on that occasion to be honest enough to tell the House that I never listened to Blue Hills. I shall be honest enough on this occasion to tell the House that I never watch the television program Bellbird either. Once I saw the publicity that occurred in relation to this matter I felt that an honourable member possibly would ask me a question, so I sought advice from the Australian Broadcasting Commission on this subject. I shall read a Press statement issued by Mr Graham White, the Assistant General Manager of the Australian Broadcasting Commission:

Considerable public reaction has been generated by reports that the ABC is either going to “axe’ Bellbird or significantly change the program. The fact is that the ABC has decided to change the format of to translate it into a weekly one-hour serial. Bellbird will remain on ABC television with its much-loved characters. There are several reasons for the proposed change. The most important reason is that the audience to Bellbird n some areas has been declining, although the ABC is aware that Bellbird remains extremely popular in most country areas throughout Australia. There has been no thought-

I assure the honourable member of this- of taking the serial off the air.

In its present form, after 9 years on the air. it has become more and more difficult to sustain fresh and involving story lines, despite the great writing, acting and production talent associated with the program.

The ABC is seeking a renewed vitality and a greater audience appeal for Bellbird. The change will take effect from Tuesday, 3 August.

page 2269

QUESTION

UNEMPLOYED SELF-HELP

Mr GARRICK:
BATMAN, VICTORIA

-Is the Minister for Employment and Industrial Relations aware that a volunteer group in my electorate of Batman has organised a program for unemployed self-help? If so, does he know that this group, like others, wishes to establish a resources and drop-in centre for unemployed people so they can contact each other in an attempt to discuss common problems and solve the worries of finding jobs, filling in application forms and knowing how to present themselves when going for a position? Having regard to the fact that these are widespread problems and that this sort of organisation will do much to help, will the Minister consider government funding for such centres, particularly the one in Batman?

Mr STREET:
Minister Assisting the Prime Minister in Public Service Matters · CORANGAMITE, VICTORIA · LP

– I was not aware of the particular project in the honourable gentleman’s electorate that he mentioned. It sounds to me a worthwhile self-help scheme and I would be pleased to arrange for officers of my Department to contact the people running the project and give such assistance as we can.

page 2269

QUESTION

ECONOMIC MEASURES: UNION CO-OPERATION

Mr CADMAN:
MITCHELL, NEW SOUTH WALES

– I address a question to the Prime Minister. Has the Australian Council of Trade Unions agreed to co-operate with the Government in its attack on inflation? Can it be said that union leaders realise that a responsible national approach will benefit all working Australians and their families?

Mr MALCOLM FRASER:
LP

– Following my address to the nation last Monday night there were considerable communications with the President of the Australian Council of Trade Unions involving the Minister for Employment and Industrial Relations and myself. As a result, 3 days have in fact been set aside for talks between the Government and the Australian Council of Trade Unions- 7 June, which I think is the date when the President of the ACTU comes back from the International Labour Organisation Conference, and the following Friday and Saturday. At these talks it is intended that the Government will lay bare to the ACTU and its delegation the economic facts available to the Government and the reasons for its decisions. Alternative approaches that might be suggested to us by the ACTU can be canvassed with officials in these circumstances. There will be the fullest possible briefing, as the honourable gentleman would understand. I intend to be present for a considerable part of the time and other relevant Ministers including, obviously, the Treasurer, the Minister for Employment and Industrial Relations and the Minister for Business and Consumer Affairs, who has responsibility for the Prices Justification Tribunal, will also be present.

I believe that these moves are encouraging. The Government had no difficulty in helping the talks to take place by saying that its industrial legislation would not, in fact, be proclaimed until after the talks took place. Honourable members should remember that the talks are taking place in the first 2 weeks in June. The Government indicated quite plainly that it would listen to the views expressed to it in relation to that legislation but we also indicated that it was our intention that the legislation should be passed through the Parliament during this session, but not proclaimed until after the talks. The Government was able to evidence to the President of the ACTU its genuine good faith in these particular matters because, as a result of talks that have already taken place and before these other matters were envisaged, there were modifications, as this House would know, to certain aspects of the proposed secret ballot legislation following suggestions put to us by the trade union movement. It is the Government’s view that those modifications will better enable the Government’s objective of secret ballots in unions to be achieved and therefore it seemed sensible h> adopt the proposals and modifications put to us.

I think all honourable gentlemen will know that there is no easy and quick solution to. our economic problems. The Treasurer’s statement tonight will be a further, very significant step on the road to realism and economic recovery- in Australia. I believe that this House is looking forward to that occasion with interest. I am able to say that the Treasurer has fully recovered from his recent illness and will be in fighting form when he delivers that speech this evening. However, there is a long haul in relation to these matters. The Government welcomes the willingness of the ACTU to entertain talks in the manner I have outlined.

page 2270

QUESTION

EAST TIMOR: SELF-DETERMINATION

Mr UREN:
REID, NEW SOUTH WALES

-I direct my question to the Foreign Minister. Does the Government regard as adequate the Indonesian proposal to allow a 50-man assembly drawn from 450 local rulers in East Timor to decide the country’s future? If not, what action will the Australian Government take to bring about a genuine act of selfdetermination for the people of East Timor? Will the Minister tell the House whether Indonesia has asked Australia to send observers to witness this socalled act of free choice? Can he state what the Government’s response has been?

Mr PEACOCK:
Minister for Foreign Affairs · KOOYONG, VICTORIA · LP

-As I have indicated in the past, our view on this matter has been in marked contrast to the Opposition’s when it was in government. At all times, and indeed while we were in opposition, we called for an act of selfdetermination to enable the Timorese to determine their own future, uncoerced by any outside powers. We hold to that. In our view the position remains that the process of self-determination should be conducted to allow the people of the territory to choose their own political future. The Government has therefore supported 3 United Nations resolutions on Timor adopted since December 1975. All have referred to the Timorese people’s right to self-determination. Pending a satisfactory process of selfdetermination the Government has recognised neither the so-called Democratic Republic of East Timor nor the so-called Provisional Government of East Timor. Both the Indonesian Government and the provisional authorities in Dili are publicly committed, as I understand from their statements, to an act of self-determination in East Timor. It appears that arrangements for such a process are now in hand.

From our point of view, we do not presume to lay down the guidelines or the methods for the process of self-determination. As the honourable member will be aware, the whole history of either non self-governing territories or those administered in the manner in which Papua New Guinea was, have determined various means of conducting self-determination programs. There has been no solitary means universally adopted, but clearly, in our view, if the process is to have validity it would seem necessary for a course to be chosen in the full knowledge of all possible alternatives. The Government also believes, and has said so in the United Nations, that some form of United Nations participation would be appropriate and in the best interests of the Timorese people. It remains to be seen whether the process foreshadowed by the provisional authorities meets United Nations and general international acceptance.

On the last point, as the Deputy Leader will be aware I have only just returned to Australia. I understand that we may receive an invitation to witness some form of self-determination, the nature of which I have not yet been able to examine in any detail. I am giving consideration to the manner of our response should that invitation have been conveyed to us during my absence. If, after question time, I ascertain that the invitation has been conveyed I shall advise the honourable member.

page 2270

QUESTION

TASMANIA: FREIGHT EQUALISATION SCHEME

Mr GROOM:
BRADDON, TASMANIA

-I ask the Minister for Transport: What is happening with the promised freight equalisation scheme for Tasmania? When can we expect to see some legislation?

Mr NIXON:
Minister for Transport · GIPPSLAND, VICTORIA · LP

– The honourable member for Braddon and other Tasmanian members have really been beating a path through my doorway on this matter. I appreciate their interest and concern. Following receipt of the Nimmo Committee report the Government felt it necessary that that report be put to study before we made a statement on the freight equalisation scheme. We would then be in a position to say something about the Nimmo Committee report. That work is almost completed, and I expect to be in a position to make a statement in respect of the freight equalisation scheme before the Parliament rises.

page 2270

QUESTION

SYDNEY-HOBART PASSENGER SERVICE

Mr STEWART:
LANG, NEW SOUTH WALES

-I address a question to the Minister for Transport. Is it a fact that the Australian Trader is to be withdrawn from the Tasmanian run in the coming 1 2 months? If so, does the Government propose to continue its support to the Australian National Line in its SydneyHobart passenger service?

Mr NIXON:
LP

-I did not hear the first part of the question?

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

– It related to the Australian Trader.

Mr NIXON:

– I am not aware that the Australian Trader is to be withdrawn. At the moment the Australian National Line is giving consideration to all of its problems on the coastal trade. The honourable member and the House will know that the most expensive part of the operations of the Australian National Line is the coastal trade. This is a heavy cost part of its operations which the Line is reviewing. It will be making a report to me when that review has been completed.

page 2271

AUSTRALIAN BROADCASTING COMMISSION: TALK BACK SESSION

page 2271

QUESTION

MORNING EXTRA

Mr MILLAR:
WIDE BAY, QUEENSLAND

– I address my question to the Minister for Post and Telecommunications. Is the Minister aware that the Australian Broadcasting Commission talk back session Morning Extra invites listeners beyond the Sydney area to ring the station ‘reverse charge’? This morning I understand that there were calls from as distant as Renmark, Forbes and Cairns. Having in mind that the ABC recently withdrew several popular programs as an economy measure when previously required by the Government to exercise restraint in spending and that further substantial staff cuts are allegedly contemplated, will the Minister take steps to establish whether the ABC can justify its action in accepting these reverse charge calls for a program of dubious merits?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-I thank the honourable member for the information that he has given me in the question. Of course I will take the matter up with the Australian Broadcasting Commission. The honourable member will appreciate, as I know all honourable members do, that the ABC has a real level of independence. It works, of course, within the budgetary allocation of the Government and it will continue to do so. Within the budgetary control which we as a Parliament exercise and take a great deal of interest in, there is enormous flexibility within the Commission and the management of its affairs. When information like this comes to my notice I take the appropriate opportunity to discuss it with the Commission. I will inform the honourable gentleman of the outcome of my discussions.

page 2271

QUESTION

ENGINE FAILURE OF ANSETT DC9 AIRCRAFT AT CAIRNS

Mr MORRIS:
SHORTLAND, NEW SOUTH WALES

– I address my question to the Minister for Transport and refer to the engine failure suffered by a DC9 aircraft operated by Ansett Airlines of Australia during take-off at Cairns on 2 May 1976 and to reports of a statement by the Cairns airport fire officer that only the quick thinking of the aircraft’s captain averted what could have been a major disaster. I ask: Will the Minister say whether the engine failure was due to metal fatigue; when was the engine installed in the aircraft; and how many hours had the engine accumulated since installation?

Mr Martyr:

– You can get this information elsewhere.

Mr MORRIS:

-I thought that honourable members opposite were interested in saving people’s lives. Further, I ask: How many hours does the Department of Transport allow a DC9 engine to accumulate before being compulsorily removed for overhaul -

Mr Calder:

– You can find this out from the -

Mr MORRIS:

-Why cannot the Minister answer for himself? Finally, is it a fact that Ansett Airlines of Australia have applied for an extension of time between overhauls?

Mr NIXON:
LP

– As the honourable member should know, this matter is presently being investigated by a section of the Department. When the report comes to hand I will give a considered reply to the honourable member’s question.

page 2271

QUESTION

STOCK PRICES

Mr SHORT:
BALLAARAT, VICTORIA

– I preface my question to the Minister for Primary Industry by referring to the large number of cattle shot in Victoria last week because of the lack of feed coupled with the appallingly low prices being obtained for such stock at auction and to proposals for similar shootings in other areas. Is the Minister aware of the large increase in stock prices that occurred following last week’s shooting? Does the Minister agree that the movement in prices last week warrants investigation in relation to the general methods of marketing livestock in Australia? In view of the very wide discrepancies already existing between the prices received for livestock by producers in Australia -

Mr SPEAKER:

-Order! The honourable gentleman is giving too much information. He will come to his question.

Mr SHORT:

-I ask whether the Minister will do all he can to ensure that the percentage increases in livestock prices of the types recorded last week are not correspondingly reflected in prices to final consumers.

Mr SINCLAIR:
Minister for Primary Industry · NEW ENGLAND, NEW SOUTH WALES · NCP/NP

– I have no exact details of the slaughter program that the Victorian Government has introduced. However, it is quite true that cattle markets have been abysmally bad., They have been aggravated by seasonal conditions and market circumstances. The whole nature of the problem is such that many dairy farmers, as indeed many beef producers, are in ii position where their incomes are significantly less than almost everybody else’s in the community. The Victorian Government felt that it was not possible to let farmers just leave their cattle to die in the paddocks or to be sent a bill because they sought to sell their cattle in the local market. The Victorian Government has therefore introduced a scheme to provide some offset against the cost of slaughter. It has organised a number of group killing programs. I must say that I regret the rather macabre way in which these programs are being portrayed on television, yet perhaps in the result there might be a recognition by many who see their meat only hanging in a butchers shop or in a supermarket deep freeze of the very real crisis that prevails in many of the farming areas of Australia.

Of course the mark-up between the price paid to the producer and the price paid by the customer is extraordinarily high. It is probably one of the areas where more than anywhere else the impact of rising wages, handling costs, slaughtering charges and so on is quite effectively destroying the opportunity for the farmer to survive. I hope that as a result of this measure there may well be a greater acceptance, therefore, by the community at large of the necessity for measures to help the aggrieved rural sector. With respect to the last part of the honourable gentleman’s question, the significant increase in prices paid in markets since the introduction of this measure has been quite extraordinary. Whether it means that somebody along the line has been receiving a very significant profit which has not been passed back to the producer or whether some other reason has been prevailing, I do not know, but I believe that certainly there is no justification whatsoever for that type of meat now to be marked up at any higher price in butchers shops or elsewhere for the housewife.

It is rather extraordinary that at a time when producers are generally going broke exporters seem to be able to operate generally at a profit and that higher and higher wages are paid to those who work in meatworks and elsewhere. I believe there is no reason whatsoever for anybody else to receive a higher price at this stage as a result of this cattle kill program. Rather one might hope that the poor aggrieved dairy farmer and beef producer might be paid something like a reasonable price for the cattle that he has on his property and wishes to sell.

page 2272

QUESTION

CHILDREN’S COMMISSION ACT

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

– I ask the Prime Minister: What is the reason for the delay in proclaiming the operative sections of the Children’s Commission Act for which he has ministerial responsiblity? How soon does he expect that he will proclaim those sections and appoint the members of the Children’s Commission and thus allow them to carry out the important functions for which appropriations were passed over 6 months ago?

Mr MALCOLM FRASER:
LP

-The honourable gentleman ‘s memory seems to be somewhat deficient; it would not be the first time. The people appointed to the Interim Committee for the Children’s Commission have been carrying out their functions all this time, as they were before the election last year. I understand from what I know of the intentions of the Leader of the Opposition which are sometimes difficult to decipher, that the reasons the Act has not been proclaimed are somewhat similar to the reasons that he did not proclaim the Act.

page 2272

RE-ENTRY VISAS

Mr DOBIE:
COOK, NEW SOUTH WALES

– I refer the Minister for Immigration and Ethnic Affairs to the statement made by him earlier this year when he so properly revoked the insidious system of the Whitlam Government requiring -

Mr SPEAKER:

-Order! The honourable member will not give information. He will ask the question.

Mr DOBIE:

– I apologise, Mr Speaker. I refer the Minister to the statement regarding Australian residents visiting overseas. I ask the Minister: In view of recently reported cases of Australian residents overseas who have not yet taken out Australian citizenship being refused permission to board commercial aircraft returning to Australia because of the lack of the now unnecessary re-entry visa forms, what will he be doing or what has he already done to ensure that all Australian residents travelling overseas are treated with the dignity and honour that residence in and citizenship of our great country still demand?

Mr MacKELLAR:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP

– I think that some people may be confused as to the necessary regulations concerning people who are residents of Australia but are not yet citizens. The problems that have arisen in relation to re-entry have concerned those people who are residents of Australia but who have not yet taken out citizenship. The system was changed on 22 March this year. Ample notice was given of the change to the system. Anybody who is an Australian resident but is not yet an Australian citizen can go along to an office of my Department and have his passport stamped to signify that he is a legal Australian resident. If people do that prior to going overseas they may travel overseas for up to 3 years without the need for a re-entry visa. Some people have not taken advantage of that situation and have travelled overseas without having their passports endorsed in that manner. When they have sought to re-enter Australia the travel authorities have, quite rightly, asked them to produce evidence that they have the legal right to re-enter Australia.

A case which received some publicity earlier this week involved a woman travelling on a British passport who went overseas to visit her sick mother without obtaining the necessary endorsement before she left. The regulations are quite clear. They were well publicised. There is no delay in obtaining that endorsement. In the case of the particular woman concerned, as soon as my department heard of the situation it cabled authority to the Australian authorities in the United Kingdom to allow that endorsement to be placed in the woman’s passport. I reiterate that all residents of Australia who have not yet taken out Australian citizenship and who may in the future be travelling overseas should take advantage of this situation before they travel and should go to an office of my department and have their passports suitably endorsed.

page 2273

QUESTION

INDUSTRY DELEGATION

Mr YOUNG:
PORT ADELAIDE, SOUTH AUSTRALIA

– Is the Prime Minister aware that delegations from 3 major industrial establishments in Australia have come to Canberra today to express their concern about the future of their jobs? As the Minister responsible has informed the delegations that he is too busy to meet them, I ask the Prime Minister whether he will meet a combined delegation from these 3 industries during the day.

Mr MALCOLM FRASER:
LP

-The honourable gentleman in asking his question did not give a great deal of information. I will try to obtain some information from him after question time and then see what the position is.

page 2273

QUESTION

CHILD ENDOWMENT: TAX INDEXATION

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– My question which is directed to the Prime Minister refers to the principles of tax indexation recommended by the Mathews Committee report, which the Government has said it desires to implement. I indicate that I have always understood that those principles applied not only to the tax brackets but also to the deductions as they apply to the taxation system itself. As it would appear from reports that the Government intends transferring the tax rebates for children to an effective form of child endowment, will the Prime Minister do what he can to see that the advantages of tax indexation will apply to those transferred forms of child endowment?

Mr MALCOLM FRASER:
LP

-The honourable gentleman will have to contain his patience for only another few hours to know in full detail the Government’s decisions and recommendations in relation to these matters. I believe that those with large families will benefit quite significantly, especially the lower income families. I hope and believe that this social reform will be widely proclaimed as one of the most advanced social measures ever to be introduced into this Parliament.

page 2273

QUESTION

INDEXATION OF BONDS

Mr MALCOLM FRASER:
LP

– I am sure the honourable gentleman would have studied the somewhat lengthy submission that the Government put to the Commonwealth Conciliation and Arbitration Commission concerning wage indexation and having done that he would well know that the proposition and the various alternatives that were put and to which the Government lent support before the Arbitration Commission were consistent with the guidelines concerning wage indexation. It is a question of the point at which indexation ought to flow through fully. I emphasise, as I have on recent occasions, that there is some division within the ranks of the trade union movement concerning the actual level of wage indexation and the mechanics of its application.

I think that the honourable gentleman may be confused concerning the relationship between wage indexation, tax indexation and indexed bonds. Government bonds, especially savings bonds of the kind that have been introduced by the present Government, are held very widely and by a great number of average Australians right around the country. While no move in a positive sense has been made in relation to indexing bonds, it is something that 1 know my colleague the Treasurer has looked at. But the judgments were made in relation to the savings bonds and the provisions made in relation to them help all investors. They do not help businessmen particularly; they help the many thousands of average people who purchase bonds. In view of this I think the suggestion implicit in the question falls to the ground.

page 2274

QUESTION

AUSTRALIA COUNCIL REPORT

Mr HAMER:
ISAACS, VICTORIA

-My question is to the Prime Minister. When will the report of the Australia Council be tabled and what has been the reason for the inordinate delay in the tabling of this report?

Mr MALCOLM FRASER:
LP

-The honourable gentleman’s question is opportune. In a few minutes I will be tabling the report of the Australia Council for 1974. The reasons for the delay are plain. The original report, of which I saw an advance copy some time ago, had significant numbers of errors in it. I had understood that there was to be an errata sheet attached to it and that sheet would then be tabled with it, but apparently the Council decided that it would be better not to publish the original report containing the many errors but to publish a limited number of a second edition. It is that second edition that I shall now be tabling. I suggest that this only emphasises what the Council has itself recognised, the need for reorganisation. Decisions will be made and announced concerning its own recommendations and the recommendations of the McKinsey report in the not too distant future. I am glad of and grateful for the fact that the Australian Council is fully aware of the heed for reorganisation of its own structures at the top level.

page 2274

QUESTION

MOTOR COMPONENTS INDUSTRY

Mr INNES:
MELBOURNE, VICTORIA

– Is the Prime Minister aware of the acute unemployment problems facing the motor components industry due to the abolition of the no reversion rule? How many applications for reversion to overseas suppliers have been received even though the rule is not to be abolished until 3 1 December next? Are any decisions being taken on these applications? If any of them are refused will the potential importers be advised that this is a policy for the future or will this merely be a short-term device to use up existing stocks? Will he take steps to defer the reversion proposals at least until there is a market recovery or large scale purchasing in Australia is commenced by the Japanese entrants into the motor plan?

Mr HOWARD:
Minister for Business and Consumer Affairs · BENNELONG, NEW SOUTH WALES · LP

-As the question indicates, the existing procedures regarding reversion control will continue to operate until 3 1 December this year. My attention has been drawn to a number of comments made by both the component manufacturing industry and sectors of the union movement regarding the decision in respect of reversion control announced by my colleague Senator Cotton some weeks ago. As the honourable member is aware, the decision on reversion control is part of an overall decision on the future of the motor vehicle industry in Australia. He also will be aware that under the requirements of the 85 per cent content plan the new entrants, Toyota and Nissan, will be required progressively to lift their level of local component content in order to reach, after the specified period of time, 85 per cent content. In the course of phasing up to the 85 per cent requirement it is expected that there could be an increased demand for local components. I can assure the honourable member and the House that the Government, although it has made a general decision on the future of the motor car industry, will watch the operation of the new rules very carefully. Naturally we will take into account the representations and comments made by the component manufacturers in Australia.

page 2274

QUESTION

CAREERS IN PRIMARY PRODUCTION

Mr MacKENZIE:
CALARE, NEW SOUTH WALES

– I direct my question to the Minister for Primary Industry. Is he concerned that for some years now statistics have shown that farmers are an ageing and numerically declining sector in our community? Is he aware that very few young people or their parents see a viable and secure future in farming? Can he give any indication of progress towards providing incentives to young people to go into farming, either as owner operators or as career managers?

Mr SINCLAIR:
NCP/NP

-I thank the honourable member for his question. I assure the honourable member for Griffith, who has interjected, that although our numbers might be declining our quality is not. However, there is a very real difficulty associated with the statistics to which the honourable member for Calare referred. It is the product of a number of circumstances. It was in recognition of the very real problem which faced young people of accumulating sufficient capital to purchase and operate a farm that in December the Liberal and National Country Parties announced a policy relating to a young farmers establishment scheme. In the extension of the terms of eligibility, by the elimination of the secondary work test for unemployment benefits for farmers, we similarly recognised problems that many young people have. This is because their indebtedness is normally higher and they are the first to be affected when an industry gets into difficulty. We would seek to keep many of them on the land if that is at all possible rather than provide, through rural reconstruction, household support or some other form of financial assistance to encourage them to get off the land. There is no easy solution to the problem. This Government certainly will direct its mind towards it. We would hope that through a combination of assistance generally designed to provide opportunities for those on the land at least equal to those in other forms of employment we might be able at least to contain the trend. However, while costs continue to rise and profits to fall, it is the cost-price squeeze essentially which is causing the crisis facing the rural sector. It is not easy to find a solution.

page 2275

QUESTION

HEALTH INSURANCE FUNDS

Dr KLUGMAN:
PROSPECT, NEW SOUTH WALES

– My question is addressed to the Minister for Health. In view of the fact that later today the Minister’s colleague, the Minister for Employment and Industrial Relations, will introduce legislation dealing with the election of trade union officials, has he considered the urgent need to introduce legislation to enable contributor members of so-called non-profit voluntary health insurance organisations, such as the Medical Benefits Fund of Australia and the Hospitals Contribution Fund to elect their office bearers, let alone do so by secret ballots? Is he aware that neither of these organisations which are registered under Federal legislation has any provision for elections by contributor members to their governing bodies or any other method of participating in the decision making? If he has not yet considered introducing such legislation, will he do so urgently?

Mr HUNT:
Minister for Health · GWYDIR, NEW SOUTH WALES · NCP/NP

-The Government will be announcing tonight some of the measures that will be implemented. These will be adequate to ensure that contributors to health funds are protected. As to the latter part of the question, this is a matter that has been exercising my attention for some time. I will give consideration to the possibility of introducing legislation to ensure that contributors do have a democratic right to elect directors to national health funds.

page 2275

QUESTION

APPLE AND PEAR INDUSTRY

Mr GOODLUCK:
FRANKLIN, TASMANIA

-My question is directed to the Minister for Primary Industry. Does the Government intend to accept the recommendations of the Industries Assistance Commission regarding assistance to the apple and pear industry for the 1 976-77 season?

Mr SINCLAIR:
NCP/NP

-I thank the honourable member for this question. He and a number of his Tasmanian colleagues saw me in Hobart the other day and expressed very real concern at the future for the fruit industry in that State, and indeed elsewhere in Australia, if the implications of the IAC report and the progressive elimination of the apple and pear stabilisation scheme were to be realised. As I explained then, this year we have in fact not accepted the IAC report, but we have provided for an additional 500 000 bushels to be covered for assistance in conjunction with the States so that there might be some alleviation of the serious shortfall in returns which the fruit exporters face. The future position depends on a marrying of export opportunities and returns to growers. No decision has been taken by the Government in respect of the second part of the IAC report, and depending on returns this year and expected market prospects next year a decision will be taken by the Government in the light of those changing circumstances. It is the Government’s firm view that there needs to be a continuation of support to help fruit growers in what is quite a critical economic crisis.

page 2275

QUESTION

FESCO SHIPPING LINE

Mr CHARLES JONES:
NEWCASTLE, VICTORIA

-I preface my question to the Prime Minister by referring to a speech I made on 1 April in the grievance debate when I drew attention to the intrusion of FESCO, the Soviet national shipping line, into Australia ‘s overseas shipping by offering quite substantial discounts on freight rates. I ask the honourable gentleman: Is similar action being pursued by this shipping line in overseas countries where it is offering up to 40 per cent freight discount, which is causing much concern to both national and private shipping lines and also to the governments of those countries? Does he regard this intrusion by FESCO as part of the Soviet Union’s foreign policy to have a major shipping presence in every country and on every ocean? Is he also aware that the United States Government, European governments, and only just recently the Prime Minister of the United Kingdom, have all given an assurance that they will personally investigate this matter and do something about it? Finally I ask: What is the Government doing to ensure that it counters the intrusion of this Russian shipping line into Australian trade and, more importantly, into Australian ports and Australian waterways?

Mr MALCOLM FRASER:
LP

– I thank the honourable gentleman for his question. I must confess that I have not read his speech that was made on that grievance day. I will ensure that the matter is drawn to the attention of the Ministers most concerned with this matter. We will consult and see whether there is any action that ought to be taken.

page 2276

QUESTION

STARVATION IN EMERGING COUNTRIES

Mr GILES:
ANGAS, SOUTH AUSTRALIA

– Is the Minister for Foreign Affairs completely satisfied that all possible is being done to remedy problems of starvation and lack of proper sustenance in emerging countries and in Asia in particular? Is it a fact that compared with last year’s estimates in relation to food aid, that aid is running at only 50 per cent of that estimate? If the Minister is hot satisfied, can he satisfy himself and this House that every endeavour is being made to move in this way from Australian farmers surplus produce which is in the category of food aid?

Mr PEACOCK:
LP

-The Treasurer will be dealing with matters relating to expenditure tonight. Amongst the matters with which he will be dealing will be the Australian development assistance program. I am not prepared to comment prior to that statement being made tonight, but after the statement is made I will be prepared to issue any statement which will further elaborate on the matters that the honourable member touches upon.

page 2276

QUESTION

HOUSING

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-Will the Prime Minister confirm or deny reports that the Government is seeking to transfer to the States responsibility for defence service homes, home savings grants and other housing activities? Does he- share my view that such a move would have disastrous consequences for home seekers and would also pauperise the States?

Mr MALCOLM FRASER:
LP

– I thank the honourable gentleman for the question and the opportunity it provides to put at rest a rumour which was publicised, and received some quite wide publicity in some States a few days ago. There is no question of the Commonwealth removing itself from significant responsibility in the housing area. It will remain responsible for what we used to call war service homes and what the previous Administration termed defence service homes. This Government will certainly be taking positive and vigorous action during its years in office to ensure that home ownership in Australia again rises instead of falling as it did during the period of the previous Administration. This House will be well aware of a number of measures that have already been introduced to achieve that very purpose.

page 2276

AUSTRALIAN COUNCIL FOR THE ARTS

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– For the information of honourable members I present the annual repoit of the Australian Council for the Arts for 1974.

page 2276

PERSONAL EXPLANATION

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

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

Mr SPEAKER:

-Does the Minister claim to have been misrepresented?

Mr PEACOCK:

-Yes. I claim to have been misrepresented in a statement in the Australian Financial Review of today, Thursday, 20 May, which appears on page 10 and which is part of an article which commences on page 4 under the heading: Uranium protest upstages loan affair. The article is related to a statement made by the Deputy Leader of the National Country Party, the Minister for Primary Industry (Mr Sinclair), and his denials of my involvement with any inquiries. Allegedly quoting Mr Sinclair, the article in the Australian Financial Review states:

Mr Peacock had said that any allegation that he supplied Mr Fancher with the names of 4 Swiss law officers were also totally untrue, although he had contacted the Ambassador to tell him to co-operate with the Queensland Government inquiries.

In fact, Mr Sinclair said quite the contrary. He said:

Mr Peacock has said that any allegation that he supplied Fancher with the names of four Swiss law officers is totally untrue.

I am quoting from Hansard. He went on:

It is certainly true that he contacted Mr Brennan, the Australia Ambassador in Geneva. He did that in order to tell the Australian Ambassador that on no account was he to embark on any sort of co-operative effort to pursue those inquiries to which the motion of the Leader of the Opposition refers.

The report in the Australian Financial Review is the opposite of what the Minister for Primary Industry said. Because of the following paragraph in the Australian Financial Review 1 should clarify the position concerning a query from the Leader of the Opposition (Mr E. G. Whitlam), who thought it was curious that I had referred in a note to the Minister to 4 law officers. That occurred only because I was in Papua New Guinea and I had a telephone communication that the Leader of the Opposition was alleging that I had contacted 4 law officers. I quote from the Australian Financial Review:

In this connection. Mr Whitlam subsequently issued a statement saying that the Opposition had made no reference to four Swiss law officers . . .

That is true. The Leader of the Opposition referred to members of the Foreign Ministry. I indicate to the Leader of the Opposition that at no stage have I ever met or talked with Mr Fancher. At no stage have I given any names of any description to any person in connection with the inquiry. What the Minister for Primary Industry said, which is mis-quoted in the Australian Financial Review, is quite correct. My only intervention in the matter was to instruct the Australian Ambassador to have nothing whatsoever to do with the inquiry.

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

-Where did you get the idea it was four?

Mr PEACOCK:

– Because I was telephoned in Papua New Guinea and told that the Leader of the Opposition was alleging that I had contacted 4 law officers. In fact he did not. There was a breakdown in communications. He alleged that I had suggested names of members of the Foreign Office in Switzerland and it is understandable that he issued a statement later saying that it was curious. I repeat that the message relayed to me was that the Leader of the Opposition was alleging that I had contacted 4 law officers, but in fact he did not. The reality is that at no stage did I do anything but tell the Ambassador not to have anything to do with the inquiry.

Mr WENTWORTH:
Mackellar

-I ask for leave to make personal explanation.

Mr SPEAKER:

– Does the honourable gentleman claim to be misrepresented?

Mr WENTWORTH:

-Yes. An article in the last issue of the National Times, reporting a paper which I gave to the Australian and New Zealand Association for the Advancement of Science in Hobart, appears to attribute to me views which are exactly the contrary to those that I expressed. The National Times says that I gave an erudite paper, which I think is correct. It then says that the paper examined what the Old Testament says about the split between the Jews and the other Semitic people 4000 years ago and discusses the ancient rules about fertility, midwives, marriage, homosexuality and bestiality. The National Times goes on to say:

One ANZAAS wit said the paper should be entitled ‘The Sexual Habits of the Jews- as Revealed by the Bible. ‘

As a matter of fact, I said that it appeared from the Bible that when the Jews split from the remainder of the Semitic people some 4000 years ago, they expressly repudiated the habits of infanticide, homosexuality and bestiality which were customary at that time among the peoples from whom they split.

page 2277

GRIEVANCE DEBATE

Spectacle Frame Industry-Australian Bureau of Statistics-Navigational Aid Ship- Dairy Industry: Slaughter of Cattle-School Dental Scheme -Protest Delegations-Preservation of the Environment -Legal Aid -Road Safety -Motor Industry: Unemployment

Question proposed:

That grievances be noted.

Mr ARMITAGE:
Chifley

-This morning a busload of 143 workers from Martin Wells Pty Ltd, spectacle frame manufacturers of St Marys, demonstrated outside the House in an attempt to save their jobs.

Mr Sullivan:

– Ha, ha, ha.

Mr ARMITAGE:

– Their jobs are at risk because of the Industries Assistance Commission report on the spectacle frame industry. The honourable member laughs at this, but it is a serious matter. I understand that the IAC report has already been to one of the Ministers and is now with Senator Cotton, the Minister for Industry and Commerce. I spoke to Senator Cotton’s senior private secretary last Thursday and asked that arrangements be made for the Minister to see a delegation of three- I made the point that it would have to be a limited delegation- this morning. Subsequently he telephoned my office and left word with my secretary that he would be telephoning the company with regard to the delegation. Firm arrangements were made. The workers left the meeting time open; they said that they would arrive either yesterday or today to fit in with the Minister’s appointments. The firm arrangement was that he would meet them at 10.30 this morning. On that basis, in an effort to protect their jobs, 143 workers representing 430 workers who will lose their jobs if this IAC report is implemented, came down here this morning to meet the Minister. At 10.30 last night, after I had finished speaking in a debate, I received the following letter from the Minister’s senior private secretary:

Dear Mr Armitage

The Minister for Industry and Commerce. Senator Cotton, has been called to a Cabinet meeting at 10 a.m. tomorrow. 20 May 1976.

This means, unfortunately, that he will not be able to see the delegation from Martin Wells.

I draw attention to the time the Minister was to see the delegation- 10.30 this morning. And at 10.30 this morning the whole of the House of Representatives members of Cabinet, including the Prime Minister, were sitting in this chamber. Therefore Senator Cotton has given a false alibi. He simply is not prepared to see these people. He is not prepared to face up to his responsibility as the Minister responsible for the IAC report at this time.

Mr Baillieu:
Mr ARMITAGE:

– Because I have been trying to stop this matter from blowing up, I told the Minister’s secretary this morning, and the honourable member can check this: ‘Right, I will not be able to stop it’. I had been trying to stop it and I told him so last night. I told his senior private secretary so when he rang this morning to say that Senator Cotton could not even spare 10 minutes to see the delegation. That is all I asked- 10 minutes at some time during the course of the day. I told him that now, I could not stop it from blowing up because the facts are that 430 jobs are at stake. The facts are that we have to do something about this if this factory is to be saved. The Minister’s senior private secretary said to me, when I asked him to arrange for the delegation to see Mr Howard, the Minister for Business and Consumer Affairs: ‘You do that’. I said: ‘Well, you do it. You are a part of this Government; you make the arrangement with Mr Howard’. He said: ‘No, he can make his own arrangements’. His attitude was inexplicable but I have now found out the reason for his attitude. It relates to an article contained in the Manufacturers’ Monthly of 15 April 1976. The caption reads: Cotton Loses Cabinet power battle. Howard to run protection policy. It states:

The first boots and all power struggle within the Fraser Cabinet took place recently with the decisive winner, the Treasurer. Mr Phil Lynch, and the loser. Senator Bob Cotton. Minister for Industry and Commerce. Such was the heat of battle that it was a remarkable tribute to the tightness of the Cabinet that news of the struggle did not leak- well, not very much, anyway.

For manufacturers the struggle was important since it decisively decided who was going to run protection policy and it is to he Mr John Howard. Minister for Business and Consumer Affairs not Bob Cotton.

It goes on to say:

On the question of protection or assistance, the Howard submission suggested that each industry departmentPrimary Industry. Industry and Commerce. National Resources- be the contact point for industries within its ambit of responsibility that sought assistance.

The article further explains this. It then states:

The appropriate industry department would chair the Standing inter-Departmental Committee on Assistance to Industry (SIDCAI) where the protection issue involved flowed from that department.

But Cotton dug his toes in. He argued in Cabinet that Howard’s department should merely administer the IAC in the sense of salaries, creation of new positions etc. He also wanted to transfer to his department from Howard ‘s department the Protection Policy Division, under Dr David Charles, which deals with all protection matters, be they manufacturing or otherwise.

It was at this point that Treasury and the Treasurer, Phil Lynch, took an interest.

It goes on to say:

In future, although each industry department will be responsible for vetting applications for protection and sending them to the IAC through Howard’s department, Business and Consumer Affairs will hold the key role of chairing SIDCAI.

Obviously that is why Senator Cotton’s senior private secretary would not make contact with the Minister for Business and Consumer Affairs. Evidently the battle is so tight that they will not talk to one another. But that does not help the 430 workers whose jobs are at stake. 1 shall give honourable members a few examples of what is in the IAC report. With regard to ophthalmic frames at present the import quota is 75 per cent of the 1973-74 imports which carries a duty of 26.25 per cent. The IAC report which is now before the Government recommends the discontinuance of quotas and the imposition of a 25 per cent duty. The import quota of sunglass frames and sunglasses is 85 per cent of 1973-74 imports and carries a 28 per cent duty. The IAC report with regard to sunglasses complete with lenses recommends the discontinuance of quotas; duty-free entry of up to $1.50 f.o.b. and 25 per cent duty over $1.50. For sunglass frames without lenses, the IAC recommends discontinuing quotas and discontinuing duty. They will have free entry. No wonder the company is concerned.

I have respect for the judgment of the Minister for Business and Consumer Affairs on this. I am sure that he is a humane man. But the facts are that if that IAC report is implemented it will mean the end of this industry. It will mean the end of spectacle frame manufacturing not only for Martin Wells in St Marys but for all companies in Australia. It means that Australia will no longer have a spectacle frame manufacturing industry. In particular, for Martin Wells at St Marys, the biggest manufacturer of these frames in Australia, it will mean that 430 workers will lose their jobs. This involves workers from areas such as Mount Druitt Housing Commission area, St Marys, Penrith and those surrounding areas.

I realise that the Minister for Business and Consumer Affairs may have had some disagreement with Senator Cotton in Cabinet, but nevertheless I believe he will appreciate that such personal differences cannot be allowed to interfere with the jobs of people who are dependent upon this industry for their living. I request the Minister to show more compassion than Senator Cotton has shown. Senator Cotton has ducked his responsibility this morning. He has refused to see the delegation by using an untruthful, false alibi- stating in effect that he would be at a Cabinet meeting at 10.30 this morning, the time he was to see the men, when at that time the House of Representatives members of the Cabinet were in this House, in public view, for everybody to see that the Minister’s alibi was false and untruthful.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-The greatest force for an egalitarian influence in a nation and the force which gives the people of a nation the opportunity to uplift themselves is not so much the distribution of power but the availability of information. What I have to say this morning will be on that theme. It will not be a popular proposition, but it will be short. It concerns the Australian Bureau of Statistics and the availability of information from that Bureau. This should be in no way understood to be a criticism of that body. The Opposition member at the table at the moment, the honourable member for Kingsford-Smith (Mr Lionel Bowen) was formerly a Minister in charge of the Australian Bureau of Statistics.

My remarks concern the equal availability of information from the Bureau in different parts of Australia at the same time. If there is one source in this country which has more information about our nation, our people, our national resources and our economic welfare at any moment of time that source is the Bureau of Statistics. One has to look only at the information and statistics which are released by the Bureau on any one day to see the amount of work which is done by that organisation. For example, on 5 May- and I have picked this date at randomthe Bureau released information on wage rate indexes, Australian exports, income distribution, labour mobility and so on. These are all matters which are extremely important, which are capable of interpretation and which ought to be interpreted not only in Canberra but also in the various other parts of Australia.

The position at the moment is that in general the information from the Bureau becomes available in Canberra and in the Canberra Press Gallery sometimes days, but generally something like a day, before it becomes available to people who have an equal interest in the various great capital cities of Australia. So very often the first interpretation of information from the Bureaufor example about the progress of the Australian economy- is the interpretation which is most widely held. I would request that the Treasurer (Mr Lynch), who cannot be here this morning, take what action he can to break the logjam concerning the availability of that information at equal times. For example, at present the State governments situated in the great capital cities very often have the duty to interpret information quickly and to take action and inform their people as to the interpretation of that information. Under the present arrangements they cannot do this. The information becomes available, for example, to a Canberra throwaway newspaper before it becomes available to a State government sitting in one of the great capitals of Australia.

I take this matter a little further. The information becomes available to such an organisation before it becomes available to a Federal member of Parliament who happens to be situated in Adelaide or even in Sydney. I know that in specific cases, such as in the case of the consumer price index which is probably the most widely viewed and apprehended piece of information issued by the Bureau, the Statistician has to make special efforts to see that information becomes available in the capital cities at a similar time to which it is available here. But that is in special cases. One would not like to generalise- in fact one cannot generalise- in this respect. Therefore I ask that the Government has discussions with the Commonwealth Statistician to see whether new procedures can be instituted so that this information will be available in places such as Sydney, Melbourne or Brisbane at a similar time to when it becomes available here.

One of the arguments that may be put forward against such a proposal is that the Bureau of Statistics has a special relationship to the Commonwealth Government and consequently it is appropriate that the services of the Bureau be available to, say, Federal Ministers or the Federal Government in advance of those who are situated in the States. I do not accept that proposition because the very development of the Bureau in Canberra derived from the prior development of the State deputy statisticians. Up until recently one State maintained a significant independence in this area, and I do not know whether Victoria still has its own State statist. Nevertheless the present Bureau has derived from the State statistics organisations and information ought to be available to all parts of Australia at similar times. I request, therefore, that the Government take this matter up with the Commonwealth Statistician and rearrange the times of distribution of the multitude of information available from the Bureau. Attempts should be made to see that that information is released in the great capital cities of Australia at a similar time to which it becomes available in Canberra. It is appropriate if a spirit of federalism is to obtain that that manifest pre-eminently in terms of information. I believe that is far more important than even propositions concerning the distribution of power and money. We are talking about information which enables people to be able to equally chart their lives. Those people situated in Canberra ought not to have the advantage in respect of the timing of the release of information which they presently have. .

I hope that what I have to say is not in any way taken to be a criticism of the present Commonwealth Statistician with whom I have had correspondence on this matter. But there is a logjam to be broken and I believe that it can be broken only through the convening of a formal conference attended by the Commonwealth Government at which new formal procedures can be worked out. For these procedures to be acceptable the Commonwealth Government would need to indicate that it is quite willing and able to facilitate the transmission of information at similar times in each part of Australia.

Mr CHARLES JONES:
Newcastle

– I refer to the decision of the former Labor Government go build a navigational aid ship for the Department of Transport to service navigational aids between Darwin and Cairns. At this point I seek leave to incorporate in Hansard the details of that ship.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

-Is leave granted? There being no objection, leave is granted.

Mr CHARLES JONES:

-I thank the House. Very briefly, without going into the details which the incorporated information gives, the ship is 50 metres in length and will cost between $4m and $5m. Whilst I know the exact price of the tender, naturally I am being very vague so as not to disclose the full details of the tender because of the decision of this Government to withdraw the decision of the Labor Government to award the tender to the North Queensland Engineers and Agents Pty Ltd in Cairns. The decision of the present Government means that at some future date it will have to get on with the job and call for fresh tenders. Even though the NQEA tender was not the lowest- the Ailsa shipyard in Scotland being the lowest tenderer- the Labor Government in formulating the Budget in July last year made the decision that the ship should be built by NQEA which submitted the lowest Australian tender. It was felt that in this way we could provide employment for Australian ship builders and in particular for people in the Cairns area which is a decentralised centre of Australia. We considered that it was much better to go about this matter in that way than to provide work for people in Scotland.

It is worth noting that it is time this Government came up with a policy in respect of what it proposes to do about ship building. At the time tenders were called NQEA employed 440 people of whom about 100 worked in the shipyard. The decision of the Labor Government would have meant that approximately 150 more people could have been employed. The NQEA tender would have been accepted but for the Liberal and National Country Parties holding up the Budget in the Senate. This action by the then Opposition has meant that working men in Cairns will not be given the opportunity of being employed in a decentralised industry on the construction of a 50-metre ship which will cost between $4m and $5m

Navigational aid vessels are required for the building, maintenance and servicing of the 334 marine navigational aids that are strategically placed around the 12 000 miles of Australian coastline. The uninterrupted operation of these aids is essential for the safety of coastal and overseas shipping. The Australian Government has an international obligation to provide and maintain first class navigational aids on her coast for the purpose of safety at sea. This ship would have replaced the M. V. Wallack which surveyors had reported was approaching the end of its working life. In actual fact it has now ended its working life. Accommodation on the ship was of a very poor standard.

When this information was put in front of our Government we acted on it and we proceeded to call tenders in 1973 to replace this ship. In 1974 the contract would have been given to Walkers Ltd shipyard in Maryborough. Unfortunately that shipyard was not prepared to accept the contract, together with contracts for 2 other landing craft heavy ships that the Department of Defence had decided to have built. The work would have been worth a total of about $8.25m. I repeat that unfortunately the shipyard was not prepared to proceed with the building of these ships. Even though the shipyard had some $8.25m worth of work the company closed the shipyard. Therefore fresh tenders had to be called, and we did this in September 1974. As I informed the House earlier, a Scottish shipyard was the lowest tenderer. NQEA was the lowest Australian tenderer, and we decided to place the contract with that company. Unfortunately we could not do so until such time as the Budget was approved. I repeat that the Budget was held up by the Liberal and Country Parties.

The Department of Transport was then forced into the position of replacing the vessel. It purchased one from Australian Shipbuilding Industries (WA) Pty Ltd of Perth to use as a stop-gap. The ship that was acquired cannot do the job as effectively as the one to which I have referred that should now be under construction by NQEA. The ship acquired cannot carry out all of the tasks required of it in north Queensland waters, such as buoy lifting and construction of navigational aids. I was not aware of what had happened. The decision had been made and money had been allocated in the Budget for the building of this ship. Some $2. 75m had been allocated in that year’s financial statement. I made inquiries of the Department of Transport some two to three weeks ago. I wanted to know the comparison between the program approved by the former Government and the cuts that had been instituted by the Fraser Government. I wanted to know what work was being deleted from the transport field. On 18 May I finally received a letter from the Minister for Transport (Mr Nixon). I was astounded to find in that letter this statement:

The major items in this category of the program were almost $5m for a new navigational aids vessel; about $0.6m for work on the various ‘Cape’ class vessels;

The Cape class vessels are the other navigational aid vessels that are at present operating on the Australian coast. Notwithstanding our international requirements and this Government’s responsibility to provide first class navigational aids around the Australian coast; notwithstanding the fact that the Department obviously has told its Minister that the replacement ship that was acquired late last year- because of the delay in the building of the new navigational aid shipwas not able to carry out all these requirements and do the work that the ship would be required to do, this Government has decided to delete from this year’s program the building of this ship which, from reports given to me, was clearly necessary and the stage was being reached at which something should have been done about it urgently. As I have said, the Labor Government did something about this matter and would have allocated the work to NQEA.

One of the things which astounds me is the fact that in this place I have not heard one word of protest from the honourable member for Leichhardt (Mr Thomson), the member for the electorate of which Cairns is the centre, at the decision of the Government he supports. The Minister for Transport is a member of the same political Party as the honourable member for Leichhardt- the National Country Party of Australia. We have not heard from him one word of objection to this decision of the Government not to proceed with the building of this ship, which would have provided employment for people in the Cairns area. It would have assisted a decentralised industry which provides more employment outside of Brisbane than any other industry in Queensland.

The honourable member for Leichhardt remains silent in this place when he should be raising his voice. He should be objecting this morning about the decision of the Government. It should have been he who was objecting right from the word go when he saw what the Government was doing in cutting work and in eliminating government expenditure. We have not heard one word from him, not one word of objection to the Minister who belongs to the same political party as he does. I am astounded that this Government, in this cutting of expenditure, is prepared to put Australian coastal and international shipping at risk by reason of the fact that it is not maintaining its navigational aids. Not only is it not proceeding with the building of this ship, but also it has eliminated $600,000 worth of work from the existing navigational aid program. We have reached a point where the servicing and maintaining of navigational aids around the Australian coast is now deteriorating and there are now second class facilities rather than first class facilities. It is the international responsibility of this Government and of all governments to ensure that shipping can operate safely in waters over which they have control. I ask the Minister and the Government to reconsider this decision in the light of the facts that I have brought to the attention of the House today, get on with the job of building this ship and ensure that Australia can provide first class navigational aids. This would enable the Government to provide employment for people in the north Queensland region where work is important and where the NQEA can be preserved, developed and retained in operation.

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

Mr GILES:
Angas

-What a strange quirk of fate it is to hear the honourable member for Newcastle (Mr Charles Jones), the previous Minister for Transport, a Minister who personally appeared to me at any rate to ruin Evans Deakin Industries Ltd -

Mr McVeigh:

– He closed it down.

Mr GILES:

-Closed it down, did he? He ruined the Adelaide Ship Construction Company by a series of circumstances -

Mr Charles Jones:

– That is a lie, and you know it.

Mr GILES:

- Mr Deputy Speaker, I demand a withdrawal of that remark. What I said was quite true.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Newcastle has been in the House long enough to know that that word is not used in debates here. I ask the honourable member to withdraw it.

Mr Charles Jones:

– I know, Mr Deputy Speaker, that I am not entitled to use the phrase: ‘That is a lie’. I did it deliberately because what he said is a lie.

Mr DEPUTY SPEAKER:

-Order! The honourable member is now only canvassing the situation.

Mr Charles Jones:

– Seeing I cannot use that phrase I will withdraw it and substitute in its place: It is untrue.

Mr DEPUTY SPEAKER:

– I asked the honourable gentleman to withdraw it, and that is the only point involved. I call the honourable member for Angas.

Mr GILES:

-If I have been a little pointed, perhaps I should transfer my attack from the exMinister, who is sometimes not solely responsible for things-I understand that- to the Government of which he was a member. That Government, by allowing charges to rise in an uncontrolled fashion md by allowing inflation to run rampant, ruined the very industries which the honourable member has the nerve to stand on his feet and purport to have some sympathy for. This Government, which has been in power now for 5 months, is expected by some magical wave of the wand according to the previous Minister, to have a set policy and to have the shipbuilding industry flourishing.

It is doubtful in my view whether the shipbuilding industry will ever get back to the stage it was in during the late 1960s when the Coalition Parties were in Government, for the simple reason that inflation has ruined the future prospects of much industry in Australia that perhaps in the past was near enough to being economic. Some industries today are uncompetitive on world markets. This all gets back to the same point. We cannot accept the blame for 3 years of .economic mismanagement and total irresponsibility which have ruined the future and the jobs of many hundreds of thousands of Australian people. It is not my purpose really today to debate that particular issue.

I wish today to try to get a little realism into some of the more hysterical remarks that appeared in the Press over the weekend. I refer to the killing of cattle which was encouraged by the Victorian slaughter bonus and by, of course, a series of circumstances over which the dairy farmers of Australia have had very little control. Because of increasing charges and a 70 per cent increase in cost inputs over the 3 years when Labor was in office, dairy farmers have found themselves in an uneconomic position. Mountains of skim milk powder have accumulated in the European Economic Community countries and in New Zealand, and the surplus is rising very quickly in Australia. The price of skim milk powder on the world market has dropped by 50 per cent and may drop more in the future. In the very rich dairying area of Victoria rainfall has usually been reliable but drought has left farmers there in a very dire position. All those factors must be taken into account.

Everbody regrets the need to slaughter cattle. Let us look at some of the remarks that have been made in the Press recently. I have here a report that says:

In a world where more than 400 million people are starving, in a land where many of our own people cannot afford meat or dairy products, we are destroying cattle.

When poor old Bessie or Tessie or some other old family pet has to be slaughtered because her useful productive life is over the problem is that the average city dweller does not understand the situation. It may well be that, only on emotional grounds, because she was a very good economic animal herself or because she left potentially very good calves behind her, she had been allowed to survive to that stage. The dairy farmer has to make these decisions and the city people should realise some of the grim realities of farming life.

I would like to make the point that this situation is not only the product of a drought but is an annual decision that dairy farmers have to make, particularly in dry years. There is no earthly use in allowing sympathy to run away with one and to try to save an old cow which in market terms is only a chopper, no matter how good she may have been, when drought has forced up the price of a bale of hay to $ 1 and beyond. Regrettably the farmer has to make a decision annually- in times of drought the impact is greater- as to what numbers he can afford to carry. In times of drought the cattle that are killed are almost entirely skin and bone. One can refute any suggestion that protein is being destroyed which might aid -

Mr James:

– What is the answer?

Mr GILES:

– If the honourable member for Hunter will give me a minute or two I will touch on one form of answer. But I am not quite there yet. One must remember that annually the farmer must make these decisions. Three or four cows may have suffered from mastitis. Their udders may have dropped and it may not be economic to try to hold on cups. Four or five cows may have become too old to be economically worth keeping as producers. That is an annual problem. It is vastly over exaggerated by the Press today. In some instances Press reports state that these cattle represent protein, meat and sustenance for starving millions. Anybody who follows the problems of the emerging countries will probably have read this week’s News Review which contains a 4-page article on how starving are the starving millions. It points out that in many areas in India the type of nutritional intake is probably infinitely preferable to our own. On most measurements this is so. One has to get this matter into perspective and not let emotions take over.

I think that this tragedy has had one good effect. Many people in Australia who are rather ignorant about these matters have been faced with the grim realities which farmers have to face. I think that that is good, but it is not good if we let ourselves run away with the idea that the slaughtering of these cattle should be on our consciences because we should be feeding the people of Asia or of other parts of the world. I repeat that the cattle being slaughtered are not really the sort of cattle that would provide meat for sustenance or that would be worth moving. The honourable member for Hunter asks whether there is anything that can be done. As chairman of the Government rural committee, in 30 seconds I would like to float one wild idea. I say ‘wild’ because I do not think that it could work. I want to demonstrate to the honourable member for Hunter that the Government is not sterile of ideas and is trying to think its way out of the problem.

Suppose that the Government in its beneficence gave the carcass value purely to encourage these cattle into the market where, at 30c a head, it is not worth sending them now because the freight from the farm to the abattoirs is far higher than that. Suppose the Government did just that- unfortunately I do not believe this would happen- and suppose it was economical to render down these cattle and turn them into blood and bone. I believe that the dairy farmers and all farmers would then be able to purchase blood and bone as a top quality fertiliser and utilise it at a very much cheaper price than they do currently. In Victoria now the price is about $40 a ton compared with $108 in South Australia. There are dangers in the scheme. What would happen if the road was opened from the Northern Territory and hundreds of thousands of head of beef cattle suddenly came “ down to South Australia? I float that just as one idea.

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

Mr YOUNG:
Port Adelaide

– It was my intention today to draw the attention of the House to the tragedy of the school dental scheme which has been hacked around by this so-called Government. It has cut $2,200,000, or 28 per cent, from the total amount which the previous Government committed in its 1975-76 Budget to building dental clinics at primary schools throughout Australia. It was my intention to focus on that matter so that people would be aware that the promises to build dental clinics in the schools throughout Australia have come to a sudden halt. Unfortunately I cannot spend my time on that subject.

Today I want to talk about a number of the delegations that have been arriving in Canberra. I think that it is important that people in positions of responsibility understand the commitment that these people make in coming here. In the last month we have had something like 5 or 6 days upon which protest delegations have visited Canberra to express their views in one way or another about the problems concerning their own communities. One day we had people here who had been affected by the Government’s decision to impose a means test on the national employment and training scheme. They were being retrained and paid a wage under the previous Government and now they find that their livelihood is being taken away by the means testing of the scheme. Yesterday people came here to express their views about uranium mining. They nave a valid case to put. I think that people in the Parliament and outside it should listen to their case. Pensioners have come here to express what they feel may be done to the pension by breaking away from the rate of 25 per cent of average weekly earnings which the Labor Government established.

We had an education day- it was quite a magnificent day- when something like 2000 people connected with education came to Canberra not only to see the Minister for Education (Senator Carrick) but also to talk to every parliamentarian about what they felt was the importance of the Australian Schools Commission and why it should not be interfered with. We are receiving many delegations. Today seems to have been the climax. About five delegations-I said at question time that there were three- have arrived here from industrial plants around Australia to express concern about the future of their jobs. In one case the people are concerned about a recommendation of the Industries Assistance Commission; in another case it is about the manner in which Australia has refused to establish what we consider to be key industries. I want to read the way in which a delegation from the dockyard at Newcastle put together its petition.

Mr Ruddock:

– In whose time are they here? What are they doing for productivity?

Mr YOUNG:

– I wish the honourable member for Parramatta would understand the difficulties that people in industry get into and how they are concerned about their jobs. He may not be concerned about this but he ought to go to the factories in his electorate and talk to the people and their dependents about how he does not have any concern whether their jobs disappear. The workers in Newcastle wrote their petition in the following terms:

We the undersigned citizens of Newcastle and surrounding areas, would like to bring to the attention of your Government the vital role Shipbuilding and Ship Repair plays in the economic stability of the Newcastle region.

A recent study by the Hunter Valley Research Foundation showed that 50 000 people were partially or wholly maintained by the State Dockyard. That stability is at present in jeopardy, as a new ship order is required within the next few weeks if serious unemployment and hardship is to be avoided.

We ask that your Government place an immediate order with the State Dockyard to advert the imminent lay-offs.

We would also ask that the previous Government’s plans for the building of a Graving Dock in Newcastle be continued. Proper ship repair facilities are a vital factor in the maintenance of a viable shipbuilding industry.

We believe that your election pledge to restore business and cut unemployment can be implemented in Newcastle if new ship orders and a Graving Dock are granted.

We do not have a political debate on this issue; it is a question of when and where Australia is going to make the very courageous decision that there are some industries which we think in the national interest ought to be established as key industries, such as we did in the case of the car industry. We say that the car industry has to be maintained in the national interest because tens of thousands of workers and their families are dependent on employment in that industry. No one has an answer as to where those people would work if we were to abolish the car industry.

Of course, people will argue that shipbuilding in Australia is far too expensive, that the Koreans or the Japanese can build ships cheaper because of their cheap labour. A lot of countries are maintaining their shipbuilding industries with subsidies because they consider it in the national interest to maintain the ability and skills to build ships. It is about time we have a debate in Australia as to whether we will maintain this industry. If we are to abolish the shipbuilding industry in Australia we ought to have some sort of adjustment scheme to find work for the people in the industry and we ought to be able to present an argument that we do not think it is important to have a shipbuilding industry and that we will import all our ships even though we are a great trading nation.

Other delegations of people are here today. There are 400 people from Martin Wells Pty Ltd who will lose their jobs if the Government accepts the recommendations of the IAC to lift the quotas on the imports of sunglasses, etc. These are some of the decisions. When these people come to Canberra they do so at a sacrifice to themselves. They are not paid to come here. They lose a day’s wages. They get up at 5 o ‘clock or 4 o’clock in the morning to travel to Canberra to talk to the Ministers, and they ought to be heard. Perhaps some of the honourable members who are not conversant with the problems of the industrial workers ought to listen to them also.

Mr Bourchier:

– I have just been out there.

Mr YOUNG:

– Of course the honourable member for Bendigo has been out to see them because he has a plant in his own electorate and the honourable member for Ballaarat (Mr Short’ and other honourable members who have plants in their electorates have been outside. But just consider the situation of the honourable member for Newcastle (Mr Charles Jones) or the honourable member for Gellibrand (Mr Willis) or other honourable members with similar positions in their electorates. They are not thinking in terms of an electorate; they are thinking in terms of what is best for Australia. One cannot say to the people in the Newcastle dockyard or the people at Martin Wells or the people in the aircraft industry: ‘It really does not matter. It is too expensive to keep your industry going. You will just have to be added to the 300 000 unemployed’. There is no adjustment scheme in Australia to deal with this. There is no Government agency to which one can go to say: ‘We have lost our jobs as a result of the Government decision. Now will you pay for our families to be shifted into an area where we can find like employment at like salary?’ There is no scheme in Australia to do this. We will have to establish in Australia a principle about what industries we want here. Obviously we would not establish some industries as key industries. Perhaps these industries would be concerned if we did not do that. But we ought to listen to people from some of the other industries who come to Canberra.

I understand that as a result of the canvassing of opinions this morning the Minister for Employment and Industrial Relations (Mr Street) has now agreed to meet some of the delegations that have come here and it is very good that he has. I hope that members of the Government parties ask for a full report from the Minister at ther next party meeting as to what can be done to reassure these people. It is not as though we do not need ships. Tenders have been called for something like 8 ships ranging from 13 000 tons to 70 000 tons. That would provide enough work for 5 000 shipbuilders for 6 years, if we can place the orders in Australia. If we are not going to do that the Government has to make a decision as to what will happen to these people. But let us have the debate first about whether we should have a shipbuilding industry because that is the important question. The White Paper on the Jackson Committee report is wanted urgently to indicate what this Government will do and what Australia will have.

Mr McVEIGH:
Darling Downs

– It has been said that nations and people may fight and war among themselves but nature will look after those who look after it. In this, what we might term the modern era, there has grown a movement which has dedicated itself to what we might generally term the preservation of the environment. Few will disagree with this as a philosophy. Many, I submit, will however disagree with the emphasis that has been given to various items which cover the whole concept of the environment. People, I submit, have some of their priorities wrong in the preservation of our resources. Soil and water are ultimate resources on which much of the nation’s economic activity and welfare depend. The conservation of these resources can best be obtained through the efforts of the community as a whole. This is a wide field and today I want to concentrate on soil and the methods and help I believe governments should contribute to overcome the irreparable damage soil erosion causes to soil resources.

The modern concept of soil conservation lays stress on the adoption of systems of land use to achieve soil conservation rather than merely on the treatment of the effects of soil erosion. The losses caused by soil erosion are: Firstly, to the land itself; secondly, to other lands; thirdly, to public utilities and public authorities; and fourthly, to the national economy and the welfare of the community as a whole. In the early days of the settlement of Australia exploitation and what we might term mining of the fertile soils of this country to take advantage of the markets of the old world characterised those farming practices. It can be truly stated too that in this modern day and age due to the various serious effects of cost inputs and declining prices on world markets farmers all over the continent have had, through the sheer necessity of survival, to adopt practices which were not good husbandry but which were very necessary for their survival.

Even today there is insufficient awareness of the vulnerability to erosion of most Australian soils. The economic climate leads both public and private landholders to follow systems of land use which cause the permanent impairment of soil resources so that they are able to obtain present benefits while ignoring costs which might have to be met in the future. This type of outlook and policies which cause this action must be changed. It is a major responsibility of Australia as a nation to ensure that both public and private landholders do not adopt systems of land use which secure benefits for themselves in the short term but at the same time transfer the costs to other users and to the community.

The problem is not only one of education but also one of fundamental attitude. Governments can and must play a part in the economic sense. Human nature being what it is, one can accept the reason for what has happened. But we cannot tolerate a continuation of what we might term the rape of our great resources. We cannot overcome this problem only by legislation. We have to instil in the hearts and minds of Australian people a natural love of and caring for the land. We must encourage them by positive government outlook to become stewards of their piece of Australia. The attitude should be that they have inherited the land as stewards. They must conserve its resources and productivity from generation to generation They must safeguard the fields from soil erosion, the flowing streams from drying up, the forests from desolation and protect the hills from over-grazing by herds so that those who follow us may have abundance during their lifetime.

If we as a nation fail in this stewardship of the land fruitful fields will become sterile stony ground or wasting gullies and our descendants shall decrease and shall live in poverty and ultimately perish. We must encourage the thought that the holding of land is in a sense a trust for posterity and that no individual or corporation, no matter what is his title or ownership, may or can be permitted either wilfully or through ignorance to use the land in such a way as to render it liable to erosion. Conservation means more than mere preservation- it means the rational utilisation of resources so that different land types are used for the purposes to which they are best adapted and most appropriately allocated- for example, to farming, to grazing, to irrigation, to urban and industrial and recreation lands and tourist reserves.

One does not have time to cover all these areas but today, in this pre- 1976 Budget era, I make a special plea to the Cabinet to make sure that in the Budget this year sufficient sums of money are allocated under the States Grants Soil Conservation Acts to make sure that the long term programs for soil conservation, which were indicated in the Conservation Act 1974, can be carried out. This long-term program for soil conservation must be an accelerated one, both by governments and individuals. Governments must aim to control soil erosion in one generation, say 30 years, otherwise the cost will be enormous and the land will be depleted further.

In Queensland one is heartened to notice the positive moves by the State Government to determine safe forms of land use by declaring certain areas soil erosion hazard areas and within these to develop sound soil conservation management practices and works to control soil erosion and improve land uses. The approach can be broadly defined as being an approach under four headings: Land management practice; land management works; erosion control works; and land use changes. From a recent study done it would appear that the total landholder cost for soil conservation measures still to be applied in Queensland has been estimated at 1 975 prices to be $ 1 18m whilst the value of work already done is in the order of only $12m to $13m. Quite obviously much remains to be done.

We are not dealing with shadows in this matter, we are dealing with substance, and whilst one can appreciate the great necessity to cut expenditure in the present economic environment it is to be hoped that funds will be made available in co-operation with the States on a long term continuing basis to overcome this serious problem which will engulf us unless controlled.

Farmers can be encouraged by a restoration of the old total tax deductions for soil erosion work on farms and one can question and one can readily subscribe to the point of view that it is better to encourage farmers to spend their surplus money on stubble mulching machinery and contour banks rather than clearing more virgin land to expose it to the ravages of soil erosion. Some of the banking institutions should, I submit, also re-think their approach in this vital matter. Too often financial houses are only too happy to provide cash to help farmers with what appears to be successful businesses but they do not take into account what the farmer is doing to protect his greatest asset, the soil. Too often they look at the short term rather than the long term and do not appear to take into account the fact that, notwithstanding the present credit rating, unless adequate finance is provided for soil control measures the valuable topsoil will not be there in 10 years time.

On the basis of a survey carried out in 1 970 it was estimated that $350m would be required to achieve control over the then existing erosion problem within 30 years. The survey showed that in the non-arid regions of Australia about 600 000 sq. km., or 30 per cent of the area, had been affected to some degree by soil erosion. On the rich black soils of the Darling Downs 300 000 hectares out of a total of 972 000 hectares in Queensland subject to severe erosion have to be controlled. Many people have contributed in a statesman-like manner to controlling the problems of soil erosion. Desirable activity in the next few years includes a continuation of the Soil Conservation Acts of 1974, the restoration of incentives regarding taxation concessions to farmers to engage in soil conservation practice, increasing research into all methods of achieving conservation systems of land use, a greater extension effort to encourage the adoption of soil conservation methods which are at present available and the co-ordination of soil conservation activity in group conservation and catchment areas.

It is only by using the land in accord with its capabilities and in balance with its environment that it can continue to produce the needs of man in perpetuity- be they for food, fibre, shelter, water supply or for recreation. Soil erosion is the manifestation of incorrect land use. There is a relationship between destruction of forests, water and soil. If one destroys any one of them -

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

Mr LIONEL BOWEN:
Smith · Kingsford

– I will be rather brief because I understand that another honourable member wishes to participate in this grievance debate. The matter I raise relates to legal aid in Australia, particularly in Victoria. As honourable members know, there has been a great need for more legal aid throughout Australia. There have been a number of reports, all suggesting ways and means by which better aid schemes could be provided. Nevertheless we must recognise the fact that this Parliament is one of the parliaments that passes laws and as part of that responsibility we ought to guarantee that people who have to comply with the laws or litigate pursuant to the laws that we pass do not suffer any delay or any injustice because of inability to obtain adequate representation pursuant to the very Acts of Parliament that we process here.

There is a great need for change in the legal profession. I think that very slowly its members are accepting the “concept that they have a real role to play in helping the citizens of Australia. The profession is very worth while but it perhaps has the disadvantage of being disorganised as a result of being distributed throughout the States and being more State-orientated rather than looking at the general needs of the community. Nevertheless let us praise the profession. After all it did instigate legal aid on the basis of need. It virtually did it alone. State governments also deserve praise because they started, admittedly some time back, to give some form of legal assistance, particularly in criminal matters.

However there is a great overriding gap where there is no legal aid for those in need. One of the problems we face in Australian government administration is the overriding position of the

Treasury which requires costs to be contained within an estimate. I am sympathetic to the present Attorney-General (Mr Ellicott) who has to keep answering questions and saying that the limitation applied to him was $lm a month. We will not deny that situation. Nevertheless, is this a valid approach to people in need? One cannot say to a person who has to appear in court next week: ‘Sorry, the funds that I have available are already allotted. You can come back in 6 weeks’ time.’ By then that case will have been dealt with. Honourable members should bear in mind that Australian governments and State governments have set up the courts. We have established those courts to process the claims of people or, in some cases, prosecute them. I have read reports that one million people appear in courts throughout Australia in a year, particularly in relation to summary matters, and in many cases they do not get legal aid.

Because of the shortage of time available I want to develop a specific issue. It is known that legal aid systems are financed by interest from the solicitors’ fidelity fund. There is a changing economic situation and I think it will accelerate. Solicitors’ funds might not continue to increase. They may well decrease. Accordingly, the interest raised from them will decrease. That means, in a nutshell, that many State legal aid schemes will not have sufficient funds to continue. I know also that the Family Law Bill has in it a provision saying that no costs are to be awarded against any participant. That is a welcome situation, but we have to look at the practicalities of it. Some people now find that under the means test they cannot undertake contested matters, particularly in the family law field, because they cannot afford the legal costs. This cuts right across the whole idea of the legislature providing an effective legal aid system. I have before me a letter from a friend who is at the Victorian bar. He asked could I please raise this matter because the legal profession in Victoria, like the profession elsewhere, has said that a crisis situation now exists in Victoria.

It arose in this way: In Victoria a legal aid scheme has been administered for many years. It has received funds from interest earned on money in solicitors’ trust accounts, some funds from the State Government and some funds from the Federal Government. The members of the legal profession have done their best to administer the Solicitors’ Guarantee Fund. In 1975 the Fund was faced with enormous claims. One default case alone involved $6m. This meant that the normal sources of revenue of the Victorian Legal Aid Committee dried up and it was forced to ask the State Government for assistance which was given subject to the condition that the Committee would not grant assistance to litigants in Federal courts. The result has been, of course, that the only people who are likely to get any aid in Victoria from a Federal point of view are pensioners. This is creating a crisis. To give an example, at present a working mother or father on a subsistence salary will be forced to undertake contested custody or matrimonial property proceedings which may conceivably extend for days with no aid from any source except from the private charity of individual practitioners.

Mr Ellicott:

– Is this under the State scheme?

Mr LIONEL BOWEN:

-This is a combined scheme, which we finance. This is the scheme which operates. Such charity is all the less likely to be extended having regard to the more limited opportunity to recover costs under the Family Law Act than was available under earlier legislation. What I am saying applies right throughout Australia. I urge the Attorney-General (Mr Ellicott) to go back to the Treasurer and say: ‘Look at the real gap that now has to be met but cannot be met throughout the States’. For example, I know that in one office in New South Wales people cannot really get any legal aid because there is a delay of some six or seven weeks due to the funds allocated being used in advance. This is not a satisfactory method of operation. The Victorian example is highlighted by the fact that the Committee members really feel they cannot provide any legal aid there because of the diminution in income in the particular fidelity fund. I would be grateful if the Attorney-General would examine these matters as a matter of urgency to ensure that legal aid is readily available to all in need instead of its being on the basis that there must be delay because of financial rationing. If finance is delayed, justice is denied.

Mr GOODLUCK:
Franklin

– Frankly, as a new member, the continuous character assassinations and the monotonous arguments on money Bills and so on leave me bitterly disillusioned. I now draw the attention of the House to a national problem which deserves to be discussed in a spirit of co-operation. I refer to road safety. The motor vehicle and the resultant problems that have occurred as a result of the massive number of cars on roads throughout Australia today, are of real concern and a vexing problem for governments now and in the future. Motor vehicles dictate our future city planning and dictate by statistics whether we will live to a ripe old age. There are approximately 516 million motor vehicles on the road today and new car registrations for the period 1972-73 numbered 534 139 and for 1974-75 they numbered 624 187. Those figures indicate the growing number of motor vehicles on our roads.

Mr Groom:

– Is that for Tasmania?

Mr GOODLUCK:

-That is for Australia. Whilst it is appreciated that the motor vehicle is a convenient mode of transport, it has become a monster, possessed sometimes to the extent of selfishness, an outlet for frustration and a large cost factor in the average family budget. It has been assessed that to own and maintain an average sized motor vehicle over a period of 5 years it could cost as much as $41.86 a week. Unfortunately motor vehicles can kill. Hospitals are full of tragic cases resulting from road accidents. Relatives and friends of victims have had happiness and future prosperity plucked from their reach by what we term the motor vehicle. For the year ended 30 June 1975 some 3656 persons were killed on the roads and 89 782 injured- - some reduced, regrettably and tragically, to vegetables for the rest of their lives. During the peak of 1970 some 3798 deaths were recorded. That was an alarming and tragic year and I think it drew attention to the real problem of road safety. From 1970 we have made great inroads into the problems that are associated with road safety. Despite an increase in population of one million and an increase in registrations of 1 800 000 the staggering death rate has been slowed by concerted efforts in road safety. Seat belts and campaigns stressing safety standards have assisted but more is needed to be done.

The motor industry is the second largest industry in Australia It employs approximately 254 000 workers in manufacturing, wholesaling and retailing. Consequently, and most importantly, it is a vital and economic growth factor for our future prosperity. We need it but we must be aware of the problems it creates. The motor vehicle is here to stay. The pride and independence of owning one’s car, the thrill of keeping up with the model, and possibly the Jones family, is accepted as part of modern living. Consumers buy to satisfy need and this basic human important psychological element in the continual purchase of motor vehicles is with us and will never change. How do we contain this man-made monster? The motor vehicle is a means of transport, of course, but it is also a lethal weapon. Much is said about the tragedy of war and the precious lives lost but we as the Government must make a concerted thrust in the area of road safety. Every State has a responsibility but they must have the support and the expertise of a sympathetic Federal Government prepared to back them and make road safety a national priority. Determined and courageous decisions must be made in car design, standards of safety, road design, compulsory inspection, decisions in behavioural patterns of drivers, alcohol, drugs and eyesight. I could name others.

The report of the Australian Automobile Association relating to new model defects is alarming, but rather than comment at this stage I would prefer to hear the defence of the industry. As parents, we shudder when our daughters or sons attain the age of sixteen because invariably their birthday request is for a learner-driver’s licence. The agonising period for parents until a learner-driver becomes competent is, nevertheless, the beginning of a never ending worry and concern for their safety on the road. We have accepted the ever growing carnage on the roads, the continuing sadness and ever growing frustration that is yours and mine because of the motor vehicle.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– That is certainly correct. I agree with you.

Mr GOODLUCK:

-Thank you. The honourable member for Robertson (Mr Cohen) chaired a very competent road safety committee which worked extremely hard to present in due course sound recommendations to this Parliament. The committee is now chaired by my colleague, the honourable member for Kennedy (Mr Katter), and the same spirit of active participation divorced from party politics but with an intense desire to contribute to road safety in Australia is evident and has revived my faith in the parliamentary system. Road safety should be the most important national priority. No expense should be spared in providing research, training and all the necessary aids to assist in reducing the sadness which is caused by the motor vehicle.

Mr INNES:
Melbourne

– I want to draw the attention of the House to a situation which is arising in the motor industry- a situation in which unemployment is looming at a time when the Minister for Business and Consumer Affairs (Mr Howard) should be taking active steps and while his colleague in another place is dithering, as usual. When the Whitlam Government was in power we brought into operation a plan for the motor industry. Like all the plans which preceded it- plans which go back to 1963 and which failed to prevent the severe reconstruction of the Leyland Motor Corporation and the Volkswagen motor company, with all the unemployment that those collapses involved- the Whitlam Government’s plan certainly had some defects. The plan provided for two areas. It provided for an area which was called complementation. Time does not permit me to deal with the details of that. I would prefer to deal with the other aspect of the scheme, which was referred to as the no reversion rule.

In relation to Japanese participation in the motor industry the theory is that while the Japanese are phasing in their activities in this country work will be available for employees in that industry. In the time available to me I would just like to say that the abolition of the no reversion rule is putting the component manufacturers of Australia in a vice. It is destroying thousands of jobs. When the independent component industry goes, as it surely will, 7500 skilled workers in that industry will be lost in the field of the repetition engineers and the small jobbing shops. There are involved another 5000 to 6000 workers, usually in the ratio of one toolmaker to 10 others, and half of their work is for the motor industry. There will be other results affecting the suppliers of raw materials. The Prime Minister (Mr Malcolm Fraser) said in relation to this matter that when the Japanese builders come into the scheme employment will improve. It may be that in the long run there will be demands for Australian components, but if the Japanese car makers could stand offshore in 1973 and import their complete cars at a barrier of 45 per cent customs duty, there is little likelihood of their sourcing components in Australia simply to gain the advantage of importing other components free of duty. It is a farcical situation. The Government must come to grips with this issue. The responsibility rests with the Minister for Business and Consumer Affairs, who is at the table, to do something about it quickly.

I asked a question of the Prime Minister this morning. It was answered by the Minister for Business and Consumer Affairs. He said that the Government is prepared to listen to representations. The people in the industry and the unions concerned have been doing that sort of thing ever since the new plan was implemented. They have been receiving representations and going through a process which has achieved little or nothing. The honourable member for Corio (Mr Scholes) has raised the issue in the House. The honourable member for Port Adelaide (Mr Young) has also raised the issue. So it goes on.

In spite of all the fine words of the Government about restoring confidence in industry, restoring consumer confidence and putting the economy back on its feet, it is difficult to find any material action in the direction to which I have made reference. The no reversion rule is not the end solution; I agree with that. I think there is need for discussion with the industry and the organisations which will be affected. Maybe the problems in the Australian motor industry will not be resolved simply by maintaining that rule. The solution depends on a very serious look at the plan as a whole. It is time for a clear announcement to be made here in the Parliament where such matters should be decided. To suggest that representations will be received, as the Minister did this morning, is merely putting the issue back in the hands of overworked and indecisive officials. We ought to be instituting a plan which will preserve the technological base of our country. A decision should be made that will save some 7500 jobs. A decision is needed that will prevent us from going back to the dark ages of being at the mercy of importers, a decision that will prevent this nation from becoming a technological desert, a decision that we will have an industrial base, a decision that we are prepared to go to lengths to preserve it. I do not want to be told that a committee will be established to look at the issues. If past performance is any guide, such a committee will be merely a sounding board and not a decision making body.

My time has been very limited. I have had discussions with the Minister at the table. It is a complex problem. The time for fine speeches and brave words is past. Let this Government take action today to solve this pressing and immediate problem and look at the potential of job availability in the industry and the maintenance of an industry which is very important in this country.

Mr DEPUTY SPEAKER (Mr Giles:
ANGAS, SOUTH AUSTRALIA

-It is now 15 minutes to 1 o’clock. In accordance with standing order 106, the debate is interrupted.

Question resolved in the affirmative.

page 2290

QUESTION

VISITING DEPUTATIONS

Ministerial Statement

Mr HOWARD:
Minister for Business and Consumer Affairs · Bennelong · LP

– by leave- I want to respond briefly to the very inflammatory attack made during the grievance debate by the honourable member for Chifley (Mr Armitage) on my colleague, the Minister for Industry and Commerce (Senator Cotton). Quite understandably the honourable member for Chifley is concerned about future job prospects of people employed by a particular company. So is the Government; so is my colleague, the Minister for Industry and Commerce. During the lunch break today he will be meeting a delegation. Suggestions that the reason that he could not see the delegation earlier today was his indifference to the view of the people employed by that company are quite incorrect, and I think the honourable member for Chifley knows that. The Government is concerned about their views. It will shortly make a decision on the Industries Assistance Commission report in question, and we will most certainly have in our minds the views put to us by the employees of Martin Wells Pty Ltd and also the views put to us by other sections of the industry regarding employment in that particular industry.

page 2290

PUBLIC ACCOUNTS COMMITTEE

Mr CONNOLLY:
Bradfield

-As Chairman, I present the 1 58th and 1 59th reports of the Joint Committee of Public Accounts.

Ordered that the reports be printed.

Mr CONNOLLY:

-I seek leave to make a statement.

Mr DEPUTY SPEAKER (Mr Giles:

-Is leave granted? There being no objection, leave is granted.

Mr CONNOLLY:

-The Committee has, for many years, conducted combined inquiries relating to expenditure from the Advance to the Treasurer and expenditure from the Consolidated Revenue Fund but has tabled separate reports on both aspects of these inquiries. The 158th report relates specifically to evidence taken by the previous Committee in connection with expenditure from the Advance to the Treasurer in 1974-75. As honourable members are aware, after the close of each financial year the Treasurer submits to the Parliament for its consideration and approval a statement of expenditure from the Advance to the Treasurer showing allocations to heads of expenditure made by him from the Advance under section 36A of the Audit Act. The Committee carries out the parliamentary scrutiny of this past expenditure by obtaining explanations from departments for each item of expenditure finally charged to the Advance and selecting the more notable of these for public inquiry. It is usual for the Committee’s report relating to expenditure from the Advance to the Treasurer to be presented during the Budget session but unfortunately this was not possible for expenditure in the 1974-75 financial year because of the double dissolution that occurred in November 1975.

In chapter 1 of the report the Committee has stated that, in examining expenditure from the Advance to the Treasurer, it has sought to ascertain whether or not expenditure from the Advance has been confined to urgent and unforeseeable requirements for which provision could not have been made in the original and additional Estimates. The Committee has also sought to ascertain whether or not the departments concerned in the inquiry have maintained efficient administration in the expenditure of funds under the items selected for public inquiry. As the report shows, there were cases where expenditure from the Advance to the Treasurer was confined to urgent and unforeseeable requirements for which provision could not have been made in the Appropriation Acts. In other cases, however, there was evidence of clerical errors, inefficient estimating procedures, and delays which caused expenditure to be charged to the Advance when provision should properly have been made in the additional Estimates. Attention has been drawn to these inadequacies where they have been discovered.

As in several previous inquiries relating to expenditure from the Advance to the Treasurer, the Committee discovered several cases where amounts were charged to the Advance without warrant authority, in contravention of Treasury Regulation 90 ( 1). Although the Committee was generally satisfied with the departmental explanations relating to these expenditures and did not examine any at public inquiry, the attention of all departments has been directed to the requirements of the Regulation.

The Committee had cause to comment adversely on the brevity of some departmental explanations and the fact that some witnesses appearing before the Committee were inadequately briefed. The Committee also commented on the fact that some departments were unduly slow in furnishing supplementary information requested during the course of the inquiry. As the Public Accounts Committee is a committee of the Parliament it is essential that all departments present evidence of a high quality and that they be represented by senior officers. In this context the Committee notes that the Treasury recently issued a circular directing the attention of all departments to the Committee’s requirements.

The 159th report comprises 2 Treasury minutes relating to previous reports of the Committee. These reports were the 144th report, which related to the then Department of Education and Science, and the 146th report, which dealt with items from the Auditor-General’s report for 1971-72. The Treasury minutes were considered by the previous Committee but the double dissolution of last November delayed their presentation. The practice of presenting Treasury minutes is the result of an arrangement made between the Committee and the Treasurer before the presentation of the Committee ‘s first report on 10 March 1953. The arrangement is that the Committee forwards a copy of each report to the Treasurer for consideration immediately that report is tabled. His reply, in the form of a Treasury minute, is then examined by the Committee and included in a later report to the Parliament. The 159th report is one of these later reports. Before preparing its minute, the Treasury consults the departments concerned and obtains their views on the recommendations and conclusions of the Committee. Essentially the Treasury minute system ensures that Committee recommendations are acted upon and informs members of the steps taken to meet their proposals. At present Treasury minutes on five of the Committee’s reports are outstanding.

In the 144th report the Committee recommended that a review then in progress to establish the training needs and organisation requirements of the Department of Education should be concluded and acted upon as a matter of urgency. The Committee noted from the Treasury minute that the review was completed and the Department had determined a broad training policy and training program, which is proceeding. The Committee also had cause to refer to the considerable delays then occurring in the preparation of subordinate legislation such as regulations. The Treasury minute informed the Committee of new measures designed to overcome past difficulties in the drafting of subordinate legislation. These included the drafting of subordinate legislation by a newly created Legislative Drafting Division in the AttorneyGeneral’s Department and the establishment of the Legislative Drafting Institute, which conducts courses and gives instructions in legislative drafting.

In the 146th report the Committee had’ commented adversely on the arrears that had accumulated in verifying accounts received from the United States Armed Services for equipment and stores purchased for the Australian armed forces. The Committee has been advised in the Treasury minute that the backlog of work has been overtaken and the position is now considered to be satisfactory. The Committee also expressed its concern that no general principles had been laid down for making provision for employee ‘s long service leave in business undertaking operating through departmental trust accounts. The Treasury minute informed the Committee that policy guidelines have been formulated on the general principles of accounting for furlough and that these guidelines have been circulated to departments. I commend the reports to honourable members.

page 2292

COMMONWEALTH GRANTS COMMISSION BILL 1976

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

Second Reading

Mr STREET:
Minister for Employment and Industrial Relations · Corangamite · LP

-I move:

This Bill is a step in the implementation of the Government’s federalism policy. Essentially, its purposes are threefold: Firstly, to remove from the Grants Commission Act 1973-1975 those references to assistance for local government which are no longer appropriate under the federalism policy; secondly, to make specific provision for the Commission to advise the Government on matters relating to assistance to local government under the new policy; and thirdly, to remove the obligation presently upon the Grants Commission to report on applications by local governing bodies referred to it in accordance with the provisions of the existing Act.

The Bill leaves unchanged the right, which the less populous States have enjoyed for 40 years, to apply for supplementary financial assistance. The Government’s federalism policy provides a framework for a co-operative partnership between all 3 levels of government- Federal, State and local- to ensure effective and responsible government with maximum community involvement. Local government will receive assistance under the new tax sharing arrangements as from the 1976-77 financial year. Under these arrangements a fixed percentage of personal income tax will be earmarked for distribution through the States to local government to provide per capita grants, possibly weighted, to all local government bodies and an equalisation or ‘topping-up’ grant to be distributed through State Grants Commissions. The proposed arrangements will be a major advance in Federal-State-local government financial relations. They ensure that local government will have a guaranteed and substantially predictable addition to its financial resources to meet its responsibilities. Local government will have access to these untied funds without the need to apply to Canberra for assistance or to form artificial regional groupings in order to qualify for assistance. The needs of less populated areas and of municipalities and shires with special disabilities will be protected. Assistance to all local government authorities will be provided. No longer will some councils be excluded from sharing in the monies provided for local government purposes; no longer will local government have to approach the Federal Government cap in hand.

Considerable progress has been made in reaching agreement with the States on the principles and details of the new arrangements. Some matters pertaining to the new arrangements have been referred to the Grants Commission for advice and it is expected that this advice together with the States’ views will be discussed at the next Premiers Conference in June. It is also expected that a statement outlining details of the new arrangements, and how local government is to participate in them, will be released following that Conference. The precise role that the Grants Commission will play in the implementation of the Government’s new federalism policy has yet to be finally determined. While the Commission will continue to exercise its traditional role in relation to the less populous States, its role in relation to local government finances will be considerably modified. The proposed amendments to the Bill reflect this modified role.

I turn now to the detail of the Bill. Clauses 3 and 6 relate to the change in the title of the Commission from Grants Commission to Commonwealth Grants Commission, to avoid confusion with State Grants Commissions. Clauses 4, 5, 8, 9, 10, 1 1, 12, 13 and 15 have the effect of deleting references which, under the new federalism policy, no longer have application. Clause 8 repeals sections 17 and 18 and substitutes a new section 17 which provides for the Minister to refer to the Commission matters relating to the provision of assistance to the States for local government purposes, as distinct from matters relating to the provision of other assistance to the States. It also defines ‘assistance to a State for local government purposes’ in such a way as to comprehend the unincorporated areas in some States where local government-type services are provided by the State government. Clause 16 revokes reverences made to the Commission between October 1975 and March 1976 but permits the Commission to have regard to information gathered in connection with these references. I commend the Bill to the House.

Debate (on motion by Mr Innes) adjourned.

Sitting suspended from 12.58 to 2.15 p.m.

page 2292

MARITIME COLLEGE BILL 1976

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

Second Reading

Mr NEWMAN:
Minister for Repatriation · Bass · LP

– I move:

A maritime College Bill had been introduced to both Houses before Parliament was dissolved in November last. When that Bill was debated in this House it was welcomed by both sides of the House. The Bill which I am now introducing is essentially the same as its predecessor. The Bill provides for the establishment of the College at Launceston and makes formal provision for the detailed planning of its functions, governance and powers. That there is a need for an updated form of maritime training cannot be doubted. Mr Summers, in his report on the training requirements for seagoing personnel, makes it quite clear that the training currently available is inadequate and that Australia is slipping behind countries with which we had previously maintained parity. As the Bill provides, the College will be concerned with the education and training of officers of merchant and fishing vessels and of people who are otherwise engaged in the shipping or fishing industry such as ratings and deckhands. Thus, while the College will offer courses at the advanced education level it will also be involved with training at the technical college level.

Honourable members will note that the Bill provides for the appointment of an interim council to make recommendations on the functions and powers of the College. The Minister for Education (Senator Carrick) will appoint the members of that council after due consultation with the Minister for Primary Industry (Mr Sinclair) and the Minister for Transport (Mr Nixon). When the interim council has made its recommendations, as set out in section 7 of the Bill, the Minister for Education will place these before the Government so that a further Bill may be introduced describing in detail the functions, governance and powers of the College. I should like the House to note that the Mayor of Launceston is in the chamber. I think it is a good thing that he should see this Bill introduced into this place. I also hope that the Bill will have a speedy passage through the Parliament.

Debate (on motion by Mr Scholes) adjourned.

page 2293

EXPORT FINANCE AND INSURANCE CORPORATION AMENDMENT BILL 1976

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

Second Reading

Mr ANTHONY:
Minister for National Resources and Minister for Overseas Trade · Richmond · NCP/NP

-I move:

The purpose of this Bill is to amend the overseas investment insurance provisions of the Export Finance and Insurance Corporation Act, 1974. The amendments proposed in the Bill do not involve any change in the Government’s policy concerning the overseas investment insurance scheme operated by the Export Finance and Insurance Corporation- EFIC. The amendments are essentially of an administrative character and are intended to streamline the administration of the scheme for the benefit of Australian investors in overseas countries.

This scheme was introducted in 1965 to assist Australian manufacturers to establish manufacturing facilities overseas as a means of preserving their export markets. At that time Australia was one of the pioneers in this field being only the fourth country to provide this facility for its overseas investors. There are about twenty such schemes operating around the world today. In 1974 the previous Government extended the scope of the scheme to encompass all new worthwhile direct investments which can assist in the social and economic development of an overseas country, and which are in Australia’s national interest to insure. The new legislation also provided that the Corporation could participate in overseas investment insurance on its own commercial account instead of the Government assuming all liability as was previously the case.

The overseas investment insurance scheme has been a useful means of implementing the policy of successive Australian Governments of encouraging direct Australian investment in developing countries, particularly those in our region. Insurance cover is offered against noncommercial risks such as expropriation, war damage and restrictions on the remittance of dividends and capital to Australia. At the present time 56 investments by Australian enterprises are insured under the scheme, involving a maximum contingent liability for the Government and the Corporation of $69m. The majority of investments insured under the scheme are in developing countries and in recent years the countries of the Association of South East Asian Nations group have been the most important locations for investments covered under the Scheme. Thirty-two applications for investment insurance cover have been submitted in the last 12 months and this increasing usage of the scheme has demonstrated a need to streamline procedures for processing applications.

The present legislation requires that all applications for investment insurance be submitted to the Minister for Overseas Trade for approval. The principal amendments proposed would empower the Corporation to transact the more routine business on its commercial account in accordance with a policy approved by the Minister, without the need to refer individual applications to the Minister for decision. The policy approved by me for the operation of this element of the scheme will establish guidelines to be observed by the Corporation on such aspects as the overseas countries which could be covered, the categories of investment eligible for insurance and the nature of the non-commercial risks against which investors overseas would be insured. Applications which fall outside the scope of the approved policy, or which the Corporation is unable to accommodate on its own commercial account, would continue to be referred to the Minister to consider whether the Government should accept the liability for insurance cover. These amendments would place the administration of the overseas investment insurance scheme on a similar basis to the administration of the other insurance facilities provided by EFIC, notably the export payments insurance and guarantees scheme.

The Bill proposes that the definition of an ‘overseas investment transaction’ which may be considered for insurance cover would be broadened the better to reflect current commercial practice. In particular, it is proposed to include 2 additional categories of investment, namely, guarantees of loans made to finance investment overseas and investment transactions made through overseas affiliates in which the Australian investor has a substantial shareholding. The Bill also proposes amendments to rectify an anomaly whereby the transitional provisions of the Export Finance and Insurance Corporation Act 1974 do not encompass applications which were received or approved under the repealed Export Payments Insurance Corporation Act 1956-1973 and which had not been finalised to the contract stage by the time the Export Finance and Insurance Corporation Act came into operation. The inadvertent effect of the transitional provisions of the Export Finance and Insurance Corporation Act has been to deny insurance to a number of transactions which would have been finalised if the Export Payments Insurance Corporation Act had continued in force. This amendment will enable these applications to be processed normally, as if they had been submitted under the existing legislation. The amendments proposed in this Bill are a step forward in the Government’s program to develop practical measures which will assist Australian industry both in Australia and overseas. The proposals will also facilitate our commercial relations with developing countries, particularly those in our own region. I commend the Bill to honourable members.

Debate (on motion by Mr Scholes) adjourned.

page 2294

WOOL TAX BILLS

Suspension of Standing Orders

Motion (by Mr Newman) agreed to:

That so much of the Standing Orders be suspended as would prevent 5 Wool Tax Amendment Bills-

being presented and read a first time together and one motion being moved without delay and one question being put in regard to, respectively, the second readings, the Committee’s report stage, and the third readings, of all the Bills together, and

the consideration of the Bills in one Committee of the Whole.

page 2294

WOOL TAX AMENDMENT BILLS

(Nos 1 to 5) 1976

Bills presented by Mr Eric Robinson, and together read a first time.

Second Readings

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

The object of these 5 Bills is to amend the Wool Tax Acts (Nos 1 to 5) 1964-1975 so as to continue in force for another year the special levy of 5 per cent on the sale value of shorn wool which is collected in connection with the minimum reserve price scheme for wool. The levy was introduced at the inception of the scheme on 2 September 1974 to provide a fund for meeting any losses that may arise from minimum reserve price operations.

Originally, both the scheme and the levy were to operate for one season only. Their operation was subsequently extended for another season and the present statutory provisions for the payment of the levy expire on 30 June 1976. In accordance with the Government’s declared policy, the minimum reserve price scheme for wool will be extended further to operate during the 1976-77 season. A Bill has already been introduced to extend the relevant accounting provisions in the Wool Industry Act for this purpose. It is now proposed that the special levy which has been collected in connection with the scheme be similarly continued. If there is to be no interruption in the collection of the levy, the statutory provisions under which the levy is imposed must be amended before 30 June.

As the Government is pledged to the continuation of reserve price support during 1976-77 at not less than the equivalent of 250c per kilogram clean for average-style 21 micron fleece wool, which is the basic of current support, continuation of the existing 5 per cent levy is seen as appropriate. Revenue from this levy is credited to the Market Support Fund established by the Australian Wool Corporation under amendments made to the Wool Industry Act in 1974. As already mentioned, the primary purpose of that Fund is to meet any losses arising from the minimum reserve price scheme.

In the meantime the money contributed by growers for the purpose of the Fund may be used by the Corporation for the purchasing of wool in its reserve price operations and for advances to growers in respect of wool that has been temporarily withheld from sale at the Corporation’s behest. Interest on such money used for those purposes is credited to the Fund by the Corporation. For administrative convenience the special levy of 5 per cent is collected in conjunction with the 3 per cent levy that represents wool grower contributions towards the financing of programs of wool research and promotion and the administration of the marketing functions of the Australian Wool Corporation. The present total levy of 8 per cent has been in force since August 1975.

All the 5 Wool Tax Bills are similar in their text, which simply extends the operation of the special 5 per cent levy until 30 June 1977. The Acts which they amend are also similar but each covers a different wool marketing channel. The need for 5 separate acts arises from a constitutional requirement that laws imposing taxes should deal with one subject of taxation only. I commend the Bills to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2295

PAPUA NEW GUINEA (STAFFING ASSISTANCE) TERMINATION BILL 1976

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

Second Reading

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

– I move:

The purpose of this Bill is to amend the Papua New Guinea (Stalling Assistance) Act 1 973- 1 975 to wind up the Australian Staffing Assistance Group arrangements in Papua New Guinea on 30 June 1976. The Australian Staffing Assistance Group was established under the Papua New Guinea (Staffing Assistance) Act 1973 and came into being on 1 December 1973, the date on which responsibility for the Papua New Guinea Public Service was transferred to the Papua New Guinea Government. At that time there were some 4500 overseas officers of the Papua New Guinea Public Service and the Papua New Guinea Police Force who had been appointed as permanent officers or engaged as contract officers by former Ministers for External Territories under the former Papua New Guinea Act.

Under the Papua New Guinea (Staffing Assistance) Act 1973 these officers, together with a small number of temporary employees of the Papua New Guinea Public Service and staff of the Electricity Commission who were contributors to the Papua New Guinea Superannuation Fund, were separated from their respective Papua New Guinea services and became the Australian Staffing Assistance Group, or ASAG, as it has become known. The purpose of the Group was to make personnel available to occupy and carry out the duties of established positions in the Papua New Guinea Public Service and other areas of public employment until Papua New Guineans became available to fill these positions, and the services of the ASAG personnel were no longer required. The salaries, conditions of employment, superannuation, and retirement and other termination benefits of the personnel employed in ASAG have been prescribed or determined under the Act, and the Australian Government has accepted full and direct responsibility for them. The only personnel who have been added to the Australian Staffing Assistance Group since its establishment in 1 973 have been those officers of the Australian and State governments who have been seconded to ASAG for service in Papua New Guinea.

In June last year the former Australian Prime Minister and the then Chief Minister- now Prime Minister-of Papua New Guinea announced jointly that, following a review of staffing assistance arrangements, it had been agreed between the 2 Governments that the direct employment by Australia of the 2900 or so personnel who were then in ASAG- many occupying senior and influential positions in the Papua New Guinea Public Service- was not in the immediate or long term interests of either

Government, and should be discontinued. Accordingly, it was decided that further recruitment to the Group would cease on 30 June 1975, and that the Australian Staffing Assistance Group arrangements themselves should be wound up on 30 June 1976. In the meantime, new arrangements would be introduced to encourage those personnel in the Group whose services were still required, to transfer to direct contract employment with the Papua New Guinea Government.

On Australia’s part, the arrangements took the form of special conditions under which personnel could voluntarily terminate their employment in the Australian Staffing Assistance Group in order to accept contract employment with the Papua New Guinea Government. These conditions were settled after full consultation with the staff association representing ASAG employees, and included leave pay concessions, deferment or preservation of certain existing entitlements, accelerated payment of compensation instalments according to the period of contract service with Papua New Guinea, and certain superannuation and retirement benefits concessions. The Papua New Guinea (Staffing Assistance) Act 1973 was amended in September 1975 to facilitate the introduction of these special conditions, the detailed provision of which will be made by regulations under the Act. On Papua New Guinea’s part, the new arrangements involved negotiation with the staff association of terms and conditions of contract employment broadly equivalent to those which applied to personnel of the Australian Staffing Assistance Group.

The Papua New Guinea (Staffing Assistance) Termination Bill 1976, which is now before the House, consists of 34 clauses, most of which are of a machinery or ‘savings’ nature to preserve the residual entitlements of personnel when the Australian Staffing Assistance Group is wound up on 30 June 1 976. To this end, the Bill provides that personnel of the Group who have not voluntarily terminated their employment by 30 June 1976, either to accept contract employment with the Papua New Guinea Government or to return to Australia, will have their employment terminated on that date. The Bill includes provision that the regulations and determinations made under the Act will continue in force after 30 June 1976, so that former personnel of the Australian Staffing Assistance Group will not be disadvantaged as a consequence of the wind up of the Group and will receive their full entitlements. ‘

The winding up of the Australian Staffing Assistance Group arrangements has also meant that personnel are becoming entitled to benefits from the superannuation schemes to which they have been contributing much earlier than anticipated by the Boards which were responsible for investing the two funds involved. In earlier years, the Boards could not have foreseen the need for substantial amounts of cash at this time and until recent years have invested the funds in medium and long term securities. This is resulting in serious liquidity problems for both the Papua New Guinea Superannuation Fund and the Contract Officers’ Benefits Fund. In the case of the Superannuation Fund, these problems have been overcome temporarily by loans under the present legislation, but a permanent solution is necessary.

The Bill therefore provides for the Commonwealth to take over the assets and liabilities of both funds and, thereafter, to be responsible for the payment of all benefits that become payable under the 2 schemes. This will avoid the funds having to sell securities at a loss in order to pay benefits becoming due over the next few months, and will ensure that the members of the 2 schemes will receive the full amount of the employee-financed share of benefits as they become payable. I should mention that, to avoid drafting complications and possible legal problems, the changeover will now take place on the date on which the Bill receives the royal assent, instead of 31 March 1976 as announced earlier by the Minister Assisting the Treasurer.

The Bill provides for the operation and administration of the Papua New Guinea schemes and two pre-war schemes- the Papua Superannuation Fund account and the New Guinea Superannuation Fund- to become, from 1 July 1976, the responsibility of the Commissioner for Superannuation, a position that will come into being under the Superannuation Act 1976 on that date. It also provides for applications to be made to the Administrative Appeals Tribunal for review of any decision confirmed or varied by the Commissioner. Regulations are being prepared to enable those contributors to the Papua New Guinea superannuation scheme, who so elect, to continue to contribute until the expiration of their first contract with the Papua New Guinea Government or until 30 June 1978, whichever occurs first. The regulations will also provide for variation of the method of updating pensions payable under that scheme and the two pre-war schemes, so as to place them on the same updating basis as will apply to pensions payable under the Superannuation Act 1922-1976, that is, the whole pension will be increased annually in accordance with the formula 1 times the percentage change in the consumer price index, March quarter to March quarter.

Mr Deputy Speaker, it may seem unusual that the Australian Staffing Assistance Group is to be terminated not many years after its inception. This, however, is a consequence of the speed with which events have moved in Papua New Guinea ‘s attainment of independence. The Australian Staffing Assistance Group was devised as a mechanism to provide the Papua New Guinea Government with the professional, technical and high level administrative expertise which it needed, particularly in the period between selfgovernment and independence. I believe that it has been an effective arrangement for that purpose. The new arrangements under which personnel of the Australian Staffing Assistance Group are encouraged to transfer to direct contract employment with the Papua New Guinea Government will, however, enable Papua New Guinea to retain most of that expertise. Already over 1200 personnel have taken up contracts and at least a further 300 are expected to do so before 30 June 1976. 1 commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2297

HOMES SAVINGS GRANT AMENDMENT BILL 1976

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

Second Reading

Mr MacKELLAR:
Acting Minister for Environment, Housing and Community Development · Warringah · LP

– I move:

The purpose of this Bill is to amend the Homes Savings Grant Act 1964-1975, to give effect to the proposals for changes in the existing home savings grant scheme which Senator Greenwood announced to the Senate on 31. March 1976. I intend, as soon as possible, to introduce legislation to establish the new home savings grant scheme, the details of which were also announced to the Senate on 3 1 March. The new scheme will apply to persons contracting to acquire their first home on or after 1 January 1 977. In passing, might I again draw attention to a special provision of the new scheme whereby savings held in the approved forms as at 3 1 May 1 976 will be deemed to have been held since 1 January 1976. I should like to advise everyone saving for their first home to ensure that their home savings are held in an acceptable form by 3 1 May 1 976. The acceptable forms for the new scheme will be the same as for the present scheme- savings bank accounts; fixed deposits with banks; shares or deposits in registered building societies or credit unions; and payments on land on which the home is to be built, deposits paid for the acquisition of the home, and payments for the construction of the home.

The amendments which I now introduce will apply to people who are otherwise eligible to receive a grant under the present scheme and who contract to buy or build their first home on or after 1 April 1976. Under the present scheme a person who builds a home on his parents rural property is ineligible for a home savings grant unless he has title to the land. To become eligible for a grant, he has to acquire separate title, which can be an expensive undertaking, or to become a joint owner, which is not always practicable. The amendments now proposed do away with this requirement. They provide that a person has an approved interest in land for the purposes of the Act if he has contracted to build a dwellinghouse on a rural property, provided that he has the permission of the owner of that property to occupy the dwelling-house on completion. Increasingly, people are buying factory-built houses which are transported to the site and placed on prepared foundations. This applies particularly to rural properties. The Bill provides that, for the purposes of the Act, this shall be regarded as the construction of the dwellinghouse on the land, as shall be the purchase of a house built on land elsewhere and transported to the site.

In addition, the amendments will assist young married couples who are buying their’ first home from a State or Commonwealth housing authority. Previously, such couples have not been eligible for a grant because of the financial assistance ‘provided by the Commonwealth in the construction and purchase of their home. This was an anomalous situation, because people acquiring privately-built homes with Commonwealth finance were not disqualified. The restriction will be removed in relation to people contracting to acquire homes from Commonwealth or State housing authorities on or after 1 April 1976. Under the conditions of the present legislation, savings with a credit union are acceptable only if the credit union has been approved for the purposes of the Act. People contracting to buy or build their first home on or after 1 April 1976 will be able to claim savings held with any credit union within their 3 years savings period.

The Bill also provides that people who contract to buy or build their first home on or after 1

April 1976 may apply for a grant at any time. However, people who contracted to buy or build their home before 1 April 1976 must still apply for their grant within twelve months, unless an extension of time is granted. This Bill should be seen as the first step towards implementing our housing policy undertaking, to make it a major national objective to encourage all people who wish to do so to own their own home. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2298

STATES GRANTS (AIR QUALITY MONITORING) BILL 1976

Bill presented by Mr MacKellar, and read a first time-

Second Reading

Mr MacKELLAR:
Minister for Immigration and Ethnic Affairs · Warringah · LP

– I move:

This Bill seeks to allocate grants to the States in 1975-76 to facilitate the monitoring of air quality. I am sure that all honourable members would be aware that air pollution in our major cities is causing concern. Air pollution levels in some of our cities are approaching, and on some occasions have already exceeded, safe community health levels set by the World Health Organisation. The need for monitoring of air pollution as a precursor to stricter controls in some locations is therefore urgent.

Where high levels of pollution occur, the cost Of such pollution is met by the community in the form of higher health bills and work absenteeism, lowered property values, and general loss of amenity. In order to alleviate these problems and to develop appropriate control measures, it is necessary that the levels and sources of pollution be clearly identified. This requires the establishment of adequate monitoring facilities. Current metropolitan air monitoring programs in each State differ in instrumentation and procedure. Under the aegis of the Australian Environment Council, agreement has been reached between the States and the Federal Government on the measures needed to achieve standardisation of methods, of measurements, types of pollutants to be measured and formats for recording data. Funds provided under this Bill will help to implement this nation-wide approach to air monitoring.

Apart from air pollution control, data from the national monitoring system will be used for the planning of future urban or regional developments. Assessment of air pollution potential is now one of the prime considerations in planning for any venture involving the location of new centres, industry and transport networks. The data collected under the program will enable more accurate assessments to be made in relation to locational decisions. The information will be collected centrally and made available to appropriate authorities for their use.

This Bill proposes a Commonwealth appropriation of $200,000 for the year 1975-76. Appropriations for each subsequent year will be considered according to future needs and within budget context. This program is necessarily an activity aimed at continued vigilance on air quality and at checking that any control strategy undertaken has been effective and efficient. Funds were appropriated under the 1974-75 Budget for the purchase of 3 mobile air monitoring vans. These vans will be loaned to the various States for the inter-comparison of instruments, determination of sites for permanent monitoring stations and other special projects. The mobile monitors are equipped with modern automatic instrumentation and are capable of taking continuous recordings of pollutants and meteorological conditions. This Bill will implement the second stage of the national monitoring program.

The need for a national approach to air quality was first expressed in the Senate Select Committee Report on Air Pollution in 1969. The National Health and Medical Research Council and the Australian Transport Advisory Council have also emphasised the urgency for improved air quality monitoring. The Government has accepted a responsibility to foster a uniform, nation-wide approach to air monitoring. In our election platform on Environment and Conservation Policy we stated ‘we will examine with each State Government the need for and cost of monitoring air, water and noise pollution standards and where necessary criteria for measurement of standards . . . Honourable members will recall that the States Grants (Water Resources Assessment) Act was enacted in December 1 974 to amend the 1 973 Act for the provision of grants to all the States for the monitoring of water quality. The present Bill complements the Water Resources Assessment Act by extending monitoring to cover both media- water and air- which are vital to human life and well being. There will be very few in Australia who will not be able to share in the benefits derived from this Bill and I am sure it will receive the support it is due. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2299

BROADCASTING AND TELEVISION AMENDMENT BILL 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

The Broadcasting and Television Amendment Bill 1 976 is designed to give effect to the Government’s decision to ban the advertising of cigarettes and cigarette tobacco on broadcasting and television stations as from 1 September 1976 and to amend the existing provisions of the Act in relation to the licensing of television translator stations, community television aerial systems and to extend the provisions of the Act relating to television translator stations to permit the licensing of broadcasting translator stations. On 27 February I announced that the Government had decided to completely ban the advertising of cigarettes and cigarette tobacco on broadcasting and television in line with the phase-out program which commenced on 1 September 1973. The phase-out program was developed at the request of the then Government by the Australian Broadcasting Control Board, on the understanding that it would provide a breathing space to enable stations to develop alternative souces of revenue. The phasing-out plan developed by the Board expires on 31 August next, and the Bill provides for the banning of cigarette and cigarette tobacco advertising from 1st September.

Reputable medical evidence indicates that cigarette smoking is causing a growing pernicious death toll including facts that approximately 90 per cent of lung cancer cases which now cause some 4000 deaths annually in Australia are related to cigarette smoking, as are 25 per cent of deaths from coronary heart disease. I am sure honourable members will agree the Government would be negligent in its duty if it did not take action to ban the advertising of such products in areas where it has constitutional power. In this connection the Government has agreed that the Minister for Health should pursue with State Health Ministers their proposals to work towards uniform legislation to control cigarette advertising in areas where the Commonwealth has no constitutional power.

The other proposals in the Bill amend the existing provisions relating to the licensing of television translator stations and community television aerial systems and extend the provisions relating to television translator stations to permit the licensing of broadcasting translator stations. The existing provisions of the Act relating to translator stations restrict the Australian Broadcasting Control Board to making a recommendation that licences be granted in these areas on a criterion based on technical considerations. It is proposed that the provisions be extended to permit the Board to recommend the grant of a licence based on ‘community of interest’. The proposals will enable the Board to recommend the grant of a licence where the television service already available does not emanate from a station which is identified with the local community- for example, in the case of a station close to a State border which may provide an adequate signal from a technical point of view to residents of the adjacent State but which does not provide appropriate programs. The amended provisions relating to Community Television Aerial Systems will similarly permit the Board to take into account ‘community of interest’ considerations when recommending the grant of licences, and provide for such systems to be developed where, for aesthetic reasons, housing estates could be planned without the necessity for houses to have individual external aerials.

There is no provision in the existing Act to permit the licensing of broadcasting translator stations. There are many areas, mainly in the outback, where broadcasting services suffer some deficiencies and where the populations are insufficient to support the viable operation of a separate station. The proposed provisions will permit the extension of existing services to such fringe or nearby areas. The widespread use of broadcasting translator stations will also be necessary in respect of frequency modulation services as they are developed in order to fill in gaps in coverage caused by natural and manmade obstructions- for example hills, tall buildings, etc. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2299

INCOME TAX ASSESSMENT AMENDMENT BILL 1976

Second Reading

Debate resumed from 19 May, on motion by Mr Lynch:

That the Bill be now read a second time.

Upon which Mr Hurford had moved by way of amendment:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not declining to give the Bill a second reading, the House notes that:

the legislation involves the breaking of election promises with the removal for many of home mortgage interest deductions and the inadequate alterations to winemakers’ tax liability, and

the provisions for the introduction of the investment allowance have created a chaotic situation in the economy’.

Mr FISHER:
Mallee

– I rise to support the Income Tax Assessment Amendment Bill, the Superannuation Amendment Bill (No. 2) and the Income Tax (International Agreements) Amendment Bill which are being debated together. I wish specifically to refer to the Income Tax Assessment Amendment Bill 1976. This Bill contains several major proposals. Some are new initiatives by the Government to confirm in legislation promises made by the Liberal and National Country Parties during the election campaign. Other measures are to correct serious inequalities forced upon private business by the previous Labor Government. These measures are part of the Government’s program to give incentives to industry to enable it to invest and to modernise its productive capacity, which will have the effect of developing job opportunities.

It should be remembered that during the previous 3 years of Labor Administration the destructive attack upon small business, private and public companies and primary producers had destroyed confidence in the productive sector which can be emphasised by the following figures. In the years 1972-73 to 1974-75 the share of private investment, excluding dwellings, as part of our gross domestic product, was only 10.7 per cent. These figures are the lowest we have had in Australia for the past 20 years. The disastrously high unemployment statistics, particularly the figures relating to young school leavers and people wishing to enter the work force for the first time can be directly attributed to the Labor Government’s attack upon business. High inflation and totally unsympathetic Labor policies removed the incentive and the ability to employ or to expand. If a growing economy is to be achieved inflation must be controlled to lift business and consumer confidence and the high level of savings that has built up must be spent. Opposition members have spent many hours in this new Parliament condemning new initiatives undertaken by the coalition Government to boost the private sector. It must be remembered that this is the sector that provides employment for almost 75 per cent of the work force, and particularly in rural areas, and is responsible for the productive base on which real wealth can be achieved. I make no apologies for our efforts in this area.

Clause 10 of the Income Tax Assessment Amendment Bill is to provide through the income tax system for an investment allowance for capital expenditure made by a taxpayer on or after 1 January 1976. Initially, a rate of 40 per cent from 1 January 1976 to 30 June 1978 will apply in calculating this deduction. In the second phase of the scheme the deduction will be at a 20 per cent rate, running until 30 June 1983. The legislation making this allowance available up to 1983 is by intention a positive Government commitment over several years in order to provide security of planning and development. It will apply over a wide range of industry- manufacturing and primary- and includes the tourist industry. It will be available for plant acquired under leasing arrangements as well as for plant that is bought outright or under hire purchase agreement.

The investment allowance is to be a special income tax. deduction representing the prescribed percentage of capital expenditure, including installation expenses, of acquiring or constructing eligible property. Generally speaking, the investment allowance will apply only to new property that is depreciable for income tax purposes. The allowance will be deductible in addition to the deductions that, under the depreciation provisions, are allowable for the full cost of the property. The allowance will be available for capital expenditure. The special deduction will be allowable in calculating the assessable income of the taxpayer for the year of income in which the eligible property is first used or installed ready for use. It is a condition of the eligibility for deduction that the property be used solely in Australia and only for the production of assessable income by the taxpayer concerned.

Individual items of property costing $500 or less will not qualify for the allowance. A full investment allowance will, however, be available for an item of eligible plant costing $976 or more. For an item of eligible plant costing between $500 and $976, the allowance will, in its first 40 per cent phase, be shaded in at the rate of 2 per cent of the cost price for each $25 or part thereof of the excess of cost over $500. During the second 20 per cent phase the corresponding shading in rate will be one per cent of the cost price for each $25 or part thereof by which the cost exceeds $500. The Government offers this new allowance as a taxation concession to promote and to encourage investment and production. Already signs are evident of its effect upon the economy, with a significant rise in both business and consumer confidence.

Another important clause in the Bill relates to our decision not to proceed with the collection of the third instalment of company tax in respect of 1974- 75 income that would otherwise have been due for payment in February 1976 or the collection of the 3 instalments of company tax that would otherwise have been payable in respect of 1975- 76 income during the 1976-77 financial year. This change will remove the additional cost placed upon companies by the former Government when it introduced quarterly tax instalments. This measure was unnecessary and was introduced only to meet the excessive and inefficient spending of a government unable to manage the economy.

I return now to the provisions in the Bill that relate to the valuation of trading stocks of wine makers. Commencing with the 1973-74 season, manufacturers of wine and brandy have been required to bring into account for income tax purposes the closing values of trading stocks according to one of the 3 bases available to taxpayers generally. This was the result of a measure introduced by the Labor Government with no understanding of this valuable Australian industry. The Labor Party did not, and still does not, understand the uniqueness of the wine industry and the special problems and stages that exist in wine production. This action did malicious damage to the wine industry and has placed the future viability of wine makers and the welfare of many producers at risk.

The Labor Government did, however, after intense pressure from the industry and many members on both sides of the House from rural areas and members from wine making electorates, agree to a period of 5 years for paying of deferred tax. This has proved however to be insufficient time. Since our election in December there has been close consultation with industry representatives. As a result this Bill proposes to give producers a more extended period- up to 8 years- in which to pay deferred tax. There is no doubt that this decision will ease liquidity problems. However, following these changes to the Income Tax Assessment Act it became obvious to many of us that even with this major advance many family owned wine making companies and some private and public wine making companies would still be in an extremely tight liquidity situation. The effects in the coming seasons upon grape producers as a result of grape intake restrictions cannot be overlooked.

I give credit to the Minister for Primary Industry (Mr Sinclair) and the Treasurer (Mr Lynch) for heeding the further representations from honourable members and the industry and for agreeing to the further specific changes to be made to the income tax law to ease the transitional arrangements for the wine industry. I think it should be mentioned that when the honourable member for Adelaide (Mr Hurford) spoke first in this debate yesterday evening he forgot to mention these important new initiatives that have been undertaken by our Government to assist the wine industry. They refer to deferred tax payable in any transitional year under the proposed extension. If it still exceeds 10 per cent of the true taxable income of that year, the excess above 10 per cent will be deferred further and the taxpayer will be allowed a further extension of time beyond 8 years, if necessary to stay below the 10 per cent ceiling in later years, to pay off the deferred tax.

The Division 7 tax arrangements for private companies will be altered as follows in respect of income from the production of wine and brandy. Firstly, the distribution requirements under Division 7 will be altered to remove any effect which would otherwise result from bringing to account income on which tax was deferred in the past. ‘Sufficient distributions’ then will not be increased above the level that would be required if there were no adjustment to income in respect of previous years’ deferred taxes. Secondly, distributable income for Division 7 purposes will be reckoned after deducting both the tax on the current year’s income and the instalment of deferred tax actually payable. These changes clearly indicate our Government’s desire to assist our productive industries and, importantly, that it is prepared to meet differing requirements of industries with specific and unique needs.

As the member for. the Mallee electorate in north-western Victoria and representing a large number of wine grape growers, several wine manufacturers and almost 90 per cent of the dried fruit industry which depends on brandy manufacture, I must point out the difficulties still confronting these industries. It should be mentioned that even with these further concessions, and despite their invaluable merit, the wine industry will now be taxed at a rate higher than that for other companies. For many wine manufacturers this could well be as high as 52lA per cent compared with the company rate of 42 Vi per cent. I give as an example an individual company that is being required to pay some $750,000 in deferred taxation over the next 7 years. This amounts to $103,000 each year. That company will require $7m in taxable income over this period to meet its commitment. The taxable income last year of this company was only $300,000. This indicates the intolerable burden and the impossible liquidity situation which will be created. This situation leads many of our companies, Australian owned and family owned companies, into a position where they will be ideally exposed to take-overs from multinational companies and overseas companies. There is also a vital philosophical argument as to whether the wine makers should even be obliged to repay a past commitment on which their future expectations and forward planning have been based. They were based on an expectation that the special stock valuation provision in section 31A would have been continued into the future.

I refer to the unique problems being experienced by partnerships and individual taxpayers involved in wine production. These people represent only 2 per cent of the wine industry on a tonnage basis but their contribution in terms of innovation, diversity and quality production is invaluable. The Minister Assisting the Treasurer (Mr Eric Robinson) will be aware of personal representations to him by my colleague the honourable member for Murray (Mr Lloyd) on this specific issue and he has been asked to consider these factors as they relate to partnerships and individual taxpayers. Their liquidity position does not seem to have been fully appreciated by either the Government or those responsible for placing the industry’s position before the Government. They appear to have been placed at an additional disadvantage in comparison with proprietary companies in relation to the tax payable upon income which arose in the past and upon which tax was deferred because of the operation of section 3 1 A. The effect of the proposed new arrangements announced by the Treasurer on 14 April are, firstly, that Division 7 arrangements now state that income arising from the past does not have to be distributed. This effectively puts a ceiling of company tax rates upon the deferred income. Secondly, the normal Division 7 distribution required is reduced by the company tax on the deferred income. This will greatly reduce the consequent personal tax payable on normal income. However, for an individual wine maker the rate of tax on deferred income in a number of cases will vary between 60 per cent and 65 per cent because tax rates are increasing as total income increases. Thus the tax rates on deferred income on top of normal income are at the upper end of the scale. Marginal tax rates exceed company tax rates at incomes of $1 1,000 approximately, with normal personal deductions. I submit, therefore, that for equity with proprietary wine makers to be reached a ceiling of the marginal tax rate payable upon deferred income should be determined. I suggest that this should be no higher than normal company tax rates.

The disposal of grape production in the future could well become a problem. If encouragement is not given to wine makers their ability to crush and store anticipated crops will be affected. Last season an estimated crop of 470 000 tonnes would have created a crisis but for several factors, particularly the high incidence of downy mildew, which resulted in a crushing of 412 000 tonnes. The Bureau of Agricultural Economics has foreshadowed a surplus and wineries will have to look at their intakes and their liquidity problems. I think that this could well be to the detriment and uncertainty of growers.

Over recent months there has been considerable discussion about the profitability of some companies involved in wine making. It should be remembered that many of our locally owned makers do not have any capacity for diversity and therefore are tied completely to wine making. The brandy excise also has created additional problems. Lower sales have resulted in increased stocks and many wine makers simply have not been able to continue the same level of brandy production. The cumulative effect is that wine income is being used to pay brandy taxes.

I ask the Minister Assisting the Treasurer to consider these specific factors for future action. Firstly, the wine industry is still in a developing stage. Any curbs will mean an erosion of years of work and enterprise that has turned a cottage industry into one of the nation’s and the world’s important industries. At 30 June 1975 the industry was carrying 4 years stocks of dry red wine, or 145 million litres. I would be surprised if any other enterprise could carry such stocks and stay in business. We all know that the life of a vine ceases only when it fails to produce an economic yield. This may take up to 30 years or longer. A vineyard cannot readily be switched from one form of activity to another. As I said earlier, much has been said about the profits of large companies but there has been no mention of the poor return on funds invested and the heavy borrowings needed to sustain progress. No doubt the implementation of recommendations of the Mathews Committee and their application to stock adjustments will assist the industry but I would appreciate from the Minister further clarification of how their application to the wine industry in particular is anticipated.

Many of the tax incentives contained in this Bill are unprecedented in their coverage and extent and will assist our objective of bringing forward a recovery in investment. There is no doubt that the long term prosperity of all our people will depend upon the reining in of inflation and the productive sector being given the incentive to expand and create employment opportunities. I support these Bills but ask the Government to consider the continuing problems that I believe some areas and some sections of the wine industry will have in the future. I oppose the amendment moved by the Opposition and believe that it shows the hypocrisy and double standards of the Opposition. While in Government the Opposition removed all the incentives to our wine industry. It drove many producers into liquidity problems. Private enterprise suffered the same fate. Now Opposition members, particularly the honourable member for Adelaide, have had the gall to criticise this Government for expanding and continuing improvements and concessions to this vital industry.

Mr HAYDEN:
Oxley

-The proposal on the investment allowance in the Bills before the House is aimed at fulfilling a quite illconceived election promise made by the Government which was based on an equally faulty diagnosis of the economic problems at that time- problems which persist today. The Government’s error in diagnosis is going to be extremely expensive. I understand that in the first full year the cost of the proposal will be of the order of $470m. A little simple arithmetic suggests that the total cost of the proposal in current cost terms will exceed $2,500m over the period of the program. I say that the concept upon which this decision was made is in error because the Government has not understood what has gone wrong with the economy. There is no shortage of capital equipment in the economy; no shortage of productive capacity. On the contrary, that is one of our problems. Where the shortage does occur is in consumer demand. The contraction in consumer activity has been the major reason the economy remains in a slack condition. Accordingly, this proposal represents not only a faulty diagnosis; in its effect it will bring about serious misallocation of economic resources within the economy. I fear that towards the end of the fairly lengthy period covered by this program- 7 Vi years- there could be serious distortions in the investment pattern as a result of these incentives which will not be in the best interests of the long term economic development of the nation, and certainly would be counterproductive to the sort of structural adjustment which is quite demandingly needed in the Australian economy.

Let me deal with one of the fallacies which is put about among Government supporters with some gusto and sense of self-satisfaction, namely, that the collapse in investment took place under the Labor Government and because of the Labor Government. All of the statistical information I can put my hands on suggests that the collapse commenced much earlier than the advent of the Labor Government. The collapse certainly accentuated in the period the Labor Government was in office. However, there is a range of reasons why that occurred, and that problem was not unique to this country. Many countries suffered similarly to varying degrees, many worse than we in this country suffered. Before I quote one source I would like to remind honourable members -

Motion (by Mr Bourchier) put:

That the question be now put. The House divided. (Mr Deputy Speaker-Mr G. O’H. Giles)

AYES: 74

NOES: 28

Majority……. 46

AYES

NOES

Question so resolved in the affirmative.

Mr DEPUTY SPEAKER (Mr Giles:

-Order! The original question was: ‘That the Bill be now read a second time’. To that motion the honourable member for Adelaide has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is: ‘That the words proposed to be omitted stand part of the question’.

Question resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time.

In Committee

Clauses 1 to 9-by leave-taken together.

Mr HURFORD:
Adelaide

-I want to address myself to clause 5 of the Bill which deals with the tax borne by.winemakers. Before doing so I know I will have your indulgence, Mr Deputy Speaker, to say that although the Opposition moved an amendment to the motion for the second reading of the Bill and because we have now come to some arrangement with the Leader of the House (Mr Sinclair) as to the timing for discussion of this Bill we did not divide the House on that amendment and take the time of the House in sitting in division-time which could be used by honourable members on both sides of the House in devoting themselves to the provisions of the Bill. We are disappointed that one or two speakers from both sides of the House who wanted to speak in the second reading debate were not able to do so, due, I believe, to a misunderstanding.

I want to draw the attention of the Committee in particular to the broken promise which is given expression in clause 5 of the Bill. During the second reading debate we heard the suggestion from one honourable member on the Government side- I believe it was the honourable member for Mallee (Mr Fisher)- that indeed some greater benefit than was promised by the previous Labor Government has been given to winemakers by this Liberal-National Country Party Government. As I said earlier in the debate, that is hardly so. The statement made by Premier Dunstan on 7 July last year in which he indicated what changes would be made by the Australian Labor Government in relation to section 31a of the principal Act and in relation to the valuation of the stocks of winemakers has, as we see it, been taken up almost all the way in the measure which is currently before the Committee. The only difference is that the deferred taxes can now be paid in 8 years instead of the 7 years which was announced by Premier Dunstan, after consultation with the then Prime Minister Whitlam. I believe that the winemakers of Australia were misled during the last Federal election into believing that section 31a of the Principal Act would be reintroduced by way of amendment to the taxation legislation before the House. They were misled by a speech made by the present Treasurer (Mr Lynch) on 19 June 1975 when he indicated to Australia that indeed that section would be reintroduced- that the special benefit given to winemakers by section 3 1a in the valuation of their stock would be reintroduced and that they would again be allowed this special benefit. As it turned out, this was quite misleading. I believe that winemakers deserve an apology from the Government for misleading them at that stage.

I have been advised that one of the large private winemakers in Australia went so far as to suggest to its workers during the last Federal election campaign-I am referring to McWilliam ‘s Wines Pry Ltd and I believe it is in its interest that I bring this matter into the openthat they would be sacked if a Liberal and National Country Party Government was not returned to office because the coalition parties were making promises relating to section 31a. This belief is now so widespread in the community that many people of Labor persuasion are not buying McWilliam ‘s wines. If that is not so and if

McWilliam ‘s was not making those threats during the election campaign then I believe it is in McWilliam ‘s interest to make a statement to that effect so that their sales of wine are not affected.

The point is that the country was misled and the winemakers were misled. Section 31a provided this special benefit. There were some reasons for that special benefit, because small winemakers- of red wines in particular- have to hold stock on low working capital. But it is not a situation that is not shared by other industries. Earlier in the debate I suggested that the timber industry is another industry where certain timbers have to be held, for maturity reasons, for quite some time and a lot of working capital is locked up in the holding of that stock. Therefore, it was discrimination in favour of winemakers. I have gone on public record as saying that if the decision making had been in my hands at the time the alteration was made, I would have gone ahead with this alteration because it was, I believed, a discrimination which should not continue. But I had hoped that I would have been able to arrange for the forgiving of all of the deferred taxes that were related to this change. That did not happen. Both the present Government and the previous Government decided that it should not happen so we now have these provisions in which the winemakers are given 8 years in which to pay their deferred taxes.

The honourable member for Mallee (Mr Fisher) gave the impression that some other benefits were given during this transitional period which were not promised by the Labor Government. That is not so. All the other benefits- one relates to the fact that the deferred tax element should not be more than 10 per cent of total tax payable in one year- had been promised before and had been announced. I repeat: The only improvement given by these coalition parties is that winemakers have 8 years rather than 7 years in which to pay deferred taxes.

I deplore the deception. I deplore the fact that winemakers allegedly told their staff that the Liberal and National Country Parties would be of great benefit to them if returned to government. That has not happened. I deplore that this is another area in which people have been misled into voting for these parties which are now in government.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I thank the shadow Treasurer, the honourable member for Adelaide (Mr Hurford), for his co-operation. It is much better that we reach agreement so that honourable members can have the longest possible time to debate this very significant legislation. I take this opportunity to speak for- a minute or two. I will not repeat the great virtues of the legislation. They have been spoken about many times over and are self-evident. Suffice it to say that many of the provisions are an integral part of the Government’s strategy to restore full employment and economic growth. A number of honourable members, particularly those on the Government Treasury Committee which is chaired by the honourable member for Berowra (Dr Edwards)- the Vice Chairman is the honourable member for Balaclava (Mr Macphee)- have spoken to me about problems in a number of industries that concern them.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– So have I.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– There is also a matter of concern to the honourable member for Lilley, and he will no doubt speak about that a little later on. I have been spoken to about the wine industry and the insurance industry. I am aware of the submissions that the hire industry has made. I have had some valuable discussions with representatives of that industry and also the chemical industry. I give an assurance to honourable members that we do not wish to delay the passage of this legislation. It is very desirable in the interests of the country that we get it through. I simply give them an assurance on behalf of the Treasurer (Mr Lynch) that the matters they have raised will be considered by the Government.

Mr HAYDEN:
Oxley

– I want to speak about clause 8 of the Bill, which will abolish the special depreciation provisions in the existing Act. I accept it would be inappropriate to maintain both the double depreciation allowance and to introduce the investment allowance. This debate gives me an opportunity to bring up one or two points I would like to have developed in more detail during the course of my second reading address, which was aborted somewhat unexpectedly. Bearing in mind the enormous cost involved in this proposal, which is about $470m for the first full year and at least $2,500m for the life of the program, in current money terms- it is much higher in year-to-year money terms- I find myself in a state of complete puzzlement because the Government is also committed to introducing the recommendations of the Mathews report on stock indexation and on depreciation. This will be an enormous bonanza for those people who can draw on both of the programs. I am not suggesting for one minute that there is total congruency between the cover given by the Mathews proposals when implemented and the cover which can be extracted from the proposals wc are now debating, but there is a great area of common cover and those people who can draw on both programs will do particularly well.

Now that the Minister Assisting the Treasurer (Mr Eric Robinson) has joined in the discussion at this early stage- I appreciate his problems as a surrogate Minister, on fairly short notice, I expect, in trying to answer this sort of issue, an issue which raises a policy consideration anyway- I would like him to deal with these problems a little in any case. He has on hand some of the best experts in Australia from Treasury and the Taxation Office who can fully inform him in the time he has available and he can explain to honourable members how the benefits of both these programs can be drawn on by the community- programs provided by a government which is committed to reducing total government expenditure.

Let us be clear on one aspect. If the government forgoes revenue collections in some way- I cannot- understand how the Minister could develop an argument along those lines, but let us assume he tries to- that is tantamount in its effect to increasing the fiscal burdens of the Government in very much the same way as increased expenditure would without a reduction in outlays. To be quite candid, I do not believe that the Government will go ahead with the Mathews proposals on stocks and depreciation. I believe that now it is in office and the full blaze of a sudden and not very comforting dawn has hit it, exposing to it the uncomfortable implications of what it is going ahead with in introducing this special investment allowance, it will be looking for some device to back away as quickly as it can from the Mathews proposals on stocks and depreciation. It is a simple question. Is it really the purpose of the Government to ensure that those sections in the business community which are able to draw on the investment allowance and who, with the introduction of the Mathews proposals, will be able to benefit from the indexation proposals in regard to company tax, will enjoy both those benefits? If so, can the Minister give us some rough idea of the order of the cost? As I recall the Mathews proposals, in regard to the business sector alone the cost was of the order of $2,000m -

The CHAIRMAN (Mr Lucock:
LYNE, NEW SOUTH WALES

-Order! The honourable member for Oxley has used the Mathews Committee as an illustration. He should not develop his speech in the Committee stages on this Bill along that line.

Mr HAYDEN:

-I prefer to say that it is an analogy with some curves and distend.

The CHAIRMAN:

– I think the honourable member has used the analogy very well and very effectively, but perhaps a little too much.

Mr HAYDEN:

– Nonetheless, I accept that the Government would not want to proceed with the double depreciation allowance and this proposal. I suggest that the same principle applies in relation to the points which I have raised. I leave the matter to the Minister because I notice that he is jotting down some points. He has drawn out some documents and I expect that we will receive a full explanation from him.

Mr GILES:
Angas

– I will commence my remarks by commenting on clauses 5 to 10 of the Bill, which relate to the wine industry. I think it is necessary to give a certain amount of the history of the matter if for no other purpose than to help the honourable member for Adelaide (Mr Hurford). I think that the honourable member has his chronological order of facts- not opinions- a little wrong. He seems to be under the impression that we are now seeking to change a situation in which there is a 7-year transitional period for the repayment of deferred tax brought about by the repeal by his Government of section 31a of the Income Tax Assessment Act. Of course, that is untrue. We are seeking to repeal a situation in which there is a 5-year transitional period. Four of those years are repayment years and one is not. This Govern ment has doubled the repayment period from 4 years to 8 years.

A 7-year period is not the law. This was an election gimmick pledge by former Prime Minister Whitlam to the South Australian electorate at the time of the South Australian election. From that time on, no action was taken. No mention of this appeared in the following Federal Budget and none of the Budget papers mentioned the loss of revenue as a result of the failure to implement the pledge. After the Budget I checked personally with the Parliamentary Counsel, with officers of the Department and in every way I could. I found out that no move had been made to honour those promises given at the time of the South Australian election. I do not want to grind this point too much because I am trying to get some facts straight in the matter. I am trying to point out that it is wrong for the honourable member for Adelaide to compare what this Government is doing now with his 7-year transitional scheme which was promised. That was only a hopeful piece of window dressing put forward at the time. We are comparing this Bill with the 5-year transitional period, currently in operation.

In justice to the honourable member for Adelaide, let us look at what the Whitlam Government offered at the time of the South Australian election. It offered to increase the transitional period from 5 years to 7 years. The Whitlam Government offered a maximum payment per annum on deferral of tax under section 31a of the Act of 15 per cent above the normal company tax rates. This Bill will bring that 15 per cent down to 10 per cent. So already we have established a situation in which this Government is listening to the industry. It has doubled the repayment years. It has cut down the maximum above normal taxation rates to 10 per cent. No such upper limit was set prior to this time. The only comparison which the honourable member for Adelaide chose to draw was in relation to a hypothetical position. As I say, the 15 per cent maximum proposed payment has now been reduced to 10 per cent. Both these measures will be of some help to the wine industry. But they pale into insignificance when compared with the importance of the division 7 alterations to the principal Act which apply to private companies.

Public companies, as I understand it, will not and of course cannot, have benefits flowing from these alterations; but the phasing-in period will be double the normal period. They will pay the maximum above normal company taxation rates which can be no greater than 10 per cent. As far as I am aware, they will have the further advantages of the Mathews Committee recommendations on stock valuation and inflationary accountancy generally. These are pretty real provisions. I remind the House that these provisions and this relaxation of terms have been given by this Government to the wine industry at a time when economic strictures are necessary. The time when the Labor Party did not offer this circumstance was a time in history when money appeared to be flowing left, right and centre to different areas of industry. So there is a totally different period in which we should compare those differences.

Because we are in Committee and because I did not have a chance to talk during the second reading debate I want to sound one or two notes of warning. I think the Government should look- the honourable member for Murray (Mr Lloyd) is particularly keen that I should mention this point for him- at one of the problems that remains- the sole trader. It may well be due to the fact that the wine industry does not truly represent this sort of people. The sole trader is in a position where logically he cannot benefit by the Division 7 provisions whereas private companies can. The sole trader is not in a position where he can benefit in many ways from this package deal. I am not at all sure that under this legislation, the sole trader or indeed those 2 people in partnership are not disadvantaged as against public and private companies. If this be true- and the discussions I have been able to have produce a query or doubt as to whether it is true to say the least-we shall have to look at this very carefully. This Government, I think more than most, would have in mind the sole trader, the small partnership, the small winery. The quality producer is the important firm of the future. We should not like to think we were stopping this regenerative process in any shape or form. I associate the honourable member for Murray with my remarks in relation to that.

I should also like to deal with another area where I am not personally satisfied. Section 31a repayals of deferred tax go back to a point in time when all wineries had stock. As from that point onwards, nominal or standard valuation was used to value all incoming stock. That is what the argument over section 3 lA is all about. It appears to me very likely that there are cases where stock taken in prior to 1953 was taken in at near enough to the cost valuation of the product at that time. It was probably not taken in on a nominal or standard valuation. Where wineries have done this they have had that stock taken in to the overall repayal due to the deferral of section 31a taxation. I am doubtful whether the Government has had a careful enough look at this problem. As one private company winery said to me: ‘You can compare it to this: If you have a shop shelf full of tins and some of them are old tins that came in last year, and every year, as your rate of sales increases there are more and more tins, there is the problem of which tin you have sold and at what valuation. So surely it is common sense that your original stock should be deducted from any backdating of payment due to deferred tax’. I am afraid that I am not an accountant. I am far from being an accountant, and hardly a bush accountant. Maybe there is not logic in what I am saying, but I suspect that there is. I should like the Government to have a look at the problem not only of the sole trader and the partnership, but also of those people who have operated perfectly honourably within the system and who might have stock dating back prior to 1953, brought in at cost. I think that historic valuation should be deducted from payments due to the deferral of the section 3 1a provisions.

In the last minute remaining to me I wish to say one more thing. Because this Government has not seen fit any more than the previous

Government did- I note the comments of the honourable member for Adelaide (Mr Hurford) yesterday in which he said that both sides of the chamber are uniform in their thinking on this matter now, and I accept that- to replace section 3 1a in the Act, I want the Committee and everybody to know that a very serious tax onus is still placed on the industry generally. It may well be that it will be 8 years, until the end of the payments under section 3 1a, before the industry can physically be taxed any more. There is a limit to how much taxation industries can pay. I place that fact very firmly before the Committee. Although the breweries think that the wine industry should be taxed, in these new circumstances I do not believe that it is realistic even to consider such a proposal.

Mr BRAITHWAITE:
Dawson

-We are taking clauses 1 to 9 together. I would like to refer to clause 8 and to the special depreciation allowance or the accelerated depreciation that has had effect since 1 July last year. The investment allowance has been introduced, and it is obvious that the Government cannot be so generous that it can also afford to allow accelerated depreciation. It has been mentioned in this Parliament that the investment allowance will cost $470m a year. I think that this must be offset to some extent by the fact that the double depreciation allowance will be withdrawn. This in itself will save a considerable amount of expenditure by the Government.

I believe that the investment allowance will be a superior form of deduction and certainly a better incentive than the accelerated depreciation allowance, because all one does if one doubles the depreciation allowance is to claim a deduction earlier and not later. The total deduction is no more because one doubles the allowance in the initial years rather than spreads it out over the life of the asset. Although I do not intend to oppose clause 8, I think it should be clearly understood that there are throughout Australia some industries which, because of the implementation of the investment allowance and the withdrawal of the special deduction for depreciation, are paying unseen taxation for having had the courage in a period of uncertainty to place orders for quite substantial plant that could take years to fabricate. They will miss out not only on the investment allowance but also on the double depreciation allowance.

I shall instance one industry, and .there must be throughout Australia other industries that are in a similar situation. The sugar industry was facing a position of expansion in the latter part of 1975. With the uncertainty that existed at the time of the Labor Government it took some courage for the industry to consider expansion. The expansion had been planned for 1977. In order to achieve this expansion large orders for plant were placed. Some of these orders totalled in the vicinity of $4m or $5m. They were placed prior to 3 1 December last year but they will not be fulfilled until the latter part of this year. The people in the sugar industry involved themselves in the acquisition of new plant worth $60m which should have been subject at least to the double depreciation allowance. Certainly it would have been subject to the special investment allowance if the orders had been placed after 1 January. Representation has been made to the Minister in this regard. I realise that it is necessary to have a cut off point at some stage.

It must be understood by this Parliament that throughout Australia there are industries that will not enjoy the benefits of either the investment allowance or the double depreciation allowance. The people in those industries must be regarded as paying an unseen tax towards this incentive that we are now introducing. I should like to place on record reference to the courage and fortitude of the sugar industry which was prepared to consider expansion, but I must point out that at the time the industry did this in the hope and with the expectation that it would get at least the benefit of the double rates of depreciation. At this stage it would appear that with the implementation of this Income Tax Assessment Amendment Bill this industry will miss out on a tax deduction for proportion of the amount of $60m that it spent on new plant. In addition to being an industry that contributes a great deal to our exports the people in the industry also are in effect paying an additional amount of taxation because they are not getting either deduction.

As I have said, I do not intend to oppose the legislation. I just want to bring to the attention of this Parliament the fact that people in the sugar industry along with people in many other industries throughout Australia who have a lag between the time they place orders and the time they are ready and available to produce assessable income will be forfeiting a deduction as a result of this legislation.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I simply out of courtesy respond to the comments made by the honourable member for Oxley (Mr Hayden) who is a former Treasurer. I wish that the honourable member could be a little brighter and happier about this legislation because I am certain he recognises that the legislation is a desirable stimulus to the economy. The honourable member, of course, talks about what the Government’s intention is with regard to the Mathews Committee. If my memory serves me correctly, it was his Government which set up the Mathews Committee. His Government- maybe not the honourable member himself- the Labor Government, took absolutely no steps towards the implementation of the very desirable decisions and recommendations of the Mathews Committee.

I can well recall that the honourable member for Oxley when introducing the Budget last year planned for a deficit, I think, of about $2.8 billion. When we came to office the prospects were closer to $5 billion than they were to $2.8 billion. I simply suggest to the honourable member who, of course, is not the shadow Treasurer but who takes an interest in financial and Treasury affairs, that he contain himself for about four more hours when the Treasurer (Mr Lynch) will be speaking to the Parliament. I know that the honourable member will be listening here with great attention. He will then know the intention of the Government. When he hears the statement tonight and subsequently the Budget in August I am certain that he will have a complete understanding of the Government’s decisions by which we will steer the economy back to a progressive and growth situation.

Mr HAYDEN:
Oxley

– I will be very brief in my comments. I accept, but not happily, the proposition put by the Minister Assisting the Treasurer (Mr Eric Robinson) because I understand the statement tonight will only relate to Mathews on personal tax indexation. That is not important. What is important is the principle. The Minister can deal with the degree to which there is congruency in the attraction of benefit between this proposal- this investment allowance- and Mathews on depreciation and stocks. That is, some people will be attracting such a generous return from the Government they might almost be in the position where they are being paid to be in business. I am not sure what the position is. But would the Minister care to express to the Committee how a government would deal with the problem?

Mr HURFORD:
Adelaide

-I enter this particular part of the Committee deliberations to support the honourable member for Dawson (Mr Braithwaite). I hope that he was in the House during my second reading debate efforts last night when I drew attention to the very points that he was raising. I have risen to me feet again only to say that I was disappointed that the Minister Assisting the Treasurer (Mr Eric

Robinson), did not devote himself to the very real problems raised by the honourable member for Dawson. I repeat the point that there have been good Australians who have taken very courageous investment decisions prior to 1 January 1976-prior to the extra benefits offering through the investment allowance- who, nevertheless, will not have their plants installed by 30 June this year. They will miss out on both of the benefits available in the tax legislation. They miss out on double depreciation because clause 8, which we are now considering, removes that right from them. They also will miss out on the investment allowance because, anticipating the debate, clause 10 ensures that the investment allowance is applicable only to plant where the decision has been made after 1 January.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I do not intend to carry on a discussion with the honourable member for Oxley (Mr Hayden) on this matter. I simply say to him again that he will have to await tonight’s speech by the Treasurer (Mr Lynch) to see what decisions the Government has taken. He may speculate as much as he likes; he will know the facts tonight. The honourable member spoke about the Government’s assisting people greatly to stay in business. In the course of the Labor Government, there were so many people forced out of business that it is about time that a private enterprise government was in office and gave real stimulus to getting people back into business, back into productivity, and helped to establish the employment opportunities which flow from that development. I listened most intently to the comments by the shadow Treasurer, the honourable member for Adelaide (Mr Hurford) and by other speakers in this debate. A line must be drawn somewhere. This is a very generous allowance. We believe that, to extend it too much further would not be to act in a proper budgetary or fiscal policy context.

Clauses agreed to.

Clause 10.

Mr WENTWORTH:
Mackellar

-This Bill proposes to give a 40 per cent deduction where the installation of plant is completed before 1 July 1979 and a 20 per cent deduction where the installation is completed and ready for use before 1 July 1984. 1 think that the dates are reasonable, but there is a little difficulty in connection with them. That is this: Investors might well in good faith want to complete before these dates and make arrangements under which they could normally be expected to complete before these dates; yet they may fail to do so because of industrial disputes and consequent delays. We know that this has happened in the past. We know that major items of plant have been delayed as much as 2 years not through any fault of the owner but because there has been concerted industrial action.

It does appear to me that, if we leave these dates certain in this way, we will open investors to all sorts of industrial blackmail from trade unions. We all know of cases where, for example, building workers have half completed a concrete pour and then demanded blackmail money in order to complete it. They have said: ‘If you do not do this, we will leave the pour half done. It will set. There will be all sorts of structural troubles’. This is almost common. It is almost an accepted practice in the building industry. We know that in a situation in which if plant is not completed by a due date there will be a very considerable loss to the company installing it- a loss which might well run into millions of dollars- a company will be open to all sorts of industrial blackmail. This would be a very bad thing indeed. Also, because of the fear of this action, investors might well refrain from installing or making a decision to install large items of plant- I give a blast furnace or a coking oven as an example- which might take many years to complete. For that reason, honourable members may find that the purpose of the Bill could be to some extent frustrated particularly in respect of such items of major plant. I believe, therefore, that we would be well advised to put some kind of flexibility into this clause. I have suggested in the amendment which has been circulated in my name that we should add to each of these provisions some words such as these. After ‘1984’, for example, we should put: ‘. . . or such later date as may be prescribed by notice in the Gazette, on the ground that the completion of such particular unit of property was delayed by reason of an industrial dispute’. Let me make these points: First, the suggestion is that this be done not by regulation but by notice in the Gazette. Secondly, the suggestion is that it should be done openly.. I would not like a thing like this to be done by some underhand arrangement. Any arrangement made would have to be notified in the Gazette. Thirdly, it is a matter where the Treasurer might give such notice in the Gazette but he would not be compelled to do so.

It is not, of course, said that in the future all industrial disputes should be free from blame by the owner of the property. It may be that in some industrial dispute in the future the owner is to blame. In that case the Treasurer would not put the notice in the Gazette, but it is essential that the Treasurer should have the power, I think, to put this notice in the Gazette in the appropriate cases. Unless he does so, there will be blackmail by trade unions demanding extra wages or improved conditions as a prerequisite to completing the plant. The trade unions will say to the owner: ‘Look, unless you pay us these exorbitant wages and meet these exorbitant demands! we will hold the job up and you will lose a million dollars’. This will be a very persuasive argument to many owners.

I believe we should take away this opportunity of industrial blackmail. If we were to put a provision similar to the one I propose in the Act, there would be no motive for the blackmail and it would not occur. As I have said, if we do this we will encourage a lot more people to invest quickly in big items of plant, and that is what the Bill is about and that is what we want to do. This constructive proposal of the Government’s would, I think, be further improved by remedying this small defect. I take entirely the observation made by the Minister Assisting the Treasurer (Mr Eric Robinson) that he did not want, and none of us would want, this Bill to be held up. I would not want to hold up the Bill. I believe the drafting of my amendment is as good as I can do. Perhaps the parliamentary draftsman can improve it. I have some kind of hope that the Government will accept this amendment in another place and that this will be the method whereby we will get this provision into the Bill without in any way delaying its passage through this Parliament. I for one would be the last person to want to delay further a measure which could help to stimulate the economy. I hope that the Minister will be able to give me an assurance which will make it unnecessary for me to move the amendment in the terms I have indicated.

Mr CREAN:
Melbourne Ports

– I want, as I have always done in this House, to indicate my root and branch objection to the whole principle of the investment allowance. It is nothing else but a naked subsidy to good old private enterprise. It is contrary to what are called market forces. I draw the attention of the Committee to what this allowance means. It is very well set out on page 28 of the explanatory memorandum. An example is given of a piece of plant which purports to cost $10,000. The investment allowance automatically treats the thing as though it had cost $14,000 and allows the purchaser to write off the hypothetical $4,000 straight away which, at company rates of tax, is near enough to a direct subsidy of $2,000.

Who will really get the advantage of this. It is not the small man. We hear all this junk about putting in a section covering amounts of $500. If the Government were dinkum it would have doubled the $500 allowance and tapered the rest. Of course, this Government always gives the maximum advantage to those who are already best able to look after themselves. The lie is given directly enough in the Jackson Committee’s report to the myth that it is only in the last couple of years that there has been a decline in fixed private investment. I refer to page 2 of the report, which states:

The stagnation of fixed investment in constant prices is not new; it is of 10 years standing. Manufacturing has tried to maintain earnings by running down its capital stock. Much of the equipment in factories, consequently is old, inefficient and overdue for replacement: desirable technical innovations have been delayed: and physical conditions for the work force leave much to be desired. For 10 years the rate of growth in labour productivity of Australian manufacturing has been far below that achieved in Japan, France and Germany, and marginally below Britain and Canada.

I point out that that state of affairs existed while the investment allowance was in force previously. Sometimes I wonder about the honesty of those people who support or claim to support private enterprise. I had the experience when I was Treasurer of being told by industry that it would much have preferred accelerated depreciation to the investment allowance. Yet- I would say for sheer political expediency- the Government has chosen to re-introduce the investment allowance. I am told by the experts that in the first year the investment allowance will cost revenue in the taxes that otherwise would have been collected if it were not allowable something like $470m. How do honourable members opposite reconcile that with the sort of stuff the Government is going to put over tonight about giving with one hand purportedly to the poorer families in the community and taking away from the same group in another way, that is, by the imposition of a levy on Medibank that is probably going to be something of the order of $ 1, 000m.

Who will benefit to the greatest extent for this investment allowance? If honourable gentlemen look at the information that was provided in the last annual report of the Commissioner of Taxation they will find in the classification called ‘public companies’ that there were 10 661 public companies of which 668 or 0.65 per cent paid $95 lm out of the $ 1,300m in tax that was paid by all public companies. A table in that document has a classification for the depreciable assets held by those 668 companies out of the 10 000-odd companies and it shows total depreciable assets of $ 1 ,46 1 m of which $ 1 ,077m or three-quarters is held by those 668 companies or that 0.65 per cent of the companies whose taxable profits exceed $lm. It is contrary to any logic that with something that costs $1,000 or $100,000 one should go through the fiction of treating it for taxation purposes as though it cost $14,000, $140,000 or in many cases $1,400,000 and immediately allow that $4,000, $40,000, $400,000 or whatever it is to be written off what would otherwise have been the proper taxable profits for that year.

Why should this particular group of taxpayers be treated differently? I heard an honourable member opposite speak as though there was some virtue in having a deferred tax. It is tax that ultimately legitimately has to be paid. We would all like to defer the payment of our taxes. The same sort of thing applies to paying company tax in advance. Why should a company not pay its tax in advance in just the same way as the PA YE earner pays tax in advance? He pays his tax as he goes along, but sympathy is sought in the name of private enterprise for the giving of concessional treatment to particular sections, of taxpayers. Candidly that is what the investment allowance is. It is a fiction. It is using the Income Tax Act to do something that ought to be done openly a different way. Clause 10 takes 20 pages- from page 9 to page 29- of the Bill to put in all the qualifications, exemptions, exclusions, inclusions, tapered rates and so on. However, the net effect of it is to increase the potential Budget deficit next year by something of the magnitude of$500m

For the last two or three years we have heard a lot of bellyaching about this deficit, as though it is the great iniquity, and a lot of froth about private enterprise and allowing market forces to prevail. The investment allowance is the contrary to market forces. It is undiscriminatory. There might be a case for giving a concession, for instance, if the Government wanted to encourage a particular industry to a particular place. But it seems that what will happen here is that some investment that otherwise would not have taken place will now take place, and it may be more than we need. Most of the investment that would have taken place will take place and get the advantage of the investment allowance, to the cost to the revenue of the magnitudes that I have said.

It is time that the Parliament started to look objectively at tax measures and to see that what the Government is doing here is giving a naked subsidy. When subsidies are given they should not be concealed; they should be revealed. The investment allowance conceals the facts. It goes equally to the brewery, whether you want the brewery to expand, as it does to some other industry that you do want to expand. Maybe your ability to move in one direction is limited because you have been too indiscriminate in the general way in which you have applied it. This sort of thing may have a kind of yo-yo effect on the economy. It ought to be an annual enact: ment, not promised for several years forward. Let industry wait on its toes a bit rather than being featherbedded for the next 5 years. Maybe the featherbedding will be at the expense of a lot of other general welfare in the community. I ask the Committee to look closely at who will be the beneficiaries of the major part of this $470m. It will be the small group of fewer than 1000 companies which are already earning profits in excess of $lm a year. The Government is prepared to make life easier for them and at the same time, tonight, to make life tougher for the majority of 131A million Australians.

Mr MACPHEE:
Balaclava

-The honourable member for Melbourne Ports (Mr Crean) has just ably illustrated why this Bill is necessary. He has illustrated why, in his period as Treasurer, investment declined in Australia. He talked about market forces. If things were left to market forces today we would have no investment. The whole purpose of this legislation is to encourage investment. It is to be applied uniformly and over a period of time so that companies know where they are and have the inducement to make investments even when they have, as at present, under-utilisation of their resources. Of course they are under-utilised and there would be scant investment. Last night the honourable member for Berowra (Dr Edwards) made it clear that this measure was designed to complement the consumer recovery which we hope will come. We are not relying on consumer recovery alone but on stimulating investment so that the two will go together to bring about an increase in productivity, a consequent reduction in inflation and a reduction in unemployment.

This a medium term measure in its effect although there is already substantial evidence, contrary to what one might have expected, that many companies are taking advantage of the investment allowance even though they have still about a 70 per cent utilisation of their present capacity. That is because of the inducement and because of the inducement extending over a period of time. This is a very complex measure. The honourable member for Mackellar (Mr Wentworth) made reference to two of the great complexities. One complexity relates to the completion dates where this long period of time is necessary. Of course, the honourable member mentioned the matter of industrial action. I endorse all his remarks. I see great merit in the spirit of the amendment which he proposes. I hope that between now and when this measure goes to the Senate the Government will give consideration to moving in the Senate an amendment in the spirit which is suggested. In relation to completion dates for other purposes, I make some specific comments. The Minister mentioned the chemical industry. I think it is appropriate if I quote some comments which have been made in relation to the completion dates, especially as the honourable member for Melbourne Ports has been critical of this aspect. A statement by the Chemical Industry Council which the Government is currently considering, states:

Some important industries which are suppliers of basic needs to many other Australian industries are highly capital, intensive. The Chemical Industry is such an industry. The construction of new production units now required to satisfy future needs may take more than 3 years from the decision to invest until the unit is commissioned.

Thus a new manufacturing unit initiated in the near future may not be commissioned until after June 1979 and in consequence the entire investment would, under the present provision of the Bill, qualify for an allowance at only the 20 per cent rate. In many cases there would be uncertainty at the time of the investment decision as to whether the investment would qualify for a 40 per cent or a 20 per cent allowance. We believe this uncertainty is contrary to the Government’s intentions, which were to increase investors’ confidence by making long term, clearly defined commitments to encourage new investment. -It is anomalous that major projects, involving substantial immediate business to the engineering and construction industries, providing lasting increases in employment and productivity and safeguarding the country’s future basic material needs, should be offered less positive inducement than small investments.

Smaller investments, possibly only involving replacement of capital equipment and thus having relatively less impact on the national economy, can be completed in a shorter time span and thus reliably qualify for the full 40 per cent allowance.

This anomaly could be largely avoided by comparatively simple amendments to the Bill and we suggest that, as a minimum, provision be made for any new manufacturing unit initiated on or after 1 January 1976 and before 1 July 1978 to qualify for the 40 per cent investment allowance in respect of all expenditure and contractual commitments incurred before 1 July 1979; the rate applicable to any expenditure incurred after that date to fall to 20 per cent. Similarly provisions might be made in respect of the second phase, i.e. for any new unit initiated on or after 1 July 1978 and before 1 July 1983, an allowance at the rate of 20 per cent should apply in respect of all expenditure and contractual commitments incurred before 1 July 1984.

I have read that statement because I believe that the contents are relevant to the Bill. I hope the Government will consider this. I know the Minister has before him a draft recommendation. I daresay that taxation officers will point out that it was drawn up by a lay draftsman. In fact, it was written by one of Australia’s most eminent Queen’s Counsel worthy, in the eyes of his colleagues, to be on the High Court. Lay counsel though he might be, the recommendation will go before the Parliamentary Counsel for his opinion to see whether those amendments can be made without altering the fundamental character of the Bill. Another matter to which I wish to refer- I know that other honourable members want to refer to it too- relates to the hiring industry. Some reference has been made to this matter. I believe that this Bill has failed to understand the important contribution which the hiring industry makes to Australia. It fails to understand the ramification of the matter. Another eminent Queen’s Counsel is preparing amendments which will be considered by the Treasury Committee comprising Government back bench members. It will go before the Minister. That Committee is indebted to the Minister and to the Treasurer (Mr Lynch) for being so co-operative in this regard.

We hope that we will be able to produce amendments which can be moved in the Senate, after which the Bill can be brought back here. As the matter stands now this simple concept of stimulating investment is a complex measure. In fact, it has led to a great many obstructions and difficulties in interpretation. We understand why the Government wants to get the measure through this Committee today. We certainly hope that the discrimination which is currently brought about by this Bill in respect of the hire industry will be eliminated after due consideration over the weekend. The hire industry has acted in good faith on the basis of statements made by the Treasurer which at no time excluded them from consideration. On all occasions the allowance purported to apply to new plant and equipment and the hire industry saw no reason why it would be excluded when transport and other service industries were included.

The hire industry also has documented accounts of advice given by the Australian Taxation Office to the effect that provisions involving its operations would be included within the Bill. The Minister did say that at some point there has to be a limit to the cost, and I suppose there has to be a cut off point; but the estimated cost of extending this allowance to the hire industry, thereby making it equal on all terms with other industries, is only a drop in the ocean compared to the Treasury estimate of $470m for the total scheme.

The honourable member for Melbourne Pons (Mr Crean) said that we are spending all this money on industry and will take it away from the poor. If we want to build up productivity and to expand job opportunities in Australia, of course we have to stimulate investment by this means. The money provided is in the nature of a loan from the Government in the sense that when the companies are operating at something like their optimum level they will be paying company tax to the Government and persons will be employed and the economy will again be functioning at something like its proper level. I must stress that under the present provisions the hire industry will be discriminated against. It is a service facility, as opposed to leasing, which is an alternative financial facility to purchase. The hire industry has put before the Minister some very substantial arguments. I believe, from the knowledge which we have been able to gain in the limited time we have had in between debates this week, that the hire industry has made out a very strong case. I must say that I am not so impressed by the Treasury case in reply. I hope that over the next weekend we will be able to clarify this question and assist the Minister for Post and Telecommunications (Mr Eric Robinson) and the Treasurer in rectifying what seems to be a severe penalty on that industry. I hope that we will clarify this in the Senate and then again in the House next week.

Mr CONNOR:
Cunningham

– I can quite understand the concern of the Government to get this measure through as soon as possible, particularly before the speech that is to be delivered tonight by the Treasurer (Mr Lynch). If there is any item which in the forthcoming Commonwealth Budget would lack any economic or social justification it is this particular one. In respect of other items such as Medibank, or transfers of endowment payments, there can be some justification of a trade off from one revenue source to another form of expenditure; but in this case, as my colleague the honourable member for Melbourne Ports (Mr Crean) has said, it is a straight, naked golden handshake.

It is an open ended commitment. We have had no indication from the Government as to exactly what it anticipates will be required. There is no indication as to who will benefit from this provision other than the very general nebulous term ‘industry’. Who will be the recipients? Will the expenditure go to industries which are labour intensive or to industries which are capital intensive? We have no clue whatever on the matter. And this is from a so-called businessmen’s Government! There is no indication of who will benefit. However, we have a shrewd idea because the message came from Melbourne on 5

April through the Minister for Foreign Affairs (Mr Peacock) that the tycoons of commerce in Melbourne were by no means enamoured of the Government’s performance. They also indicated that they did not think very much of the accelerated depreciation allowances. But this sweetener of 40 per cent is fruit for the sideboard. It could provide a new rolling mill for the steel industry. It could provide a new mill for the sugar industry. It could provide a new set of malting equipment and brewing vats for the brewing industry and, even more than that, it can and will undoubtedly be seized on with the greatest avidity by the multi-nationals.

This is the one item without any social or economic justification and it is for that reason that the Government, in its discomfort, wants to get it through now. It would sit ill when considered with an ordinary Budget package being introduced for the first time and the Government would undoubtedly be ripped to pieces. Instead, if it goes through now, as it will by sheer weight of numbers in this House and in the Senate, it will become an accomplished fact, and that is it. The Government can tick off one of the items of legislation that it wants to wreak its worst on the body politic of Australia.

Speaking in terms of the ordinary run of the mill of secondary industry today, the surveys made show that in general only about 70 per cent of existing plant is in use. It becomes a question of which comes first, the chicken or the egg- the chicken being an expansion of plant and the egg being a return of consumer confidence- and whether such industries, and I am speaking of the smaller elements of secondary industry, can be enticed to come in and nibble. The big boys will be in, boots and all, with their ears back. They have never had it better than from this Government consisting of their friends.

Apart from this being an open-end commitment, how soon would the operation flow through? No indication has been given on that score. As to its effect on employment, how much of it will be labour-intensive and how much capital-intensive? Here we can take the classic case of the building industry in Australia today. It is the largest single employer of labour in this country. Normally 90 000 men are engaged in it. At the present time 30 000 of those men in the eastern States of Australia, particularly New South Wales and Victoria, are unemployed. Without making free handouts to anyone, what has been vaguely adumbrated as the amount of Government expenditure would be manna from Heaven for these people. The building industry is different from most industries. First and foremost it depends on home building. In the past it has depended as well upon office construction but with over 3 % million square feet of vacant space still to be let in Sydney, with little hope of it being let in the very near future or even the next 3 or 4 years, the accent is more than ever on home building. Today there are home builders who are carrying on and tendering at cost so that they can retain the limited number of skilled tradesmen left in the industry. If those tradesmen go from that industry they will not return. What is the Government doing about that situation? Nothing whatever. That is where money on this scale ought to be going; it should be going where there can be an immediate effect. But no, the Government, in its mulishness and pigheadedness, wants to proceed with what it chooses to class as an election promise.

We have had quite enough from this Government of pleas to tighten our belts and at the same time spend freely. No distinction is being made in this legislation between the rights or entitlements of small and large manufacturers. It is wide open. This is the open gate for the multinationals to enter. It is the open gate for the biggest companies in Australia to enter and help themselves. It is the payoff. I repeat, that in terms of employment there is no justification for this legislation. There is just the vague hope that somehow something will happen if this money is thrust upon the lesser elements of secondary industry which do not want it, but the big boys do. If this is to be the situation, all right; there is only one way to describe it- it is a naked and blatant exercise in Liberal discrimination for those people who put the Government in power and to whose tune the Government dances.

Why is there no exemption in this legislation for the multi-nationals? There is none. I quote what my colleague the Deputy Leader of the Opposition (Mr Uren) said when I say that 2 per cent of the companies operating in Australia net about 50 per cent of the total gross profit. Those are the people who will be coming in to help themselves. What precautions are there against exploitation? To take a classic case, anyone who wants to buy a truck with a capacity of over one ton can qualify under this scheme. What about the question of the trade-in? There will not be any trade-ins from now on. That will be a side issue. To maximise the benefit people will get there will be a straight transaction without the question of a trade-in, but on the side there will be a separate transaction for the sale of what would normally be the trade-in. That is just giving one case to illustrate how loose this proposal is. There has not been proper thinking on it. The Government is over eager to bring it in. It is over eager to get the legislation through today, and it is a disgrace. It is the only item in the coming set of Budget legislation for which it has neither social nor economic justification.

Mr KING:
Wimmera

-After listening to the honourable member for Cunningham (Mr Connor) and the honourable member for Melbourne Ports (Mr Crean) I just wonder what makes these people think this way. They seem to have a thing about assisting any form of advancement, any form of industry, any form of expansion. They seem to have a thing about multi-nationals and big business, yet they seem to overlook the fact that without these so-called big businesses there would be little employment available. Their thinking along this line is very narrow.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– This is not helping only big business. It is helping the smaller people too.

Mr KING:

– Of course it helps the smaller businessman. The honourable member for Melbourne Ports talked about the escalation of the depreciation allowance. Of course that would be true because very early in his position as Treasurer he actually slashed the normal depreciation allowances in many types of industry, particularly the rural industry, almost to the point where some industries were non-existent and some industries would have to be maintained for 30 to 40 years to be able to use up their total allowances.

I want to refer this afternoon to clause 10 which inserts into subdivision B of the Act new section 82aa. I commend the honourable member for Balaclava (Mr Macphee) for raising this very important issue in which I am interested. He referred to leasing. In the second reading speech the Treasurer (Mr Lynch) said:

It has been the Government’s wish and expectation all along- with the position of smaller businesses particularly in mind- that the benefit or the allowance provided in respect of leased plant be passed by lessors through to the lessees who actually operate the plant in productive use. The special provisions contained in the Bill to apply to leased plant have been drawn up with this end in mind.

Reference is made to partnerships in proposed section 82AJ but I do not want to deal with this at this stage. Proposed section 82aa refers to longterm leases. Proposed section 82AQ defines ‘long-term lease agreement’. Basically it refers to a 4-year period. The honourable member for Balaclava had something to say on this and I wish to enlarge on it, because there is a trend today, due to high costs, high prices of materials and machinery, towards leasing, hiring and syndication. I think this is fair enough where a partnership is involved. This is covered in proposed section 82AJ. The other side of the problem- that is, syndication- is not quite as clearcut. I believe, firstly, that in the case of partnerships leasing can be a bit lengthy if it is to continue for a period of 4 years. In other words, if an individual or a single company were to purchase an item over the reasonable period of 4 years, it is obvious that if 4 individuals or companies were to purchase the same piece of equipment the time should be reduced to one year. I put that proposition to the Minister. I hope that when consideration is being given to the proposals put forward by the honourable member for Balaclava he will also look at that particular point.

Another problem also arises in regard to leasing by a syndicate, namely, that it is very difficult to obtain direct ownership because an item can be leased on a small deposit or, in some cases, no deposit and the payments can be divided between those who are making use of the machine being leased. At the end of the leasing period, whether it be 12 months or longer, the members of the syndicate contribute their share. But there is no clear indication on purchase what percentage each of them would own. I trust that the Minister and the Government will give consideration to the issues I have put forward. Apart from those matters which I have mentioned, I support this measure wholeheartedly. I do not go along with the honourable member for Melbourne Ports, the honourable member for Cunningham and other speakers from the Labor Party who appear to be very frightened that this measure is going to help industry. We must be very mindful of one important aspect: The Government has had to introduce measures to stimulate industry because, as we all know, there were 3 years of Labor regime in this Parliament.

Mr HAYDEN:
Oxley

-The concluding comments of the honourable member for Wimmera (Mr King) are cockeyed nonsense. As I tried to say in my remarks in the second reading debate, if one looks at the charts and the seasonally adjusted indicators for 1975 from the Bureau of Statistics, one discovers that investments started to slump in 1 970-7 1 . 1 do not have enough time in the literally very limited moments available to me in the Committee stage to deal with that matter. This is the most extravagant piece of wastefulness that we have seen in this Parliament for a long time. A great deal of assessment has been carried out by a great number of people to try to establish the extent to which investment allowances of the nature wc have before us do in fact stimulate investment in industry, either as a counter cyclical activity or in terms of some direction in economic growth. There is no substantial evidence to justify any belief that investment allowances of this nature influence investment decisions. The experiences in this country confirm that I refer to the 1960s and the reintroduction of the program in, I think, 1972. In fact, the decline in the investment rate continued well after the introduction of the program.

Let us look at some of the nastiness of this proposition. First of all, most of the money for the first 18 months to 2 years will go to people for investment, the decisions about which have already been taken. Such is the nature of the lags between consideration of an investment undertaking and the actual decision to undertake that investment. So it is a gift to those who already have investments somewhere along the pipeline in the decision-making process. Let us look therefore at how costly this will be in terms of actual new investment stimulated, hypothetically because of the allowance. It was pointed out by the Minister that at the present time nondwelling investment is down to less than 1 1 per cent of gross domestic product.

Let us assume that there is an increase in investment of 1 per cent of gross domestic product. Let us use current GDP terms of about $70,000m and let us assume an increase of $700m in investment in the course of this year, again assuming that the allowance had commenced from the beginning of this financial year. That is a significant increase in the rate of investment for a 12 month period, considering the economic slump which we have seen. The increase in investment is equivalent to about 1 per cent of GDP. I think it is a very generous assumption that 20 per cent of that increase has been stimulated by the allowance. I would be surprised if that has been the case for some years. The evidence is that practically none of the increase can be detected as having been initiated because of the allowance. But let us assume that 20 per cent of the increase is due to the allowance. That would represent about $140m in investment. This is a hell of an outlay to get $140m worth of new investment. In the sum of $470m we are outlaying 335 per cent of the actual addition to investment which can be attributed to this allowance. Of course, I do not believe this will happen. The allowance, in fact, will be totally attracted to people who have already made decisions or are in the process of making decisions and who would have invested in any case.

As the honourable member for Melbourne Ports (Mr Crean) pointed out quite succinctlyas one would expect with his backgroundit is a direct transfer to people in business. It is a straight out subsidy at the expense of the rest of the community. I should like to highlight this point by putting it in another way: The cost of this, in money terms, would represent the equivalent of a reduction in company taxation rates from 42 V4 per cent to about 3VA per cent. If anyone suggested that that course of action be taken, there would be screeches from all parts of the community. Yet that is the sort of effect it has. It discriminates between labour intensive and capital intensive industries. It gives much less help to the labour intensive industries. I put the proposition that that is not the most desirable course to be followed at this point. Will the allowance be paid to people who, for instance, import labour- replacing capital equipment? That will not help the son of economic recovery about which people have been talking. Will it cover equipment imported from a parent company at a substantially inflated cost to maximise the benefit of this allowance? These are some of the abuses which can creep in.

I should like to deal with the leasing arrangements briefly because I do not believe that this area has been thought out. I believe that the Taxation Office will find itself bogged down in litigation as a result of the proposals implicit in the leasing arrangements. Early in his second reading speech the Treasurer (Mr Lynch) said that the allowance would go to the lessor but he wanted to see it paid to the lessee. In the middle of his speech he said that the Government would make some arrangement, which tends to vary the initial proposition a little. At the end of his speech he said that the full benefit would go to the lessee. This is all most unsatisfactory. How exactly will it go to the lessee? What sort of tensions will arise between people in business as a result of this vapid proposition? The Minister said that to attract the benefit for leased equipment the contract has to be for a period of 4 years. We will find all sorts of arrangements being made by people who enter into contracts for 4 years but who do not really need leased equipment for that period. I dare say that that equipment will be lying idle for several months or longer if, on balance, the advantages lie with doing that. That probably will happen, with legal adjustments being made to the books for taxation purposes. But that is bad for the economy. That is a quite irresponsible misuse of resources.

I should like now to deal with the other situation to which the Minister referred. That is, that no allowance will be available for a contract which is terminated within less than 12 months. Does this mean that a racket will develop whereby people will enter into contracts for 4 years but after 12 months and one day or 12 months and one month- or some other periodterminate the contract? Will they attract the investment allowance? How is it proposed that that sort of racket will be prevented? Are we to see leasing companies, well stocked with good equipment, let us assume bought in the last six to twelve months mostly and well short of exhausting its productive life, facing a boycott from people who want to lease equipment? As I understand it, only equipment which is new from the date of this arrangement will attract the benefit. I can imagine that it would be profitable for some people to close down businesses, maybe put them into liquidation, form new companies and buy new equipment. What an extravagantly wasteful way of handling capital equipment. Of course the most obvious thing is that it will lead to a serious distortion in the use of economic resources.

I regard this leasing area as being absolutely rotten in the way in which it is riddled with anomalies and defects. No one but the Government can be blamed, because quite clearly the Government never thought its way through this proposal clearly before initiating it. Its action was a sort of knee jerk response to a political, economic situation. It looked good. It might get votes. The coalition did not realise the problems which would arise. Now that it is in government it talks about the need to be lean and hungry in handling public money, but it is to shell out $470m in the first year of the program and over $2500m over its full period. There is a 20 per cent depreciation allowance on top of that. Then there will be the advantages of the Mathews proposal on indexation of stocks and depreciation, if honourable members opposite are people of honour and adhere to their undertaking to implement the Mathews report.

What is before us represents a real mess. Frankly, I think it ought to be referred to a select committee comprising members from both sides of the House of Representatives to go into it in detail, not so much to save the face of the Government because I do not think that effort is worth undertaking under any circumstances, but to save the Australian community from unnecessary cost and, most of all, to save the bureaucracy from being bogged down in the litigation which will symbolise the operation of this section of the Act in the near future.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I first of all respond to the honourable member for Mackellar (Mr Wentworth), who talked about the problem of setting time limits in the Bill. The time limits that have been set will give industry a reasonable and certain period over which it can plan with confidence for re-equipment and expansion. I say to the honourable member for Mackellar that there are some practical difficulties in the amendment that he put to us. If the termination of the concession were to be extended to a date fixed by regulation, either the regulation would have general effect and thereby provide windfall gains to all manner of enterprises not affected by industrial action, or a separate date would have to be prescribed for each individual enterprise affected by industrial trouble.

It could even be envisaged that in respect of a particular company a number of completion dates would have to be prescribed for separate items of the plant being installed where industrial disputes put the whole of a construction project behind schedule. Another problem with the amendment is that an industrial dispute delaying completion could be occurring overseas. There could also be difficulties in having to apportion blame for an industrial dispute. It would not be appropriate to extend the allowance if the company concerned itself- this is a possibilitywere at fault. Nevertheless, as I have said privately to the honourable member for Mackellar, and as I repeat now, the matter he has raised will be given due consideration. I appreciate his interest in bringing it forward to the Parliament.

I will not respond to the honourable member for Melbourne Pons (Mr Crean) or the honourable member for Cunningham (Mr Connor) because I feel that the honourable members for Balaclava (Mr Macphee) and Wimmera (Mr King) adequately responded to them. I am very sorry that the honourable member for Oxley (Mr Hayden) is so dismal about this legislation. As we go through the debate his comments are becoming more and more extravagant each time he rises to his feet. I did not think that the honourable member had quite the same opposition to the investment allowance as did his predecessor, the honourable member for Melbourne Ports, or the honourable member for Cunningham. But I am getting the impression that the honourable member is more violently opposed to the investment allowance than either of those 2 honourable members. I will restrict my remarks to the lessor-lessee relationship. I want to say this: The Government wants the benefit to flow on to the lessee.

Mr Hayden:

– But will it flow on?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-I will make some comments which I hope will alleviate the worry in the honourable member’s mind. We have stated quite clearly to the finance industry that it is to negotiate with the lessees because we want the benefit to be in the hands of the users. I am aware myself of a substantial number of small businesses which are considering the matter and discussing with finance companies arrangements which will see that the benefit is passed on. I do not think that we should get bogged down talking about multi-national companies and the sorts of things about which the honourable member for Cunningham spoke.

Certain machinery has been set up. The situation will be closely monitored by the Taxation Office to see that correct procedures are followed. The Treasurer (Mr Lynch) has said quite specifically that we will be watching the situation closely. If we believe that the system is not working so that the end benefit is in the hands of the user, the matter will come up for reconsideration. I find it difficult to accept the comments of members of the Opposition that they cannot accept the simple fact of life that this measure will add to productivity and that this will mean increasing job opportunities. Of course, some members of the Opposition hold a philosophical attitude in regard to this matter. We could spend all night arguing the matter and still not satisfy their complaints about it. However, I state to the honourable member for Oxley who has raised a specific matter of lessor-lessee relationships that the matter has been given a lot of consideration. It has been the subject of intense discussion with the Treasury and Taxation Office. We will see that the benefit flows through to the user.

Mr WENTWORTH:
Mackellar

– I thank the Minister for Post and Telecommunications (Mr Eric Robinson) for what he said. However, I point out to him that I do not think he was listening to what I said, otherwise I do not think he would have spoken as he did. I did not say that the matter should be done by way of regulation but rather that it should be done individually. I can see no reason why this should not be done if it be done openly and in the Australian Government Gazette. It is true that the dispute may be overseas. So what? If the owner of the plant honestly thinks that he can have it completed to gain the benefit of the allowance and for reasons outside his control he cannot get it completed, I think it is reasonable for the provision to be extended.

I point out that if an amendment such as I have suggested were made to the Bill, the blackmail of which the Minister spoke would not arise. But if the amendment is not made to the Bill, then the blackmail from the unions will arise. However, it does not seem to me to matter very much that the record should be in relation to particular items of plant. Perhaps it has escaped the Minister that the Bill itself relates to particular items of plant. If that can be stated in the Bill, it should be inserted in the Gazette. I must say that I cannot follow what the Minister has said because it does not seem to me to make very much sense.

Clause agreed to.

Clause 1 1.

After section 82KB of the Principal Act the following section is inserted: 82KBA. ( 1 ) A deduction is not allowable under this Sub division in respect of an amount by way of interest paid by the taxpayer on or after 1 July 1976 in respect of a loan connected with a dwelling used by the taxpayer as his sole or principal residence if-

  1. another dwelling was used by the taxpayer as his sole or principal residence in Australia at a time before he commenced to use the first-mentioned dwelling us his sole or principal residence: and
  2. at the time mentioned in paragraph (a) the taxpayer, or a person who was the spouse of the taxpayer at that time, held a relevant interest in the other dwelling.
Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-There are one or two parts of clause 1 1 that deserve comment. This clause is not the first clause on which I would have desired to speak, but of course there is a necessary contraction of the time available to members. Nevertheless, that is part of the organisation of the House. Of necessity the difficulties with clause 1 1 are similar to the difficulties which apply to clause 10. Those difficulties are common in this respect: An attempt is being made to create a market under which a certain scheme will operate. It is not that the Government is going out and working on the market that exists; it is making its own market. Of necessity, in respect of clause 10 we have seen some of the problems that exist. A government can only do what is possible in determining the adequacy and the justice of that market. In clause 10 it took about 18 pages to do so. In this clause it takes about one page to determine the new market on which the tax deductibility scheme will operate. There are 2 principles of the operation of clause 1 1 which are outlined in the

Minister’s second reading speech. I believe that those principles are denied and seriously modified by the precise application of clause 1 1. The relevant sentences of the second reading speech are these:

The realities are that it is the move into the first purchased home that is the key step, and that the relative burden of servicing a loan is normally heaviest during the first years of the loan.

So it is the first home which is the key step. The second principle expressed in the speech is:

That is why. under the amendments proposed, interest deductions will be allowable after 30 June 1976 only in respect of first homes and during the first 5 years of the loan to acquire that home.

So it is the first home and 5 years after 30 June 1976 which are the determining- it is a word I hate to use- parameters of the Government’s mind.

In clause 1 1 there are what I consider to be the development of serious injustices. I refer firstly to clause 11(1) (b), lines 15 to 17. That sub-clause means a serious injustice. It provides one of the qualifying principles to be utilised in respect of gaining the mortgage deductible interest. It simply means that if a taxpayer, or the spouse of a taxpayer, had had an interest in a previous home the taxpayer is debarred from receiving the benefit of the interest deductibility. I give an example of what is meant by that: A woman may be married and her husband may die. She becomes a widow. She may have an interest in the previous home which is an extremely modest interest. It may be an interest only in the land or it may be an interest in a home that is in fact a shack. Nevertheless for the purposes of her husband and herself, it is a first home. She becomes a widow and marries again, and because of that first interest, in respect of the second home the taxpayer is debarred from receiving the benefit of the interest deductibility. It is a situation which I desire to take care of by moving an amendment to leave out words in clause 11 (l)(b). That clause states that the deduction is not allowable if: at the time mentioned in paragraph (a) the taxpayer, or a person who was the spouse of the taxpayer at that time, held a relevant interest in the other dwelling.

My proposal is to leave out the words ‘or a person who was the spouse of the taxpayer at that time’. That would fix that situation. But immediately, other positions arise, because if one spouse dies there could be a remarriage. There could be separations and so on. If one were to amend that clause, and if loopholes were not to be created, there would have to be an amendment to clause 1 1 (2) (ii), lines 27 to 35. Frankly I have not been able to devise an appropriate amendment to that clause. But it is something that the Government ought to look at because if that were taken out, at first blush the thought should be that the second proposition- lines 25 to 34- ought also to be taken out. They provide that a deduction is not allowable in respect of an amount by way of interest paid by a taxpayer on or after 1 July 1976 in respect of a loan connected with a dwelling: if another person who is or has been the spouse of the taxpayer holds or has held a relevant interest in the dwelling and that other person-

  1. acquired such interest at a time when that other person was the spouse of the taxpayer or
  2. became the spouse of the taxpayer at a time when that other person held such an interest . . .

If lines 25 to 34 were taken out the property could be handed on from one spouse to another over successive 5-year periods for the purpose of the loan. It would also be necessary to take out sub-section (3) of the proposed new section 83KBA which reads:

A deduction is not allowable under this Subdivision in respect of an amount by way of interest paid by a taxpayer on or after 1 July 1 976 in respect of a loan connected with a dwelling where, if the amount had been paid by the spouse of the taxpayer, a deduction would not, by reason of subsection (1) or (2), have been allowable under this Subdivision in respect of the payment.

That sub-section would create loopholes that are unsatisfactory. So I say to the Government that I hope it bears in mind the inadequacies that develop in respect of the qualifying circumstances for tax deductibility. The 2 principles that should be borne in mind in giving this tax deductibility are simply that the Government should say that a new home means a new household and define for its own purposes what a household is. It ought to redefine sub-section (4) of proposed new section 82KBA and redefine the relevant interest in the previous home which debars the subsequent spouse from receiving the benefit of the tax deductibility scheme. At present it is defined very widely. I believe that with the wit that is available to clever lawyers and the Treasury it can be redefined and that the Government should look at this matter between now and the time when the Bill passes to the Senate or subsequent to its passage in the Senate.

I return once again to the nature of the scheme with which this clause deals. It should not be considered for one moment that I ever thought that this tax deductibility scheme was a good scheme. I always thought that it was a poor scheme, a very regressive scheme for a whole host of reasons. Both the Government and the Opposition know my views in respect of that matter. But the scheme is with us. I suspect that very senior people in the Opposition who brought this scheme in as a last minute election promise in 1972 also realised the inadequacy of the scheme. I have reason to believe that they intended to see the scheme phased out by letting the $14,000 limit remain and pass into insignificance as inflation went on its way.

I return again to the proposition that I am making. The Government will have to look at redefining the market which will be appropriate for giving this tax deductibility. It ought to try to redefine that in terms of households. It ought to try to redefine in another way the relevant interest which causes a spouse of a previous marriage to debar a taxpayer in a subsequent marriage from receiving the benefit of the tax deductions. If that is done, and if it is costed, I believe that it would provide a semblance of justice in respect of the scheme. It would also cause the second reading speech of the Minister to be expanded to define the circumstances of this new market. As with the investment allowance, the difficulty here is defining the market- what are to be the exclusions, what are to be the inclusions and what are to be the limits with respect to both. In all cases in which a government is defining a situation of this kind it will find difficulties at the margin. The difficulties at the margin here, which differ in a different way from the difficulty in respect of the investment allowances, are ones that concern people very personally. They concern people with respect to their homes and their households. I believe that the Government would get credit if it gave an indication- I say this to the Minister who is having a discussion at the table -

Mr Innes:

– He will not listen to you.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-But he will take notice, I am sure. I believe that the Government would get credit if the Minister would only indicate that this whole matter will be looked at again, with the idea of providing some semblance of social justice that ought to apply in respect of this section of the community.

The CHAIRMAN (Mr Lucock:

-I take it that the honourable member has moved his amendment to clause 11?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I move:

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-The Opposition is quite unequivocal, quite unambiguous in its attitude on this matter. It intends to oppose this clause because it represents a very retrograde step that will affect the well-being of a very large number of people. I suppose that we can play around before we get to that stage and give some consideration to the fairly innocuous amendment which was moved by the honourable member for Lilley (Mr Kevin Cairns). It will not affect very many people. It is a little bit of dusting after the place has been completely devastated. But if it gives him any satisfaction we will be supporting him. I believe that it should give him, as one who knows a bit about housing, some satisfaction to know that the Opposition will not have a bar of the Government’s declared intention to bite so heavily into the tax deductibility of the mortgage interest scheme. This scheme was introduced to provide benefit for the home seeking Australian community. More than one million families are at present benefiting as a result of this provision which I understand is incurring or involving expenditure in excess of $120m a year

The honourable gentleman has already mentioned what this Government is doing. The people do not yet know what is intended because they were lulled into a state of false security at election time and on many other occasions. The present Minister for Construction (Mr McLeay), who was the shadow Minister at the time I was the Minister for Housing and Construction, assured the House time and time again that if there was a change of government there would be no jettisoning of the deductability of mortgage interest rates for tax purposes. Unqualified assurances were given to that effect. If I had the time I could refer the Committee to those promises and undertakings chapter and verse. The same undertakings were made during the election campaign.

As I have said, one million families have been benefiting to a very considerable extent. How many will now be deprived of the benefit which from now on will be confined to people who are paying off their first home and will be limited to the first 5 years? I did a rough check- it is impossible to check with any accuracy-of people who are receiving the benefit in my electorate which is, if you like, a post-war electorate, an electorate where most of the development took place in the 1 950s and 1 960s. I venture to say that in my electorate 10 000 people currently receiving a substantial kind of benefit will be deprived of that benefit.

Why was the benefit introduced by the Labor Government? I think everyone knows that in the face of inflation interest rates rose and the building societies were extremely concerned that people did not have the capacity to qualify for a loan. The Treasurer (Mr Lynch) is completely off the beam in respect of this matter when he says that the scheme is insufficient and wasteful and not getting to the core of the problem, which is the deposit gap. Let me assure him that the problem involves a lot more than the consideration of deposit gaps.

As the Minister for Housing and Construction at that time, I had it put to me in an official way by the permanent building societies and the terminating building societies that they were unable to expand their funds because of the incapacity of people to meet the repayments. Many loans have been negotiated on the basis of the benefits flowing from the tax deductibility of mortgage interest. That is to say, without tax deductibility of mortgage interest the people concerned would not have been able to meet the weekly repayments on their mortgages. If honourable gentlemen opposite do not know about that, they do not know anything at all about housing. They will find out why already petitions on this matter have come spontaneously from people all over Australia who are starting to learn that this Government is taking from them something which is of great importance.

Let me just mention the amounts of money that the Government is taking away. I have 2 tables which the Minister assisting the Treasurer has been good enough to indicate he will allow me to have incorporated in Hansard. The first table sets out the effect of mortgage interest deductibility. It shows the tax saving of a taxpayer with a dependent wife and 2 dependent non-student children at various levels of income using the 1975-76 tax rates. It is assumed in the table that the $540 rebate was claimed at all income levels. It is also assumed in the table that taxpayers at various levels of income make identical interest payments of $1,440 a year- that is, 12 per cent interest on an outstanding debt of $12,000. The second table shows the tax savings on mortgage interest deduction at a rate of interest of 10 per cent. I seek leave to incorporate the 2 tables in Hansard.

The CHAIRMAN:

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

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-A11 people affected by the Government’s action will be able to get hold of the Hansard report to see for themselves the extent to which this Government is dipping into their pockets. Let us take an ordinary average worker who has a gross family income of $8,000 a year with a housing loan of, say, $22,000 and making interest payments of $2,200 a year. The amount of tax saving involved in that case is $562 a year. This Government will take that benefit from that man, if he is paying this money in respect of a loan which is not on his first home or if he has been paying that amount for 5 years. Take the case of a man on $10,000 a year. On a loan of $27,500 and with annual interest payments of $2,750, the amount of his deduction allowance is $1,238. His saving is $528. There are numerous examples where people receive a benefit of approximately $10 a week or $40 a month from this scheme.

Does the Government believe that it is rendering a service to a man in that position and to the ailing housing industry at this time by making these unforeseen unpredicted inroads into this tax deductibility scheme? The fact of the matter is that no indication has been given by the Government as to the amount of saving which will be effected by this action. We know that the total cost involved is in excess of $ 120m a year. What will the Government be saving as a result of this action? Will the Minister for Post and Telecommunications (Mr Eric Robinson) be able to tell me when I take my seat whether the Government intends to save $50m or $80m by dipping into the home purchaser’s pocket in this way? Will he be able to tell me how many families will be deprived of this benefit? Why is the Government operating on the fallacious contention that people suffer no hardship if they have been paying off a home for 5 years or if they are paying off a home other than their first home? What a ridiculous proposition that is! How many families would honourable gentlemen know who incur a level of hardship that they have not incurred before when children come along? When people have two, three or four children and are faced with the responsibility of sending those children on to a secondary education and sustaining them as they go through tertiary education, do they not face hardship? How can the Government contend that people suffer hardship only if they are paying off their first home? Why, if people are transferred from one job to another they can be in very considerable difficulties. Some people are engaged in forms of employment which necessitate frequent transfer; some of them lose heavily on the deal each time they transfer.

I believe that this issue represents one of the most deceitful acts on the part of this Government. I believe that it will act as a catalyst and will result in spontaneous indignation on the part of thousands of people throughout Australia who believe that this action involves the breaking of a promise not to remove this benefit. The Government proposes to substitute the homes savings grant scheme for this benefit. That is a form of embellishment by which the Government will assist people who have a capacity to save $2,000 over 4 years. The Government is more intent on giving money to wealthy people rather than continuing this benefit which has provided assistance to one million families or more throughout Australia. The alternative emphasis which the Government has lacks principle. There are very good reasons why the Opposition should oppose this measure and indicate to the Australian people that, if the Labor Party were in government at this time, these benefits would be sustained.

The CHAIRMAN (Mr Lucock:

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

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– We had an arrangement by which this debate was to conclude at 5.20 p.m. We have exceeded that time by a few minutes. Let me take a minute or two to respond, first of all, to the honourable member for Lilley (Mr Kevin Cairns). I listened carefully to the argument he put forward. We believe that there would be a number of other considerations we would have to take into account including the need to expand largely upon the problems that he has raised. As I have indicated to him, the matter will be studied and if it is possible that we can take into account, and assist him in, the concern that he has raised- it is a valid one- we will do so.

I turn to the remarks of the honourable member for Hughes (Mr Les Johnson). I can understand his attitude. He is a former Minister for Housing and Construction. I simply want to put it to the honourable member for Hughes that he can produce all the figures and all the arguments he wishes, but he should look at the record of the Labor Administration. He should look at its record in the reduction of home ownership in Australia during its 3 years in office and look at the enormous increase in the costs of housing.

Mr Brown:

– It was Labor’s mismanagement of the economy.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– The management of the economy under Labor made it so much more difficult for the average Australian to purchase land, to build a home and to pay the extraordinarily high rates of interest. This was all an integral part of the management of the economy under the Labor Administration. I thank members on both sides who have contributed to the debate; some contributions were helpful, others 1 believe were damaging. Nevertheless, it has been a worthwhile debate and I thank all those who contributed.

Amendment negatived. Question put:

That the clause be agreed to. The Committee divided. (The Chairman- Mr P. E. Lucock)

AYES: 75

NOES: 28

Majority……. 47

AYES

NOES

Question so resolved in the affirmative.

Remainder of Bill- by leave-taken as a whole, and agreed to.

Bill reported without amendment, report adopted.

Third Reading

Bill (on motion by Mr Eric Robinson)- by leave- read a third time.

page 2323

SUPERANNUATION AMENDMENT BILL (No. 2) 1976

Second Reading

Consideration resumed from 6 May, on motion by Mr Lynch:

Question resolved in the affirmative. Bill read a second time.

That the Bill be now read a second lime. Question resolved in the affirmative. Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2323

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT BILL 1976

Second Reading

Consideration resumed from 6 May, on motion by Mr Lynch:

Question resolved in the affirmative. Bill read a second time.

That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2323

CONCILIATION AND ARBITRATION AMENDMENT BILL 1976

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

Second Reading

Mr STREET:
Minister for Employment and Industrial Relations · Corangamite · LP

– I move:

Before I explain the Bill I would like to make some general comments. This is the first Bill introduced by the Government to give effect to aspects of the Government’s industrial relations policies and its electoral commitments in this area. The Government is committed to genuine consultations with employers and trade unions on its industrial legislation. I have consulted with the peak trade union organisations, the Australian Council of Trade Unions, the Australian Council for Salaried and Professional Associations and the Council of Australian Government Employee Organisations, and the National Employers Policy Committee, representing the employers, on the Government’s proposals. As honourable members will know, there were detailed discussions here in Canberra on 5 May.

In keeping with its constructive approach, the Government has been prepared to recognise the merits of arguments put to it, and to make substantial modifications to its legislative proposals, where this has been possible, consistent with maintaining the Government’s basic policy objectives.

I turn now to the Bill itself. The proposals which it incorporates have the following purposes: Firstly, to rectify weaknesses in the Act regarding representation by the Minister of the public interest, in relation to appeals and references; secondly, to extend the present requirement that in Full Bench proceedings, the Commission must have regard to the state of the economy and the likely effect of any award made, to include specifically the level of employment and inflation; thirdly, to make sure that every member of a union or employer organisation has a real opportunity to choose, without intimidation, who should conduct the affairs of the organisation; fourthly, to limit the term of office of office bearers of organisation to a maximum of 4 years; and finally, to provide for the appointment of an additional judge of the Industrial Court.

Appeals and References in the Public Interest

The Government has the right to intervene in the public interest in national wage and other cases, including appeals the references, once they come before Full Benches. However, it is in the anomalous position that it does not have the opportunity to express a view as to whether there should in fact be an appeal or reference to a Full Bench in the public interest. Clauses 4 and 5 of the Bill remedy this omission. It will of course still be for the Commission to decide whether to hear an appeal or reference in the public interest. The Government will be in no different position from any party in this regard.

The Government had also proposed that it should be a ground of appeal that an award is not in accord with decisions of principles by a Full Bench. While accepting that such decisions should be observed and applied by individual members of the tribunals, whether Commonwealth or State, the employers expressed concern about the problems that might arise because there is no one Full Bench. The Government has concluded that the proposal the I have already explained, relating to appeals and references, would be adequate. Similar provisions for appeals and references are to apply within the Flight Crew Officers Industrial Tribunal jurisdiction as a result of clauses 9 and 10.

The State of the Economy

I do not need to emphasise the importance of the wage fixing principles enunciated by the Commission in relation to the general economy. They are all the more significant in the context of the present levels of inflation and unemployment. The Act already requires a Full Bench of the Commission to have regard to the state of the national economy and the likely effects of any award that might be made. However, the Government has in clause 6 of the Bill widened this provision to require Full Benches to take account specifically of the likely effects on the level of employment and on inflation. This change does not in any way erode the authority of the Commission, or change the character of its functioning.

Mr Innes:

– What does it do?

Mr STREET:

– It does, however, recognise-as recent experience has highlighted- the nature of the nexus between the rate of increase in labour costs, especially wages, unemployment and inflation. I do not need to stress the importance of this in the overall interests of the Australian community. I would have thought that the honourable member for Melbourne (Mr Innes) might have expressed some interest in the Australian community.

Mr Innes:

-A lot more than you have.

Mr DEPUTY SPEAKER (Mr Giles:

-Order! The honourable member is on the front bench now. I think he should remember that.

Mr Innes:

- Mr Deputy Speaker, I take a point of order.

Mr DEPUTY SPEAKER:

-The honourable member will resume his seat. No point of order arises on this matter. I call the Minister.

Mr STREET:

– I next deal with ballots. The Government’s intentions to provide for secret postal ballots was one of the issues most commonly discussed during the election campaign. It is evident that there is widespread support for the proposal. Essentially the Government is concerned that every member of a union and employer organisation has a real opportunity, without intimidation, to choose who should conduct the affairs of the organisation. The Government had proposed that all elections for officers should be conducted by the Australian Electoral Office, with the cost of the election being paid for by the Government. As honourable members will know, it is already the practice to provide for officially conducted elections at Government expense- provisions which, I might add, the unions indicated, when they saw me on 5 May. had their support.

During my discussions with the unions they expressed very strong opposition to the proposal that the Electoral Office should conduct all elections. They emphasised in particular their concern that the affairs of organisations were being taken out of the hands of the organisation. They also questioned whether the International Labour Organisation Convention on Freedom of Association and Protection of the Right to Organise, which the Australian Government had ratified, would not be contravened. There can be no gainsaying that many members of organisations do not, for various reasons, participate in the ballots for officers within their organisations. For example, in the last election of a Commonwealth Chairman of the Amalgamated Metal Workers Union, less than 2 per cent of the total membership exercised its prerogative to vote. The AMWU had had similar experiences with elections for other office holders. The Government sees a major solution to this problem being through a secret postal ballot.

At the same time the Government has appreciated the real concern expressed by the unions and has sought to meet their objections, consistent with its policy objectives. What it therefore proposes is that all organisations, whether of employers or workers, will be required to have elections conducted by secret postal ballot, and that these arrangements should have the opportunity of a 2-year trial. There may in special circumstances be other methods of election in which all members would have an adequate opportunity to vote, the ballot would be conducted without intimidation, and it would result in a greater participation of members. The Industrial Registrar may, on application from the organisation in respect of a ballot, give an exemption from the postal ballot provisions, where he is satisfied that all of these conditions are met. There will also be provision for the making of regulations in relation to the conduct of postal ballots. Where an organisation’s rules do not provide for postal voting, its rules may not be appropriate for the conduct of elections by postal ballot. This amendment will enable appropriate provision to be made by regulation. Clauses 3, 12 and 13 of the Bill give effect to the proposals on election ballots. It will, of course, still be open to organisations to use the present facility to have election ballots conducted on their behalf by the Industrial Registrar or the Commonwealth Electoral Officer at Government expense.

Before leaving the matter of ballots, I should perhaps refer to the difficult and controversial question of collegiate voting. As things stand, as a result of amendments introduced in 1973, organisations which provide for collegiate voting are required to move to direct elections for full time officers by mid November. The Government accepts in principle a form of collegiate voting, but the system adopted must be consistent with its policy of fullest participation by members. As I have indicated, the issue is a very complex one. and the Government believes that further detailed consideration is necessary, so that it can properly examine the large numbers of representations which it has received.

Term of Office

The Government considers that a maximum term should be fixed for office bearers in organisations. Its initial disposition was to favour a 3-year term. However, in the light of the views which were expressed, particularly by the unions, it has opted for a maximum term of 4 years. Organisations will have 12 months within which to comply with this provision. The change will apply, prospectively, to elections when the present term of office of current office holders expires. Clause 1 2 provides for this.

Appointment of an additional Judge

Clause 1 1 of the Bill provides for an increase in the maximum number of judges of the industrial Court. The Government is anxious that the person appointed to be President of the Administrative Appeals Tribunal should be of the highest calibre, and thus it is appropriate that he should have judicial status. The Prime Minister (Mr Malcolm Fraser) has already announced that the Government proposes to bring the Act extablishing the Tribunal into operation this year. The increase by one in the permissible number of judges in the Industrial Court will enable the President of the Tribunal to be a judge of the Court. He will also be available to take part in the work of the Court other than appeals on administrative matters.

Machinery Matters

The Bill further proposes some machinery changes. I would be pleased to explain these at the committee stage. I am also happy to add that up to date copies of the Conciliation and Arbitration Act are available from the Bills and

Papers Officer for those who desire them. I indicated at the outset that the Government is committed to genuine and constructive consultations with employers and trade unions on its industrial legislation. It has demonstrated again its willingness to work with employers and workers, that it is flexible and prepared to recognise the merit of arguments put to it.

As a result of the Government’s initiatives, the ACTU has agreed to take part in wide ranging discussions with the Government on the state of the economy, with particular emphasis on wages policies. Such a spirit of co-operation is vital in the interests of the Australian community. Wage restraint is essential for economic recovery. As a further evidence of the Government’s good faith, we have agreed not to proclaim the legislation, other than that relating to the appointment of the additional judge, pending the holding of the discussions. I commend the Bill to the House.

Debate (on motion by Mr Willis) adjourned.

page 2326

REMUNERATION AND ALLOWANCES AMENDMENT BILL 1976

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

Second Reading

Mr ELLICOTT:
WentworthAttorneyGeneral · LP

-I move:

The purpose of this Bill is to provide for increases in the salaries and allowances of Judges of the Family Court of Australia. The rates of salaries and allowances for Judges of the Family Court, which are at present prescribed in the Family Law Act 1975, have fallen behind the rates for Judges of other Federal courts of comparable status. This has occurred largely because the Family Law Bill occupied so much of the time of both Houses during its passage through Parliament last year.

The proposed new rates of salary and allowances are based on a recommendation obtained by the previous Government from the Remuneration Tribunal and are the same as those proposed in a Bill to give effect to the recommendation introduced into, but not passed by, the last Parliament. The rates proposed for the Chief Judge and for Senior Judges of the Family Court are equivalent to the rates for the Chief Judge and Judges respectively of the Australian Industrial Court. The proposed rate for ordinary Judges of the Family Court- at which level the majority of Judges are being appointedis $5,000 less than that for Senior Judges.

Since the proposed increases were to have been made before the commencement of the Family Law Act, and appointments to the Court have been offered and accepted on this basis, the Bill now before the House provides for the increases to be retrospective to 5 January 1976, the date of commencement of the Family Law Act.

Immediately after the House has agreed on further debate on this Bill, I propose to introduce a Family Law Amendment Bill to make a number of amendments to the Family Law Act. One of those amendments will make changes to the Act to complement the provisions of this Bill. One of the most significant provisions of the Family Law Act is the establishment of Family Courts. It is important both to the Judges already appointed and for the appointment of further Judges that the salary increases provided for in this Bill be made, and made as soon as possible. 1 commend the Bill to the House.

Debate (on motion by Mr Lionel Bowen) adjourned.

page 2326

FAMILY LAW AMENDMENT BILL 1976

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

Second Reading

Mr ELLICOTT:
WentworthAttorneyGeneral · LP

I move:

The purpose of this Bill is to make amendments to the Family Law Act 1975. Honourable members will be aware that the Family Law Act has replaced the old divorce, maintenance, custody and property laws contained in the Matrimonial Causes Act and to some extent in State and Territory legislation, and that it came into operation on 5 January this year. Honourable members will also doubtless be aware that the basic provisions of the Act were subsequently challenged in the High Court which, on 1 1 May, delivered judgment substantially affirming the validity of the provisions.

While the decision was substantially favourable to the Act, and was welcomed by the Government, the limited extent to which the Court held it to be beyond power does give rise to problems. I refer to the decision that, in the case of custody of children, the Act was valid only to the extent that it applied to proceeding between the parties to a marriage for the custody of the natural or adopted children of both of them. This means that disputes between one party to a marriage and, say, a grandparent of a child of the marriage would fall outside the jurisdiction of the Act and would therefore have to be resolved according to relevant State law. Likewise disputes between a husband and wife over a stepchild would be outside the Act.

In the case of matrimonial property, the High Court held that the Act is valid only where the property proceedings are related to pending or completed proceedings between the parties for divorce or other principal relief. Here again, the jurisdiction over resolution of disputes is therefore divided between the Act and the relevant State law.

A further regrettable consequence of the decision as to the limits of jurisdiction under the Act is that the jurisdiction of the Family Court of Australia, a Federal court created by the Act, is limited to the same degree. This means that a person who has taken proceedings under the Family Law Act in the Family Court, only to find that his case is beyond the limits of the jurisdiction under the Act, would have to start again in the appropriate State court under the relevant State legislation. It will be seen that the High Court decision has meant that the concept of a family court able to deal with all matters relating to family law cannot be realised under a law of this Parliament. Under present constitutional limitations, this concept can be realised only through a system of State family courts exercising State and federal jurisdiction covering the whole area of family law.

One of the main purposes of the Bill now before the House is to amend the Act so as to bring it into line with the decision of the High Court. The definition of ‘matrimonial cause’ in section 4, which governs the extent of jurisdiction created by the Act, has been narrowed in the areas of custody and property to the degree called for by the decision. In the areas of maintenance and injunctions, the definition has been confined to proceedings between the parties and, in the case of maintenance of a child, to proceedings by or on behalf of a child against one or both parents. The expression ‘child of a marriage’ has been limited to the natural or adopted children of both parties to the marriage, although the existing, wider meaning has been retained for the purposes of section 63, which prevents a divorce becoming absolute unless the court is satisfied as to the welfare of children of the marriage.

I am concerned at the difficulties and hardships that may be encountered by people as a result of the incomplete extent of the jurisdiction under the Act in the areas of custody and matrimonial property. I therefore propose to raise these matters with the States at the next meeting of the Standing Committee of Commonwealth and State Attorneys-General arranged for next month. The Standing Committee is already examining proposals for uniform matrimonial property laws amongst the States and Territories, and I hope that it will be able to come up with some firm proposals in the light of the High Court’s decision. As far as custody is concerned, the problem of the disputes beyond the reach of the Family Law Act is part of a wider need for uniform State and Territory laws as to custody, including custody and rights of ex-nuptial children. All these are matters on which there should be uniformity of law as far as possible. Being fairly clearly beyond the power of the Commonwealth, they should desirably be the subject of a uniform approach by the States.

Before leaving the decision of the High Court. I should mention that section 97 ( 1 ), which requires proceedings under the Act to be held in closed court, was held to be invalid so far as it purported to apply to State courts when exercising jurisdiction under the Act. The clear policy of Parliament, as expressed in section 97 ( 1 ), was that proceedings under the Act should be in closed court. As the High Court decision means that the closing of State courts when exercising Federal jurisdiction is a matter for State law, the adoption of the principle in section 97 (1) will depend on the co-operation of the States. I therefore propose to suggest to the States that they consider introducing complementary legislation as to the closing of their courts when exercising jurisdiction under the Family Law Act. Although the jurisdiction of the State supreme courts under the Act will be terminated in the near future- at the request of the States- I expect State courts of summary jurisdiction to continue to exercise concurrent jurisdiction with the Family Court for some time to come. In the meantime, section 97 will remain unaltered, so that proceedings before the Family Court of Australia will continue to be in closed court.

The remainder of the amendments are mainly of a formal nature, with a few being of substance. None alters any of the main principles of the Act. For the benefit of new honourable members, 1 mention that these principles were debated at great length in both Houses of the last Parliament, and the Bill was extensively amended before being finally approved by a free vote of members on all sides. These remaining amendments include some that were foreshadowed, but not moved, by the Attorney-General in the previous Government during the debate on the Bill, and others for which the need has been disclosed by experience with the administration of the Act since its commencement. They amount to a miscellaneous collection, which I can best deal with in a general way by taking them in broad categories. Each of the amendments is explained briefly in the explanatory memorandum circulated in the House with the Bill, and can be further clarified in the Committee stage if necessary.

One category comprises amendments included to ensure that State Family Courts established pursuant to section 41 of the Act can operate on the same basis as the Family Court of Australia. In the grafting-on of the provisions for State Family Courts to the Family Law Bill during its passage through Parliament, a few oversights and omissions occurred which this Bill seeks to remedy. For instance, the Bill provides for transfers of proceedings from a Supreme Court to a State Family Court in the same way as the Act now provides for transfers to the Family Court of Australia. An omission in the provisions of the Act governing appeals from State Family Courts is also dealt with.

After Western Australia decided to establish its State Family Court, it became apparent that it would be preferable for the Court to have its own counselling staff rather than use that of the Family Court of Australia, as envisaged by section 41 of the Act. The Bill includes amendments to ensure that this can be achieved. At the request of Western Australia, a provision of the Bill will permit one person to hold simultaneously the offices of Judge of a State Family Court and Judge of the Family Court of Australia. Having in mind that double judicial commissions are not usually encouraged, I have given careful consideration to this matter. I have accepted the Western Australian view that the holding by one person of commissions in both courts could be desirable in the special circumstances of this case.

The Bill also includes some amendments to the transitional provisions of the Act, which provide for the disposal of proceedings that were pending when the Act came into operation. In the case of pending divorce proceedings that have been continued under the repealed Matrimonial Causes Act, as permitted by the new Act, some uncertainty has arisen as to whether decrees granted after 5 January become absolute in 3 months, as under the old Act, or in one month, as under the new Act. The Bill seeks to make it clear that such decrees become absolute in the shorter period, consistently with decrees that had been granted but had not become absolute on 5 January. Also, the right to apply to have pending divorce proceedings dealt with under the new Act on the no-fault ground is extended to either party, provided they have been separated for the required period. At the moment the right is restricted to a petitioner or cross-petitioner.

The Bill contains some amendments to make the maintenance and custody provisions more effective. One amendment will enable an authority or officer of the Commonwealth or a State to take proceedings to obtain a maintenance order on behalf of a party or child. This would make sure, for example, that the Department for Community Welfare in South Australia may continue to take maintenance proceedings on behalf of persons to whom it pays pension. The amendment will correspond to section 106 (b) of the Act, which was sponsored by the right honourable member for Lowe when the Family Law Bill was in this House, and which enables proceedings for enforcement of maintenance orders to be taken on behalf of persons entitled to moneys under them. I might add that section 106(b) has itself been re-drafted as a formal amendment. The substance of the provision remains unchanged.

Other amendments made by the Bill are designed to clarify the powers of a person to whom a warrant is addressed to enforce a custody or access order. Doubts have been raised as to the extent of these powers, and the amendments spell out the powers under a court order that may be exercised, where necessary, to search places and to use force to take possession of a child.

Two amendments in the child welfare area have been included in the Bill at the request of the former New South Wales Government. One of these ensures that a child who is under the guardianship of a State or Territory Director of Child Welfare while awaiting adoption cannot be the subject of a maintenance or custody order except in special circumstances. At present the Act confines this exemption to children who are under the care and control of a Minister pursuant to State or Territory child welfare legislation. The other amendment would take away the jurisdiction that a court now has under the Act to order the continuance of a custody or access order relating to a child after the child has been adopted.

By an oversight when the original Bill was being amended during its passage through Parliament, provision was not included to enable appeals to be taken from Territory Supreme Courts to the Full Court of the Family Court, which is the court of appeal from State Supreme Courts under the Act. The only avenue of appeal from Territory Supreme Courts is therefore to the High Court. An amendment in the Bill provides for appeals from Territory Supreme Courts to the Full Court of the Family Court.

To facilitate the determination of questions of law by the Full Court of the Family Court, a provision has been inserted to enable such questions that arise in any proceedings before the Family Court to be referred by way of a case stated procedure to the Full Court. An authoritative decision of the Full Court could thus be obtained without the need for a full scale appeal.

The remaining amendments in the Bill are consequential upon those already referred to, or are relatively insubstantial or are of a formal or drafting nature. Honourable members will recognise the need to remedy promptly any defects in an area of law that is so important to so many people in the community as this law obviously is. I commend the Bill to the House.

Debate (on motion by Mr Lionel Bowen) adjourned.

Sitting suspended from 6.5 to 8 p.m.

page 2329

QUESTION

FISCAL POLICY DECISIONS

Ministerial Statement

Mr LYNCH:
Treasurer · Flinders · LP

-by leave- This statement is a further major step in the implementation of the Government’s economic policy; it represents the culmination of 5 months work which began on 14 December 1975. The decisions which I shall announce tonight establish this Government’s priorities. Because of the intensive work which has gone on during the past 5 months the Government is able to act decisively some 3 months before the traditional August Budget. The measures which I shall shortly outline will enable the Government to regain control of the national Budget- a task which is essential to the attack on inflation and unemployment and returning the private sector to its rightful role. Above all they will establish confidence in the Government’s capacity to deal with the economic problems which we as a nation face. Difficult decisions have been required; they have to be taken. The Government has sei out to reduce greatly the rate of increase in Commonwealth spending and, consequently, in many cases individual programs have been strictly curtailed or even reduced from present levels. Without this determined action the pressing taxation and family reforms which the Government has decided to introduce would not have been possible.

This statement will enable all Australia to see the main course on which the Government is set: it charts that course. The announcements I shall make tonight are merely part- though an important part- of the continuing and progressive pursuit of lines of policy which we as a government have pursued from the outset. Unlike its predecessor, the present Government has always had a clear conception of what needed to be done- and how to do it. The election policy speech delivered by the Prime Minister (Mr Malcolm Fraser) on 27 November included the following passages:

On 14 December, we will start the most rigorous planning for the 1976 Budget. We as a Government will be concerned that you get value for the dollars we spend on your behalf.

Spending on essential Education. Health and Welfare programmes will be protected against inflation. At the Mime time, a great many improvements in administrative efficiency can and will be made.

These actions will give the private sector room to start expanding production and providing jobs.

Over the next three years, we will introduce a number of major reforms to direct resources away from Government and back into the hands of individuals and business.

These passages sum up our public expenditure policies to date. They are the genesis of the further decisions I shall announce tonight.

The Strategy Restated

There are sufficient signs now for believing that economic recovery is under way. though it is at an early stage and will of course require careful nurturing. The real threat to a sustainable, long term recovery is the threat of inflation. If inflation continues unchecked, or seems likely to do so, at its present crippling rate, businessmen will continue to place first emphasis upon survival and the avoidance of any risk. They will postpone investment and pare inventories and employment to the bone. Consumers will save rather than spend. An increasing proportion of local demand will be supplied from overseas as Australia’s international competiveness declines progressively.

It is because the Government wishes to avoid these things that it is continuing to aim for a moderate, balanced recovery in which the public sector stands aside to permit the private sector to grow. At the same time investment needs to be actively encouraged in order to lessen the possibility of the recovery running into bottlenecks at an early stage. It will be clear from this that we as a government are not looking for a rapid upsurge in the level of activity but for a strong, soundly-based and sustained growth at a rate that will endure. As we have been arguing before the Conciliation and Arbitration Commission, sustained recovery can hardly come about so long as real wages are maintained at the inflated level which, over the past 3 years, they have attained. Without progress, and the expectation of progress, on the wages front, we are locked in to a rate of inflation which will simply not permit a large increase in investment and the provision of job opportunities at a rate which would significantly reduce the present level of unemployment. To attempt to force a more rapid recovery with inflation poised to take off again from its double digit rate would prove counterproductive. It is this reality which closes off easy options and dictates policies which have a longer view.

One of the more depressing aspects of the current economic situation is that under conditions of inflation, particularly of the rapid variety we have been experiencing in this country in recent years, it is the poor and the disadvantaged who are the hardest hit. Inflation is a hidden tax which falls most heavily upon the disadvantaged, the unorganised, the aged, the retired and the thrifty. That fact, to which we have been pointing for some time, is becoming more generally recognised. It has for example been well documented by the reports of the Henderson poverty inquiry. Over and over again we have pointed to the nexus between unemployment and inflation- Over and over again we have pointed also to the nexus between the inflation we are now experiencing and the extraordinary degree to which, over the last 2 years, the Budget has been pushed into deficit by the insensate rush to inflate the level of government spending. This has all been set down at length in my statement on the economy and economic policy delivered in the House on 4 March last and elaborated further, so far as monetary conditions and prospects are concerned, in my statement to the House on that topic on 25 March.

The Government’s policies have in no way changed since those statements were delivered. They remain, in essence:

To bring inflation under control as the first priority.

Pursuant to that, to halt the massive increase in government spending and the growth in the public sector, and in the process reverse the trend to big government and to centralised bureaucracy; tax indexation is a key element in the achievement of this objective.

As pan of this process, to control the Budget deficit, so that the huge amounts of liquidity flowing from it and the inflation which they generate may be checked.

To administer monetary policy flexibly so that the rate of monetary expansion will be less accommodating to inflation but at the same time will permit financial institutions to underwrite the economic recovery.

To encourage the private sector to expand, indirectly through inflation control and directly via the investment allowance and other measures.

To conduct exchange rate and protection policies in a way which contributes to the antiinflation objective.

To exercise all our available powers, persuasion and influence to achieve a more moderate increase in wages; tax policies here are again of great importance. To tap that growing reservoir of good sense in the community which recognises that excessive wage and cost increases are eroded by the inflation they cause and, what is far worse, reduce living standards by destroying job opportunities, adversely affecting productivity and in the process jeopardising economic recovery.

The decisions I shall announce tonight will conform in all respects with those objectives.

First and foremost, they represent a major step towards reining in the growth of the publicsector through the overall reductions we have made in the expenditure programs coming before us.

Secondly, they mean a major step, in the Medibank area, towards restoring greater freedom of choice while maintaining universality of health cover and avoiding any means test but, in the process, lightening the load on the Budget further.

Thirdly, through the new family allowances proposal they involve a major decision to improve the lot of the disadvantaged in the society at relatively slight net cost to the Budget deficit.

Fourthly, because of the restraints we have imposed on the growth of Commonwealth spending, we shall be able to introduce our personal tax indexation proposals while maintaining a responsible approach to the overall prospective Budget outcome.

Fifthly, the introduction of personal tax indexation will itself produce a desirable discipline upon future Government spending decisions; and

Lastly, while this is neither the time nor the occasion upon which to present a detailed budgetary prospect for 1976-77, we are now confident that our Budget when brought down in August will provide for a deficit substantially smaller than the deficit in the Budget we have inherited.

Special mention should be made of wages policy. The Government’s wages policy is central to its approach in bringing inflation under control. Under present circumstances wage restraint is essential to the economic future of this country. The trade unions have made it clear that they see a necessary link between wages policy and tax indexation. The Government, for its part, is sensitive to that approach. We realise that wage earners are more likely to be willing to moderate their wage claims if the wage increases they receive are not being automatically subjected to higher tax rates through the mere workings of inflation on the personal tax system.

We believe that our policy on tax indexationas a permanent feature of Australia’s tax system- should make it possible to work out with the unions a rational wages policy which will be of benefit to all workers and to the nation as a whole. The new arrangements for assistance to families, particularly families on low incomes, should also help in this direction. We hope that the measures I shall introduce and announce tonight will contribute to fruitful talks with the unions next month.

The Public Sector

From the outset, one- though only oneelement in our policy approach has been our utter conviction that the growth in the public sector spending area must be reined in if inflation is to be checked; and as already indicated, unless inflation can be so checked, sustainable levels of output and employment will not be achieved. That is the whole thrust of what the Government has in recent weeks been putting to the Australian Conciliation and Arbitration Commission.

On 14 December 1975 we therefore set ourselves, as a major priority in our strategy of recovery, the task of regaining control over Commonwealth expediture. To this end new procedures were established for the control of spending and the administration of Government programs. In December it was determined that all but the most essential new expenditure proposals should be deferred and that additional funds for essential on-going activities in 1975-76 should be offset against expenditure in other areas wherever practicable.

In January urgent reviews were made of Government spending programs and of staffing levels both in the Public Service Act area and in the area involving Commonwealth bodies not in a statutory relations!1 p with the Public Service Board. Arising out f these reviews, decisions were taken which .ave been estimated to reduce Budget outlays in the balance of 1975-76 by some $360m below what they would otherwise have been. The results of these and other measures to tighten our grip on expenditures are already showing up.

On the staffing side, between end-November 1975 and end-April the number of Public Service Act staff and staff in bodies outside the Public Service Act area for which staff ceilings were also set has declined by 8250 or 2.5 per cent, to 324 300, which was already below the June 1 976 target ceiling level of 326 380; in the Public Service Act area alone the decline was 3.4 per cent. While there are always considerable uncertainties about budgetary estimates until the numbers actually go up. on present indicationsMr Uren- That is an understatement.

Mr LYNCH:
LP

– If the honourable gentleman listens, he might learn something for the first time.

Mr McLeay:

-I doubt that.

Mr LYNCH:

– Well, hope springs eternally. On present indications actual outlays in 1975-76 will be somewhat less than the original Budget estimate of $2 1,915m. If achieved, it will be the first occasion since 1968-69 that this has happened and it will be in marked contrast to the situation in 1974-75 when final outlays exceeded the Budget estimate by a staggering $ 1,700m.

The pick-up in our revenues as the economy begins its tentative recovery is also now beginning to emerge in our accounts. As a result of this and the decisions which the Government took earlier, it is now clear that we shall finish the present financial year with a deficit well below what was in prospect when this Government took office. I mention these facts as demonstrating the results, now coming to hand, of some of the measures we took immediately on assuming office. But as well as these immediate measures! the Government has been preparing from the outset to deal on a longer-term basis with what was obviously going to be for some time a major problem area.

All along we have recognised that the results of the extravagance of our predecessors could not be put to rights within 6 months. One central element in putting things to rights must be the restoration of budgetary responsibility through rigorous restraint on expenditures. There will be some areas where we shall be cutting deeply in order to eradicate the waste and inefficiency of the past or to amend the thrust of policies not of our making.

In other areas we shall be maintaining the present real levels of the programs involved. In others again we shall be providing for some increase in spending in real terms, although usually less than had been sought. As a result of our decisions we shall be relieving the expenditure side of the Budget of what would otherwise have been very considerable sums. Overall, however, the resulting emphasis will be on reducing the rate of growth in expenditures- and on doing this in ways which are consistent with this Government’s overall economic and social objectives.

The decisions I will announce shortly relate to expenditure restraint, Medibank, a new scheme of family allowances and personal tax indexation. These decisions should be seen as but the latest instalments of the Government’s continuing policy to restore economic health and at the same time to improve the living standards of less well-off sections in the Australian community.

Reining-in Government Spending

We have set about the task of reining-in Government spending in an orderly and systematic manner. We began immediately after the Government’s election. On 24 December 1975 departments were asked to submit their forward estimates of projected 1976-77 expenditure, after rigorous scrutiny and approval by their Ministers, to the Treasury by 12 February. The Treasury report on these forward estimates was completed on 1 1 March. Although relating largely to existing- as distinct from new- policy programs, the forward estimates then implied a further increase of about $4,700m in Budget outlays in 1976-77 and a deficit of $4,800m. These figures illustrate all too starkly the enormous and snowballing costs of the multitude of programs introduced by the previous Government.

The Economic Committee on Cabinet gave early consideration to this situation at its meeting on 15 March. It agreed that such a forward prospect was just not credible in terms of responsible economic policy, or of the basic philosophy of the present Government. Since then there has been the most searching examination of Government expenditure programs by officials and Ministers. In some cases large programs have been involved; in others small ones. In total, the reductions that have been effected compared with the original forward estimate of expenditure amount to almost $2,600m. As a result of those decisions the task of framing, over the next few months, a responsible Budget for 1976-77 has now been reduced to manageable proportions. This was a foremost objective of the expenditure review exercise.

I should however emphasise that I am not tonight bringing down a Budget. I am not for the most part announcing detailed figures of appropriations for particular expenditure programs for 1976-77. 1 am not dwelling upon the economic prospects for the year ahead in the way that is customary in a Budget Speech. I am not speculating upon what, when we come actually to frame the Budget, the outcome for the deficit will be. Clearly, given the enormous budgetary imbalance which we have inherited, we cannot withdraw to a balanced Budget situation overnight. Indeed, if we were to seek to do so, the repercussions for the Australian economy of the measures which would necessarily be involved would not be acceptable. We can achieve a substantial reduction in 1976-77 and we shall now do so when the Budget is brought down in August.

The present exercise, though it will be of central importance to the Budget we frame in July, cannot substitute for the normal budget-making process. It is not intended to do so. The reduction of $2,600m from the original forward estimates will however make it possible, within the context of a sound overall fiscal framework, to announce now certain other decisions which are of vital interest to all sections of the Australian community. In the light of our efforts on the expenditure side, and on the basis of the advice available to us, these decisions can now responsibly be announced. Their announcement now will reduce uncertainty, add to confidence and assist in overall economic recovery. The expenditure decisions which have been taken to date, and those that will be taken during the course of the next few months, will be reflected fully in the Budget to be brought down in August. Some of the more significant decisions can, however, be indicated now; additional details will be provided by the relevant Ministers where appropriate.

Environment Housing and Community Development

Commonwealth expenditure on urban and regional development programs- including growth centres, land commissions and sewerage works- has grown very rapidly over recent years. The forward estimates pointed to further substantial increases in 1976-77. Although the activities carried out under many of these programs are desirable, the programs do involve large and continuing expenditures. If the Government is adequately to restrain the growth in total public spending, and at the same time to insulate as far as possible payments to needy individuals, much of the restraint on expenditures must fall on these large and costly programs.

Against this background the Government has initiated a complete and searching review of all major urban and regional development programs to ascertain the nature and extent of its future involvement in these areas. An interdepartmental committee has been established for this purpose and has been asked to report urgently. Matters to be covered in this review will include, for example, the overall impact of the land commission programs on the availability and price of urban land and their impact on the viability of the private sector. The Committee has also been asked to review the Commonwealth role in the growth centres program.

In the light of this review it is envisaged that there be an early meeting with the Premiers to consider the future of this program. Pending the results of these various processes, the Government has decided to meet on-going firm commitments arising from agreements previously entered into. The decisions taken on the whole gamut of programs administered by the Department of Environment, Housing and Community Development have the effect at this stage of reducing that Department’s original forward estimates by over $400m. Substantial reductions have been made also in the forward estimates of several other departments.

Post and Telecommunications

The projected call of the Department of Post and Telecommunications on the 1976-77 Budget, for example, has been reduced by close to $250m. The total amount to be available to the Australian Telecommunications Commission for its capital program in 1976-77, apart from funds available from its own internal resources, will be $415m. This compares with $392m in 1975-76. However, of the 1 976-77 amount it is proposed that only $2 15m be provided to the Commission from the Budget. Subject to the agreement of the Loan Council, the Commission- a major business undertaking- will be permitted to borrow the balance of $200m itself on the local market. This will not reduce the call on resources of the public sector overall but it will relieve the call on the Budget to the extent of $200m in 1976-77.

The other major reduction from the forward estimates of this Department is in respect of the Australian Broadcasting Commission. The amount to be provided to the ABC for its operational and equipment expenditures in 1975-76 is currently estimated at about $133m. This amount does not include costs- estimated at $33m-of facilities and services provided for the national broadcasting and television service by the Telecommunications Commission and by other departments. The net cost to the Budget has grown tremendously over recent years as a consequence partly of the abolition of radio and television licence fees and partly of a large growth in the activities and staff of the Commission. In 1976-77 we shall provide $128m to the ABC for its operational and equipment expenditures, with provision for unavoidable increases in costs during the year.

Transport

Expenditure on transport facilities and services of all kinds represents such a large slice of the Budget that some restraint on projected expenditures in this area would have to be imposed if we were to achieve the kind of overall reductions we are seeking. In all, our recent decisions reduce the forward estimates of the Department of Transport by roughly $220 m. although total Commonwealth expenditure on transport services and facilities next year is still expected to be somewhat higher than this year’s level. Although less than the increase provided for in the forward estimates, the Government is proposing to appropriate an additional $35.8m for assistance to the States for roads in 1 976-77.

Total expenditure from the 1976-77 Budget for roads will amount to $453.5m, including the carryover from 1975-76, compared with the estimated cash outlay in the current year of $413.5m. It is the Government’s intention that in the distribution of these funds particular attention should be given to the needs of local government authorities. The Government has determined, in the interests of administrative efficiency, to amalgamate the Commonwealth Bureau of Roads and the Bureau of Transport Economics.

The Government has also made a number of decisions in the area of railways. The Australian

National Railways Commission will withdraw its twice-weekly freight service between Darwin and Larrimah in the Northern Territory but will continue with the co-ordinated road /rail service to Darwin, which will be able to provide a faster and more regular service.

The Government has decided to ask an independent committee to inquire into the Adelaide/Crystal Brook railway project and the options available, and into the Tasmanian railway system. There is also to be a review of the construction standards and costs of the Tarcoola /Alice Springs railway project. Reports on these matters are expected within 2 months. In the meantime, expenditure and new commitments in these areas will be kept to a minimum.

The Government is concerned at the increasing costs to the Budget of providing civil aviation services. Operating expenditure in this area in 1976-77 is to be held at $153m-the currently estimated level of 1975-76 expenditure- and expenditure on technical equipment will be substantially reduced.

Air navigation charges will be increased by 1 5 per cent with effect from 1 December 1976 and we will be examining urgently other ways both of reducing the costs of these facilities and of recovering more of the costs involved. The Government proposes also to examine ways of rationalising the fleet of Commonwealth-owned aircraft with a view to reducing expenditure in this area.

Finally, I mention that an estimated $45m will be available to the States in 1976-77 for projects already approved under the urban public transport improvement program. This is substantially less than the amount sought in the forward estimates but still represents a significant increase on the amount being provided under this program in 1975-76; in all the circumstances, it is not proposed that any new projects under this program should commence in 1976-77.

Construction

The forward estimates for the major programs of the Department of Construction have been reduced by about $60m. Within the Civil Works Program (Part I), all works now under construction will be carried through to completion. So far as new works are concerned, the Government has taken steps to ensure that only projects that meet the strictest test of essentiality are commenced in 1 976-77. There is an estimated $ 100m worth of new works in this category, a somewhat lower level than the volume of new works programmed in recent years. I note in passing that a substantial portion of these new works will be located in the Northern Territory.

Within the furniture and fittings vote of the Department, we shall, consistent with our intentions for continuing restraint in the growth of the Public Service, reduce expenditure in 1 976-77 on furniture and fittings for civil departments below the level of 1975-76. The Department’s large forward estimate for civil repairs and maintenance activities has also been pared substantially to exclude provision for all but essential activities.

Administrative Services

The same rigorous approach to the departmental forward estimates is reflected also in our decisions on the major programs of the Department of Administrative Services. In all, these decisions are estimated to reduce the projected call on the 1976-77 Budget by over $30m. The major reductions are in respect of the Overseas Property Bureau and the civil acquisitions program. The allocation to the Overseas Property Bureau in 1976-77 will be sufficient only to meet current commitments on overseas property services, buildings under construction and plant and equipment, while expenditure on repairs and maintenance is to be rigorously controlled. Expenditure under the civil acquisitions program will be confined to essential property acquisitionsmeaning largely to settlement of acquisitions already in progress.

Aboriginal Affairs

In recent years large sums have been provided from the Budget for Aboriginal advancement through a multitude of diverse programs. Unfortunately, some of this expenditure does not appear to be achieving the results intended. The Government had decided, therefore, that 1976-77 should be regarded as a period of consolidation and re-assessment of the activities of the Department of Aboriginal Affairs, with a view to ensuring that maximum effectiveness is obtained from future expenditure programs in this area. This is consistent with the Government’s action last January in appointing Mr David Hay to conduct an examination for the Government of the delivery of services provided by the Department of Aboriginal Affairs. It is expected that Mr Hay’s report will be available to the Government shortly. As a consequence of this general approach the aggregate amount to be provided for Aboriginal programs in 1976-77 will be significantly less than estimated expenditure in 1975-76 and substantially less than the forward estimate.

Mr SPEAKER:

-Order! The honourable member for Chifley and the honourable member for Hughes will remain silent.

Government supporters- Hear, hear!

Mr Armitage:

– It is the first time I have heard anyone say: ‘Hear, hear’.

Mr SPEAKER:

-The honourable member for Chifley will cease interjecting.

Mr LYNCH:
LP

-A large part of the shortfall compared with 1975-76 reflects our decision to confine grants to Aboriginal housing associations in 1976-77 to outstanding legal commitments pending the outcome of urgent investigations into past practices in relation to these associations. I would mention here, however, that the Government’s proposed new arrangements for assistance to families will be of particular benefit to Aboriginal families.

One further matter to which I should refer is the Government’s decision to abolish the Aboriginal Advancement Trust Account from 1 July 1976. Funds for the programs previously financed from the Trust Account will in future be appropriated on the normal division and item basis. This will require greater specification of objectives in particular areas and greater all-round fiscal discipline than presently exists. It will also facilitate closer parliamentary scrutiny of proposed expenditure in this field. Honourable members may recall that this was an aspect to which the Auditor-General, in his special report on the Department of Aboriginal Affairs tabled in Parliament on 5 March 1974, directed particular attention.

The Territories

A total reduction of about $50m has been achieved on the forward estimates of the Department of the Capital Territory and the Department of the Northern Territory. The rapid growth in the size of the Public Service, particularly in Canberra, over recent years has now been arrested by the Government. As a consequence we have decided that so far as the National Capital Development Commission is concerned, there should be a marked slowing down in the substantial rate of increase there has been from year to year in the funds allocated for the development of Canberra.

The Commission’s activities in 1976-77 will therefore be directed towards essential works: expenditure on land development, housing, educational and health facilities will proceed but some projects of lesser priority will be deferred. In the area of community services, we are taking steps, consistent with our objective of slowing down the rate of growth in capital expenditure on Canberra, to contain running costs on a variety of services. We will explore all avenues for improving the economics of the Australian Capital Territory transport undertaking, paying particular attention to reducing the deficit on the operation of the bus service.

In the housing area, the time has long since passed when there was justification for the Government assisting residents of the Australian Capital Territory to obtain housing regardless of their means. In this and other fields there is no longer any need for incentives or preferential treatment for A.C.T. residents in order to induce people to move to Canberra. Consistent with the assistance the Government provides to certain people in the States through the Home Builders’ Account arrangements, eligibility for A.C.T. Commissioner for Housing loans will be subject to a means test similar to those applying in the States. These arrangements will produce a significant reduction in the funds to be made available in the forthcoming Budget for lending by the Commissioner for Housing in 1 976-77.

Mr SPEAKER:

-Order! The Treasurer will resume his seat. There is a level of conversation in the Chamber which is not fitting to the importance of the statement. I ask honourable members to remain silent and listen to the Treasurer. 1 call the Treasurer.

Mr Armitage:

– The Prime Minister is the worst.

Mr SPEAKER:

– The honourable member for Chifley will cease interjecting. This is the second occasion on which I have had to call him to attention. If he insists on interjecting I will have to deal with him.

Mr LYNCH:
LP

– There will also be a review of the interest rates charged on existing loans to place them on a more realistic basis, where appropriate. A similarly oriented review will be made of the basis on which rents are charged for government housing in the Australian Capital Territory; rental rebates will, however, continue to be available for pensioners and others in needy circumstances.

In the Northern Territory the Government provides all services of a ‘State’ and local government kind. We will continue to have due regard to the special circumstances of the Territory in doing so. At the same time, however, we will be seeking to confine expenditure next financial year to minimum unavoidable levels of spending. To that end we propose to take various steps, including action to rationalise the operations of the Tourist Board and the transport undertaking and to defer certain capital projects sponsored by the Reserves Board and the Darwin and Alice Springs City Corporations.

The Government is also proposing to place government housing rentals in the Territory on a basis more comparable to the rest of Australia. In addition, it will be looking to the Northern Territory Legislative Assembly to co-operate in moves to increase the charges for the provision of electricity, water and sewerage, as well as drivers’ licence fees, motor vehicle registration fees and stamp duties, to realistic levels. Charges for some government services in the Northern Territory have been not increased for many years. The Government appreciates that there is an enormous task still remaining in re-housing the people of Darwin as a result of havoc caused by Cyclone Tracy.

Mr SPEAKER:

-Order! The honourable member for the Northern Territory and the honourable member for Chifley will cease the exchange in which they are engaging.

Mr Calder:

– That is the fourth time you have had to pick up the honourable member for Chifley.

Mr SPEAKER:

-Order! The honourable member for the Northern Territory will cease assisting me or I will have to deal with him too.

Mr LYNCH:

– Now that the process of reconstructing Darwin has gathered momentum, we shall be providing in 1976-77 a substantially increased allocation of funds to the Darwin Reconstruction Commission, the Northern Territory Housing Commission and the Northern Territory Home Finance Trustee.

Industry

The Government is committed to the early restoration of a prosperous and expanding industrial sector. Several steps have been taken towards this end, including the introduction of generous investment allowances. What industry needs more than anything else, however, is clear evidence that the battle against inflation is being won. As with other spending programs, therefore, the Government’s programs of direct and indirect assistance to industry have been subjected to thorough scrutiny and many earlier estimates reduced to minimum amounts consistent with the Government’s commitments. Overall, the decisions taken in respect of programs administered by the Departments of Overseas Trade, National Resources, Industry and Commerce and Primary Industry represent a reduction of about $80m on the relevant forward estimates.

The export market development grants scheme is proving to be a more expensive program than was intended when it was introduced. A very substantial increase in expenditure would be needed to pay all grant claims which, under the present scheme, might arise in 1976-77. Accordingly, we have decided that- although payments under the scheme in 1976-77 will increase appreciably in any case- some deferments of payments will be necessary. Meanwhile, the scheme is to be reviewed so as to reduce future grant payments to be incurred after 30 June 1976. The Government has decided to terminate the overseas investment feasibility study scheme. Firms whose proposed studies have already been approved will remain eligible for reimbursement up to 12 months after the date of application.

Similarly, the scheme to encourage Australian investment overseas, by way of investment survey missions abroad is to be terminated. Australian investment overseas will continue to be assisted by the availability of insurance, against the risks of expropriation, exchange transfer and war damage, from the Export Finance and Insurance Corporation. The future of the Consultancy Services Feasibility Study Fund is to be reviewed by the Government; in the meantime expenditure is to be limited to existing commitments.

In the field of tourism, the amount to be provided for the Australian Tourist Commission in 1976-77 will be limited to $3m. Discussions will be held with industry groups and state governments with a view to their matching dollar for dollar the Commonwealth’s contribution to the Commission, up to $1.5m, in which case the amount provided to the Commission from the Commonwealth’s Budget would be $1.5m. The grants scheme for low-cost accommodation has been terminated.

The Government will investigate ways in which the New South Wales and Victorian Governments might share in financing assets required for the operation and maintenance of the Snowy Mountains scheme. In the meantime the Authority will not enter into commitments except in respect of assets which clearly form part of the permanent works of the scheme. The National Pipeline Authority will not enter into any commitment with respect to the country laterals of the Moomba-Sydney natural gas pipeline until the Government has reviewed the matter in the context of the 1976-77 Budget. There will be no provision in 1976-77 for planning and design of new pipelines by the Authority.

The Government has already announced that, in its view, there is no justification whatever for the Australian Atomic Energy Commission to continue field exploration for uranium. The Commission’s withdrawal from this activity is to be expedited. Pending the outcome of certain reviews, expenditure under some primary industry programs in 1976-77 is expected to be less than in 1975-76. 1 should also mention here that if current expectations regarding the wool market are realised, the Budget next year could benefit substantially from the repayment of ad- .vances made to the Australian Wool Corporation from the Budgets in 1974-75 and 1975-76.

Science

Budget outlays on research activities through Commonwealth Scientific and Industrial Research Organization and other bodiesincluding the provision for research grants under the aegis of the Australian Research Grants Committee- in 1976-77 are to be held to broadly the same real levels of spending as in 1975-76. This nonetheless represents a reduction of about $20m on the projected levels of expenditure for these programs. The Government has also decided that an independent external inquiry be conducted into the operation of CSIRO. The inquiry is to cover the general philosophy, organisation and management structure of the organisation, the efficacy of its research programs and its revenue-raising potential.

Child Care and the Arts

The forward estimates for child care, the arts, and other programs administered by the Department of the Prime Minister and Cabinet have been reduced by about $ 15m. The Government has decided that about $73m should be appropriated in 1976-77 in respect of the pre-school and child care program. This compares with an estimated outlay of $65m under this program in 1 975-76. Consideration is being given to changes in the program designed to ensure greater emphasis on child care to children of needy families.

We propose a program of assistance to the arts in 1976-77, under the Australia Council, of $ 1 9.4m exclusive of administrative costs. Expenditure on this program will, as a result, be marginally below the presently estimated level for 1975- 76. The program of acquisitions of works of art by the Australian National Gallery is to be increased, from $2.6m in the current year to $3.5m in 1976-77.

Attorney-General’s Department

Among other programs the Cabinet reviewed the family law and legal aid programs administered by the Attorney-General. The comparatively new program of family law will be continued with a budget of $ 10.4m for 1976-77. Within the funds to be made available, the Institute of Family Studies is to be established during the course of 1976-77. The legal aid program is currently under review between the AttorneyGeneral (Mr Ellicott) and the States and the Attorney-General will report to the Government when negotiations are completed. The Government’s objective will be to reach co-operative arrangements with the States designed to maintain the provision of legal aid services to the community at a reasonable cost to the Commonwealth.

Health

The decisions we have taken on health programs- other than Medibank which I will come to shortly- represent an overall reduction of more than $100m on the forward estimates. Aggregate spending on these programs in 1976- 77 is estimated, however, to be slightly higher in money terms than in 1975-76. In line with the undertaking given by our predecessors, an amount of $ 108m- about the same provision as in 1975-76- will be made available to the States in 1976-77 as capital assistance for the development of public hospitals and related health care facilities.

Grants to the States in 1976-77 for the capital and operational costs of school dental clinics and of training facilities for dental therapists will be sufficient to meet all existing commitments. These are currently estimated at $25m, which is about the same as the present estimate of expenditure under the scheme in 1975-76. Grants to the States, local government authorities and other eligible organisations in 1976-77 under the community health program will maintain already approved services and facilities at a viable level. An amount currently estimated at $70m will be allocated in 1976-77, compared with estimated expenditure of $58m this year.

The Budget provision for expenditure on medical research in 1976-77 will be increased to $9m, which should enable some increase on current real levels of activity. Because of the high incidence of tuberculosis in the early post-war period, the Commonwealth decided in 1948 to launch a national anti-tuberculosis campaign under which the State governments are reimbursed capital and maintenance expenditure incurred by them in the diagnosis and treatment of tuberculosis. The campaign has been highly successful and tuberculosis is no longer a national problem. Accordingly, the Commonwealth has decided to give the State 6 months notice that it will cease the special financing arrangements under the Tuberculosis Act.

Pensions

In the 1973-74 Budget the former Government announced that all pensions paid under the social security legislation to people of pensionable age would be subject to tax. Equivalent pensions paid under the repatriation legislation were also made taxable but only in respect of people of age pension age. This situation is anomalous. For example, many younger recipients of service pensions are at least as well able to bear tax upon their pensions as pensioners of age pension age. Accordingly the Government has decided that service pensioners who are less than age pension age, other than those who have been granted a pension on the grounds of invalidity, should also have their pensions subject to taxation.

The Government has also reviewed the taxation arrangements which relate to unemployment and sickness benefits, widows’ pensions and supporting mothers benefit. Clearly, in many cases the total incomes of the recipients of these benefits would not be such as to bring them above the minimum taxation threshold.

Mr Hayden:

– You have gone. You have had it.

Mr SPEAKER:

-Order! The Treasurer will resume his seat. The honourable member for Oxley will cease that activity. If he does not, I shall have to deal with him forthwith.

Mr Hayden:

– I apologise, Mr Speaker. I was identifying those who were going at the next election.

Mr LYNCH:
LP

– In a sizable proportion of cases, however, this is not so; thus a seasonal worker, for example, might be unemployed and receive unemployment benefit for some part of the year even though his income for the balance of the year puts him well into the taxable area for the year as a whole. Similar situations occur in the case of persons in receipt of widows’ pensions and supporting mothers benefit.

The Government has decided, therefore, to subject unemployment and sickness benefits to taxation and to subject widows’ pension and supporting mothers benefits to taxation on the same basis as is currently applicable to pensions payable to persons of age pension age. These decisions will apply in respect of benefit and pension payments made on or after 1 July 1976. The Commissioner of Taxation will not require pay as you earn deductions from pensions and mothers benefits, unless the recipient wants them made. In practice, no such deductions will be made from unemployment and sickness benefits if the recipient lodges the usual rebate declaration. Tax will, in those cases where it is payable, thus generally be collected at the end of the year.

Repatriation

The Government has decided that eligible veterans and their dependants are, in general, to be classified as Medibank hospital patients when admitted to non-repatriation hospitals. The Repatriation Commission will, however, still have the discretion to admit veterans as private patients to ensure that their repatriation doctor can attend to them.

Social Security

I have already mentioned the steps being taken to tax widows’ pensions and supporting mothers benefits on the same basis as is currently applicable to pensions payable to persons of age pension age. No changes are to be made in existing arrangements relating to aged pensions and allowances and to invalid pensions and sheltered employment allowances.

The Government has decided to introduce a 3 year program costing $225m to eliminate the current backlog of applications from organisations seeking subsidies for the building of aged persons’ accommodation. For budgetary reasons, however, it is necessary to limit the cash provision in 1976-77 to $45m; it is intended that the balance be provided over the following 2 years. Special arrangements are to be made in this area which will enable organisations to commence early construction of approved projects with their own funds and/or bridging finance on the understanding that the Government’s contribution will be forthcoming at a specified date over the next 3 years. The Minister for Social Security (Senator Guilfoyle) will provide further details.

I should also mention the Australian Assistance Plan, which was introduced as a 3 year pilot program in 1973. The Minister for Social Security is meeting with the State Ministers in Darwin tomorrow in order to discuss future arrangements for this program.

Immigration

The Government acknowledges the favourable impact which immigration has had on Australia’s economic and cultural development. Consistent with this view the Government has decided on a target of 70 000 persons for the immigration program for 1976-77, compared with the estimated intake of 50 000 in 1975-76. Among other things, this expanded program will facilitate family reunions. Attention will continue to be given to the occupational qualifications of prospective migrants so that newly arriving migrants do not face the prospect of unemployment or take jobs which otherwise would be available to unemployed members of the existing workforce.

The total program provides for 30 000 persons to be assisted with travel costs under the assisted passages scheme. To help offset the cost of the assisted passages, we have decided to increase the contributions from migrants receiving assistance under the scheme by $50 to $200 in the case of single migrants, and by $ 150 to $300 in the case of family units.

Education

As in many other areas, it is not possible to provide for the very rapid expenditure increases implicit in the forward estimates for education and, at the same time, achieve the requisite overall degree of restraint in public spending. The forward estimates for the programs examined have, in fact, been reduced by about $80m. But in education, unlike in many other areas, we will be providing for significant real growth in spending next year. We are also introducing new rolling program arrangements to provide for greater continuity in planning by the various education Commissions.

Liberal Party and National Country Party Governments have always given a very high priority to education. They established the Universities Commission and the Commission on Advanced Education. They also initiated substantial programs of financial support to the States for both technical education and schools. That support for schools encompassed financial assistance for both government and non-government schools. In fact one of our first actions, as the caretaker Government last November, was to confirm that we would support the programs of assistance announced by the previous Government for the calendar year 1976 for universities, colleges of advanced education, technical and further education and schools.

Mr Innes:

– What about the interpreter services?

Mr LYNCH:
LP

– I would like to lend the honourable member an interpreter; he could certainly do with one.

Mr Innes:

– I need one to try to interpret that rubbish.

Mr LYNCH:

– Apparently the honourable gentleman is not interested in getting the details of the education program. Now, as part of its review of prospective Budget outlays in 1 976-77, the Government has been considering the levels of financial assistance that it might provide in 1977 through the Universities Commission, the Commission on Advanced Education, the Technical and Further Education Commission and the Schools Commission.

The Government has decided on significant further growth in real levels of expenditure in 1977 at each of the 4 levels of education:

For unversities, a 2 per cent growth in real terms, based on the program approved by the previous Government for 1976, plus an additional $2m for capital expenditure.

For colleges of advanced education, a 5 per cent growth in real terms over the program determined for 1976.

For technical and further education institutions, a 7.5 per cent growth in real terms over the program approved for 1976.

For schools, a 2 per cent growth in real terms over the program provided for 1 976.

As a result of these decisions, the levels of expenditure on the programs of the education commissions in 1976-77, expressed at December 1 975 price levels, will be: $m

Universities……… 557

Colleges of Advanced Education . . 430 Technical and Further Education . . 72 Schools……….. 510

The total of $ 1,569m represents an overall increase of roughly 4 per cent in real terms compared with 1 975-76. The funds to be provided to the tertiary institutions next year will accommodate some increase in new enrolments at these institutions in 1977 over the estimated 1976 level of 100 700. We will also provide $500,000 next year for a start on the proposed Maritime College in Tasmania.

The Government has decided to replace the existing cost supplementation provisions by less automatic arrangements which will take account of unavoidable increases in wages and other costs; our aim is thereby to encourage greater cost-consciousness and tighter control of expenditure within the education program. As I indicated, new 3 year rolling program arrangements to replace the fixed triennial funding arrangements are to be introduced from the beginning of 1977. These new arrangements will provide greater budgetary flexibility for the Commonwealth while providing a proper planning framework for the commissions which, hopefully, will assist in avoiding the stop-start situation of recent years. In this latter connection the commissions are to be given minimum figures, for planning guidance only, for the second and third years of the initial rolling program, that is, 1978 and 1979.

This planning guidance is: for universities, colleges and schools, 2 per cent growth in real terms per annum for technical and further education institutions, 5 per cent growth in real terms per annum.

The Government has also reviewed its various measures of assistance to students, particularly those in universities and colleges of advanced education. We have decided to restrict the number of new awards in 1977 under the post graduate awards scheme to 800, a reduction of 100 from the 1976 figure. We have decided also to phase out the means-test-free scheme of special pre-school teacher education awards. Existing scholars will be able to complete their courses under the present scheme, but commencing in 1977 new entrants to pre-school teacher education courses will apply for assistance under the means tested tertiary education assistance scheme in the ordinary way. With a view to lightening somewhat the burden which education programs are now placing upon the Budget, it has been decided to re-introduce tuition fees for students taking second and higher degrees. There is no reason why the general taxpayer should be expected to finance second and subsequent degrees of first degree holders. The question of imposing tuition fees for foreign students is also to be considered.

Local Government

Commonwealth funds are provided to local government through a variety of programs, including general revenue assistance and specific purpose assistance for roads, sewerage works and so on. Some of the decisions indicated earlier could adversely affect the funds available to local government for some of these specific activities in 1976-77.

We have decided therefore to make $140m available to local government in 1976-77 in untied general revenue assistance. That amount represents an increase of 75 per cent on the general purpose assistance provided to local government in 1975-76 and should be seen as a major contribution towards making local government a genuine partner in our federalism system. The amount of $ 140m will constitute the base for the calculation of assistance in future years in accordance with arrangements which are now subject to negotiation with the States.

Foreign Aid

Budgetary difficulties notwithstanding, the Government has decided on a 14 per cent increase in Australia’s total overseas aid program next year.

Defence

The Government has recognised that defence expenditure has been unduly constrained in recent years. Important capital equipment items have been deferred, spares and stocks have run down and there have been restrictions on exercise activities, which are the essence of the morale of an effective defence force. To overcome these deficiencies, we have approved the planning and development of a defence program to provide for a marked increase in expenditure on defence during the next 5 years, 1976-198 1, particularly on capital equipment and Service activities. Defence cannot be totally immune from the general budgetary retraints however, and some reductions have been made in the forward estimates.

Mr Innes:

– Here is the good news, Jim.

Mr LYNCH:
LP

– Expenditure in real terms- and this is the good news, if the honourable member listens- is estimated to increase significantly in 1976-77, with even larger increases planned for later in the period to coincide with the long lead times for new major capital equipment.

That concludes my summary of major reductions which have been made from the 1976-77 forward estimates submitted by departments in February. These and other decisions responsible for the overall reduction of $2,600m in expenditure foreshadowed in the original forward estimates will be reflected in the Budget documents.

Medibank

I now turn to Medibank. The cost of Medibank to the Commonwealth in 1975-76 is estimated at about $ 1,400m, or about 6.4 per cent of total Budget outlays. If nothing is done, the cost next year would turn out to be of the order of $2,000m. As these figures indicate, Medibank is very expensive program. Moreover, the program is quite open-ended and there is every likelihood that subsequent years would bring even larger increases.

It was against this background that the Government announced on 13 January that a Medibank Review Committee under the chairmanship of Mr Austin Holmes was to be established to review the operation of Medibank. The Committee has reported to the Minister and we have reviewed the scheme in the light of his recommendations. The Government is firmly committed to the concept of Medibank. We shall retain Medibank and maintain the fundamental principle of universal hospital and medical insurance coverage for all Australians. There will be no means test involved.

However, our review has confirmed that Medibank in its present form has serious weaknesses. It places on the State and Federal governments virtually the whole responsibility for financing the basic level of hospital and medical care, not only for those who need assistance with their health care costs, but also for those who can afford to pay for themselves. It provides few incentives to economy in the use of health services, whether on the part of users of those services or on the part of the medical profession who, as providers, have a key role in the determination of overall costs.

The Government has therefore decided to make a number of significant modifications to Medibank. While retaining the principle of universal coverage, protecting the position of lower income earners and widening the choices available in the field of health care, these changes will also provide immediate savings to the federal Budget. People who wish to receive the benefits currently provided by Medibank will in future be required to contribute on a graduated scale by paying either a levy of 2.5 per cent on taxable income or a premium direct to Medibank.

Linking the levy to taxable income in this way ensures that those on the lowest incomes pay no levy and those on moderate incomes will pay the levy only in accordance with their means. All of them will, however, remain entitled to all the benefits of Medibank, that is, treatment and accommodation in public hospitals by doctors engaged by the hospital, and benefits at their present levels for medical expenses incurred outside of hospitals.

It will also be possible to purchase Medibank coverage for these benefits by the payment of a premium. This in effect sets a ceiling on the levy payable by those on higher incomes who wish to stay with the basic high quality health care provided by Medibank. It is in fact the simplest and best means of setting that ceiling. Without it those on higher incomes who wished to remain in Medibank could be required to pay a levy in excess of the benefits they would receive. Such a system would force people on higher incomes out of Medibank. That is not what the Government proposes.

The Government believes that all should have access to Medibank; the opportunity for higher income earners to pay a premium to remain in Medibank will make this possible. The premium will be set by the Minister for Health and myself in consultation. Furthermore the Government believes that, to the greatest extent possible, people should have the choice of access to private insurance for hospital and medical benefits as an alternative to Medibank because this Government believes in the concepts of choice. Accordingly, people who wish to insure themselves and their dependants privately for approved hospital and medical benefits will be exempt from payment of the levy. The minimum approved level of private insurance will provide coverage for shared or intermediate ward accommodation in public hospitals, with treatment by private doctors, and benefits for medical expenses no less than those provided by Medibank. The hospital benefits under an approved private insurance package can also be applied towards the cost of accommodation in private hospitals. To widen choice further, people who pay the levy, but wish to have private patient status in hospitals, may purchase private insurance for their hospital cover but continue to receive their medical benefits from Medibank.

The new arrangements will ensure that those in the community with higher incomes will pay a major proportion of the insurance cost of their health expenditures. Those choosing to pay the levy will do so because it costs them less than it would to take private insurance or pay the full premium to Medibank. In this way they will receive subsidies from Consolidated Revenue, additional to the amounts they have contributed through their levy payments, towards the total cost of their health care. These subsidies will, as at present, be financed by all in proportion to the overall taxes they pay.

The changes I have described will also provide incentives to the medical profession and private insurers to constrain costs by establishing competition between the public and private sectors. Competition between private insurers and Medibank should maintain both the quality of services and their cost efficiency. For virtually the first time in Australia, the medical profession will have an incentive to participate in schemes which help curtail unnecessary usage and expenditure in order to maintain the long-term viability of private practice.

Since purchase of approved hospital and medical insurance packages will provide exemption from the levy, existing tax concessions for health insurance will be withdrawn. Bulk billing will be retained; however, doctors who bulk bill will, in future, be allowed to collect a patient moiety so long as the total charge does not exceed the scheduled fee. So that pensioners will not be disadvantaged under these arrangements, doctors will be asked to accept the Commonwealth rebate in full settlement of the accounts of those receiving pensioner health benefits. Full details of these and other associated changes resulting from the Government’s review of Medibank will be announced by the Minister for Health.

Relevant legislation will be introduced immediately so that the changes can take effect from 1 October 1 976. On that basis it is estimated that in a full year total savings to the Budget would amount to about $8 10m, of which just over half would represent reductions in budgetary expenditures and the remainder the yield from the levy. Because of the unavoidable interval before the scheme can be brought into operation on 1 October, and given other lags in payments and receipts, total savings to the Budget in 1976-77 are estimated to be in the order of $450m.

Assistance to Families

The Government is also proposing a major reform of present arrangements for assistance to families, so as to direct much more support to those families in real need. Here too the decisions the Government has reached are based on thorough study over an extended period involving bodies both inside and outside the Government. At present, assistance towards meeting expenditure upon children ‘s needs is provided in 2 main ways- by child endowment and by taxation rebates for dependent children.

At existing rates, the cost to the Budget of assistance through the taxation system is about 3 times as great as the direct expenditure on child endowment, which is relatively small and has been seriously eroded by inflation in recent years. These arrangements discriminate against families in which the income of the main or sole income earner falls short of the minimum taxation threshold. Such families are unable to take advantage of the taxation rebates for children which are available to the great majority of families. A system under which low-income families are denied the main form of assistance to families is clearly a matter of very great inequity. The Government has therefore decided on a new system which is fairer and simpler. In essence, it involves abolishing the taxation allowances for dependent children, and disbursing the resultant additional revenue in the form of large increases in child endowment.

A reform along these lines was advocated as a high priority by the Commission of Inquiry into Poverty, under Professor Henderson, in its first main report tabled in the Parliament in August 1975. The Asprey Taxation Review Committee also supported such a change. The details of the new arrangements will be announced by the Minister for Social Security (Senator Guilfoyle) but in brief the main features are: The present taxation rebates for children will be abolished as from the end of this financial year. The existing arrangements for payment of child endowment will be maintained but at substantially increased rates. The new rates of child endowment, compared with the present rates, are as shown in the following table and I ask for leave to have it incorporated in Hansard.

Mr SPEAKER:

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

Mr LYNCH:
LP

– The figures show that for the first child the present rebate of 50c will be increased to $3.50. For 2 children the present rate of $1.50 will be increased to $8.50. For 3 children the rate will be increased from $3.50 to $14.50. For 4 children the endowment will move from $5.75 to $20.50. For 5 children the endowment will increase from $8.25 to $27.50. The broad effect of these changes will be to increase the weekly level of child endowment paid to families by between $3 and $4 per child. As the weekly equivalent of the present maximum taxation rebate is $3.85 in respect of most children, the overall position of families able to take full advantage of these rebates at present will not be greatly changed. There are, however, about 800 000 children in low income families which pay little or no taxation. These include the children of widow and invalid pensioners, of workers close to the minimum wage or in intermittent employment, of self-employed people unable to earn an adequate income, and of many Aborigines, recently-arrived migrants and other disadvantaged groups. The new system will provide greatly increased assistance to 300 000 such families.

Another effect of the new system will be to bring about some redistribution of income within families. Child endowment will continue to be paid, as it always has been, usually to the mother. At the same time, of course, the takehome pay of many fathers will be reduced as a result of the withdrawal of the taxation rebates. The full-year cost of taxation rebates for dependent children and students, had they been indexed in 1976-77, together with the cost of the present child endowment scheme, would have amounted to about $ 1,025m. The annual cost of the new family allowances scheme in a full year is almost exactly the same. There will thus be no net full-year cost to the Budget arising from the new system, other than the cost which would otherwise have been incurred in indexing rebates for dependent children.

For a number of technical reasons associated with the changed arrangements, there will however be a net cost to the Budget of the order of $100m in 1976-77. The Government believes that the new scheme is a most important step towards the alleviation of poverty in Australia and that it will be readily accepted as more efficient and more equitable than present arrangements.

Tax Indexation

After taking into account the totality of our other decisions, the Government has judged it feasible and appropriate to proceed now to implement its commitment to personal income tax indexation. Members will recall that the notion of personal tax indexation was raised in the report of the Asprey Committee and that the Mathews Committee dealt at length with the matter in its report on inflation and taxation. The Government undertook at the last election to introduce personal tax indexation within its current term of office.

In the recent national wage case hearing, counsel for the Commonwealth stated, with our authority, that the Government intended to substantially implement personal tax indexation this year. It was made clear at that time that this was being done both in fulfilment of our objective of getting the Government’s hands out of taxpayers’ pockets, and for wage policy reasons. Individuals, rightly in our view, attach considerable importance to their own command over their incomes and their ability so far as possible to spend those incomes as they see fit.

Under conditions of inflation, taxpayers whose money incomes are rising on that account alone find themselves being pushed into higher and higher tax brackets under the progressive income tax scale. As a result, the relative burden of taxation upon them is increasing even though, in terms of what their increasing money incomes would buy, they are no better off than they were before. In these circumstances it is only governments which become ‘better off’. There is then a standing temptation to governments to launch upon new or increased spending programs whereby they generously give back to taxpayers the revenues- or some of them- they have taken from them.

What we aim to do through indexing the major part of the personal income tax system is to ensure that the ‘real’ burden of taxation for any taxpayer will not increase unless his ‘real’ income increases. Let me illustrate by an example. Take a person who had a taxable income of $10,000 in 1975-76. In this case the marginal rate of tax for 1975-76 is 35c in the dollar on the amount of income between $5,000 and $10,000. If the same person had an income of $1 1,300 in 1976-77, that is, an increase of 13 per cent, the marginal rate on the extra $1,300 would, without indexation, be 45c in the dollar. With indexation the rate on the additional $1,300 will stay at 35c thus reducing tax on it by $130. Not only that, the taxpayer will make savings from indexation of the brackets lower down the scale. That, together with the similar effects which flow from indexing the levels of the various tax rebates in the system, is what indexation is mainly about.

I can now say that legislation will be introduced tonight to provide for full personal tax indexation from 1 July 1976. The income tax rates scale will be indexed and so also will the rebates for a dependent spouse or a housekeeper, the sole parent rebate and the $540 basic rebate; because of our decision in relation to the new family allowances, the question of indexing the existing children’s rebates will not now arise. In indexing the system each financial year we shall allow for price movements, other than those due to increases in the level of indirect taxes, up to the March quarter of the financial year just ending. So far as 1976-77 is concerned, price movements up to the end of the March quarter of 1 976 are already known. Adjusted for indirect taxes, the average level of the consumer price index in the year ended 31 March 1976 was 13 per cent higher than in the preceding year.

The index to be applied will therefore be 13 per cent. Each step in the marginal rate scale will begin and end at incomes 1 3 per cent higher than at present- in other words, the steps will be widened and lower rates will apply up to higher money incomes than at present. The various categories of dependants’ rebates will also become higher than at present. On a 13 per cent indexation basis alone, the rebate for a dependent spouse, daughter-housekeeper or a housekeeper would be increased from $400 to $452 and the sole parent rebate from $200 to $226. We have however decided, as a separate matter, to increase the levels of these rebates to $500 and $350 respectively; the remaining dependant rebates will become 13 per cent higher than at present. Finally, the $540 basic rebate will also be increased to $610. These changes will achieve the objective, noted earlier, of preventing the rise in effective tax rates which would otherwise have come about as a result of inflation of 13 per cent. The new arrangements for PA YE will be reflected in the instalment schedules for salaries and wages paid on or after 1 July 1 976.

The total cost to the Budget of indexing in this manner, including the cost of raising the spouse, etc., and sole parent rebates, is estimated to be $ 1,050m in 1976-77 and $1,2 10m in a full year. Before I leave the taxation area I should also refer to the area of corporate taxationspecifically, to proposals for a cost of stock valuation adjustment, and a depreciation valuation adjustment, which in our policy speech we undertook to implement within 3 years. By contrast with the relative simplicity of the personal income tax indexation proposals, both these measures are of great technical complexity so far as the taxation law and administration are concerned. We have them under study.

Conclusion

I mentioned at the outset that, on the basis of the forward estimates originally before us, we faced a deficit in 1976-77 then put at $4,800m. The reductions of $2,600m in those estimates now achieved or in prospect have now radically improved that position. Our decisions on

Medibank will improve it substantially further, particularly on the full-year basis. These measures make it not only possible but also desirable to introduce the new family allowances scheme and our tax indexation measures in 1 976-77. The Government is confident that these new proposals can be encompassed within a responsible Budget in 3 months’ time. The process of putting fiscal policy back to rights has to be a continuing one. The Budget will be the next step in that continuing process. Normal preparations for it are now under way.

In fact departments have now submitted to the Treasury their formal expenditure bids for next year taking account of the decisions we have taken and announced in this statement. These formal bids- which as honourable members know are quite distinct from the forward estimates processes- represent the first step in the normal budgetary timetable which culminates in the Budget Cabinet in July and the bringing down of the Budget in August. These formal bids will now be subjected- initially by the Treasury and eventually by the Budget Cabinet- to a thorough-going review against the broad criterion of containing Government spending while at the same time having regard to generally accepted notions of social justice. In the months ahead the Government will also be seeking to trim down further the bureaucratic empire which has been built up over recent years.

In this the Government will be receiving advice from a number of committees which have still to report to us. In particular, we have begun to receive some elements of the report of the Administrative Review Committee which was set up under Sir Henry Bland last December and we look forward to receiving the remainder in the period ahead. When finally received Sir Henry’s report, taken in conjunction with the related report of the royal commission under Dr Coombs, will provide us with a further basis for review. Similarly we look forward to receiving shortly, and thereafter acting upon, the report of the committee, under the aegis of Mr David Hay, on the review of delivery of services financed by the Department of Aboriginal Affairs.

In these and other ways we shall press on with winding down a grossly excessive public sector. As I hope I have made clear, that task is not however to be accomplished within 6 months, or within the compass of a single Budget. The important point is that steady progress is being made. The House, and the country, can be confident that that progress will continue. I commend this statement to the House. I present the following paper:

Fiscal Policy Decisions- Ministerial Statement. 20 May 1976.

Motion (by Mr Sinclair) proposed:

That the House take note of the paper.

Mr Hurford:

- Mr Speaker, with your indulgence, as I am prevented by the Government from continuing my remarks when the debate opens next week, I cannot say now what I think of this ill-conceived and counter-productive statement. I am obliged merely to move that the debate be now adjourned.

Mr SPEAKER:

-Order! The honourable member will resume his seat. Does he wish to move for the adjournment of the debate?

Mr Hurford:

– I was saying, Mr Speaker, that I merely move that the debate be adjourned.

Mr SPEAKER:

-Order! The honourable member will resume his seat. The question is that the House take note of the paper. Those of that opinion say ‘ aye ‘, to the contrary ‘no ‘. I think the ayes have it.

Mr Scholes:

- Mr Speaker, I rise on a point of order. The honourable member for Adelaide moved for the adjournment of the debate.

Mr Hurford:

- Mr Speaker, before you put the motion I moved that the debate be adjourned.

Mr SPEAKER:

-The honorable member for Adelaide insisted on making a statement. I did not hear him move for the adjournment of the debate.

Mr Hurford:

– I said that I -

Mr- SPEAKER-Order! If the honourable member assures me that he did so, I will accept his word for it.

Mr Hurford:

- Mr Speaker, I give you my personal assurance that I was moving for the adjournment of the debate. I moved that the debate be adjourned.

Mr SPEAKER:

-The honourable member will resume his seat. I accept what he said.

Debate (on motion by Mr Hurford) adjourned.

page 2345

INCOME TAX ASSESSMENT AMENDMENT BILL (No. 2) 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

This Bill and 2 others I shall shortly introduce mark the commencement of personal income tax indexation in Australia. These indexation measures are a turning point in taxation policy in this country. They are among the most important and far reaching tax reforms ever introduced into the Parliament. Indexation is to apply to tax on incomes of the year 1976-77 and its effects are to be reflected in PA YE deductions from salaries and wages as from 1 July next.

The Bills are also related to other aspects of the policy package the Government is presenting. They deal with aspects of the better and fairer system of family assistance, and reductions in Government expediture that are elements of that package. The Treasurer (Mr Lynch) has elsewhere explained the concepts on which personal income tax indexation is based. Nevertheless, I think that in this speech, which is related so directly to the subject, it would be appropriate for me to reiterate some of the Treasurer’s earlier remarks. There is no doubt that the effects of inflation combined with a progressive income tax rate scale are demonstrably unfair to taxpayers. For example, an employee sees wages increased, but if they merely keep pace with inflation he knows this does not maintain real income after tax.

Without indexation of the income tax rates scale, the wage increase forces the employee into a higher tax bracket. The higher tax has the effect of reducing real income. It is, of course, not only wage and salary earners that are caught up in this interaction between extra money income and the tax scales. Business people are just as much affected. In broad terms, personal income tax indexation seeks to avoid these situations mainly by providing for income tax brackets in the rate scale to be adjusted in an appropriate way for inflation. In the Bills I am presenting the income brackets in the tax scale are being adjusted by 13 per cent.

As already explained, this represents the increase in the average level of the consumer price index for the year ended 31 March 1976 over its average level in the preceding year, as reduced by the effects of indirect taxes. Other countries use the consumer price index on a corresponding basis as the measure for tax indexation. As a simple example of what is achieved by this form of indexation we can take the case of a person who had a taxable income of $10,000 in 1975-76. In this case the marginal rate of tax for 1975-76 is 35 cents in the dollar on the amount of income between $5,000 and $ 10,000. If the same person had an income of $11,300 in 1976-77, that is, an increase of 13 per cent, the marginal rate on the extra $1,300 would, without indexation, be 45 cents in the dollar. With indexation the rate on the extra $1,300 will stay at 35 cents thus reducing tax on it by $130. Not only that, the taxpayer will make savings from indexation of the brackets lower down the scale. That is what indexation is mainly about. But, as I Will mention later, certain tax rebates are also being, indexed upwards and this will mean further savings for many. taxpayers

Turning now to the technical provisions of this Bill, I should say firstly that the tax rebate to be allowed for’ the maintenance of a spouse,, a daughter-housekeeper or a housekeeper is to be increased from $400 to $500 for 1976-77. The sole parent rebate is to be increased from $200 to $350. If these 2 rebates had only been indexed they would have become $452 and $226 respectively. The Government believes, however, that in these 2 areas indexation alone would not have gone far enough, bearing in mind other changeswhich are being made, and has accordingly increased the rebates by considerably more than the indexation factor. The rebate for an invalid relative is to be indexed so that it becomes $226 instead of $200. Similarly, the rebate for a parent or parent-in-law will become $452 instead of $400. The general rebate of $540 is to be indexed by 13 per cent and will thus become $610. It is not proposed at this stage to index certain other tax allowances.

The most important of these are payments for life insurance or superannuation- present limit $1200- education expenses- present limit $250 per person- and rates on private dwellingspresent limit $300. We are not alone in limiting indexation in this marginal way. For example, the Mathews Committee discloses at page 205 of its report that Canada restricts indexation to personal exemptions and the tax brackets. The report states that in Canada standard medical and charitable deductions are not indexed, nor are deductions for employee expenses or contributions to pension and retirement funds. The Government is committed to on-going indexation and the legislation provides accordingly. Explicitly, it states that indexation for financial years following 1976-77 is to be based upon upward movements in the consumer price index during the 12 months ending on 31 March of the previous year, excluding increases resulting from indirect taxes.

The precise indexation factor is to be determined on these guidelines by the Treasurer. The indexation factor is to be applied in years beyond 1976-77 to all elements of the system that are being indexed for that year. For this purpose it is proposed that the spouse and sole parent rebates, although actually substantially increased for 1976r77, are to be regarded as having been indexed.

I should mention specifically there is to be indexation of the element of the Zone A and Zone B allowances which is related to rebates for maintenance of dependants. Although, as I shall refer to later, the Government’s new proposals for better and fairer family allowances entails the withdrawal of tax rebates for children, this will not exclude them from the basis for calculation of the zone allowances. In effect, the dependants rebate element in the zone allowance will be continued as if all the relevant rebates were still in existence and were being indexed at the 1 3 per cent rate.

Before I pass on from the indexation proposals I should mention two other matters, one affecting the separate net income provisions associated with dependants rebates and the other affecting provisional tax payable for 1976-77. At present the maximum amount of separate net income a dependant may have without reducing the rebate allowable is $150. This amount is to be increased to $170. As regards provisional tax, it is to be borne in mind that it is payable for 1976-77 on income for 1975-76. Provisional tax is the equivalent for self-employed people of PA YE deductions for employees. The difference is that employees pay on current income while self-employed people pay on income lagged one year behind.

When, as is now proposed, there is a change in tax rates specifically attributable to general inflation on incomes there is, in the Government’s view, a strong case for not applying the indexed rates in determining provisional tax when the incomes themselves are not indexed for that purpose. This is so because the tax is being calculated on income of the previous year and it would involve a sort of ‘double counting’ to apply the indexed rates scale in determining it. For these reasons it has been decided that provisional tax for 1976-77 will be charged on 1975-76 incomes at 1975-76 rates. Allowance will, however, be made for increased dependants rebates, and zone allowance, where they are relevant, and the child dependant allowances that are to be abolished will not be allowed.

I have spoken elsewhere of the Government’s proposals for an improved scheme of family allowances and pointed out the reasons for the consequential removal of the rebates for maintenance of children from the income tax law. The Bill effects this removal which, of course, will apply for the first time in assessments based on 1976-77 income. It will not affect assessments for the current year, 1975-76.

The final matter dealt with by the Bill is associated with the Government’s firm commitment to reduce Government expenditure. It deals with the taxation of certain social security payments. In 1976-77 and subsequent income years it is proposed that particular social security benefits be included in assessable income and thus made subject to income tax. Service pensions available to ex-servicemen and women between the ages of 60 and 65 and 55 and 60 respectively are to become taxable for 1976-77. These pensions are the equivalent of age pensions which are already taxable. In fact, service pensions are now exempt from tax while the recipient is under the qualifying age for an age pension. As soon as that age is reached the pensions become taxable. This is an anomalous situation which the Bill will eliminate.

Also to become taxable are widows pensions and supporting mothers benefits. Widows pensions are, subject to a means test, paid at the same rates as age pensions. As age pensions are taxable, it is anomalous for widows pensions to be outside the tax net. The supporting mothers benefit is analogous to the widows pension and is to be treated in the same way for tax purposes.

Finally, unemployment and sickness benefits are to become taxable. The present exemption from tax of this form of income gives rise to serious anomalies. It is usually received for short periods and its exemption from tax can make a recipient of it better off than a person who has worked all the year round and received the same total income, not including any unemployment or sickness benefits. The Government does not believe that this could possibly be viewed as a right result and proposes that it should no longer occur.

In conclusion I mention that the Government has deemed it prudent to proceed with indexation of the personal tax system at this time rather than await the outcome of a review of the system. Our indexation of the present system is evidence of our strong commitment to indexation which we regard as urgently necessary. Technical aspects of the Bill are discussed in an explanatory memorandum being circulated to honourable members. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2347

INCOME TAX (RATES) BILL 1976

Bill presented by Mr Eric Robinson and read a first time

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

This Bill is a technical measure made necessary by the proposed move into indexation of the personal income tax. It is supplementary to the Bill to amend the Income Tax Assessment Act which I have just introduced. The Bill will, in effect, establish a standing measure setting out the rates of tax applicable to individual taxpayers for 1976-77 and subsequent years of income. The rates declared in the Bill reflect those declared for 1975-76 indexed by 13 percent.

The Bill also provides-in the terms I have described in my earlier introductory speech- for the means of automatic indexation of those rates in subsequent years according to the criteria that I have mentioned. The indexed rates it declares will be applicable in 1976-77 and subsequent years only if an Act to impose them in respect of each year is passed. A separate Bill which I will shortly introduce will impose the indexed rates for 1976-77. An explanatory memorandum on the Bill is being made available to honourable members. I commend the Bill to the House.

Debate (on motion by Mr Hurford) adjourned.

page 2347

INCOME TAX (INDIVIDUALS) BILL 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

This Bill is also supplementary to the Income Tax Bills I have earlier introduced. It will impose tax payable by individuals and trustees for 1 976-77. As I have already explained, tax is to be imposed at the rates declared for 1975-76 indexed by 1 3 per cent for inflation. This means that the 7 steps included in the existing scale are to be changed so that the lower and upper limits are 13 per cent more than in 1975-76. For example, the 1975-76 bracket of $5,000 to $ 10,000 in respect of which a marginal rate of 35 per cent is payable becomes $5,650 to $1 1,300 for 1976-77. Tax in the brackets up to $5,650 will be 27 per cent, so that the slice of income between $5,000 and $5,650 will be taxed at 27 per cent instead of the 35 per cent that would have applied if there had been no indexation. The flat 50 per cent rate payable by trusts assessed under section 99A of the Income Tax Assessment Act is not being changed. Rates of tax for a financial year are not customarily imposed until the Budget sittings.

The early imposition in this instance is, of course, due to the Government’s wish to get the beneficial effects to taxpayers of the indexed rates scale and rebates into the pay as you earn system as from 1 July. The Bill does not impose rates for 1976-77 for companies or superannuation funds. An explanatory memorandum setting out technical explanations of the Bill is being circulated for the assistance of honourable members. I commend the Bill to the House.

Debate (on motion by Mr Hurford) adjourned.

page 2348

HEALTH INSURANCE LEVY ASSESSMENT BILL 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
Minister Assisting the Treasurer · MCPHERSON, QUEENSLAND · LP

(9.58)- I move:

This Bill, in association with other Bills I shall shortly present, introduces the health insurance levy and other taxation arrangements necessary to implement the modifications to Medibank. The reforms were announced in the statement earlier today by the Treasurer (Mr Lynch) and are explained in some detail in the statement made by the Minister for Health (Mr Hunt). As indicated earlier, and as I now re-affirm, the universal cover provided by Medibank is being retained. The levy and associated arrangements do not mean anything else.

In brief, a health insurance levy of 2.5 per cent of taxable income is to be imposed. It will be payable by Australian residents who do not have appropriate cover for themselves and their families with a registered private insurance fund, or through payment of a premium to Medibank. The legislation proposes a basic rate of levy on the taxable incomes of taxpayers. But there will be an exemption from the levy for that part of an income year in which a person has appropriate cover for both hospital and medical benefits with a registered private insurance fund or through a premium paid direct to Medibank. The cover must extend to any dependants of a person for the exemption to be available. Payment of a family contribution will provide exemption for each member of a 2-income family. Exemption from the levy will also be granted to repatriation beneficiaries who are entitled to full free medical and hospital treatment under the repatriation system and who have no dependants, or who have dependants who are also so entitled.

Repatriation beneficiaries who are entitled to full free medical and hospital treatment, but whose dependants are not so entitled, will have the basic rate of levy reduced to one-half of the ordinary rate. These people will not, however, be subject to any levy if their dependants are covered through payment of appropriate private insurance or Medibank premiums. Defence force personnel will be eligible for relief from the levy on the same lines as is proposed for repatriation beneficiaries. A person will be treated as a ‘dependant’ of a taxpayer if he or she is the taxpayer’s spouse or child under 16 years of age, and the taxpayer contributes to his or her maintenance. A child of the taxpayer who is aged 16 or more but less than 25 and who is a full-time student will be treated as a dependant if his or her income is not above $ 1 ,073.

In making these reforms, the Government has been concerned to ensure that people with relatively small incomes should not in any event be called on to pay the levy. The method we have chosen to achieve this is to allow people who pay no income tax because their concessional rebates exceed tax calculated at scale rates to apply the excess rebates against the levy. As a result of this and the other changes in the income tax system which were announced today, a taxpayer entitled to a full rebate for a spouse will not be liable to pay the levy if his or her taxable income is $4,299 or less. A single taxpayer will not be liable to pay the levy if his or her taxable income is $2,604 or less. These low income reliefs, and the fact that levy payable will be graduated according to income, demonstrate that our reforms have given recognition to the circumstances of the less well off sections of the community.

The levy, where it is payable, will be collected through the income tax system, but shown as a separate item on notices of assessment. People who insure privately, or who pay a premium to Medibank or who are eligible for exemption as a repatriation beneficiary or serviceman or woman will lodge a certificate from the body concerned with their tax returns. This will provide a basis for granting them exemption from the levy. A declaration by an employee to an employer that he or she is covered in one or other of these ways will mean that pay-as-you-earn deductions made from the employee’s salary or wages will not include the levy.

All the modifications proposed by the Government are to come into operation on 1 October 1 976. In consequence of this, the rate of levy to be applied on assessment to taxable incomes for 1976-77 is to be three-quarters of the full year rate. The basic rate of levy on 1976-77 taxable income will therefore be 1.875 per cent instead of the full year rate of 2.5 per cent. People who qualify for exemption from the levy for the 9 months from 1 October 1976 will be granted exemption for the full year. Qualification for a shorter period will give proportionate partial exemption. So that PAYE deductions incorporating the levy will approximately match the end-of-year levy liability, the rate of levy to be incorporated in PAYE deductions from 1 October 1976 is to be the full year rate of 2.5 per cent.

Provision is also being made for the withdrawal of the existing concessional rebate for contributions to hospital and medical benefits funds. This will apply to all contributions made for insurance packages which qualify for exemption from the levy, and for all other hospital and medical benefits insurance payments made on or after 1 October 1976. All the provisions of the Bill are explained in an explanatory memorandum that has been prepared for the information of honourable members and it remains only for me at this stage to commend the Bill to the House.

Debate (on motion by Mr Hurford) adjourned.

page 2349

HEALTH INSURANCE LEVY BILL 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

When introducing the Health Insurance Levy Assessment Bill I outlined the basic features of the Government’s scheme for introduction of a Health Insurance Levy. The Health Insurance Levy Bill declares the basic rate of levy. For 1976-77 this will be 1.875 per cent of taxable income, that is, three-quarters of the full-year rate of 2.5 per cent. As I mentioned in my speech on the first Bill, the rate will be reduced by onehalf for certain repatriation beneficiaries and Service personnel. I commend the Bill to the House.

Debate (on motion by Mr Hurford) adjourned.

page 2349

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT BILL (No. 2) 1976

Bill presented by Mr Eric Robinson, and read a first time.

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

This short Bill is of a technical nature. The Bill is needed because the proposed Health Insurance Levy will be collected through the income tax system and is for many technical purposes to be treated as an income tax. In substance, however, the levy is a payment for health insurance. It will be paid only by people who do not have insurance with a registered private insurance fund and do not pay a premium direct to Medibank. In these circumstances it would be inappropriate to treat the levy as an income tax against which people who have income from foreign sources may credit foreign tax. The amount to be paid for medical services should not be reduced in this way. The Bill, which I commend to the House, ensures that the levy will not be so treated.

Debate (on motion by Mr Hurford) adjourned.

page 2349

HEALTH INSURANCE AMENDMENT BILL 1976

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

Second Reading

Mr HUNT:
Minister for Health · Gwydir · NCP/NP

-I move: That the Bill be now read a second time.

The Bill before the House is one of a number of Bills which are designed to authorise modifications to the health insurance program Medibank. The Government’s proposals follow a comprehensive review of the operation of the health insurance program. This has been carried out with the assistance of the Medibank Review Committee which was appointed in January of this year. In formulating its proposals the Government has worked in close collaboration with the Committee over a sustained period. Because of this, the Committee has not prepared a written report for publication. I would like to thank the many people and organisations who made submissions to the Committee or participated in discussions with it. The Committee, and through it, the Government, have benefited very greatly from their assistance. I would also like to express the Government’s appreciation to the members of the Medibank Review Committee for the excellent task that they have performed.

Funds for health services flow from both the public and the private sectors. The share of the burden accepted by the public sector has grown sharply in recent years from 52 per cent between 1963 and 1970 to 57 per cent in 1972-73 and an estimated 74 per cent in 1975-76. Within the public sector, the Commonwealth share has risen from 55 per cent in 1972-73 to an estimated 73 per cent in 1975-76. Not only has the Commonwealth share grown quickly, but the actual amounts of expenditure also have risen from $260m in 1963-64 to an estimated $2,500m in 1975-76, which is nearly a 1000 per cent increase in 12 years.

These rises have been associated with an increase in the proportion of gross domestic product devoted to health from 5.2 per cent 25 years ago to an estimated 6.5 per cent. Total expenditures on health in Australia are estimated at $4,700m in 1975-76 and $5,400m in 1976-77. The health insurance program is not concerned with all health services costs. It helps to pay for general hospital and medical services which will cost about $2,850m in 1975-76. The Commonwealth Government share of this expenditure would be over $ 1,800m if no changes were made.

The Government is concerned to develop the most effective and efficient system of health services delivery and to ensure that every Australian has adequate access to high quality health care. The Government is therefore committed to the maintenance of universal insurance coverage for hospital and medical expenditure. Every Australian will continue to have the right to remain in Medibank. This is the basic concept of Medibank, and the Government is determined that it will be maintained. However, it is clear that Medibank in its present form has serious weaknesses. It has achieved universal coverage, but at the expense of largely disregarding the need for economy and efficiency in overall health care expenditures by the individual and the community. It provides few incentives to economy in the use of health services, either on the part of the consumer or, more particularly, on the part of the medical profession which has a key role in determining overall health costs.

In its present form Medibank places on the State and Federal governments virtually the whole responsibility for financing the basic level of hospital and medical care. It does this not only for those who need assistance with their health care costs, but also for those who can afford to pay for themselves. Indeed, voluntary health insurance contributed only 8 per cent of the money that went towards meeting health costs in 1975-76, while in 1973 voluntary health insurance contributed 14 per cent. The cost of Medibank to the Commonwealth in the current financial year is estimated to be approaching $ 1,400m. If nothing were done, the cost next year would rise to over $ 1,800m. Moreover, the program is quite open ended and there is every likelihood that subsequent years could bring even larger increases.

Finally, Medibank has threatened the continuance of private medical practice in hospitals. While the majority of the population has chosen to maintain insurance coverage which would allow them to be treated by their own doctor in hospital, there is considerable doubt whether they would have done so if an across the board levy had been introduced as the Labor Government proposed. In addition, the charges for intermediate and private accommodation in public hospitals have been set at unrealistic levels which deliberately undermine the competitive position of private hospitals.

The Government is therefore proposing a number of modifications to Medibank, while retaining the principle of universal coverage. These proposed changes are designed to provide immediate savings to the Budget by encouraging people to take out their own health insurance with private insurance funds, and by requiring those who choose to remain in Medibank and who are able to contribute towards the cost of their hospital and medical care, to do so. As a result, Government subsidies out of general revenue will be concentrated on the members of the community who are in greatest need, yet means tests will be avoided. The changes we are proposing are also designed to provide incentives to the medical profession, and private insurers, to constrain costs by establishing competition between the public and private sectors. Competition between private insurers and Medibank should maintain both the quality of services and their cost efficiency. For virtually the first time in Australia the medical profession will have an incentive to participate in schemes to help curtail unnecessary usage and expenditure in order to maintain the long term viability of private practice.

The Bill before the House provides for persons who are not privately insured persons to continue to be eligible for Medibank medical benefits. In addition, in accordance with the hospital agreements between the Commonwealth and State governments, they will continue to be eligible for free standard ward treatment in recognised hospitals. However, it is proposed, as a general principle, that those who choose to remain in Medibank will be required to contribute towards the cost of their health care by paying a levy of 2.5 per cent of their taxable incomes or by paying contributions to the Health Insurance Commission. I shall be introducing separate legislation to authorise the arrangements for people to contribute to the Commission. It is anticipated that the arrangement for people to contribute to the Commission will provide an effective ceiling on levy payments of about $ 1 50 a year for a person without dependants and about $300 a year for a family.

By introducing a system of direct entry into Medibank by payment of a contribution, those who have a personal preference for Medibank, but have high incomes, will be able to exercise their preference. No one will be compelled to insure privately. Others on lower incomes who choose to pay the levy will receive the same benefits at a lower cost than the full premium and on a graduated scale related to their means. Those on the very lowest incomes will pay no levy. Briefly, people will continue to be eligible for the benefits of Medibank unless they have private insurance with a health benefits organisation registered under the National Health Act which will provide them with protection against the fees for the range of health services covered by Medibank. I shall be introducing separate legislation relating to the provision of this insurance.

I want to emphasise that the only difference between coverage by Medibank and coverage under the standard private health insurance tables will be that Medibank will provide cover for treatment in public hospitals rendered by doctors engaged by the hospitals, whereas the standard private insurance tables will relate to shared accommodation in public or private hospitals with treatment by doctors engaged by the patient. Apart from this, there will be no difference in entitlements. For example, the medical benefits for treatment by a private practitioner outside of a hospital will be the same. The difference between Medibank and private insurance coverage will thus be no greater than already exists between those who at present rely entirely on Medibank and those who have taken out additional insurance coverage.

I have already stated that the Medibank program is quite open ended. This is reflected in the provisions relating to the payment of medical benefits. The Government believes that these benefits should be directed to assisting individuals in meeting the fees they incur for professional services. However, such benefits should not be paid to relieve governments, government authorities, or employers of costs that, but for Medibank, would be borne by them. The Bill provides that medical benefits will no longer be paid in these circumstances unless the Minister otherwise directs. It is considered important that the Minister should have this power of direction to ensure that individuals are not disadvantaged in any circumstances.

It is consistent with the approach that medical benefits under the Health Insurance Act should be directed to assisting individuals, that Medibank, through the payment of medical benefits in cases such as workers compensation and third party cases, should not relieve insurers of their liabilities. The Bill provides that, where persons have a right to, or have received compensation or damages under the law of a State or Territory related to fees for professional services, the Minister may take into consideration the compensation or damages paid or payable and determine that medical benefits are not payable or are payable at a reduced rate. Provision is also made for the Minister to make provisional payments of medical benefits where it appears that a claim may relate to expenses in respect of which compensation or damages may be payable. The provisional payments may, of course, be recovered in part or in full, as is appropriate, where compensation or damages are subsequently paid.

Similar provisions relating to daily bed payments made in respect of patients in private hospitals have also been included in the Bill. The provisions are designed to protect individuals and providers of services while avoiding the present situation whereby Medibank is paying about $30m a year on workers compensation and third party claims. All States will be requested to adopt fee charging policies for compensation and damages cases in recognised hospitals, designed to achieve the Government’s objective that the cost of such claims should be recovered from the insurers.

There have been a number of allegations of abuses of Medibank by both doctors and patients through the provision of excessive or unnecessary services. This problem has been considered very carefully by the Government and the Medibank Review Committee. It is apparent that there are some abuses. It has been widely suggested that direct billing of Medibank by doctors, which is authorised by section 20 (3) of the Health Insurance Act, should be discontinued in order to reduce abuses. On the other hand, direct billing is by far the least costly way for Medibank to process claims and it is convenient for many patients and doctors. The Government has therefore decided to retain direct billing. However, the Bill permits practitioners who direct bill to charge the patient an amount in addition to the benefit payable by Medibank provided that the total charge does not exceed the scheduled fee for the service. This should provide the patient with an opportunity to scrutinise and query accounts. For pensioner health benefit recipients, practitioners will be asked to accept the Medibank medical benefits in full settlement.

The Bill provides for the termination of arrangements under which cheques are issued in the name of the practitioner where a person lodges a claim for medical benefits and the medical expenses have not been paid. It is proposed that in future cheques will be issued to the claimant. Where evidence occurs of fraudulent practices, they will be dealt with by prosecution. This approach has already been adopted and several prosecutions are pending. However, the major problem is not one of fraudulent activity, but of the excessive use and provision of medical services. The Government believes that the best way of dealing with this problem is not by confrontation but by obtaining the co-operation of the medical profession to establish systems to restrain unnecessary usage. The changes being made by the Government to Medibank should help provide incentives for the profession. I shall refer to this again later.

A number of cases have been revealed where services are being charged to Medibank which, because of the circumstances in which they are provided, do not warrant the payment of the usual Medibank benefit. The Bill provides that the Minister may refer such cases to the Medical Benefits Advisory Committee. If the Committee recommends that medical benefits should not be paid in particular circumstances, regulations may be promulgated to provide that the benefits are not payable.

Section 18 of the Health Insurance Act at present prevents the payment of benefits for diagnostic services- pathology and radiology- to private patients in recognised hospitals. This section was a product of the previous Government’s vendetta against private practice in hospitals and has caused serious anomalies. As a result the provision of diagnostic services has been impaired in many public hospitals. The Bill provides therefore for the repeal of this section. The Bill also provides for the present arrangements under which visitors from overseas are automatically eligible persons for the purposes of the Medibank program to be discontinued. Visitors will in future be informed that they are personally responsible for any health costs and will be advised to take out appropriate private insurance to cover their stay. However, arrangements will be made in cases of genuine hardship for visitors from overseas who have not insured to receive the benefits of the Medibank program.

I wish to turn now to the hospital agreements between the Commonwealth and State governments. It is the Government’s policy that privately insured persons should meet, through the private health insurance arrangements, an increased proportion of the cost of providing hospital services. It is proposed that a privately insured person whether an in-patient or an outpatient, should be able to obtain medical treatment in a recognised hospital from doctors engaged by the hospital. However, the Government proposes to discuss with the States the desirability of charging for medical treatment on an all-inclusive basis in these circumstances and also for medical treatment provided to outpatients. The Government will also propose to the States that recognised hospital charges be raised to $40 a day for shared accommodation and $60 a day for private wards. The present charges are unduly low and increases are necessary to restore the competitive position of private hospitals. The Government will maintain the daily bed payments of $16 a day for patients in private hospitals. However, where States would prefer for recognised hospitals that these payments cease as a separately identifiable component of the Commonwealth’s payments under the hospital agreements, the Commonwealth will agree to the payments being discontinued providing the States undertake to provide adequate statistical information.

The Government also proposes to enter into discussions with the States with a view to establishing a new basis on which the costs of operating hospitals will be shared. The present basis is open ended and does not provide, in the Government’s view, adequate incentive for cost efficiency.

This Bill includes a provision for the existing Hospital Agreements to continue but the heads of agreement in Schedule 2 to the Act have been revised to enable the Government, with the agreement of each State, to vary the agreement to achieve the objectives I have just outlined. I wish to emphasise that the modifications to the Medibank program are being proposed with much more than immediate Budget savings in mind. They will provide real incentives to the medical profession and private insurers to help constrain costs.

Health care costs have been growing rapidly both in Australia and in most countries overseas.

Debate interrupted.

page 2353

ADJOURNMENT

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

That the House do now adjourn.

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I require the question to be put forthwith without debate.

Question resolved in the negative.

page 2353

HEALTH INSURANCE AMENDMENT BILL 1976

Second Reading

Debate resumed.

Mr HUNT:
NCP/NP

– I was saying that health care costs have been growing rapidly both in Australia and most countries overseas. Whether any particular country is spending enough or too much is an open issue. However, making people more aware of the costs involved may be an important first step in any assessment. Moreover there is a clear need to control cost escalations that are not related to benefits and to ensure that as much value as possible is obtained for the money spent in both the public and private sectors.

Doctors play a key role in determining overall costs because it is largely they who make the decisions to put patients into hospital, the length of stay, the need for and nature of operations or other courses of treatment. The costs generated by doctors are not restricted to their own fees, but involve the total costs resulting from the decisions they make. Efforts to curtail the growth in costs must therefore start with the decisions made by doctors.

The Government attaches considerable importance to this matter and will ask the medical profession to institute systems of professional standards review, designed both to assess the quality of, and to seek the justification for, services rendered. The Government expects the profession to establish review arrangements in close consultation with the Department of Health. The participation of private insurers in the provision of information and in other ways will also be sought. Failure to have workable systems in operation within 3 years could result in the introduction of mandatory systems. Preliminary discussions with professional groups have indicated that they will co-operate in programs of quality assurance. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2353

NATIONAL HEALTH AMENDMENT BILL 1976

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

Second Reading

Mr HUNT:
Minister for Health · Gwydir · NCP/NP

-I move:

This Bill relates principally to private health insurance organizations. It contains many matters of detail which I will outline shortly. Before I do this, however, I want first to outline the Government’s proposals as they will affect both the people who choose private health insurance and the health insurance organizations.

People who choose to insure themselves and their dependants for benefits in accordance with the standard hospital and medical benefits tables provided by organizations registered under the National Health Act will be exempt from payment of the Health Insurance Levy. Briefly, the standard medical benefits table will provide the same level of medical benefits as Medibank. Included in the benefits payable in accordance with the standard hospital benefits table will be benefits sufficient to cover the charges for privately insured patients who are treated by their own doctors in the standard wards of recognised hospitals.

These benefits will, of course, also be available for application towards the fees for accommodation in private hospitals. Those who choose private room accommodation will need to take out additional private insurance to cover the extra hospital charges. The setting of contribution rates for the standard tables will be a matter for the individual organisations but will continue to be subject to the surveillance of the Minister. There may be variations in contribution rates both between individual organisations and between States. However, it is estimated that the combined contribution rates for the standard tables will be of the order of$175 a year-$3.35 a week-at the single rate and $350 a year-$6.70 a week- at the family rate.

While these are substantial amounts they still represent only part of the full cost of hospital and medical insurance when averaged over the community as a whole. The Government believes that those who are able to do so should meet a substantial proportion of their hospital and medical costs through direct insurance payments, rather than through taxes. Subsidies from general revenue can thus be directed to those with the lowest incomes.

Treatment in recognised hospitals by private doctors will not be restricted to those who insure for the benefits I have just described. People who remain in Medibank will continue to be able to contribute to a hospital benefits fund for cover for the fees charged by recognised hospitals in these cases. The cost of this additional cover is estimated at $135 a year-or $2.60 a week- at a family rate and would be payable in addition to the levy.

In one respect, the Government will be narrowing the differences in benefits available to Medibank and privately insured patients. At present, an additional benefit is paid by the private funds to their members while they are in nursing homes. This benefit is also paid by the Government to pensioners who satisfy a means test, but not to other persons. The Government has decided to extend this benefit to all persons who continue in Medibank after 1 October 1 976. The cost of this concession is estimated at $ 10m in a full year and $7.5m in 1 976-77.

The changes being introduced by the Government will ensure a continuing role for private health insurance organisations. However, the Government does not intend that this should result in a mere reversion to the situation that existed prior to the introduction of Medibank. We believe that organisations will need to give much greater attention than in the past to economy and efficiency in their operations and to devising ways of keeping overall costs and contribution rates down. In the United States of America, health insurers have made substantial progress in developing methods of monitoring the usage of services, in co-operation with the medical profession, in order to eliminate unnecessary expenditure and so restrain costs to contributors. In Australia these developments have, so far, been totally neglected. The Government intends that this situation should now change.

We have considered whether it would be desirable to permit commercial insurers to undertake health insurance business in Australia, in order to provide greater competition and to stimulate the adoption of new techniques to monitor usage and control costs. However, for the time being we have decided not to take this step and will restrict health insurance business to non-profit organisations. This will allow existing organisations to adapt to the new environment in which they will be in competition with Medibank and to develop their own arrangements to monitor usage in co-operation with the medical profession.

To date medical and hospital benefits provided by most registered organisations have been cash benefits. Provisions in the Bill will enable registered organisations to expand their activities to include the provision of medical, hospital and other allied health services to contributors. The provisions will assist in creating an environment in which health maintenance organisations might successfully operate. The Bill requires hospital and medical benefits organisations, as conditions of registration, to admit any contributor to the standard benefits tables in respect of himself and any of his dependants. The conditions of registration also require organisations to limit any benefit waiting periods for contributors to the standard benefit tables to a maximum of 2 months and for no waiting period to be applied to persons who become contributors on or before 30 November 1976.

Dr Klugman:

– What about obstetric patients?

Mr HUNT:

-The period will be 2 months. Registered organisations will also be required to continue to pay benefits for contributors and their dependants for a period of 2 months after they cease to pay contributions. This requirement will enable levy relief certificates to be issued by organisations before the end of each financial year. To contain excessive billing of privately insured patients, organisations will also be required to limit medical benefits to amounts equivalent to the schedule fees. To discourage over-utilisation of hospital services benefits, these are to be limited to the fees charged, and where the medical services charge is less than the schedule fee, the medical benefit will be the lesser amount.

Organisations will also be required to maintain records of contributors and their dependants. The Bill also provides for registered organisations to play a greater role than in the past in the care of the chronically ill. In the past, contributors or their dependants who were classified by the fund as having a pre-existing condition or as chronically ill, or who had prolonged stays in hospital, could be placed in a special account and the deficits in these accounts were met by the Commonwealth. The cost to the Commonwealth of these arrangements is estimated at over $60m in the current financial year. This would rise to over $100m next year with the expected increases in hospital charges. The Bill provides for these arrangements to be ceased, with effect from 1 October 1976, but special provision is made for them to continue to apply for persons who make claims after that date in respect of expenses incurred prior to that date.

In future registered medical and hospital benefits organisations will be required to provide benefits for all contributors to the standard benefits tables regardless of their state of health. It is recognised that the financial liabilities of hospital benefits organisations resulting from this requirementt may vary quite significantly. The Bill provides for hospital benefits organisations to establish and maintain reinsurance accounts within their hospital funds to record these differing experiences to the extent that contributors attract hospital benefits in excess of 60 days in any period of 12 months.

The Bill also provides for the establishment, operation and administration by trustees appointed by the Minister, of a Hospital Benefits Reinsurance Trust Fund. The Trust Fund will operate to even out differences between hospital benefits organisations in the incidence of hospital costs for chronically ill members, while at the same time ensuring that each organisation contributes towards these costs. The Commonwealth will make a fixed contribution to the Trust Fund. I propose that detailed arrangaments for the pool will be discussed with the registered hospital benefits organisations.

In view of the above requirements the Bill provides for the Minister to review the registration of all organisations presently registered under the Act. Where the Minister is not satisfied that the organisation will be able to meet the requirements, he is empowered to cancel the registration of the organisation. An organisation which has had its registration cancelled will be able to apply for registration at any time from 1 October 1976, when it claims it will be able to meet the requirements for registration.

The Bill provides power for the Minister to give directions relating to a number of matters including the rates of contributions, the scope and level of benefits, the provision of services and the admission of contributors and the provision of necessary information. It is not intended that these powers should be used extensively, or that they should be used in relation to contribution rates in such a way as to discourage competition between organisations. The Government’s primary concern is to ensure that the benefits provided by organisations to contributors to the standard benefits tables are adequate, and that funds do not limit membership so as to discriminate against people who are regarded as poor health risks. Regulation by the Government will be kept to the minimum necessary to the achievement of these objectives and the protection of the interests of contributors and the provision of necessary statistical and other information.

I have mentioned that the legislation confers power on the Minister to give direction in certain matters. In other areas, the Minister has power to decide whether the registration of the organisation, or changes submitted by, it in relation to matters contained in section 78 of the Act, should be refused. The Bill also enables the Minister to impose or vary a term or condition. These are significant powers and the Bill therefore provides, in new Part VII A, for a decision taken by the Minister in relation to the matters I have just outlined to be subject to review by the Administrative Appeals Tribunal, which will be operating at the time these provisions commence. As a corollary to its objective of universal coverage against medical and hospital costs for all persons in the community, this Government sees as its responsibility the need to protect the interests of persons who elect to contribute to registered medical and hospital benefits organisations.

Consequently, the Bill includes provisions to enable the Minister, where it appears that a registered organisation is or may become unable to meet its liabilities or has contravened or failed to comply with requirements arising from the operation of the Act, to request an organisation to show cause why it should not be investigated in relation to specified matters. Where the organisation fails to satisfy the Minister, and he believes it to be in the contributors’ interests, he may appoint an inspector to conduct an investigation into specified matters relating to the affairs of the organisation. The Bill further provides that after he has considered the report of the inspector, the Minister may take such action consistent with the Act as he considers appropriate. This may include making an application to the Australian Industrial Court for the appointment by the Court of a judicial manager to manage the affairs of the fund or for the fund to be wound up by the Court.-

Dr Klugman:

– You have finally taken up our Bill.

Mr HUNT:

– Then the honourable member would agree with that.

Dr Klugman:

– But you opposed it.

Mr HUNT:

-Do not tell me the honourable member will oppose it this time. The Bill also provides that the Minister may make application to the Court for the appointment of a judicial manager where the Minister is satisfied that the organisation has failed to comply with a provision of the Act, a term or condition of registration or a direction of the Minister.

Provision is included in the Bill to require a judicial manager, appointed by the Court, to conduct the affairs of the fund with the greatest economy consistent with the efficiency and to report to the Court, as soon as possible, as to the course of action to be taken in relation to the fund. This could include recommendations to return the fund to its former management; to transfer all or part of its affairs to another organisation with the consent of the other organisation; or that the fund be wound up.

The Bill provides for funds to be wound up under the supervision of the Court upon an application and in accordance with a scheme submitted by the Minister, the judicial manager or the organisation conducting the fund. All schemes for winding up are to be subject to confirmation by the Court which may vary the schemes. The Court is required where practicable to effect the transfer of contributors to a fund to be wound up to a fund conducted by another registered organisation.

These provisions are similar to provisions in other legislation relating to the supervision of insurance business. Although I would anticipate that they would be used only rarely, except perhaps at the instigation of organisations which might apply to have a fund wound up, I believe that contributors should have the security of such provisions under arrangements deliberately designed to achieve universal health insurance. There are many provisions in the National Health Act which have become redundant.

Commonwealth medical benefits have not been payable under the Act in respect of services rendered after 30 June 1975. Commonwealth hospital benefits have not been payable in respect of hospital treatment received by qualified hospital patients after 31 March 1976. As these provisions are no longer required the opportunity has been taken in this Bill to provide for their repeal. Provisions have been included in the Bill which ensure that benefits continue to be payable in respect of services provided on or before the .:es to which I have just referred.

In view of the significance of the Government’s proposals as they relate to the future role to be played by registered organisations, I have made arrangements to meet with representatives of the organisations. In addition, I have requested officers of my Department to arrange to hold more detailed discussions with representatives of the organisations in the near future. I am confident the Government will obtain the ready co-operation of registered health benefits organisations which will have an important role to play in providing health care protection for a significant percentage of the Australian community. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2356

HEALTH INSURANCE COMMISSION AMENDMENT BILL 1976

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

Second Reading

Mr Hunt:
Minister for Health · Gwydir · NCP/NP

(10.53)-I move

That the Bill be now read a second time.

In my second reading speech on the Health Insurance Amendment Bill 1 976 1 explained that people would be able to choose to pay the health insurance levy of 2.5 per cent of their taxable incomes, contribute to the standard benefits tables of registered medical and hospital insurance organisations, or contribute to the Health Insurance Commission. The Bill before the House provides for persons to contribute to the Health Insurance Commission on behalf of themselves and any dependants. Such persons will be exempt from the levy. Precise contribution rates will be determined when the contribution rates of the major private health insurance funds are known. As a guide, annual contribution rates to Medibank are expected to be about $ 1 50 a year for a person without dependants and about $300 a year for a family.

I wish to emphasise that this contribution process provides an effective ceiling on levy payments. By introducing a system of direct entry into Medibank by payment of a contribution, those who have a personal preference for Medibank, but have high incomes, will be able to exercise their preference. No one will be compelled to insure privately. This Bill ensures that every Australian can exercise his right to remain in Medibank. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2357

SOCIAL SERVICES AMENDMENT BILL (No. 2) 1976

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

Second Reading

Mr HUNT:
Minister for Health · Gwydir · NCP/NP

– I move:

The Bill gives effect to part of a Government decision which will be of far-reaching benefit to a very significant number of people who are amongst those most in need of financial assistance. It will do this by substantially increasing family allowances for families. Under this Bill it is proposed to increase payments to $3.50 a week for the first child, $5 a week for the second child. $6 a week for the third and fourth children and $7 a week for each other child. I ask leave to have incorporated in Hansard the following table which compares existing rates with those proposed in the Bill.

Mr DEPUTY SPEAKER (Mr Lucock:

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

Mr HUNT:

– Another significant change proposed is that students will be brought into account in the assessment of the total amount of family allowance payable, as if they were children under 16 years of age, and the rate payable for them will be determined according to their position in a family. The rate now payable for students- that is, $1.50 a week flat -will be increased to a minimum of $3.50 for the eldest or only child in the family; if there are 2 student children in the family the rate payable for the second student will be $5 a week. This will overcome the existing anomaly that, upon a child reaching 16 years and becoming a student, the total amount payable increases in one and two child families but decreases in families where there are more than two children. In addition the age limit beyond which family allowances cease to be payable for students is to be increased from 2 1 to 25 years.

Other proposals which will broaden the eligibility conditions for payment are (a) children of alien fathers will no longer be disqualified on nationality grounds; and (b) payment will in future be made to a person presently ineligible if a child is dependent on the claimant or spouse and the claimant or spouse is a resident of

Australia as defined in the Income Tax Assessment Act.

The new rates of family allowances will apply from 15 June and will be available for payment in respect of instalments due on 13 July 1976. Because of the administrative arrangements applying to payment, many people paid by cheque will receive the higher amount on 29 June 1976. People who are receiving family allowances when the new rates come into operation will not need to apply to receive the higher payments, but claims will need to be lodged by those who will become eligible to receive payments under the new eligibility conditions. For example, where a student is above the age of 21 years, a new claim will need to be lodged. The Department of Social Security has no way of re-activating claims which have already expired. General publicity will bo given to the new conditions of eligibility.

The proposals outlined arise from a review til” the manner in which assistance for families is now available. Most families receive assistance for children under 16 years of age and students by way of child endowment and personal incometax rebates. However, the benefits that arc available to some taxpayers by way of tax rebates for children do not apply to some 300 000 families whose incomes are insufficient to enable them to take advantage of those tax rebates. The Government regards it as of first importance that these families who, as a class, are those most in need, should receive the additional financial help which this Bill will provide. The redistribution of income described is possible as a result of the parallel Government decision to abolish personal income tax rebates for children and students. Increases in the sole parent rebate and the rebate for a dependent spouse will be of benefit to all single income families which are subject to taxation. For such families they will more than offset any reduction in assistance for children arising from the substitution of increased family allowances for personal income tax rebates.

The abolition of tax allowances for children and large increases in family allowances were recommended by Professor Henderson in the first main report of the Commission of Inquiry into Poverty. The report of the Taxation Review Committee under Mr Justice Asprey also saw advantage in a change of this kind. The increases in family allowances will take effect at virtually the same time as the pay-as-you-earn schedules of tax instalments are adjusted to take account of the withdrawal of rebates for children and students. The actual impact of the withdrawal of tax rebates on pay-packets themselves will also be reduced because of the effects of tax indexation. The new proposals will increase the annual cost of child endowment by $785m to $ 1 ,020m a year. This additional cost will be offset by the abolition of taxation rebates for children and students. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2358

BILLS RETURNED FROM THE SENATE

The following Bills were returned from the Senate without amendment:

Roads Acts Amendment Bill 1976. Acts Citation Bill 1976.

House adjourned at 11.4 p.m.

page 2359

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Tasmanian Senate Elections

Television: Menindee (Question No. 135)

Mr FitzPatrick:

asked the Minister for Post and Telecommunications, upon notice:

  1. 1 ) When is it expected that a television repeater station being erected at Menindee, New South Wales, will be brought into service.
  2. Will reviews of expenditure announced by him affect the commissioning of this facility.
Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

  1. 1 ) It is expected that the Menindee station will commence operation in August 1976.
  2. No.

National Sports Institute (Question No. 142)

Mr Stewart:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. I ) Had the Study Group into the feasibility of a National Sports Institute prepared and submitted a report to the Department of Tourism and Recreation before the inquiry was terminated: if so. will the report be tabled.
Mr MacKellar:
LP

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

  1. I ) The National Sports Institute Study Group’s report submitted to the former Department of Tourism and Recreation was tabled in the Parliament on Wednesday. 28 April 1976.

Canberra: Express Bus Services (Question No. 227)

Mr Haslem:

asked the Minister for the Capital Territory, upon notice:

  1. 1 ) How many buses travel in the express bus lane on Adelaide Avenue on weekdays between the hours of ( a ) 8.00 a.m. to 9.00 a.m. northbound and (b) S.00 p.m. to 6.00 p.m. southbound.
  2. How many passengers are carried in those buses during those times.
  3. How many cars travel along Adelaide Avenue on weekdays between the hours of (a) 8.00 a.m. to 9.00 a.m. northbound and ( b ) S.00 p.m. to 6.00 p.m. southbound.
  4. How many drivers and passengers are carried in those cars during that period.
  5. What was the complete cost of research, design, construction and road line marking of the express bus lanes constructed in Adelaide Avenue and Yarra Glen.
Mr Staley:
Minister for the Capital Territory · CHISHOLM, VICTORIA · LP

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

  1. (a) 18 buses 8.00 a.m. to 9.00 a.m., northbound: (b) 17 buses S.00 p.m. to 6.00 p.m.. southbound.
  2. (a) 893 passengers northbound; (b) 725 passengers southbound.
  3. 3 ) ( a ) 5202 vehicles northbound: (b) 3942 vehicles southbound.

  4. Based on a car occupancy of 1.4 persons:

    1. 7283 car travellers northbound;
    2. 55 19 car travellers southbound.
  5. $150,000.

It is pointed out that the purpose of introducing bus lanes to Adelaide Avenue (and Canberra) ostensibly before significant demand for them is apparent is threefold:

  1. to demonstrate that faster, more reliable services can be provided by the Canberra Bus Service on major bus routes;
  2. to attract more patronage to public transport as it is seen to be more acceptable to commuters: and
  3. to carry commuters more efficiently over scarce road space and to relieve pressures on limited long stay parking spaces, especially around City.

Defence Service Homes (Question No. 255)

Mr Uren:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. 1 ) Is consideration being given to handing over the administration of the Defence Service Homes Act to State institutions.
  2. If so. at what level are discussions taking place with the States, and have the States responded to this suggestion.
  3. If they have responded, either favourably or unfavourably, what were the general reactions of the States approached.
  4. Have the RSL and other ex-servicemen’s and women’s organisations been consulted cither before or after the States were approached: if so, what was the reaction of those groups.
  5. 5 ) If consideration is being given to such a transfer of administrative responsibility, what discussions have taken place with representatives of the Defence Service Homes Staff or representatives of unions affected.
  6. If this suggestion is to be proceeded with what will be the effects on the employment future of Defence Service Homes staff employed in (a) head office and (b) State offices.
Mr MacKellar:
LP

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

  1. Yes.
  2. The Secretary of the Department of Environment, Housing and Community Development has raised the matter in the course of discussions with State officials.
  3. 3 ) The responses of the State officials have indicated that the matter could be pursued further if the Commonwealth Government decided that devolution of administration is desirable.
  4. 4 ) The Prime Minister announced on 2 February that the Returned Servicemen’s League would be consulted on the best method of administering the Defence Service Homes Scheme consequent on the decision to abolish the Australian Housing Corporation. The League has advised the Government that it is opposed to devolution of the Defence Service Homes Scheme to the States.
  5. 5 ) All staff and all unions represented among the Defence Service Homes staff have been informed of the study of alternative administrative arrangements and have been assured that they will be consulted in relation to the outcome of the study. The Department of Environment. Housing and Community Development will be consulting also with the Public Service Board as the study develops because of the Board ‘s special concern for the rights of staff.
  6. No decisions have been made on the issue of devolution: but if it were to be proceeded with the rights of the staff would be fully preserved in consultation with the Public Service Board.

Television: Presentation of Advertisements (Question No. 274)

Dr Klugman:

asked the Minister for Post and Telecommunications, upon notice:

  1. 1 ) Are there any rules preventing television stations increasing the sound level of advertising matter above that of the preceding feature.
  2. Has there been any evidence of television stations increasing the sound level of advertising.
  3. Does the Australian Broadcasting Control Board monitor television stations to detect any variation in sound levels.
Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

  1. 1 ) The Australian Broadcasting Control Board, as the authority responsible for the technical standards of broadcasting and television stations, has given considerable attention to the problem of ‘noisy commercials’. However, the Board has no power to prevent television advertisements being processed’ in such a manner as to make them sound loud. Indeed, some degree of sound ‘processing’, quite apart from control of volume, is involved in the making of any recording.
  2. ) 1 am advised that the Board has, over the years, observed a number of cases in which there are apparent varying levels of loudness between advertising matter and program matter which suggest that the sound component of some advertisements has been ‘processed’ to make them sound loud.

Although the normal technical facilities installed at stations ensure the proper control of volume, the measurements obtained by such facilities do not always correspond with the subjective loudness as heard by the human ear. Devices have been developed on a limited scale overseas for the automatic control of loudness but, at this stage, the Board is not satisfied that these devices present an effective answer to the problem.

  1. The Board assures me that it regularly monitors the programs of commercial television stations and is continuing to keep the question of ‘loud ‘ advertisements under examination in an endeavour to find a practical solution. It is a problem of some complexity and an early solution is not foreseen.

Australian Sports Council (Question No. 283)

Mr Stewart:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. 1 ) What were the duties and responsibilities of the Australian Sports Council established by the previous Government.
  2. What were the names and backgrounds of the members of the Council.
  3. What method was used to select members of the Council.
  4. Did the Council discuss and approve most, if not all, of the policies adopted by the previous Government in youth, sport and recreation.
  5. Does the Minister intend to re-establish an Australian Sports Council; if not, why not.
Mr MacKellar:
LP

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

  1. I ) The duties and responsibilities of the Australian Sports Council were as set out in the following Terms of Reference: ‘The Australian Sports Council will advise the Minister for Tourism and Recreation on the Development of sport and physical recreation in Australia.

In providing this advice, the Council will take into account, comment on, and where appropriate, make recommendations covering:

  1. the encouragement of wider participation in sport and physical recreation in Australia:
  2. the raising of the standards of performance in sport and physical recreation in Australia:
  3. the provision of sports facilities throughout Australia:
  4. assistance towards the organisation and administration of national sporting associations;
  5. the promotion within the community of a general understanding of the value of sport and physical recreation:
  6. the establishment of a policy or policies for the development of sports and physical recreations at national level:
  7. the relationship between professional bodies, sporting associations and the Council in the development of sport and physical recreation in Australia;

  8. the encouragement of industry, institutions, trusts and others in supporting the development of sport and physical recreation: and

    1. any other aspects considered to be relevant to the tasks of the Council.

To liaise and co-operate with Sports Councils in the States and similar bodies throughout Australia and overseas.

The Council shall also consider matters referred to it by the Minister.’

  1. The names and backgrounds, at the time of their appointment, of the members of the Australian Sports Council were:

Mr Jim Barry

Managing Director Avon Stationery Group Pty Ltd. Melbourne. ‘President Australian Amateur Gymnastic Union, delegate to Australian Olympic Federation. Councillor National Fitness Council. Victoria. Lieutenant Colonel (RAA) Active. Citizen Military Forces. Previous champion in gymnastics. Other interests snow skiing, swimming and water skiing.

Professor John Bloomfield

Professor and Head of Department of Physical Education. University of Western Australia: Deputy Chairman. Community Recreation Council of W.A.: former President of Australian Sports Medicine Federation: involved with scientific sports coaching: N.S.W. Surf Belt Champion 1950-1954. Resigned early 1975.

Mr Herb J. Elliot. M.B.E.

Manager Pioneer Concrete: associated with National Heart Foundation in rehabilitating coronary patients and in ‘get lit’ campaigns: 2 gold medals 1958 Commonwealth Games and I gold medal 1960 Olympic Games: active orienteerer Resigned early 1 975.

Mrs Wendy M. Ey ( nee Hayes)

Lecturer in P.E.. Adelaide College of Advanced Education: President S.A. Women’s Amateur Athletic Association: research on ‘women and sport’: involved with coaching: silver medal 1958 Commonwealth Games: accomplished sportswoman in a variety of fields.

Mr Geoff Frier

State Supervisor of Physical Education. Tasmanian Education Department: member National Fitness Council of Tasmania: sportsman, coach and administrator in many sports, including swimming, basketball and Australian Rules: Senior league footballer 15 years: State representative in swimming, life-saving and basketball.

Miss Eunice P. Gill. M.B.E.

Senior Lecturer. Department of Physical Education. University of Melbourne: former State and National representative in Netball: various sports administrative experience: Past President. Australian Council for Health. Physical Education and Recreation: recent studies psychological study of skilled behaviour and aesthetic evaluation of movement.

M r Syd B, Grange. O.B.E. M.V.O.

Ceremonial officer for the Government of N.S.W.: Vice Chairman Australian Olympic Federation: General Manager I960 Australian Olympic team: chairman National Fitness Council of N.S.W.: Sec/Treasurer Amateur Swimming Union of Australia.

Mr Norman May

Sporting Commentator. Australian Broadcasting Commission. Several times N.S.W. representative at Surf Life Saving. District Rugby in Sydney. Attended all Commonwealth and Olympic Games as commentator since 1962. Also World Championships Swimming Belgrade 1973. Compere ‘Sportsman of the Year’ Award.

Mr David H. Mackenzie

Solicitor, senior partner legal firm Australian fencing representative at 3 Olympic Games, silver medallist 1962 Commonwealth Games: President Australian Fencing Federation: Chairman of the Oceania Fencing Federation: acting Chairman of the British Commonwealth Fencing Association: Vice Chairman of N.S.W. Olympic Council: executive member for NS.W. on the Australian Olympic Federation.

Mr Howard C. J. Mutton

Inspector of Physical Education. South Australia: member S.A. National Fitness Council: various other administrative positions: Sheffield Shield cricket 1959-60: 4 years as State coach S.A. Amateur Football League: member and former Secretary Australian Council for Health. Physical Education and Recreation.

Hon Lindsay A. North M.L.C.

Member of N.S.W. Legislative Council since 1964: State Secretary and General President of Australian Textile Workers Union: active tennis player for 50 years and No. 5 Pennant Bowls player: Councillor and member of tournament committee N.S.W. L.T.A.A.

Mr Julius H. Patching, O.B.E.

Recreation supervisor, City of Melbourne: General Manager 2 Olympic teams: Secretary Australian Olympic Federation: various other administrative positions: several sports, especially athletics.

Mrs Ruby Robinson. M.B.E.

Sports writer. Brisbane. President Australian Women’s Hockey Association, member of the Queensland Olympic Council, Queensland National Fitness Council, manager women’s team at Mexico Olympics, former President Brisbane Softball Association, lite member Queensland Swimming Association.

Mr Michael Wenden. M.B.E.

Commonwealth Bank employee, Captain of 4 Australian swimming teams, represented at 2 Olympic and 3 Commonwealth Games: many swimming medals and records: member N.S.W. Amateur Swimming Association’s Board of Management. Also member of the Education and Coaching Committee and the Competitive Committee of the N.S.W’. Amateur Swimming Association.

  1. State Ministers responsible for sport and recreation nominated three possible candidates and other names were submitted by individuals, voluntary bodies and previous Department of Tourism and Recreation.

From this comprehensive list of names the then Minister appointed a Council of fourteen members for an initial term of one year. Members were elected as individuals and not as representatives of the Minister, the State. State Sports Councils or any particular sporting group.

  1. The Council discussed, and where appropriate made recommendations on most of the matters of direct relevance to sport and physical recreation. The Council was not allocated responsibility for youth and broader recreational policies.
  2. 5 ) No decision on the future of the Council has yet been taken. It last met in September 1975. I have requested my Department to advise me on a comprehensive policy in the youth, sport and recreation fields for further consideration.

Sport and Recreation Programs (Question No. 284)

Mr Stewart:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. I ) Did the Minister, on Friday. 19 March 1976. advise a delegation representing some 50 national sporting organisations that there was a need to rationalise the ad hoc spoi ls and recreation programs inherited from the previous Government.

    1. 2 ) Was the statement totally accurate.
    2. 3 ) If not. why was it made.
Mr MacKellar:
LP

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

  1. 1 ) Yes.
  2. Yes.
  3. Not applicable.

Office Building Program (Question No. 328)

Mr MacKenzie:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. 1 ) Will the accelerated office building program initiated in 1 975 continue: if so: what projects und”er this program arc currently being considered.
  2. Has the Minister’s attention been drawn to the advanced state of planning for office development that has been achieved by the Orange City Council in association with private sponsors.
  3. If so. will the Minister consider the possibility of rationalising Commonwealth office space requirements in Orange in association with the City Council’s planned development.
Mr MacKellar:
LP

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

  1. 1 ) The Government has decided to take no action at this lime on the proposed accelerated office accommodation program originated by the previous Government. This decision was announced on 25 February 1976 by my colleague, the Minister for Administrative Services.
  2. 2 ) Yes.
  3. 3 ) Yes. The Government’s accommodation requirements are being assessed as pan of the overall review of administrative arrangements. The availability of office space in Orange will he kept in mind when consideration is being given id the location of Australian Government employment.

Growth Centres (Question No. 432)

Mr Scholes:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

  1. I ) As the Government is still considering AlburyWodonga and Geelong as growth centres, and as the new motor vehicle policy will have an effect on both these areas, has the Minister’s Department, or any other department, made any estimate of employment opportunities in these areas as a’ result of the new policies. ( 2 1 If so will the Minister arrange to table the estimates.
Mr MacKellar:
LP

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

  1. I ) Recent decisions by the Government provide long term assistance to the Passenger Vehicle manufacturing industry through the 85 percent Local Content Plan and for assistance to the Commercial Vehicle manufacturing industry through a continuation of tariffs

The Government recognised that these decisions could have .significant effects on sections of the industry, and in different locations. The Department of Environment. Housing and Community Development made an assessment of possible effects, particularly with respect to the levels of activity within the industry over the period to 1980.

  1. Any assessment of employment prospects in AlburyWodonga and Geelong depends on a forecast of thi prospects for the companies located in each area. These are. of course, the Borg-Warner automatic transmission plant in Albury. while in Geelong, Ford have an engines, panels and components plant and International Harvester have an engines and components plant.

It would not be appropriate for the Government to make public pronouncements on the existing employment and future prospects for particular companies and therefore 1 will not be tabling the Department’s assessment of employment opportunities in these two cities.

Governor-General: Visit to Europe (Question No. 457)

Mr Morris:

asked the Prime Minister, upon notice:

  1. 1 ) Further to Questions Nos 3 1 and 249. what was the name, designation and salary of each of the 5 officials who accompanied the Governor-General.

  2. What were the places visited and the nature of the Governor-General’s official engagements during (a) the 18 days spent in Great Britain. ( b ) the 17 days spent in France.

    1. c ) the 4 days spent in Hong Kong and ( d ) the 3 days spent in Italy.
  3. What was the duration of each of the official engagements.

  4. What was the total cost of the trip and, in particular, the cost of (a) travel, (b) accommodation, (c) car hire and

    1. gifts.
Mr Malcolm Fraser:
LP

– The answer to the honourable member’s question is as follows: (1), (2) and (3) 1 have nothing further to add to my answers on 23 March 1976. (Hansard, page 927) and 27 April 1976. (Hansard, page 1651 and Senate Hansard, page 1308).

  1. 4 ) Costs of the visit have not yet been finalised.

Marijuana (Question No. 495)

Mr Sainsbury:
EDEN-MONARO, NEW SOUTH WALES

asked the Attorney-General, upon notice:

  1. 1 ) Has his attention been drawn to the widespread criticism which occurred throughout Australia last year when it became known that the possession of the drug marijuana in the Australian Capital Territory is. under many circumstances, exempt from police action.
  2. Are any changes contemplated in the criminal law in the Australian Capital Territory, in relation to the drug marijuana and to other so-called hard drugs.
  3. 3 ) Will the Government consider increasing drastically the penalties for the pushers of either marijuana or hard drugs.
Mr Ellicott:
LP

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

  1. 1 ) I am aware of the controversy which followed the reply given on 8 April 1975 to Parliamentary Question No. 926’bv a former Attorney-General. (House of Representatives Hansard. 8 April 1975 page 1312).
  2. 2 ) The criminal law in the Australian Capital Territory has since been changed by amendments to the Public Health (Prohibited Drugs) Ordinance which removed the previous weaknesses in the definition of cannabis that had made it difficult to secure convictions.
  3. 3 ) The question of penalties for offences relating to drugs was discussed at the last meeting of the National Standing Control Committee on Drugs of Dependence and was referred to the Committee’s working Party on Legislation for consideration. As this is an area where there are strong arguments in favour of uniformity of legislation throughout Australia the views of the States that will be expressed in that Committee will be of conserable importance.

St Joseph’s School Library (Question No. 518)

Mr Yates:
HOLT, VICTORIA

asked the Minister representing the Minister for Education, upon notice:

When does the Department of Education intend to authorise a federal grant for the completion of St Joseph’s Primary Catholic School library at Springvale. Victoria.

Mr Viner:
Minister for Aboriginal Affairs · STIRLING, WESTERN AUSTRALIA · LP

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

St Joseph’s Primary School, Springvale. received a grant, to a maximum value of $190,000, for a building project under the Schools Commission’s General Building Program and funded through the States Grants (Schools) Act 1973-74.

The Schools Commission has now received an application from the school seeking assistance towards a library project. This application is currently being considered by the Commission and it is expected that a decision, in respect of this project, will be made in July.

School for Handicapped Children: Purchase of Bus (Question No. 519)

Mr Yates:

asked the Minister, representing the Minister for Social Security, upon notice:

Has the Department of Social Security yet decided to authorise a grant to purchase a new school bus for the Special School for Handicapped Children. Heatherton Road. Dandenong. Victoria.

Mr Hunt:
NCP/NP

– The Minister for Social Security has provided the following answer to the honourable member’s question:

Yes. The organisation was advised that a grant of $3,925 had been approved on 22 April 1976. towards meeting the cost of this vehicle.

Department of Repatriation: Purchase of Blankets (Question No. 389)

Mr Bungey:
CANNING, WESTERN AUSTRALIA

asked the Minister for Repatriation, upon notice:

  1. What quantities of (a) woollen blankets and (b) blankets made of man-made fibre have been purchased for his Department in each of the last 3 years.
  2. What guidelines currently govern the purchase of blankets for his Department.
Mr Newman:
LP

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

  1. Blankets purchased for use in Repatriation institutions-
  2. 2 ) Blankets are obtained under tender and contract normally arranged every three to four years. In relation to woollen blankets a standard specification was designed for the Department following extensive investigation and laboratory testing to develop a shrink-resistant blanket that would meet medical needs and at the same time withstand high temperature laundering. Investigation and testing was undertaken in conjunction with industry and with the cooperation of the CSIRO and the Australian Wool Corporation and Wool Testing Authority.

Australian Broadcasting Commission: Defamation Judgments (Question No. 190)

Mr Connolly:

asked the Minister for Post and Telecommunications, upon notice:

What sum has the ABC had to pay in order to satisfy defamation judgments awarded against it or to settle defamation actions before judgment was entered in each of the last 5 financial years.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

Mr Bungey:

asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice:

What sum has been paid by the Department of Environment. Housing and Community Development, or by Departments formerly encompassing the functions now performed by that Department, to each airline for air travel within Australia during the last 2 years.

Mr MacKellar:
LP

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

The amounts paid to Ansett Airlines of Australia and Trans Australian Airlines for air travel in Australia for the past two years by the former Departments of Urban and Regional Development. Tourism and Recreation. Environment, and the present Department of Environment. Housing and Community Development are as follows:

Arisen: April 1 974 to March 1976….. 134.986

TAA: April 1974 to March 1976 …… 698.775

It has not been possible to include costs met by the former Department of Housing and Construction on ‘ Housing’ matters in other than the ACT. or to delete costs relating to the ‘Tourism’ function now the responsibility of the Department of Industry and Commerce or the Water Resources’ function now the responsibility of the Department of National Resources. Information on these items of costs would have to be sought from those Departments.

Public Service: Air Travel (Question No. 364)

Mr Bungey:

asked the Minister for Post and Telecommunications, upon notice:

  1. 1 ) What sum has been paid by his Department to each airline for air travel within Australia during the last two years.
  2. Will he supply similar information in relation to (a) the Australian Postal Commission and (b) the Australian Telecommunications Commission for the period since they commenced operating.
Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

  1. I ) The Postal and Telecommunications Department has existed only since December 1975. It absorbed the PostmasterGeneral’s and some functions of the former Department of the Media. The sums given below for 1973-74 and 1974-75 refer to the Postmaster-General’s Department prior to the vesting of the Postal and Telecommunications Commissions. The sums given for 1975-76 refer to the new Department from December 1975 until 31 March 1976 and to the former Postmaster-General’s Department together with the now absorbed sections of the Department of the Media from July to December 1 975.

1973- 74-

Ansett Airlines of Australia…… 365.360

Trans-Australia Airlines……. 996.478

1974- 75-

Ansett Airlines of Australia…… 479,0 1 8

Trans-Australia Airlines……. 1,402.365 1975- 76(upto31 March 1976)-

Ansett Airlines of Australia…… 1.538

Trans-Australia Airlines……. 2.783

  1. (a) Payments by the Australian Postal Commission between 1 July 1975 and 31 March 1976-

Ansett Airlines of Australia…….. 50,625

Trans-Australia Airlines……… 112.811

MacRobertson Miller Airline……. 14.158

East-West Airlines……….. 3.038

Airlines of New South Wales……. 3.861

Airlines of South Australia…….. 880

Miscellaneous Air Services…….. 2.276

  1. (b) Payments by the Australian Telecommunications Commission between 1 July 1975 and 9 April 1976-

Ansett Airlines of Australia…….. 260,880

Trans-Australia Airlines……… 733.178

Public Service: Air Travel (Question No. 365)

Mr Bungey:

asked the Minister for Construction, upon notice:

What sum has been paid by his Department, or by Departments formerly encompassing the functions now performed by. his Department, to each airline for air travel within Australia during the last two years.

Mr McLeay:
LP

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

Departmental payments to each airline for travel within Australia during the last two years were:

The above figures include amounts paid for the 'Housing 'sector of the former Department of Housing and Construction up to 31.12. 1975. As the task of identifying this component would be a time consuming and costly process, I am not prepared to authorise the detailed work involved in apportioning the payments. {:#subdebate-61-17} #### Public Service: Air Travel (Question No. 366) {: #subdebate-61-17-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Repatriation, upon notice: >What sum has been paid by his Department to each airline for air travel within Australia during the last 2 years. {: #subdebate-61-17-s1 .speaker-JVV} ##### Mr Newman:
LP -The answer to the honourable member's question, for the financial years 1973-74 and 1974-75, is as follows: >Ansett Airlines........... 240,790 > >Air Tasmania............ 2.000 > >Airlines of N.S.W........... 86.500 > >Burnett Airways Pty Ltd........ 230 > >Bush Pilots Airways.......... 260 > >Business Jets ( Aust. ) Pty Ltd....... 790 > >Central Australian Airways....... 100 > >Civil Flying Services Pty Ltd....... 60 > >East-West Airlines Ltd......... 69.200 > >Island Air Pty Ltd.......... 2 10 > >MacRobertson Miller Airline Services . . . 3.750 > >Masling Commuter Services....... 4.000 {:#subdebate-61-18} #### Agreements with the States (Question No. 41 2) {: #subdebate-61-18-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister representing the Minister Assisting the Prime Minister in Federal Affairs, upon notice: {: type="1" start="1"} 0. 1 ) What agreements with any Stale or States have been signed by- {: type="a" start="1"} 0. a ) the Prime Minister and 1. his Ministers. 1. 2 ) When will they be tabled. {: #subdebate-61-18-s1 .speaker-EE6} ##### Mr Viner:
LP -- The Minister Assisting the Prime Minister in Federal Affairs has provided the following information for answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) (a) and (2) The following agreements were signed by the Prime Minister and were tabled, or are expected to be tabled, on the date indicated. {: type="1" start="1"} 0. 1 ) ( b) and (2) The following agreements were signed by the Ministers indicated and were tabled on the date indicated.

Cite as: Australia, House of Representatives, Debates, 20 May 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760520_reps_30_hor99/>.

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