30th Parliament · 1st Session
Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2.15 p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That whereas uranium found in vast quantities in Australia is the raw material for the nuclear fission reaction.
And whereas presently assured reserves of uranium in Australia represent a potential production of over540 000 kilograms of Plutonium 239 if utilized in Light Water Reactors overseas.
And whereas the Maximum Permissible Inhalation of Plutonium 239 is 0.00000025 gram.
And whereas Plutonium 239 is one of the most dangerous substances human society has ever created, causing mutations and cancers.
And whereas there are no methods of safely and absolutely confining Plutonium from the biosphere for the requisite quarter of a million years.
And whereas Plutonium coming in contact with the air forms an aerosol cloud of micron-sized particles, its most dangerous form.
And whereas the export of uranium may return to us an import of Plutonium particles dispersed in the global environment via the circulation of the atmosphere.
And whereas there are no sure safeguards against the military use of nuclear fission, and the nuclear proliferation represents a prime environmental threat to all forms of life on the only earth available to us.
And that it is therefore an act of self-preservation to demand a halt to all exports of uranium except for bio-medical uses.
Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:
And your petitioners as in duty bound will ever pray. by Mr Bonnett, Mr Kevin Cairns, Mr Hodges and Mr Moore.
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 are 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 in 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. by Mr Lynch, Mr Sinclair and Mr Bonnett.
A similar petition has been lodged by Mr Millar.
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
And your petitioners as in duty bound will ever pray. by Mr Lynch, Mr Connolly and Mr Lusher.
United Nations Conference on Trade and Development
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 that Australia take a strong role of leadership at the forthcoming United Nations Conference on Trade and -Development.
We your petitioners do therefore humbly pray that the Australian Government instruct its delegation to the fourth session of UNCTAD
And your petitioners as in duty bound will ever pray. by Mr Sinclair.
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 those who have retired and those who are about to retire, are being severely and adversely affected by inflation and Australian economic circumstances.
The continuance of the means test on pensions causes undue hardship to them.
We call on the Government to immediately abolish the means test on all Aged Pensions.
To ensure a pension for all on retirement, and a guarantee that all Australian Citizens will retire with dignity.
Acknowledge that a pension is a right and not a charity.
And your petitioners as in duty bound will ever pray. by Mr Beazley.
To the Honourable the Speaker and House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
We, your petitioners, therefore humbly pray that you will:
And your petitioners as in duty bound will ever pray. by Mr Connolly.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That 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.
To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That whereas the natural environment of Fraser Island is so outstanding that it should be identified as part of the World Natural Heritage, and whereas the Island should be conserved for the enjoyment of this and future generations,
Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:
And your petitioners as in duty bound will ever pray. by Mr Connolly.
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 State Colleges of Victoria respectfully showeth:
That teachers recruited outside Australia by the Victorian Education Department have their income taxation exemption for the period of their stay in Australia cancelled.
Your Petitioners therefore humbly pray that the Treasurer will carry out this petition.
And your petitioners as in duty bound will ever pray. byMrCrean.
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 providing the opportunity for citizens of Australia to participate in an integrated planning process with all levels of Government and since Regional Councils for Social Development foster self-help and extensive volunteer activity in local committees.
We your petitioners do most humbly pray that the House of Representatives in Parliament will take immediate steps to 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 of March 1976.
And your petitioners as in duty bound will ever pray. by Mr Falconer.
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 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 that 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 Garrick.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble
Petition of undersigned citizens of Australia respectfully showeth:
That the existence of a system of double taxation of personal incomes whereby both the Australian Government and State Governments had the power to vary personal income taxes would mean that taxpayers who worked in more than one State in any year would:
Your petitioners therefore humbly pray that a system of double income tax on personal incomes be not reintroduced.
And your petitioners as in duty bound will ever pray. by Mr Morris.
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 our humble petition respectfully showeth.
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 Morris.
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 our humble petition respectfully showeth:
Your petitioners therefore humbly pray:
And your petitioners as in duty bound will ever pray. by Mr Morris.
Dockyards at Newcastle, New South Wales
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Newcastle respectfully showeth:
That shipbuilding and repairs play a vital role in the economic stability of the Newcastle region.
That a recent study by the Hunter Valley Research Foundation showed that SO 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.
That the previous Government’s plan for the building of a graving dock in Newcastle should be continued as proper ship repair facilities are a vital factor in the maintenance of a viable shipbuilding industry.
That the Government’s election pledge to restore business and cut unemployment can be implemented in Newcastle if new orders and a graving dock are granted.
Your petitioners therefore humbly pray that the Government place immediate orders with the Newcastle State Dockyard and implement the previous Government’s plan to build a graving dock in Newcastle.
And your petitioners as in duty bound will ever pray. by Mr Morris.
– I address a question to the Minister for Health. Is it a fact that yesterday in Melbourne there were 200 000 claims on Medibank offices as distinct from the daily average of 40 000 claims? Is it also a fact that migrants are confused by proposals that Medibank is to end? Has this also happened in other States? What is the Government to do to stop this panic and confusion of the Australian people?
-The Australian Labor Party-the Leader of the Opposition and every member of it- can take some of the blame for any panic that has been created in respect of the modified Medibank proposals. For the sake of those who are concerned, let it be understood that there will be no change in the present scheme until 1
October. The Government is currently preparing some hundreds of thousands of pamphlets which in the next week or two will be made available at public places so that the Australian people will have a clear understanding of the wide ranging choices that are available to them. We are concerned that migrants and people generally are being panicked into making such a rush for claims. I appeal to the Australian people not to be concerned. There will be no change to the situation until 1 October. By that time every Australian will be able to make an intelligent decision as to what suits him or her best of the wide ranging choices of health care cover that are available.
– I direct a question to the Minister for Defence. Is it correct, as reported, that there are serious shortages of some equipment and spare parts in the defence forces at the present time and, if so, why?
– I am indebted to the honourable gentleman for asking what I would describe as a very proper and apposite question, particularly following a recent speech delivered with some spirit by the honourable member for Oxley. If it had not been for the honourable gentleman’s speech I would have sought to spare this House and the country the shame of the utter neglect of the last Labor Administration. (Opposition members interjecting)
– It is all very fine but no amount of jeering will be able to disguise exactly what has taken place. The fact of the matter is that there was during the last 3 years what I would describe as a scandalous run down of spare parts and equipment by the Labor Government and the country deserves to be informed about that. This run down was over a very wide range of items. There are approximately 1.3 million items of equipment and spare parts used by the 3 Services. Of course it would be intelligible that from time to time there would be shortages but I found that there was a very wide range of shortages when the present Government took office and the person who was the Treasurer who clamped down on the 3 Services was the honourable member for Oxley. He was the one who said to Service after Service: ‘No, we will put ceilings upon expenditure’.
I can give the House some indication of the shortages. There were even shortages of shoes and hats fur felt. If the honourable member for Oxley had ever worn a hat fur felt he might have felt something about it. There was a shortage of tracks for armoured personnel carriers. There was even a shortage of tinned food. This is the record of the Labor Government. It is against that record that this Government proposes to take action and to bring back some credibility and some realism into the defence of this country. (Opposition members interjecting)
– If honourable members opposite want more they will get it.
-Can the Minister for Health explain how the Government’s decision to allow doctors who bulk bill to charge their patients the 15 per cent gap between the Medibank rebate and the scheduled fee, and at the same time not to allow patients to submit unpaid accounts to Medibank for payment in the doctor’s name, will assist low income earners? Will the Minister also inform the House what review mechanisms the Government proposes to control rises in doctors’ fees, bearing in mind that before the advent of Medibank the free play of competition between the health funds did nothing to curtail increases in doctors ‘fees?
– I thank the honourable member for a very good question. Let me say for his information and for the information of the Australian people that the Government has resolved to maintain bulk billing, to the advantage particularly of pensioners and low income earners. The Government will prevail upon the medical profession to ensure that its members do not charge a moiety or make an additional charge to pensioners and low income families. In other cases the doctor will be able to charge a moiety up to the additional 15 per cent as long as it costs no more than $5 for any one service. We have decided that, instead of there being a ‘pay patient’ cheque, if the patient makes a claim there will be a ‘pay doctor’ cheque sent back to that patient as before. We intend to amend the legislation to overcome what could have resulted in an obvious problem.
In respect of professional standards and perhaps the excessive provision of medical services, we intend to establish a peer review of professional standards. We will ask the Australian Medical Association, the private health funds, the Australian Hospital Association and other interested groups to become engaged in a peer review of medical standards in Australia. We hope to see developed an adequate peer review system which will result in a more efficient and, I think, a more desirable health care delivery process. If the profession and those other allied groups are unable to come to grips with this problem within 3 years then the Government will consider introducing mandatory measures to try to overcome the problem to which the honourable member refers. But we have every reason to believe that the AMA and other people involved in the medical profession are as anxious as the Government is, and indeed as anxious as the Opposition is, to see the peer review system achieve some real progress in this matter.
– I ask the Minister for Defence whether he is able to define for the House his decisions about the future of the cadet corps of the armed forces and its relationship to schools throughout Australia.
– It was my hope and expectation that I could make a statement to the House after question time.
– You said that last time.
-Oh, be patient. Despite the best endeavours of my friend the Leader of the House, parliamentary time is not available to make a statement today but I am assured that time will be made available tomorrow. In the meantime, to try to quieten the impatience of my honourable friends opposite I can say that the cadet system in this country will be restored.
– Are you joining, Jim?
– If brains were water, the honourable gentleman could be declared a drought area. I have explained to the House already some of the difficulties associated with the restoration of the system; in particular, I have adverted to the difficulty associated with the Army cadets. All of the 320 Army cadet units in Australia were associated with schools. I sought to have what I would describe as an open cadet system, but there is one thing conspicuously wrong with it: It would not work. So I have had to embrace 2 systems. The new system will hold to the old system- that is to say, the Army cadet units will be associated with the schools- and there will be provision for open cadet units to be sponsored by interested parties and for those units to be associated with Army reserve units. I will give all the details of this matter tomorrow, and I would like to think that my honourable friend from South Australia will be in attendance to furnish his mind.
– My question is directed to the Prime Minister. Is it a fart that the honourable member for Macarthur has been commissioned by the Prime Minister to assist in the urgent preparation of a pamphlet to promote the new Medibank arrangements? Is the Department of Health objecting to the hasty preparation of the pamphlet because it does not want to be held to the figures it produced for the statement made by the Minister for Health last Thursday? Is the honourable member for Macarthur to be associated with yet another faulty prospectus?
– Order ! The honourable member for Hunter will withdraw the last part of the question. It is a reflection on the honourable member for Macarthur and it is unparliamentary. I ask the honourable member for Hunter to withdraw the last part of the question.
– Yes, Mr Speaker, in deference to you.
– Order! I ask the honourable member to use the formula accepted in the House, that is, ‘I withdraw the statement’.
– I withdraw the latter part of the question.
-Mr Speaker, I thank you for the action you took. If I may, I would only say that the nature of the honourable gentleman’s question does him honour because e knows no better. Shortly before question time the Minister for Health and other people were in my office looking at a draft of a simplified document which will enable people throughout Australiawhether they be single people, married people with one income between the two, or 2-income families- to determine the choices available to them. It will allow them therefore to make the proper choice depending on whether they want universally available health care under Medibank, which will provide for all people in Australia the cheapest form of health cover of a good and high standard- both medical and hospital cover- or wish to make a decision which would enable them, for themselves as single people or for their families, to take out some additional insurance to enable them to be treated in hospital by their own doctor in either an intermediate or private ward.
I would have hoped that honourable gentlemen on all sides of the House would wish this information to be freely and properly available so that individuals and families can make the best decision in their own interests. A number of people are contributing to the format of this document. We would even be prepared to make copies available to members of the Opposition so that they may freely distribute them among their own electors. I hope they will show sufficient concern for their own electors, many of whom will want to know the specific choices available to them and to be able to relate those choices to the family income and circumstances and their predilections for the kind of health care that they want.
– I direct a question to the Minister for Health. The Minister will recall that in answer to a question I asked him yesterday he said that I would be able to convey his reply, confirmed by his Department, to the people who were concerned about the possible introduction of disease into this country. In view of the fact that the people concerned do not accept the reply given and consider that conditions do exist which could result in disease being introduced, will the Minister have the position urgently and carefully examined with the object of ensuring that the quarantine conditions are being strictly adhered to and take the appropriate action if they are not being strictly adhered to? In this regard will the Minister also consider the statement by Mr J. Elliot, who has expressed a deep concern about this matter?
-If what the honourable member for Capricornia implied in his question is correct, it is a matter of serious concern to me as the Minister for Health. Clearly, the Government has a no risk policy in respect to quarantine matters, particularly in relation to diseases that affect both people and animals. We will continue to maintain that no risk policy. In view of the fact that the honourable member claims that the people of Capricornia do not agree with the information I gave to the House, I shall ask senior officers of my Department to investigate the matter and report to the honourable member in due course. I note also the honourable member’s reference to Mr Elliot. I know that he has been concerned about the matter and I have received a message from him. I assure the honourable member that I shall undertake an inquiry into this matter and report in due course.
-When will the Prime Minister table the report of the Medibank review team whose appointment and terms of reference he announced on 1 3 January last? I point out that the report of the committee which was set up to plan Medibank in December 1972 was tabled at the beginning of May 1973 before any legislation was drafted. I also ask him when the reports of the Administrative Review Committee under Sir Harry Bland will be tabled.
-There is no one report of the Medibank Review Committee as such. There were a number of reports successively to the Government and it is on the basis of those reports that decisions have been made. The Government does not believe that they are the kinds of reports which would serve any useful purpose or advance public debate in relation to these particular matters. It is not intended that they will be tabled. This Government is determined to protect the traditions of the Public Service, which the previous Administration was not. The Government stands ready to take whatever credit or blame may be attributed to its own actions and decisions and will not hide behind reports from other people. It might well be known that on many occasions during the term of the previous Administration there were attempts to blame officials for the mistakes and decisions of Government. We will stand on our own feet in relation to these matters and take whatever comes. The question of handling the reports by Sir Henry Bland in final detail has not yet been determined by my colleagues in the Cabinet and myself. When we have had discussions on that matter we will take the appropriate decisions in relation to those reports.
-Is the Minister for Employment and Industrial Relations aware of Press reports relating to the final report by the Commission of Inquiry into Alleged Payments to Maritime Unions? Will he table that report today and will the Government take a strong line to ensure the implementation of legislation, if none is currently applicable, to enforce repayment of the moneys fraudulently obtained by some members of some maritime unions and to impose criminal sanctions on such persons?
– My colleague, the Minister for Administrative Services, yesterday tabled in the Senate the final report of the Commission of Inquiry into Alleged Payments to Maritime Unions. I shall table a copy in this House today. The Royal Commission was established, as honourable members will remember, in September 1974 to investigate certain payments to maritime unions and the investigation was conducted by Mr Justice Sweeney. The significant findings of the Royal Commission include one that indemnity payments were made to maritime unions and another that some of the money paid should be refunded, and it was recommended that payments made by one company should be paid to a charity. Another point made was that the payments were not in support of Australian Council of Trade Unions policy. Indeed the Commission made some criticism of the ACTU for an apparent unwillingness to make submissions to the Commission. Some of the findings were of a very serious nature. For example, in some instances there was no clear indication of where the money paid was at the moment but some had been disbursed by way of testimonials, on payments for picnics, and as allowances to union officials, and other moneys were still in union funds.
The recommendations made by Mr Justice Sweeney will involve my colleagues the Attorney-General and the Minister for Transport, as well as my own Department in regard particularly to accounting practices of unions and financial reports to union members. The Government is now examining the report and the recommendations. We will be considering what action should be taken and in due course my Department and the Departments of the Ministers I have mentioned will take action in relation to the recommendations made by His Honour.
-Can the Minister for Health give the approximate cost to the taxpayer of recalling all Medibank cards and re-issuing cards before 1 October and the approximate cost to insurers in voluntary health funds of their reissue of cards under the new arrangements?
– The honourable member will be interested to know that we will not be withdrawing the Medibank cards from the Australian people.
– This is part of the confusion.
– If you listen your confusion might be somewhat lifted from your shoulders.
– I am only expressing the confusion in the country.
– May I continue to try to overcome the confusion you suffer?
-Order! The Minister and the honourable member for Adelaide will cease the crossfire. I ask the Minister to answer the question and to direct his answer through the Chair.
-Yes, Mr Speaker. The Medibank cards will be handed in only at the time when a person chooses to insure with a voluntary fund. When he goes to or writes to a fund to insure himself the fund will be asked to recover the card. If the applicant does not have the card he will fill out a form which will be sent to the Health Insurance Commission and his name will then be struck off the Health Insurance Commission’s rolls.
-What will happen if he stops paying his fund one week later?
– We will come to that question later. It will be up to the voluntary insurance fund to hand its insurer a card or a book with a serialised number so that the insurer can use that to gain an exemption from paying the 2V4 per cent levy.
-Is the Acting Minister for Environment, Housing and Community Development aware of reports in the media of an alleged statement by a Mr John Bulbeck that the Australian Government delegation to the United Nations Habitat Conference on Human Settlement to be held shortly in Canada is in a mess and that there will not be a Minister leading the Australian delegation? Is this criticism correct? What is the Government’s attitude to the Habitat Conference?
– I have seen reports of the nature that the honourable gentleman outlined. Most of the statement referred to is non-factual. Firstly, the Habitat delegation from Australia was to have been led by a senior Minister of this Government. I am sure all honourable gentlemen on both sides of the House will be very sad that Senator the Hon. Ivor Greenwood, who was to lead the delegation, will no longer be leading it. However, the Prime Minister has asked me to lead the delegation. I will be attending the early part of the conference. After I leave the conference to take part in the visit to migrant source countries in Europe, the leadership of the delegation will be taken over by Dr McMichael, a man of impeccable record internationally and nationally. I believe that the standard of the Australian delegates to the conference compares favourably with that of any other delegation that will be present. I have the utmost confidence in the Australian delegates.
-My question, which is addressed to the Minister for Employment and Industrial Relations, concerns a recent address by the Minister to the Australian and New Zealand Association for the Advancement of Science Congress in which he emphasised the need for manpower programs in times of high inflation and poor economic growth. Is it a fact that over 100 positions in his Department’s Central Office were withdrawn recently and that half of those positions were in sections dealing with manpower policy? Is it also the case that the number of National Employment and Training scheme trainees at the end of April was only about half the number attained last year and that the Budget for NEAT next year has been cut by $12m? If so, can the Minister inform the House how he reconciles his statements to the ANZAAS Congress with the actions of his Government?
-No, the first statement by the honourable member is not correct. Like all other departments, my Department has been making a critical review of the work of the Department for some time. As a result, what is taking place is a shift in resources from some areas of the Department to other areas. Whereas some 105 positions have been withdrawn, 108 are substantively vacant in the Central Office. The allocation of those positions is going to areas of high priority, in the Government’s view. This reallocation of resources was achieved by way of a review committee set up within the Department. Its recommendations were considered by the Permanent Head and myself, and the priorities decided on were in accord with the recommendations.
In relation to the second part of the honourable member’s question, the Government indicated some time ago that it disagreed strongly with the attitude taken by the previous Government of providing non-means tested allowances to NEAT students. We made it clear that under this Government the NEAT program would accurately reflect the needs of individuals without skills seeking to gain skills for which there was a demand in the market place. I am glad to say that entrants to the scheme now are reflecting more accurately what should have been the objectives of the scheme, which I think were outlined with some force by the honourable member for Hindmarsh some time ago when the scheme was being debated in this House. We believe that the budgetary allocation for next year will be sufficient to meet the requirements of those people seeking training for jobs which are in demand in the labour market place.
– I direct my question to the Deputy Prime Minister. I ask this question in the spirit of trying to make fully available to the public information on important matters. Has the Minister seen the very authoritative reports establishing clearly that carbon dioxide emissions from fossil fuels pose a far greater threat to the atmosphere and the environment in general than does nuclear power? Could the right honourable gentleman ensure that the Queensland railway unions become aware of this fact before they make any further disastrous attempts to impose their uninformed minority opinions -
– Order! The honourable member is suggesting the answer to the question. He has asked enough. I call the Deputy Prime Minister.
– I have not seen the very informed reports that the honourable member mentions. I think it is fairly obvious and well known that the burning of fossil fuels has an impact on the environment. A lot of action is being taken around the world to try to correct the situation. In relation to the rail strike which had very serious implications right across the nation, all I can say is that I severely condemn those few union leaders who brought it about. What they were doing was usurping the authority of elected governments in deciding policy issues which really bore no relevance to their own industrial affairs. I doubt very much whether within those few ranks there is the capacity to understand fully the implications of nuclear waste and the actions that are being taken around the world to try to exercise precautions and safeguards. But there is concern all over the world that every precaution be taken with regard to nuclear waste.
Today there are something like ISO established nuclear power stations. The plans for about another 500 are on the drawing boards. Nations have had to decide for themselves the alternative forms of energy that they would use. It appears that nuclear power generation is one of the few alternatives left to these countries. They have been through a lot of public debate and a lot of inquiry on this subject before they have made a decision. In Australia the previous government decided on an environmental inquiry before there was any further development of uranium. I refer to the Ranger Uranium Environmental Inquiry. The Government has announced quite clearly, and I believe quite properly, that no policy decisions will be made in this area until the report is presented. I hope that responsible union leaders will do the same thing and withhold their judgment until we have a report instead of causing so much disruption across the country on a subject on which I do not believe they have the full knowledge.
-Has the Minister for Health noted suggestions that the income tax levy for Medibank might vary from State to State? Will he confirm that the levy will and, indeed, must be uniform in all States?
-I have noticed the suggestion that the levy might vary from State to State. It would be quite ridiculous of course and quite unconstitutional for a levy of this type to vary from State to State. The people of Queensland will be entitled to the same wide ranging choices as other Australians. I am sure that the people of Queensland will be quite happy to make their contribution towards the choices that are available to them. As I said last night on a television program, there is no such thing as a free meal. There might be a free breakfast at Tiffanys, but even those breakfasts can cost quite a lot.
– I ask the Minister for National Resources whether he is aware of comments made by the Senior Managing Director of Nippon Steel, Mr Tanabe, cautioning the Government not to interfere in negotiations concerning the establishment of major new coal projects in central Queensland. I ask the Minister whether Mr Tanabe need be concerned about the Government’s attitude to these projects.
– I have seen a number of reported comments by Mr Tanabe who is Senior Managing Director of Nippon Steel. I believe that these comments are quite uncalled for. They are comments which I think were indiscreet for a person in his position in that they levelled criticism at government policy in this country, which is really none of his affair, and because he is personally responsible for negotiating iron ore and coal contracts with Australia on behalf of all the Japanese steel mills. In other words, he acts as the corporate body for all the interests in Japan in the buying of iron ore and coal and naturally he will want to be buying them on the best commercial terms possible.
I have spoken with Mr Tanabe with members of his board, with other Japanese steel companies and with the Japanese Government. I have explained the Government’s policy in relation to export contracts and the sale of iron ore and coal that is, that the Government intends to carry out a watching brief as to how these negotiations are carried on and if it can be shown that there is unreasonableness or that the national interest is not being fully protected the Government will become involved. That has become quite clear and they have accepted it. Yet Mr Tanabe has now interfered and condemned the Government for its involvement with the central Queensland coal projects in which we have been concerned to have a high degree of Australian interest. I am pleased to say that arrangements have been made in respect of all of those projects. There are no Commonwealth obstacles in the way of those projects. I hope that they are developed as soon as possible. If Mr Tanabe continues to make such indiscreet comments he will not help the relations between the 2 countries and I doubt whether the Japanese Government or his own board would appreciate his comments.
-I address a question to the Minister for Transport. It relates to the AdelaideCrystal Brook Standard Gauge Railway Agreement, which was ratified by both the Australian Government and the South Australian Government. It places an obligation on both governments jointly to build an independent railway line from Adelaide to Crystal Brook. Did the Minister give the South Australian Minister an unqualified assurance last February that the standardisation program would proceed in accordance with the Agreement? The Prime Minister can stare, but he gave the same undertaking to the Premier.
– Order! The honourable gentleman will proceed to ask his question.
-Is it the Minister’s intention to repudiate the Agreement by means of the independent committee which is now being established? Does co-operative federalism mean that State Ministers are required to obey the decisions of Federal Ministers even when those decisions are wrong or in clear contravention of earlier undertakings? Finally, will the Minister make a statement to the House on this matter before the end of this session to enable a full debate to be conducted on the issue? If not, I will be delighted to debate it with him today.
– I take it from the interest shown by the honourable member that his electorate is also somewhat concerned in this matter. The simple fact about the railway line referred to by the honourable member is that it is progressing. Needless to say, though, we are concerned about the high cost involved in the re-development of the line and I have asked an independent committee to look at it from that aspect. If it advises me that the cost is too great I will be taking up the matter with the South Australian Minister. That is not outside the Agreement. The only other comment I would make is that in all of its dealings with the South Australian Government the previous Labor Government simply sold out and abrogated its responsibilities. The Agreement between the Commonwealth Government and the South Australian Government, which was signed by the then Prime Minister, Mr Whitlam, and the Premier of South Australia, Mr Dunstan, makes it impossible for the Australian National Railways to take any decision which the South Australian Minister cannot veto, and if agreement cannot be reached between the 2 parties the matter has to go to an arbitrator. Has any honourable member ever heard of a business selling out and then letting the seller control the business? It is the most stupid deal ever undertaken by a federal government in the history of Federation.
-I ask the Minister for Aboriginal Affairs: Having regard to earlier statements made by the Minister on a timetable for the introduction of legislation to give effect to the granting of land rights to Aborigines in the Northern Territory, can the Minister inform the House of the current situation?
– Yes, I can inform the honourable gentleman of the present situation. It is that the Government has authorised the introduction of legislation to recognise land rights for Aborigines in the Northern Territory, those land rights being in respect of the reserves there and also traditional lands to which Aborigines wish to make claim. The legislation, after being introduced, will be allowed to stand in the Parliament until the Budget session so that all persons interested can consider it. It is an important and complex piece of legislation. It is important that it has the widest possible coverage and that as many people as are interested in it can look at it and make any recommendations to the Government on any changes that are required. I know the anxiety of Aborigines throughout Australia that this legislation be introduced. The Government is aware of that anxiety. Its concern was first expressed in its published policy statement. Since it became my responsibility I have taken it on myself to discuss the matter with many people, Aborigines and others, throughout the Northern Territory in particular, who are interested in the subject.
I am quite satisfied that the Bill which this Government will introduce will be a much better and more comprehensive Bill than that introduced by the previous Government. I mention only one factor which will indicate that. A fundamental provision recommended by Mr Justice Woodward- namely, to declare the nature of the Aboriginal land rights to their own land- was omitted from the Bill introduced by the previous Government. Without that provision the Bill really would have been worthless to Aborigines. We will be making sure that their rights are given to them in a legislative framework, with complementary legislation in the Northern Territory, in such areas as land use and the right of entry to Aboriginal land and communities. Out of this cooperative effort between this Government and the Northern Territory we will have a piece of legislation giving land rights to Aborigines which will be able to last for a long time.
– I ask the Minister for Transport a question about railway changes which will cause no expense for governments but save very great expenses for customers. I ask: What has he done so far to carry out the undertaking which he gave the House m mid-March to formalise the meeting of Commissioners of Railways in order to consider the discriminatory freight rates between Victoria and the Riverina?
– A preliminary meeting of Commissioners of Railways was held prior to the last meeting of the Australian Transport Advisory Council. My understanding is that certain discussions took place at that point. No further formalisation has occurred since that time.
– Has the attention of the Minister for Post and Telecommunications been drawn to an article on page 2 of the May edition of the publication known as Australia Post? Under the title ‘True or False’ the first question asked is: ‘The objective of the Postal Commission is to provide a fast and efficient service at any costtrue or false?’ I ask the Minister this question because, to my mind, the question in the article is misleading. The answer given in the article is this:
False. Our objective- as laid down by the Chairman, Mr Jim Kennedy . . .
The article then goes on to give the reasons. I ask the Minister: Who is responsible for the objectives and policies? Is the Chairman responsible, or are they laid down in the Act which was introduced by the previous Labor Government?
– My attention has not been directed to the article to which the honourable member referred, but I shall have a look at it after question time. Of course, the Act lays down in some detail what the requirements of the Postal Commission are, and that Act was introduced by the previous Labor Administration. As I have said to the House before, we had some reservations and there were some qualifications about it at the time it was introduced, and we expressed those reservations and qualifications. But we did not oppose the Bill and it became an Act. It is not the Chairman of the Commission; it is the Commission as an entire entity which has a responsibility to look after the affairs of the postal service basically without interference on a day to day basis.
May I take this opportunity of saying to the honourable member that my contact with the Commissions, particularly with the chairmen of the commissions has in recent weeks been such that there are very real, close relationships and co-operation so that the Parliament and the commissions can work together for the benefit of the postal and telecommunications service. I believe that part of the improved relations has resulted from the work carried out by the Government members’ committee on this subject and the contribution that a number of parliamentary members have made to it. I believe that we will have the co-operation that will be of benefit to all.
– I direct a question to the Treasurer. Is up to date information about current household expenditure and savings patterns essential for the development of effective antiinflationary policies? Was the Australian Bureau of Statistics on-going household expenditure survey instituted by the Australian Labor Government obtaining this information? Is the Government axing this survey? If so, why?
– The Government has taken recently a wide-ranging series of decisions. I must say to the honourable gentleman in a spirit of utter candour that I would need to check the record to be precise about the answer I would give in this House. I shall check the record and let the honourable member know later. I might also say if I may, Mr Speaker- assuming this may be the last question, and I do not want to derogate from the Prime Minister’s prerogative in this matter- that I really think it is a matter of supreme irony that a Treasurer should sit in this House day after day without any sensible economic questions from this Opposition.
– Pursuant to section 23 of the Egg Export Control Act 1947-73 I present the annual report of the Australian Egg Board for the year ended 30 June 1975.
– For the information of honourable members I present the final report of the Commission of Inquiry into Alleged Payments to Maritime Unions. Due to the limited number available at this time, reference copies of this report have been placed in the Bills and Papers Office of the House of Representatives and the Parliamentary Library.
– For the information of honourable members I present a report by the Bureau of Transport Economics entitled Provision of General Cargo Facilities at the Port of Darwin. Due to the limited number available, reference copies of the report have been placed in the Bills and Papers Office of the House of Representatives and the Parliamentary Library.
-On behalf of the Joint Committee on the Parliamentary Committee System I bring up the final report of the Committee entitled A New Parliamentary Committee System. Copies will be available for general distribution in the near future.
Ordered that the report be printed.
-I seek leave of the House to make a short statement in connection with the report.
-Is leave granted? There being no objection, leave is granted.
– The Joint Parliamentary Committee on the Parliamentary Committee System was appointed more than 18 months ago. It was almost ready to report to the Parliament when the double dissolution occurred. The time lag between the dissolution of the Committee and its reappointment necessitated some reassessment of the situation and updating of the report. A sub-committee of four was sent to Westminster and Ottawa in 1975. That sub-committee produced 2 reports, one of which was tabled in this House as an interim report. Let me refer first to the basic philosophy of the Committee ‘s deliberations. The task that faced it was to create a new committee structure. The first step was to recommend abolition of all existing committees and the second step to ascertain whether each House should have its own system. Working on the basis that existing committees should be abolished and that each House should have its own system, the Committee designed a totally new structure. The new system incorporates about half of the old committees, with some minor alterations. The system proposes the establishment of at least 6 new types of committees.
Under the heading ‘Legislation Committees’ the report recommends that each House should use committees for the Committee of the Whole stage of considering legislation. Detailed recommendations are made regarding these committees. The report also recommends that the House should use committees which take evidence for pre-legislative inquiries and a second look at the policy of legislation from time to time. Under the heading ‘Financial Committees’ the report recommends that an omnibus financial committee of the House of Representatives be constituted. This would be a large committee and would take over the functions of the Expenditure, Public Accounts and Public Works Committees. Additionally, Senate Estimates Committees should be strengthened and support staff increased.
Under the heading ‘Subject Matter Committees’ it is recommended that 8 standing subject matter committees be formed by the Senate. These committees would not be very different from the present committees. The House of Representatives should establish a business committee to sift the mass of material which comes before the House that is not given proper consideration. From time to time select committees should be appointed on the recommendation of the business committee. The level of continuing House of Representatives activity will depend entirely upon the members of the House. I draw to the attention of honourable members the fact that the quality and output of the work of committees is dependent upon the input from members of this House. Over and over again we saw during the taking of evidence by the Committee, and I have seen in other committees on which I have served, an influx of members when the committee was instituted and a gradual tailing off because of a lack of interest and a lack of attendance by members of this House.
I refer now to the domestic committees. The functions of the House, Library and Printing Committees should be combined into management and members’ services committees which would be chaired by the President and the Speaker. Other domestic committees should remain as they are. It is recommended also that each House should establish a procedure committee to carry out a continuing assessment of the procedures and practices of its House. Under the heading ‘Miscellaneous Matters’ it is recommended that the jurisdiction of the Regulations and Ordinances Committee should be broadened. At some time the House may wish to engage in direct scrutiny of the exercise of delegated powers. Procedural matters could best be dealt with under the functions of a new procedure committee. It is recommended that the new procedure committee should undertake the assessment and substantial amendment of Standing Orders and some legislation.
The Parliament must give the Presiding Officers more authority. Additionally, the Parliament must be financially and administratively independent of the Government. In the review of committee staffing and research it is recommended that these aspects be strengthened. In particular, Hansard facilities need upgrading. When a comparison is made with the Hansard facilities available in the United Kingdom House of Commons and the Canadian House of Commons it is realised that the facilities available to Hansard here are substantially deficient. Accommodation for committee meetings needs to be greatly expanded and upgraded.
I draw to the particular attention of honourable members that section of the report dealing with the activities of the sub-committee during its visit to Westminster and Ottawa. On no account can the deliberations of and information gained by the sub-committee in each of those 2 parliaments be overestimated. The committee was led by evidence taken in Australia to believe that certain committee systems, in particular the system of the Expenditure Committee of the British House of Commons and the Expenditure Committee of the Canadian House of Commons, ought to be instituted in our own Parliament; but the on-site examination of the operations of those expenditure committees showed that in reality their functions and activities were quite different from what our Committee had been led to believe they were by evidence given to it.
At this stage I would like to express on behalf of our Committee, our thanks to the Presiding Officers, members and staff of the British Parliament and the Canadian Parliament for the substantial help, assistance and courtesy extended to the sub-committee during its visit. At the same time, on behalf of the Committee I would like to extend appreciation and gratitude to the staff of the Joint Committee on the Parliamentary Committee System; that is, Mr Graeme Horsfield, the Secretary to the Committee, Mr Graham Friedman, Mrs Lyn Simons and Miss Lorraine Calabria. I mention at the same time the tremendous effort made in meeting the deadline of having the report before the Parliament today. I understand that at 3.30 a.m. today the report was still being typed. It is a credit to the staff, their capacity and their application. Because the Committee had to meet the deadline today, it has not been possible to print the report for wide distribution. The Bills and Papers Offices of the Houses have copies, as does the Parliamentary Library. It is expected that further copies will become available when the report is finally printed in about 2 weeks time. In commending the report to the House I believe that it is worth stressing the need to give it careful consideration. I urge honourable members to participate fully in debate on it in the Budget session. The consideration of the evidence by the Committee and the very detailed and at times tedious work undertaken in preparing this report, in looking at existing systems and in preparing what we believe to be a practical and improved alternative to the present committee arrangements, I feel, demand the attention of this House. The Parliament will gain only if the members of this House participate in a debate on and an examination of the report.
It is important also that the Committee place on record its appreciation of the work of the present Deputy Chairman and former Chairman, the honourable member for Scullin (Dr Jenkins), who unfortunately is indisposed this week and who I know must be disappointed at not being here today to table this report. I am honoured to have the opportunity to table it in his absence. Although the Committee has experienced all of the administrative problems associated with joint committees, it has managed in its very tight time schedule to operate in a nonpartisan and co-operative manner. Again I express to my colleagues on the Committee- the previous Committee and the current Committeemy appreciation, and I am sure the appreciation of the honourable member for Scullin, of the impartial, co-operative and forthcoming approach of the members of the Committee in bringing this report before the Parliament. I commend the report to honourable members for earnest study.
– In view of the nature of this report and the fact that copies of it are not available for ready distribution and examination, I seek leave to move a motion that the House take note of the paper. In so doing I give the House an assurance that there will be an opportunity to debate the statement which has been made by the honourable member for Shortland (Mr Morris) at a later stage, probably in the Budget session.
-Is leave granted? There being no objection, leave is granted.
That the House take note of the paper.
Debate (on motion by Mr Scholes) adjourned.
– I move:
That, in accordance with the provisions of the Public Works Committee Act 1969-1974, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: Development of a navy supply centre and army workshop facility at defence establishment, Zetland New South Wales.
The proposal is for the redevelopment of the exLeyland car manufacturing plant at Zetland for Defence purposes as: (a) a Navy supply centre, and (b) an Army workshop and servicing facility. The extent of the works proposed comprises construction of one major new building, conversion and rehabilitation of existing buildings, and the installation of specialised stores handling and vehicle servicing facilities. A complete fire detection system is proposed for all buildings, together with an improved fire suppression installation. Rationalisation and upgrading of engineering services, renewal of major sections of roofing of 3 buildings and any necessary minor maintenance to buildings is also included. The cost of the proposal at April 1976 prices is $ 14.2m. I table plans of the proposed work.
Question resolved in the affirmative.
Debate resumed from 20 May, on motion by Mr Eric Robinson:
That the Bill be now read a second time.
- Mr Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation? Because of the character of the debate and the necessity to maximise opportunities for honourable members to participate in the general second reading character of the debate on each item of legislation, before the debate is resumed on this Bill I would like to suggest that it might suit the convenience of the House to have a general debate covering this Bill, the Income Tax (Rates) Bill, the Income Tax (Individuals) Bill, the Social Services Amendment Bill (No. 2), the Health Insurance Levy Assessment Bill, the Health Insurance Levy Bill, the Income Tax (International Agreements) Amendment Bill (No. 2), the Health Insurance Amendment Bill, the National Health Amendment Bill and the Health Insurance Commission Amendment Bill, as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest, therefore, Mr Speaker, that you might permit the subject matter of the 10 Bills to be discussed in this debate.
-Is it the wish of the House to have a general debate covering the 10 measures? There being agreement, I will allow that course to be followed.
– It is most unfortunate that the intention of the Treasurer (Mr Lynch) to inform the community better on proposed economic policy should have become a casualty so early in the piece. He said, when he made his statement to the Parliament last week, that the decisions he would announce would establish the government’s priorities. He also said that because of the intensive work which the Government had undertaken during its period in office it was in a position to act decisively’decisively’ being his word- some 3 months before the traditional August Budget. They are healthy claims, but as they unfolded it was proved that the decisive explanations were disabled before they got under way. What was supposed to be fruitful turned out to be feckless.
I do not want to condemn everything that was put forward. Some elements which were put forward deserve endorsement. For instance, the proposal to move tax rebates for children into child endowment is desirable, but with qualifications, as I will mention a little later, because the net benefit is much less than the benefit was made to appear when the statement was made to the Parliament. Similarly, the proposal to introduce personal tax indexation is helpful and something that is welcomed by the community generally, but then that too is qualified because there are efforts to reduce the benefits of personal tax indexation- efforts which have not been spelt out too well but which can be divined from the statement of the Treasurer. What is most unfortunate is the way in which the statement has contributed to confusion rather than to enlightenment and a better understanding of the Government’s intentions. Perhaps a fairly obvious product of that in the community is a suspicion that is growing in the public mind that the Treasurer and the Government have been less than candid for some deceitful purpose. As one goes through the statement one can understand why that sort of view would be abroad in many minds. I think one can assert quite reasonably that there appears to be a consistent thread of deception through the Treasurer’s statement. I am prepared to accept rebuttal of that suggestion, but rebuttal can be established only on fact, detail and a more wholesome explanation of what the Treasurer is about, and that is not what we have received in this statement.
In short, what I will be arguing in the course of what I have to say on the Treasurer’s economic statement is that we need more information. I am sure that his intention was well motivated but it is regrettable that the results have been counterproductive to the objectives he sought. The confusion, uncertainty, unease and suspicion which have developed in the community following this statement demand that there should be a full spelling out of the arithmetic associated with that statement. The gaps should be filled in.
I now turn to what appears to be on the surface a fairly consistent thread of deception. The Minister mentioned the virtues of tax indexation but what he did not spell out in too much detail was the intention of the Government to exclude indirect tax increases from the adjustment when tax indexation occurs. He did not spell out that the Medibank levy is really an increase in personal tax; that it is above and beyond the benefits of adjustment from tax indexation and, therefore, to that extent cuts across the benefits that tax indexation provides. There are 2 counter-productive forces at work upon which the Treasurer did not bother to dwell in the course of his address to the Parliament- the subtraction of indirect tax increases and the cost burden of the Medibank levy. The sum total of these must be borne. It is clear in the light of statements made by the Treasurer that he wilfully played down the significance of those 2 effects. He did this very simply because he is dedicated to reducing real income. I give him full credit for the candour with which he mentioned this, albeit fleetingly, in his statement. I cannot help meditating from time to time on the sort of industrial strife which will follow from this less than candid discussion of the important implications of these 2 counter-productive forces- the reduction of the benefits of tax indexation through the effects of indirect tax increases and the cost burden of the Medibank levy in terms of reducing real income.
A second illustration is that the Treasurer neglected to mention the degree to which the States will be forced to take up cost reponsibilities because the Federal Government has shouldered off some of the liabilities previously met from the Federal Budget. From the statements of a number of Premiers it is clear that increased charges will be imposed on the community as a result. There will be increased charges for services or increased charges in the form of some sort of State tax which will feed into the consumer price index and push up the cost of living at a time when incomes are adjusted through indexation according to the CPI movements. That will be a reinforcing effect of the unhealthy economic forces at work in the economy at present.
A third illustration is his less than honest presentation of the expenditure cuts. It is not terribly meaningful to talk in a dramatic sense about cuts from forward estimates. All honourable members who have been in government know that many of the forward estimates are unreal. They often represent a most extreme display of optimism on the part of the Minister and not much a quotient of his realistic assessment of what he is likely to get out of the Budget hassle. It is a try-on. On occasions a Minister may be lucky and may get a little more than he expects injustice he should get. The Government in its last Budget preparation cut more than $2,000m from the forward estimates. Quite frankly, I did not see any reason for joy and jubilation in the streets because of that. All that indicated was that the claims- in some cases extravagant, in other cases modest but in all cases somewhat excessive- of a number of Ministers were pared back to a more realistic level. It does not mean much at all in terms of economic management if, in fact the cut is a cut from an unreal level and does not represent any real reduction in Government outlays in existing programs or any real restraint in the overall budgetary framework. I am not suggesting for one second that restraint did not show up in places in the Treasurer’s statement; it did. I must say, however, that the way in which it was presented was confusing and in many respects it was difficult to sort out exactly what was happening. This, of course, contributed to much of the confusion in the community.
A fourth example is the dishonesty of the way in which the deficit is presented. There is a soft shuffle, pushing $200m of capital requirement by Australia Post and the Australian Telecommunications Commission out of the Budget on to the open loan market. It may be a clever bookkeeping device but in terms of overall economic management it does not diminish at all the problems of handling the economic difficulties with which we are confronted at present. I assert that it adds to them to the extent that the open competition from those 2 authorities for a loan of $200m pushes up interest rates and does not have a healthy effect in the community. To the extent that it squeezes out other worthwhile programs or forces up the costs of them, there are social as well as economic costs imposed on the community. In any case, the community is bearing the cost. I repeat that the influence, in terms of overall economic management, is not diminished; if anything it is accentuated. How much is coming back in the form of repayments from the wool industry for loans which were made- on terms which I always regarded as rather generous and somewhat hopeful- by previous governments, of which I was a member? How much has been plugged into the receipts side to patch up the appearance of the Budget? Is it as much as $300m? I do not really know but, at a rough guess, that is the figure I think may have been plugged in. If that figure is correct, frankly I am sceptical. The arithmetic is open to severe questioning. I am justified in raising those queries because none of this detail has been presented to us.
A fifth example is the deception of only partly giving the sums. We are told that $2,600m has been cut from forward estimates. On the calculations I have carried out, it is clear from the Treasurer’s statement that $ 1,300m- about half of the alleged $2,600m- has yet to be accounted for. That is a substantial amount of money. Where did the cuts occur? Were they soft options? Were they cuts on unreal claims that did not really mean anything in terms of either the overall budgetary framework or economic management, or were they in fact hard reductions? I think that some of them probably were hard reductions and I am concerned at the effects of them. The social and economic cost might be much greater than any alleged advantage. If the Treasurer is to make statements to the Parliament he should give all the details so we can draw a conclusion about the results of his actions.
A sixth and very important illustration is his entire failure to give any evidence to support the assumptions about the movements in average weekly earnings upon which his statement was drawn together. This is vitally important. As far as I can calculate, I expect that he is working on an increase of about 16 per cent in average weekly earnings. But if it is less than that, it means that the deficit will be higher than he suggested, because receipts from payasyouearn income tax will not be so high and indirect taxes will be increased. These are reasonable questions. I believe that the national Parliament and, more importantly, the confused community and the worried businessmen, should be given more detail so they can accurately assess the effects that will flow from these economic decisions.
A final illustration from a by no means exhaustive list of indications of what seems to be a thread of deception is the Treasurer’s failure to indicate the effects of what seems to me a rapid turn around in the influence of the Budget on overall economic management. Outlays will increase by about 9 per cent next financial year, after a projected increase of 22 per cent for this financial year. That is, there will be a 41 per cent turn round in the rate of activity from the public sector at the Federal level. Given the state of the economy, the sluggishness, if not the stagnation in which the economy is wallowing, I believe that that is too severe a turnabout and represents a further contraction. At the very best we will see the present high rate of unemployment prolonged well into next year and we will see the present absence of any advance in productivity well into next year.
There are other aspects which must concern people and on which I should like more information. My colleague the honourable member for Adelaide (Mr Hurford) has pointed out that this statement is a formula for accentuated recession. The more I look at the inadequately presented statement of the Treasurer the more the suspicion mounts that that is completely correct. A deficit of about $3,250m next financial year represents an increase of about 10 per cent in the money supply broadly defined. If we assume that average weekly earnings will rise at about 16 per cent, this represents a fairly severe squeeze on the private sector. How does the Government propose to handle this? How will it handle the money supply problem?
Of course the external account is a source for increased money supply. But our reserves have plummeted from the first quarter of this financial year to quite recently by well over $ 1,000m to about $2,500m. People who owe debts overseas get money out quickly to pay the debts and people who have money to come back to Australia which they have earned are holding it overseas as long as they can because they are frightened of the possibility of a devaluation. As long as that sort of atmosphere is about we will not see any build up in reserves because we will not see any rapid improvement in the rate of foreign capital inflow. These are the sorts of questions to which we need to know the answers in more detail. How will the money supply be handled in 1976-77? I add in passing that the Government cannot expect to continue borrowing overseas, not as it says to maintain its name and credility before overseas lenders but because it wants to plug up overseas reserves to stave off or to discourage those people who are putting pressure on the Government for a devaluation. I do not want to make too much of that; it would be irresponsible to do so. Nonetheless the fact is that that is the reason for so much of the borrowing that has suddenly splurged forth in recent times.
This statement represents quite a squeeze on the private sector through cuts in construction and capital works, sewerage and urban improvement. The people who are involved in these fields supplying goods and services- the contractors, the professionals, the engineers, architects and draughtsmen, the people who are the labour inputs- can expect a belt tightening period over the next 12 months. That is the clear implication of the sorts of cuts outlined by the Treasurer in his statement. If I heard the honourable member for Lilley (Mr Kevin Cairns) correctly last night, putting to one side the political input in what he was saying, I agree with him when he says that at present the deficit is necessary to maintain the level of activity in the economy. As the private sector picks up the public sector, in my opinion, ought to be wound down. But it is a fairly gradual sort of process and is yet to start. The turn round which I mentioned before is altogether too rapid.
This preoccupation with cutting back government expenditure will undermine the strength of the private sector.
Local authorities which gained a total of $230m from the Australian Government in the course of this year from several programs will receive only $ 140m. That is further evidence of the demand for supplies and for labour diminishing. Rates will probably go up, adding to cost problems and consumer price index movements. The program put before us is very ill thought out. I repeat that with wage indexation in operation, based on movements in the CPI, just about everything that the Government has done will aggravate wage-push in the course of the next year, unleashing the cost increases further through the imposition of the Medibank levy.
Honourable members will remember that in the September and December quarters of last year the benefits of Medibank, because they were covered from general revenue, represented about a 3 per cent reduction in what would have otherwise occurred in movements in the CPI. The increased costs which I have been talking about, the increased cost of the Medibank levy and the increased charges for hospital services the Government is trying to impose on State governments, will represent a much more substantial increase in the CPI in the December quarter of this calendar year than we saw at any time in the last calendar year. These are very disturbing aspects of what is implicit in the Government’s program before us.
I wish to raise another aspect of what the Government has put before us, its ‘clever’ tactic to introduce a Medibank levy which is nothing more than an increase in personal income tax concealed under the name of a Medibank levy, an earmarked tax. I put the word ‘clever’ in inverted commas because I do not think it is particularly clever; I think it is deceitful but the Government no doubt thinks it is clever. In the view of the Government the cleverness no doubt lies in the fact that it will increase revenue from this source but by putting the levy outside the ‘New Federalism’, the double tax system, it will avoid sharing any of that revenue with the States and so can apply a squeeze on the States on the one hand through indexation or with earmarked taxes and on the other hand with its access to earmarked taxes like Medibank and to indirect taxes it will be able to maintain a fairly generous rate of increase for its own receipts above and beyond the reach of State governments. It would have been far more honest to increase the marginal rate of tax- for instance for average weekly earners from 35 per cent to 38 per cent- to cover the Medibank levy than to fiddle around in this way.
The child endowment proposals- moving the tax rebate for children across to child endowmentI believe constitute a very good principle. I have to say that or people would be waving documents that I used to write, and some of which were published, throughout the 1960s arguing for this and for more. On this occasion however, unlike the thinking behind those documents, the motivation is not based upon a sense of equity; it is based upon a very tardy motive. The Government does not want to index the rebates for children which existed under the tax scheme and accordingly is moving them across to child endowment. The benefits for those 200 000 or 300 000 poor families of which the Treasurer spoke will tend to erode year by year after the first year and will provide little alleviation of the problems of those in need, because of the inroads of inflation solely because these benefits are not indexed.
Our tax cuts were genuine cuts. They went well beyond what indexation would have produced. For instance the cuts in 1974-75 amounted to $640m for personal tax, and $240m of that could have been accounted for by inflation. This meant taxpayers were $400m better off as a result of those tax cuts. The increase in after-tax real income for an average income earner was 7 per cent, much better than would have been the case merely with indexation.
The scene for this so-called package has been set, with protracted stagnation, further cost increases- they will be accentuated by beef price increases- industrial conflict as the unions realise the way in which this tax indexation gimmick has been put across in an effort to deceive them, prolonged high unemployment, no worthwhile advance in productive output. Quite frankly this document must have the community in jitters. It is too vague to be anything but a confusing and worrying document which will create more suspicions and will not conduce to enlightenment.
I move on to Medibank. I think it is remarkable that I should have to debate 10 Bills in 30 minutes. It is usual to be provided with 30 minutes for each Bill. The Medibank proposals are quite outrageous. The Government refuses to release the report upon which the decisions have been made. I heard today from the Prime Minister (Mr Malcolm Fraser) that this is allegedly because it would not serve any useful purpose or advance public debate. Is the Prime Minister confessing that no useful purpose was served for the Government by the findings of the report? If he denies that, is he suggesting that the public is not sophisticated or intelligent enough to be able to advance their own information on what the Government is about by having access to the report? These proposals represent noxious price discrimination aimed at enfeebling, if not destroying, Medibank.
Let us look succinctly at the proposals. The family premium for Medibank hospital and medical cover will be $300. If a person wishes to take out private insurance on top of that to cover intermediate hospitalisation, the additional cost will be $135-a total of $435. But, if such a person decides against taking out those 2 forms of cover and instead takes out private fund medical and intermediate ward cover, the total cost will be only $350. That is, people who stay with Medibank will have to bear a penalty of $85. In other words, there is to be a 25 per cent penalty loading on people who want to stay in the Medibank scheme as against rates for private funds. This clearly means that Medibank is costing too much. It means that the Government is really ripping into people who want to stay with the Medibank scheme. What justification can there be for such rotten dishonesty on the part of the Government? What vicious ideological hate is there in the Government’s mind that it is prepared to discriminate against and penalise people in this sort of way?
– You are joking.
– The Minister for the Capital Territory objects strongly because he upholds the principle of imposing a far higher penalty on people who want to stay with Medibank than on those who decide that because of this penalty they want to go into private health insurance. The fact is that the levels of $300 for those who want to stay in Medibank and $350 for those who decide to go into private insurance, as I mentioned, and an additional cost of $135 for private medical and intermediate hospital insurance for those who stick with Medibank, were not struck as a result of some searching guided by a sense of equity and justice. They were struck because the people on the committee of inquiry were discreetly instructed to develop a system which would exclude 50 per cent of the population, one which would force 50 per cent of the population to opt out of the Medibank scheme. That is the reason why there will continue to be a $50 differential between the premium levels for those who wish to stay in Medibank and have only public ward hospital insurance cover and those who go into private health insurance for medical and intermediate hospital cover.
Let me remind honourable members that at present if one is in Medibank and takes out intermediate ward cover with a private health insurance fund in New South Wales the additional cost is only of the order of $75. Why then is the Government imposing a charge of $135 a year on people under the new arrangements- a penalty rate of 80 per cent on what presently exists as a private health insurance charge? It is nothing more than a crude and malicious conspiracy to destroy Medibank. The Government did not have the courage to face the public and say that that was its purpose. It is doing it in this rather clumsy way. In doing this sort of thing the Government is not aiming at efficiency in handling public money. All it is aiming at is some sort of Budget board shuffling. It is more interested in some sort of bookkeeping fiddle, in pushing money out of the Budget and on to the public; but the public still has to meet the cost. The cost is met overall. What is most disappointing is that the efficiency of Medibank is going to be lost. The Medibank program is now highly efficient. The turn-round of claims on average is now about 5 days.
– It is pretty expensive, though.
– One of the South Australian schemes- if the honourable member for Canberra is moonstruck he will understand the one I am talking about- has an 1 1-week turn-round. Medibank in total costs no more than the old private health insurance scheme cost; yet it covers everyone in the community. This new arrangement will cost much more in total. I think the honourable member for Canberra, who interjected, should remember that Medibank is going to save about $100m this year on projections. Another aspect of Medibank which ought to be borne in mind is that not only is this an assault on taxpayers generally; it represents a brutalising of the middle class. Middle class people are going to pay much more. There will be no tax rebates for them for the contributions they make to private health insurance. The $140 rebate they would get on the $350 outlaid on private intermediate and medical insurance is no longer to be available to them.
The $50m which is to go into the so-called reinsurance pool is a fixed amount. What has not been mentioned is that if fees go up- the Government is seeking to force them up by imposing on the States a doubling of them- the amount in the reinsurance pool will not concomitantly go up to $100m; it will stay at $50m. The people who are going to feel the squeeze are the people who, by and large, trusted this Governmentthe middle class people who thought this
Government understood them. The middle class people who largely will be going into private hospital and medical insurance will find that private health insurance will cost about $10 a week under these new arrangements. I mentioned before that what this proposal does, from another aspect of economic management, is to push up the cost of living. It will increase the consumer price index quite substantially. It is a backdoor effort to subvert the full benefits of tax indexation. A man who has a wife and 2 children and who is on the average weekly earnings will be nearly $1 a week worse off as a result of all of these proposals and in future years he will be worse off again as inflation comes down. The more inflation comes down, the more the Medibank levy will undermine the benefits which otherwise would have flowed from tax indexation.
The program is quite cruel on the less lucky in the community. For instance, a widow on $70 a week will be paying 10c a week tax and $2 a week Medibank levy because, unlike the promise made on occasions by the Minister for Health (Mr Hunt), there is to be no graduation in the way the levy will be applied. This will be an administrative nightmare. Every tax return will have to be checked. The Health Insurance Commission will have to issue certificates and so will the private health insurance funds. There will have to be policing of gap charging and bulk billing. A whole range of problems will arise. There will be significant sackings of Medibank staff. The Medibank computers will be underutilised and there will be a waste of resources. This is a wicked proposal aimed at discriminating against the public and imposing higher charges without improving benefits in any way and ultimately destroying Medibank.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
– It is quite exciting to follow the honourable member for Oxley (Mr Hayden) in this debate because of some of the statements he made about the Bills now before the House. Often I sit here and wonder about some of the magnificent statements made by members of the Opposition. I wonder what they really know about economics and what they know about managing money. I sat here and listened intently to the honourable member, who spoke mainly about Medibank and the disadvantages of the Medibank package brought down last week by the Treasurer (Mr Lynch). Although I concentrate as hard as I can, I can not see anything wrong with the scheme. In fact, I can only see that it is a scheme that is of tremendous advantage to all Australians and that it costs less.
I would like to get back to all the Bills that are listed for debate at this time. There are a number of them and there has been some suggestions that they should be debated separately. I disagree with that proposition because most of the Bills stem from the statement made last week by the Treasurer. I agree with the opening remarks of the Treasurer when he said:
This statement is a further major step in the implementation of the Government’s economic policy; it represents the culmination of S months work which began on 14 December 1975.
This Govenment has gone a long way towards rectifying all the ills created by the former Labor Government. We still have a long way to go and a lot of hard work to do before all those ills can be rectified. As I said before, when honourable members opposite talk about economic matters generally, they talk about plant that lies idle round Australia. They look at the bare simplicity of things. When plant lies idle and there is no domestic demand they ask: ‘What can we do to stimulate investment?’ Sometimes I have sat here and wondered whether they have ever heard of the word ‘export’ or the word ‘efficiency’. Those are the fields in which considerable improvements can be made. Those are the fields in which we have plenty of room to move. Only late last week the shadow Treasurer, the honourable member for Adelaide (Mr Hurford) said that recovery must be consumer led. We agree that recovery must involve consumer recovery but it does not necessarily have to be consumer led. Statements similar to this have been made on many occasions by members of the Opposition. They do not seem to realise that by influencing people to invest and by influencing people to get involved in capital expenditure, it follows that consumer recovery will result therefrom.
– What is the good of investing in things you cannot sell?
– That is what the honourable member does not understand. It is all right to the honourable member to invest in things that he understands, but he does not see why one should invest in things that he does not understand. The shadow Treasurer does not understand what I am talking about; he only understands the basic simplicity of economics. He as not heard of the word ‘export’. He has not found out that if we cannot sell goods locally, other markets are still left open. We have made the statement that our recovery will be investment led; never at any time did we say that consumer recovery would not result. We are seeing a consumer recovery coming now as a result of our policies for an investment led recovery.
The shadow Treasurer, who has just left the chamber, also said: ‘the investment allowance is just a gratuitous handout’. The honourable member for Oxley referred to it as an enormous bonanza. The honourable member for Melbourne Ports (Mr Crean) referred to it as a ‘naked subsidy’. I do not quite know what he means by a ‘naked subsidy’. But our economic recoveries are starting to work. I should like to talk about some of the details contained in the statement of the Treasurer last week and the generosity of them. We have talked a little about Medibank. The Opposition seems to measure the effectiveness of everything by how much money is spent. If we continue to measure things by the amount of money spent, all we do is breed inefficiency. Our Government tends to give the Australian people more value. We tend to cut out the waste and the duplication and we tend to give the Australian people better value for their money because it is their money. As I said before, Medibank offers the choice of many different arrangements to the people. At the same time it saves the country money. The people are achieving more than they achieved before and it is costing us less. If that is not efficiency, I do not know what it is.
I refer now to child endowment. I notice that honourable members from the other side of the House have not criticised this generosity to any great extent because they cannot find anything to criticise. It is a most generous move on behalf of the Government to increase child endowment to the extent it has. If there is anything that Australia needs it is to make sure that our young families are provided for because these are our future and this is the area in which we should be working.
Personal tax indexation was another step in the right direction. We all know that with the erosion of wages over the last few years through massive inflation incentive has been taken away from people to work and to earn money because all it does is to create increased taxes that go into government hands. Today many people are not willing to work longer hours or overtime to earn more money because taxation erodes it away. When the country gets to a situation like that, and incentive is taken away, we are in real trouble. Our package to restore personal tax indexation will gradually restore the incentive to the people- to the workers. It will give ample reward to the people who want to work. I might add that the statement by the Treasurer the other night certainly was not a Budget. We shall see the Budget in August. But the statement certainly was an incentive to give people confidence at the present time.
I should like to come to part of the economic deal which is the investment allowance. The investment allowance which is before the Parliament at the moment provides incentive to make businesses invest in capital equipment and to encourage investment generally. That is the thing which the honourable gentlemen on the other side cannot understand. I should like to spend some time on this matter because I think it is a most generous and important part of our economic policy. I think that in many instances members of the public do not realise the true advantage and generosity of this allowance. The investment allowance is designed to encourage people to put forward their plans for capital expenditure. I agree with previous speakers that an investment allowance will not necessarily encourage additional expenditure, but it certainly will encourage people to bring forward their plans for investment. This is exactly what we want because at the moment plant around Australia has idle capacity. This was not the case prior to the Labor Government coming to office. What we want to do is to take up this idle capacity quickly by encouraging people through the investment allowance to bring their orders forward.
Let me explain briefly how and why we are so intent on encouraging investment in this area, how it will flow on to consumer recovery, and how it will benefit Australia generally. At the moment we have high unemployment in Australia. There are over 300 000 people out of work. If we look closely at where that unemployment came from, we find that it came from the industries that were formerly manufacturing what we refer to as ‘capital items.’ Unemployment came from the heavy engineering industry. When the downturn came in the economy and people lost confidence in the previous Government, businesses and organisations generally stopped ordering this major equipment. A lot of people call it ‘putting their tails between their legs’. That is where the unemployment came from. Today we have the staggering number of over 300 000 people out of work. It is costing the country $500m a year in payment of social service benefits to those unfortunate people. If through the investment allowance, we can encourage orders to come back to those companies which lost them so that they can once again gear up their production, they will draw their work force from the 300 000-odd people who are out of work.
The investment allowance will do a number of things. First of all it will gradually reduce the tremendous expense to the Government of this $500m a year in unemployment benefits. The Government will be greatly advantaged by that situation. Secondly, it will provide wages to those people who were formerly trying to exist on dole payments and out of those wages those people will contribute their fair share of taxation towards the cost of government. Not only will we save in unemployment benefit payments but also the country will gain handsomely from the tax that is collected from those people. So, instead of a saving of $500m in unemployment benefit, the advantage to the country might be something like $ 1,000m because we will also be getting the tax that is collected.
Let us talk about the other advantages that will flow on and that will allow us, as a government, to be generous in relation to social welfare, as we have shown in the statement made by the Treasurer the other night, and that will help the Government to be most generous in relation to social welfare in the Budget next August and in subsequent years. I think many people do not realise- certainly many people on the Opposition benches do not realise- that the money we provide for spending on education, health and so on has to come from somewhere and the only area from which a government gets money is from taxation- the taxation that it takes out of people’s wages and the taxation that comes from company profits.
The best way in which to have more money to spend on health, pensions and so on is to give confidence to the private sector, to encourage the private sector- not because we as a government want the private sector to get rich and make profits, which is only secondary, but because we want the private sector to make profits so that we as a government can obtain increased revenue. The Government is going to get the increased revenue not by overtaxing people; it is going to get the increased revenue by making the private sector more profitable. Once this increased revenue comes about and, as I have just been reminded, a reduction in unemployment takes place there will be more money for education, health and all the other things for which a government is depended upon to help those people most in need. That is exactly what the Government is doing. The Government is a big filter that takes in taxation at one end and filters it through to the needy. That is exactly what our policies are designed to do. That is exactly what the Government intends to do.
I wish now to give in a few explanatory figures to the House. Some honourable members feel that no economic recovery is in sight, but I can assure the House that a study of the latest statistics that have been produced indicate that economic recovery is now on the way. Let us look at the latest figures, namely, those for the March quarter. They indicate that the value of retail sales in March increased by $61m. These economic statistics are the official figures of the Department of the Treasury. That represents a 3.9 increase. The increase in February over the same period last month was only $ 14.1m. In January of this year there was an actual decline of $4.8m over January of last year.
So, taking the 3 months of January, February and March into account, we had a disastrous January when the figures actually fell behind those for January of last year, but in February we gained a little bit, being $ 14.1m ahead in retail sales, and in March we were ahead by $6 lm over last year. Increased retail sales have come about through consumer spending. It is absolute rubbish for honourable members on the other side of the House to say that our policies do not affect consumer spending because they certainly do. Those figures prove it. Compared with the position in 1975, we were 2.9 per cent in front over the whole quarter and that has even taken into account the disastrous January figures.
I turn now to another important indicator which certainly influences our economy greatly and which is a great indication of how we are going, namely, the registration of new passenger vehicles. The registration of new passenger vehicles increased strongly in March to a level higher that the average monthly level recorded in 1975. In seasonally adjusted terms, which is perhaps the fairest way in which to put such figures, the registrations for the March quarter of 1976 were up 14.7 per cent on the registrations for the March quarter of 1 975. That is a quite significant increase. So a whole lot of rubbish is being spoken by honourable members opposite when they say that the policies of the Government are not working. They are working. They will not only influence investment spending and capital spending but also greatly influence and help consumer spending.
It is the Government’s policy to increase the profitability of the private sector, but it is not doing so at the expense of the public sector because the public sector is dependent upon increases coming from the private sector as the public sector’s wages come from the taxation that is generated by the private sector. But we will increase the profitability of the private sector. We will gain additional revenue without having to overtax the people and the additional revenue that we gain will go out to the people in the form of increased social welfare payments, increased pensions, better health services and better education. In 3 years’ time when we come to be judged again by the people they will judge us on those matters.
– You will not be here; you will be gone.
– I will be here. The people will judge us on those matters and we will be back in office with- I know it is hard to imagine it- a larger majority than we have now.
-After that scintillating defence of the Government’s economic package, perhaps we can look at what is really behind it. I think it would be fair to say that the only description of what the Treasurer (Mr Lynch) and the Prime Minister (Mr Malcolm Fraser) have done to this country is to say that they have introduced a cynical grab-bag of new policies that are inspired more by ideology than by common sense. The Prime Minister and the Treasurer have decided to bite the economic bullet but, after the reaction that they have had to their actions, they are not sure whether what they have done will backfire and blow off their heads. Certainly they would have every reason to be worried men.
Basically the Treasurer’s statement was made because of the Prime Minister’s own slavish commitment to the concept of small government. Reductions in the size of the public sector, tax indexation and the Medibank changes are all evidence of what one honourable member described as the Prime Minister’s pre-copernican preoccupations. The son of establishment figures who drafted the Australian Constitution around the turn of the century have been reincarnated in the present Prime Minister. He wants to reduce the role of the Commonwealth Parliament and the public sector in Australia. Not only is he committing himself to this course, but also he is doing it on the disgraceful premise of a package that is designed to soften up the unions for a wage pause- in fact, a cut in real wages. In other words he has accepted the line that the Federal Treasury has been promoting for the last three or four years- the line that the Australian Labor Party rejected in 1974- that a pool of unemployment is the only way in which one will achieve anything in respect of a reduction in wages. He never says to business that there ought to be increases in productivity. No. He says that there can be an investment recovery only when there is a cut in real wages.
The people whom the Liberal Party of Australia and the National Country Party of Australia humiliated throughout the last 2 years and throughout the election campaign by calling them dole bludgers are now suffering from a policy of planned unemployment. How hypocritical and how squalid can those Parties and this Government be to embark upon such a policy. But, bad enough as it is that the Government is hypocritical, the Treasurer’s statement also reveals the duplicity with which the Government always operates. In this respect he has told only half the story. The statement which he delivered the other night identifies only about $ 1,600m of the $2,600m which will be cut from expenditure in the forward estimates of the Budget. So another $ 1,600m of public expenditure which affects people vitally is still unidentified. We heard that the Treasury advice to the Government was that by the time the next Budget was introduced an extra $700m to $ 1,000m would be cut to achieve the Budget deficit in 1977-78 of between $2,200m and $2,500m. Again, where those cuts are to be made is not identified. Not only have we seen the dastardly deeds which have been identified in relation to the next Budget, but also we have yet to be told details of another $2,000m worth of good news in relation to expenditure cuts. The Government, of course, has failed to identify those.
The so-called investment led recovery- the rubbish we heard last year and the rubbish we heard constantly during the election campaignnow, apparently in the Government’s view, has failed. The investment allowance, which the honourable member for Barton (Mr Bradfield) referred to as a naked subsidy, which it is, has not been taken up by those sections of business which should be using it. It is not working, and the reason it is not working is that there is no demand in the Australian community to take from production. No businessman, particularly those with moderate size or small businesses in which most people in Australia are employed, are prepared to invest in productive plant when they know that there is no demand for products. While they have only 50 per cent or 60 per cent utilisation of their plant, they would be absolutely stupid to invest in new plant, even if the Government holds out the carrot to them. So that policy has failed.
Now we are witnessing a great switch in strategy. The Government has been in office for only 6 months. It has already spoken about the need for consumer recovery, now that the investment recovery concept has failed. In Perth just a couple of weeks ago the Prime Minister said: ‘Buy, buy, buy; spend, spend, spend’. He could have paraphrased that by saying ‘Save my skin’, because the whole future of his Government is wrapped up in the success of the next Budget. In other words, the policies he sets in train this year, 1976, will decide his electoral fortunes at the end of this Parliament. He knows that the concept of the Labor Party’s Budget last year was correct, and he is now talking only of consumer recovery.
So I think the Prime Minister’s TreasurerTreasury approach is this: Reduce public sector outlays to allow the national slack to be taken up by free enterprise- this has to be done in a climate of reduced inflation which has to be achieved by a drop in real wages- and then there will be a consumer recovery which will lead to continuing demand and finally regenerate employment. That is the magic scenario. All that is to be done without any specific government intervention. Enterprise is to be left to the pressures of the market place, and the people in the market place are to come up with the goods; all the Government has got to do is set the scene and the whole show will take off. But when have we ever seen an increase in consumer confidence when there has been unemployment?
I had the Parliamentary Library take out a table for me which may interest honourable members and which I will show to the Minister for Aboriginal Affairs (Mr Viner) who is at the table. It illustrates very plainly that savings bank deposits increased dramatically in the 2 years of unemployment. At the moment savings bank deposits stand somewhere at about $ 1 3,500m, with unemployment at about 270 000 on a seasonally adjusted basis. So the Government has based its package on the premise that consumer confidence will recover, but when has there ever been consumer confidence when at the same time there has been unemployment? I say that there has not been, and that will be the rock upon which the whole concept will perish. In 1974 there was a 26 per cent movement in wages. That happened at a time of continuing unemployment; it did not slow down the movement of wages. Why should the Treasury be right on this occasion in believing that because there will be planned unemployment there will be a slowing down in wages- in fact, a cut in real wages? That is the second reason why I believe that this policy will fail.
The whole rationale is cynical because it relies upon a cut in real wages, and it is defective because it believes there will be consumer spending at a time of unemployment. The total package, so-called, is then disguised by all the other measures which have been introduced, and I shall deal with those. I refer to such things as the cancellation of the rebate for dependants and its replacement with a family allowance or increased child endowment payments; the disbanding of Medibank and the forced return of people to the private health insurance funds, with a slug to taxpayers to pay for it; and income tax indexation as a trade-off to the Medibank tax or the Medibank levy- call it what you will, because it is one and the same thing. As I said earlier, these matters are not a product of the Treasury’s pre-occupation with a wage cut; they are the product of the Prime Minister’s own warped mentality in relation to small government.
Let us analyse some of these measures. Not every aspect of the Government’s proposals is bad, but the motivation is bad. Let us look at the dependants’ rebate and the family allowance in terms of dollars and cents. Why did the Government decide to take away the rebate for dependent children and turn it into a family allowance or an increase in the child endowment? The reason is that it refused to index the rebate for dependants. So what it has done is to push a certain amount of money across to mothers. The Government will save about $l,025m with the elimination of the rebate for dependants, and the cost of the new child endowment payments is the same amount, $ 1,025m. In other words, there is no cost to the Government. But the Government has not introduced this measure because of any welfare motive. The 2 Government parties have never been interested in welfare. Throughout the 1950s and the 1960s they kept pensioners on the breadline with increases of only 50c and $1. The reason for that was that when they wanted to introduce a stimulus in consumer demand they pushed out a bit of money by means of an increase of 50c or $1 in pensions. The Labor Party said during that period that what it would do was introduce pensions that were indexedour motivation was social welfare- so that they always kept their value. But, of course, the Government is not indexing the child endowment payments. It refused to index the rebates for dependents, and we will not see it index the new child endowment payments.
What we have seen is the introduction of a concept which the Government believes will lead to mothers, who are the recipients of the endowment payments, spending their money rather than leaving it on deposit. Again that is another assumption which may not and probably will not pay off. There is no reason to believe that the money will necessarily be spent, although it is true to say that the breadwinner of the family will receive a reduced pay packet because the dependant’s allowance which was made available to him each week under the rebate system introduced in the last Labor Budget has been taken away. Therefore his pay packet will be reduced. In the light of that the Government believes that the money which is being given to the mothers will be spent. It may well be spent to make up for the leeway in dad’s pay packet, but it may stay on deposit. Child endowment payments are paid into the banks, and I think it is true to say that many mothers will leave the money there as a nest egg, call it what you will. All one can say is that it is a cynical exercise in sexism to use women as an investment stimulus for the Government’s own shabby economic package. At any time in the future that the Government may want to increase child endowment payments it can add to consumer stimulus by doing so.
I turn now to Medibank. The Prime Minister has again broken his promise in regard to Medibank. Since the beginning of this Parliament we have seen promise upon promisespecific promises- broken by this Government. Only the other night an Australian Broadcasting Commission program enlightened us by telling us that the Prime Minister regards promises as being only in the ‘immediate term’. Whatever the phrase ‘immediate term’ means, I do not know. So we can take it that any promise he makes during an election campaign will last only a day, a week, a month- who knows?- but certainly only in the ‘immediate term’. That statement is very true in respect of Medibank. He said unequivocally that the Government would maintain Medibank. He has failed to do that and he has imposed a 2.5 per cent tax on it. He calls it a levy, but in fact it is a tax and nothing else but a tax. To add insult to injury he has done so at the express wish of the private health funds in Australia. Not only is he again pandering to his own views on small government but also he is pandering to the private health funds, which helped to put him in power, and giving them the pay-off. The pay-off is that the Committee set up to investigate Medibank arrangements was told that it had to come up with a scheme which forced 50 per cent of people over to the funds. The Deputy Speaker may laugh, but the scheme was outlined a few moments ago by the honourable member for Oxley (Mr Hayden), the former Treasurer.
Under the new arrangements the maximum Medibank cover available is $300 with an extra $135 available for privately insured people wanting intermediate care. It adds up to $435 for the total package if one stays in Medibank. But anyone who chooses to go to the private funds will be able to get the same package for both medical care and hospital care in private and intermediate wards for $350. So there is a $85 disincentive for anybody above a certain income to stay in Medibank. Of course, this is the Government’s scheme. It was not actuarily worked out. The Government set the conclusion and worked back. The conclusion was that half the people had to leave Medibank so the Government devised a scheme under which a certain number of people would be forced out. Even the Minister for Health (Mr Hunt) had the temerity to say the other day that the Government gave no commitment that there would not be any cost increases in the Medibank package. So if it just happended that the Medibank package did finally become competitive with the private funds the Government would increase the levy to make sure that the scheme worked as it intends it should, that is, with a 50 per cent drop out rate. That is what that statement means. This Government, of course, is not believable and cannot be trusted.
I now refer to tax indexation which was a trade-off from Medibank and, again, another product of the mental block of the Prime Minister in respect of big government. But what the Prime Minister proposes is not tax indexation; it is not a tax cut as such. People believe that he is talking about a tax cut. But it is only a tax cut if wages are not moving up in the 12 months in which tax indexation operates. Tax indexation is designed to hold the rate of tax by indexing the brackets. In other words the brackets expand with inflation so that the same rate of tax applies. This is given as a palliative, a sort of sugar coating to the Medibank pill which, of course, is an enormous tax slug to most people in the community.
A Government document released, or leaked, a couple of days ago indicates that 57 per cent of taxpayers will be worse off as a result of the 3 changes announced by the Treasurer, that is child endowment, Medibank and tax indexation. Fifty-seven per cent are worse off! Not only are most people in the community worse off in respect of their arrangements with the Commonwealth but also the States will be far worse off under this package. Specific purpose grants will go by the board. Most of the States will be forced to resort to indirect taxation. Not only will the States be forced to do this but also the Federal Government will be forced to resort to indirect taxation in the next Budget. Of course, if this does happen the result will be another attack on real wages because if tax indexation is introduced to account for inflation and indirect taxes are imposed this, of course, will eat away at real wages.
Again, local government will be another area vitally affected by the nature of the cuts. Of course, we are told that the Government’s policy is designed to promote recovery. But ultimately this policy must hinder recovery. Just take the Medibank item alone. The $400m that will be paid by taxpayers in a full year towards Medibank in the net sense will be, of course, an inhibitor to consumer demand. It will be money taken away from taxpayers which they would otherwise spend; money which will go to the Government coffers. So the result will be a disaster for this nation. Not only is the package deflationary, it will also create confusion with the buying public and with investing enterprise. It must damage consumer confidence.
The package is designed deliberately to create unemployment. Not only that, but also it robs people of essential Government services which they will now not have made available to them. It will burden the States with costs and an absence of revenue which must be made up by resort to other indirect taxes. The total package relies upon a cut in real wages. Not only that, but the proposals for Medibank, child endowment and others form a policy for the redistribution of wealth which in itself is not an economic policy. These items are only put in the policy to disguise the general intent of the Government’s program, which is, as I said earlier, to make sure that there is a reduction in real wages. On that basis there is supposed to be some let up in inflation. Therefore everything in the garden is to be rosy, people will spend again and Australia will get out of its present economic mess. That will not happen. The middle class has been slugged to death by a party which basically it supported. The working class can now see how untrustworthy the Prime Minister and his colleagues are in respect of specific undertakings they have given. In short, the whole policy is a dastardly one. It is dishonest. It is a major breach of faith with the Australian electorate. I believe it sets the pace for this Parliament in respect of the economy of this country. Ultimately it will show the Prime Minister that his policy will fail. I believe that the volatility of Australian politics is such that the Government and the Prime Minister will be flat out to be returned to office at the next election.
– The cognate Bills that we are discussing relate to the economic statement made by the Treasurer (Mr Lynch) last week. That statement is probably one of the most far reaching economic statements made outside of a Budget speech. It is reflection of the Government’s continuing determination to tackle inflation and to get it under control. Inflation was one of the central issues of the last election campaign, an election campaign which gave the Liberal and National Country parties an overwhelming mandate to tackle the economic management of this country and to try to bring about recovery to eliminate the recession and unemployment that had been imposed upon this country.
The Government is relying on a two-pronged strategy to achieve this objective. The first objective of the Government is to curb Government expenditure and the size of the inflationary Budget deficit. The other is to bring about greater wage justice and social benefits by the introduction of tax indexation and family allowances in the desire that there will be greater wage restraint on the part of the ordinary men and women of this country. Wage restraint is absolutely necessary if we are to break out of the inflationary spiral besetting this nation today. It is most unfortunate that so many of the comments on the Government’s economic measures have been pitched at the gain or loss level to the individual. However, I have enough respect for the commonsense of the average Australian to think much further than that. I believe that the average Australian is concerned about national welfare and the overall interests of the nation. I believe he is very concerned that there is a Government that is prepared to tackle these problems.
The burden of the response of the honourable member for Adelaide (Mr Hurford), who is the shadow Treasurer, to these measures seems to be that all we need to do is to accept the Budget brought down by the previous Government and everything will turn out all right. Well, what more frightening prospect does that open up? The Leader of the Opposition (Mr E. G. Whitlam) talks about people having to pay for their health insurance. Is he suggesting that health insurance under his Government cost nothing; that it was free? Medibank is costing about $ 1,400m in its first year of operation. That $ 1,400m has to be found by the taxpayers. The great majority of Australian people have enough commonsense to accept the fact that they have to pay for their health care one way or the other. They accept that those who can afford it should make a contribution towards health insurance, and that is what the Government has proposed. They do not accept the subterfuge of so-called free health care under a scheme which, if uncontrolled, will in the end impose a massive financial burden on the taxpayers of Australia.
I am sure that most people have now rejected the concept and the mentality fostered by the Whitlam Government which said that they could get all they wanted from the Government for nothing and no harm would come from such an approach. The harm in the form of massive inflation and unemployment caused by uncontrolled Government spending has been exposed for all to see. This Government now has the task of repairing the damage done by the Whitlam Government. It will have the support of most Australians in doing that job. The change from child endowment to family allowances, together with the abolition of the tax rebates for dependent children, will bring very great benefits to low income families. Whilst this is welcome for that reason alone it is especially welcome because there are many primary producer families today which have little or no income. It will mean much for them. The very serious depression in the cattle and dairy industries in particular, and in some other rural industries as well, has resulted in many farm families receiving a very minimum income. Recently the Government has made things easier by easing up on the qualifications required for unemployment benefits. However, the basic change now to be made with the introduction of family allowances at a much higher rate than the previous child endowment will prove to be of major assistance to many of these low income farm families about which I have spoken.
I think that we need to have a clear picture in our minds of the situation in which the Government has acted. Australia has been lagging behind the economic recovery of the rest of the world but I believe that we have recently seen signs of recovery here. Industrial production started picking up very slowly in the middle of 1975 and is now currently rising at the annual rate of 12 per cent. We need to remember, though, that this improvement can be sustained only with a general lift in demand and production. It cannot be stressed too much that this recovery is fragile. We must make sure that it continues. It is no coincidence that those countries showing the most solid recovery- especially the United States of America and Germany- are the very ones that have been most successful in tackling domestic inflation rates. That is the key. We in this country have a very long way to go in accomplishing that task. The latest figures show that inflation in Australia is running at 12 14 per cent compared with 5 per cent and 6 per cent in the United States and Germany. Coupled with that intolerable level of inflation we have unemployment at the highest level since the 1930s. I repeat the point which I have made many times before: The key to putting people back to work is getting inflation down.
As the Treasurer (Mr Lynch) said in his statement last Thursday night, the Government’s main aim is to overcome inflation. As long as inflation in this country continues at its present level there will be no revival of the economy. Inflation is the real cause of unemployment in Australia today. By discouraging investment, by lowering profitability, inflation is a direct cause of unemployment, because fewer jobs are being created. The funds necessary to utilise the country’s productive capacity are not being directed to areas where they are needed. This distortion in investment is only one aspect of the larger distortions to which inflation leads in the whole economy. Nowhere is this more evident than in public finances. Inflation leads directly to a transfer of wealth from the private to the public sector. The huge increases in Commonwealth revenue from taxation as a result of higher wages have led to a doubling of the Commonwealth income tax collections in the last 4 years. More seriously, the cost of Government programs has risen out of all proportion as a result of inflation. As I said, the cost of Medibank will be $ 1,400m in the first year and it would have cost $2,000m in the next year if we had not acted.
– How much?
-Two thousand million dollars. If it kept increasing at that rate until 1980 Medibank would be costing in the vicinity of $6,000m. When we came into government we were faced with a situation in which many programs were simply beginning to get out of control. I know that many of those programs were in themselves beneficial to certain sections of the community. But however worthy those programs and policies on which they were based might have been, it was simply not possible to allow them to continue expanding unchecked. The Government had to take a stand and had to act decisively in order to regain the initiative over its own spending. It would not be going too far to say that we were fast reaching the stage where the Commonwealth Government was losing control of its own finances. The Government has now acted to reassert control over its fiscal policies. We will continue to ensure that discipline and financial sanity are brought to bear in Federal finances.
It is all too easy for politicians to let programs and the rosy prospects of benefits which they offer go along unchecked. It is easy for politicians to adopt the course of least resistance and let events take over. But that is irresponsibility which amounts to political vandalism. Political responsibility has just as much meaning in being able to say no to demands as being able to say yes. Once the Government loses control of its own finances and spending a country is plunged into a morass of inflation and all the evils that flow from inflation until eventually it is faced with complete social and economic disruption. It has happened before. Let no one believe that it could not happen in Australia. Experiences in Germany in the 1920s and in Argentina in the 1950s are painful reminders of how easy it is to let inflation take control of a country. It is the height of irresponsibility for politicians simply to let events look after themselves. I recall 18 months ago a Minister of the Labor Government asking: ‘What is wrong with inflation?’ Not only does that attitude reveal ignorance; it demonstrates a wanton disregard for our whole social structure. It is not only insidious in its reasoning but also dangerous in its implications. The simple fact is that inflation destroys not only a nation’s economy but also its entire social fabric.
This Government is determined not to let inflation happen in Australia. We are one of the governments in the world which have acted to reduce their spending, to cut the size of the Public Service and to cut down on the open ended claims which people can make on welfare and other services. The Government has also acted to halt the great transfer of revenue to the public sector as a result of windfall increases in tax collections. Tax indexation is a concrete example of this Government’s determination to put a stop to the drift towards larger public sector spending which has occurred during the last 3 years. The Government is determined to bring discipline into public spending in Australia. Our federalism policy is aimed at making all governments more directly responsible for their own finances and hence for their own spending.
As Minister for Overseas Trade and Minister for National Resources, I am particularly aware of the damage inflation causes to exporters and to people who have to produce in competition with imports. The jobs of a million Australians are directly or indirectly bound up with exports. There are many more jobs involved in the production of goods and services which directly and indirectly compete with imports. The cost structure of Australian industry has got completely out of step with that of the rest of the world. For those industries which have to compete on the world market, the disadvantages they suffer are rapidly becoming a serious national problem. As an example of cost increases, I need mention only wages increases in Australia and in the United States in the last 5 years. Since 1970 Australian wages have increased by over ISO per cent. Whereas in America the increase has been a little over 50 per cent. Wage increases in New Zealand since 1970 have been less than twothirds of ours, and wage increases in Canada have been only half the increases in Australia.
To go on continuing to demand wage increases is self-defeating and is bringing great hardship to those people who no longer can get employment and to those people who keep their businesses going. We cannot compete in international markets if this trend continues. Already the competitiveness of some of our mineral developments is balancing on a razor’s edge because of the inflationary situation. This worries me greatly, because I see in new mineral developments and in revived projects one of the best hopes of a major contribution to real and sustained economic recovery in this country. Unless inflation can be controlled and the international competitive position of the Australian mineral industry can be maintained, there will be only further damage. Every day I hear of markets which are no longer open to us or of opportunities for doing business being lost because we cannot compete. Many of the problems facing Australia’s great rural industries are the result of massive cost increases. The beef industry would still be profitable if processing costs were not as prohibitive as they are today. The wool industry would be properous if shearing, transport and handling costs were not as high as they are.
The measures announced last week by the Treasurer (Mr Lynch) are a continuation and an extension of the responsible strategy adopted by the coalition parties since we took office and indeed of the strategy which we, in Opposition, exhorted the previous Government to implement. The strategy recognises inflation as the prime enemy, and the Budget deficit as the principal cause of inflation. I come back to my central point: Inflation is the fundamental cause of unemployment. It is the cause of high interest rates. It is the cause of rising land rates. It is the cause of all the economic and social problems of this country. The impact of inflation on our competitive situation, on investment and on the consumer earnings psychology makes it essential not only that we resist the temptation to reflate by enlarging the Government’s deficit but also that we reduce the existing deficit. This calls for fiscal responsibility- precisely the policy the present Government has been implementing since it came into office, a policy exemplified by the measures we are now debating in this House.
I believe that if the Australian people are prepared to go along with this Government and the economic initiatives it has brought forward we will have recovery in this country. It requires the total response of the whole Australian communitythose who are in management, those who work, those who give leadership- to tackle the great fight against inflation if we are to attain all the aspirations and hopes that we have for this country of ours.
-In the past week we have seen on the part of this Government the most amazing display of giving with the one hand and taking with the other. What we have seen is an amazing smokescreen of deception, an economic package designed to confuse and bewilder, an attempt to fool people into believing that they are benefiting from the mini Budget. There has been a lot of hot air and guff about benefiting the lower income earners. The cold hard reality is very different. The miniBudget is a budget for the rich; the more one earns, the greater is the benefit. All we hear in the belly-aching of the Deputy Prime Minister (Mr Anthony) is a union bashing exercise. He calls on us to take heed of what has happened in the United States. He expresses his desire to fight inflation by calling for wage restraint but never mentioning what we do about prices. He says that we should take advantage of the experience in the United States where 9 per cent of the work force is now unemployed. That is about twice the level of unemployed in this country. He wants to see a pool of unemployed that will dictate the price of labour, but to let prices go unchecked.
This Government is continuing its program of robbing from the poor to give to the more affluent in society. The lower income earners have suffered not only from the new tax arrangements but also in that many of the programs that have suffered crippling cuts were programs aimed specifically at improving the quality of life in disadvantaged areas. Along with the miniBudget we have had mini policy statements from various Ministers including the Minister for Immigration and Ethnic Affairs (Mr MacKellar).
Like the contribution by the Treasurer (Mr Lynch), the statement by the Minister for Immigration and Ethnic Affairs is another exercise in faulty logic and woolly thinking. Certainly his statements on the increased migrant intake directly contradict the statements on manpower policy made by his colleague, the Minister for Employment and Industrial Relations (Mr Street). Addressing the recent Australian and New Zealand Association for the Advancement of Science conference, the Minister made the following statement:
If you look at the latest unemployment analysis, you will see that close to 60 000 unemployed people were classified as unskilled, whereas there were less than 2000 recorded unskilled vacancies.
Yet the Minister for Immigration and Ethnic Affairs says that he will allow employers to recruit a limited number of unskilled workers. No one appreciates more than I do the contribution that our ethnic communities have made to our nation. I believe that we should do all we can to open our door to people who wish to migrate to Australia, but our intake of migrants must be geared to the capacity of our society to absorb those people successfully.
It is a very distressing fact, but a fact nonetheless, that our society, our culture is infested with a dangerous trend towards racism. One has only to look at the terms that have been used to describe our new settlers to gauge the depth of prejudice in our country. Terms such as ‘wog’, …….., ‘dago’, ‘wop’, ‘chink’, and ‘pom’ are used. They are all terms of abuse that one does not have to travel very far to hear. The benches of the Country Party are rife in this area. I believe that we are moving away from our racist past. I believe that more and more people are coming to realise and appreciate the contribution that our ethnic communities have made. I hope that we can look forward to the day when racial prejudice will be a thing of the past, but we must honestly admit that racism does exist. If there is anything that can be guaranteed to bring out into the open this racism, it would be an immigration program that increased the competition for already scarce jobs. One has only to reflect on what went on in the United Kingdom after the First World War to find evidence of that sort of exercise. It is absolute insanity even to consider bringing in unskilled labour at a time when the number of job opportunities is 58 000 less than the number of unskilled workers seeking employment.
In his statement the Minister makes a vague reference to gaps in the labour force; but what are these gaps? Surely if the program is to have any credibility at all these gaps must be spelt out clearly, not only here but also overseas; or will the Minister trust to good luck that the people applying to come here will possess magically the very occupational skills that are needed here, whatever they may be? I ask the Minister: Does he intend actively to recruit suitable persons to fill these gaps, or will the Government continue its immigration administration simply by taking skilled workers if, and only if, these persons offer themselves? What indication has the Government that its present administrative arrangements will fill these gaps? To the contrary, they will not. Did the Government find, during the past year, that it had a surplus of persons eligible under the occupational categories? If not, by what means does the Minister expect to recruit more skilled workers?
– We have not been the Government for a year.
– Surely to God you can read about what happened before. The Minister is attempting to create the impression that the new quota of 70 000 migrants is based on a rational assessment of manpower needs. It is not. The reason is that no new machinery for the recruitment of particular occupational categories has been set up. Indeed, even the basic identification of areas in which skilled workers are needed has not been attempted. The present criteria of acceptable skills are based on short term data from the Commonwealth Employment Office. They reflect the day to day work force needs, not the long term trends within the economy. It is vital that we base our immigration policy on the long term projections rather than the temporary day to day fluctuations. The talk of skills is, in fact, a smokescreen. Nobody who has the necessary skills has been refused permission to migrate.
The Government is increasing the quota of people allowed into the country under the family reunion categories. The concept of family reunion as a basis for migrant eligibility is one that the Australian Labor Party strongly supports. Indeed, it was under the Labor Government that the number of permanent residents entering the country to join families steadily increased as a proportion of the total migrant intake. But, as I said before, the number of new arrivals every year must be balanced by the capacity of the society to accommodate these new arrivals. People coming to this country have the right to expect support facilities that will meet their needs. It is not good enough to return to the old factory fodder notion of bringing people here by the boatload solely to fill places on the assembly line or have them, as would the honourable member for Hume (Mr Lusher), who is trying to interject, in the Army in the jungles of Vietnam. The Labor Government introduced a whole range of services that benefited members of our ethnic communities. It introduced the Medibank scheme, community health centres, welfare rights officers, and translator and interpreter services. What a lot of hypocrisy we heard this afternoon when the Prime Minister (Mr Malcolm Fraser) answered a question about providing pamphlets to describe to people how the new Medibank proposals would operate. The Government has done away with the translator and interpreter services that provided the wherewithal for ethnic groups to take advantage of any of the benefits under the scheme. The Labor Government introduced child migrant education programs, community recreation projects and schemes designed to improve the quality of life in the disadvantaged areas of our cities- the areas of high ethnic group concentration.
What is happening under this Government is that while the Minister for Immigration and Ethnic Affairs is increasing the level of immigration, so creating a greater need for these support services, the Treasurer is hell-bent on dismantling the same services. I refer to the education program. In table 1 on page 3 of Budget paper No. %-Education ]975-76-of the Hayden Budget there was an estimated outlay of $23.6m for migrant education needs. According to the latest statement by the Minister for Education (Senator Carrick), expenditure has been cut back to a mere $9m. We are led to believe that the child migrant education program is included in the general allocation for the Schools Commission. In other words, there is no longer any guarantee that the special needs of migrant children will be catered for adequately. The Minister for Education admits that courses in adult preembarkation and shipboard education will be limited in 1976-77 to the same number of teachers and students as in the 1975-76 period. Despite the increased migrant intake there has been no corresponding increase in the provision for adult education in the English language to accommodate either those migrants already here or those which will arrive in the future.
Probably one of the most savage cuts introduced in the mini-Budget was in urban and regional development. A whole series of programs directed at areas of ethnic concentration has been destroyed. These are the area improvement program, recreation programs, public transport in the urban areas and roads for the inner cities- programs that were designed to reshape the face of our cities to end the years of indifference and neglect by previous LiberalCountry Party governments. It is now certain that the Australian Assistance Plan is doomed. It is a program that offered, for the first time, the hope for our ethnic communities that their specific needs and aspirations would be recognised and, more importantly, that they, as communities, would be actively involved in schemes to meet these needs. There has been a reduction in forward estimates of over $400m in the Department of Environment, Housing and Community Development. This cut will drastically affect the lives of those who live in the most disadvantaged areas of our cities- the inner city areas and the western suburbs of Sydney and Melbourne. It will destroy a whole range of schemes, many of which were deliberately designed with the needs of our ethnic communities in mind.
I turn to the area of child care. This is not the first time that I have stressed the vital importance of child care for our ethnic communities generally and, in particular, the children in the disadvantaged areas. The importance of child care will increase even further as the Minister has decided to increase the migrant intake. In the first few years while people battle to establish themselves in this country it is often absolutely necessary for both parents to work. It is therefore vital that adequate child care be provided. Proper child care also has the effect of giving the child of migrant parents the opportunity to improve English language skills so that the child will not be disadvantaged on first going to school. Yet what has been the response of this Government? The appropriation for 1976-77 is exactly the same as it was in the original Hayden Budget allocation for 1975-76- a sum of $73m. In other words, spending on child care has been effectively reduced by 15 per cent if we take into account inflation. There is no provision for expansion despite the fact that the Government has decided to increase the number of migrants coming to this country. There will be an increase in demand for child care services but a decrease in the funds available to meet this demand.
I now refer to the key area of health. I do not wish to discuss the effect of the Government’s changes in Medibank- that has been effectively handled by the honourable member for Oxley (Mr Hayden) and others- but I note in passing that the Medibank changes will once again disadvantage our ethnic communities. I mentioned the specific problem of not knowing how to take advantage of benefits. The cut in the other health programs will be $100m. There is no real detail in the Treasurer’s statement as to how this cut is to be achieved. The reference to the community health program is brief and lacking in detail, but with a proposed cut in spending of $100m its future hardly looks hopeful. At best, we can hope that existing community health centres will continue to function while the plans for expanding and establishing new centres, so badly needed in the areas to which I have referred, will be shelved. Once again I stress the vital role that community health centres have begun to play in our ethnic communities. They are important for the medical services they provide and, for many people, community health centres are the only places where they can obtain medical advice in their own language. These community health centres are playing a vital social role as well as performing a medical function. They have become the focal point for many of our communities, places for ethnic communities to meet, discuss their problems and devise their own solutions. It is not difficult to see whose interests this Government protects. It is certainly the interests of neither our ethnic communities nor the disadvantaged people in this country.
In the provisions for the Australian Assistance Plan the Treasurer blandly asserts that the Minister for Social Security (Senator Guilfoyle) is meeting State Ministers in order to discuss future arrangements for this program. We now know what these future arrangements are. The Federal Government will abandon the scheme totally. Through the Australian Assistance Plan communities were given, for the first time, the opportunity to meet to discuss their specific problems and to participate directly in solving these problems. Most of the regional councils in areas of ethnic group concentration are employing ethnic liaison officers- people who are actively seeking the views of our ethnic communities and are providing the skills and expertise to allow our ethnic communities to voice their needs in the wider Australian community. Such people are no longer active in the area of Medibank. They are stamping envelopes and forms to be sent away for approval for payment. The officers are not carrying out their duty. They are being dispersed in this great economic program of the Government. Once again they have been the first victims of the Government’s deliberate policy of dismantling all that range of programs that we as a government introduced to improve the quality of life of the vast majority of Australians.
At the same time this Government is systematically destroying all the support systems, the community centres, the area improvement programs, the community development officers, the regional councils, the community recreation programs and, as I have said, the translator and interpreter services. At the same time this Government has announced that it will increase the migrant intake for 1976-77. I have nothing against this increase if at the same time the Government is prepared similarly to increase the range and quality of services available for the newcomers. But what sort of logic is it that increases the immigration intake and at the same time reduces the quality and quantity of the services available once these people have arrived in our country? It is a return to the old ‘dump them off the boat and into the factories ‘ philosophy.
We as a government believed that every person arriving in Australia had the right to expect that community services would be geared to his or her particular needs. As a government we were progressively implementing that policy. This Government is reversing that policy, is turning the clock back, and is destroying all the initiatives of the past 3 years. I have already discussed the absence of rational planning in the increased intake. The figure of 20 000 more migrants is one that the Minister has plucked out of thin air. The talk of gaps in the work force is a smokescreen. We have never in the past exceeded the quota of migrants eligible under the occupational skills criteria of the immigration program. What we are talking about- let us be honest about it- is increasing the number of migrants under the family reunification program. This being the case, I welcome the extension of that category to include non-dependent work force age parents and their dependent children. At least the presence of members of their families who have already settled here will soften the blow of these cuts that I have mentioned, cuts that have destroyed most of the support systems available to our new arrivals.
The Government has opted out of the role of providing for these people once they arrive here. Why has the Government not extended the policy on this issue right across the board having taken it so far, and that is the logical issue on which the policy rests? Why has it not extended the family reunification program to include brothers and sisters of the permanent residents in Australia? There are many cases, particularly when both parents are deceased, where the people involved wish to join their brothers or sisters in this country to reunite what is left of their families. I suggest that real consideration be given to extending the concept of family reunification.
I wish to make only one last point about the Government’s immigration program and that is to draw attention to the impression that the new Minister has given that he is intent on returning to the traditional sources of migrants for this country, in other words the United Kingdom. I call on the Minister to give the House an unqualified assurance that this new quota will not discriminate against the non-British migrant, that every person living in Australia will have an equal opportunity to nominate members of his family as permanent settlers, an unqualified assurance that eligibility under this new quota will in no way be influenced by the country of origin of the persons applying to migrate to this country.
– I welcome the opportunity to enter this debate. I want to concentrate in particular on Social Services Amendment Bill (No. 2) and especially the family allowances proposals, which have been overlooked by honourable members opposite during the course of this debate. I welcome the Bill because it indicates to me that while the Government on the one hand is prepared to make difficult and perhaps politically unpopular decisions to combat unemployment and inflation, on the other hand it is determined to ensure that the weaker and the poorer sections of the community will not suffer. More than that, the Government is determined to ensure that these people will have their living standards substantially and positively improved.
The remarks by the honourable member for Melbourne (Mr Innes) totally ignored the benefits accruing to the poor people in Australia and which will flow from these proposals. As I said in my speech in the Address-in-Reply debate, the incidence and the extent of poverty in Australia was well documented in the report of the Commission of Inquiry into Poverty in Australia. That report revealed that nearly one in five income units in Australian society is either very poor or close to it. A further most disturbing aspect of this inquiry was that it revealed that there were 250 000 dependent children in very poor families in Australia. In this context it is of great significance, in relation to the Government’s decision to use the vehicle of family allowance to direct resources away from the relatively well off to the poor, that the report showed quite clearly that the group of people in the community whose incomes fall below the poverty line by the biggest percentage were in large families whose fathers were earning the minimum wage or a little more. I should like to quote from the outline of the report of the Commission of Inquiry into Poverty. At page 7 it states:
Indeed, one of the most disturbing aspects of the situation was that there were a quarter of a million dependent children in very poor families, many of them in 2 -parent families with the father in full employment. For these people current rates of child endowment are grossly inadequate. We therefore recommend that substantial increases be made in rates of child endowment and that taxation allowances for children be replaced by tax credits which should be added to child endowment to help poorer families.
In this Bill the Government is now implementing the principles of that recommendation of the Commission.
I take this opportunity to state that I was amazed at the comments of the Leader of the Opposition in the Western Australian Parliament, Mr Jamieson, who was quoted in the West Australian newspaper last Saturday as saying:
The semi-Budget would only significantly benefit a handful of people on the highest incomes.
That is a gross misrepresentation of the facts. This was further borne out by the Treasurer (Mr Lynch) in this House yesterday when he produced figures to show that allegations by Mr Hawke, who claimed that 57 per cent of the Australian people would be worse off as a result of the total package, were completely wrong. Mr Hawke ‘s allegations were also reported in the West Australian newspaper of last Saturday. I am surprised that the honourable member for Oxley (Mr Hayden) and the honourable member for Blaxland (Mr Keating) earlier in this debate, when summing up their comments on these proposals, would not acknowledge the benefits of income redistribution which accrue from the family allowance proposals.
In further support of these proposals I also mention that the Government has paid particular attention to the needs of families with only one breadwinner, especially sole parent families. As a group, sole parent families constitute a large
Proportion of the 300 000 families and their 00 000 children who do not receive the full benefit of the existing rebates for children and students and accordingly who will be among the principal beneficiaries of these measures. The Government has recognised that the previous system of taxation rebates for dependent children benefited those in the high tax brackets and did little for the really poor families, particularly those who did not pay any income tax at all. The rebates were of no value to them, but now their children will benefit substantially.
In the last few years there have been large increases in assistance to poor people who are eligible for pensions and benefits. Between May 1972 and May 1976 the standard rate of pension increased by 126 per cent, but by contrast the additional allowance for children of pensioners increased by only 66 per cent and child endowment payments, which remained stationary in nominal terms, declined steeply in real value because of the rate of inflation experienced in Australia over the last few years. These changes have been to the detriment of poor people with children. Under the system of tax rebates the poor people who did not have a tax liability because of their low incomes received no advantage and the tax system therefore operated as a kind of reverse means test because only those above a certain income level received any advantage.
This Government regards it as imperative that the poor families who did not benefit much if at all from the rebate system should receive the additional financial help which this Bill will provide. By this new system of family allowances the Government is giving recognition to all parents of the extra responsibilities they carry, not merely to the taxpayers amongst them. I think it should also be recognised- this is of particular significance to middle income earners- that the impact of the withdrawal of the tax rebates on pay packets themselves will be reduced because of the effects of personal income tax indexation.
I have always been unhappy with the previous system of tax rebates combined with small child endowment payments. It was not only that the poor did not benefit; the rich, who benefited most from the money they received from the tax concessions for their children, used what to them was a small and marginally insignificant child endowment payment either to swell their children’s bank accounts or to purchase luxury items for them. At least now the relatively well off in the community will have less opportunity to do this. I have always felt that this was an abuse of scarce government resources, particularly when there were many poor families who needed much more in the way of family allowances to provide better food, clothing and other basic or essential items for their children. The real value of family allowances now will be felt more by those who need them. Although child endowment is not means tested, the impact of the combined measures- that is, the increases in endowment payments and the abolition of tax rebates for children- has a similar effect to that of a means test and quite properly will ensure that resources will be directed away from the relatively well off families and into the hands of the poorer families in Australia.
It automatically follows that this has another important implication. It means a much fairer and more reasonable pattern of expenditure on behalf of children. I have alluded already to the fact that by redistributing the benefits of family allowances to the poorer families this money will be spent on more essential items for the children. Conversely, because of this redistribution, if wealthier families wish to purchase less essential and more luxury items for their children, obviously more of this kind of expenditure will have to come from their own resources and less from the Government. I think that this is quite proper. The family allowances plan obviously, therefore, has a dual benefit for the country: Firstly, it introduces a very real measure of social justice into our welfare system and, secondly, together with the impact of” personal income tax indexation, it will redirect resources to people in the community who have a much higher propensity to consume. This will appease those members of the Opposition who have constantly expressed concern that the Government supposedly has done nothing to stimulate the consumption component of aggregate demand as part of its economic strategy.
The family allowances proposals will have a very significant influence on consumer expenditure. I was amazed that the Leader of the Opposition (Mr E. G. Whitlam), in his public comments on the Treasurer’s statement last week, said that this Government had done nothing to encourage consumer spending. One does not have to be terribly well versed in the theories of consumer behaviour to realise that such a redistribution of income will stimulate this component of aggregate demand. A further advantage of the new system is that families will not have to wait until the end of the financial year to receive the benefits of family allowances, as occurred under the tax rebate system. In periods of high inflation rates this meant that the value of the deduction had already been eroded by inflation before it was received. Under the new system of increased weekly payments the money can be spent immediately at current prices, thereby increasing the real purchasing power of money disbursed by this means.
I have been surprised by some of the criticisms made of the family allowances proposals. Some members of the public in Western Australia have questioned the wisdom of a government providing subsidies to those who wish to have children; some have suggested that it is a penalty against those who do not have children; some have said that it provides a positive incentive to have more children; and the most distasteful criticism of all comes from those who say that it gives encouragement to those irresponsible people who have many children but cannot afford them. Some of these criticisms, particularly the last one, are quite repugnant. They are ill-founded on the ground of logic and in my opinion they do not reflect a proper understanding of the principles behind the family allowances proposals. I will deal with each of these criticisms separately. To those who suggest that it is wrong for the Government to subsidise those who have children and to penalise those who do not, I simply say that in the aggregate there has not been any significant increase in government resources directed to helping families who have children, whether these resources be measured in the form of direct expenditure via child endowment payments or in the form of a loss to revenue through tax rebates. The total amount has simply been redistributed to poorer families. The cost of the family allowances scheme will be $ 1,020m in the first year, but $900m of this will be provided by the abolition of the rebate system. Only the remainder will be provided as a new direct subsidy to social welfare.
The other criticisms I have heard- I repeat them- are that this scheme is an incentive to have more children and that in particular it gives encouragement to certain irresponsible people who have large families but cannot afford them. I suggest that even the maximum payment of $7 per child for the fifth and subsequent children could not be considered in any way as an incentive in terms of either the actual or the intangible costs of rearing a child. Secondly, I believe, and my Party believes, very strongly in the principle of a right to welfare benefits according to need and not according to any pompous and selfrighteous moral judgment as to the cause of a person’s deprivation or disadvantaged position. Too often these kinds of criticisms are made by people who live in the best possible circumstances, having had no personal contact with those who suffer from poor education, alcholism, poverty, unemployment and so forth. They have no idea of the relationship between one’s present circumstances and what went before. The casual relationship is not as clear as these pious critics might suggest.
To the people who make these kinds of criticisms about poor people and large families, I say that it is morally questionable to suggest that the capacity or incentive to have children should be judged solely by pecuniary considerations. Of those who put these criticisms, I ask: Is it not true that those to whom $7 a week constitutes an incentive must be people of meagre means, otherwise it would not be an incentive to them? If this is so, is their need for assistance not even greater? Of course it is. To those who put forward these criticisms, I say that their argument means that to deny these poor people assistance is like shutting the gate after the horse has bolted and the children would suffer the consequences if adequate government assistance were not available to compensate them for their parents’ amorous activities. Further, I ask: Who is entitled to say that certain people can have children and certain people cannot? No one, especially not governments, can assume such a God-like posture. Surely in a country such as Australia anyone who wants to have children is entitled to have them and governments must ensure that their policies are structured in such a way as to permit this. These new measures will help to ensure that this is the case, whereas the previous levels of child endowment in an indirect way more or less suggested that only the relatively well off could benefit from Government assistance, principally through the tax rebate system, if they had children. This presumptuous position of government has been taken away by these new measures.
Surely this is what child endowment is all about. It is not an incentive for parents to have children. It is not an instrument used to implement a population policy. It is not designed to convey special benefits to the children of wealthy parents. It is not designed for the end benefit of parents at all. It is designed simply to ensure that when parents do decide to have children those children, irrespective of their parents’ circumstances, are not denied the essentials necessary to give them the living standards that all children in a country such as Australia could reasonably expect.
Our migrant families are a particular group in the community who will benefit very substantially from the introduction of the family allowances proposals. In the course of its inquiries the Henderson Commission recognised that during their first 2 years in Australia many non-British migrants have to make large personal sacrifices in order to earn sufficient income to keep out of poverty. It was revealed that some 12 per cent of non-British migrants- that is 18 000 adult income units- had incomes below the poverty line after housing costs. Although many migrant mothers might prefer to stay at home and attend to normal motherly duties, many of them are forced by their circumstances to join the work force in order to supplement the family income. I have seen many instances of this in my electorate, which has a very substantial migrant population. I have also seen the stress which this has imposed upon their family life. Often migrants get poor jobs and are among the first to become unemployed during recession periods such as have been experienced in Australia over the past few years.
Under this new scheme payments will normally be made directly to the mother. In those families where there are a large number of children- these are normally the poorest people in the community, particularly the non-British migrant families- the allowance will provide substantial regular income. Although it will not be substantial enough to constitute a mother’s wage, as advocated by a number of women’s groups, it will at least allow those women including migrant women who are presently forced to work because of inadequate income, to choose more freely whether or not to work. There remains of course a marginal decision, but it at least introduces an element of choice which was not present before these measures were introduced.
Honourable members opposite will make a lot of noise about the policy package introduced last week by the Treasurer. In fact, they have done so already. They will try to point out that some people will gain more than others, and that some people will not gain at all, while others in the community will be slightly worse off. This last allegation has been shown by the Treasurer to be quite false. One thing honourable members opposite will have to concede is that the poorest and the weakest members of the Australian community will have their circumstances immediately and substantially improved by the combined family allowances and tax indexation measures. It should also be remembered that the poor and the pensioners will not be affected by the introduction of a levy for health services.
The Social Services Amendment Bill is an antipoverty measure giving immediate effect to one of the most important recommendations of the Commission of Inquiry into Poverty in Australia. This Commission recommended that a proposal for an increase in child endowment was ‘for immediate action’. This action has now been taken. In the conclusion to its report, the Commission, in drawing its many recommendations together into a practical program of reform set down guidelines, the first of which was:
There must be a determined policy to give help first to the poorest people.
The second guideline was:
The main thrust of policy must be to provide income for them.
This Bill is a first immediate step to achieve these goals. I therefore support the Social Services
Amendment Bill as a major step by this Government to alleviate the circumstances of those most in need in the Australian community.
-This group of Bills, or the economic package, whatever we like to deal with, makes a number of changes, some on ideological grounds, some on social grounds, and some, I think, in hope. I think the first thing we ought to acknowledge is that most of the Government’s economic activity to date has been based on an ideological rather than economic base. Last year the present Prime Minister (Mr Malcolm Fraser) indicated that he was opposed to the policy of successive governments of providing some degree of equality of opportunity in our society. That has been carried through. This particular package is brought in at this time in order to try to overcome what has become a fairly substantial lagging of confidence in the Government’s policy to bring about the economic recovery it promised. Some of the statements of the Treasurer (Mr Lynch) are almost mythical. They certainly have little substance in fact. In other areas the ideological content is far greater than it ought to be within the national Parliament.
The area hardest hit because of ideological differences is the Australian Broadcasting Commission. Its actual expenditure of $ 124.2m for this year has been cut to $ 1 1 9m for next year. It is not a $Sm cut because it is a cut on actual expenditure on a forward estimate which is lower than the actual expenditure and takes no account of the increased operating costs which would be anticipated if there were no alterations at all in the levels of activity. A bland statement that this can be taken up by changes in administrative operation is, I think, just that. In fact I think that if the Treasurer believes that statement he believes in fairy stories. Quite clearly it is aimed at removing the independence of the ABC to plan its programs.
There has been disaffection among conservative parties in Australia with some of the developments which the ABC has made in recent years. Some have been merely movements towards consumer demand in radio. One of the areas specifically singled out for an attack is the link between the new Sydney and Melbourne ABC stations. Access programs tend to be used and tend to express points of view which the conservative parties would not readily accept. I believe that the cuts in the ABC’s allocation are designed to alter the program content, to whip the ABC into line, and to bring about a situation where contentious material is not utilised. I think that is a bad thing because I think that basically the thing that is needed more than anything else in this country is broader expressions of opinion on a range of subjects. With the exception of a few of the more senior members, we have heard government spokesmen, one after another, rising and supporting the package out of hand. No group of people could be in such agreement. There are areas with which most will agree, areas about which some will have doubt and areas where there will be violent disagreement.
One of the things which should and must be said is that within this package is a sleight of hand operation. The first sleight of hand is in the estimates for the Department of Post and Telecommunications. It is said that an approximate cut of $250m has been made in that area. I suggest that that is cooking the books in a way that no private company would be allowed to do. What is being done is that Government borrowing, official, is being replaced by Government borrowing, unofficial. Because the borrowing is unofficial it is not shown in the Treasury’s Budget estimations. Therefore, it is said to be not part of government expenditure and not part of the Budget. If the borrowings of the Government as such are deficit then the borrowings of Telecom are just as much deficit because they are government borrowings, government sponsored and are utilised for exactly the same purpose.
There is a practice of charging forward investments to the year of cost. This is not a practice which is normal in any form of private or company budgeting. It is one which tends to inflate current expenditure. The average family with whom we equate, I think quite wrongly, budgetary policy, does not pay for its house in the year of purchase. It does not debit income for that year with the total cost of the house. Until interest rates became prohibitive, most of the major items in a household were similarly purchased on long term commitments whereby debits were made against the household income as the payments were made to meet the initial capital cost. Now we have a situation with regard to Telecom where this statement suggests that $200m will be saved to government revenue by Telecom’s going on the market, setting up its own fund raising organisation, having its own procedures for paying out interest, and establishing its own borrowing authority. I am not sure that is not a good thing. It will create a degree of independence from the normal Public Service regulations and the dead hand of the Treasury in a business operation. I think it is advisable. The Government Aircraft Factory is a real sufferer in this area. To some extent Telecom will be removed from that area and better utilisation of its facilities will be allowed. In the initial stages, it may well prove to be a difficult operation. But it certainly does not deduct from the levels of government spending. It certainly does not deduct from the deficit. The $200m will be spent. It is just being transferred from one pocket to another.
There have been changes in a number of other areas that I think ought to be drawn to the attention of the House and the Australian community. I do not think anyone disputes the value of the changes in the child endowment and dependants’ allowances area. I certainly do not. The changes that have been made in the means of distributing funds in this area are to the advantage of the large families on low incomes. This is something that was suggested in at least the last 2 years by persons advising the former Government and that was not taken up. I think that is not to its credit. But the fact of the matter is that these are welcome changes.
The changes in relation to Medibank are not a welcome move. The suggestion that has been made that the cost of Medibank was being borne out of taxation and that by some means this fiscal package alters that burden is, I submit, another sleight of hand trick. The taxation scales have been fixed to cover the cost of Medibank. The only reason why levies were not previously applied to Medibank in the initial stage is because the present Government refused to allow the legislation to be passed in the Senate. It did that as a deliberate act of policy that inflated the budgetary deficit, which it then condemned. It was an act of economic banditry of the worst type. In reimposing the levy after the tax scales have been adjusted to meet the lost revenue which was involved in the original nonapplication of the levy, the Government has now come forward and promoted what it voted against in this House and what thus created a great deal of the budgetary deficit problems. The Government now promotes the levy as a virtue.
I would suggest that this type of presentation of an economic policy brings the whole economic strategy of the Government into disrepute. I would suggest that the failure to inform the House at the time on Thursday night when the Medibank levy and other measures were announced of the letter by the Prime Minister to the State Premiers seeking increases- a doubling- in certain hospital charges was a misleading of the House. It is part of the economic package. I would suggest that by not taking into account the removal from tax deductibility of the major portion of the home mortagage interest deduction scheme, which also occurred on
Thursday, the Government has presented a false picture of the real income tax take by the Government.
A number of other important considerations should be taken into account by the House. The first obviouly is: Will the economic package work? It is obviously designed to inspire confidence so that people will spend money, but, as was said earlier, people will not be encouraged to spend money unless they have confidence in their future, and by that I mean that they have some confidence that they will have a future income. An honourable member who spoke earlier in the debate made great play of the point that large amounts of money will be saved in payments on unemployment benefits. I would suggest that the only moneys that will be saved are those that will be saved as a result of the changes in the work test that were announced some time ago and that were designed to remove from the unemployment benefit list about 1 in 3 of the recipients. I doubt very much whether those work test alterations have had the effect for which they were designed. But this economic package is, in the initial stages at least, going to increase unemployment and not reduce it.
The money that is to be paid in child endowment to a substantial number of families but not all families will be more than offset by the losses of expendable income in areas in which people have greater reserves and are more likely to spend that income. It also should be pointed out that 58 per cent of the child endowment payments are currently paid directly into bank accounts. I see no real reason why that procedure will not continue. Many people banked the tax concessions that have now been taken away by not claiming them at the time but leaving them with the Taxation Office to draw at the time that they submitted their taxation returns, which happened to be a very convenient time for most families. Subject to the grace of the Commissioner of Taxation, the taxation refund usually arrived in October, November or, at the latest, early December- immediately prior to Christmas and just prior to the period of greatest expenditure for most families. The payment of water and municipal rates and the re-equipment of children going back to school, plus the cost of the Christmas lay-off, all happened to fall within that period.
The money is now going to be paid into the wife’s account. Anyone who thinks that that will make a great deal of difference to family expenditure does not know how much control most wives have over their husband’s pay packet. It will in fact mean that the husband will not have to carry such a load home to hand over to his wife. That is the major difference. But I suggest that the child endowment payments in those areas in which the family can possibly afford it- if the family could not it would be spending its total income anyhow- will remain in the bank to meet especially those commitments to rates and the commitments of that nature that will of necessity increase because the Government has not in this package indicated a sufficient level of support to local government to prevent very substantial increases in costs in that area being passed on to the public this year in the form of municipal rate increases. I think that about 1.5 per cent of the revenue has been estimated as the amount that is to be paid to local government. I suggest that local government needs at least 2 per cent in order to offset the increased costs that it cannot meet from its own resources without making unreasonable increases in rates. Rates are a bad form of tax from society’s point of view. They have a totally regressive application to people on low incomes in that the rates are relatively higher for them in real terms than they are for persons on higher incomes.
I would suggest that the economic package is to a degree a sleight of hand. The Government has made great play of the goodies. For the sake of the nation, I hope that the package works, but I do not believe that it will. I see nothing in the investment allowance, which is an earlier measure, the supposed cuts in government expenditure and the actual cuts in government activities, which are going to cause serious problems in the construction industry and other industries. If, for instance, Telecom cancels its orders with a private company in order to save money this year- I know of such an instance recently- that company is not going to expand its work force; in fact, it is going to be lucky if it is there next year when Telecom, on which the company has been dependent for a number of years for regular orders for essential materials, starts to pick up its stocks. The facts as I see them are that a lot of the Government cuts are in fact cuts in activity in the private sector which does the work for the Government. A great deal of government expenditure is purely the provision of money for works done by governments.
I understand that in the pipeline are substantial increases in the cost of nursing home beds in private nursing homes in Victoria- about a $33 rise, I am told, on top of a serious deficit between the actual support and the cost at the moment. There are very serious problems in other areas of care that will have to be met. I understand that studies are being made to see how the Government can reduce- not extend but reduce- its expenditure on nursing care for the aged. No one can meet the costs involved in these areas, and none of the States is in a position to provide the. facilities.
The other important matter which must be delved into is the effect of this economic package on the States. There is a lot of talk about federalism, but what the talk is concerned with is the Commonwealth removing itself from substantial areas of responsibility into which it has moved over, say, the last ten or fifteen years through a gradually widening acceptance of national responsibility in certain areas. A number of these areas cannot be discounted entirely; they are areas in which the community will require the continuation of Commonwealth participation. I refer not necessarily to new programs of the last 3 years but to community facilities which must be provided. One which I shall mention is the area of sewerage, into which the Commonwealth recently moved and from which apparently it will shortly move. The urban affairs area is almost just a replacement of State expenditure with Commonwealth expenditure, but it is necessary expenditure. It would appear that the States will be required by some magical formula to raise additional funds- at the moment it is not a State tax but during the New South Wales election campaign the Government parties clearly indicated that it would not be an additional tax- in order to meet the requirements which the community has and which the Commonwealth previously met in areas out of which it has now moved. If that is what we mean by federalism, we ought to examine whether or not it is worth the price. If revenue from Commonwealth sources which is raised more equitably than revenue from other income sources, either State or municipal, is replaced by those forms of revenue then the cost to the community in the long term increases rather than decreases, and the competence of the community must decrease rather than become the abundant flow which is hoped for and which will send out people to spend their money in glee. I believe that people will be keeping their money in the bank until they know where they are going. This economic package confuses rather than clears the air.
-Surely it must be a very long time indeed since, if ever, we have seen an Opposition contribution to a major debate on major economic proposals as sterile, as ill-informed and as consciously and deliberately misleading as the contribution we have had today from the Opposition and to which we were subjected yesterday during the debate on the Treasurer’s statement. The Australian people deserve a better go from the Opposition than this. They deserve an Opposition which can contribute constructively, objectively and honestly; they do not have that. Instead they have an Opposition which has quite deliberately set out to deceive and to misinform.
To illustrate my point, let me take up some of the red herrings and the assertions made by Opposition spokesmen in the past 2 days. The shadow Treasurer, the honourable member for Adelaide (Mr Hurford)- a gentleman for whom until yesterday I had respect for his economic knowledge and his economic integrity- asserted that the Government, in its economic policy proposals of which the Bills we are now debating are an integral part, is deliberately continuing a policy of high unemployment, is mutilating the government sector, is keeping credit tight, and is aiming for a reduction in real wages. He said that the Government is ignoring health schemes, social security programs, welfare and so on. What arrant nonsense. Not only is it arrant nonsense, but also the honourable gentleman’s whole statement is shot through with inconsistencies and confusion. For example, he said that he does not quibble with the Government’s present money supply targets of 1 1 per cent to 1 3 per cent growth. If that is so, how can he criticise the Government on the grounds that it is keeping credit tight? He says that he believes that that target can be achieved with careful money market management, without increased interest rates, yet at the same time he advocates an increase in government spending and therefore an increase in the Budget deficit. It is really quite astonishing. If the honourable member for Adelaide can explain to the country just how he proposes to achieve this miracle then he puts Houdini to shame. The simple fact is that he cannot do so, and the honourable gentleman knows that just as well as I do.
The shadow Treasurer said that there must be restraint in public spending; it cannot be limitless. Of course, that is true. What a pity his Party did not accept that view when in government. If it had, if it had exercised one ounce of real responsibility for economic management and restraint, this country would not have been in the perilous position which it was in December 1975 and which this Government is so courageously and capably working to correct. How can the honourable member for Adelaide stand up in this chamber and so deceive the Australian people?
Let me give the House a couple more examples of that deceit. He said that many private sector contracts were being cancelled as a result of the Government’s policy measures. That is simply not true. He said that many pensioners would be taxed as a result of the Government’s proposals. That also is untrue. Few, if any, pensioners who rely on their pension as their sole source of income will have an income which attracts tax.
The honourable member for Adelaide is of the opinion that the principal priority in economic policy at present should be dealing with unemployment. He laments the present level of unemployment. So do I; so does the Government; so does every Australian. What he omits to mention, though, is the originator of that unemployment. The originator was the Whitlam Government. It was the Whitlam Government’s abysmal handling of the economy, including in particular the complete loss of control over government spending, which led to the greatest sustained level of inflation in Australia’s history a level of inflation which was a major contributor to the level of unemployment we now have.
Does the shadow Treasurer not concede the link between inflation and unemployment? If not, he is out of line with every economist in Australia, with the possible exception of Professor Ted Wheelwright whom he quoted so fully yesterday but who has never been exactly noted for his contributions to serious economic debate, in recent years at least. The honourable member for Adelaide is also out of line with every businessman in Australia, both those with large businesses and those with small businesses. He obviously has not spoken to a rural producer recently. He is also out of line with his colleague, the honourable member for Oxley (Mr Hayden) who, as Labor’s last Treasurer, said in his 1975 Budget Speech:
On the economic front, inflation is this nation’s most menacing enemy. We aim to curb it. Unless this aim is achieved, the nation’s productive capacity will run down and job opportunities will diminish. Our present level of unemployment is too high. If we fail to control inflation unemployment will get worse.
No thinking person could possibly disagree with those words- no one, that is, except, it seems, the present shadow Treasurer. Unfortunately Mr Hayden was unable to get his way. He was unable to persuade his Prime Minister, Mr Whitlam, to be sufficiently tough to bring the Labor Cabinet and the Labor Caucus into line on the need, in practice as well as in words, for responsible economic management. The result was that the Hayden Budget went completely awry and the nation plunged further down the road of inflation, unemployment and stagnation.
This brings me to the contribution in the House yesterday of the Leader of the Opposition (Mr E. G. Whitlam). I have said that the shadow Treasurer’s statement was deceitful and shot with inconsistencies.
-Order! If the honourable member uses the word ‘deceitful’ in the sense of lying, he would be incorrect in doing so. I suggest that he watches the degree to which he uses that word.
-I did not mean it in that way, Mr Deputy Speaker. By comparison his statement was pure innocence when compared with that of his interim leader. The Leader of the Opposition said that the Government had killed Medibank, had chopped it in half. What a monstrous misleading of the Australian people. The honourable gentleman knows full well that the Medibank proposals preserve in full the universality of the scheme, without any means test. It preserves the existing benefits of the scheme. It gives all Australians a range of options in relation to participation in the scheme which they are fully free to exercise.
The Leader of the Opposition says that the growth centre program will be terminated. This is simply incorrect, as the honourable gentleman well knows. What the Government has wisely decided to do is to review the program, and a review is badly needed. The Labor Government’s headlong rush into massive expenditure on growth centres was executed without adequate study, without regard to population trends in Australia and without regard to the balanced development of Australia as a whole, including in particular non-metropolitan areas which were not designated as growth centres. The Government’s decision to take stock of the situation is timely and, in my view, to be applauded There may well be a real role for designated growth centres. But let us first look at the situation as a whole and, unlike the previous Government, reach our decisions on the basis of objective and reasoned study and discussion. The Leader of the Opposition implied that because federal funds for land commissioners are to be reduced next year the land price spiral will continue. There is no evidence whatsoever to support that inference. Indeed, there is evidence to suggest that under at least one existing land commission the price of land has increased by more than it otherwise would.
The Leader of the Opposition asserted that restraint in the growth of Government expenditure will blunt Australia’s competitiveness as a trading nation. If ever there was an inversion of the real situation it must be this statement. Inflation destroys a nation’s competiveness. Unless the honourable gentleman is at odds with this simple truth, and with the views of his last Treasurer, he could not in any honesty make such an astonishing assertion. So much for the contribution to this debate by the Opposition. The situation would be laughable if the effect of the Opposition’s contribution were not so serious. This situation is serious because it reflects the depths to which the Opposition has sunk in this Parliament. It is even more serious because the Opposition is deliberately misleading the Australian people. The real situation is this: Australia faces a very serious economic situation caused by the policies of the Whitlam Government. The No.l priority now is to reduce the level of inflation and to get the Australian economy back on an upward path. These 2 aspects are fundamentally inter-related.
Sitting suspended from 5.58 to 8 p.m.
-I was saying before the suspension of the sitting that the Government’s first priority now is to reduce the level of inflation and to get the Australian economy back on an upward growth path. These 2 aspects are fundamentally interrelated. A reduction in the level of inflation is an essential prerequisite for a sustained recovery in economic activity. It is therefore as well an essential prerequisite for the future development of desirable health, social welfare and similar programs which are the responsibility of government and which in the main only government can provide. What is often overlooked is that government does not have a free hand in this regard. These programs have a call on the community’s resources in the same way as other programs have.
In the short run at least, these programs constitute a demand on overall resources without adding directly to the supply of resources. Without an overall increase in the supply of resources which in the main must come from increased productive activity in Australia and particularly from the private sector, the capacity of the economy to provide what all Australians want by way of increased living standards is very limited. It is for this reason that the Government has placed emphasis on the need to regenerate private sector activity. The Government’s economic measures- not only those announced last week but also the whole policy approach since regaining government-should go a long way towards achieving the objective that all Australians want. However, they will not do the trick on their own. They will need to be accompanied by cooperation from all sections of the communityemployers, self-employed people, union officials and employees. We need to recognise that we in Australia are not going to be able to achieve all those things that we want both for ourselves and for Australia without co-operation, hard work and restraint on all sides.
The attempt by the Opposition in this debate and through the media to drive a wedge between the Government and the union movement is pitiful and to be deplored by all Australians. The President of the Australian Council of Trade Unions, Mr Hawke, has given the Government’s latest policy measures cautious approval. It is a pity that the Opposition has not responded in the same responsible manner. In my view, the Government’s latest measures are an excellent blend to meet our overall economic requirements and at the same time to meet a real economic and social need of those in our community who are amongst the worst off- namely, the very low income earners with children. The new scheme of family allowances which benefits those worst off families the most is a major advance in social welfare in Australia and is recognised as such by all Australians. It is fatuous for the shadow Treasurer, the honourable member for Adelaide, to say as he did in the debate yesterday:
We would have done this ourselves. We had had position papers on the subject since 1971. However, we delayed implementation until the recommendations of the Henderson poverty inquiry were made known. These recommendations were not made to our Government until last August which was too late for our last Budget.
What nonsense! Why did the Labor Government have to wait when it claims it had had the position papers on the subject since 1971? Either Labor had not the courage of its convictions or it was unconcerned about the real social need in the Australian community. I suspect that it was a combination of both.
The introduction of full personal tax indexation is a measure which also has been acclaimed by all sections of the community, including the union movement. The important thing to remember about tax indexation is that it is a continuing benefit, not a once and for all measure. Therefore it is short-sighted simply to judge it in the light of the next 12 months when for many people the take home pay will not be much different from what it is now when the Medibank levy is taken into account. But for many people there will be a very real and significant increase in their real take home pay, and the people who will be most affected in that respect are again those who are most in need in the community. The Medibank levy is not an additional tax. If the levy had not been introduced the cost of Medibank would have had to be financed through higher and higher general taxation. Medibank never was and never could be free to the community as a whole. The new proposals make clear that the service provided by Medibank has to be paid for except by those most in need- persons without taxable incomes. This is equitable and it is much more honest than the previous system. Even one of the founders of Medibank, Dr Scotton, publicly supported these changes on television last week.
The proposals before the House must be looked at as a package. Of course not everyone will like every element of that package but overall it is a package which I have no doubt at all is on the right lines in both economic and social terms and will increasingly come to be so recognised as the Australian economy responds to the responsible economic management now at last provided by this Government after 3 years of the opposite.
-As all these tax Bills, particularly those providing for indexation, relate to a reduction of revenue for the Government I would like to draw attention to another possible reduction which could be substituted in part, that is, the mounting public reaction against the Government’s intention to abrogate, abnegate and destroy those projects, programs and policies which the preceding Labor Government initiated and which were all structured to improve the quality of life of so many people. That was never put more bluntly than it was in last Sunday’s Adelaide Sunday Mail in an article, under the heading ‘Welfare Minister ‘ ‘ shocked ‘ ‘, ‘ which said: ‘Shocked and bitterly disappointed’.
That was the reaction yesterday of South Australia’s Community Welfare Minister, Mr Payne, to the announcement by the Social Security Minister, Senator Guilfoyle, that the Federal Government would cease to provide funds for the Australian Assistance Plan after 12 months from 1 July.
He believed the State governments had been presented with a fait accompli’ . . . [Under AAP, introduced by the previous Labor Government, the Commonwealth provided financial help for community welfare programs through the Regional Councils in which there was considerable local community participation.] . . . Senator Guilfoyle had put these plans in jeopardy . . . ‘The SA Government is firmly committed to the community councils for social development established under State legislation’, the Minister said. ‘The development of regional councils with Federal support was integrated into the scheme by agreement between the Federal and State Ministers. ‘The Federal Government move away from this area will create a crisis of care for certain needy people which cannot be overlooked’.
The article concludes: ‘I regret that the present Australian Government seems to be hell bent on dismantling everything set up by the previous Government, irrespective of the worth of the project concerned’, Mr Payne said.
Since it assumed office last December this Government’s rating in sheer weight of numbers and its achievements in the area of broken records, pledges and promises will be enshrined forever in the Guinness Book of Records.
The transport policies of this Government remind me of a thought for the day which I saw on a calendar yesterday and which said: ‘Buses of our transport system must fear attack; they always travel in convoys’. Certainly a war of attrition on the viability of transport in Australia was declared not only in the so-called economic statement of the Treasurer (Mr Lynch) but also by these tax measures. In spite of the continuing chaos in public transport in Sydney and in Melbourne, in spite of the demands by the people of New South Wales for improved public transport as endorsed in the recent New South Wales election and in spite of the hopeless position of the State railways systems with their massive losses, their ever deteriorating debt position and their antiquated rolling stock, this Government has decided to add a further statistic to its claim for a slot in the Guinness Book of Records.
In this House today I asked the Minister for Transport (Mr Nixon) a question relating to something that is very crucial to South Australia; that is, the implementation of an agreement ratified by both Parliaments- this Parliament and the State Parliament- in regard to the Adelaide-Crystal Brook standard gauge railway project. I asked whether that agreement places an obligation on both governments to build a new independent railway link between Adelaide and Crystal Brook. I further asked the Minister whether in fact he gave the South Australian Minister of Transport, as the Prime Minister did shortly after the election last December, an unqualified assurance that the agreement in fact would be implemented. I also asked the Minister whether it is a fact that he has instituted a committee of inquiry which, in my view at any rate, undoubtedly will repudiate the agreement. The answer will appear in Hansard. At this time it will bring very little comfort to the people of South Australia to know that- there is no doubt in my mind about this- the Minister for
Transport in this Government is machinating to opt out of and destroy the agreement.
Whilst the statement of the Treasurer as a whole brought little joy to people-I refer to the tax measures- from South Australia’s point of view the decision by the Government to ask an independent committee to inquire into the Adelaide-Crystal Brook standardisation project a calamity, it is a disaster for South Australia. As far back as 1940 the then Labor Government recognised the need to standardise the rail systems of Australia; but now, after 30 years, the matter is being questioned by the present Government as it did for almost 2 1/2 decades. The fact is that Adelaide is the only mainland capital which is not connected to the standard gauge rail system. Accordingly, it suffers the disability of either transshipment or bogie exchange to get its goods on the standard gauge system. When it is remembered that in excess of 85 per cent of the white goods manufactured in South Australia are sold on the eastern markets, the importance of an efficient, effective and economical transport system becomes self-evident.
At this late stage, to establish a committee to inquire into the building of the standard line from Adelaide to Crystal Brook is, to say the least, astonishing. I point out that I had numerous discussions with the then Commissioner for Railways at the time the agreement was first negotiated. I am informed that the committee is to be asked to look at 4 particular points. For what purposes? Let me advance some constructive assumptions on my part as to the purposes of the inquiry: Firstly, to see whether the Commonwealth Government can get out of its commitment under the agreement. Secondly, to see whether it is possible to slow down the project to a snail’s pace. Thirdly, to consider whether the line could be standardised by a different method. Fourthly, to look at any other areas where there could be a reduction in the financial commitment of the Australian Government.
To analyse the criteria properly it is necessary to look back into the history of this standardisation project. As I said earlier, it was the Chifley Labor Government that enacted legislation in the late 1940s to provide for the rail systems of Australia to be converted to standard gauge. After 23 years of inactivity by successive Liberal governments, in the late 1960s the then Federal Government was persuaded that it was long overdue that Adelaide should be connected to the standard gauge system and accordingly it commissioned an inquiry and subsequently commissioned Maunsell and Partners to act as consulting engineers for the purpose of informing the Government and recommending a course of action.
In late 1970 the present Minister for Transport, who was then the Minister for Transport, discussed the proposals with the present and also then Minister of Transport in South Australia. I was fully informed, like every other South Australian member, of the negotiations that took place at that time. The discussions largely centred round the Maunsell report. One of the matters discussed was the possibility of converting the existing 5 feet 3 inches gauge to the standard gauge of 4 feet 8te inches. This was a proposition that had been promoted assiduously by the then South Australian Commissioner of Transport. The Federal Minister for Transport rejected out of hand any suggestion that the work should be undertaken in any way other than the way recommended in the Maunsell report. I repeat that the Federal Minister for Transport rejected out of hand any suggestion that the work should be undertaken in any way other than the way recommended in the Maunsell report. His attitude then was that the Government had employed a competent firm of consulting engineers to advise it, and the Government was prepared to accept that advice but no other. He repeated that on no fewer than 6 occasions. In the light of that attitude, how can the Federal Minister now subscribe to the appointment of a committee to look at alternatives? Five years ago he was adamant that the line had to be built in accordance with the recommendations of the consultants that he commissioned.
Whilst the rail standardisation agreement was not finalised during the period in office of the present Minister, the majority of the basic principles associated with the standardisation project in fact were resolved. The other matters which were resolved subsequently between the South Australian Minister and the then new Federal Transport Minister, the honourable member for Newcastle (Mr Charles Jones), were issues such as the connection of the General MotorsHolden’s plants at Elizabeth and Woodville, the connection of the Mile End goods yards and similar matters. I assume, as I always have assumed, that they were matters that in fact were left outstanding.
The agreement was finalised on 17 May 1974 when the Prime Minister of the day, the present Leader of the Opposition (Mr Whitlam), and the Premier of South Australia, Mr Dunstan, attached their signatures to the agreement. That agreement subsequently was ratified by the Parliament of South Australia and by this Parliament on 1 7 January 1 975 and was gazetted on 24 January 1975. The agreement provides for the building of the line, and particular attention ought to be paid to clause (3) on page 3, which says that the railway work to which the agreement relates should be:
How can any government that is honest in its endeavours- I suggest that this one is not honest on this issue- seek now to inquire into whether a standard gauge line may be constructed in any way other than the way laid down in that agreement, despite the fact that a good deal moneytaxpayers ‘ money- was spent in commissioning engineers and reaching agreement?
It is also worth saying that, immediately following the election of this Government last December, the Premier of South Australia, in discussion with the Prime Minister, referred to various agreements, including the standard rail gauge agreement, and received from the Prime Minister an unqualified assurance that the Fraser Government would honour every agreement- I repeat ‘every agreement’- which had been entered into between the South Australian Government and the former Labor Government. I am informed that that assurance as to that agreement was given in the presence of the Federal Treasurer, the Leader of the National Country Party and the present Minister for Transport. It would seem from this that one must now seriously question any undertaking given by the Prime Minister as it appears that he is very likely to abrogate any promise given. I challenge the Minister to deny that on 23 February this year the State Minister of Transport in South Australia called on the Federal Minister at his office in this building to discuss finance for the Adelaide- Crystal Brook rail project. At that stage the Minister was attempting to curtail the provision of $2.7m which had been committed for the standardisation project.
Subsequently, this matter was satisfactorily resolved, but I am informed that during the course of this meeting Mr Virgo raised the question of the future of the standardisation project with the Federal Minister because, he said, rumours were rife that the Federal Government was not going to proceed with the project. Mr Virgo received an unqualified assurance from the Minister that the project would proceed along the lines contained in the Maunsell report and the Agreement ratified by both parliaments. He said there could be some minor changes that might be desirable and acceptable to both the Australian and State Ministers but basically there was no doubt that the project would proceed in accordance with the Maunsell plan and the Agreement. This promise was given by the Minister for Transport in the presence of South Australian officers who accompanied Mr Virgo. It augurs well for this Government! Have we anything to look forward to from assurances, undertakings and promises when this sort of thing goes on between Federal and State Ministers?
-They will all be kept, too.
-Yes, of course they will! It is now clear that the promises of the Minister for Transport have very little value; otherwise there would be no investigation taking place. Indeed, one must now question why the Government is establishing an independent committee to consider the options available to it. There are no options other than to repudiate undertakings given, promises made and the legislation of both parliaments. The Federal Minister should disclose immediately his intentions and those of the Government in relation to the standardisation project and not hide behind promises which clearly he and the Government are not prepared to keep.
The policies of this Government threaten the national railway system in another direction. The Government has placed, stupidly, a ceiling of 8000 on the number of Commonwealth railway workers. This is a reduction from the present work force of 8260. It is clear that this staff limit has been chosen arbitrarily without due regard to the requirements of the national railway system. At least the Australian Labor Party pledged itself to assist the States to modernise and rationalise their railway system but this Government intends to place on the employment market a futher 260 people.
– An instruction was issued by your Minister to that effect. What is rubbish about that? It is quite obvious that the Minister does not care. Repeated telegrams have been sent to him by Mr Virgo in an attempt to get some satisfaction. All the South Australian Minister and the affected unions could get was a telegram of acknowledgment. The unions require more if an industrial dispute is to be avoided. It is claimed in South Australia that the present railway staff works 1 1 to 13 shifts per fortnight. The employment of additional staff would have several effects. Firstly, it would produce a saving because overtime and penalty rates would not be applicable. Secondly, the quality of services would not be reduced. Thirdly, employment would be assured. The present industrial unrest in the Australian National Railways Commission is a result of pending dismissal notices. A reduction in staff is more likely to incur increased costs than it is to achieve savings. The terms of the South Australian Railways Agreement required that no person would be disadvantaged, that the level of services would not be diminished and that the workshop work force would not be reduced. The South Australian Railway Agreement is being examined, as I said earlier, for no other reason than for the Government to opt out of it. No new initiatives on urban public transport are contained in any of the documents that have been tabled in the Parliament. The $45m likely to be provided for 1976-77 is to cover existing commitments. Some re-allocation of priorities may be negotiated. This must have a detrimental effect on existing plans to upgrade the quality of suburban rail services. Priority for transfer in fact has been repudiated by the Minister for Transport. He acquiesces in the disastrous chopping of transport funds.
The advance towards an effective national railway system gained momentum over the last 3 years; there is no question about that. This progress was years late in coming and there is still much to be done. Australia cannot now afford a government hell-bent on emasculating the Australian railways, apparently for no reason other than the fact that they were remodelled and expanded by the previous Government. Eventually the necessity of an effective national railway system will be brought home to most people in this country and particularly to this Government. For the sake of Australia let it be sooner rather than later. The whole action of the Government in this matter which is so vital to South Australia is a clear example that it will sacrifice anything and anybody to overcome inflation. It ought to be clear that the heaviest blow of the Government’s projected policy to overcome inflation will be felt by the employees across the length and breadth of this country. The Government and the Minister for Transport stand condemned for abrogating an agreement which means so much to the economic stability of South Australia.
-I support these 10 Bills. Much has been said by speakers on the Government side about their necessity. As a matter of custom more than belief, the Opposition has to oppose them. I believe that these Bills, taken together as the package they are intended to be, form the most innovative program presented in legislation before this House for many years. In using the word ‘innovative’ I pay tribute to the previous Labor Government. It introduced many innovative ideas but unfortunately it could not provide the good financial management necessary to back its programs. I believe that these 10 Bills represent an economic package backed by good sound financial business principles that this Government will exercise m the implementation of its policies. Without that type of management no legislation will be effective. I believe that the past 3 years will be a record of that in history. These Bills are innovative in that the financial, social and wage restraining aspects of the Government’s policy are wrapped up in the one package.
Let me deal with tax indexation. Previous speakers from the Government side have said that inflation is the main problem that not only the Government but also Australia as a whole has to overcome. I believe that tax indexation is an indication of the good faith of the Government in going to the unions and employees throughout the Commonwealth and saying: ‘We have done our part. We expect you to do yours’. Tax indexation will be a curb on wage demands but more importantly a restraint and a curb on the Government itself. Inflation has only one beneficiary, and that is the Government through taxes. This measure will make the Government live within its own means. It will mean that the Government will take its share of inflation but no more. As was said earlier this afternoon, tax collections have doubled in the last 4 years because of inflation. Tax indexation is a means by which the Government will take its share and no more.
May I just take as an example what the present wage structure throughout Australia is doing to our development. I will take the matter a step further by refuting and rebutting any suggestions in this House that multi-national companies are no good for Australia. I know, and I know that members of the Government know, that it is only as a result of the money and expertise supplied to Australia by multi-national organisations that we have been able to develop resources. I come from an electorate in which this is evident. I refer to the coal rnining basin of Bowen. If it had not been for the money put into these ventures by multi-national organisations, the Utah organisation in particular, the minerals would still be where Mr Connor wants them- in the ground.
Having said that as a background I want to comment on the effect that inflation is having on our development, particularly in the amount being paid in weekly wages to Australians. I refer to an article which appeared earlier this year in the Australian and which states:
Wall Street bankers see little hope of any significant resumption of the flow of American investment and manufacturing capital to Australia under present conditions.
Why is this? It is because within the last 4 years the average Australian wage has outstripped the average American wage; at this moment it is $47 in excess of the American wage. Which multinational, unless it is desperate for resources, would want to invest in Australia with those difficulties operating against them? If we wish to continue the development that this country witnessed prior to 1 972, tax indexation is a means of doing so. With measures such as tax indexation we might get back to the old theory that wages should increase only in accordance with real increases in productivity, not just as a result of consumer price index increases.
With these measures goes the indexation of concessional rebates for spouses and the various other rebates included in the Income Tax Assessment Act. I would particularly like to mention one matter that has been given some consideration by the Treasury, that is, the indexation of zone allowances. Special mention is made of the fact that zone allowances are to be indexed to the extent that they will increase in respect of the element of which is related to rebates for maintenance dependants and the allowances for children. Having recognised that the zone allowance is to be indexed, one wonders why the base rate was not similarly indexed. I draw the Government’s attention to the fact that the last base rate increase was in 1958, and over a period of 18 years inflation must certainly have caught up with it. I suggest that at the same time, possibly in the Budget, the Government should consider if not indexing the 1958 base rate at least providing some considerable increase to make it effective.
Happy as I am to see the measures taken in regard to tax indexation, I suggest that we still have further to go. I have mentioned that tax indexation will be an incentive to wage restraint but what we need in Australia today is some incentive to private industry or to manufacturing industry to get back to the job of improving productivity and thus increasing the nation’s production. There have been many reports containing certain recommendations. In particular there is the Mathews report which has suggested that stock and assets be indexed in order to get, in the first instance, a more realistic value on stock and also to allow proper depreciation allowances on up to date costings of assets. This Government only recently passed through this House a measure relating to the investment allowance which was to be an incentive for business to invest and to produce. With additional incentive provided in the indexing of stock and assets for depreciation purposes we could certainly go a lot further.
I want to mention another matter which was raised in a question on 2 March 1976 relating to Division 7 of the Income Tax Act, which concerns the retention allowance. In reply to a question asked by a Government supporter the Treasurer (Mr Lynch) said, that 2 specific initiatives had been designed to assist the small business community. He said: … the retention allowance will be increased to enable private companies to invest in capital equipment, and shareholders in private companies will be given the option of being taxed as a partnership in order to minimise the double taxation of private company income.
I agree with the second part of that reply- that one initiative must be that we allow private company shareholders to be assessed as partners in a partnership. I suggest that the Treasurer should go further with his first initiative. Instead of allowing the investment allowance to increase for a specific instance of investment in capita1 equipment, Division 7 should be wiped out of the Act altogether and no penalty should be imposed on private companies over and above that applying to normal private and public companies, namely, tax at the rate of 42.5c in the dollar. If the Government benefits to that extent, that is sufficient. We should allow for natural forces acting within private companies, the managements and shareholders, to disgorge some of these things in the normal way. When I refer to ‘the normal way’ I do not believe it is normal that the management of a company should be asked to retain profits in proportion to a fixed formula. Each company has a different requirement, a different need, to add to its reserves in a period of inflation, not only for investment in capital but also to increase stock inventories and to finance debtors and such other working capital. Again I suggest that the Treasurer, in order to give proper incentives to businesses, particularly small businesses, should remove Division 7.
In making suggestions relating to the small business area, I should say that it has been an anomaly for many years that depreciation on business buildings has not been allowed although the institutes and societies of accountants throughout Australia make firm recommendations that these assets should be depreciated when used for business purposes. More recently such people have suggested that stock be indexed and current price increases be taken for books of account. Again, provision for depreciation on buildings and provision for long service leave ought to be recognised tax deductions so that tax aspects and accounting aspects may flow more evenly. I believe that these types of incentives would cost the Government little, for what we would lose as revenue as a result of the deductions allowed we would gain because of the increased activity of small business. I do not believe that Australia will get back on its feet until we give these proper incentives to businesses, both small and large alike.
I now mention Medibank. I notice that the Opposition has mounted an attack against the change, more because of custom than belief. I think that over the last 12 months Australians have generally come to recognise that Medibank has been a financial cancer which has been eroding our national economy. I believe also that they have not been duped by the fact that it was espoused as a free benefit given to the people by the Government. They realised that Medibank had to be paid for by someone. I believe that more recently they have recognised that they have paid for this benefit through inflation which in itself possibly is the largest unseen form of taxation we have had in Australia particularly over the last 3 years. Everybody has suffered through inflation; it is a hidden tax.
I give full support to the recent Medibank changes. In doing so I realise that much advice would have been given to the Government, particularly to the Minister for Health (Mr Hunt). Many options may have been open to the Government. Certainly it would have consulted with the private health funds. As a result of all this advice and all the inquiries I believe we now have a package where the user pays. The one million people throughout Australia who could not afford health insurance 2 years ago, and for which 13 million other Australians had to pay, now recognise that they get free treatment but beyond that the user pays. I believe that any normal Australian would expect to pay for any facility he used. It has been suggested to me that there should have been a fifth option, namely, that anybody who so desired could take the consequences of opting not to take any insurance cover whatsoever and taking it upon himself. I believe that had we offered that option we could have led ourselves to more massive abuse of the system. An abuse which has been prevalent over the last 12 months would have been accelerated by letting anybody opt out of the system completely. So, all in all, I believe that Medibank in its new form will be a scheme that Australians are looking for.
I turn now to the last aspect, namely, family allowances: Again, the provision of these increased allowances represents a complete shift in our social program as to the way in which we place money in the hands of those people who need it. Somebody said that perhaps we are doing this in an attempt to make some reconciliation with women. I do not believe that that is the case at all. I believe that, if women can get money in their hands to use as they see fit and also know that they are receiving it tax free, it will give the advantage that is intended. I refer to statements that have been made to the effect that the family allowance proposals will benefit the 300 000 families and their 800 000 children throughout Australia who could not take advantage of the previous system of tax deductions for dependants. I believe that the new system is a real advance in our social welfare program, bearing in mind that it provides that the taxpayer no longer has the right to claim tax deductions for his dependent children.
I point out to the Parliament that this advantage was diluted in the Hayden Budget last year. These concessions were replaced by a rebate system on the basis of 40 per cent of the allowable deductions. So I have no hesitation in saying that, when one looks at the loss that might be suffered by taxpayers through the loss of the dependants’ rebates and the imposition of the Medibank levy where it will be charged, and weighs these against the cash advantage of the allowances, one will see that this puts the Australian taxpayer practically in a fine ball situation. This also has been criticised by the Opposition. I see nothing wrong with this because in doing this we have made Medibank pay for itself and we have given an impetus to the people who want the advantage of the family allowances, namely, the poor and the disadvantaged. Tax indexation, when introduced, will be an advantage to all of those above the line ball situation we have at the moment.
I have great pleasure in supporting this legislation. As a new member, I realise that at times we as backbenchers are called upon to support legislation about which we may not feel very deeply, but I can assure the Government that it is my belief that this package is the type of legislation that will improve the lot of the average Australian. It will provide a climate in which we can build better wage restraint, improve real wages, get back to productivity as the gauge for wage increases and give an incentive for all Australianswhether they be taxpayers, employers or employees- to participate in getting this economy of ours back on its feet.
-I shall start by replying to the honourable member for Dawson (Mr Braithwaite) who has just sat down. He probably shares many of the beliefs or false beliefs of other people, not only on the Government side. One is that the Government has now been able to make Medibank pay for itself. It is interesting that that statement should come from a Government member. We have heard repeatedly that the estimated cost of Medibank next year will be somewhere between $ 1,800m and $2,000m. But the maximum saving, including income, of the proposals before us is $8 10m. Therefore, it is an interesting way of approaching the subject to say that if we save $8 10m out of $2,000m we will make Medibank
S>ay for itself. That would not quite make it pay or itself.
I intend to speak mainly on Medibank. One of the difficulties about the debate tonight as far as I am concerned is that we are dealing with 10 separate pieces of legislation. I support quite a number of them; I support the idea behind others, even though in some cases I oppose the proposition which has specifically been put on them. I should like to make a few general statements before I get into the specifics of the Medibank debate. I was one of those who participated at great length in the introduction of Medibank when I was Chairman of the then Government Members Welfare Committee. We produced Green Papers and White Papers and the scheme was not easy to introduce. I find it rather depressing that it is quite obvious from the remarks of the honourable member for Dawson that he does not really understand what is being introduced today. I am sure this applies to other honourable members on the Government side and also to some honourable members on this side of the House. There has not been enough discussion.
A report has been presented by the Medibank Review Committee. I know some of the people on that Committee. I think that the people appointed to that Committee were excellent. I disagree with some of the honourable members on my side of the House on that question. I am sure that the propositions of the Committee are reasonable. But it is a huge topic in which it was involved. I am sure that the members of the Committee were not nearly as confident about the predictions made on Medibank as the Minister for Health (Mr Hunt) appeared to be. He said that the Government would save $810m-$430m from savings in outlay, $330m from the income from the levy and about $50m from other peripheral things, especially workers compensation and third party insurance payments. I am sure that the people who advised the Minister would not have been as specific as that; they would not have come to a decision that $330m would be raised by the levy and $430m would come from savings. The result will depend a lot on how many people leave the system, what kind of people stay in and what kind of people go out.
I instance the case of single people. They will pay 2.5 per cent of their taxable income as the Medibank levy, up to a $150 maximum. But the point is that they will pay the maximum levy of $150 a year on reaching a taxable income of $120 a week. That means that it will be more tempting for single young people- more single people are young people- to opt out of Medibank. This seems reasonable to me. If single people pay the maximum levy when they reach a salary of $120 a week rather than a salary of about $1 1,000 a year, obviously’ a bigger proportion of them will be involved. If the young people opt out of Medibank there will not be a fair cross-section of people who will stay in Medibank and people who will go into private funds. I am now speaking medically. Obviously, if I were an insurer I would much prefer to insure the group of people aged between 16 years, when those people start work, and about 25 years, when they start a family than the groups before or after that age group. So there will not be a nice division by numbers which will work out. I know that some other factors will work the other way.
I started by speaking about Medibank; but I want, in passing, to make one point on another matter; that is- I will not deal with it for any great length of time- the tax tables and the prose and cons of the benefit figures which were published last week by the Taxation Office on the situations of families with different compositions and different incomes. In comparing the child endowment payments with the tax rebates it was stated that the present rebate is $3.85 a week or $200 a year per child and the difference was calculated on that basis. However, because of the Government’s decision to index taxation and to index deductions- for example, for a dependent wife and some other dependants- it is obvious that the indexed rebate for a child next year would have been $226, not $200. Therefore, the difference should have been calculated on an extra $26, which would raise the present endowment by 50c a week for each child. So, although the tax tables published show that people will be 7c or 14c better off, I do not think that is terribly important; nonetheless, for every child in the family people will really be 5c a week worse off than was shown in the published figures.
I turn now to Medibank. Firstly, I refer to the big point which I think is one of the major points which should have been considered in greater detail by this Government before making the decision to make Medibank pay for itself, as the last honourable member said. I do not believe that it will pay for itself. However, the pros are that in one way or another we are allegedly saving $800m. The cons are that we are adding approximately 3 per cent to the consumer price index. Because of the way in which the consumer price index is calculated at the present time, because of the way in which the Arbitration Commission regards the CPI and certainly because of the way in which the trade unions will regard the CPI even if the Arbitration Commission came to a different decision, we will get an increase at the end of the December quarter this year of 3 per cent plus whatever else we are going to get at that time, depending on inflation. The net result of that will be a significant boost to inflation. I have not calculated the figure but a 3 per cent increase in all award wages adds up to much more than the $800m which is allegedly being withdrawn from the economy.
Another fundamental point is that fund insurance contributions will not be a tax deduction. The unions will ask for that as a contribution, firstly on the CPI and secondly from employers, as we have seen already today. What has happened in the United States- and we often follow the United States- is that fringe benefits in many organisations and institutions include the Blue Cross or health maintenance organisation subscriptions there. These become a tax deduction as far as the employer is concerned. So the Government comes back into the game. If we have a company tax of 42.5 per cent we are giving a 42.5 per cent subsidy to subscriptions to the fund if the employer pays the subscription instead of the individual subscriber and if the employer is able to reduce his total profit by the amount that he subscribes on behalf of his employees.
We are withdrawing an additional $800m from circulation which some people will say is a good thing if we are looking at it from the inflation point of view but which must surely be a bad thing from the point of view of increased consumer spending. We are reducing the amount in circulation by the $800m that we talked about before or at least by $760m if we do not include the part that is being paid by the insurance companies. As I see it, terrific difficulties will be encountered in checking membership of the private funds. I made the point earlier today by way of interjection that under the rules which are proposed, if a person decides to join a private health fund that fund will clear him as far as the Taxation Office is concerned. He has to pay only one week’s subscription. He does not pay taxation any more after that The Taxation Office may or may not catch up with him at the end of the year. I would say that they would have great difficulty in catching up with him on the basis of Medibank numbers. I do not know just how much privacy there will be or how easy it will be to check up as to whether a person is really a subscriber or only joined the fund for one week. Of course, even if the person has joined for only 1 week, the funds are responsible for payments for 2 months. Since the funds have to accept everybody it will be interesting to see what happens. What happens in the case of a married couple when the wife is about 6 months pregnant? If they pay their subscription for about 6 weeks they will then have all their obstetric expenses paid for by the fund during their 2 months period of grace. They will get all that for a few weeks payments, depending on how certain they are about the actual date of confinement.
I turn now to more specific points dealing with individual Bills. The National Health Amendment Bill abolishes gap insurance. I think that is a good point. I think it is important that gap insurance should be abolished. It was a ridiculous thing to have in the first instance. In passing, I should like to refer to the inconsistency on the part of the Australian Medical Association. The Australian Medical Association argued, because it got trapped by the funds, that people should take out gap insurance. It was called Medicover in New South Wales; I do not know what it was called in other States but it was, in effect, gap insurance. The doctors put notices up in their waiting rooms asking people to join private funds so as to cover themselves for that 15 per cent gap with a maximum of $5 between the scheduled fee and the amount that could be obtained from Medibank. At the same time they argued, I think with some force- that is why I am supporting the removal of gap insurance- that there ought to be a moiety on the part of the patient. If the patient does not have to pay anything, there is a tendency for the patient unnecessarily to attend a medical practitioner. I think there was a very small proportion of over use but nonetheless there would be an over use if there were no ‘patient moiety’ as it is called. So on the one hand, the AMA argued in favour of patient moiety and on the other hand encouraged people to take out extra cover for the gap insurance which abolished the patient moiety. I am pleased to say that the Government is now abolishing gap insurance. I should like to raise one point that struck me with regard to the Health Insurance Levy Assessment Bill. I suppose I should have been a criminal lawyer or a tax adviser or something like that.
– I am not trying to pretend that I have legal knowledge. The position is that instead of paying the 2.5 per cent levy a person can pay a contracting out premium. If that person has dependants he has to pay a $300 premium but if he does not have dependants he has to pay a $150 premium. I am referring to a man on a relatively high taxable income of $9,000 plus. He contracts out by paying his premium of $150. He may have a wife who is not legally dependent on him having an income of around $2,000 to $3,000 a year. She is not classed as a dependent under the taxation legislation, he is not able to claim any deduction for her. Yet she does not have to pay anything into Medibank. There is no levy on her. She has no taxable income when she is earning up to $2,604. So it does not matter even if a wife is earning $3,000 a year, she would only be paying a very small amount of levy. I hope that honourable members can follow that. If they cannot, I hope they can follow it in Hansard tomorrow. The net result is that the person can get out of paying his full premium.
In addition I think there is one other important point which is a general point. This is a first step in the introduction of dealing with joint incomes of husbands and wives. It relates to the proposition that the incomes should be assessed jointly for tax purposes. Back in 1972 or 1971, the present Speaker, then Treasurer, got himself into a lot of hot water when he floated that idea not even on the basis of wanting to introduce it but just in an aside or in reply to a comment. I am not necessarily opposing the proposition that there should be taxation on joint incomes. But I think politically it would be a very difficult thing for this Government to sell.
At this stage I should like to incorporate a Morgan Gallup Poll table published in this week’s Bulletin which shows that politically the Government has to be careful even though it has another 2 years to run in office because the position now is that the Liberal Party and the National Country Party have 47 per cent of the vote and we have 46 per cent of the vote. That is quite a remarkable change in position. I seek leave of the House to have the table incorporated.
-Is leave granted? There being no objection, leave is granted. (The table read as follows)-
– I should like to deal with another point- the question of repatriation beneficiaries. I raised this point yesterday with the Minister for Repatriation (Mr Newman). Some beneficiaries are not entitled to full medical cover. They are only entitled to treatment for certain conditions, though for all practical purposes that might well mean that they are covered for everything. When I used to be a local medical officer for the Department of Repatriation, for practical purposes people who had had 2 or 3 conditions accepted for treatment were covered for everything. They will now lose that advantage because they will now have to pay the levy or join a fund. The rebate for health insurance contributions will be withdrawn- in other words, the contributions will be no longer a tax deductionbut medical and hospital fees still will be tax deductions. Therefore I think it would be rash of people on fairly high incomes necessarily to opt for insurance for private and intermediate care. They may well prefer to pay the $300 levy in the case of families for a Medibank cover and take the risk on the insurance side, even if they want to go into a private hospital, because anything they spend on medical and hospital expenses still will be a tax deduction.
There has been a lot of argument on the point that the taxpayers in the poorer section of the community should not subsidise the richer people who go into private or intermediate wards. I agree with that proposition, as it has been stated repeatedly by the Prime Minster and the Minister for Health in the last few days. But it is important to remember that the taxpayers in the poorer section of the community still will have to pay for it because those people who do not insure themselves and who in fact claim deductions for hospital and medical expenses still will be entitled to a rebate of 40c in the dollar for their expenses. I have made the point that there are 2 grounds against single people- that the single person is to be charged a 2.5 per cent levy, even though to a lower maximum level, that it is unfair for the people who stay in Medibank and that it will attract to the funds the young, single, healthy people who obviously are the best from the insurers point of view.
In his second reading speech on the Health Insurance Amendment Bill the Minister for Health referred to unnecessary work being done and said that he hoped that doctors will contribute to reducing the cost of medical services. I wish to make a few points on that aspect. One of the points that distinguishes personal health services from many other services, although not from all services, is that the customer does not know what he is buying, which is a terribly important point, and the major supplier can manipulate the demand. The major supplier is the doctor. As the Minister said in his second reading speech, the doctor can decide just how many and what services one should have as a customer. I think Parkinson’s law when applied to medicine states that the demand for surgery will increase to fill all the available beds, to fill all the available operating theatres and to occupy all the available surgeons.
I conclude my remarks by saying that I support the Government in relation to the proposition of doubling the fees for intermediate and private wards. There has been some criticism of this proposition, but I think it is a perfectly justifiable action to double the fees. The new amount still will be below the amount which is the real cost to the States governments. I think it is important that the fees be doubled. But the Government is doing it for the wrong reasons, if I read the Minister’s speech correctly. It is doing it to make it easier for people to go into private hospitals rather than the private wards and intermediate wards of public hospitals. But, whatever the reasons, I think it is an important principle, as the Prime Minister pointed out the other day, that the poorer sections of the community do not subsidise those sections of the community which go into intermediate and private wards.
Obviously I still will be given the opportunity to speak in the Committee stage of the debate on this legislation. I deplore the manner in which this legislation was brought on for debate. I think it would have been much better to leave the Bills lying on the table for a few weeks while the Parliament was sitting so that wider discussion on them would be possible and the views of more interested bodies could be obtained.
Mr DEPUTY SPEAKER (Mr Bonnett)Order! The honourable member’s time has expired.
-This Government cares. The new family allowances are probably the most far-reaching welfare step taken by any government since Federation. They give proof that the Parties on this side of the House care, that the Government cares, and that each and every honourable member on the Government side of the House is concerned about the people of Australia. I am sick and tired of hearing it being said on the other side of the House that we do not care. I am sick and tired of hearing talk about silver spoons and privilege. We are privileged all right. We are privileged to serve the people of Australia and they recognise our concern”. The honourable member for Melbourne (Mr Innes) talked earlier in the debate about the economic package being hot guff. He said that it was for the rich and that we were robbing the poor. He did not mention the family allowances.
– Who said that?
-The honourable member for Melbourne said that. He did not praise the family allowances that every Australian mother will be entitled to receive. I say to all Australians, particularly to social workers and to people in the welfare field, that we really care. This measure, above all else, proves that. We are concerned about people, we are concerned about helping people to help themselves and about helping those unable to help themselves and those really in need. That is our policy; nay, it is not only our policy- it is more deep seated even than that- it is also our philosophy. It is something that is unshakable and at the root of our belief, our concern for people, for every individual Australian. Every Australian must now be convinced that we are a Government and Parties so concerned. I received a letter from a constituent today. I would like to read it because it indicates what people in the electorate are thinking and how they have summed up our measures. It reads:
I would congratulate the Liberal Party on the social compassion for the less well-off shown in the recent proposals and for the hope they give that inflation may gradually decline. I am sure we nave all got to realise production and work value for payment given is the real key.
– A very discerning elector.
-Hear, hear! I agree with the interjection by my honourable friend.
– Is that from your mother?
– It is from a constituent and is unsolicited. It is a letter from somebody who is really concerned and who understands more than the honourable member for Prospect understands. I say that we are more concerned about real welfare than any other Parry in Australia. I say to every trade unionist that we are concerned about them, their families and their jobs. The trade union movement has rightly been concerned that workers on the minimum wage should be better off. The policy concerning family allowances for the family man and woman helps such people. I hope that we will get the recognition that we deserve for it. Our social welfare policy and approach seek to enhance the security, dignity and self-reliance of each individual.
I would like to refer now to the report of the Henderson Commission of Inquiry into Poverty, which, I remind honourable members, was instituted by a Liberal-Country Party Government in 1 972. We instituted this far-reaching inquiry and we have now acted on parts of it. Let me quote from the section of the report entitled ‘Measures to Assist Families’. It reads:
The most urgent need of poor families is for income support. More money will alleviate the stress on these families, provide greater security, and increase the families’ choices in the way they organise their lives.
On the subject of child endowment the report states:
We have seen that poverty among 2-parent families is related to family size . . . The- earnings of heads of large families are, in fact, very similar to those of heads of small families.
The report goes on to say:
As an immediate measure, therefore, the Commission would concentrate help to families through child endowment and abolish taxation deductions.
We have acted. In 1972 we instituted an inquiry to report on this matter, and we have acted on this important part of that report in the national interest. Every mother will receive in the post every week a non taxable, means test free, cheque. She has a guaranteed income. She can plan on receiving that money reliably. It is a brilliant measure. It is sensible because no new centralist bureaucratic structure is being set up to administer it. We are using existing expertise and experience. Minimum growth will be required in the Public Service to administer it. It gives assistance to the mother in that it gives her the power and the choice of deciding how to spend the money received. To that extent we are giving her control over her life. My friend, the honourable member for Perth (Mr McLean), rightly pointed out earlier in the debate that this proposal will play a significant part in the recovery because every mother will receive that cheque and she will know on which items she wants to spend it. I am confident that she will spend it and so boost consumer spending and thereby help the economy.
– Hear, hear! Well said.
-I thank the honourable member for that interjection. What I said is true. I know that the honourable member recognises that. The proposal is a boost to the status of women generally; that must be acknowledged. The mother who wants to stay at home can be assisted in staying at home. It will give her this little nest egg every week. Similarly, if the mother wants to work, this assistance will help her if she wishes to pay for child minding or obtain some other assistance. We have recognised the special position and the degree of independence needed to help women in the community. These measures will help 300 000 low income families and their 800 000 children. We have, through this significant measure, channelled assistance where it is most needed- to the poor and to the disadvantaged.
I tum now to some comments made by the honourable member for Melbourne and, I think, the honourable member for Hawker (Mr Jacobi) about the Australian Assistance Plan. It is part of our federalism policy that individuals must be free to participate fully in government and that the forms of government must be decentralised to permit maximum response and involvement. Government must be brought as close as possible to the people. That is something that our friends opposite do not quite understand. The Minister for Social Security (Senator Guilfoyle) has announced that the Government is agreeable to funding the staffing and administrative costs of the 37 Regional Councils for Social Development which have been funded during the pilot phase of the Australian Assistance Plan for a maximum period of 12 months from 1 July 1976,’ which involves a maximum commitment of $3m for the year 1976-77. During that period funding will also be provided for Australian Assistance Plan projects for which commitments beyond 30 June this year have been entered into, and the estimated commitment in this regard is approximately $2m.
I point out that the Australian Assistance Plan was a pilot plan. It had 6 months of its 3-year period to run when our Government was elected to office last December. It is part of our federalism policy that Government must be closer to the people. That is in our mind in our announcements on the Australian Assistance Plan, and that will be the result of our actions. We are convinced that that type of activity is one which it is appropriate to administer and fund, if desired, at State and local government level. I think that is very important and it must be remembered by all of us. State governments will be able to make their own decisions as to what they want to do.
I again refer to the Henderson report on the subject of State governments. It states:
We therefore welcome the substantial moves in recent years by several States into the provision of more comprehensive family and community welfare services . . . much of the administration of welfare should be carried out by local communities under the leadership of local governments, but the responsibility for ensuring that no one in any locality is neglected is a State responsibility.
That is what the Henderson Commission said about State governments, and that is a passage of the report which is not often quoted, if it is quoted at all, by our friends opposite. It is recognised that State governments, under our announcement, will need time to work out with local government authorities the form of any future involvement. Our announcement and our program will enable that to be done. I understand that officers of the Department of Social Security during this transition period of one year will be available to assist with the transfer of the Plan to the States. At the end of the period officers of the Department will be willing and able to assist the States in further development of the Plan if it is desired. Similarly, a number of items will be transferred for absorption by the States when the matter is considered by the Government and the States, and the financial agreement reached will take that into account at that time. The measures to which I have spoken this evening prove beyond all reasonable doubt that this Government is concerned about the people of Australia.
– I really do think it is a tragedy. We all remember the former member for Higgins, the Right Honourable John Gorton. We remember him as a man of very great stature. We may not always have agreed with his point of view. In fact, we have had disagreements with him on many occasions. We always admired his sincerity and the earthy manner in which he made his points and put his case, always removed from the histrionics of politics. We always knew, whether or not we agreed with his point of view, that he was sincere. Then we heard that Shakespearean display in the chamber earlier tonight. The honourable member for Higgins (Mr Shipton) obviously lacks the basic sincerity of his predecessor. I was shocked at the reply I received when I suddenly asked: ‘Who is that bird speaking?’ I was told: ‘That is the honourable member for Higgins’. I said: ‘Good God!’ However, that is as it will be. It demonstrates the vicissitudes and sometimes the tragedy of politics: Men- even those who may not agree with our viewpoint- are sometimes knocked down when they could have given so much to Australia. Lesser men take their place. I leave it at that. I do feel quite sincerely that it is a tragedy and a pity that we do not have John Gorton in this Parliament today, a man who brought an individuality to the House and who was one of the more outstanding personalities that one meets in this place.
The Government’s economic package has been described as a mini-Budget. Personally I do not think it can be called a mini-Budget; I think it can only be called a maxi-Budget. Without a doubt this Budget is a rob Peter to pay Paul exercise. There are some very good examples of this. I am very pleased to see the increase in child endowment. But, of course, this increase is basically to be paid for by the discontinuance of the allowances for children, namely, the actual cash rebate of $200 for each student child and $150 for each non-student child. In other words, the Government proposes to take money from one area and give it in the form of increased child endowment payments in another area. This is supposed to be a magnificent gesture which will convince the trade union movement that it must accept the Government’s proposals to vary the wage indexation guidelines with which the Government promised at the last election campaign it would not interfere. People all over the country today are realising that this is the most politically dishonest government in the history of this country. It has broken promise after promise, undertaking after undertaking and is still going ahead in this manner.
Another good example is the Government’s proposal to introduce tax indexation. The Government proposes to pay for tax indexation by means of the Medibank levy. This again is a rob Peter to pay Paul exercise. This sort of exercise is the whole basis of the propositions of this Government. The actions of the Government have caused strong reactions. The honourable member for Prospect (Dr Klugman) a short while ago quoted to honourable members the latest gallup poll figures from the Bulletin which show that the Liberal-National Country Party coalition had 47 per cent of the vote and that the
Labor Party had 46 per cent. These figures show a dramatic increase in Labor’s share of the vote in such a short time. All of the oncers in oncers’ corner on the other side of the House should start heeding the cold wind. They will need to be careful if they are to retain their seats at the next election.
Even their closest friends are losing confidence in them. A meeting of representatives of the various health funds was held in Sydney yesterday and Mr J. F. Cade of the Medical Benefits Fund of Australia told the Minister for Health (Mr Hunt) that he was going to get some Government senators to cross the floor to vote against the Medibank proposals. Furthermore, the Minister for Health raised this matter in the Government Caucus this morning. I cannot reveal which honourable member opposite told me this. One does not give away one’ s source. Senator Baume, the chairman of the Government supporters welfare committee, or whatever it is called, gave an assurance that none of the Government senators would cross the floor. He must have had a guilty conscience to have had to jump up and give that assurance. One cannot be certain that Government senators will not cross the floor because one can recall how many times in the past Senator Baume has given an assurance that he would cross the floor. One can remember the whispers that ran around the corridors last November in respect of the refusal of Supply. On that occasion the honourable senator did not cross the floor at the appropriate time. One never knows, the reverse situation might apply on this occasion. Although the honourable senator this time says that he will not cross the floor this might be the time when he will cross the floor together with some of his other friends who are perhaps a little more advanced in their thinking than their colleagues.
I really do not believe that we can look at the
Proposals covering child endowment, tax rebates or dependent children, tax indexation and the Medibank levy in isolation, because there are so many other propositions at which one has to look. If one looks very carefully at the whole economic package, this massive economic package, that the Government has introduced one can see that if ever there has been a weighting of the scales in that the Government has put on a pound weight instead of the required 4 oz this is the occasion. I would like to give a few examples. The Government has cut the child care and preschool program, the area improvement program, the sewerage program -
– The honourable member said that the sewerage program smells, but the whole purpose of this exercise is to see that it does not smell in the future. I am quite certain that it does not smell the same as some of the smells coming from the other side of the House. There has been a complete abrogation of the undertaking and promise given during the last election campaign not to interfere with the home mortgage interest tax deductibility scheme.
– They would cut anything.
– That is quite correct. The Government undertook quite clearly not to interfere with this program. Yet, from now on, about 80 per cent of the people who have enjoyed this facility will not do so in the future.
– What are you talking about?
– I am talking about the economic package which will increase housing commission rents. I am talking about the intention of the Government to increase the interest rate on defence service homes. I am talking about the intention of the Government to increase the interest rate which is the subject of Commonwealth-State housing agreements. I am talking about the decision to issue Australian savings bonds at 101/2 per cent, which has meant a massive withdrawal of funds particularly from the building industry.
The honourable member for Higgins tried to maintain that the Government was not interfering with the Australian Assistance Plan. The honourable member should not kid himself. The Government is trying by an obtuse dishonest method to phase out the Australian Assistance Plan utterly and completely within 12 months. That is what the Government’s actions amount to. The Government has said that the States can continue the Plan if they want to but that it will not give the States the necessary finance to continue it. This decision means the end of this great reform. The examples that I have mentioned are part and parcel of the Government’s economic package. The decision now to cut widows pensions or I should say to tax widows pensions; the decision from now on to cut sickness benefits, unemployment benefits- I mean to tax-
Mr DEPUTY SPEAKER (Mr Bonnett)Order! I remind honourable gentlemen on my right who are interjecting that interjections are out of order.
– Thank you, Mr Deputy Speaker. I admire your impartiality.
– I rise on a point of order. I take your comment most seriously, Mr Deputy
Speaker, but I think you should also draw the attention of the honourable member who is speaking to the fact that he obviously does not understand what he is talking about. He is not even stating the situation correctly. He does not know whether he is talking about cuts or taxes.
-There is no substance to the point of order.
– Thank you, Mr Deputy Speaker. I am sorry that I did not use the correct word, but I corrected myself. I make the point that it has been decided to tax widows’ pensions, unemployment benefits, deserted wives’ pensions and sickness benefits right across the board. That is what the decision amounts to. All these policies come basically from one man, the Prime Minister (Mr Malcolm Fraser)- a man who was born with a silver spoon in his mouth, a man who has never had to struggle and work for a crust, a man who believes that everybody should lead a spartan life, yet who inherited everything that he has. That is the reason why he is living such a wonderful life today.
– I raise a point of order, Mr Deputy Speaker. The honourable member is casting an aspersion on the Prime Minister. He has suggested that the Prime Minister has inherited everything that he has. The honourable member has no proof with which to back up his suggestion. He has made a scurrilous attack on the Prime Minister, and I ask him to withdraw.
Mr DEPUTY SPEAKER (Mr Bonnett)There is no substance whatsoever in the point of order. This debate has been a wide-ranging one and a number of areas have been covered. ‘ Mr ARMITAGE- Thank you very much, Mr Deputy Speaker. As I said, the Prime Minister is one of those people who have inherited their wealth. He was born with a silver spoon in his mouth. He has enjoyed the best of the fruits that this society can offer. He has a phoney belief in a spartan life.
– I raise a point of order, Mr Deputy Speaker. I do not wish to canvass your ruling, but standing order 75 says that ‘no member may use offensive words against either House of the Parliament or any member thereof. Just because the honourable member for Chifley did not inherit brains from his mother -
-Order! The honourable member for Griffith will resume his seat I remind him that I am concerned with the progress of the business of the House and I will ave no facetious points of order.
- Mr Deputy Speaker, the honourable member for Griffith for many years has been noted for his offensive points of order.
-Order! I warn the honourable member for Chifley not to provoke honourable members on the other side.
– I have not said a word. I have referred to some of the programs with which the Government is interfering. The important point here is that if the Government had set out to cut expenditure in areas which would not affect employment it would not have been so bad, but it has deliberately planned to make expenditure cuts in all these areas, including cuts to the area improvement programs and the sewerage program which will have a vital effect on the outer western suburbs of Sydney. It also has made cuts to the child care program which will affect the building trades. The CommonwealthState Housing Agreement also will be affected by the cuts. All these various programs which are being cut have been providing employment. Probably the most important point which has not been realised is that the Government is the biggest purchaser in the country. When the Government stops purchasing there is a dramatic impact upon production- upon factory production, the building trades and all the various barometers of economic health. This, in turn, increases the level of unemployment.
Without a doubt, the Government has opted to fight inflation by increasing unemployment. The Government has available to it many instruments with which to fight inflation. The Government says that in this way it will control the unions’ demands for wage increases. What it forgets is that a very large proportion of those who are unemployed and whom the Government is putting out of work are not trade union members. In the last 2 months, when according to all the rules the unemployment level should have decreased, the seasonally adjusted figures have shown increases in the unemployment level. Unfortunately, that will continue because of the Government’s deliberate policy of opting for the proposition- the honourable member for Ballaarat (Mr Short), who was employed in the Treasury, knows about this- of increasing unemployment as a means of controlling inflation. I think that is an immoral and anti-social proposition. The Government lacks a social conscience. Either it does not realise or it is deliberately ignoring the fact that the cuts which it has made in the last couple of months throughout the social and economic framework of this country will have a dramatic effect on employment. Of course, it is banking on the argument that there will not be an election for 2Vi years and by then the people will have forgotten. No doubt honourable members have heard such talk in the corridors and in their little skunk holes. The fact is that this policy which the Government is enunciating will not be forgotten by the people of this country.
The Government’s proposals for child endowment, the abolition of the tax rebates for dependent children, tax indexation and the Medibank levy, which will mean that about 57 per cent of the people will be worse off, will not be ignored by the people. I am very pleased that the honourable member for Prospect sounded his warning tonight about the latest gallup poll figures. It is time that the Government realised and that the honourable members who are sitting over there -
– I was just about to say ‘the oncers’, the honourable members who might have an opportunity to be re-elected if only they come to their senses. Unfortunately, the honourable members in the oncers corner do not show the ability of intellect to do something about it.
– I raise a point of order, Mr Deputy Speaker. The honourable member for Chifley should be addressing his remarks to the Chair instead of to the honourable member for Hunter and others in the chamber.
-I will not take any notice of that. There is no substance in the point of order.
– I have been looking at you constantly, Mr Deputy Speaker. I leave it at that. The important thing is that the Government’s policies will cause mass unemployment. The Government has opted for this policy deliberately as its method of controlling inflation. It will cause widespread misery throughout the community. The Government completely and utterly lacks a social conscience. The man responsible for this policy is a man who was born with a silver spoon in his mouth, a man who wants everybody except himself to lead a spartan existence, a man who inherited his wealth, a man who is endeavouring to force this situation upon society and a man who completely lacks any social conscience.
– I must say that I listened to the remarks of the honourable member for Chifley (Mr Armitage) with great attention, but I apologise to him for the derisive remarks that came from this side of the chamber. The points he made were as cogent as I would have expected from him. I consider his position to be truly representative of the positions being maintained opposite. I think that he expressed the views of honourable members opposite exceptionally well. I commend to those honourable members who missed his speech the reading of Hansard in order to establish quite clearly in their minds why the House is split in the way it is. I would think that the speech of the honourable member for Chifley is such as would endear him to his colleagues sufficiently, I would imagine to make him a serious contender for the position of Leader which I believe is an incipient vacancy. Given more speeches of that calibre, the manner in which obviously he can reflect the collective views of his Party would, I am certain, endear him to all his colleagues.
Having recognised the merit of his speech, may I address myself to a speech of less interest and less enthusiasm, but nonetheless a very interesting speech that came from the Opposition side from the honourable member for Adelaide (Mr Hurford) who led for the Opposition in this debate. This was a different style of speech from that of the honourable member for Chifley; it was in fact addressed to the subject. The speech of the honourable member for Adelaide was interesting because it maintained many of the positions that the Government has maintained. I think it was an interesting speech not because he ended up agreeing with us- of course he did not do so in many of his conclusions- but because much of his analysis of what was wrong and what is wrong with the economy was correct. It is an analysis that is not shared by other honourable members opposite who spoke after him. I would like to quote various sections of that speech to remind honourable members opposite that there is a view on their side, even though it is not a very widely supported one, that does approach at least the direction of rationality. The honourable member for Adelaide said at page 2390 of Hansard:
The rate of return in the business sector is too low.
The honourable member for Melbourne Ports (Mr Crean) does not seem to agree with that view. The honourable member for Adelaide said:
In a mixed economy like ours, where the private sector is responsible for the employment of three-quarters of the work force, it is important to encourage firms to invest again.
Here we have a man who at least recognises the problem even though he has no solution, even though the Government which he supported played a major part in creating that problem. Our big question now, the problem that faces us tonight is whether we are resolving the problem in the best possible way. There is a problem. The honourable member for Adelaide, leading for the Opposition in this debate, has recognised the areas of problem, as has the Government, of course.
What we have been putting up is a package which I believe deserves the strong support of not only this side of the chamber but also the people of Australia. It is a program not to be taken in isolation. Of course everyone can complain about specific items, but the package as a whole is designed to get Australia on the move again. It is designed to restore individual effort, individual incentive. It is designed basically to restore the pool of wealth from which this nation can pay its welfare, from which it can pay for all the things that it should be doing in the total welfare area. There are many projects, many worthwhile, sound, outstanding projects which are currently being deferred. They are being deferred because there is no money left in the pool. Over a period of 3 years someone turned on the tap and it all ran out; and someone forgot to refill the pool. It is a simple rule, an uncomplicated rule, that you cannot keep drawing water from the dam unless you keep putting some back in. I am afraid that what has happened in the last 3 years is simply that someone kept on pulling out more than was put in. This year, for example, with the Hayden Budget it was proposed to take an additional $5,000m out of the pool. Actually it only budgeted for $2,700m but it was obvious that the Budget was a hoax. The figures at the time the Budget was put down clearly demonstrated that the deficit was going to be at least $5,000m. That was said at the time but was laughed at by those particular gentlemen in the Press who appear to have ears very close to- I am not quite certain what orifice, but let us presume it was the mouths of honourable gentlemen opposite. The facts are simply that if you draw too much out and do not replenish it you go broke, and this country was in the middle of going broke. We have tried, desperately -
– Is that how you advised Patrick Partners?
– That is the sort of interjection I would expect from the honourable member for Chifley. We have tried desperately to restore the pool, to put money back into that pool.
– You are the expert.
-If I am the expert on that matter, it is a shame that honourable members opposite apparently have had no experience in any real terms of effort or endeavour and have obviously shown their lack of experience and lack of knowledge by trying to ruin this nation in 3 years of incompetent administration. The simple proposition is that if we do not have an economy that is in fact stimulated, an economy that is working hard, an economy that is producing revenue and gross domestic product, we do not have the surpluses available to put back into welfare. It is not simply a question of saying ‘too much of the cake is going to the business sector, let us put some into welfare’. What we have to do is increase the size of the cake.
– Is that going to stimulate them too?
-I suggest that the honourable member for Prospect stop eating so much cake.
– Is it an aphrodisiac?
– I can now understand your attraction for it.
– You are keen on the stimulation.
– That joke has been cracked already. As I see it the problem we now face is how to make certain that we replenish the pool with funds so that we can in fact go ahead with many of the welfare initiatives that I believe were quite properly supported by the Labor Government. My complaint with those welfare initiatives is that the Labor Government endeavoured to pay for them with non-existent money. My complaint is that the Labor Government destroyed our capacity to pay for those welfare initiatives. I am distressed that many of those initiatives now must be deferred. Having built up the expectations of the people of Australia those initiatives must now be deferred until we can restore the wealth of society- the wealth of this nation- sufficiently to be able to pay for those welfare projects.
What we have to ask ourselves is this: Is this package of Bills that has been presented the right way to go about it? I believe that in general terms it is. There are some specific areas in which I must say I have a degree of difference with the Treasurer (Mr Lynch). In fact the Minister Assisting the Treasurer (Mr Eric Robinson) has been kind enough occasionally to listen to discussion on these matters with the Government committee of which I must say I am very pleased to be a member. There has been great discussion, for example, about the investment allowance, whether this is the best way to try to redress this disgracefully unfair collapse of real profits of the business community. My personal view is that I would much rather have seen us go about it in a slightly different way.
I would much rather have seen the Government introduce that section of the Mathews report which relates to indexing depreciation charges. I would much rather see us, for example, force upon the business community the requirement to report profits accurately; in other words, not to say that a piece of plant or equipment is valued at the historic price which was paid for it, but that the piece of equipment should be shown as being depreciated according to what it would cost to replace it. That would mean that every company’s depreciation provision would be massively higher and its tax therefore much lower. The significance of this, I believe, would be that it would enable companies to build up a pool of resources to be able to finance the replacement of plant and equipment. In other words, it would enable them to maintain an ability to be competitive. Unfortunately, at the moment many of them do not have that capacity. They do not have the retained profits, because the profits are not there. The companies are being taxed on non-existent profits under an archaic tax system.
I submit very strongly that if the Government were to force upon the business community the requirement to report depreciation provisions that related to the replacement value of plant, in other words, if it said to the business community that it would get this special depreciation provision provided it reported its accounts to the public in that way, then there would be a massive fall in reported profits by Australian companies. These profits would in fact fall to something approaching reality. At the moment Australian corporate profits are massively overstated. I believe that the honourable member for Grayndler (Mr Antony Whitlam) would be well aware of the degree of overstatement of Australian profits if in fact coherent taxing and reporting systems were adopted.
– It makes it easier to sell the shares though.
– I believe that in this way we could offer some stimulation. The honourable member for Prospect, a doctor of medicine, has a great interest in stimulation, even if it is only vicarious. I am certain the honourable member for Prospect must realise that if the private sector has the capacity to increase its employment levels and to expand its productive capacity it will do 2 things. Not only will it diminish the number of people who are dependent on handouts from the state by way of unemployment benefits, which is a drain on our national pool of wealth, but also it will increase that pool of wealth because salaries will then be paid to people and they will be paying taxes. It is a beneficial, progressive idea to have the nation at work and business investing. I am glad to see that at least the honourable member for Adelaide can grasp that concept, even if he then cannot progress to the next logical step of how to correct it.
Having raised the matter of depreciation allowances, I am also concerned that up to this stage there has not been enough discussion in the debate on these current Bills of the question of stock valuation adjustment, towards which I believe the private sector desperately needs some movement if it is to survive. One of the serious problems to emerge as a result of massive inflation and excessive governmental taxing is that the private sector’s capacity to retain profits and therefore to finance its own expansion has been decimated. The private sector has been maintaining its dividend payments; it must. In fact it has even been increasing them a bit, but its retained profits in real terms have been falling sharply, particularly in the last 3 years. This means that the private sector is more and more dependent on borrowing money to finance its continuing activity and its expansion. It must go more and more into debt. The consequence of this is particularly serious when we look at the increasing use made of monetary policy by governments, particularly amateur governments like that which existed for 3 years of temporary aberration until last December. That amateur government did not recognise that monetary policy would have a much more direct and serious impact on the business community than ever before because of its massively increased vulnerability to movements in monetary policy. Those sorts of people could bring about, and indeed did bring about, a destructive and disastrous fall in the private sector in Australia.
The simplistic line we hear from honourable members opposite that what the Government is trying to do is to take away from the poor and give to the companies is totally, maliciously and wickedly untrue. We are trying to stimulate, to increase the activities of the private sector so that from their taxes, what they contribute to society, we can afford to pay more to the poor, the oppressed and the unfairly dealt with. The policies of honourable gentlemen directly opposite which aimed at destroying the wealth- it is not a dirty word- of the nation would have continually reduced the power of this nation to feed, to pay for, to clothe, and to look after, in the medical and every other sense, the oppressed people of this nation. The facts are very simple. At the moment the population is aging. More and more pensioners will have to be supported by a smaller and smaller proportion of the work force. It is desperately important that this nation become increasingly efficient and productive so that this bigger and bigger proportion of our nation can in fact be supported by the smaller and smaller proportion. The Opposition does not appear to recognise the desperate measures that are needed as a result of their own incompetence combined with the pressures of the times. The pressure of the times are leading us to disaster if major, significant, important measures are not taken.
However I believe there are many more things at which we must look urgently. I do not take the view that the economy is moving ahead fast enough yet. I do not take the view that we should be obsessive about the size of the deficit. Honourable members opposite know all about deficits. In government they had one which they did not try to control. They did not know what it was all about. They were quite happy as long as they were spending money and making handouts. That was all that mattered. My view is that we need a continuing high deficit at this stage. I do not believe it will have the monetary impact that many of our commentators appear to think it will. I believe that if we have perhaps a higher deficit than the Government is at present aiming for we will, as many honourable members opposite have said, be able to keep activity in various sections of industry which depend on government spending at a much more satisfactory level than if this government spending were suddenly withdrawn before the private sector could take up the slack. Obviously it will need very fine tuning.
The Treasury and the Treasurer appear confident that they will be able to bring about this subtle move, the subtle removal of the Government as the client for large sections of private enterprise and the replacement of the Government by other sections of private enterprise as the client. I believe we are running a bit of a risk in adopting this approach. I would much rather see us not so obsessed about the size of the deficit but concentrating much more on maintaining private sector activity, recognising that if we increase the activity of the private sector we will increase the likelihood of imports. About 80 per cent of imports are used in the manufacturing process. If a large amount of the deficit goes overseas in the form of payments for imports it will not have the serious monetary effects about which so many internal commentators seem to be obsessed. Nonetheless I must stress that I totally support this overall package. It is an excellent overall package. I believe it will lead us out of Labor’s induced recession. It will lead us to a far better economy and a far better nation- a nation that can afford more and more welfare that is real rather than illusory.
– Stimulation must have helped you. You came to a climax.
-I know that the honourable member for Prospect is a medical practititioner and that the honourable member for Macarthur is a businessman, but I think they are talking about different stimulations of the private sector. I now call another medical practitioner, the honourable member for Maribyrnong.
-The Government is either lying or deceiving itself on the question of Medibank. It is not Medibank which is becoming increasingly expensive but hospital and medical services. Whatever system the Government adopts, patients will continue to get sick, consult doctors, be admitted to hospitals and consume medicines. All of this is paid for by the community eventually. Until the early 1950s many people who felt that they should consult a doctor were unable to do so because they could not afford to pay. It was this socially unacceptable situation which led a Liberal-Country Party Government years ago to introduce the health scheme based on voluntary health insurance funds. This was a mixed private enterprise and government scheme where everyone paid taxes to provide Commonwealth hospital and medical benefits and many voluntarily paid contributions to so-called voluntary health insurance funds. A condition imposed by the Liberal-Country Party Government at the time was that no one could claim their Commonwealth medical benefits, for which everyone had paid their taxes, unless they belonged to a voluntary health fund. Unfortunately many failed to contribute to these funds and so finished up, in effect, with no cover against illness.
Medibank was devised to overcome this deficiency which was identified in the findings of the Nimmo Committee of inquiry into health insurance. The Committee, set up by the LiberalCountry Party Government, reported in 1969 and confirmed as follows:
The operation of the health insurance scheme is unnecessarily complex . . . contributions … are beyond the capacity of some members of the community and involve considerable hardship for others … An unduly high proportion of the contributions received by some organisations is absorbed in operating expenses.
In other words, Medibank is simply a more efficient mechanism for collecting funds from the whole community to pay to the doctors and hospitals and nursing homes. We of the Labor Party proposed, when in government, to collect some of the funds via the usual taxation route and some via a levy but the Liberals, when in Opposition, stopped that idea. Now the LiberalCountry Party Government is to introduce a levy and pretend that that will somehow save money. All that the Government is doing is indulging in an accounting sleight of hand. The same total sum of money will have to be found to pay the doctors and the hospitals. Under the Labor Government most of this money was to be collected by the Australian Taxation Office as income tax. Under the present Government’s proposal a proportion will still be collected by the Taxation Office as tax and a larger proportion will be collected via the levy from the whole community but still through the Taxation Office. Thus the total sum collected by the Government will be the same. By collecting a levy the Government is pretending that it is not a tax. Funds collected by the levy will pay part of the cost of doctors’ and hospitals’ bills. The Government will pay less from the other money collected from the community via what it still calls tax and so will appear to reduce its deficit. It has said that it will not increase taxes, but what is its levy if not a tax? The Government is fooling itself but I am sure it will not fool the community with this sleight of hand, this dishonest juggling of words. In reality, and simply and honestly stated, the Government is increasing our tax and by using the word ‘levy’ is pretending that it is not a tax.
Mr DEPUTY SPEAKER (Mr Jarman)Order! I am interested in what the honourable member for Maribyrnong is saying but a number of honourable members are talking.
– We cannot hear the Liberals because there are only three of them present.
– At the moment I am not interested in hearing the Liberals. I am interested in hearing the honourable member for Maribyrnong and I would like to be able to hear him.
– That is enough of these financial deceptions. I now wish to touch upon another deception, a far more dangerous one. Perhaps it could best be summarised as public subsidisation of legalised murder. Much is made of the abuses of Medibank but at least the Government, judging by a reply from one of its Ministers to a question I asked today, is beginning to recognise that these abuses are mainly due to excessive doctor originated services- unnecessary medical treatment of patients by doctors.
Dr Esselstyn, in an article in the New England Journal of Medicine in 1962, gave details of the findings of a number of studies on the utilisation rate for medical services under varying conditions of payment of doctors. One study relating to the United Mineworkers of America reported:
When group practice teams of salaried physicians provided services for beneficiaries of the fund, in a carefully studied area, hospital admissions declined 32.5 per cent, all surgery 16.S per cent, and appendectomy S9.4 percent.
The Special Study of the Medical Care Program for Steelworkers and their Families, a study encompassing over 1 million steelworkers, ‘corroborated the United Mineworkers of America findings by revealing that the 38 879 who obtained their health care through a prepaid, direct service, comprehensive group practice plan, where doctors were on salary, had similar experiences. Hospital admissions declined in this instance from 135 per 1000 beneficiaries for those under the care of solo practitioners on a fee-for-service basis to 90 per 1000, hospital days per 1000 from 1032 to 570, and surgical cases per 1000 from 69 to 33. ‘
Another study by the Health Insurance Plan of Greater New York, a community sponsored prepayment comprehensive direct service movement, agreed with the other studies and showed ‘20 per cent less hospitalisation than a comparable Blue Shield population’ where the doctors are paid on a fee for service basis. Well, that was in 1962 and honourable members may say that it is old hat. However, the New York Times of 27 January this year reported:
In studies sponsored by the United States Department of Health Education and Welfare, comparisons between Federal employees who are covered by Blue Cross (where doctors receive a fee for service) and those enrolled in a prepaid group health plan (where the physicians are paid the same amount whether they operate or not) showed that -
-Is that a health benefit organisation?
– Yes, it is that sort of thing. The newspaper report continued: showed that surgery rates were 44 to 54 per cent higher among the Blue Cross participants.
That is when doctors received fee for service. Dr Jim Lawson addressed the Australian Hospital Association Congress in 1 969-1 think it was held in Melbourne- and discussed operation rates per thousand members per year for fee for service and salaried medical services and compared these operation rates in Australia, the United Kingdom and United States of America. I have a table showing these results and I seek permission for it to be incorporated in Hansard. However I would like to quote a couple of the examples.
-Is leave granted?
-Leave is granted. (The table read as follows)-
– I will quote a couple of the figures. For example, the tonsillectomy and adenoidectomy rate in Australia for doctors on a fee for service basis was 7 per thousand per year. In the United States it was 10.6 on a fee for service basis and 4 per thousand in the case of the salaried group. In the United Kingdom it was 3.6 in the case of salaried doctors. The appendicectomy rate was 5 per thousand in Australia on a fee for service basis and in the United States it was 2.6. In the United States on a salaried basis it was. only 1.4 and in the United Kingdom on a salaried basis it was 2.5. The final rates relate to hysterectomies. Ladies, hang on to your uteruses. In Australia a woman has twice the chance of losing her uterus. On a fee for service basis the rate in Australia was 2 per 1000 and in the United Kingdom on a salaried basis it was 1 per 1000. 1 will quote what was said in the New York Times to show that this is a fairly common phenomenon. This report appeared in January this year and stated:
Some doctors have been accused by others in the profession of performing ‘ hip-pocket hysterectomies ‘, where the only beneficiary is the donor’s wallet. In England and Wales where doctors are salaried, the rate of hysterectomies is only 40 per cent of that of the United States, where most surgeons are paid by the operation.
Dr Lawson again said:
It has been suggested that the higher operation rates among patients receiving medical care under ‘feeforservice’ arrangements reflects a higher quality of care among this group. In New York State, Shapiro et al. have demonstrated that the contrary situation exists in that community, the perinatal and infant mortality among patients receiving care from salaried doctors in group practice being substantially lower than under fee for service plans.
Dr Milton Roemer discussed in an article in the Journal of Health and Human Behaviour the relative merits of fee for service and salaried staffing. He gave the figures for this particular study of the health insurance plan of Greater New York. For the salaried medical staff the perinatal mortality rate was 2 1.3 per 1000 births in contrast to a figure of 38.1 per 1000 births - a much higher figure- for patients in the controlled population treated by fee for service doctors. Dr Roemer said:
Moreover, it is generally conceded that the best quality of medical care in the United States is found in the medical schools and the great teaching medical centres, where physicians are conventionally on salary. The same high regard is held for non-university centres like the Mayo Clinic where physicians are on salary. Even in governmental installations, despite their social handicaps in attracting good personnel, the quality of medical care from salaried physicians is generally high; a survey of the Veterans Administration medical care program by the American Medical Association drew this conclusion.
The New York Times of January 1976 goes into the other side of the question and what it means. I again quote from the New York Times:
Fourteen million non emergency operations are performed annually-
In the United States- of which 2.38 million - That is about 1 7 per centwere considered unnecessary by Dr Eugene McCarthy of Cornell University Medical College and in his view 1 1 900 people died during unnecessary surgery.
– In one year.
– That is right, in one year. The article continued:
Six billion doses of antibiotics it is estimated are consumed in the United States each year and 22 per cent of these are considered to have been prescribed unnecessarily, and … 10 000 fatal and near fatal reactions to this unnecessary medication occur, according to the Food and Drug Administration, the Health Research Group and the Ohio State University.
The New York Times continued:
About 2200 hospitals, nearly one-third of the total in the United States, fail to meet the minimum standards of safety and adequacy of patient care required by the medical profession’s Joint Commission on Hospital Accreditation. Despite this, there is no legal restriction on the medical and surgical procedures these hospitals may attempt on patients.
The New York Times at a later date stated:
Hospitals with fewer than 100 beds- and there are more than 3000 of them in the country- have death rates 40 per cent higher than other hospitals when the severity of their cases is taken into account.
According to the New York Times:
The cost of this unnecessary surgery . . . was $3.9m and 1 1 900 lives, using a conservative estimate of a 0.S per cent mortality rate associated with elective surgery.
Using the same mortality rate, which is a conservative one, and judging the unnecessary surgery from the figures supplied by Dr Lawson, it is reasonable to suggest that through the voluntary health insurance scheme and the Commonwealth medical and hospital benefits system in 1967-68 we subsidised 52 000 unnecessary operations for tonsillectomy and adenoidectomy, appendectomy and hysterectomy. Probably 260 of these patients died from the unnecessary surgery. So we subsidised legalised murder. Dr Lawson stated: … the fee for service system of payment appears to lead to a higher utilisation of surgical services than when surgeons are paid by salary. Therefore the problem is to introduce a means of reviewing the quality of medical care and in particular the indications for surgical operations, admission of patients to hospital, for the conduct of expensive investigations, etc.
Dr Lawson went on to suggest the introduction of the American surgical and medical audit which had then become compulsory in many United States hospitals before payment of hospital costs by health insurance organisations. He claimed:
Since the introduction of the ‘surgical audit’ as a means of continuing education and quality control, some American hospitals report a reduction of over 40 per cent in the rate of some surgical operations.
How about Australia? Professor R. A. Joske, in an address to the annual meeting of the Royal Australasian College of Physicians in June 1971, described the experience at the Royal Perth Hospital with honorary and salaried specialist staffing. Making a plea for geographically fulltime appointments of specialists to the large hospitals he commented:
This has at times been cited as too costly. Experience in Perth shows that it is not; it is honorary service which is costly to the hospital and community. Sessional payments for physicians at the Royal Perth Hospital began in November 1968 . . Since then, and without extra beds, monthly admissions have increased from 1600 to 2200, and the average bed stay fallen by 2 days. This is equivalent to an increase of 225 beds, with a capital cost at present rates -
That was in 1971- of over $5.5m.
Finally I should like to quote from the report of the Health Manpower Commission made in 1967 to the American Government which gives an assessment of the Kaiser Foundation Medical Care Program in which doctors are employed on a full-time salaried basis. The report states:
Although the survey was constrained both by time and experimental design, it was the strong impression that the quality of medical care delivered by the California Permanente Medical Groups is equivalent, if not superior, to that available in most communities. Compared to the California averages, Kaiser had significantly fewer hospital beds and physicians per member served, and for roughly comparable medical services, Kaiser expenses per member are 35 per cent to 45 per cent less than the expenses of the average Californian. Between 1960 and 1965 -
We talk about hospital and medical expenses racing ahead- total expenses per member for the services provided by Kaiser increases by 19 per cent. During the same period, national per capita private consumer expenditures for comparable medical services increased by 44 per cent.
The major source of economy within Kaiser appears to be good control over what medical care is provided and where it is provided. This source of economy is most apparent in hospital care, with the age-adjusted days of hospital care per year for Kaiser members being only 70 per cent of the State ‘s per capita average.
The most striking relative economy of Kaiser is in its requirements for hospital beds and its per member cost of hospitalisation. On an age-adjusted basis, Kaiser required only 59 per cent as many hospital beds per person as did the State of California. Similarly, Kaiser’s per person cost for providing hospital care on an age-adjusted basis was only 6 1 per cent of the statewide cost.
So one could go on, but I think we are bored with the figures. The reality is, when one looks at the real -
– It is very interesting.
– I am glad that the honourable member for Holt has made that observation because, contrary to many comments made about the British health scheme and its cost, in total terms the cost of the British health scheme is not as high as that of the Australian health scheme or the American health scheme. The figures show that there is considerable restraint in the number of unnecessary operations performed on patients and therefore, one presumes, the unnecessary death rate is lower. There is inevitably some death rate associated with surgery because it is a serious enterprise. Nonetheless, when a person is operated on unnecessarily and then dies it is a deplorable situation.
We talk a lot about the cost of Medibank. We are fooling ourselves. Medibank costs very little. In terms of administrative costs, the cost of Medibank will be less than the cost to the community of the multitudinous voluntary health insurance funds which now will get much more business. The Nimmo Committee pointed that out years ago. That Committee was not appointed by us; it was appointed by a previous
Liberal-Country Party Government. The reality is that that Committee showed that the running expenses of the health funds absorb something near 15 per cent to 20 per cent of every dollar collected. The running expenses of Medibank, I am informed, probably will be less than 5 per cent. By the Government’s manoeuvre it is increasing the cost of administration by forcing many people back to the voluntary funds and of course increasing the complication and the nuisance value to many members of the community.
But, as I said, that is not what the real cost of health service is all about; the real cost is the cost of doctor services and hospital services. Those services are dictated, in the main, not by patients. A patient cannot decide to have his appendix out. A doctor has to advise him to have his appendix out. It is a matter of a doctor’s judgment. If in fact excessive medical services are provided, in the main they are doctor originated. Nothing will be resolved in this dilemma of increasing costs of health services until we grapple with the basic way in which doctors provide their services. The faultis not with the medical profession. In all my speech I have not been criticising the doctors, I have been criticising the system. I suggest that anybody in the same position as a doctor, given the option of operating or not operating with a fee of $100 attached to operating and a fee of $5 for not operating, would be under severe pressure seriously to consider the operation despite the medical indications.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Eric Robinson) read a third time.
Consideration resumed from 20 May, on motion by Mr Eric Robinson:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Eric Robinson) read a third time.
Consideration resumed from 20 May, on motion by Mr Eric Robinson:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Eric Robinson) read a third time.
Debate resumed from 20 May, on motion by Mr Hunt:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Message from Governor-General recommending appropriation announced.
-At this Committee stage of the Social Services Amendment Bill (No. 2) 1 976I should just like to make 2 points. Broadly speaking, the Opposition agrees with the provisions of the Bill relating to child endowment. It is part of the package in which taxation rebates for children have been removed. Substituted in their stead has been a significant increase in child endowment. The main beneficiaries will be the people on the lowest incomes- the people who at present have not been able to benefit from the tax rebates. The Opposition very strongly supports that proposal.
The first point I raise is that when tables were published giving comparisons of the whole effect of the package, a comparison was made on the basis of a rebate of $200 for student children. In legislation which we have just passed-an earlier Bill dealing with income tax- in every other case the Government has indexed the rebates. It is obvious that the rebate for children, had it been retained, would also have been indexed. In other words, it is silly to compare the endowment figure with a notional rebate of $3.85 a week per child which the taxpayer now loses- $200 a year. What it should be compared with is $226 a year which would have been the indexed figure. This amounts to $3.85 a week plus 50c which is $4.35 a week. So people will be 50c per week per child worse off than is shown in the published tables. I hope people can follow that reasoning. Therefore the original tables published by the Department and by Treasurer are not fair.
The second point I should like to raise is a question that has been raised in the newspapers. It concerns maintenance payments with regard to couples who have split up. I cite the case of a woman who has been receiving maintenance payments from her husband or former husband which one assumes have been geared on the basis that they pay for the child’s upkeep. Because the father paid for the upkeep he was able to get a taxation rebate of $200 a year for each one of his children. He will now no longer be able to receive that rebate. On the other hand, the woman who is looking after the child will get significantly increased child endowment. I am not necessarily arguing one way or the other. It may well be that because maintenance payments are not indexed as other things in our society are indexed it is fair enough that in the large proportion of cases at least there is a transfer of extra money from the husband to the wife. But generally speaking I thing that individual cases ought to be looked at rather than make this matter a mass transfer where the ex-husband in every case loses his benefit and the mother looking after the child automatically gains that benefit. I cannot see any provision in the legislation under which this position can be interfered with in any way. There is no way for the husband still to claim his rebate. There is no way for the husband to get part of the child endowment if the children are with the mother. Honourable members have probably had letters from individuals pointing out the facts. Letters have been published in the newspapers in which fathers claim that there will be a significant unfair transfer of extra child maintenance from the husband to the wife who is looking after the children.
Bill agreed to.
Bill reported without amendment; report adopted.
Motion ( by Mr Hunt)- by leave- proposed:
That the Bill be now read a third time.
-Mr Speaker, at this stage I think it is important that the matter raised by the honourable member for Prospect (Dr Klugman) be answered. I believe that the Minister for Health (Mr Hunt) does not have an answer at this stage. I would hope that the third reading could be delayed until tomorrow.
– If the honourable member keeps speaking for 30 seconds I shall have to put the question for the adjournment.
-I realise that, Mr Speaker. I am sure that the Minister will be in a position to give us a reply to the question by tomorrow because it is a matter of some real consequence to a large number of people.
Australian Economy -Manufacturing Industry- Pensions- Poland- Telecom Technical Staff-Friends of the Earth-Whales-Newspaper Article
-Order! It being 10.30 p.m., in accordance with the Order of the House of 1 8 February 1976I propose the question:
That the House do now adjourn.
-One must congratulate the Premier of New South Wales, Mr Neville Wran, for stating that the new Labor Government in New South Wales would give top priority to tackling unemployment. There are over 100 000 unemployed persons in New South Wales alone. They are heavily concentrated in the building and metal industries. This House has to encourage the implementation of Labor’s pledges and policies in relation to housing, education, city planning and health. The previous Government in New South Wales and the present Federal Liberal-Country Party Government both have poor records in this field. A crash rolling stock program through the transport policy will give a boost to employment and lead to a better relationship between the unions and the Government, which have to work for a better Australia and unity in New South Wales.
If business and consumers lack confidence it is largely because the Prime Minister (Mr Malcolm Fraser) and his Cabinet spent their first months in office warning that there were no soft options, talking about tough times ahead and leaking news about severe cuts in government spending. They now realise that they went too far. They have left businessmen and consumers shivering with fear. It is clear that the steady economic recovery set in train by the Hayden Budget has been allowed to wind down. At the end of April, 4.4 per cent of the work force was still unemployed. It is hardly the time, therefore, to threaten consumers with charges for Medibank and to frighten businessmen with the prospect of further cuts in government spending- cuts that would undermine much of the private sector.
The Labor Council of New South Wales has requested an urgent meeting with the Prime Minister to discuss the situation of manufacturing industry in the State. In a letter to the Prime Minister the Secretary of the Labor Council, Mr John Ducker, said that the downturn in manufacturing industry had caused a crisis. He went on to say:
Production and job figures have hit a dangerous low, while imports are riding high. If these trends continue there can be no improvement in employment and there will be further layoffs among the factory work force. Manufacturing industry could find itself in a semi-permanent slump.
He said that inquiries had established that production levels in the metal, rubber, vehicle, textile, white goods, electrical and electronic industries were substantially down on 1973-74 levels. The extent to which they were down varied between 1 1 and 25 per cent. Imports remain at a high level, with no sign of a reduction. Industry has already lost the special skills of many retrenched workers.
The tariff policy of the Industries Assistance Commission is a prime cause of this situation. The average tariff protection for manufacturing industry was 10 per cent lower in 1975 than it was in 1970. The Government’s policy in the vehicle industry will result in the loss of 1 5 000 jobs in the vehicle component parts and steel industries, mainly in New South Wales. Further heavy retrenchments are expected if the Government adopts the IAC reports on the production of storage batteries, electric motors and railway rolling stock. Mr Ducker said that the Labor Council wanted a meeting with the Prime Minister, the Treasurer (Mr Lynch), the Minister for Industry and Commerce (Senator Cotton) and the Minister for Employment and Industrial Relations (Mr Street) to discuss the position. I hope that this meeting will be carried out expeditiously.
Referring to another subject, I have received correspondence from Mr J. Sharrock, the State Secretary of the Combined Pensioners Association, Room 44, Trades Hall, Goulburn Street, Sydney, which reads:
The decision of the Federal Government to remove some 60 drugs from the schedule of pharmaceutical benefits is causing distress among pensioners. It could well be more serious than the attempt by the Government to remove the funeral benefit.
In answer to our Association’s request that the items taken off the schedule be replaced for those pensioners and their dependants who qualify under the means test for fringe benefits, the Minister for Health, Mr Hunt, MHR, makes it very clear that the Government’s action was to cut expenditure.
To qualify for entitlement to pharmaceutical benefits the pensioner must come within a means test on income and assets which has operated for many years and applies to all pensioners and their dependent children. Our Association accepts the principle of this means test because it aims to protect those most in need. Among those who pass the test are the poorest of the poor.
The Government’s action means that many of these people will be compelled to pay for prescribed medicines, or do without and risk endangering their health. Did the Australian people elect the present Federal Government for this? Is this what the Government calls ‘good management’?
Without the concessions granted by Federal, State and local government, and also by clubs and other organisations, the capacity of a great number of pensioners to exist would be at risk.
We appreciate the action taken by those Government members and senators who saved the funeral benefit for pensioners, and we are looking forward to the support of all members of the Federal Parliament in having all the deleted items restored to the free list for those pensioners who have qualified as required and whose right to this assistance is much greater than economy measures.
Pensioners are the needy people whom we read about in the morning and afternoon newspapers and see on television -
-Order! The honourable member’s time has expired.
– I want to speak about the recent constitutional amendments imposed upon the people of Poland, which is a matter of great importance to many thousands of Polish people now living in Perth. I am very much aware of the great concern of the Polish community in Perth. It is a concern with which I have a great deal of sympathy and which should be shared by all members of this Parliament and all members of the Australian public who have a respect for the rights of the individual.
The changes recently proposed to the constitution of Poland by the Polish United Workers Party- the Communist Party there- were severe and repressive. They included the official recognition of the leading role of the Polish United Workers Party in ‘gradually transforming Poland into a state of all the people’, with such a role to be written into the constitution. They did not want any other parties to exist. The amendment also included the incorporation into the constitution of an official eternal alliance with the Union of Soviet Socialist Republics or, to use the original wording, to make the constitution reflect the ‘unshakable fraternal bond’ with the Soviet Union. So much for an independent foreign affairs policy. This would represent-I use the words of our own Minister for Foreign Affairs (Mr Peacock)- ‘a derogation from the fundamental principle of national sovereignty by any country anywhere’. Thirdly, Poland was to be declared officially as a socialist state. Fourthly, it was also proposed that citizens’ rights should be linked with the performance of their civic duties- in other words, there were no civil rights. Their entitlement to civil freedoms would be dependent upon an arbitrary assessment by the state as to what one’s personal civic performance should be. This represents an amazing contradiction of terms.
These measures were designed totally to subjugate the Polish people and their country to the Soviet Union. I think it is to the everlasting credit of the Polish people and their courage that these measures were widely opposed. There was strong and widespread opposition and dissent to these measures. The lead in the opposition came from Cardinal Wyszynski and the clergy in general and spread through the intelligentsia, the students and, most significantly of all, private citizens. I pay tribute to those who had the courage of their convictions to speak out and oppose these amendments. As a result of these protestations, the original proposals of the Communist Party were modified and made less dogmatic. A number of ‘particular formulations’ underwent at least some changes in their final form. For example, the country still will be known as the Polish People’s Republic rather than as the Polish People’s Socialist Republic. However, the socialist nature of the state will be defined in the constitution.
In addition, the role of the Polish United Workers Party has been modified so that the wording of the constitution provides only for its being a ‘leading political force in the construction of socialism’. The original wording has been toned down but the essence remains the same. Regarding Poland’s place in the socialist community, the revised wording of the constitution omits reference to an ‘unshakable fraternal bond’ with the Soviet Union and simply states that Poland ‘strengthens its friendship and cooperation with the Soviet Union and other socialist states’. Again the essence remains the same. Although some minor liberalisation of citizens ‘ rights and duties was achieved, the basic points- that is, the socialist character of the state, the role of the Polish United Workers Party and the country’s reliance on the Soviet Union for political support and defence- remain in force. The Government has by and large clothed the original objectives in more obscure language, hiding them behind a curtain of generalities. But the intent and the effect of the measures remain. The future of individual rights in Poland is now quite clearly suspect.
I urge the Minister for Foreign Affairs officially to express this Government’s concern for the people of Poland and the threat to their individual freedoms. I certainly endorse the resolutions to this effect which were passed by members of the Polish community of Perth at a public meeting at which I had the privilege of attending in Maylands on 14 March 1976. To these people I quote an often quoted phrase from their own language: Niech zyte Polska, which simply means: Let Poland live.
– I want to take up again the issue on which I spoke this afternoon regarding the weight given by the Government to the concept of the sacrificial lamb. I do not think there is any doubt that this Government will cure inflation by increasing the unemployment pool. I notified the Minister for Post and Telecommunications (Mr Eric Robinson) that I intended to speak this evening on the matter of the reduction of technical staff in Telecom. I can do that best by quoting from a letter dated 24 April 1976 from the President of the sub-branch of the Telecom Training Centre in my State of South Australia to the Prime Minister (Mr Malcolm Fraser). It reads:
On behalf of the members of my association I wish to register our disgust with the methods being employed by Telecom Australia (SA) in relation to
demotion of personnel
We are all employed by Telecom Australia as Technical Instructors Grade II and above, in the Telecom Training Centre, Adelaide. Because of the policy of your government in regards to recruiting, we have had ten Instructors demoted to either Technician or Technical officer.
This policy which prevents Telecom from employing ap- prentices in highly technical spheres is against that of the Minister for Industrial Relations who has gone on record to say that industry needs to employ apprentices. Telecom Australia is an industry. In Adelaide we nave a large backlog of Telephone installations. Not training Telecom tradesmen most certainly will not help this situation improve.
The Instructors that were demoted left the Training Centre in groups. The first group was given 12 working hours or less notice of their demotion. We found this most unsatisfactory and complained to Telecom through normal channels. We were assured that this would not re-occur, yet it has again. On Thursday, 15 April, 3 Instructors were told to report to their new positions at 8 a.m. on the next working day, i.e. the day after Easter Monday. Some of these people have been in the Training School for some time and require time to pack equipment and notes let alone their right of appeal.
As I said, Sir, we find these things unacceptable and look to you in your position as Prime Minister to rectify them.
Copies of that letter were sent to me, the Managing Director of Telecom Australia and the Manager of Telecom, South Australia. Why is it that although the Minister for Employment and
Industrial Relations (Mr Street) goes on television to persuade industry to employ apprentices we find that the intake of apprentices for Telecom Australia is cut back to minimal figures. For example, in New South Wales the intake was nil while the number required was 1 10; in Victoria the intake was 58 and the number required 112; in Western Australia the intake was nil and the number required 60; in South Australia the intake was 12 and the number required 80; in Queensland the intake was 47 and the number required 78; and in Tasmania the intake was 12 and the number required 24. It ought to be noted that these figures are approximate and apply to apprentices only. There have been traineeships but those also have been greatly reduced as most were ‘in house’ trainees, that is, previously employed apprentices promoted to trainees.
With the backlog of telephone applications, due chiefly to staff shortages, why has not Telecom Australia increased its apprentice intake rather than reducing it? This applies in my area in South Australia particularly to Tea Tree Gully and the Modbury area. This situation was highlighted by a leading article which appeared in the Adelaide Advertiser of 10 March. Communications are undergoing great technological development at a time when training of skilled tradesmen has become vital. Yet in South Australia 10 skilled instructors have been demoted, not because of inefficiency but because of the Government’s cost cutting. Can the Minister please explain why these costs are being cut in a most vital area? I know that the Minister will be in the House later and I ask him to give this matterI understand the situation applies throughout Australia and not merely in South Australiahis urgent consideration.
– I congratulate the honourable member for Perth (Mr McLean) on his support for Polish democracy and Polish independence just as enthusiastically as I condemn the honourable member for Adelaide (Mr Hurford) for quoting last evening an editorial written by Father Wilkinson, the editor of the Adelaide Southern Cross. I certainly found what Father Wilkinson had to say interesting but I do not think it was an ex cathedra economic pronouncement which was worthy of anything more than interest in this House. It may have had interest but it certainly lacked objectivity in the sense that it did not say who was responsible for the unemployment which has produced what we call dole bludgers. I think the article would have been considerably improved if some reference had been made to those causes. I shall be interested in the future to see whether Father Wilkinson has something to say editorially about last Monday’s disgraceful rail strike. It is on that subject that I want to speak now.
I believe there is a real connection between last Monday’s rail strike and last week’s Woodstock outside this House by the Friends of the Earth. Both were certainly encouraged by Dr Mosley and his Australian Conservation Foundation and also by those in the backgroundthose who encourage Dr Mosley in his efforts. I think it is the same pro-communist crowd who in Victoria have used the Australian Conservation Foundation’s former respectability to cover its sabotage of the Newport power station. Which are the unions involved? They are the Builders Labourers Federation, Building Workers Industrial Union, Plumbers and Gasfitters Union, Electrical Trades Union, Amalgamated Metal Workers Union, Waterside Workers Federation, Seamen’s Union and the Federated Engine Drivers and Firemen’s Association. The honourable member for Port Adelaide (Mr Young) will note that I did not include his old union because that is considered to be a right wing union, believe it or not.
– When did you last go to see Santamaria?
– Not so long ago and he was in good health, too. Honourable members should note the fundamental importance of those unions to the economy and realise that they and others can hold up Australia- and not just Victoriawhenever they want to. The Australian Conservation Foundation really is what I want to say something about tonight. It was once reasonably respectable and balanced. That was in the days when Sir Garfield Barwick, Professor Fenner of the Australian National University, Mr Ronald Downs of the Victorian Department of Conservation and, I think, Mr Dunbavin Butcher, of Victoria, at one period, were executive members of the Australian Conservation Foundation. But they were rolled when the Mosley crowd backed by the left wing, got away in 1973 with a takeover, and the Federal Labor Government did absolutely nothing to stop it. Since then we have had dictator Mosley- I understand he is not related to the honourable member for Grayndler (Mr Antony Whitlam) who is trying to interject or to Sir Oswald Mosley of infamy -
-Order! The honourable gentleman will not reflect upon another person in that way.
– I withdraw the reflection, Mr Speaker. Imagine my surprise, anyway, when Dr Mosley turned up at the Government Parties’ seminar on federalism during the last recess and gave us some ideas about what we should and should not do. One Press article which I have seen recently stated:
The Australian Conservation Foundation is in everything, whether it is uranium mining, Newport power house, Concorde, green bans, Fraser Island, bauxite mining. This largely anonymous body commands access to the media and influence over public opinion beyond the wildest dreams of organisations with many times its membership. There is a conservationist interest to be preserved in every one of these issues so long as it is genuine, non-partisan and balanced. But is the ACF genuine, non-partisan and balanced. Who is behind it? In whose interests are its policy interests taken?
The Australian Conservation Foundation is in receipt of something like $150,000 a year from this Government. I certainly hope that the Government will seriously consider just where that money is going and the results that it can have.
– They are all communists!
-No, not all of them. I am asking the Government to consider seriously stopping payment of that money because I believe that what the Australian Conservation Foundation does is diametrically opposed to everything that this Government is trying to do in this community.
-The honourable member for Swan (Mr Martyr) who has just finished speaking was, I understand, State President of the Democratic Labor Party in Western Australia. Is that right?
– State Secretary.
– He was State Secretary of the DLP in Western Australia until a comparatively recent time. Then somehow or other Lang Hancock- is that who it was- got you preselection for the Liberal Party.
– Order! The honourable gentleman will address his remarks through the Chair.
– Yes, Mr Speaker. I understand it was Mr Lang Hancock who got him preselection for the Liberal Party and got him into this House in double quick time. But he is showing, of course, the usual complete fanaticism of the DLP people.
– I rise on a point of order. I resent the reference to a man who cannot answer for himself in this Parliament. Is the honourable member entitled to use a man’s name in reference to myself in that respect?
-Yes, the honourable member is entitled to do so. The House and the public will make their own judgments as to whether or not it is proper to do so, but there is no way in which I can prevent him from doing so.
– Anyhow, Mr Speaker, this is not the important matter with which I want to deal at the moment. The honourable member has shown the usual fanaticism in describing the Australian Conservation Foundation as a communist inspired organisation. I have heard the lot now.
This week has been set aside for Project Jonah, because many people with a conscience very seriously consider that something should be done about conserving the whale population of the world. We are getting to the stage where, as a result of indiscriminate killing, some species are already virtually extinct and many others will become extinct. Today I received a letter from a very young lady, a young student, in my electorate. It reads: 34 Stewart Avenue, Blacktown. 24 May 1976
Would you please STOP killing whales because it’s NOT fair to them or us. There home is in the ocean, ours is on land. Don’t you think that’s right. You wouldn’t like it if you were a whale and you got killed by someone. YOU wouldn ‘t like it would you? STOP being so CRUEL. You wouldn ‘t like it if a harpoon went through your stomach and a grenade blowing you to smivereens.
I say to Cheryl that I am more than happy to work and to do as much as I can to stop the indiscriminate killing of whales.
Australia has had some good records and some very bad records in respect of this matter. We officially rely on the advice of the International Whaling Commission’s scientific committee which is said to ‘keep the status of all whale populations under constant review’. The support of the scientific committee stems from the chairman, Dr K. Radway Allen, Chief of the Division of Fisheries and Oceanography of the Commonwealth Scientific and Industrial Research Organisation. Dr Allen would contend that management of whale stocks is a totally scientific problem in which 60 per cent of the original population of whales should be and can be maintained in steady state.
In 1973 Australia voted for the 10-year moratorium and was the only country with an active whaling industry to do so. However the moratorium, which was proposed by the United States of America, was defeated because of vetos by Russia, Japan, Norway, South Africa and Iceland. In 1 974 Australia decided instead to follow Dr Allen’s recommendations, as it did in 1975 and 1976. 1 think there are some things we can do. Firstly, Australia should press for the abolition of the international Whaling Commission, because its members have a strong whaling bias. Secondly, the Cheynes Beach station reported a loss of $455,846 for the 8 months to 31 July 1975 which represented a trebling of its previous loss. Before further losses are sustained, the company’s activities should be rapidly phased out. Thirdly, Australia should ban the importation of all whale products since synthetic substitutes are now available. Finally, the responsibility for whales should be transferred from the Department of Primary Industry to the Department of Environment, Housing and Community Development.
– I do not wish to harpoon the honourable member, but his time has expired.
-This afternoon by pony express today’s Hobart Mercury arrived. It contained a most extraordinary headline which I think has staggered every Tasmanian member whether Liberal or Labor. Under the headline ‘Call Fraser ‘s Bluff: Neilson’, followed by the sub-headline: ‘Senate Bid on Cuts?’, the following article appears:
The States should ‘call the bluff’ on the Federal Government on financial cutbacks, the Premier, Mr Neilson, advocated yesterday.
He said the Tasmanian Government would try to persuade a majority in the Senate to force the Federal Government to continue to support programs from which it was withdrawing.
The Premier of Tasmania made a classic statement. The article went on to state:
Mr Neilson said the Prime Minister, Mr Fraser, had perpetrated ‘a fairly substantial confidence trick designed to give the impression that somehow or other services can be maintained by the Commonwealth withdrawing from activities and without the States imposing additional taxes.’
A little later- this will be great news for the Australian Council of Trade Unions- the article stated:
Mr Neilson claimed that, as far as State Governments were concerned, tax indexation was a confidence trick.
It gives me no pleasure to pick up a newspaper and see that the Premier of any State of Australia, let alone my own State, can publish such arrant nonsense. For the Premier of Tasmania to claim barely 5 weeks after the April Premiers Conference that Mr Fraser has played what he describes as a confidence trick on him, and that tax indexation is a confidence trick, is to give credence to the sort of nonsense which regrettably was floated in New South Wales recently by Mr Wran. The people in New South Wales are now starting to realise that Mr Wran is not going to be able to carry out his promises as in fact he said he would.
– What about-
-The other night I was called the fascist member from Tasmania. I am delighted that the only communist member of the chamber has been interjecting while I have been speaking tonight.
-Order! The honourable member will withdraw that.
-I have not said which one, Mr Speaker.
– You have identified the honourable gentleman. If you wish to make fun with me I will deal with you. You have identified the honourable member who interjected. You will withdraw.
– I will repeat it here or outside.
-He has identified himself, so I withdraw it. I withdraw it, Sir, because he has identified himself.
-Order! The honourable gentleman is withdrawing because I commanded him to do so on the grounds that the honourable gentleman who interjected has already been identified. I am not going to have argument about this matter.
-No, I withdraw it, Mr Speaker. May I say that I do not mind if people on the other side of the House call members on this side fascists because quite frankly that was the comment applied to me. I did not ask for it to be withdrawn because I do not mind what the honourable member says. Nobody pays any attention to him anyway. To come back to his colleague, the Premier of Tasmania, it is an absolutely incredible situation to find a Premier who was one of 6 Premiers present at the Premiers Conference in April and who unanimously agreed to stage one of the federalism policy making the claim that he has now been the victim of a confidence trick. I am sorry that I have lost one of the audience but frankly I am not sure that he is a loss.
– Go outside.
-Oh, he is waiting for me outside. I heard that he waited for someone in Kings Hall a few months ago. I heard it was rather like the contest between Mohammad Ali and the nice Mr Richard Dunn the other day. I do not know whether there is a ring out there, but
I will be very happy to see the gentleman in due course. To come back to more serious matters, I just want to say publicly that the Premier of Tasmania has made a complete and utter fool of himself by claiming that he was a victim of a confidence trick. Either he was not in full possession of his faculties at the Premiers Conference when he, Mr Dunstan and the rest agreed to the proposals put at that conference or else he has done the greatest somersault of all time. As a Tas.manian may I say that Tasmania will not go forward until we get rid of Mr Neilson and we make Mr Bingham the next Premier of that State.
-In the few moments left I would like simply to make the point that, as I understand it, the Premiers were not informed of this package and that is what they are complaining about. They feel that maybe they did not comprehend what was being put. I suspect that most of the Australian community is beginning to find itself in the same position. If one reads carefully in retrospect what the present Prime Ministe said during the election campaign and the way he tends to put policy, when the facts start showing themselves it is easy to see that one can be deceived. One takes at face value what he says. The details in fact are not there and when finally the light dawns for all of us we recognise that the Prime Minister in the way he expressed the proposition leaves the option open -
-The House stands adjourned until tomorrow at 10.30 a.m.
House adjourned at 11 p.m.
The following answers to questions upon notice were circulated:
Commonwealth Police Investigations
asked the Minister for Immigration and Ethnic Affairs, upon notice:
– The answer to the honourable member’s question is as follows:
Nations Security Council’s resolution of 29 May 1968. This includes the following:
Decides that all States members of the United Nations shall:
Subject to observance of this resolution, the entry to Australia of Rhodesians may be authorised within the categories normally eligible for entry to this country, namely on the basis of being the spouse, dependent children or parents of Australian residents or of possession of specific skills or experience in demand here, as determined by the list of approved occupations.
Law of the Sea Negotiations (Question No. 456)
asked the Attorney-General, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Education, upon notice:
– The Minister for Education has provided the following answer to the honourable member’s question:
Department of the Treasury: Expenditure (Question No. 526)
asked the Treasurer, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for Immigration and Ethnic Affairs, upon notice:
How many applications for permission to enter Australia for permanent residence have been-
b) rejected since he became a Minister.
– The answer to the honourable member’s question is as follows:
Because migration statistics are prepared on a monthly basis, I am providing the closest available approximation to the information requested by the honourable member.
The numbers of persons who were (a) approved and (b) rejected for migrant entry for the quarter ending March 1976 for some 60 countries for which this information is available at present are:
asked the Minister for Employment and Industrial Relations, upon notice:
What was the number of (a) registered unemployed and (b) recipients of unemployment benefit in the categories of (i) adult males, (ii) adult females, (iii) junior males and (iv) junior females for each New South Wales regional employment office in each quarter of 1 975 and in 1 976 to date.
– The answer to the honourable member’s question is as follows:
Cite as: Australia, House of Representatives, Debates, 26 May 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760526_reps_30_hor99/>.