House of Representatives
9 September 1976

30th Parliament · 1st Session

Mr ACTING SPEAKER (Mr Lucock) took the chair at 10.30 a.m., and read prayers.

page 855


The Acting Clerk- Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:

Tasmanian Shipping Service

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

That the decision to withdraw the Australian Trader from the Tasmanian service:

  1. is a great injustice to the State of Tasmania;
  2. has delivered a severe blow to the Tasmanian Tourist Industry; and
  3. has caused grave concern that this is the commencement of the dismantling of the Australian National Line.

Your petitioners therefore humbly pray that the House of Representatives in Parliament Assembled will move to restore the Australian Trader to the Tasmanian service.

And your petitioners as in duty bound will ever pray. by Mr Armitage, Mr Les McMahon, Mr Martin, Mr Morris, Mr Stewart and Mr Antony Whitlam.

Petitions received.

Australian Broadcasting Commission

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

We, the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth Government:

  1. Subscribe to the view that the Australian Broadcasting Commission belongs to the people and not to the government of the day whatever political party;
  2. Eschew all means, direct or indirect, of diminishing the independence of the Australian Broadcasting Commission;
  3. Reject all proposals for the introduction of advertising into ABC programs;
  4. Develop methods for publicly funding the Commission which will prevent the granting or withholding of funds being used as a method of diminishing its independence; and
  5. Ensure that any general enquiries into broadcasting in Australia which may seem desirable from time to time shall be conducted publicly and that strong representation of the public shall be included within the body conducting the enquiry.

And your petitioners as in duty bound will ever pray. by Mr Fry, Mr Les McMahon, Mr Morris and Mr Antony Whitlam.

Petitions received.

Metric System

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

That the plan to obliterate the traditional weights and measures of this country is causing and will cause widespread inconvenience, confusion, expense and distress.

That there is no certainty that any significant benefits or indeed any benefits at all will follow the use of the new weights and measures.

That the traditional weights and measures are eminently satisfactory.

Your petitioners therefore pray:

That the Metric Coversion Act be repealed, and that the Government take urgent steps to cause the traditional and familiar units to be restored to those areas where the greatest inconvenience and distress are occurring, that is to say, in meteorology, in road distances, in sport, in the building and allied trades, in the printing trade, and in retail trade.

And your petitioners as in duty bound will ever pray. by Mr Aldred, Mr Scholes and Mr Simon.

Petitions received.

Chiropractic Services

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble peitition of the undersigned electors of the Commonwealth respectfully showeth:

  1. Whereas the West Australia State Government has seen fit to register Chiropractors licensed under the provisions of the Chiropractors Act, 1 964. This unique and specific branch of the healing arts is utilised by an ever-increasing cross section of the public who can neither gain compensation nor make claim for expenses so incurred under existing Income Tax provisions.
  2. Whereas your petitioners respectfully request that action be taken to provide legislation to cover both of these matters in the States or Territories where Chiropractic is recognised by the administrative powers.
  3. Whereas your petitioners respectfully request consideration be given to:

    1. Adequate cover by Federal Health Insurance schemes.
    2. That fees payable to a Chiropractor, qualified under States or Territories Chiropractic registration acts, be made a full tax deductible item.

Both of the above being without the prerequisite of referral by a medical practitioner.

Therefore you petitioners pray your Honourable House to legislate accommodation of these matters under the provisions of Federal law.

And your petitioners as in duty bound will ever pray. by Mr Sinclair and Mr Nixon.

Petitions received.


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:

  1. That the Ethnic Radio Hour in N.S.W. broadcast in Croatian is controlled and run by members of the Yugoslav community and that the Australian-Croatian ethnic community is given no say.
  2. That Australian passports have been denied to some Australian citizens of Croatian origin without explanation or possibility of appeal.
  3. That discrimination has been exercised in the granting of citizenship privileges to migrants of Croatian origin.
  4. That discriminaton is being exercised by the Australian Parliament in the negation and non-recognition of Croatian nationality.
  5. That discrimination is being exercised by the Australian Government in Ethnic Schools and University courses when it permits only the teaching of Serbo-Croat and not of the Croatian language as an alternative.

Your petitioners call on the Australian Government as a matter of urgency to consider these facts in the light of justice toward a people who came as strangers to this land, and to take appropriate action to remedy the present situation.

And your petitioners as in duty bound will ever pray. by Mr Aldred and Mr Haslem.

Petitions received.

Social Security Payments

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 the 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 Peacock.

Petition received.


To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The petition of the undersigned respectfully showeth: the urgent need for a community owned and operated public access radio broadcasting station to service the mid western suburbs of Sydney and in particular the Municipalities of Ashfield, Burwood, Concord, Drummoyne and Strathfield.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled should grant a licence for this purpose to 2RDJ FM Community Radio.

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

Petition received.


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, although we accept the verdict of the Australian people in the 1975 election, we do not accept the right of a Governor-General to dismiss a Prime Minister who maintains the confidence of the House of Representatives.

We believe that the continued presence of Sir John Kerr as Governor-General is a cause of division among the Australian people.

Your petitioners therefore humbly pray that your Honourable House will call on Sir John Kerr to resign as Australian Governor-General.

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

Petition received.

Nursing Homes Subsidies

To the honourable the Speaker and members of the House of Representatives in Parliament assembled, the petition of the undersigned respectfully showeth:

The purpose of this petition is to bring to your notice the mounting financial burden being thrust upon patients and or relatives of Nursing Home Patients.

Fee levels are controlled by the Government but increases in Government subsidies have not been sufficient to cover the spiralling fees in Nursing Homes.

Your petitioners must humbly pray that the Government will consider its decision and take immediate steps to apply a major increase in patients subsidies.

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

Petition received.

Income Tax: Land and Water Rates

To the honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the undersigned persons believe that:

The $300 limit on income tax deductibility in respect of personal residential land and water rates is unrealistic and is a discriminatory income tax penalty.

Your petitioners therefore humbly pray that the Government will take steps to see that the aforesaid limitation is removed entirely or substantially increased.

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

Petition received.

Mr Ignazio Salemi

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 an amnesty was announced for all illegal migrants and that whereas Mr Ignazio Salemi an applicant for amnesty has been denied amnesty.

Your petitioners humbly pray that the members of the House assembled, will take the most urgent steps to ensure:

That as Mr Salemi fulfils all the publicly announced criteria for amnesty he is permitted to remain in Australia as a resident

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

Petition received.


To the honourable the Speaker and members of the House of Representatives in Parliament assembled, we the undersigned, citizens of the Commonwealth by this our humble petition respectfully showeth:

That Medibank has proved to be the cheapest and most efficient means of bringing health care to Australian citizens and that the citizens of Australia have received Medibank as a great and valued social reform.

That Medibank has proved itself to be a far superior system of health care than was offered by the private health funds prior to July 1 975.

Your petitioners therefore humbly pray that the Government will observe the promise made by the Prime Minister in his policy speech that ‘We will maintain Medibank and ensure the standard of health care does not decline ‘.

And your petitioners as in duty bound will ever pray. by Dr Jenkins.

Petition received.


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

That the decision of the Government to introduce a 2.5 per cent levy on incomes to finance Medibank and to offer private health insurance as an alternative to Medibank.

  1. Constitutes a repudiation of an election promise to retain Medibank.
  2. Will place an unjust financial burden upon low and middle income earners.
  3. Will force many people out of Medibank and create a double standard of health care in Australia.
  4. Will destroy the principle of a comprehensive compulsory health insurance scheme for all Australians.

Your petitioners call upon the Australian Government.

  1. To strengthen and extend the principles of Medibank as a comprehensive compulsory health insurance scheme covering all Australians, from General Revenue.
  2. Provide equitable health care for all members of Australian society.

And your petitioners as in duty bound will ever pray. by Dr Jenkins.

Petition received.

Milk Substitutes

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:

  1. That reduction of the age limit from six years to eighteen months for patients eligible to receive cows’ milk substitutes as a pharmaceutical benefit under the schedules of the National Health Act will cause serious financial hardship to many families;
  2. That children allergic to cows’ milk and other dairy products who often include asthmatics and sufferers of respiratory complaints depend on Soya Bean milk such as Isomil or Prosobee as a main source of protein;
  3. That the Government’s action is responsible for a 100 per cent increase in the cost of milk substitutes frequently involving parents in expenditure of $10 per week to sustain desirable protein intake for an affected child;
  4. That there is an urgent, humane need to restore milk substitutes to children up to six years of age to the schedule of Pharmaceutical Benefits.

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

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

Petition received.

Shipyards at Newcastle

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 50 000 people were partially or wholly maintained by the State Dockyard.

That stability is at present in jeopardy, as a new ship order is required within the next few weeks if serious unemployment and hardship is to be avoided.

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 employment 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.

Petition received.

Tertiary Education Assistance Scheme

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:

  1. That the Australian Government maintain the effective indexed value of education spending.
  2. That the Tertiary Education Assistance Scheme be immediately increased and indexed as recommended by the 1975 Williams Committee.
  3. That the Australian Government implement the 1975 reports of the Schools Commission and the Technical and Further Education Commission; and introduce a secondary students living allowance scheme with principles in line with those advocated for the Tertiary Education Assistance Scheme.
  4. That the Australian Government implement the 1975 reports of the Australian Universities Commission and the Commission on Advanced Education and re-establish the principle of triennial planning.

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

Petition received.

Sessional Pre-schools

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 Federal Government subsidy of 75 per cent of pre-school teacher salaries be at least maintained after 31 December 1976.

We consider that any reduction in Government grants would not only seriously retard the sessional pre-school programme, which at present is only able to provide six months of pre-school education for 70 per cent of the available preschool population in the 4-5 year old age group, but would also endanger the existence of newly developed diversification schemes implemented by pre-schools in South Australia at the Federal Government ‘s request.

Concern is also felt that a survey recently conducted in Canberra which favours full day care, is not a true reading of the parent opinion in South Australia, where full day care facilities are coping adequately with the demand.

Sessional pre-schools in South Australia are heavily waitlisted until mid- 1977, indicating the tremendous desire of parents for this type of education. We ask that sufficient funds be granted to enable pre-school schemes to continue operating.

Your Petitioners therefore humbly pray that the Government will take no measures to interfere with the existing arrangements for the funding of sessional pre-schools, which arrangements at present function reasonably.

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

Petition received.

page 858



page 858



Mr E G Whitlam:

– I ask the Minister for Employment and Industrial Relations a question without notice. Last February in answer to my question on the seventh anniversary of the Industrial Court judgment in Moore v. Doyle which stressed the urgency of Federal and State legislation to reduce demarcation issues between Federal and State unions- in that case the transport workers unions- he stated that the Federal legislation passed after Mr Justice Sweeney’s report depended on complementary or similar State legislation, and he went on to say that the matter was raised at almost every conference of Ministers for labour and that he himself would be looking at ways to deal with it with State Ministers. I ask him whether he raised the problem at the conference of Ministers for labour last Friday? If so, with what result?

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

– I recall the occasion very well. If my recollection is correct- I shall need to check on this- after the question from the Leader of the Opposition I raised the issue again by way of letter with the State Ministers. The matter had been listed, as I remember, for the next meeting of labour Ministers but it was down the agenda and I do not think we got to it. My normal practice is that if agenda items are not discussed I raise them by letter afterwards. I shall have to check to see whether I followed that course on this occasion. The agenda for Ministers’ meetings, as the Leader of the labour would know, is arranged in conjunction with the State labour Ministers and for this last occasion they did not seek to have the issue put on the agenda. So it was not raised at the meeting last Friday. But what I said to the Leader of the Opposition on the last occasion still stands.

page 858



Minister for Productivity · BALACLAVA, VICTORIA · LP

– My question is to the Prime Minister. Does the Victorian State Budget announced last night assist this Government in its overall econonic strategy?

Prime Minister · WANNON, VICTORIA · LP

– I believe that not only the Victorian Budget but also the New South Wales Budget and the South Australian Budget are all driving in the right direction at present. The 3 State Premiers concerned have resisted the temptation to increase indirect taxes and they are holding their general expenditures, I believe, in a sensible and proper manner. As I indicated earlier I believe that they are enabled to hold their situations and not increase indirect taxes and charges largely because of the federalism proposals of the Commonwealth Government which have enabled tax reimbursements grants to be increased by more than 20 per cent. These of course are the funds which give the States total flexibility in the way they spend their funds. It is interesting to note that both the South Australian Premier, Mr Dunstan, and the New South Wales Premier, Mr Wran, seem to have understood that one cannot solve economic problems by unlimited government spending. That is certainly very welcome. It is a message that the Leader of the Opposition has not yet learned, because in newspaper articles over the last few days he has made it perfectly plain that he would do it all again, breakfast with Iraqis and all.

page 859




– I ask the Foreign Minister whether the Government’s claimed 15 per cent increase in overseas aid was achieved by comparing the 1976-77 Budget allocation with the 1975-76 expenditure, which because of the Treasurer’s 20 May cuts was $3 8.6m below the 1975- 76 Budget allocation? I further ask whether the actual increase in Budget allocations for 1976- 77 was only $12.9m- an increase of 3.3 per cent in cash terms and a reduction in real terms of about 8 per cent?

Minister for Foreign Affairs · KOOYONG, VICTORIA · LP

– The allocation that was announced in the Treasurer’s Budget statement is an increase over the expenditure of the previous financial year. I have previously canvassed these matters in the House and have not only given explanations of the percentage increases in regard to the aid allocation this year compared with the aid allocation last year but also reminded the House that, whilst we strive for the goal of 0.7 per cent of the gross national product, this goal will not be achieved in the next year or two, nor would it have been achieved under the previous Administration. Indeed, I recall that when the so-called Hayden Budget was brought down during the period of the previous Administration the amount was reduced from 0.56 per cent of the gross national product to 0.52 per cent. The necessary constraints that have been imposed in relation to the economy, which were caused by the Labor Government’s mismanagement, mean that we will not be able to allocate more in aid programs until we re-direct the growth in the economy. The stronger the economy the greater the aid program. That ought to be recognisable by anyone.

Mr Hurford:

– What is your percentage?


-The shadow Treasurer asks what is our percentage. At the moment it would be impossible to give a definitive answer as to the percentage of the gross national product this year. Nevertheless, I estimate it to be approximately 0.5 per cent at the moment. The Government is constantly reviewing its aid programs. Honourable members opposite will be aware that occasions arise when there is a need to increase them, but at the moment the 14 per cent increase over the expenditure for the last financial year compares more than favourably with the approaches taken by the previous Government when it reduced the aid allocation.

Mr Hurford:

– It is the worst for 10 years.


-I will reply to that interjection. Honourable members will know that the average amount spent by member countries of the Organisation for Economic Co-operation and Development, which are supposedly working towards a figure of 0.7 per cent of the gross national product, is approximately 0.36 per cent. The lowest figure reached by Australia to date was reached during the period of office of the Labor Government- in the calendar year 1973- when the figure fell to 0.44 per cent.


-Order! The comment is sometimes made that answers by Ministers are too long. I suggest to honourable members that they think of that when they are interjecting and, in a sense, asking 3 questions of a Minister while he is replying to one.

page 859



Mr Peter Johnson:

-Is the Minister for Post and Telecommunications aware that on 7 September the Australian Broadcasting Commission program This Day Tonight included a segment of 17 minutes’ duration about police from Cairns arresting a number of people living at Cedar Bay on charges of possession of drugs and vagrancy? Has the Minister received any complaints about the apparent lack of balance and the bias in this program?

Mr Eric Robinson:

-I have received a substantial number of complaints about that segment of the This This Day Tonight program. I will be making some inquiries about this matter. I take the opportunity of saying that we all have a lot of pride in the Australian Broadcasting Commission and if that pride is to continue it is essential that we have not only quality but also objectivity. I am bound to say that in the matter raised by the honourable member and in one or two other matters that have come to my notice, I think there has been a diminution of objectivity in the This Day Tonight programs. The maintenance of proper standards is, of course, the concern of the Commission, the management and the staff generally. Team spirit alone will maintain the objectivity and the quality that we all desire. If the honourable member wishes to press me for details of that matter I will be only too happy to ascertain all the details about it from the Australian Broadcasting Commission.

I also take this opportunity to refer to an answer that I gave yesterday to a question by the honourable member for Hotham in which I said that no doubt the Chairman of the Commission had consulted his Commissioners before he took certain action. Information flowing to me reassures me that that did take place. Any chairman of a board or commission of any intelligence would hardly make a decision unless he had had discussions with members of the board or commission. That did occur. Certainly one would have expected Sir Henry Bland, a man of substantial quality and experience, to have done just that, and that is what happened.

page 860




-Is the Prime Minister aware of the great need in Australia for a comprehensive structural change program? Does he realise that retraining and relocation programs are required urgently in areas suffering most as a result of the present economic recession? Finally, will he indicate how soon these programs can be put into operation to avoid hardship on employees and to minimise the business problems of employers and investors?


-The honourable gentleman, I hope, will be aware that the Commonwealth has offered to establish with South Australia and New South Wales a joint Commonwealth-State committee to examine the impact of the Industries Assistance Commission’s recommendations, whatever they may be, on Whyalla and Newcastle. That committee will start to operate as soon as we have the IAC report. I believe that something useful will come out of that. The Government, of course, is concerned with these matters, but the Government’s objective is to get the economy at large moving forward in a sensible and constructive fashion. The task would not be anything like as difficult as it is if the previous Administration had not embarked on such wild and foolish schemes as a 25 per cent across the board tariff cut, which of itself, it is alleged, exported about 40 000 jobs to countries overseas. It is the economic policies of the previous Administration which have caused these difficulties, led to a trebling of unemployment and made it very difficult for a number of Australian industries. The people of Australia and the trade unions of Australia must be vastly disturbed to see the statement by the Leader of the Opposition, if I may repeat it, that he would do it all again.

page 860




-Mr Acting Speaker, if I may, I would like to correct something I said in relation to New South Wales in answer to an earlier question. Mr Wran, of course, has not brought down his Budget. What I was saying in relation to him was in expectation of what he will do, because he has said that he believes the Commonwealth Budget ought to be given an opportunity to work and that his Budget will be a responsible Budget. If that is so, he will have a Budget very much in line with that of the Victorian Premier and with that of the South Australian Premier.

page 860




– I address my question to the Minister for Employment and Industrial Relations concerning apprenticeships. In doing so, with your indulgence, Mr Acting Speaker, I bring to the notice of this House that the Australian Capital Territory Apprentice of the Year award, which was made last night, went to Brian Griffin, who served his apprenticeship in this Parliament as a cook with the Joint House Department.


-Order! A lot of honourable members are interjecting. I think some of them might be a good advertisement for Mr Griffin’s capacity and capabilities as a cook.


– Is the Minister aware that there is considerable disquiet in the community concerning the number of places available for apprenticeship training? If so, is the Government taking any initiatives to ensure that there is continuing and increasing emphasis placed on trade training?


– I am aware that the Australian Capital Territory Apprentice of the Year was Mr Griffin. I congratulate him. I am sure that it is very pleasing to all members of this House that he is a former member of the staff here. Having attended many apprenticeship presentations, I can say that I have always been very impressed with the outstanding quality of the craftsmanship that is displayed there. There is no doubt that Australia needs more tradesmen. Despite the very large contribution by the Commonwealth Government in this field- about $41m this year, of which $26m is to be paid by way of subsidy to employers of first year apprentices- the numbers are failing. This issue was discussed at length at the meeting of labour Ministers held last week in Adelaide. I might say that it was a very constructive meeting and I acknowledge the contributions made at the conference by both Labor and Liberal Party Ministers. As a result of the discussions, a working party was set up to report back to a special meeting of labour Ministers in November. I should emphasise that, despite some comments that have been made recently, there is no question of the Federal Government vacating this field. I am concerned to see how existing funds can be used to get better results and whether the base of support for apprentice training in Australia could be widened.

page 861




-I ask the Minister for Health: Is it true that most private health insurance funds are undercutting Medibank Private contribution rates for intermediate and private ward cover by in many cases in excess of $1 a week? Is it also true that while Medibank Private is required to pay the equivalent of State taxes to federal Consolidated Revenue it cannot draw on $2 10m of invested reserves to subsidise its contribution rates? Will the Government review the contribution rates set by Medibank Private and provide it with funds to match the reserves of the private funds or abolish the equivalent payment of State taxes so that Medibank Private can compete effectively with private health insurance funds?

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

– Let us be clear that Medibank Private is competing very effectively with the private health insurance funds in the table which will be taken by 80 per cent of the Australian people who insure themselves. That is the shared ward accommodation rate. In most instances Medibank Private is within 10c or 20c a week of the competing larger private funds. Certainly, some of the smaller funds in some States have undercut by much greater amounts. It is not for the Government to tell Medibank Private where it shall set its rates. It is an independent commercial private insurance fund competing with other funds in a competitive sense. The Government decided that Medibank Private would compete on fair and equal terms and that where there were charges such as rates, stamp duties or payroll tax these would be taken into account in assessing the premiums payable by people who insure with Medibank Private. The Government also decided that where those notional estimates should be directed to State or local government authorities they will in fact be so directed rather than be lumped in with Consolidated Revenue.

I repeat that Medibank Private is very competitive. It has set a bench mark for private insurance premiums in this country and if it is forcing the other private insurance funds to use their reserves to try to undercut by a few cents a week, I make no apology for that because I believe that it is making the other funds return to contributors some of the reserves of funds which have been taken from them over the years. I believe that Medibank Private in the long term will be a strong competitor indeed. I wish that members of the Opposition would get right behind

Medibank Private and do what the honourable member for Hindmarsh has done, what Mr Hawke has done, what the Prime Minister has done and what the Minister for Health has done: Join Medibank Private and get behind it.

page 861




– My question is directed to the Prime Minister. In view of his expressed concern with the drought position in southern Australia, is he aware of criticism that the Commonwealth does not provide financial assistance until the State governments have spent a designated base amount? Would he be prepared to vary this method of payment so that immediate Commonwealth aid could be provided to meet the urgent and serious needs of drought affected primary producers?


– I am aware of criticism that has been made in recent times in, I think, both New South Wales and Victoria as a result of the widening of the schemes of assistance that the Commonwealth is prepared to support in relation to droughts. I had thought that it had been widely understood that so far as agreed assistance is concerned all the States should spend a base amount, which in New South Wales is $5m, in Victoria $3.5m, in Queensland $2m, in South Australia $l.Sm, in Western Australia $ 1.5m and in Tasmania $600,000, and that after that amount had been spent the Commonwealth should meet the total expenditure incurred in the particular State. Over the years, of course, because of the magnitude of the disasters and the difficulties that have occurred, Commonwealth expenditure has been very much greater than that incurred by the States. For example, between the 2 years 1974 and 1976 the Commonwealth spent about $15m or $16m in Victoria, which was much more than the base amount of $3.5m spent by that State. It ought to be noted that in the past the Commonwealth has picked up the total expenditure after the base amount has been provided by the States.

The broadening of the categories of the schemes of assistance which the Commonwealth is prepared to support clearly would mean that the States would achieve their base amount of expenditure more quickly than otherwise would be the case, because unless it is agreed expenditure it does not count. If some States are dissatisfied with the arrangement that has lasted for some time- that is, the States meeting the base amount and the Commonwealth picking up all expenditure beyond that- I would be very happy, following discussion with the Treasurer and the Minister for Primary Industry this morning, to offer the States concerned matching expenditure on a dollar for dollar basis which would be payable from the beginning of a disaster right through to the end, no matter what the expenditure might be. In the case of smaller disasters that method of payment would have advantages for the States, but in the case of larger disasters it might have disadvantages. It is an alternative method of payment which we would be prepared to offer. I do not believe it would be practical for the States to switch backwards and forwards from the present method of payment to the new one at will. But if they want to move to a dollar for dollar arrangement, we will accommodate them in that regard.

page 862




– My question, which is directed to the Minister for Business and Consumer Affairs, relates in part to the question asked by the honourable member for Newcastle. Will the Minister confirm that the Trade Practices Commission has received a number of complaints concerning misleading advertising by private health insurance funds, such as the Hospital Benefits Association Ltd and the Australian Natives Association Insurance Co. Ltd in Victoria? If so, what action has the Government taken to ensure that private health insurance funds do not gain a competitive advantage over Medibank Private through the use of misleading statements and unfair trade practices?

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

-I understand that the Trade Practices Commission has in fact received a number of complaints about misleading advertising. I think the honourable gentleman would be aware that arising out of some of those complaints the Commission sought my consent to the prosecution of one of the major health insurance funds regarding misleading advertising. That consent was given. I do not wish to say anything further about that case. The general issue which the question raises concerns the Government. I am particularly concerned, as is the Minister for Health, that in the next few weeks and in the months immediately following 1 October there should be accurate and full disclosure of the conditions of entry and the conditions of benefit in respect of both Medibank Private and the private health insurance funds.

page 862




– Is the Minister for Environment, Housing and Community Development aware that contracts to construct 400 family homes to be built by the New South Wales Government have not been let although tenders closed on 19 July? What is the reason for a 2-month delay in construction by the New South Wales Housing Commission in the Wollongong, Newcastle, Gosford and Sydney areas which have higher unemployment figures than other areas of New South Wales? Are contracts let by the Commission to the New South Wales Housing Commission Building Group influenced by the Building Workers Industrial Union’s requirements for sub-contractors’ conditions of employment? Will the Minister use his influence with the New South Wales Government to allow construction to proceed without further delay and without restrictive practice?

Minister for Environment, Housing and Community Development · BASS, TASMANIA · LP

– I have been informed that contracts for 400 family homes in New South Wales are being delayed and that tenders did close approximately 2 months ago. I understand that the Building Workers Industrial Union is objecting to tenders being called on the open market- open to industry as a whole- rather than being confined to the Housing Commission Building Group. It seems that the BWIU has a special arrangement with the Housing Commission Building Group that allows them to have sub-contract rates at substantially higher levels than are available to the rest of the industry. Yesterday a delegation came to this place and that delegation had in it representatives from the BWIU. They asked that the Government do more for the housing and construction industry. In view of this I find it surprising that the BWIU is delaying this important work. I find it very disturbing that these homes the construction of which is being delayed are located in areas of high unemployment. They are in areas like Newcastle, Gosford and Wollongong as well as Sydney. I can only hope that the delay of this important work will not continue because of the blocking tactics of the BWIU.

page 862




– My question is addressed to the Minister for Foreign Affairs. Will he check with the Minister for Administrative Services whether it is proposed to demolish an historic Japanese style home owned by Australia in Tokyo and to replace it with a t6-unit apartment house for the use of Tokyo based staff mainly from his Department? Will he also check whether instructions have been issued to expedite the demolition and preparatory work to circumvent new building and zoning regulations which are to come into operation in Tokyo next year, whether the Japanese Government has been advised of Australia’s intentions and whether the cost of each unit on 1 974 estimates is in excess of $250,000? Will he ensure that our relations with Japan will not be jeopardised by any action on our part to circumvent local regulations? Will he ascertain whether this extravagance can be justified in the present economic climate in Australia?


-I would be delighted to check with the Minister for Administrative Services who has control of the Overseas Property Bureau. It, not my Department, administers this matter.

Mr Hurford:

– I would not mind getting my hands on it.


-Frankly, I would not mind having my hands on it but it is administered by the Minister for Administrative Services and I will certainly convey the question to him.

page 863



Mr Donald Cameron:

– I direct my question to the Minister for Health whom I assume subscribes to the belief that free enterprise should be allowed to flourish within the bounds of honest business practice. Will the Minister assure the House that where private health funds are more efficient and offer lower rates than Medibank, they will not be persecuted because they are doing what free enterprise is all about?


– The answer to that question is yes. We welcome competition. We welcome free enterprise in the truest sense. There has not been as much competition in the area of private health insurance as perhaps there could have been until the entry of Medibank Private. We will not do anything which will limit the capacity of the private health insurance funds to exercise the greatest possible efficiency in order to compete effectively with Medibank Private. To ensure that there will be fair competition the Government decided that all charges that the private health insurance funds have to meet in the States would be the subject of a notional deduction from Medibank Private and this would be reflected in the premiums that the funds could offer the Australian people. There will be free competition. We welcome free competition as part of our general concept of and belief in free enterprise.

page 863




– I direct a question to the Minister for Transport. In view of the completion of the sealing of the Eyre Highway in South Australia as a result of the national roads program introduced by the former Government and the official opening of the highway on 28 September, is the Minister able to release any information on the inquiry into the new route of the Stuart Highway from Port Augusta to Alice Springs? When is it anticipated that work on the construction of the new Stuart Highway will commence, a highway also declared under the national roads program as a national highway?

Minister for Transport · GIPPSLAND, VICTORIA · LP

– I was interested to note that the honourable member claims that the national highways program was within the total policy province of the previous Government. The former Minister for Transport might be able to remind the honourable member that a study instituted by me as Minister for Transport led to the national highways program. So for once there is a bipartisan approach. I was one of the first to be pleased when the Labor Government picked up that program and instituted it. It showed that the former Minister had some sense, for once. I am delighted that the sealing program has reached the border. I have sent my regrets to the responsible State Minister that I am unable to attend the opening. If the honourable member attends he might convey my apology in person. It is a very significant step that we have reached this stage with the sealing program and I look forward to the day when the total program is completed. As to the last part of the honourable member’s question, I will get the information and pass it on to him.

page 863




– My question is directed to the Treasurer. Is the Treasurer aware that the Tasmanian Budget brought down last week provides for the abolition or reduction of a number of sectional taxes, an increase in expenditure for 1 976-77 of 2 1 . 1 per cent and a deficit of less than $500,000? Is there any truth in the suggestion that the Tasmanian Budget was made possible only as a direct result of arrrangements made by the Tasmanian Premier with the Whitlam Government in respect of Medibank and the takeover of the Tasmanian railways, or is the Tasmanian Budget a clear vindication of our federalism policies?


– I thank the honourable member for a very pleasant and friendly question because it can be said at the outset- not merely asserted but indeed sustained- that the Tasmanian Budget, which has just been brought down, is very much a direct reflection of the success of this Government’s federalism policies. That Budget which was brought down, I think, on 1 September certainly reflects what the Prime Minister and I, and other senior Ministers, have been saying recently- there is not need for any State government to bring down a budget which imposes increases in State taxes. In spite of what the Premier of Tasmania has been saying in recent months and in spite of his previous poster.ings, any claim that Tasmania had been given insufficient funds is clearly rejected by the fact that there have been no increases in any of the State Government’s tax rates.

Mr Hurford:

– What about services?


– In response to the honourable member’s interjection about services, expenditure by the Tasmanian Government will increase by 21.1 per cent this year- almost twice the rate at which Commonwealth outlays are expected to grow. I note also that the Tasmanian Government expects to increase its capital expenditures by about 21 per cent this year in spite of a 5 per cent increase in its Loan Council program, a fundamental -

Mr Hurford:

– We all know -


– I ask the honourable gentleman to give me a moment in which to speak. He is making life a little difficult. In fact, I feel a little tired this morning; so I hope that he will bear with me. Of fundamental significance is the fact that the Tasmanian Government had a surplus of $4.1m last year and had a credit balance of $ 1 7.3m in its loan fund. Therefore, it can be said that it is nothing less than amazing for a State Premier to claim financial hardship on the one hand and to end up with a credit in the State’s loan fund of $17m on the other hand. This Budget shows that that Premier has been crying wolf without substance. The Budget documents certainly make that clear. They reflect, as the honourable gentleman indicated, the generosity of the tax sharing arrangements which this Government has made. They are far superior both in relation to principle and finance than those which the Whitlam Administration entered into. The fact remains that the Tasmanian Government will receive an estimated $4.5m more this year than it would have received under the arrangements of the Whitlam Administration.

page 864




– My question, which is directed to the Attorney-General, is in relation to the Law Reform Commission. The Attorney-General is aware that over the years I have made repeated representations pressing the urgent need for a thorough review of insurance law, particularly in the areas of contracts, solvency, competency of directors and the level and area of assets of insurance companies. He will recall also that I made a full submission to him last May outlining the need for a review of insurance law to be referred to the Law Reform Commission. Can the . Minister indicate whether at long last this course has been agreed to?


-I thank the honourable member for his interest in this area of the law and also for his perseverance in the matter. It so happens that today I have referred the question of inquiry into insurance contracts to the Law Reform Commission. This is an area of the law that developed at a time when there was a complete freedom of contract. There has tended to be a degree of inequality between the insurer and the insured. I do not subscribe to the view that there are grave abuses evident in this area. At the same time, however, it is an area that needs consideration. After consultation with the Treasurer, within whose responsibility this area falls in the Commonwealth sphere, I have decided to refer the matter to the Law Reform Commission. I will issue a statement later in the day to which will be annexed a copy of the terms of reference. The terms of reference will relate particularly to contracts of insurance. They will exclude contracts of marine insurance, third party insurance and workers compensation because those are matters which are the subject of specific contracts. The honourable member will be grateful to know that questions relating to other insurance contracts have been referred to the Law Reform Commission.

page 864




-Is the Minister for Primary Industry aware of the effects that the current waterfront demarcation disputes and other stoppages are having on Australia’s rural export trade? In particular, is the Minister aware of the very serious impact that such stoppages are currently having on our export meat trade? Will he further indicate what impact these continuing stoppages will have on the already low returns to our Australian beef producers?

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

– The honourable gentleman represents an electorate where the beef industry has been in a disastrous plight now for more than 12 months. As I understand the position, seasonal conditions have deteriorated and many producers are in a position of quite critical economic stress. Of course, that is not peculiar to the electorate of Capricornia; it is pertinent to every other beef producing area in Australia. In view of that, the behaviour on the Australian waterfront, to which my colleague the Deputy Prime Minister referred yesterday and about which I should also like to say something, must be viewed most seriously. To 16 August this year 167 days were lost on the Australian coast. That is equivalent to 5 round voyages between Japan and Australia. It represents approximately 1 8 000 tonnes of reefer capacity. The delays particularly affect the container turnaround. The figures cited by the Deputy Prime Minister gave a broader base of this.

With regard to the meat industry, at the moment 2 particular destinations are quite critical to the survival of Australian beef exports. Because of the Presidential elections in the United States there have been some problems in determining the quantity of beef that might be exported to the United States. In view of that, the situation regarding exports to the alternative market of Japan has become quite critical. At present the shortfall in deliveries to Japan is between 2500 tonnes and 3000 tonnes. This is solely because of industrial disputes on our waterfront. Of course, because of the demarcation dispute between the waterside workers and the transport workers, delays have been experienced not just on the waterfront but also in container depots. In Melbourne 90 days have been lost since 1 January, of which 83 days have been lost since 1 May. In Brisbane 16 days have been lost from 1 January, 1 1 of which have been lost since 1 May. In Sydney 38 days have been lost from 1 January, 30 of which have been lost since 1 May. In circumstances where the political affiliation of the leadership of so many of Australia’s unions has already been suspect, it seems incredible that one of the areas that is being affected is the other market of the Union of Soviet Socialist Republics. The Australian Meat Board has negotiated a contract to alleviate some aspects of the position regarding the over-supply of beef in Australia. It seems incredible that that market in the U.S.S.R. also is being prejudiced because the fulfilment of the contractual deliveries to that market is being affected by industrial troubles in Australia. One further market, that of Mauritius, where we have been averaging about 400 tonnes a month in shipments, is another market that is now affected because of its connection with the South African trade.

The tragedy behind this situation is that these markets, to which it seems our beef may not be supplied because of industrial troubles in Australia, may well be lost to other countries. Both the Japanese and Mauritius markets have already suggested that they may turn to other sources of supply. The Sydney representative of the Japanese Livestock Industry and Promotion Corporation has advised that if Australian exporters are unable to ship to tender dates, Japan will look elsewhere for beef supplies. This matter must be looked at in a most serious light. I hope that in all those circumstances, those on the waterfront will realise that because of their present totally irresponsible behaviour, their own jobs will be at risk and the whole survival of an industry and possibly of a trade will be at risk.

page 865



Mr E G Whitlam:

-Has the Prime Minister yet received any report or reports from the interdepartmental committee which I set up last October to investigate tax incentives to encourage and promote the arts?


-Work is progressing in this particular matter. I have nothing to add to the public statements I have already made concerning it.

page 865




-I direct my question to the Treasurer. Is it a fact that those tax rebates now indexed include the general rebate and the dependent wife’s allowance? If rebates for dependent children had been retained, is it likely that they too would have been indexed? In view of this is it intended that family allowances which have replaced the rebates for dependent children will be indexed so that they retain their real value? Will the Government give consideration to increasing in real terms those benefits which are paid in respect of young children of preschool age?


-The matters to which the honourable gentleman has referred are quite clearly matters of substance. Of course the suggestions which the honourable gentleman has made in the question will be given consideration during the period ahead. The matters mentioned in the question are essentially ones of policy, but I welcome the fact that the honourable gentleman has raised them today. They will be considered.

page 865




– I direct my question to the Minister for Employment and Industrial Relations. The question concerns the national and State committees on discrimination in employment and occupation which were established following ratification of International Labour Organisation convention 1 1 1. Is the Minister aware that the national committee has not met since midMay when its Chairman resigned and that the State committees have not been able to meet since the end of June, at which time the term of office of the committee chairmen expired? Is the Minister also aware that a substantial backlog of work has now built up due to the inability of the committees to conduct any business in the absence of chairmen? Will the Minister now explain to the House why he has not bothered to appoint chairmen to these committees? Will he give the House an assurance that he will do so in the very near future and so enable the committees to get on with their important work?


– Yes, these committees do important work and I recognise that. They were established over a period of time by the previous Government and accordingly not all the terms of office expired on the same date. To bring things into line I decided to have all terms of office of these committees expire on 30 June this year to get a common date. I have been engaged since in discussions and investigations relating to the appointment of chairmen. I am aware that there has been a build-up of work both at the national and State levels but I am anxious to get all the chairmen appointed at the same time to avoid confusion. I am in the final stages of getting appointments approved and I hope to announce the chairmen at both the national and State levels in the very near future.

page 866




– Has the Minister for Transport seen reports that at the Australian National Cattlemen’s Council seminar in Brisbane on 4 August Sir John Egerton, a director of Qantas, stated that Qantas does not buy Australian beef for its kitchens anywhere in the world outside Australia because of what he calls the poor quality control and deceptive labelling of Australian beef? Is Sir John’s statement true? If so, can the Minister do anything to have the situation corrected?


– I have not seen the reports referred to by the honourable member. Sir John Egerton of course is a director of Qantas and one would assume that he knows what he is talking about. Nevertheless, I am a bit puzzled by the statement because my understanding is that Qantas in fact has only one kitchen overseas, which is at Fiji, and in that kitchen it uses only Australian beef. At the other international airports overseas Qantas has contracts with the airlines in those countries which do the providoring for Qantas. Qantas therefore has no control over the supplies obtained to satisfy those contracts.

As a reciprocal arrangement Qantas does the providoring in Australia for the international airlines that operate services to and from this country and therefore Australian beef is supplied to international aircraft as they leave Australia. But having said all that I would be disturbed if the allegation that has been made is factual. I shall make inquiries to see, first, whether Sir John Egerton made the statement, and, secondly, whether it is true.

page 866


Minister for Primary Industry · New England · NCP/NP

– Pursuant to section 30 of the Honey Industry Act 1962 I present the interim annual report of the Australian Honey Board for the year ended 30 June 1 976.

page 866


Minister for Primary Industry · New England · NCP/NP

– Pursuant to section 23 of the Egg Export Control Act 1947 I present the interim annual report of the Australian Egg Board for the year ended 30 June 1 976.

page 866


Minister for Health · Gwydir · NCP/NP

For the information of honourable members, I present the text of a statement by the Minister for Social Security relating to the 3-year program of accommodation for aged or disabled persons.

page 866


Minister for Aboriginal Affairs · Stirling · LP

– For the information of honourable members, I present a report of the Working Party on Languages and Linguistics to the Universities Commission entitled Languages and Linguistics in Australian Universities, together with a statement by the Minister for Education relating to that report.

page 866


Minister for the Northern Territory · Fisher · NCP/NP

– For the information of honourable members, I present an agreement between the Government of Australia and the Government of the Federal Republic of Germany on scientific and technological cooperation.

page 867


Minister for Employment and Industrial Relations · Corangamite · LP

- Mr Acting Speaker, I wish to make a personal explanation. I would like to correct some information which I gave in an answer to a question from the Leader of the Opposition (Mr E. G. Whitlam) last Tuesday. The question related to the seasonally adjusted figures for unemployment and related statistics. The particular element of my reply that I would like to correct is that relating to seasonally adjusted overtime figures. When I cleared the Press statement for release, the figures for overtime were on the basis on which they had normally been published, that is, on a seasonally adjusted basis. Normally, those figures appear only in that form and I thought that they had been maintained on that criterion. However, due to a misunderstanding when the figures were reproduced, the raw figures were substituted for the seasonally adjusted figures and I was not aware of the change. The reason I was not aware is that I was attending a conference of Commonwealth and State Ministers for Labour in Adelaide at the time the Press statement was being produced in my Department in Melbourne. The seasonally adjusted figure was, in fact, 2.6 hours. The original figure was 2.5 hours.

page 867



Mr E G Whitlam:
Leader of the Opposition · WERRIWA, NEW SOUTH WALES · ALP

- Mr Acting Speaker, the Minister for Employment and Industrial relations (Mr Street) wrote to me that he would be making this statement. May I have your indulgence to ask a consequential question of 2 sentences on the same subject?


– I call the Leader of the Opposition.

Mr E G Whitlam:

– I ask the Minister whether he noted a report in the Melbourne Age yesterday of the opinion of the Australian Statistician that in the case of the overtime series he was not aware of any unusual problem with the seasonal adjustment. I therefore ask the Minister whether in future monthly statements which he makes on this subject he will at least issue the seasonally adjusted figures for overtime.


– I shall check with the Australian Statistician on this question and certainly give further consideration to it in the light of my discussions with him.

page 867


Discussion of Matter of Public Importance


– I have received a letter from the Leader of the Opposition (Mr E. Whitlam) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Prime Minister’s failure to honour his election mandate.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the Standing Orders having risen in their places-

Mi E. G. WHITLAM (Werriwa-Leader of the Opposition) ( 1 1.28)- Whatever else may be said of this Government’s performance in the past 9 months, it has earned for itself one unchallenged and unenviable distinction: It is the most dishonest Government that Australians have ever known. However mediocre its talents, however negative its policies, however limited its vision, in one respect at least it outshines all other Australian Governments past and present. It is the supreme exponent of political deception. In its ability to break promises the Fraser Government is without peer. This is a charge which can be specifically documented and conclusively proved. There is scarcely a promise in the Liberal policy speeches and documents at the last election that has not been broken or set aside. There is scarcely an issue on which the Fraser Government can still be trusted or believed.

Let me be quite clear about the burden of our charge. It is not just that the Fraser Government has failed to carry out its promises. That much is obvious. It is not just that the Government has failed to live up to whatever expectations the people may have had of it. That much is admitted by the Deputy Prime Minister (Mr Anthony) himself. Six weeks ago the Deputy Prime Minister stated publicly that people were disappointed with the Government’s performance. I quote his words as reported in the Press of 3 1 July:

I am well aware of the criticism which has been expressed about certain areas of Government policy and action- or lack of action. I am well aware of the fact that the new Government, which was elected last December, has not come up to the expectations of many people.

The right honourable gentleman has been listening intently to my quotation of his statement and does not demur to the accuracy of my quotation or in fact the accuracy of his opinion. It was a candid admission by the Deputy Prime Minister and no one would dispute it. I would welcome the opportunity to hear the Deputy Prime Minister on this subject, but some people have suggested that the Government, not content with ousting general business today, is in fact going to gag this debate immediately after the Prime Minister (Mr Malcolm Fraser) has spoken. It is quite obvious that in this case the Prime Minister cannot count on the support of the Deputy Prime Minister. The Deputy Prime Minister is on record as admitting the shortcomings of the Government. He was candid about it. But that is not the point of our matter of public importance today. There is all the difference in the world between an honest government that is unable to do what it promises and a government that deliberately does the opposite. Mistakes can be forgiven, delays can be forgiven, errors of judgment can be forgiven. Even a genuine change of policy, honestly motivated, can be forgiven, even welcomed. What can never be forgiven is deliberate, sustained and systematic deception. And that, precisely, has been the record of the Fraser Government on policy after policy, on promise after promise.

It is easy to multiply examples. The honourable member for Hughes (Mr Les Johnson), who is due to follow me, and I will give as many as time allows; but let us recall the background to this Government’s promises. It came before the people last December posing as a government of honesty and responsibility. The people were asked to put their trust in this Government- a government which alone, they were told, could manage the economy; a government which alone, there were told, could solve our economic difficulties. Trust was the commodity this Government sought from the people; trust is the commodity the Government has squandered and abused. The enormity of the Government’s broken promises is vastly compounded by the circumstances in which these promises were made. In any normal election people make a realistic assessment of a Government’s promises. No doubt some political promises by the Liberals were taken with a grain of salt. That is a fanenough rule in normal times. But what are people to think when a government forces an election at an abnormal time in unprecedented circumstances? If people are told that the circumstances justify any breach of rules or convention to bring about an election, they expect that promises made at such an election will be even more solemn and binding on the Party which makes them. Far from being more scrupulous in keeping its promises, the Fraser Government has been increasingly ruthless in breaking them. On no issue were the people more entitled to expect honesty from the Government than in the management of the economy. They were entitled to believe, and were led to believe, that the Government would continue the policies which were leading to a decline in unemployment and a steady economic recovery. The Government’s policy speech, as delivered by the present Prime Minister stated: …. the problems of overcoming inflation and unemployment are pre-eminent. . . . Only under a Liberal-National Country Party Government will there be jobs for all who want to work.

The Prime Minister has been busy gabbling to the Minister for Employment and Industrial Relations (Mr Street) to this stage. I do not want to interrupt him, but, of course, he will remember his promises last November and December on inflation and unemployment. On this matter he knows he can get no assistance from the Minister for Employment and Industrial Relations. The Minister for Employment and Industrial Relations cannot justify the breaches of promise on this. He was an unwilling tool in carrying out this particular breach of promise. What happened? The Government is now deliberately creating unemployment. There is no secret about it. Seasonally adjusted unemployment has been rising since February to 5.2 per cent of the work force in July. Industrial production fell in May and June. Both the rate of inflation and the rate of unemployment will be as high in December 1976 as they were when the Fraser Government took office. The rise in unemployment is not due to the failure of an honest policy but to the deliberate breach of a dishonest promise. Labor’s strategy has been reversed. Unemployment is being fostered in order to attack real wages. Yet what did the Prime Minister’s policy speech say about wages? It said:

Our reforms will maintain the purchasing power of wages.

That promise was broken. The Government has never had the slightest intention of maintaining the purchasing power of wages. In the supplementary economic statement issued with the Liberal policy speech the Prime Minister declared:

The Government will support the wage indexation agreement in the current economic circumstances.

The Prime Minister and his Minister for Employment and Industrial Relations, despite all this crude persiflage in which they are engaging, know that they cannot justify their breach of this promise. They can put on a trivial front while the promise is recalled, but they admit that the promise was made; they admit that the promise was broken. There was no suggestion that the commitment was partial or qualified in the circumstances of last December. Yet 7 weeks after the election the commitment to wage indexation was abandoned. Wage indexation was effectively destroyed, and with it the essential foundation of trust and co-operation on which economic recovery was based. The Minister for Employment and Industrial Relations, to his credit, tried in Cabinet to persuade his colleagues to honour a promise which had been made barely 7 weeks before, and he was overriden. No wonder he looks so crushed and minute in this forum today.

With trust undermined, with the recession deepening, with unemployment growing, what has been the reaction of the Government? Not to admit its mistakes, not to take the people into its confidence, but to cut back funds for unemployment benefits and to conceal the real dimensions of the unemployment crisis by abolishing seasonally adjusted figures. One deception has led to another. The announcement last Friday by the Minister for Employment and Industrial Relations that seasonally adjusted figures would be discontinued drew us further into a Liberal web of falsehood and concealment. There is no statistical difficulty about the overtime figures being published in seasonally adjusted form. The Statistician went on record to this effect in the Age yesterday. Similarly with other unemployment figures such as vacancies. There is no statistical difficulty in continuing publication of them in seasonally adjusted form.

There have been broken promises on welfare and social security. The deplorable record on Medibank is well known. The Prime Minister promised that Medibank would be preserved. As late as 3 February he said: . . . that’s not just a verbal use of the term ‘Medibank’. I think the concept of Medibank was endorsed.

It was certainly endorsed by the people, if not by the Government. The concept of Medibank is being destroyed by the Government’s forcing half the people into private funds. On 8 June the Prime Minister promised ‘fair competition’ between Medibank and the private funds. Yet every private fund has been allowed to undercut Medibank with cheaper rates for private insurance.

On 8 December pensioners were promised:

We propose to bring in legislation which will allow increases in pensions to be made instantly and automatically as soon as the new index is announced.

That promise has been broken. Again in his policy speech the Prime Minister said:

We stand by our commitment to abolish the means test on pensions.

That promise has been broken.

Home owners and home buyers have been doubly deceived by the Fraser Government. The Liberal policy document on housing stated categorically that the Fraser Government would continue to support my Government’s scheme for tax deductions on housing loans. It was one of the few promises publicly restated by the Prime Minister during the campaign. On 5 December he said the interest subsidy scheme would continue. It has in fact been half demolished.

A whole range of deception and manipulation was embraced in the Liberal promise to maintain certain essential spending. On 9 December the Prime Minister stated:

I have said repeatedly that essential programs in health, education, welfare and urban development will be maintained.

I suppose there could have been some scope for backtracking in the definition of ‘essential’, but in urban development the Government has found nothing essential at all. The Liberal policy speech promised:

We will continue urban programs … to overcome the problems caused by rapid growth in the cities and in new expanding suburbs.

Yet urban programs have been virtually wiped out. Growth centres have been abandoned. Funds for sewerage have been cut by 70 per cent in real terms. Area improvement and land commission funds have been eliminated. Despite the Liberal policy promise to maintain standards of health care and continue the present community health programs, funds for these services have been cut by 15 per cent in real terms. The list can be extended. There was a promise to maintain legal aid for all who need it, but the Legal Aid Offices are being closed down or the promised ones are not being opened. There was a promise that the Conciliation and Arbitration Bill would not be proclaimed before discussions with the Australian Council of Trade Unions. That promise has been broken. There was a promise to give full executive authority on city management to the Australian Capital Territory Legislative Assembly by 1 July. That promise has been broken. There were solemn and written promises by the Attorney-General (Mr Ellicott) to the Aboriginal communities. Those promises have been broken. There were numerous promises by the Deputy Prime Minister (Mr Anthony) to the rural community, including the establishment of a rural bank. Those promises have not been kept. The education policy issued in October 1975 stated:

We affirm our commitment not to reintroduce payments of fees by students in universities and tertiary colleges.

That promise has already been broken with the reintroduction of fees for second and higher degrees and fees are being examined for other degrees and diplomas. The Deputy Prime Minister and the Treasurer promised assistance to the gold mining industry before the end of January. That promise has been broken. The transport policy of the Government Parties released on 25 November stated:

The . . . coalition will support the development of major highways and urban arterial links to meet demands for public and private transport.

That promise has been broken. The policy speech promised:

The States will have access to the increased money resources necessary to discharge their responsibilities in the field of transport services.

But it has been reduced by 13 per cent in real terms. The result of all the dishonesty and glib deception is not just to destroy for ever the credibility of the Liberal Party. If that were all it did the remedy could be left safely in the people’s hands. But the faith of the public in Australia’s democratic system has been undermined by this Government.


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

Minister for Business and Consumer Affairs · Bennelong · LP

– The first question I think the House is entitled to ask today of the Leader of the Opposition (Mr E. G. Whitlam) is this: Is he really serious? He has been a member of this House long enough to know the forms. If he is really concerned about mandates being broken, if he is really sensitive -

Mr Les Johnson:

– I raise a point of order, Mr Acting Speaker. Is it not the case that the Prime Minister rose to reply to the Leader of the Opposition?


-Order! There is no point of order. The honourable member will resume his seat.


– I am not surprised at the sensitivity of members of the Opposition about the performance they have heard during the past quarter of an hour. Having raised a matter of public importance, having ignored the forms of the House which normally are invoked when one wishes to make general criticisms of a government’s performance and of a Prime Minister’s performance, one can only conjecture as to whether the Leader of the Opposition is unsure of his troops unsure of the charge he has levelled against the Government, or whether he is confused and short on facts. It is no wonder that the

Leader of the Opposition was sensitive about the form he should use when talking about the mandate of this Government. His own mandate as Leader of the Opposition is extremely dubious. He talked about the mandate of the Leader of the Government. He ought to look to the sort of mandate that his own Party gave him after the worst electoral defeat in the history of Australia suffered at the end of last year. He ought to recall the words of his former Deputy Prime Minister, quoted in the Brisbane Courier-Mail on 5 January 1976:

The first thing the Party has to do is get rid of Mr Whitlam as Leader.

Or the words of Jack Edgerton, quoted on 28 July:

I could never trust Whitlam again nor could Australia. He has never given loyalty and this is one of the reasons why he isn ‘t Prime Minister of Australia.

Yet the very person about whom those words were spoken has the temerity to get up in this House and talk about dishonesty on this side of the Parliament. He presided over the most dishonest government since Federation. He led his Party to the worst electoral defeat in the history of Australia. He created divisions in the community which never existed before. He divided country people from city people. He perpetuated, and the policies of his Party perpetuated, divisions in the Australian community which we had not had since the 1930s. Yet, unrepentant, what did he say? As recently as last week he said: ‘I would do it all again. ‘ In the National Times of 6 September he was asked:

Is there a need for the Labor Party to revise its attitude towards the rural sector and the country areas generally?

The answer:

No. The Labor Party has been basically right in its attitude to rural industry.

That is why we find not one representative of the Labor Party sitting in this Parliament today who is from a genuinely rural area. That is why, one by one, the rural seats of Australia have fallen to the Liberal and National Country Parties. That is the nature of the record of the man who now calls in question the mandate that was given to this Government on 13 December last year. Essentially, it was a mandate to do 4 things. It was a mandate for responsible government, it was a mandate for economic recovery, it was a mandate for the individual and it was a mandate for social reform. One by one those broad mandates have been implemented. With an immaculate sense of timing, the Leader of the Opposition has raised this matter of public importance today, the very day that hot from the presses comes a publication which I would like to table listing the achievements of the FraserAnthony coalition Government in 9 months of office. Of 51 specific undertakings given in December last year, 39 have been implemented in only 9 months. I table this document, Mr Acting Speaker. I have a very large quantity of copies of it and I seek the indulgence of the Clerk to have them circulated. There are other printing presses working overtime in Australia now and I should very much like this document handed around.


-Is leave granted?

Mr E G Whitlam:

– Before giving leave, might I ask if there will be a second edition, as with Medibank?


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


-The first of the mandates was to restore responsible government. We have restored the Cabinet and parliamentary system of government in Australia. No longer does the Prime Minister of this country communicate with his Ministers through the columns of the daily newspapers. It is a great pity that the honourable member for Hindmarsh (Mr Clyde Cameron) is in New York because he would know exactly what I am talking about. Once again the institution of Parliament has been restored as the supreme element of the Government of Australia. Cabinet government has been restored. The role of Parliament has been enhanced. Relations between the Commonwealth and the States have been given a new lease of life by this Government’s federalism policy. The role of local government has been enhanced. Long neglected, given golden words but little assistance by our predecessors, local government now takes its place as a true partner in the system of government in Australia. Above all, relations between the coalition Parties in this Government have never been better.

The second great mandate we were given on 13 December was a mandate for economic recovery. We have taken action to get control of the national Budget. We have ended the unbridled expansion of Federal Government spending. We have been honest enough to tell the Australian people that until such time as we control our rate of inflation long term economic stability and prosperity will not arrive. We have been honest enough to tell the Australian people that there is a critical nexus between unemployment and inflation, and that there is a critical nexus between the unwillingness of people in Australia to invest and the high rate of inflation. We have brought government spending under control. We have reduced the unbridled growth of the Federal Public Service. We have introduced in 6 months full personal tax indexation. The undertaking was to do it in the lifetime of a parliament, yet we did it in 6 months.

We have introduced the most significant social reform in Australia since the end of the Second World War. What did the Labor Opposition say when we introduced the family allowances scheme? It said nothing, because it was embarrassed. It knew very well that as a party it had constantly championed itself as being the representative of the underprivileged and the less fortunate. It knew very well that the family allowances scheme was a reform that it should have introduced when it was in government, but it did not do so. It knew very well that the record of the Liberal and National Country Parties in the area of social reform is a record that compares more than favourably with that of its own Party. We have introduced automatic adjustment of pensions in accordance with the increase in the consumer price index. No longer will pension increases be made a political football. No longer will pensioners have to wait to know whether their increase will be granted. These are significant social reforms.

We have been honest enough to tell the Australian people that until such time as a responsible wages policy is developed in Australia we cannot have the economic recovery that we all so devoutly want. We have been honest enough to take our case to the Conciliation and Arbitration Commission. So far from our attitude on wages being a breach of an election undertaking, as the Leader of the Opposition charged, he, as well as every honourable member on this side of the House, knows that the indexation guidelines proclaimed by the Conciliation and Arbitration Commission, permit any party which goes to the Commission to argue that the full effects of the consumer price index increase should not be carried forward. It was precisely in conformity with those guidelines that we acted as we did in respect of the national wage case in February of this year. That has been the policy that we have been pursuing ever since, and it is the policy that we will continue to pursue.

This Government once again has resurrected profit making as a respectable Australian enterprise. This Government once again has faced the reality that unless companies make profits they cannot employ people, and unless people are employed naturally unemployment levels will go to ever-increasing heights. This Government has been honest enough to admit that the real revival of the Australian economy can be achieved only if individuals are given the opportunity and the incentive to work and to make profits. The Government has been honest enough to implement its policies with respect to the individual. We promised above all at the end of last year that we would create an Australia in which individuals once again played a leading role, that we would create an Australia in which private enterprise held pride of place, and that we would create an Australia in which the individual efforts and initiatives of ordinary Australian people would be the device by which economic recovery could be achieved.

I believe that the record of the Fraser Government in its 9 months in office has been an outstanding one. It has been a record of reform. It has been a record of giving initiative to individual Australians. It has been a record of keeping promises. The Leader of the Opposition talks about election promises. He ought to be sensitive about election promises. Honourable members should remember that marvellous election promise he made at Blacktown in 1972. He said:

Restore as a first priority genuine full employment without qualification, without hedging.

What happened over the following 3 years? He presided over the worst unemployment in Australia since the great Depression. What else did he say in Blacktown in 1972? He made this promise:

Build into the administration of the affairs of this nation machinery that will prevent any government from ever again cloaking our affairs under excessive and needless secrecy.

Mr Hodgman:

– What about the Executive Council minute?


– Yes, indeed, there was the Executive Council minute. That was the promise that he made, but look at the performance. That man, that Party, now has the temerity to raise in this Parliament a matter of public importance challenging the performance of this Government in its 9 months in office, challenging a government which, notwithstanding the enormous economic difficulties facing Australia, notwithstanding the huge deficit we inherited from our predecessors, and notwithstanding the rate of inflation that we inherited from our predecessors, has still been able to introduce significant social reforms of the type that I have mentioned.

It is a government which is concerned for the right of the individual and which has extended its responsibilities into the area of law reform. It is a government whose concern for the right of the individual prompted it to send to the Law Reform Commission a reference on the subject of privacy. It is a government which has proceeded with the introduction of the ombudsman legislation and the Administrative Appeals Tribunal legislation. These are all significant reforms. They illustrate that this is a reforming government and that it is not a government which, notwithstanding the present economic problems, is prepared to put reform to one side and say that we will worry about reform in a few years ‘ time when we have solved other problems. It is a government which is prepared to reform and to be progressive, notwithstanding our tremendous economic problems.

Perhaps most importantly of all it is a government which has brought back a sense of perspective into our foreign affairs and defence policies. It is a government which has re-asserted proper relations between this country and the United States of America. It is a government led by a Prime Minister, ably supported by a Foreign Minister, which has developed and expanded our relations in South East Asia. It is a government which is sensitive to the defence needs of this country. It is a government which has given once again to the armed Services of this country their rightful place in the community. It is a government that no longer denigrates armed service in the defence of this country. It is a government which is building respect and regard throughout South East Asia. It is a government which I believe has brought back both perspective and responsibility to the conduct of our foreign relations and our defence. It is a government which above all is entitled to claim that it has more than discharged the mandate it was given in December of last year. It has been a reforming government, a government which has kept its promises and a government which I believe the Australian people will continue to trust in the measure that they demonstrated in December last year.


– I call the honourable member for Hughes.

Mr Les Johnson:

-Mr Acting SpeakerMotion (by Mr Howard) put:

That the business of the day be called on.

Question put.

The House divided. (Mr Acting Speaker- Mr P. E. Lucock)

AYES: 82

NOES: 30

Majority……. 52



Question so resolved in the affirmative.

page 873


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

Second Reading

Treasurer · Flinders · LP

– I move:

That the Bill be now read a second time.

In his policy speech on 27 November last year the Prime Minister (Mr Malcolm Fraser) gave an undertaking to increase the exemption from estate duty where the whole or part of the estate of a deceased person passes to a surviving spouse. This Bill fulfils the Government’s election undertaking. It is part of the Government’s overall program to reduce the general burden of taxation. It is a much needed reform that will give a significant measure of relief in an area of the law that has been given insufficient attention in recent years.

The legislation is a further reflection of this Government’s determination to press on with reforms to the taxation system in spite of the very serious economic difficulties that were inherited from the previous Administration. The relief will exclude from Liability for duty the value- up to a maximum of $50,000- of the spouse’s interest in the estate. It will be available whatever the total value of the estate or the nature of the assets included in it. At the same time it is proposed to discontinue the estate duty deduction which, since 30 April 1974, has been available, under certain conditions, where an interest in a matrimonial home passes to the surviving spouse of a deceased person. Both proposals are to have effect in the assessment of duty on estates of persons dying on or after 18 August 1976. Where an estate passes wholly to the surviving spouse of a deceased person the new concession will, in conjunction with the existing statutory exemptions, entirely exempt from duty estates of a gross value up to $90,000. Primary producer estates passing in this way will be exempt up to a value of$98,000.

The Government recognises that the support given to each other by a husband and wife contributes to the accumulation of property that may pass to one partner on the death of the other. Accordingly, it will go as far as it responsibly can to lighten the burden of estate duty where property passes to one marriage partner on the death of the other. The new concession will generally provide greater benefits than the matrimonial home deduction it is rep.’ icing. That deduction was too selective. It conferred no benefit at all when the assets passing to the spouse did not include a matrimonial home. Not only that, it was subject to a phasing-out arrangement so that it became much less than $35,000 for many estates. The new deduction of $50,000 is not to be phased out in this way.

For easier administration by both the Taxation Office and administrators of estates, the Bill also proposes some changes in respect of estate duty returns. At present returns are required to be in a form prescribed by regulation and the administrator is obliged to verify a return by statutory declaration. The amendments proposed by the Bill will provide for the lodgment of returns in accordance with a form approved by the Commissioner of Taxation instead of one prescribed by regulation. This will eliminate frequent amendments to the regulations. The Bill provides also for returns to be verified, like income tax returns, by declaration as required by the return form rather than by statutory declaration. Furthermore, returns will not be required where the value of an estate does not exceed the relevant statutory exemptions or, in the case of an estate passing wholly to the surviving spouse of a deceased person, $90,000. Hitherto exemption from furnishing returns has been provided by regulation.

Finally, the Bill makes provision for a number of formal amendments in line with current drafting practices. These amendments will not affect the operation of the provisions to which they relate. The various provisions of the Bill are explained in detail in a memorandum being made available to honourable members. I commend the Bill to the House.

Debate (on motion by Mr Hurford) adjourned.

page 874


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

Second Reading

Minister for Defence · Moreton · LP

– I move:

That the Bill be now read a second time.

This is a very short Bill and its purpose may be stated shortly. When in May this year I announced the Government’s decision to restore Service cadets throughout Australia I indicated, contemporaneously with that announcement, that the Government would be examining the Air Force Act to ensure that what was a suspected blemish regarding the regulation power in that Act was removed. An examination of the Act has confirmed that the power to make regulations pursuant to the Act was very, very dubious indeed.

The purpose of this Bill is to provide a new section 8 which removes all doubt relating to that matter. The Air Training Corps, as you will vividly recall Mr Deputy Speaker, was established in 1941. 1 suppose it is one of those quirks of history that for some 35 years an organisation existed and in terms of sharp statutory validity people may question the legitimacy of it, but it has been a corps which has contributed enormously to the cultivation of a sentiment favourable to the Royal Australian Air Force. I commend the Bill to the House.

Debate (on motion by Dr Cass) adjourned.

page 874


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

Second Reading

Minister for Business and Consumer Affairs · Bennelong · LP

– I move:

That the Bill be now read a second time.

The Customs Tariff (Coal Export Duty) Amendment Bill 1976 now before the House proposes amendments to the Customs Tariff (Coal Export Duty) Act 1975 to exempt from duty exports of non-coking coal which conforms with the specifications indicated in clause 4 of the Bill, to reduce the export duty on high quality coking coal from $6 per tonne to $4.50 per tonne and to reduce the export duty on other coal from $2 per tonne to $1.50 per tonne. Honourable members will recall that these changes were foreshadowed by my colleague the Treasurer (Mr Lynch) in his Budget Speech on 17 August 1976 and that following that speech I introduced Customs Tariff (Coal Export Duty) Proposals (1976) to authorise collection of duty at the reduced rates with effect from 8 o’clock that evening. The purpose of the Bill now before the House is to enact those changes.

As indicated in the Budget Speech, this action is the first step towards phasing out this levy which the Government regards as an entirely inappropriate form of tax in that its effects fall in a quite haphazard manner as marginal fields pay the same rate of duty as economically more profitable fields, or in some cases more. The existing levy has had undesirable effects both on existing producers and on potential developments. However, the reduction in duty rates proposed by this Bill and the Government’s announced intention of phasing out the levy over 3 years will have the immediate effect of encouraging the healthy development of the industry. I commend the Bill to honourable members.

Debate (on motion by Dr Cass) adjourned.

page 875


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

Second Reading

Minister for Transport · Gippsland · LP

– I move:

This Bill is to amend the Air Navigation (Charges) Act which imposes charges on aircraft for the use of aerodromes, airway facilities, meteorological, and search and rescue services, which are provided, operated and maintained by the Commonwealth. The main purpose of the Bill is to increase the rates of charges by 15 per cent ‘across the board* with effect from 1 December 1976. This increase, which will apply to all operators, both domestic and international, will ensure that the current level of cost recovery of services provided by the Government to the air transport industry is maintained and progressively improved.

In the year 1975-76, the cost of providing air transport facilities exceeded the revenue received from the users of those facilities by over $70m, with a cost recovery level of only 60 per cent. The Government has been concerned at the level of costs involved in providing facilities and services but is seeking to keep any increases in charges within economically acceptable levels. The increase of 15 per cent provided for in the Bill is expected to increase revenue by about $4m in 1 976-77 or S8m in a full year.

The Bill also provides for the introduction of a revised scale of charges for scheduled international nights arriving in, or departing from, Australia. The Government is concerned to see these charges proportioned more directly to the services provided by the Commonwealth. The change will adopt a charging principle endorsed by the International Civil Aviation Organisation in that the costs incurred by the Commonwealth in the provision and maintenance of airway facilities, as distinct from airport facilities, will be recovered in proportion to the distance flown.

I want to make it clear that the revised scale, in itself, is not designed to increase total revenue from international flights. The scale sets a lower charge for shorter flights in Australia’s area of responsibility, while longer flights will attract a higher charge than under the current arrangements. The impact upon each international airline will therefore depend on its mix of flights to Australia. For instance, those airlines which predominantly fly across the Australian continent with flights from Melbourne and Sydney direct to South-East Asia and Europe, will be required to pay higher charges than those which operate predominantly from the Australian eastern seaboard to destinations across the Tasman and the Pacific. The proposed adjustments to the scale will have the effect of placing the charges for international air services on a more equitable basis.

I must point out that before setting the revised scale of charges, discussions were held between the International Air Transport AssociationLATA and my Department. On 5 August I was pleased to be able to discuss the matter with a visiting LATA group of some 1 1 representatives, together with a representative of the non-IATA airlines serving Australia. At the meeting, I indicated that if IATA could itself propose an alternative scheme to the one put forward in this Bill and if all the airlines concerned were in agreement I would put their proposition to the Government. I have recently received advice that the international airlines are unable to reach agreement on an alternative charging scheme and, under these circumstances, the Government is implementing the scale of charges originally proposed.

Honourable members will be aware, of course, that the air navigation charges scheme is kept under constant review. If it is found that there is a need for further modification to the proposed scale of charges for international flights, or in respect of any other provision of the Act, appropriate amendments will be introduced by the Government at the appropriate time. The Bill also contains several procedural amendments which are designed to update and facilitate the administration of the air navigation charges scheme. These include a provision for an interest charge of 10 per cent per annum on overdue accounts which is designed to encourage the prompt payment of charges by those aircraft owners who are slow in meeting their financial commitments. The interest charge will be imposed only when the payment becomes 45 days overdue.

The Bill changes the existing provisions relating to departmental adjustments of charges in cases where a change in the ownership of an aircraft occurs. It will now be left to the seller and the purchaser of an aircraft to arrange an adjustment between themselves for any prepaid charges. This is similar to the procedures adopted by State governments in levying motor vehicle registration fees. These and other more minor amendments contained in the Bill will lead to a reduction of the administrative workload within my Department and will contribute to a more equitable and efficient operation of the charging system. I commend the Bill to the House.

Debate (on motion by Mr Morris) adjourned.

page 876


Ministerial Statement

Prime Minister · Wannon · LP

– by leave- I wish to inform the House that the Government has decided to appoint a Committee of Inquiry into Education and Training. The Committee will deal with a number of fundamental issues related to education. In particular, the Committee will examine the whole field of post-secondary education. It will also examine the broader problem of the relationship between education and the labour market. In the latter area the Committee will be asked to expand its review into secondary education as appropriate.

I will deal firstly with post-secondary education. It is now more than a decade since the presentation of the Martin report on tertiary education in Australia. In that decade there have been major changes in post-secondary educationchanges which were strongly influenced by the Martin report itself. In the period since the Martin report the number of universities has increased from ten to nineteen. The whole system of colleges of advanced education has been developed. Recently the Commonwealth has become more heavily involved in technical and further education. Not merely has the structure of education altered. During this period also there has been a vigorous debate about the role of education in our society, about the purposes of education and in particular about the appropriate relationship between education and the economy.

The developments in the structure of postsecondary education, the growing interest in concepts such as open education, recurrent education and retraining, the growing recognition of the importance of technical and further education and the question of education’s relevance to a person’s working life have led the Government to conclude that there is a need for a wide ranging review of the whole area of postsecondary education. Inquiries in this area have been completed recently in Western Australia and Tasmania. Victoria and South Australia have announced proposals to conduct inquiries. The Organisation for Economic Co-operation and Development is at present conducting a review of Australian education, focusing on the transition from school to work or further study. A national working party established by the Australian Education Council has recently completed a report on the problems of school leavers in making the transition to employment. The Commonwealth Government believes that a comprehensive review is required.

This review will complement, not duplicate, the various State and other inquiries by taking a broad and long-term perspective on the development of post-secondary education, and by examining the relationship between education and the labour market. I have mentioned that one important reason for this review is the changing structure of post-secondary education. These developments have raised questions about the most appropriate allocation of responsibilities between the different sectors of postsecondary education. Boundaries between these sectors have become blurred. Particularly because of the establishment of separate commissions in post-secondary education there has grown up a tendancy to treat the universities, the colleges of advanced education and institutions for technical and further education in isolation from each other.

There is a need for the roles of the various institutions to be clarified. More than that, there is a need to consider how post-secondary education as a whole relates to the needs of individuals and to the linkages between education and employment.

Because Australia has an advanced industrial economy and because the aspirations of our people demand it, there is a need for a substantial share of the nation’s resources to be devoted to education. Because this share is so large it is vital that resources devoted to education should be used to maximum effect, that unnecessary duplication should be avoided and that integrated forward planning of educational provision be given every encouragement. The Government wishes to set in train the extensive work required to anticipate needs for postsecondary education over the medium and long term.

Issues of major concern to this inquiry will include the co-ordination and rationalisation of existing types of post-secondary institutions, the relevance of new kinds of institutions, and the capability of both existing and possible new structures for meeting the educational needs and preferences of the individuals, the community and the economy.

In addressing itself to the provision of educational facilities and services it will examine amongst other things the overall pattern of institutions and courses including their objectives, the magnitude of the provision including the desirable balance between sectors, the relationship of educational provision to community and individual needs and preferences, the accessibility of education and training including reentry and transferability, the problems of special groups, for example, the handicapped, ethnic groups, Aboriginals and women, the responsibility of State and Commonwealth authorities in relation to the nature and location of institutions, preparation for employment including skilled and semi-skilled groups, the provision of recurrent education and the means of evaluating the quality and efficiency of the system. Honourable members will see from this the wide ranging nature of the inquiry.

Education has a vital role in achieving the objectives of the Government and the Australian people for an Australia in which everyone has a realistic opportunity to seek personal fulfilment. It is not only through the education system that this objective will be achieved. All our institutions have a role to play in expanding people’s capacities to realise their abilities and in encouraging them to achieve their best.

I now turn to the second major aspect of the inquiry- the relationship between education and the labour market. If an education system fails to provide people with relevant skills- skills which they can use in their work- it is at the same time diminishing their chances of achieving satisfying lives. There are few aspects of a person’s life which can be more important in achieving personal satisfaction than their work. The inquiry will need to consider the view that the education system, and particularly the pattern of postsecondary education is not matching satisfactorily the employment needs of many young people with the demands of the labour market.

Unemployment is particularly severe among the young and this is a matter of serious concern to the Government. In May 1976 the unemployment rate for persons under 20 years of age was 12.5 per cent, or more than 4 times the rate of 3 per cent for those aged 20 years and over.

Although persons under 20 years of age comprise only 12 per cent of the labour force, they account for 36 per cent of the total unemployed. The incidence of unemployment is even greater among some disadvantaged groups, such as young females, young people generally in nonmetropolitan areas, Aboriginals, and young migrants. Underemployment is also widespread. Australians, through their choices in the market place, significantly influence the pattern of job opportunities. This inquiry is intended to examine the relationship between this pattern and the role of our educational system.

Clearly many fundamental issues are raised. Some have argued that the existing pattern of education and training in Australia has led to bottlenecks in the economy- shortages of critical skills which inhibit the creation of job opportunities in other areas. This requires examination. There is a danger that as economic growth gathers pace it may be hampered by inadequate availability of people with appropriate skills. In considering the relationship between the labour market and the education system the Committee has been asked to extend its review into secondary education as appropriate, having regard to the fact that a significant number of children do not proceed beyond year 10 in secondary schools. The Committee of Inquiry will be required under its terms of reference to have regard to the Government’s objectives in the area of education. These include widening, educational opportunity, including access to education for those with the ability, but lacking the means; expanding educational and occupational choice; developing quality and excellence in all spheres of education, and encouraging community participation in education and training matters.

It is frequently said that we live in a society experiencing rapid change. Our educational system has a central role in increasing the capacity of people to adapt to change. This involves not merely increasing understanding of the nature of change. It includes also providing opportunities for re-entry into formal education for the updating of old skills or the acquisition of new skills relevant to new needs and new demands. In this context the inquiry will be asked to examine the variety of linkages between education and employment. The Committee is being asked to examine the role of the educational system in preparing people for work and influencing their choice of occupation- both for new entrants to the work force and for existing members; the extent of and trends in unemployment and underemployment especially amongst the young; the interaction between the labour market and rising educational standards of new recruits to the work force, including the role of educational qualifications in credentialling or selecting people for jobs; the needs of special groups with special regard to government services for special groups; and the manner in which manpower forecasts may be made their reliability and their application in educational planning.

I wish to emphasise however, that this inquiry will extend its consideration to a wide range of fundamental issues in education. The Committee will take as given the arrangements for financing and co-ordinating post-secondary education agreed between State and Commonwealth governments except in so far as such consideration is essential to the main theme of the inquiry. It will, of course, have regard to other related inquiries and reviews.

The Government anticipates that the inquiry will last approximately 18 months. The submissions to the inquiry and its findings will be made public. It will be left to the Committee itself to determine whether it wishes to hold public hearings. The composition of the Committee has yet to be decided, but it will be a small expert group expressing a variety of perspectives. It will have a full-time secretariat, and will be able, subject to the usual restraints, to hire consultants and to commission research.

The Government’s decision to establish this inquiry reflects our concern that our educational system must adapt to meet the changing needs of Australians A great deal depends on that system for achieving the objectives we all share. The Government is, of course, seeking the cooperation of State governments in the conduct of the Inquiry and inviting nominations from among which a member of the Committee will be chosen. This inquiry will be probably the most important and certainly the most comprehensive and far-reaching in this field ever established in Australia. The findings of the inquiry should be of value to the community and to Commonwealth and State governments for many years ahead. It will provide a perspective on educational planning to the year 2000. I commend the Inquiry to honourable members. In addition I table the terms of reference for the inquiry and seek leave for the document to be incorporated in Hansard.

Mr Lucock

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

The document read as follows-

page 878


It is now more than a decade since the Martin Report on Tertiary Education in Australia, which strongly influenced the present form of our tertiary education system. Since then there has been growing recognition of the importance of technical and further education and deeper interest in concepts of open education, recurrent education and retraining. There is now concern about the overall pattern of postsecondary education. There is equally concern about problems of the relation between secondary, or post-secondary education on the one hand and subsequent employment and careers on the other.

To assist the Commonwealth and the States in responding co-operatively to this situation, the Commonwealth Government has decided to establish a committee to undertake a review of possible developments up to 2000. Issues of major concern clearly reflected in a number of recent and current inquiries are the co-ordination and rationalisation of existing types of post-secondary institutions, the relevance of new kinds of institutions and the capabilities of both existing and possible new structures for meeting the educational needs and preferences of the individual, the community and the requirements of the labour market.

In considering the relationship between the labour market and the education system the committee is asked to extend its review into secondary education as appropriate having regard to the fact that a significant number of children do not proceed beyond Year 10 in secondary schools.

page 878


The review should address itself specifically to the following:

The Committee shall: have regard to the Government’s objectives including widening educational opportunity, expanding educational and occupational choice, developing quality and excellence in education and encouraging community participation in education and training matters; take as given and not consider in detail, the arrangements for funding and co-ordinating post-secondary education agreed between the State and Commonwealth Governments, except insofar as such consideration is essential to the main theme; and have regard to recent and current State and Commonwealth inquiries and reviews such as that conducted by the OECD on the transition from school to work or further study.


– I present the following paper:

Committee of Inquiry into Education and TrainingMinisterial Statement, 9 September 1976- Terms of Reference.

Motion (by Mr MacKellar) proposed:

That the House take note of the papers.

Mr E G Whitlam:
Leader of the Opposition · WERRIWA, NEW SOUTH WALES · ALP

– The preparation of the statement of the Prime Minister (Mr Malcolm Fraser) was obviously a very rushed job. The ordinary time at which ministerial statements of this character are made is immediately after question time or occasionally at 8 o’clock at night. The etiquette- the arrangement- which has been reached between both sides of the House for many years now is that such statements are not made unless a copy of the statement is given to the Opposition 2 hours in advance. This statement was not ready in time for the Prime Minister to make it after question time; in fact the statement was not ready for the Opposition until the House assembled. Accordingly, the Prime Minister could not speak until almost 2 hours after the House met. There are internal features of the statement of course which show the rush in which it was prepared. The Prime Minister had to correct some of the English in the statement, of which we got a copy 2 hours before it was made. One sentence, for instance, did not even have a verb in it, which is surprising even for a former Liberal Minister for Education.

But quite apart from that, we do not know yet who is the chairman of the Committee of Inquiry. We do not know who any of the members are. We do not know how many members there will be. All we know is that the Federal

Government will be gracious enough to appoint one person from a panel nominated by the State governments. That is the new federalism. The States can have one member on a committee composed of an indeterminate number of people under an unknown chairman. But of course the reason why the job is such a rush one is to head off pressure within the Government parties. Every daily newspaper this morning refers to the debate. The reports are amazingly specific as to who the spokesmen were.

The Liberal Party and even the National Country Party members are now feeling the pressure in their own electorates. That is, half the Government’s people realise that their positions in the Parliament are in jeopardy, that they could be unemployed come the next Federal election. In particular there is a public backlash against this talk of a year or 9 months ago about dole bludgers. The specific dole bludgers are those who will be leaving school. To make sure that they do not bludge on the dole nobody leaving school will get any dole until the next school year or academic year commences. In the meantime, if I can believe the report in the Australian and attributed to the Minister for Post and Telecommunications (Mr Eric Robinson), the families of these young people can look after them; they will be under wholesome family supervision for 3 months until -

Mr Sullivan:

– Hear, hear!

Mr E G Whitlam:

-The honourable and gallant member for Riverina says: ‘Hear, hear! ‘ That is the way to look after the troops. If they are not at home have them in the Army, and in either case see that they are kept on a pittance. I do not want to be unfair to honourable members opposite. Some of them in fact did express solicitude for the plight of the young people leaving school, finishing their formal education and not able to get jobs. Among this honourable band, according to the newspapers, are the honourable members for Mackellar (Mr Wentworth), Lilley (Mr Kevin Cairns), Franklin (Mr Goodluck), and Denison (Mr Hodgman). But of course they were overwhelmed by such formidable orators as the honourable members for Evans (Mr Abel), Barton (Mr Bradfield) and Parramatta (Mr Ruddock). They said that it was all phoney, that in fact the bludgers were real. It is because of this pressure within the Government parties that the Government has now decided to fob off the whole question, to relieve the pressure for 18 months by appointing a committee. We have the terms of reference. We do not know the personnel. They may take a month or so to find.

In fact the terms of reference will be very restricted. For the first time in 20 years during which successive governments, Liberal and Labor, have appointed inquiries on education this particular committee will be precluded from inquiring into the particular method of financing, that is, what proportion of the national income should go to education or to some form of education. Every previous Prime Minister, myself among them, has always left these expert inquiries that have been appointed into various aspects of education- since Murray 20 years ago- free to accept evidence and to make investigations into and reports upon the financing of their proposals. Here of course this committee is to take as granted and not consider in detail the arrangements for funding and co-ordinating post-secondary education and so on.

It would be rather difficult to get first-rate people to inquire into these fields if their hands are tied in that respect. Even under the new federalism it is basic to ascertain what proportion of the burden will be accepted by the federal or State authorities or charitable or academic bodies, endowments and so on. It is necessary also to consider the very real problem of the diverse taxability or revenue-raising capacity of different parts of Australia. If we go back to the old position of twenty or more years ago when the Federal government was not involved, inevitably we will get a situation in which the more remote and the less developed parts of Australia have inferior opportunities for education. That is, of course, what young people find now in provincial cities or in the country. It is what the migrants find.

It is clear that the Government should recognise the special needs of post-secondary education and their relationship to employment opportunities for young people. There may be changes in the pattern of employment in Australia as in other parts of the developed or the industrial world. My Government was the first national government to investigate the needs of technical and further education and to set up an expert independent commission to administer this field and to allocate resources to it. That commission was set up on the basis of expert advice. It has discharged its task with great efficiency. My Government also introduced a national apprenticeship assistance scheme in January 1973 which has provided greatly increased opportunity for apprentices.

Only last Friday this Government approached State Ministers with a proposal to involve employers in the States in encouraging a high level of apprenticeship training. The proposal was rejected by the States. With thousands of school leavers coming onto the market this year the Government is now establishing another inquiry. It has no clear idea of what it wants to achieve. It is now going to look around for some people who will give it a few ideas in the next 18 months. It has been obvious all this year that apprenticeship and further education schemes were in chaos, but nothing was done. Nothing has been done to expand the training of youths, particularly those with little or no skills, under the National Employment and Training Scheme. The allocation for NEAT in this year ‘s Budget is $ 1 2m less than that allocated under last year’s Budget- that is, in terms of dollars, not in real terms. The drop there has obviously been very much greater. This shows the priority this Government attaches to retraining and the employment opportunities of young people.

The Opposition does not underestimate the importance and severity of the long-term problem and the need for expert investigations. But we see no need to rush in to an inquiry for cosmetic political purposes. There is a wealth of evidence already about the needs of young people in relation to the labour market. The survey of unemployed young people conducted in September last year by the Department of Labour and Immigration revealed that these people were predominantly the less educationally qualified, the low-skilled and the inexperienced. The survey reported:

Over two-thirds of the young males unemployed were registered for semi-skilled and unskilled employment and the same proportion of unemployed young females were registered for clerical and administrative occupations . . . More than one-quarter of the males and one-third of the females had had no previous work experience . . . Almost one-half of those unemployed young people had not attempted any education beyond third form secondary standard, and 2 out of every 3 had not attempted beyond fourth form. In country areas the situation was even worse. Very nearly three-quarters of the young unemployed males there had not attempted any education beyond fourth form.

Of course this inquiry will do nothing about them, because this inquiry will concern only those people in the post-secondary stage; it will do nothing about the unemployed, the dole bludgers, male and female, who will be leaving school after the third or fourth form. This inquiry is expected to predict conditions and set guidelines for post-secondary education as far ahead as the year 2000. It is expected to make recommendations on the basis of funding procedures and financial arrangements between the Commonwealth and the States which the present Government apparently considers immutable. If we had gone back a quarter of a century, as this inquiry is supposed to look a quarter of a century forward, would we accept the financial relations which were obtaining a quarter of a century ago? The improved educational opportunities in Australia in the last quarter of a century have been brought about because we have changed the financial arrangements which obtained a quarter of a century ago. We changed those financial arrangements on the basis of expert inquiries conducted by persons whose names we knew, whose qualifications were public knowledge. We are expected to take this Committee on trust. We do not know who the members of the Committee will be, nor do we know how many of them there will be. All we know is that they are not to inquire into the funding arrangements. That aspect is to be left to the Government. Does any honourable member believe, whatever he may think of the present financial arrangements between the States this year or last year, that those financial arrangements will be immutable for the next 25 years? What would Sir Keith Murray have thought when he was asked to conduct the first of these inquiries 20 years ago? What would have been thought by all the others who made inquiries during the next 2 decades? They all made proposals in this way. How can we really expect this Committee to come up with arrangements and proposals for the rest of this century if it is not to inquire into the financial arrangements?

On 27 August, Mr Peter Kirby, First Assistant Secretary of the Department of Employment and Industrial Relations, stated:

Technical and further education- TAFE -

This is the term used by the honourable member for Fremantle (Mr Beazley) when he appointed the committee to inquire into this subjectis more than a formal process of preparing people for a work role . . . Education responsibilities go beyond meeting the needs of young people interested in career orientation and exploration of those wanting preparation for their first job.

Important as jobs are, important as the needs of industry are, education must still be seen as paramount in its own right; as a human process directed to the social and cultural needs of young people and their place in a civilised society. Education is not a means to an end but an end in itself. The Government will be failing in its duty, and its inquiry will be worthless, dangerous, circumscribed and counter-productive if education at any level is seen primarily as a function of economics and industrial efficiency.

Debate (on motion by Mr Bourchier) adjourned.

page 881


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

Second Reading

Minister for Transport · Gippsland · LP

– I move:

That the Bill be now read a second time.

The purpose of the Bill is to appropriate $20m to meet cost increases on projects approved under the terms of the joint Commonwealth-States urban public transport agreement. Under this Agreement, acceptable cost increases can occur either through variations to an approved project which are agreed to by both myself and a State Minister or through increases in the cost of labour and materials. With regard to the latter, the States have been given an assurance that the Commonwealth would meet its share of cost increases that could not have been reasonably foreseen at the time initial estimates were prepared and submitted to the Commonwealth.

The amount to be appropriated is the estimate required to meet, in part, cost increases which have arisen from the inception of the program in 1973-74 up to 30 June 1976. This year’s Budget allocation from existing appropriations is $44.6m for the continuation of approved projects and, together with the provision under this Bill, raises the total Commonwealth funds available for urban public transport to $64.6m in 1976-77. This represents a 90 per cent increase over the $33.8m advanced to the States in 1 975-76.

Those of the Opposition who claim the Commonwealth has withdrawn from urban improvement programs need to get their facts straight; They should be applauding the level of assistance we are providing. It is an increase of over 50 per cent on what they were prepared to provide last year. It is obviously necessary to remind honourable gentlemen opposite of the origins of the urban public transport improvement program. The former Prime Minister has often claimed it is his initiative; but for the record I make it quite clear that the initiative was in fact taken by me in 1 97 1 .

At the July 1971 meeting of the Australian Transport Advisory Council, my State colleagues and I agreed that the Bureau of Transport Economics should urgently prepare a report on the needs for a capital investment program in urban public transport. The BTE report clearly demonstrated that there were many vitally needed improvements to our public transport systems which should be undertaken. That report was presented to the July 1972 meeting of ATAC, and the then Prime Minister, my colleague the right honourable member for Lowe (Mr William McMahon) became the first federal Leader to give a firm commitment that the Commonwealth would assist in improving urban public transport.

Having set the record straight as to who initiated investment in public transport, I want briefly to review the achievements of the previous Labor Administration. At my first meeting with State Transport Ministers in February of this year, I was inundated with requests to simplify the administration of the urban public transport agreement. I was also asked to ease the centralist authoritarian control which had been exercised by the former Government. Although the .States were charged with the task of implementing approved projects, there was the spectre of the former Minister continuously checking on their performance in the way of a headmaster. I have indicated quite clearly to my State colleagues that this is not the way in which a Liberal-National Country Party Government operates. We recognise that in this field it is the States who have special knowledge and a high degree of competence and accordingly agree that they should have responsibility in such matters. We do acknowledge, of course, that there are areas where the Commonwealth is able to contribute to the States’ benefit. The emphasis of our relations with the States is one of co-operative federalism, not a centralist dictatorship.

This program has suffered, as so many of the former Government’s programs have suffered, through the indecent haste with which it was foisted upon the States. Indeed, the first Budget allocations for the program were made even before the agreement had been negotiated with the States. It is just one example of the Opposition’s naive approach that money is the sole solution to all problems; an attitude that led between 1973 and 1976 to unprecedented levels of government spending with limited returns and, ultimately, to the massive defeat of the Labor Government. It is no wonder that the Labor Government presided over some of the highest levels of inflation in the nation ‘s history.

What proved to be a complex program to the States, due to its inflexible administrative requirements, was further complicated by the former Government’s policy that finance for rolling stock acquisition should be limited to a year by year basis. Such an approach is, of course, totally impractical. It is not feasible to place orders, accept delivery and pay for rolling stock within a 12-month period. But this is what the former Government required. It placed the States in an untenable position. The States were naturally reluctant to place orders in anticipation of Commonwealth financial assistance and hence the whole program was disrupted. This disruption also spread to rolling stock manufacturers. They were understandably cautious about investing in plant and equipment in order to increase production for what was only a 12-month order without any assurance that there would be continuity of further orders. They saw themselves as pawns at the whim of a centralist Labor Government.

As I have indicated, all these shortcomings in the program stem from the former Government’s attempts to change the world in 12 months, and to enforce its own socialist ideology upon the States. Upon assuming the portfolio of Minister for Transport, I immediately advised my State colleagues on the Australian Transport Advisory Council that I would be prepared to examine ways of greatly improving the administrative arrangements introduced by my predecessor. At the same time I made it quite clear that I had responsibilities to the Parliament for Commonwealth funds disbursed under this program. I offered also to consider any proposals the States wished to put forward for the revision of program priorities within the constraints of the existing financial allocations. The States have all indicated they will take up my offer to re-order the program allocations. As I will indicate later, in almost all cases the States have sought to cancel projects concerned with the expansion of their urban transport systems and to concentrate available resources on upgrading the existing network. The States’ greatest priority has been to divert funds to rolling stock acquisition. In all cases I have been prepared to accept the States priorities rather than follow those which had been dogmatically imposed by the previous Government. For the information of honourable members, I have prepared a table that provides details of the program revisions I have so far approved. I seek leave to have the document incorporated in Hansard.


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

The document read as follows-


– In fairness to the former Minis- greater than the amount advanced to the Statester, I should add that he had indicated that he during 1975-76. The States all accept the present was prepared to consider similar arrangements economic situation. It has caused them some in 1975 to try to overcome the total disruption problems but we are working together to minicaused by his Government’s failure to provide mise their problems, for a new program in the 1975-76 Budget In & suspended from 1 to 2.15 p.m. answer to any claim that the Government has failed to fund a new program in 1976-77, 1 point Mr NIXON- My Government’s support for out that our provision for 1976-77 is 90 per cent the improvement of urban public transport is clear. The Government recognises that the Commonwealth, State and local governments each have responsibilities in the field of urban transport. It is therefore essential that all 3 levels of government meet in a co-operative atmosphere to discuss problems and formulate guidelines for the development of programs and responsibilities. We must work together. It is not acceptable to have one government pursuing a particular policy line while another government moves in a different direction. The Commonwealth sees its role as identifying national needs. To this end we utilise the resources of the Bureau of Transport Economics to evaluate critically transport investment programs. The Government also makes available the resources of the Bureau to assist the States in the investigation of specific urban transport improvements. Over two-thirds of Australia’s population lives in our major cities. We are extremely conscious of the need therefore to develop a balanced transport system for these cities.

In this regard, one significant current deficiency is the lack of adequate inter-suburban transport links. The great majority of the Australian urban workers has no direct public transport link with their work location. This leads to increasing use of the private motor car for the journey to and from work with its resultant road and parking congestion. We are all aware of the benefits and costs which are attributable to urban travel by private motor vehicles. There is a growing belief that these costs tend to outweigh the benefits to the community at large. We are therefore anxious to assist the States and provide improved public transport services to relieve congestion and pollution on suburban streets. Our approach to urban transport problems will proceed hand in hand with our development of Federal/State relations policies. State and local governments have clear responsibilities in the provision of urban transport services. It is our aim to see that they receive adequate funds to carry out these responsibilities consistent with prevailing budgetary considerations. This does not mean of course that the Commonwealth does not have a national responsibility in urban issues. Rather it believes that decisions should be made and implemented wherever possible at the State and local level.

I am currently investigating in co-operation with my colleagues in ATAC the general question of the future funding of urban transport improvements bearing in mind that the present Agreement expires at the end of 1977-78. 1 propose to ensure any future financial arrangements are consistent with the Government’s overall federalism policy. I want to be clearly aware of the States requirements so that I can adequately represent their views to my Government. But most of all I want the development of programs that have been carefully planned and evaluated. It is important that we learn from experience. The difficulties created by the present arrangements should not be repeated, so that the benefits of any future investment program can be maximised. As I have already indicated, the two most salutory lessons from the 3 years of Labor maladministration are the need to plan carefully and to act in full co-operation with State and local government. This should not be interpreted by honourable members as implying that the Government does not appreciate the urgency and need for improvements to the public transport systems in our cities. We certainly acknowledge the overall need as is reflected by the 90 per cent increase in the Commonwealth allocation of this program for 1976-77. But in a period where it is simply unrealistic to contemplate the high levels of expenditure required to upgrade totally the urban transport systems of our cities, we must seek to optimise the funds available.

In this regard, I would point out that there is an obvious world-wide swing away from the ‘grand strategy’ approach of solving the transport problems of urban areas. The pendulum is swinging towards making best use of the existing infrastructure rather than providing new systems. The emerging philosophy is to concentrate on making existing systems operate as efficiently and effectively as possible rather than appropriate at the taxpayer’s expense the vast expenditure required for new systems. A corollary of this approach is the emphasis now being placed on the co-ordination of transport services. Buses feed trains and ferries, cars feed buses and trains. The park and ride principle is widely adopted overseas and is growing in use in Australia with several such schemes being introduced under this program. Several operators in Australia are adopting ticketing systems which allow transfers between modes. The operators of public transport services are also aware of the need to keep travellers moving. In this regard a number of measures designed to give public transport vehicles priority over general traffic h£.ve been successfully introduced.

On the aspect of investigating improvements to public transport, members should be aware of the financial assistance provided to the States by the Commonwealth for transport planning and research. Under this scheme the Commonwealth provides two-thirds of the cost of projects proposed by the States and approved for assistance. In 1976-77 some $8m Will be provided to the States, of which about 36 per cent will be directed to urban transport projects. The projects are aimed at identifying transport problems and examining potential solutions. This is seen to be an essential element in the formulation of sound social, economic and technological solutions to transportation problems.

I have always been conscious of the importance to Australia of overseas developments in urban transport. In June this year I attended the European Conference of Ministers of Transport in Toulouse. This conference consists of 18 European ministers, with Australia and Japan being associate members and the United States and Canada having observer status. Members will appreciate that the Conference brings together an extensive knowledge of transportation. It therefore provides an opportunity to exchange views with the majority of government transport authorities in the developed world. I was greatly impressed with the work of the ECMT, and I intend to ensure that Australia obtains maximum benefit from our associate membership. I recognise of course that overseas experience and solutions are not always directly applicable to the Australian situation. Access to overseas expertise can however avoid many pitfalls and duplication of effort and expenditure.

I repeat that we are acutely aware of the significance of urban transport in contributing to the overall quality of life in our major cities. We stand ready to work in co-operation with the State and local governments in order to achieve our mutual aims of an improved public transport system. I commend the Bill to the House.

Debate (on motion by Mr Morris) adjourned.

page 885


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

Second Reading

AttorneyGeneral · Went worth · LP

– I move:

That the Bill be now read a second time.

The purpose of this Bill is to make amendments to the Family Law Act 1975. Honourable members will recall that a number of amendments were made to the Act by the Family Law Amendment Act 1 976, which was passed by Parliament in the last sittings. The main purpose of this much shorter Bill is to amend the Act to enable regulations to be made imposing court fees, as announced by the Treasurer (Mr Lynch) in the Budget Speech. The fee to be imposed will be $60 payable on the filing of each application for divorce from 1 October. Under the Budget proposals, no fees will be payable in respect of any ancillary applications such as maintenance or custody applications. The Bill does not itself specify the amount of the fee. Clause 7 enables the fee to be prescribed by regulations.

The Government decided to impose this fee in order to provide funds which will contribute to meeting the rising cost of legal aid. Some 80 per cent of Commonwealth funds appropriated for legal aid matters referred to private practitioners is in respect of matters arising under the Family Law Act. In this year’s Budget, a total of $9.5m has been provided for payment to the private profession for legal aid. Approximately 80 per cent of this figure therefore will represent payments for family law legal aid. The increased expenditure allowed in this year’s Budget for legal aid, other than Aboriginal legal aid, is $3.7m. The Government regards it as reasonable that applicants for dissolution who are able to do so should be required to pay a fee of $60. It is normal to pay a fee for being married, sometimes in excess of $30. Having in mind the facilities provided by the Family Court, a fee of $60 is not regarded as excessive. The proposed amount of $60 is also in line with the amount of fees formerly imposed under the Matrimonial Causes Act when due allowance is made for price movements since they were abolished in 1973. The total expected to be derived from these fees is $2. 8m over a full year. This may be compared with $ 16.2m which is the total estimated Commonwealth expenditure on legal aid, other than Aboriginal legal aid, over the same period. It is anticipated that in the present financial year the total number of divorce applications will be 48,000. Because the fee is a once-only imposition, it is not expected that the comparative cost of collecting it will be large.

The Bill includes a provision permitting the regulations to provide for exempting persons from paying the fee. I propose that the regulations will provide for automatic exemption from payment of the fee where a person produces written evidence that he or she is receiving legal aid for the divorce proceedings from a Commonwealth, State or Territory legal aid scheme. Registrars of courts will also have power to exempt payment where they are satisfied that it would impose hardship on an applicant. Honourable members will of course have the usual opportunity to scrutinise regulations made under the provisions of the Bill. In the case of applications filed in a State Family Court- at the moment only the Family Court of Western Australiathe Bill provides that the fees are to be. paid to :he State concerned. This has been done for administrative convenience, so that the fees collected will not constitute Commonwealth revenue aid, as such, have to be subject to Commonwealth Treasury and audit supervision. Negotiations are being undertaken with the Western . ustralian Government for adjustments to be mat e between the two governments to take account cf the receipt of this additional revenue by Western m Australia.

The remaining provisions of the Bill are of a clarifying or formal nature. Recent litigation has thrown some doubt on the extent of the provision enabling a court, in special circumstances, to make a maintenance or custody order in respect of a chile who has been put into care under State welfare legislation. The Bill clarifies the relevant provision . At the request of Western Australia, the Bill will enable the Commonwealth AttorneyGeneral to delegate his power of intervention in proceedings to the Attorney-General of a State ha ling r. State Family Court.

The proposed amendment to section 105 will facilitate ;he enforcement of court orders, particularly maintenance orders. This section enables any court to enforce an order made under the Act by any other court, but a prerequisite to the enforcement of an order is the registration of the order. A problem arises where a person is arrested in. say. Townsville, on a warrant issued in Sydney. The court in Townsville cannot deal with the matter until the order has been registered, and this may take some days. What is needed sr. a provision whereby a person arrested in Townsville can be released on bail pending the registration of the order. The amendment would enable the regulations to make a suitable provision. Honourable members will recognise th*.t the number and. complexity of the amendments contained in this Bill are not great, and I therefore ask them to give their early and speedy consideration to it. I commend the Bill to the House. debate (on motion by Mr Lionel Bowen’ ad.adjourned

APPROPRIATION BILL (No. 1) 1976-77 Second Reading (Budget Debate)

Debate resumed from 7 September, on motion by Mr Lynch: That the Bill be now read a second time.

Upon which Mr E. G. Whitlam had moved by way of amendment:

That all the words after “That” be omitted with a view to substituting the following words: “the House condemns the Budget because-

  1. it pursues a policy of unemployment as a weapon to reduce real wages and salaries;
  2. it abdicates federal government responsibilities and forces the State governments and local governments either to reduce their services or institute additional charges, or both;
  3. it introduces an additional tax in the form of the Medibank levy, thus further reducing consumer spending;
  4. it reduces the availability of services to the whole community but particularly to those most vulnerable to hardship notably Aborigines, the unemployed and migrants, and
  5. ) it fails to institute selective stimulatory expenditure to reduce unemployment and restore consumer confidence”.

-This Budget has been validly called a big man’s Budget. It has also been validly called a miner’s Budget. Also quite validly, it has been called a reversion to the Premiers’ Plan of the mid-depression years, with the adoption of precisely the same policies as were advocated in the Premiers’ Plan. One would have thought that over the years we might have learned a few lessons, but apparently the conservatives who at present are governing this country have not learned them. I will give one example of why this is a miner’s Budget. Take the case of Utah Mining Australia Limited, which is reputed to be the company which paid Khemlani’s expenses. I have heard, and I think it is quite well known, that that is the company which paid Khemlani’s expenses and which weighed in very heavily for the election expenses of both the National Country Party and the Liberal Party. Let us consider the golden handshake Utah will get out of this Budget. Last year that company exported approximately 13.5 million tonnes of coal, and it is understood that this year it will be exporting considerably more than that. It will receive a reduction of $1.50 per tonne in the coal export levy, which amounts to a saving this financial year of $20.25m, assuming that it exports the same amount of coal as last year. However it is reported that it will be exporting more.

To that saving can be added some of the other special assistance given in this Budget. Firstly, the allowable capital expenditure of any mining company on the development of a mine or field will be deductible on a diminishing value basis, as at present, by reference to a maximum life of mine or field of 5 years instead of the present 25 years. Secondly, allowable capital expenditure on facilities used for the transportation of minerals, including petroleum, will now be deductible on a straight line basis over either 20 years, as at present, or 10 years at the taxpayers’ option, to be increased with the first claim for the deduction. Thirdly, the categories of expenditure covered by the present provisions giving deductions for allowable capital expenditure on mineral transport facilities will be extended to cover expenditure, at present not deductible, on port developments such as harbour surveys, initial dredging, navigational aids and breakwaters. Fourthly, the company will benefit from the general 40 per cent investment allowance. So there are 5 propositions from which that company will benefit. From one alone- the reduction in the coal export duty- it will benefit to the extent of $20.25m, based on last year’s exports. The other 4 benefits are all investment allowances. By the time the company reaps the whole of the benefits it is to receive from the Budget, it will be saving something like $35m to $40m this financial year. This is a company which the Sydney Morning Herald on only 28 August announced would make $148m in the year ending on 31 October. What a golden handshake- $35m to $40m- for having weighed in to the coffers of the Government parties during the election and for having paid Khemlani’s expenses.

Mr Stewart:

– What did the DLP get out of it?


– I have not the slightest doubt that the Democratic Labor Party would have got something. I know that the honourable member for Swan (Mr Martyr), who has been trying constantly to interject, until a couple of years ago was the State Secretary of the DLP in Western Australia. He now represents the Liberal Party in this House, but of course he will be a oncer. He is in oncers’ corner over there. The example I have just given is a very good indication of why this Budget can be called a miner’s Budget

The Budget has also been called a reversion to the Premiers’ Plan of the depression years in the 1930s. Without a doubt, the whole strategy of the Budget is to provide further short sharp knocks to the economy, as though it has not already suffered enough. At the very least it is aimed at maintaining the present levels of employment. Of course, we know that the Treasurer (Mr Lynch) admits to the level of unemployment being approximately the same next June as it was this June. As most of his predictions have been wrong- the situation has turned out to be far worse than he has predicted- there is little doubt that the number of unemployed will rise by next

January to something like 400 000. It could go through the roof and reach the half million mark.

I think it is important that we should be looking at the matter of the employment of youth. I am glad to see that some Government supporters have a conscience. I refer to the honourable member for Lilley (Mr Kevin Cairns) and the honourable member for Mackellar (Mr Wentworth), both of whom have been raising this matter in their own Liberal Party Caucus, but apparently, according to this morning’s Press, they have been rolled. I would like to cite a few statistics in that regard from my own electorate. My electorate incorporates the outer western suburbs of Sydney, which are suffering some of the worst unemployment, if not the worst, in the whole of Australia. The statistics I have relate to the Penrith Employment Office, the Mt Druitt Employment Office and the Blacktown Employment Office. But my electorate does not take in the whole of those areas. It can be seen that as at the end of August 1976, of the total of 7287 persons registered as unemployed at those 3 offices somewhere between 6000 and 6500 persons- it would be nearer 6500- would be resident in my electorate. Of that total of 7287 unemployed as at the end of August, compared with a total of 6026 unemployed last August- that gives an indication of the decline in the employment situation- 3287 were juveniles. In other words, of those registered as unemployed in those 3 offices, 45.1 per cent are people under the age of 18 years, or juveniles. I think that any government which does not take that into account has very little social conscience indeed.

It must be realised that those juveniles who are presently unemployed will find it very hard to obtain employment after the next crop of school leavers come onto the market. That is so because of their age and because of the fact that employers naturally want people with experience. Those poor young people have not even had the chance of obtaining experience. Also, because of their age, an employer will naturally engage the younger person to whom he will be required to pay a wage which would be lower than that paid to those who are a year older. I think that is a factor which has been forgotten. Unfortunately the situation will get worse.

We must also look at the areas in which the Government has made its cuts in expenditure, because unfortunately the great body of those cuts have been made in employment giving areas. It should always be remembered that government is the biggest purchaser from the factory; it is the biggest single employer. When government introduces cuts in employment giving areas this must have a very serious effect on the employment situation. The Age of 18 August, under the heading ‘Where Lynch Axe Fell’, lists those areas in which cuts have been effected. I shall cite a few of them. The figures given indicate the percentage drop in government expenditure. They are: Sewerage 56.1 per cent, migrant education 50 per cent, old people’s homes 29.1 per cent, area improvement programs 96 per cent, shipping 49.5 per cent, pipelines 36. 1 per cent; ship building 37.4 per cent, stevedoring industry 33 per cent, and Commonwealth offices- that, of course, would include the Commonwealth Government Centre in Parramatta 16.4 per cent. All of these cuts are in employment giving areas, and they must all have a very serious impact upon the employment situation. They have a multiplying effect right through the economy, as far as employment is concerned, and that is particularly so in the building industry. The programs and the policies introduced by the Government, such as the Australian savings bond issues, drew away from the building societies a large proportion of funds which otherwise could have gone into the home building industry.

I wish to refer now to a report of the Indicative Planning Council on the housing industry. The Australian Financial Review of 27 August, in dealing with that report, states:

According to the report the desirable level of dwelling completions during 1976-77, 1977-78 and 1978-79 financial years is 148 700, 155 500 and 160 800 respectively for Australia as a whole.

In value terms, the desirable levels for the three-year period are $ 1 ,274m, $ 1 ,296m and $ 1 ,302m respectively.

By contrast, the council estimates that, due to resource constraints -

And that is the responsibility of this Government- the feasible levels of dwelling completions in those years will be 138 400 in 1 976-77 ( 10 000 short of demand), 144 800 in 1977-78 (10 700 short of demand) and 150 700 in 1978-79 (10 100 short of demand). ‘N.S.W. is in by far the worst position,’ the report says. ‘The present capacity of the industry is well below what it was some years ago and well short of the desirable level. ‘

We should keep in mind the fact that the unemployment situation is worse in New South Wales than it is in any other State of Australia. It is for that reason that I think the Government should set about having a very good look at the need to reduce the percentage of specified securities required to be held by the savings banks. At present the savings banks are required to hold 50 per cent of their deposits in specified securities. They can then lend a further 50 per cent. If that percentage was reduced by 5 per cent to 45 per cent it would mean that over an extended period of about 9 months more than $ 1,000m could be released for housing loan finance. That would be really worthwhile in prompting the building industry, because I emphasise that the building industry is in for a very serious recession indeed. The unemployment figures which I cited to the House this afternoon for the outer western suburbs of Sydney will become appreciably worse because there are more building workers in the outer western suburbs of Sydney than in any other similar area in the whole of Australia. Therefore that area will be affected all the more.

It is vital that the Government should enunciate and determine policies which will help overcome what will be a very serious depression in the building industry unless action is taken immediately. I make that submission to the Treasurer and to the Government as being a viable proposition. It has been advocated by some of the Treasurer’s friends in the Press, by the way, including the Australian Financial Review as far back as 14 May this year. I should mention that action taken by the Whitlam Labor Government when the building industry started to go backwards gave that industry a little fillip at that stage. The percentage of specified securities held by the savings banks was reduced from 55 per cent to 50 per cent. Now is the right time to reduce it from 50 per cent to 45 per cent. Of course, that would offset the effect of the Government ‘s Australian savings bond issues which have drained from the building societies and so on funds used for home loans.

I think it is also time that the Government set to on a long term planning program to revive secondary industry generally, and employment in secondary industry in particular. The Jackson report indicates that secondary industry started its decline not in the 1970s but from the mid-1960s and that that decline basically arose from industry not receiving sufficient capital investment to modernise it. That is to say, after the war industry put in the most modern equipment available up to that time. Accordingly, we had a very efficient secondary industry. Other countries such as North America, Japan and West Germany have now passed us by with the installation of much more efficient equipment in their industries. Added to that we now find that our own industry is not as competitive as it used to be with the low labour cost countries. When a company does decide to modernise its factory, the pattern is that it finds cheap industrial land in the outer suburbs such as the outer western suburbs of Sydney, builds its new factory on that land and pays for that new factory by flogging the old property in the inner suburbs. It puts in modern up-to-date and automated equipment and pays for the equipment over the long term because it has to employ very much less labour and therefore its labour costs are much less. An example of this is a food processor at Seven Hills, Cerebos. We must also take into account that more and more companies are today operating off shore. They are operating in places such as Taiwan and Singapore.

Mr Crean:

– And in the Philippines.


– Yes, and in the Philippines, as the honourable member says. This means jobs which would normally be held by Australians are now held overseas. This is once again a reason for the down-turn in employment opportunities. This development in industry will mean that as time goes on fewer and fewer job opportunities will occur in secondary industry, and society therefore has to decide whether we will maintain a very high rate of unemployment with consequent heavy expenditure by Government on unemployment relief with its associated social problems; whether we will introduce unemployment relief schemes to provide job opportunities and social and cultural improvements such as playing fields; whether government increases the vote of funds for public investment to provide also improved public facilities such as hospitals, road building, sewerage and schools; or whether working hours are to be cut and annual and long service leave are to be increased so as to allow for a great many more people to be employed in industry than are at present.

Probably a mix of all these proposals would be the best, but certainly we should now be looking at an unemployment relief scheme to provide employment particularly for young people and men with families. For example, a man with a wife and 3 children today receives $91 a week in unemployment relief. We should keep in mind the award provisions. The State award in New South Wales, based on a minimum wage for labourers, for a process worker is $107.50. For a carpenter the State award is $180 and the Federal award is $179.70. For a fitter and turner the State award is $128.10 and the Federal award is $128.10. In other words, if we add somewhere between $20 and $50 a week to that unemployment relief which is going down the drain, and in respect of which we are not obtaining any benefit for the community as a whole, then we have the wage of a labourer or a tradesman and the community gets something for its money.

For that reason, I submit it is imperative that from now on the Government should introduce some form of unemployment relief scheme such as the Regional Employment Development scheme or something similar. We are quite prepared to look at any sort of proposal but the important thing is to give to the community something which will be lasting. People forget that one of the major sources of labour in the construction of the Sydney Harbour Bridge was the unemployment relief scheme operating in those days. Despite the Treasurer’s argument that consumer spending will increase as a result of this Budget, the opposite will apply. The reasons are that with the fear of unemployment people will save more and spend less to protect themselves from a rainy day. That is indicated by an article in today’s Australian Financial Review. Pay as you earn taxation is going up to $ 1,766.3m, an increase of 24.7 per cent. This must reduce consumer spending. That is indicated at page 1 15 of the Budget Papers. On page 112 of the Budget Papers we find that the Government is going to tax widow’s pensions, supporting mother’s benefits, service pensions, unemployment benefits, sickness and special benefits.

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

Wide Bay

-It would be more than surprising if a Budget introduced in this Parliament failed to arouse the ire of the Opposition of the day, and in most cases the indignation of a long suffering public convinced that all governments are ruthlessly dedicated to the imposition of greater taxes to offset their own ineptitude. It is more than significant that on this occasion, despite the hollow protests of the Opposition, the people of Australia recognise the Budget as a document carrying the hallmarks of responsible and efficient management.

The people of Australia on 13 December 1975 demonstrated quite clearly their apprehension of the fiscal irresponsibility of the previous Administration. They are now encouraged by the ring of credibility in the Government’s economics policy to believe that the stage has been set for the sure, albeit initially slow, recovery of our economy. If the stage has been so set it must necessarily follow that all Australians are players, and therein rests the eventual success or failure not only of this Government but of the future of this Australia as we know it. There comes a time when, in adversity, the gap between government and the people narrows. Such a situation may be seen in the experience of the

United Kingdom where, notwithstanding emphatic warnings by governments over a period of years, the various factions blindly pursued their respective goals and that once great nation was brought to its knees. Only now that a cautious spirit of co-operation with the Government by both labour and capital has emerged can the seeds of recovery, sown and germinated by government policy, grow and flourish to yield some sort of a harvest for the nation as a whole. It must be conceded that labour, the unions in the United Kingdom, did not arrive at that attitude without considerable trauma. The United Kingdom trade unionists are regarded as the great traditionalists of the trade union movement. It must convey a message to the members of the trade unions in this country of the seriousness of the situation which confronted the United Kingdom and which must inevitably afflict this country if some measures are not adopted to withstand its evil influence.

I was fortunate enough as a member of a parliamentary delegation recently to visit South East Asia. I could not help but be impressed, indeed awed, by the extent of the off-shore activities. Wherever we went through Indonesia, Singapore, Malaysia and what we knew once as Borneo, now Sarawak, there was ample evidence of industrial activity. There was more than a surprise to find not only multi-nationals and companies from all over the world but a considerable number of Australian companies engaged in industry in those areas. They were not exploiting intensive labour operations in most cases. They were highly efficient and most automated industries but they were the beneficiaries of government policies in those countries which gave them pioneer status and tax holidays from which clearly they would benefit.

It is no good here in Australia arguing that those practices are grossly unfair and they would only undermine our standard of living. We have to face the fact that this is the world in which we live. If the Opposition wants to insist that many of our economic vicissitudes are a logical onflow of international economics it must necessarily follow that we cannot insulate ourselves against those same forces by maintaining an insular nation and economy so that we maintain an artificial standard of living. This clearly cannot continue. The unions must recognise that they have a major contribution to make to the economic wellbeing of this country. The message is clear. This country must work its way out of its dilemma. Private enterprise must respond to the challenge in a climate where they can be assured of reasonable reward for initiative, energy and attendant risks, continually mindful that private enterprise is not to be construed as a licence to rape, ravage or in any way to unfairly exploit. Likewise, the wage earner must recognise that the best wage conditions on earth are worthless if one does not have a job. There must as a result be a closer involvement between management and the work force from which a fuller understanding of each other’s role might arise, and thereby an acceptance of their mutual dependence.

In short, we must urgently address ourselves to the question of what sort of country we wish Australia to be- whether with a national spirit we set out to develop and manage our great natural resources, both men and material, so that all Australians will get a fair share or persist in our folly of funding our extravagance from capital instead of from earnings. In this respect it is noteworthy that of an estimated outlay for 1976-77 totalling $24,320.9m almost half is made up by health expenditure of $2,908.7m, education $2,204m, social security and welfare $6,187.1m- and I might mention that constitutes 25 per cent of total outlays- and culture and recreation $253. 9m. These fundings, admirable as they are in intent and generally accepted by most as being a legitimate responsibility of government, emphasise the need to sustain a level of productivity. If we delude ourselves that we can go on living a champagne existence on a beer income there can be only one result: The burden will become too great and the nation will be bankrupted.

It is rather significant that the Prime Minister (Mr Malcolm Fraser) made a statement today regarding the establishment of a committee to review secondary and tertiary education to ascertain whether in actual fact the nations resources are being profitably directed in those fields. The Leader of the Opposition (Mr E. G. Whitlam) responded to the effect that education was a cause in its own right, that it was justified in itself. To a certain extent that is true, but it must be equally clear that if we pursue a policy of education for itself without due regard to the eventual absorption and use of the talents so acquired by those engaged in it without concurrent attention to the economy we will be in the extraordinary position of having the best educated and, under our health programs, the most healthy and most cultured unemployed in our history.

It is true that most people subscribe to the notion that education must be paramount and that is perhaps a commendable attitude. It took its rise from the 1950s when the Russians were demonstrating that they could put a satellite in space. We recognised in the Western world that we were monumentally deficient in the educational field and that we urgently needed physicists and the like, so we embarked on this crash education program which has developed on a broader base in the meantime, so much so that we have imbued our young with the idea that if they do not proceed to tertiary education they are either derelict or a failure in some way or another. At the same time we encourage them to believe that having taken advantage of this great opportunity provided for them by the taxpayer the world owes them a living. So we reap the legacy of such a policy and the legacy leaves a lot to be desired. We see many of our young students who, pressed by this philosophy to go on to tertiary education, are proving to be lamentably inadequate and they fall by the wayside and we inherit another crop of disenchanted young people who adopt extreme social practices to escape the reality of their own failures. From the other end, those who are successful come out into a world in which there is no room for their talents, unless, of course, in another exercise of horizontal arabesque we reclassify positions progressively downwards so that eventually we insist on the office boy having an arts degree. This is only an exercise in self delusion.

Our welfare is a matter of considerable concern. It is rather ironic that all governments meeting the social attitudes of the day, insisting that more and more money be made available to relieve the distress of those disadvantaged sections of our community, find too often that when we move out to remove the blot on our society we often find that the blot grows larger. It is one of the perverse characteristics of human nature that if the responsibility of fending for themselves is removed or even alleviated they tend to be less energetic in fending for themselves. That is not a blanket condemnation of welfare programs. Clearly, any government sensitive to the people it represents must attend to these problems, but all too often we overrun ourselves with our enthusiasm and create more problems that we solve. There is perhaps a parallel to be seen in the treatment of government funding over several years in the field of Aboriginal welfare where all too often we find that, notwithstanding the expenditure of unbelievable sums of money, the immediate problems of the ultimate beneficiaries appear unrelieved. There must be some degree of restraint and objectivity in these programs to ensure that eventually when we look back upon our works we do not come to the conclusion that we have not been wisely or gainfully employed.

This country is unbelievably fortunate in the extent of its natural wealth in primary industry and minerals. It is essential that those engaged in such production be given a fair share of the wealth so generated. I might mention in slight digression that the present position wherein a beef producer receives only 30c of the customer’s dollar compared with 70c some few years ago illustrates quite graphically the plight of many primary producers. Add to this the savage increase in producers’ costs and it must become clear to all how slender has become the thread on which the wellbeing of many of our primary producers hangs. The Government has made available in this Budget $15m for further carry-on loans to beef producers. The Commonwealth Government will match approvals by the States on a $ 1 for $ 1 basis. Whilst such assistance is of value to producers it cannot be seen as a solution to their problems. Until inflation is arrested and costs no longer escalate there can be no future for primary producers and those servicing them in an area equivalent to three-quarters of Australia.

In speaking to the Budget Opposition supporters have protested against the Medibank levy, suggesting that the levy is nothing more than another form of taxation rake-off. It seems to me that they conveniently overlook the fact that the levy is a charge for a specific service, that is, health insurance. Not to pay a premium for health insurance would suggest that one should not be required to pay a premium for fire insurance, car insurance or for that matter any of the standard forms of insurance. It should also be noted that the Budget provision for Medibank of $l,612m is offset by only $250m from levy proceeds in 1976-77. So that should dispell the notion that the taxpayer in general is not going to pick up the greater portion of financial responsibility for Medibank. The levy payers are by no stretch of the imagination meeting the cost of the scheme. Low income earners, together with most pensioners and repatriation beneficiaries, will be exempted from paying the levy. The simple fact is that society, through the government of the day, elected to establish a universal health scheme and the present Government, through its pre-election undertaking not to dismantle the scheme, has effected such modification so as to ensure that the scheme will not consume the economy as has been the case in other countries.

Queensland had no need of Medibank but it has been required to fall into line. A disturbing feature of the arrangements is that in the States of greater area many people do not have reasonable access to medical facilities. They will, of course, be required to pay the levy, highlighting once again the disadvantages under which people living out of the great cities must compete for consideration from an often unmindful society. The Government must remain alert to excessive and damaging trends within Medibank and must be prepared from time to time to make such changes as are necessary to keep the scheme within reason. The recent statements of the honourable member for Tangey (Dr Richardson) sound a warning to those who unreservedly support an open-ended health scheme. The honourable member’s suggestions to place restraint on indiscriminate and improper use of Medibank are well worth consideration.

In the Budget the Government has at last brought some relief to private companies and small businesses. The Government has undertaken to ease the distribution requirements for private companies under Division 7 of the Income Tax Assessment Act. In that regard, the needs of small businesses were particularly in mind. From now, in respect of distributions of taxable incomes for the year 1975-76 and subsequent years, the retention allowance for trade or business income will be increased from 50 per cent to 60 per cent. This will have the effect of increasing by one-fifth the amount of after tax income which a private company can retain without incurring Division 7 tax.

I would say, while speaking of small business, that not all of the problems of small business are attributable to government- to any government. With changing techniques and practices within the field of commerce, many small businesses, particularly in rural and provincial areas, are reeling under the impact. With the introduction of the practice of bulk buying, many of these small businesses, particularly country stores, are greatly handicapped. They require to gain any son of a concession in price to purchase quantities of goods that will remain on their shelves for a prolonged period. Even by buying in that way, they do not receive discounts as favourable as those received by the larger companies and businesses in the metropolitan areas. While these commodities remain on the shelves, the overdrafts which financed the purchases must be serviced by the payment of an interest rate which is all too high. The Government has indicated its resolve to reduce interest rates at the earliest possible moment without unduly exacerbating the inflationary effects. The Government also in relation to business has introduced a valuation on trading stock which will be of considerable value to business.

The Government has maintained its overseas aid- in fact, it has increased it by 14.6 per cent in nominal value- at $400m. This aid represents a commitment by Australia, one that is endorsed by most right-thinking people. Again, referring to my recent visit to South-East Asia, I had ample opportunity to review these foreign aid activities. They are very much appreciated in the recipient countries and I am sure that they will make a major contribution towards goodwill that is so essential between neighbouring countries.

Pensioners have been assured that the Government automatically will tie their pension rates to increases in the consumer price index. They will be freed from the anxiety of wondering whether the increase in inflation, in the meantime, will exceed their spending capacity. Also, pensioners have been relieved of the property means test. This will give them additional security. Handicapped persons have been recognised in the Budget by the provision of funding amounting to $30m. The handicapped children’s allowance has been increased from $10 a week to $15 a week. The Government has embarked on a policy designed to ensure that the taxpayer retains a greater proportion of his earnings and also that he will have the option to determine how those earnings will be spent. In that respect, tax indexation- a major achievement of this Government- has the effect of surrendering, virtually, revenue amounting to $ 1,050m which would have been collected by way of taxation. That money remains with the taxpayer.

As further evidence of the Government’s resolve in the direction of taxation, I point out that for the first time in very many years there has been no increase in the tax on cigarettes, beer, spirits and petrol which traditionally have provided an excellent revenue harvest for sorely pressed governments. Mr Deputy Speaker, in conclusion I say that it is encouraging to all right thinking Australians that having set out to build a better Australia, our defence funding has been increased by 1 7 per cent to ensure that what we have we hold.


-The right honourable the Prime Minister (Mr Malcolm Fraser) was my predecessor as Minister for Education. I was therefore interested when the right honourable gentleman spoke about the importance of technical education and the need for a new emphasis on technical education in Australia. When I became the Minister for Education, Commonwealth expenditure on technical education was $19m a year. We raised that amount to $71m a year, a 350 per cent increase. In my time as Minister for Education, we made technical education free and student enrolments at technical colleges rose from 400 000 to 70S 000. 1 would think that a 75 per cent increase in enrolments in 2 years showed a considerable re-orientation of Australian education towards technical education. However, I think that the Prime Minister’s distinctions between technical education and other education need very careful examination.

A study by the Canberra Technical College showed that of 880 apprentices, 16 per cent, which would be more than 120 apprentices, had reading ages totally inadequate to do a technical course. When apprentice week was being held, I, as Minister for Education, looked particularly at the reading material required by apprentices. For instance, a motor mechanic apprentice used company manuals- manuals from Ford, Holden, Austin, Toyota and all the various motor firms. If a reading age of 15 is required to understand an Australian income tax form, which I understand is the age required for understanding that form, it would require a reading age of much more than that to understand a motor manual. Again, if a young person is training as a chef at the Canberra Technical College or as a horticultural apprentice of any kind, the tertiary text books that are required are of full university level. There is no way in the world by which a modern technical student can get by without a high level of literacy, numeracy and power of expression- the things that are called academic. There is no escape from this. A thoroughly efficient academic education which confers on the student literacy, numeracy and the power of expression is absolutely essential.

Let us not draw false distinctions between technical education and other education. As I say, an increase in enrolment from 400 000 students to 705 000 students is quite significant. I think that the Government has gravely underestimated the continued rising demand, notwithstanding what the Prime Minister has had to say. I admit that the increase of 300 000 students who have enrolled over a couple of years must level out. Perhaps I could best use the expressions of the Technical and Further Education Commission itself in relation to this matter. The Commission writes:

A rate of enrolment growth of the magnitude experienced by TAFE systems in recent years must be expected to level off at some time. Also, some scope exists to increase the utilisation of existing capital facilities of TAFE throughout the day, week and year, and to make greater use of unused industrial facilities. After allowing for this, the Commission has concluded that it would be irresponsible to plan on the basis of an increase of any less than 85 000 additional enrolments over the triennium for which further capital faculties will need to be specifically provided.

I would like to say something about the States in relation to this matter. They have had responsibility for technical education. When I became Minister, we were concluding a triennium in which the Commonwealth had granted $36m over 3 years to the States for technical education buildings. That was immediately increased to $46m. The States could not, would not, or at any rate did not, spend the money. Of that $46m provided over 3 years, which in all conscience was a small enough amount, $39m was spent. Three States returned $7m unspent. The 3 States were New South Wales, then under a Liberal government; Queensland, then governed as it is now; and Victoria, then governed as it is now. The other States spent their money and some were asking for more. The Technical and Further Education Commission under Professor Richardson advocated an expenditure for capital facilities of $234m in 2’A years. There was no way in the world in which I could logically convince the Treasury that States which could not spend $46m in 3 years could spend $234m in Vh years, and I did not attempt to do so. The position was reached of course where there were not the safeguards in this form of education that there had been in the Schools Commission.

I engaged in a television debate on this matter with Sir Eric Willis. I must say that he was a man who was very difficult to look in the face because he had such dazzling cheek. He said that the Commonwealth grants were a nice piece of icing on the cake. So I drew his attention to the fact that with regard to capital expenditure on technical education in New South Wales, 10 Commonwealth dollars were being spent for one State dollar. So the icing in that respect, anyway, was 10 times as thick as the cake. Sir Eric very graciously said: ‘Well, I will admit the icing was very thick and very sweet’. The icing on technical education which the Prime Minister particularly picked up with regard to Victoria was that for capital construction of technical colleges 4 Commonwealth dollars were being spent for one State dollar. In South Australia the situation was almost the reverse; 3 State dollars were being spent for one Commonwealth dollar. I think the depressing conclusion that one would come to with regard to the field of technical education was that the States of New South Wales and Victoriatremendously important States- were using Commonwealth grants of a capital nature for technical education as a substitute for and not additional to their own expenditure. There was no provision in the legislation about the maintenance of effort by the States such as existed in the Schools Commission legislation. I think that the last speaker, in making his remarks on academic education, forgot a very important thing: It may be my opinion that someone ought not to study law because the country has enough lawyers -

Mr Martyr:

– Too many.


-As the honourable gentleman suggests, it may already have too many. But that ought not to be my decision if I am Minister for Education. People have the right to choose their careers. Admittedly greater pressure was put onto the resources when universities, colleges of advances education and technical colleges were made free. I dislike the rather flimsy suggestion that there has been too great an emphasis in these fields, when the experiment of 1974-75 of making tertiary education free, is, after all, very new.

I think that the interesting thing is the position taken by the States in this matter. Under the old system for universities or colleges of advanced education, the Commonwealth found a dollar for every dollar found by the States. In the recurring expenditure, the Commonwealth found a dollar for every $ 1.85 found by the States. So the Treasury was never critical of Universities Commission reports or of Colleges of Advanced Education Commission reports because before the Treasury got a look at them, 6 State Treasuries had engaged in a blocking activity. I will not name the State nor the Under-Secretary of Treasury who, whenever the Universities Commission visited his State, would say: ‘Don’t you come down here recommending great expenditure on universities or colleges of advanced education. Don’t forget you have only got to find a dollar and we have to find $1.85’. When the Commonwealth became the exclusive authority to finance tertiary education, my, what a transformation came over the scene. I was perpetually bombarded by Mr Thompson and Sir Eric Willis when he was Minister for Education. They even advocated that the Teachers’ College in Armidale, a city of 15 000 people, should get a $lm library and that the University of New England, a few miles away in the same city and training 3 times as many teachers as the Teachers’ College, should get a $1.5m library. The idea of any Under-Secretary of a State Treasury advocating such expenditure before it became a matter of sending the bill to the Commonwealth is fantastic. It always amused me that the standard comment from the then Opposition benches while I was Minister for Education was how responsible the States were and how irresponsible the Commonwealth was. Of course this was States grants legislation and the States were spending the money themselves. This legislation involved grants to the States.

My immediate successor as Minister for Education, Senator Margaret Guilfoyle, for whom I have a very great deal of respect, nevertheless used to tell a marvellous little story about the wastefulness of Commonwealth expenditure. She told the story of how some school in a remote area where television reception could not be received had obtained a television set. I should like to explain that we did not decide who got television sets. The grants for providing equipment in schools were made to the States. If the States themselves did not know the areas within their own borders which received television reception, that was hardly our responsibility. In any event, I think there was a vast advance in education during our period of office.

I know that if we say the words ‘free enterprise’, we ought immediately to genuflect. I am quite prepared to genuflect to you, Mr Deputy Speaker, but I should like to say something about free enterprise in the book trade and about inflation. Certain unions, because of demarcation disputes, left the concrete running in university buildings, including university hospital buildings, so it all had to be chopped out. That drove up the cost and was a factor in inflation. But the boys involved were pikers compared with those in the Australian book trade which surely must be one of the most unscrupulous in the world. When we came to power, $A100 was equal to US$119. Within 9 months, $A100 was equal to US$148.75. We in the education field sat back confidently to watch the fall in the price of books. Did we see it? We certainly did not. The book trade simply pocketed the difference. As an alternative to reading the Budget when I was ill recently, I bought an Agatha Christie whodunit to read in bed. The English price marked on that book was ‘30p which is equal to 48 Australian cents. The marked price for retail to the Australian market was 95c. A member of my household who had befriended a naval officer in Australia and who wished to present him with that current annual Jane ‘s Fighting Ships- a technical naval publicationsaw that it was marked at $72 a copy in Australian bookshops. He bought it in England by post, paid the freight and all charges to have it delivered to Australia and it cost only $31. This case is very typical of the position regarding highly technical or educational material. I am not surprised that organisations like the Canberra Parents and Citizens Association can pay the fares of book buyers to Britain, pay their accommodation costs in Britain, pay the freight on the books and bring them to Australia for very much less than they can buy them in Australian bookshops. I know all about inflation and I know what the economist theorists say about a revaluation upwards being an answer to inflation. I think revaluations upwards and cuts in tariffs in many cases simply added to the pocketing of the sums of money that were earned by the people retailing. In the field of education this situation was very serious indeed.

The Government has what is called a rolling triennium instead of a fixed triennium. Under the fixed triennium- the system which existed under our predecessors and in respect of which we introduced indexation in 1974- the allocation for universities was $1,1 06m. Indexation put that figure up by $306m. There were some new initiatives but by and large the expenditure was locked off from the impact of inflation. Equally, in the field of advanced education the expenditure envisaged for the triennium was $462m. We took on board the teachers’ colleges and then that figure became $842m under the impact of teachers’ colleges and indexation. So they were immunised.

That was what is called the fixed triennium. The Government has rejected the fixed triennium as unwise and it says it has a rolling triennium. There are 2 possible explanations of the rolling triennium; it is the rolling stone that gathers no moss or it is the snowball which in rolling gets larger and becomes an avalanche. The Universities Commission does not seem to be terribly optimistic that it is the snowball that is envisaged over the next 3 years. The Universities Commission was very moderate in its estimates for the triennium. We had to suspend the program for the triennium basically because of the leap in the recommendations for technical and further education capital from $46m in 3 years to $2 3 4m in 2lA years and then the recommendation of the Advanced Education Commission to double the expenditure from $840m in a triennium to $ 1,680m and envisaged $584m worth of capital. To take as an example, one which my colleague from Swan would know quite well, WAIT, the Western Australian Institute of Technology, alongside Murdoch University, the Advanced Education Commission recommended $26m worth of building for the Western Australian Institute of Technology and $13m was recommended by the Universities Commission for Murdoch. WAIT is a quite developed place; Murdoch is a new place and the $ 13m was easier to justify and was a more moderate figure. But my point is that in a small locality there were 2 institutions competing for labour and materials.

We suspended the triennial program- not getting rid of it or replacing it with a rolling one but because the sums asked for, especially on the capital side, were too great- and we tried to make an arrangement between the Commissions so that they would not compete with one another for capital.

I do not need to stress that problem. Anyone who looks at the graph on page 5 of the report of the Universities Commission will see the depressing fall that it anticipates in capital construction. This is serious. Do not make distinctions between technical and university education. There are many technical faculties of the utmost importance in universities- veterinary science, engineering, medicine and so on.

Mr Martyr:

– Not sociology.


– Sociology is unpopular in the Soviet Union. I hope the honourable gentleman has not the same reasons for making it so.


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

Mr Kevin Cairns:

-I do not intend to join the honourable member for Fremantle (Mr Beazley) in a discussion about education, but merely would like to make the necessary equation between what he has been speaking about and the Budget. I think the necessary equation lies in the work of Kuznets in the 1950s in which he stated the simple proposition that education means economic growth and that if more is spent on education- this has been fastened on by so many university and other authorities over the years- ipso facto there will be a better economic performance only on account of this fact. As the honourable member for Fremantle has pointed out quite clearly it is often the nature of the expenditure on education that needs to be examined if it is to have an effect on the broad economic parameters of any nation. That would be a matter for a discussion at a subsequent time.

I want to discuss the Budget from a viewpoint of history- fairly recent history and history a little further distant. In looking at the recent background of the Budget, perhaps in a political sense I resist the temptation to quote again the words that were spoken by the Leader of the Opposition (Mr E. G. Whitlam) at Blacktown in 1972. 1 will not go to that situation but I will go to the amendment which was moved and voted on in 1971 by the Leader of the Opposition in his penultimate Budget debate as an Opposition Leader before he became Prime Minister. He had some fascinating words in that proposed amendment. He moved that the Budget be rejected, for 5 reasons, among them: because it produces no programs for high national objectives of social welfare, economic strength and national security.

He foreshadowed his own broad attitude to economic management as determined by a Budget. We all know now that within almost 12 months of moving that amendment in order to reject the Budget of 1971 he was responsible for introducing the new experience into the Australian economic scene, the experience of negflation, one which we had never had before and one which this country had never suffered before. I define negflation in few words as a unique situation where one is able to have at the one moment a quadrumvirate of negative growth, negative productivity, rising unemployment and inflation. We had the four of them together. In his own way the Leader of the Opposition was responsible at least for improving our knowledge of the English language.

Let us look at the situation from a little further distance in history because I think this will illustrate that almost since the days of Federation the Opposition has failed to comprehend how to examine a Budget statement. I am attracted to the words of the first Treasurer of the Commonwealth who, in introducing the first Budget into the Commonwealth in 1901 had this to say in, I suggest, a spirit of enlivened goodwill. Sir George Turner said:

I do not myself claim to be an accountant -

That was the acme of all the professions at that time- and I want to see the accounts of the Treasury kept in such a simple manner that any honourable member requiring information may always be able to get it without difficulty.

That was a piece of advice given 75 years ago. I suggest that the simplicity of the present Budget Statement has not only been not understood but it has not even been begun to be comprehended. I have always thought that the Opposition when in government and considering a Budget displayed a chocolate-wheel mentality or regarded the Budget as a kind of chocolatewheel. The chocolate-wheel is used more in New South Wales where people gamble more avidly than in other States. You get a wheel, you throw at it every misconception, every ideological prejudice, every piece of misunderstood statistical data, and you take out what you want, make it into a budget, dress it up with some scientific form and say: ‘That is our Budget’. That went on for 3 years.

Mr Martyr:

– You give it a whirl.

Mr Kevin Cairns:

-Yes, you give it a whirl, too. That process has ended and I hope it has ended for all time. The Opposition has misunderstood 2 key features of the Budget on which I should like to join issue with Opposition members fervently and powerfully in this debate. With respect to employment, they have misunderstood and misconstrued the statement of the Treasurer (Mr Lynch) in Budget Statement No. 2, the one that has been quoted over and over again, in respect of employment. Let us look at this in a simple, positive manner. The Treasurer stated:

Employment growth then appears to be likely to be of the order of 1 to 2 per cent for the year as a whole, although a faster rate of growth- more than 2 per cent over the year- is implied.

One might say: ‘That is not enough ‘. I should like it to be more and there would not be anybody in this chamber who would not want it to be more. But of course things cannot be reversed overnight. Let me go back a little in history to see what the performance was in terms of employment growth over the period before the present Government came to power- not unemployment, the growth in the labour force. Bearing in mind that the labour force in Australia is reputed to grow by 1 50 000-odd per year, over the period of 18 months from June 1974 to December 1975 the work force actually in employment- forget unemployment figures- declined by nearly -100 000. This Budget is talking about a growth. The achievement before this Government came to office was a negative growth rate. We went down hill. But the ingredients of that declinethis is a central and human part of any economic management- deserve to be examined. Nearly 70 000 of the actual decline in the work force in employment consisted of males, the majority of whom were breadwinners. That fact adds a particular degree of distress to the situation. So for the Opposition to move motions in this House which talk about unemployment and how unemployment will not be reduced sufficiently quickly, bearing in mind that it as a government was able to achieve a real negative growth- a decline- in the work force, is a piece of contradictory nonsense.

I know that Opposition members opposite and Government supporters will be happy to know that the decline in the growth of the work force seems to have plateaued and bottomed out and that there is a ray of sunshine. The latest data available on employed wage and salary earners in Australia- the figures for June of this yearwere not below but were the same as the figures for January of this year and December of last year. The decline has been halted. All honourable members know that a situation cannot be improved until a plateau has been reached. That is the position. There will be a real rate of growth in the work force. We would like it to occur quicker. But the real rate of growth in the work force is an actual and real reversal of the situation that applied until the Government came to office.

The other fact which the Opposition seems to have forgotten is a simple one. It is nonsense to talk about economic welfare unless one remembers what is the real escalator of economic welfare. The Budget foreshadows and is based on the assumption of a 4 per cent increase in the gross domestic product over the year in real terms. When there is a total growth situation in the economy it is possible to begin to do something in respect of economic welfare or social welfare. Unless that growth occurs it is impossible to do anything real in terms of social welfare because one is merely substituting one form of expenditure for another. In other words, one form of deprivation is being substituted for another. I hope that the Opposition is aware of those matters.

I come to the other difficulty which I believe the Opposition faces. It is the difficulty of knowing what its policy actually is. I have noted that not one word has been spoken throughout the Budget debate by honourable members opposite about taxation and nothing has been said by them about the way in which revenue would be raised and, in fact, was raised by the Labor Government. I am disturbed to note that the Leader of the Opposition seems to be adopting a policy of not finding out what is going on behind him. He has a Deputy- a very talented man; the representative of a Sydney seat- whose policies are running contrary to his own.

I am reminded of the story so beautifully told by George Orwell during World War II when he was broadcasting on the British Broadcasting Commission of his own experience as a child. He said that he had a wasp that he would feed strawberry jam on a plate. As a child he got a razor blade and cut off the nether end of the wasp. But the wasp just kept on eating the strawberry jam. Of course, a thin, faint trickle of red jam came out of the nether end of the wasp. This insect did not quite realise what had befallen it until it tried to wing up and fly away.

I suggest that that is precisely what is happening behind the Leader of the Opposition today. The Deputy Leader of the Opposition (Mr Uren) is proposing some policies and doubting a number of other policies which the Leader of the Opposition would never dare to do. I refer to a speech concerning tax indexation that the Deputy Leader of the Opposition made to a New South Wales body called the New South Wales Living Standards Conference on Saturday, 28 August. Apparently he is a friend of members of that organisation. The Government’s policy on tax indexation was adopted by it after some disagreement. I am delighted to know that the honourable member for Mackellar (Mr Went worth) and I can claim some little success for the adoption of this policy against considerable, but always friendly opposition. At the conference on 28 August the Deputy Leader of the Opposition said:

The Budget gives nothing to the besieged wage and salary earner. Rather it takes from them. Tax indexation was not devised to assist the worker; it was devised to assist the employers by reducing the workers ‘ claims on the employers for the maintenance of real wages.

I emphasise that he claimed that tax indexation was not devised to assist the worker. I hope that those words are remembered and I hope that the significance of those words are meditated upon long and constantly by the Opposition. Mr Jolly of the Australian Council of Trade Unions was a member of the body that made some of the recommendations. The policy was adopted by the ACTU. At the end of 1975 the Labor Party released subterranean reports from taxation officers which tried to kill tax indexation. Tax indexation was designed to increase the disposable dollars in the pockets of Australian wage and salary earners. It was also devised in an inflationary situation to act as a guarantee that when restraint was required in terms of wages those least able to defend their position would not be thrown to the wolves. That is a mixture of the economic and the social ingredients of tax indexation. However, the Deputy Leader of the Opposition has another proposition, namely, that it was not designed to assist the worker.

Keeping in mind the wasp and being aware of the policies being enunciated behind the Leader of the Opposition, I refer again to the speech made by the Deputy Leader of the Opposition. Of course, he does not Like the mining industry but some of his quaint economic fulminations come out in this speech. At page 8 of it he said:

The growth of the mining industry, and exports of minerals will also mean the erosion of Australia’s manufacturing industry. This happens because when export earnings are high the major overseas buyers exert pressure on Australia to raise its imports, in the name of trade balance.

None of the major buyers of minerals from Australia are going to tolerate unfavourable trade balances for too long. Imports will have to rise in line with exports and these imports will be imports of foreign manufactured goods.

What is the sense of that statement? The sense of it is that the Deputy Leader of the Opposition quite obviously does not like Australia to have a positive and growing trade balance because a positive and growing trade balance that is pursued perhaps in terms of the mining industry and perhaps in terms of the Utah Mining Co. represents a threat to Australia’s manufacturing industries. What an incredible piece of economic rubbish and nonsense. Does the Deputy Leader of the Opposition not realise that a growing trade balance and a vital, viable, significant export industry enable standards to be retained in manufacturing industries which are subject to tariff or quota protection? Does he not realise that that is a necessary transfer that does and should occur in the Australian economy? No. The Deputy Leader of the Opposition would rather return to the difficult days of the 1940s, the 1950s and the early 1960s when Australia was always on a knife’s edge and a razor’s edge in terms of export income. To him export income and a positive trade balance mean doom and despair for Australia’s manufacturing industry. Yet he comes from one of the great manufacturing cities and centres of Australia. Without going back to read George Orwell’s broadcasts of World War II, I suggest to the Leader of the Opposition that he should have a look at and perhaps synchronise some of his own statements with those that are being made by the Deputy Leader of the Opposition.

One last thing I want to mention concerns the chocolate wheel again. A consistent argument has been put on the monetary theory that if the increase in the volume of money is to be only 10 to 12 per cent as presumed on page 25 of Budget Statement No. 2, if we are going to have an average rate of inflation of that order over the year, and if there is to be a gross domestic product rate of growth of 4 per cent over the year, there is not going to be sufficient money around to see that economic production will occur, to see that the economy can go on. Does he realise that he has become more a Friedmanite than anybody else? What he has forgotten- it is only a small thing -is that it is Friedman who said that the velocity of money does not change; but it has been the experience of Australia over the years that the velocity of money can change more than is necessary to make up the difference. In fact, on some calculations I have made in respect of recent years, the velocity of money has increased in a number of years by more than 4 per cent, which would more than make up the difference that is implied in terms of the monetary strategy of the

Budget. It increased by more than 4 per cent between 1967-68 and 1968-69, between 1969-70 and 1970-71 and, lo and behold, while Labor was in government between 1973-74 and 1 974-75. So a number of serious misconceptions have occurred. I would suggest that the advice given, given very honestly and very fairly, 76 years ago ought to be taken.

The Budget is a simple document. One only has to read it to see what the words mean. I suggest that is the first task the Opposition should undertake. We know that in the months ahead there will be an agonising waiting time between an increase in production in Australia and an increase in demand for all those things we want to see occur. I would hope that, as with any government, flexibility will be pursued to see whether that waiting time can be shortened without disadvantage and without impairing any overall budget or economic strategy. After all, flexibility was pursued during the early 1950s, in 1961-62, in 1965-66 and even in 1974 with advantage. But the overall proposition remains the same. I would only suggest to the honourable member for Shortland (Mr Morris), the Opposition front bench spokesman- I think he is for the moment- who is going to follow me, that he bear in mind Sir George Orwell’s words at the beginning of this century and look at the Budget as a simple document.


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


– I have listened with pleasure to my colleague, the honourable member for Lilley (Mr Kevin Cairns). We all enjoy from time to time his little economic dissertations and his little stories. I notice he is smiling because he knows I enjoy what he says from time to time. What he does not tell the House and the community is that his own people do not believe him. His own Party does not support him. As the Deputy Leader of the Opposition (Mr Uren) said yesterday, the honourable member for Lilley is strange, because he has a Jekyll and Hyde personality. In this chamber he says one thing because he knows it will get into Hansard, and outside he says something else. Obviously his own Party cannot interpret him. I do not think that we of the Opposition or the community should be asked to interpret something that his own colleagues cannot interpret. I turn to the Budget.

Mr Hodgman:

– Very noble of you.


-I wish the honourable member would go back to his seat and interject from there so I can respond to him. Despite all the attempts by the Prime Minister to talk up recovery and talk up consumer spending, this Budget is designed deliberately to raise unemployment to an all time national record. It is designed to force on to the shoulders of the unemployed and the lower to middle class income groups the cost of this corrupt conservative Government’s ill-advised attempt to combat inflation. This Government came to office at the climax of an orchestrated campaign of conspiracy, deception and deceit.

Mr Martyr:

– Oh, come on!


– I know it hurts, but you have to take it. It was a campaign in which the Government’s masters- the media proprietors and big business- backed and helped to coordinate. Let there be no misunderstanding by the Australian community: This Government is being manipulated by big business, and this Budget is the pay-off. It is a succession of handouts to big business at the expense of the wage and salary earners, at the expense of the unemployed and the hundreds of thousands of people who will join the ranks of the unemployed in the months ahead. Let us examine just a few quotations from the election policy of the Liberal and Country Parties in November. They said:

We will maintain Medibank . . .

Medibank has become medimuddle. and in its place has been substituted a new form of taxation, a health services tax. It represents a reduction in disposable income.

Mr Yates:

– It is good enough for the people.


– The honourable member says that it is good enough for the people. That is his view. It is not the view of the Opposition. The new tax is a sell-out to the Australian Medical Association and the private health funds. The Government Parties said about legal aid:

We shall ensure that no person is denied legal aid because of lack of means.

First the Government attempted to off-load legal aid to the States. The State Attorneys-General sent the Commonwealth’s representatives back to Canberra to get some money. Now the Government is introducing a harsh means test. In my electorate there is a 4-week waiting list on urgent cases, and non-urgent cases just do not rate. That is how the Government has maintained legal aid. During the election campaign it said:

Only under a Liberal-Country Party Government will there be a return to business confidence.

Confidence in this country was demolished in the period from 16 October last year, when honourable members opposite and their colleagues outside this place deliberately brought this country to an economic standstill in their refusal to consider the Budget. No one can deny that. That was the severance, the cut-off point, in the economic development of this country over the last 18 months. The Government has destroyed confidence. The people of this country realised after the election what the Government had done. If the oncers who sit opposite are not worried, I ask them to compare the New South Wales election results with the last Federal election results.

Mr Martyr:

– Have a look at your own figures.


– Mine are very good. I am very happy about them. There was a 16 per cent improvement between December and 1 May. I think the honourable member would be very happy if his rating was as good. During the election campaign the Government said:

Only under a Liberal-Country Party Government will there be jobs for all who want to work.

It was a shallow promise. The Government has not only abolished the right to work but is determined that those who are not able to find work will be cared for less. Let me refer to page 47 of Budget Statement No. 3. Our friend, the honourable member for Lilley, quoted profusely from the Budget. It shows a reduction of $33.6m in the provision for the unemployed and sick in the coming year. The Government itself accepts that there will be an increase in unemployment. We know that the honourable member for Lilley is an economics lecturer and maybe he has a special way of doing mathematics, but if he can make more per capita for the unemployed out of $36m less, 1 hope and wish he would do something about it. Another election promise was this:

The present community health program will be continued.

The Budget provides a cut in real terms of 1 5 per cent. The $500,000 community health centre going up in my electorate will not be built. The services it could offer will not be provided. The Government’s friends in the AMA will be very happy about that. The school dental program which provides much benefit to parents is being wound down as a result of the cut in real terms in the provision for this program in the Budget. The Prime Minister has gone one better. He has repudiated the whole range of policies. On the television program Monday Conference on 24 May, referring to last year’s policy speech, he told Mr Alan Barnes:

That policy speech was obviously specifically directed to the circumstances in which it was made.

In other words, voters should have realised it was not meant to be implemented. The speech was only words said for the occasion. The Government has rapidly established a remarkable record of inconsistency, but the one objective in which it has been singularly consistent and which it did not mention to the voters is the determined objective deliberately to expand unemployment and force upon wage and salary earners a reduction in living standards, a reduction in real wages and salaries. No honourable member on the Government side will deny that it is so. The Government misled the nation with a great bag of false promises while all the time it concealed its true objective of a massive increase in the jobless to bring a return to the hungry thirties, a return to the indignities and despair of the great depression. What more shameful exercise can there be than that of some members of the Government, who delight in vilifying and denigrating young people who are unable to get work by referring to them as dole bludgers. I hope that their sons and daughters, when they go looking for work and are unable to find it, receive the same sort of treatment from other persons as honourable members opposite have been meting out to young people in this community over the last 1 8 months.

This Government, coerced by its dictatorial Prime Minister, again seeks to mislead the nation by union bashing and the creation of phoney issues in a futile attempt to divert public attention away from the real issue of its responsibility for the planned expansion of unemployment and the stagnating economy. Its continued attack on the trade union movement and the so-called left wing minority should be seen for what it is- an attempt to set up the trade union movement as the scapegoat for the certain failure of the Government’s economic strategy. The Government controls the Treasury purse strings, not the trade union movement, and it is the Government which has the responsibility for the management of the economy. The Prime Minister- and I am sure some of the oncers opposite must have been dismayed, but outwardly they agree with what was done- has adopted a pro-Mao anti-Soviet stance to try to show the Union of Soviet Socialist Republics as a dangerous threat to our security in order to distract public attention away from the extreme hardships the Government is intent on creating for most Australians. The bogey of the Soviet threat -

Mr Yates:

-It is a fact. According to the Government, the Mao communists, the Chinese communists, are OK, they are number one, but the bad ones are those Soviet communists. That is the Government’s policy, not the Opposition’s. The bogey of the Soviet threat is made all the more ludicrous when we consider that, on the one hand, uniformed Russian seamen on our west coast are painted as a dangerous threat while on our east coast non-uniformed Russian seamen of the Soviet line Fesco are given a red carpet welcome by the Minister for Transport (Mr Nixon) to carry our exports to world markets because their freight rates are IS per cent less than those of the Conference lines. By its own actions, the Government has valued the magnitude of the Soviet threat to our security as being worth something less than the 15 per cent freight discount available from the Soviet line Fesco. Currently the United States nuclear vessel Truxtun is visiting Australia, a visit obviously engineered to trigger a reaction from certain sections of the trade union movement, again to distract attention away from the evil of unemployment which this Government is fostering. Additionally, there is no doubt in my mind that the visit has been organised to give grace to the use of uranium powered vessels and uranium in general, having in mind the release of the Fox report.

Allied to those factors are the actions of the Prime Minister and the Governor-General at public appearances, actions which can be interpreted only as designed to create and promote violence in the community. The Prime Minister has adopted an ‘I dare you to’ attitude to demonstrators, again hoping to draw attention away from the perilous state of our economy. His actions are irresponsible, divisive and dangerous. I do not believe that Australians will be hoodwinked by the Government’s tactics of directing public discussion to false issues. If the Government persists in its union bashing it is more likely to meet the same fate as did Edward Heath in the United Kingdom when he thought he could batter the United Kingdom miners into submission. After all, governments and not unions are responsible for the economy. The Government when in Opposition refused to acknowledge that the Australian economy was locked into the world trading scene. Now in office it seeks to explain its failures as being the result of external trading factors and the unions. In office the Government has learned that when Japan sneezes Australia goes to bed with pneumonia. In truth, Australia is in the hands of a bumbling, fumbling bunch of incompetents whose first loyalty is to big business and to the overseas shareholders of the multi-national corporations. It should be remembered that 90 per cent of the shareholding of Utah Mining Australia Limited, which received something like $40m out of this Budget, is outside this country, but $33.6m has been taken from the vote for unemployment and sickness benefits. That shows a strange set of priorities.

The lack of confidence and uncertainty in the community flow directly from the actions of those who sit opposite, those who last year tore up the rules and destroyed parliamentary conventions in their indecent haste to grab power. They blocked the Hayden Budget and brought the nation to an economic standstill. How could anyone have confidence in the future when the Government in its own Budget Papers has acknowledged that unemployment is to increase? How can consumers increase their spending and use their savings when all the prospects indicate that many thousands of them are going to join the jobless in the coming months? My best advice to those who have savings is to hang on to those savings because we know that as a direct result of this Budget the chances are that they may not have jobs much longer. What the Budget seeks to achieve in this time of record depression is to make life easier, not for the wage and salary earners and the unemployed but for the big corporations and the overseas shareholders.

The Budget provided the Government with an opportunity to give a stimulus to economic activity and to provide hope and encouragement to all Australians. Instead it has done the opposite by making severe cuts in real capital expenditure in the public sector. In its obsession with expenditure in the public sector the Government has overlooked 2 factors; firstly, that people quite naturally expect that governments are there to assist and provide for them in times of difficulty and to do for them the things they are not able to do for themselves, things such as the provision of health services and education and assistance in times of unemployment; secondly, that capital expenditure in the public sector creates jobs and profits in the private sector. The Prime Minister has said that he wants to see increased profits for the corporations. Apparently he does not realise that as a result of his ruthless chops in public capital expenditure, tenders for Government contracts in the non-dwelling public sector are being made at around cost and below cost. These tenders for projects are being submitted by large companies almost on a ‘go anywhere’ basis to try to keep their production teams together. The large and the strong companies may survive because many of them have other interests anyway, but many small to medium sized construction firms will not survive.

Transport is an area in which the Government could have acted to stimulate the economy. Road program funding could have been expanded. The urban public transport program could have been accelerated with new initiatives. The upgrading of inter-capital railway lines and the expansion of railway rolling stock would have given an impetus to regional economic activity and job opportunities as well as providing a more efficient transport system. However, the Government has chosen to reduce transport expenditure. The total expenditure of $874. lm for the coming year is in real terms a reduction of 7.5 per cent as compared with last year. An amount of $938.9m would have been required for the corning year to keep expenditure at the same level in real terms. I will deal with individual allocations a little later, but I want to say something about the way in which information and decision making in the Department of Transport is being hidden from public examination by a return to the closed shop style of operation reminiscent of the conservative governments of the 1 960s.

Running through the activities of the Department since last November are 2 expanding themes, secrecy and a reduction of safety standards, both on the roads and in the air. Since the present Minister for Transport took office we have seen a succession of secret inquiries and procedures. The Road Safety Standards Authority has been abolished as an independent road safety authority. Secret inquiries have been ordered into the construction of the Adelaide to Crystal Brook rail line and the Tarcoola to Alice Springs rail line, as well as the Tasmanian Government Railways Agreement and the South Australian Government Railways Agreement, the last two in a snide attempt by the Federal Government to evade federal responsibility. Then there is the scandalous MacNeill inquiry into publicly owned transport undertakings, conducted by a loaded committee which involves a serious conflict of interest. There is the Aviation Industry Review Committee, chaired by Sir Lenox Hewitt, whose report is qualified by that other secret committee, the Bland Committee. Now we have the proposed repeal of the Bureau of Roads Act 1964 to facilitate the absorption of the Bureau of Roads into the Department of Transport. All of those inquiries should have been conducted in public and their reports made to the Parliament, but the reports will go to the Minister and not to the Parliament. The question raised by these actions is this: What is the

Government trying to hide? If the inquiries are honourable and above board, they should be seen to be honourable and above board. Obviously the Government plans to use the reports as devices to enable it to evade public examination of its actions.

Turning now to safety aspects, the abolition of the Road Safety Standards Authority as an independent authority was a paltry exercise in reducing expenditure at the cost of motorists’ lives in the future. The amalgamation of the Bureau of Roads with the Bureau of Transport Economics in the Department of Transport is in direct opposition to representations from motorists ‘ organisations. Again, the excuse is that it is to reduce expenditure, but the exercise means slower development of improved road standards, reduced access by local government organisations and the public and, ominously, tighter personal control by the Minister. In the field of air operations, the Government’s expenditure cuts are irresponsible. In fact, its irresponsibility is compounded by the Minister’s denial in this House on 3 1 March this year, and later on 6 April, that reduced air safety was resulting from his Department’s freeze on finance. On 3 1 March he admitted to the House that he did not know the answer to the question I asked on the discontinuance of monthly airworthiness directives. A week later, on 6 April, he stated, as is shown on page 1343 of Hansard:

I repeat the assurance which I have already given that no measure under the Government’s cost recovery program or economic drive will be permitted to put at risk those people who travel by air.

Either the Minister is incompetent or he cannot distinguish between fact and fiction, because in a departmental report embracing the airworthiness branch for the quarter ending 30 June 1 976- that is the quarter in which he gave an explicit assurance to this House on the maintenance of air safety standards- the following words appear:

Serious delays continue in the processing and production of airworthiness directives on the mandatory modification or inspection of aircraft. Further deterioration of this vital safety function is inevitable whilst 2 officers of an establishment of 3 officers continue vacant under the current recruiting embargo.

Clearly the Minister is placing the lives of air travellers in jeopardy. The report of the Minister’s own Department proves beyond any doubt that the undermanning of the airworthiness directive section constituted a serious and deliberate hazard to air travellers and that the Minister in his statement on 6 April misled the House. It places in doubt any future assurances on air safety by the Minister. It expresses the concern of responsible officers in his Department at the situation that has been created by the Government’s decision to reduce funds available for the essential tasks of the Department of Transport. The lives that are lost as the result of his Government’s decision to reduce expenditure on safety standards and procedures on the roads and in the air under the smokescreen of re-allocation expenditure will be on his head, and before he, as Minister, makes such decisions he should give some thought to the distress and hardship that he will be creating for thousands of Australian families.

I turn now to proposed expenditure and receipts for the Department of Transport. Despite its trenchant criticism of the Labor Government’s aviation cost recovery program, the Government has decided to increase air navigation charges by a further IS per cent from December, and that decision was taken at a time when the airlines are experiencing one of their most difficult trading periods in history. The refusal of the Government to approve any new projects in urban public transport will have serious effects on attempts by the States to improve their public transport services. In considering the sum of $63.4m which is provided for the Australian Shipping Commission, attention must be given also to the repayment of $35.7m in principal and interest by the Australian National Line following the re-financing of the 2 large bulk carriers being built overseas.

In summary, this Budget then is a blueprint for disaster for tens of thousands of Australians. It offers a dismal future for our youth. It places the interests of foreign shareholders and big business before the interests of Australians seeking the right to work and before the interests of the unemployed and the needy. No matter how much the Government flays about trying to create false issues, the people are rapidly realising that this Government is deliberately creating unemployment so as to force upon wage and salary earners a reduction in real wages and living standards.


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

North Sydney

-I rise to support the Treasurer (Mr Lynch) and his Budget, and I will vote to oppose the amendment put forward by the Opposition. The Treasurer has stated in his Budget Speech that when the people of Australia voted at the election held on 13 December 1975 the national economy was suffering from inflation, stagnation and unemployment, that Australia was locked into its most serious postwar recession, and that at that time there were people who were pondering whether we were facing historical developments that would be seen to be similar to the fearful economic circumstances of the 1930s. During the period 1972 to 1975 we had a Labor Party government led by the honourable member for Werriwa (Mr E. G. Whitlam). As my colleagues have said, during the period 197 1 and 1972 there were many criticisms from the Labor Party leaders about the budgets of the Liberal and Country Party governments which had been in office from 1949 to that period. There had been occasions during that period when the leaders of the Labor Party had made the most tremendous offers to the Australian voters in the hope of gaining their support.

I can well remember a former honourable member for Barton, the late Dr H. V. Evatt, during the election campaigns in 1954 and 1955 talking about the need for Australians to spend vast sums of money on social welfare and decrying the standards of education in the community. So when the Labor Party came to office at the end of 1972 it was not surprising to find in the next 2 budgets of 1973 and 1974 an expression of these opinions and a manifestation of the Labor Party’s desire to bring largesse- to take from the rich and to give the poor, so to speak, enormous assets, sums of money, to improve the standard of living of the average Australian. In the manner in which the words were uttered there was some sort of an association with people having the right to vote and the reasons for making those utterances which will not escape the attention of the House.

I well remember the honourable member for Melbourne Ports (Mr Crean), who has been in the House most of the time, using in 1973 phrases like this: ‘Now is the time for us to consider the transfer of assets from the private to the public sector’. I well remember the former Prime Minister, now the Leader of the Opposition, telling the House of Representatives that in his view it was eminently proper that the Commonwealth Government should use the Public Service as a pace-setter for wages and conditions. That the Labor Party Government set out to do, and the impact upon the Australian economy and upon the welfare of the people in Australia was inevitable. The members of the Labor Party knew it was inevitable, and gradually it penetrated the adamantine crust.

Finally in 1974 my friend the honourable member for Melbourne Ports, whose program of economic development in Australia and whose political programs were having such an appalling effect, was robbed of his power and his position as Treasurer of Australia. He was replaced, we will recall, by the honourable member for Lalor (Dr J. F. Cairns). After a relatively short period he was replaced by the honourable member for Oxley (Mr Hayden) who in his 1975 Budget was struggling to cope with the circumstances which then prevailed, and the main responsibility for creating those circumstances has to be carried by the Labor Party and its leaders. After all, it is of no real satisfaction to point at influences from overseas and to blame them for the circumstances which prevailed at that time. The responsibility lies with the Government of the Commonwealth of Australia, its Prime Minister and its Cabinet. One could quote the words of the late President Harry Truman. He said: ‘The buck stops here’. That was the position in relation to the former Government.

By the end of 1974, as I have said, the misery and the tragedy of the results of Labor Party policies were becoming clear to the Prime Minister of the day and to his colleagues. So decisions were taken which were dramatic, theatrical and unprecedented. We do not know too much about those decisions because it has been necessary for people who took part in them to be very careful and security minded about what those decisions were. We know, because reference has been made to it by the honourable member for Chifley (Mr Armitage), that he at least had his interest excited, and he understood that the Utah company, an American-Australian international mining company, appeared to have something to do with a gentleman whom we have seen referred to as a financier, a gentleman from the Levant whose name was Tirath Khemlani. I am told by the honourable member for Chifley that this international company had something to do with the activities of that distinguished financier. I recall that in this House distinguished members of the Labor Government, when questioned about those rather unusual circumstances, protested that their representatives overseas were of the highest calibre. They said those representatives were people who were well and favourably known in London to the financial advisers of the previous Liberal-Country Party Government as well as the Government of the honourable member for Werriwa. I think that there would be some of the members of the Labor Party who could confirm what I have been saying.

A sum of $4,000m was to be borrowed from sources not clearly defined and never yet truly admitted. It was generally accepted that it was to come from Middle East countries. One is led to believe that they were probably in the Organisation of Petroleum Exporting Countries. An Executive Council minute of December 1974 was used as a basis for the authority to secure this mammoth loan. I raise this matter because the honourable member for Chifley brought it up in the most startling manner, with a most unusual reference to this Australian-American company. When this matter was explored to the degree to which it was explored, it appeared that other businessmen not associated with finance were involved. Apparently people from Adelaide who were described rather quaintly as friends of the honourable member for Hindmarsh (Mr Clyde Cameron), were responsible for an association which eventually involved the honourable member for Cunningham (Mr Connor). How this extraordinary event could have taken place without the knowledge of the honourable member for Werriwa and his close associates, such as the distinguished Treasurer of the day, the honourable member for Lalor, I find hard to understand, but the fact is that a proposal was being investigated and a decision had been made that was going to involve the government of the Commonwealth of Australia in overseas borrowings unparallelled and unprecedented in our history. The borrowings were so vast in fact that had they been successful it may have been possible for the honourable gentleman and his colleagues to have ignored this Parliament in terms of public expenditure. This would have created a set of circumstances that no rational person could possibly tolerate. The references in Hansard to the gentleman, Mr Khemlani, referred to by the honourable member for Cunningham who was the Minister for Minerals and Energy at the time and by the then Prime Minister, make no reference to the Utah company at all. This appears to be some extra information that the honourable member for Chifley has acquired as a result of further, perhaps clandestine, examination of the matter.

I compliment the Government and the Treasurer upon the Budget. This is the first time for such a long time that I have sat in this place and not heard taxes put on to the beer, for example, of the working man, the wine for South Australian people, various liquors, cigarettes, motor cars, and other goods, and I do think that one ought to congratulate the Treasurer. I was here when Sir Arthur Fadden delivered the famous Budget in 195 1 which did such appalling things to these products that are relatively important in our community. I recall the old and distinguished right honourable Treasurer returning to this place and announcing that he had had a most successful political meeting in his electorate but it had been held in a telephone booth. One had rather expected that this type of problem would have been with us after the Budget of 17 August. I am delighted that it is not.

I would like to refer to some of the points that the honourable member for Shortland (Mr Morris) made in this extraordinary attack upon the commercial world. He seems to have forgotten that in the period prior to the election in 1975 his leader and certainly the honourable member for Oxley were making comments which indicated that they understood that three-quarters of all the employment in Australia is provided by private enterprise. The honourable member for Melbourne Ports, I think, has been on the record at a time when what he said was important and significant as saying that if people were to press for wage increases they should bear in mind that if they succeeded with this process it would simply lead to unemployment for other people. The picture emerged of those who were significant, powerful trade union people in large numbers being greedy and committing to nothing those who were absolutely dependent upon unemployment relief.

These senior members of that Party are the people who made such statements as: ‘One man ‘s price rise is another man ‘s job ‘. That is the sort of remark that one heard from the distinguished accountant, the honourable member for Melbourne Ports. Surely it must be understood by socialists that, in an economy such as ours, they cannot possibly have absolute and complete control of the economy if private enterprise is providing 75 per cent of all the employment. Why is there thus mama for killing the goose that laid the golden egg? It is absolutely beyond my comprehension and I think it is quite absurd.

The references that were made by honourable members to the mining companies ought to be dealt with too. What the honourable member for Chifley described as a golden handout was quite startling. The fact is that Australia after oil was discovered in 1954 had a tremendous boost in interest and endeavour. It took 4 years to convince the late Sir Harold Raggatt and the late Sir William Spooner that it would be in the interests of Australia if there was public encouragement given to people, to the taxpayers in the country, to take an interest in the development of this industry. At the end of the 4 years, when taxation deductions were made available to people, there was a real boost in the industry and an infrastructure was created between 1958-59 and 1970 which has brought Australia very considerably towards two-thirds self-sufficiency in petroleum.

The great mining industries that were in existence beforehand, the Mount Isa’s where people had to invest for 23 years with no return, between 1923 and 1948, were certainly international investments when they first began but they are no longer international investments. There is a great deal of Australian participation. Encouragement of this industry is vital. I hope that the Commonwealth Government will find it possible in the very near future to return to the style of encouragement that will allow the ordinary Australian to take part in the development of his country.

In my view the harm that was done in 3 years by the honourable member for Cunningham (Mr Connor) as a minister is beyond belief. The very infrastructure was destroyed. The young mengraduates in science or palaeontology- from cities such as Adelaide are now working in the Philippines, Indonesia and other parts of the world. These people have left Australian companies that have been absolutely destroyed because the Labor Government held up all the arrangements that had been undertaken by the Liberal-Country Party Government in relation to permits to explore, permits to produce and in relation to leases. It was an incredible performance, utterly bereft of integrity, devoid of intelligence and a manifestation of a incredibly arrogant attitude towards business people who are after all in a very risky, speculative field. It was absolutely absurd; most reprehensible. Finally, that same honourable member even ran foul of his own leader in the Labor Party and I remember him sitting in the chamber looking most morose and cantankerous.

I had hoped I would have sufficient time to make a few comments about defence matters, but I am afraid my time has been cut rather short. However, I want to point out that one aspect of the Budget that is worth while drawing to the attention of the House is the way in which Australia helps the friendly countries in our region of immediate interest. The estimated expenditure of $23.9m includes $6.9m as part of our commitment to Indonesia. As honourable members will know, we are helping the Indonesian Government in aviation and we are providing assistance with other technical equipment. The Indonesian Government believes that it should be capable of protecting its country. This also applies to Malaysia, Thailand, Fiji and Singapore. All these things are a manifestation of friendship. They are testimony to the fact that the Minister for Foreign Affairs (Mr Peacock), who is sitting at the table, and his colleagues are well and favourably thought of in these countries. We are looked upon as a friendly country, but if there is a great conflict in this world we will then find out that we are very much on our own and dependent upon our own capacity to defend ourselves because if that does come about the people who decry concern about the presence of Russian vessels in the Indian Ocean will find out very quickly how significant it is. I can assure honourable members from experience of years ago that this sort of threat to trade lines has a vital effect on welfare of the nation.


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


-I rise to support the amendment moved by the Leader of the Opposition (Mr E. G. Whitlam) in this House last week. I think the main words are contained in the first part of the amendment which reads:

  1. I) it pursues a policy of unemployment as a weapon to reduce real wages and salaries;

I think that is our main criticism of this Budget because to our way of thinking it does appear that the Government is seeing only one problem and that is the problem of inflation. We certainly accept that there is a great problem with the inflation that is besetting not only Australia but most other countries throughout the world. However, there are other problems which we feel this Budget does not take into account. I think this has been pointed out by previous speakers. The unemployment figure which has been cited certainly indicates that the Government is not placing the emphasis on reducing unemployment that we feel it should. It appears as though the Government is prepared to let the unemployment level go up to an extremely high level as long as it gets on top of inflation. We are not opposed to measures to bring down the inflation rate, but we feel that matters of human concern to the Australian people should also be receiving consideration. On the question of the unemployment figure, there have certainly been attempts to bide the real unemployment figure. We will see very shortly that this figure will no longer include the number of school leavers who are unemployed because they will not be entitled to receive the unemployment benefit. For that reason I feel we will be getting a false unemployment figure. We feel again that this is a typical Liberal approach to solving a situation such as that which we face today.

If those with a sense of history think back to the early 1950s they will recall that following the 1949 election the then Prime Minister, Bob Menzies, said his Government would put value back into the pound. Those honourable members who have been here for some time will remember that by 19S2 inflation reached the highest level in Australia’s history, despite what people have said over the last couple of years. How did the then Liberal Government try to get out of the problem at that time? It supported all the applications for the abolition of the cost of living adjustments before the Commonwealth Conciliation and Arbitration Commission and it was successful. That Government used the ordinary worker’s wage as a means of trying to overcome inflationary problems. It succeeded in pegging what the workers were receiving at that time. That was an era when that Government was supposed to be putting value back into the pound.

We see the same thing happening today. In 1974 when there was a fair amount of pressure on the position of wages the then Minister for Labour, the honourable member for Hindmarsh (Mr Clyde Cameron) put up a proposition about wage indexation. A number of unions did not support wage indexation at the time. Some of them do not fully accept it now, but they did feel that in the situation that arose at that time and under the pressures that were applying, they should give indexation a go. The Liberal and Country Parties are now trying to do away with the indexation proposals and this is despite the promise which was made prior to the election that it would maintain indexation. Despite the fact that indexation has generally been accepted by the unions the Government is now trying to water it down and in the last few applications which have been before the Commission it has put its proposal in an effort to ensure that the real wages of the employees in this country will be reduced. I do not think that is the way a government should attack inflation- by reducing the living standards of the ordinary employees in industry. I am sure that if the Government succeeds in abolishing the wages indexation concept the people in the unions will not take it lying down. I think the best way to approach this is to leave indexation alone. I am sure that others in industry will play their part.

This raises the question of whether it is possible to trust this Government because prior to the election the then Leader of the Opposition said his Party would support indexation. This Government has certainly withdrawn that promise, so people cannot trust this Government. This Government certainly has a list of broken promises. We have been told today what a marvellous thing Medibank is at the present time. Again, it is a fact that prior to the election the then Leader of the Opposition said that in office his Government would not touch Medibank, but we have seen Medibank emasculated. Instead of having one scheme which applied before we now have 3 schemes. We are not opposed to the imposition of a levy to pay for Medibank because in government we put forward this same concept but, of course, at that time the Liberal-Country Party Opposition which had control of the Senate rejected our proposal to impose a levy to finance the scheme. I personally am not opposed to a levy. I realise that the imposition of the levy means a reduction in wages but I feel the levy should be closer to the figure we intended to impose, that is, 1.35 per cent of income instead of 2’/i per cent. Bear in mind that there are 3 other schemes in addition to the basic Medibank proposal.

We can talk not only about Medibank but also about some of the other health proposals that I feel are being ignored or certainly cut back in this Budget. This is quite evident in my own electorate. The establishment of community health centres is going to be cut back, as one Liberal supporter said earlier in respect of health care in outlying areas under the community health program introduced by the previous Minister for Health, Dr Doug Everingham, the Minister established community health centres in outback areas. If anyone doubts the truth of this statement he can come and have a look at what has been done in my electorate. Altogether, there were 7 community health centres either agreed to or established while he was the Minister for Health. Only a couple of weeks ago, I attended the opening of one at Port Lincoln. The project cost between $800,000 and $900,000. It certainly stands as a monument to the work of that former Minister for Health. I am never backward in giving recognition to what that Minister did and how he allowed health care to be taken to the more outback areas so that people living there could receive the health care to which they were entitled.

I have said that 7 community health centres all told were established. Some were quite small, some were of medium size. Some were constructed in towns with populations between 1000 people and 1500 people. Other big centres such as Port Lincoln also received community health centres. Certainly, this was of great credit to Dr Doug Everingham, the former Minister for Health. It is a fact that in this Budget the amount of finance provided for the community health centres will be cut back. I do not know just what effect it will have but certainly this takes all the impetus out of the program which was established previously.

I wish to say a few words about another matter that affects my electorate quite considerably. I refer to the cutback in the vote for Aboriginal Affairs. According to the Budget Papers, this vote has been cut back by $33m. In percentage terms, this represents an 18 per cent cut-back. I know the Government has said that possibly it will look at some things later on, but I know the great concern that is felt not only by the Aborigines themselves but also by those people who are concerned about the Aboriginal question. They wonder what the effect will be. Everywhere I have been in my electorate over the last few months, this concern has been expressed. It has been expressed not only in my electorate. I went to the Northern Territory about 2 months ago. The same concern was expressed to me up there concerning projects which it was hoped would be carried out but which may get the chop because of the cut-back in the finance available. There is a housing project under way at Coober Pedy. It has been going along quite well. I was told that the houses built cost $25,000 each. A European type house could not be build in that remote area of Coober Pedy for $25,000. But this was the cost of the last house which they constructed. The former Minister for Aboriginal Affairs, Senator Cavanagh, agreed to the establishment of a new village to replace an eyesore outside Port Augusta- the Davenport reserve, a place of rundown, second-rate buildings, shacks and so forth. But what happened? The previous Government decided to establish the new village and, of course, the plans were drawn up. Originally I think there were to be 53 houses. At the present time, 14 houses have been completed. Again concern has been expressed as to whether they will ever get their 53 houses or whether the project will stop at its present stage of development.

I can mention other areas that I visited where the same concern was expressed. I can remember visiting Yuendumu where a pipeline project was to be undertaken. Water was to be piped in to give the settlement a permanent water supply. From memory, I think the water was to be piped 9 kilometres. Here again, concern was expressed as to whether that project would go ahead. Another point that concerned the people, apart from the supply of water, was that projects such as these provide employment opportunities for people on their settlement. It is a pretty isolated place. I think it is situated about 1 80 miles northwest of Alice Springs. The project provided employment opportunities for the people on the reserve. Such projects are in jeopardy. They may or may not get their money. Also, there has been a cut-back in the amount of finance available for the health services for Aborigines. We know of the high mortality rates in some areas. This is one area of expenditure which should not have been touched. Apparently, these health services will be cut. When we look at what was said by the previous shadow Minister for Aboriginal Affairs just prior to the election, we wonder how this happened. He sent a telegram and told the Aboriginal people they had nothing to be afraid of, that they would be better off under a Liberal government and that finance would not be cut. I think this now sounds a little hollow. The whole matter was put pretty clearly by Senator Bonner, himself an Aborigine. His statements are reported in the Age newspaper of Thursday, 19 August 1976. The article reads:

Senator Bonner said the Federal Government had broken a promise before the December election that Aboriginal welfare spending would be maintained. ‘I supported that and I worked to see it maintained’, he said.

Further on he states:

What can I say to my people? How can we expect the Government to keep its second promise to increase Aboriginal spending when it cannot keep the first? I am shocked and gravely concerned. I never dreamt my Party could treat the Aboriginal people in such a callous way.

Further on in the article he stated:

How can I go out and ask my people to work for increases in the allocation for Aboriginal affairs? My people will say to me: ‘ How can you believe the Government will not lie twice ‘.

The Government should have a look at this question because I think that we should look at our own consciences. If we are to make cuts in those areas I think we should be ashamed of ourselves. One other area that will be cut- here again, it has been quite evident in my electorate- is children’s services. I have received letters from all over the electorate written by people connected with kindergartens. They were very concerned about a circular put out by the Minister. Implicit in the letter was the threat that financing of kindergartens could go back to the States. Of course, the same thing applied to child care centres. People connected with these centres were concerned about what would happen with them. Once again, this is a case in which progressive programs were introduced by the previous Government and accepted by the people connected with kindergartens. Now, they do not know what the future holds for them. They are in the position of wondering where they will go. It is certainly a step backwards from the progressive policies put forward by the Whitlam Labor Government.

Perhaps I could refer to another area. Last night the honourable member for St George (Mr Neil) spoke about the provision of aged persons’ homes. He made the statement that the Labor Government cut off all the finance in this area. I will concede that last year we sent out notices to the various people connected with these projects in which it was stated that there would be deferments. But the deferments were brought about for a reason completely different from the one mentioned by the honourable member. When we came to power, we increased the subsidy for aged persons’ homes. The result was that in many areas people who had not had programs before decided then to introduce programs to provide accommodation for their old folk. In my electorate at the present time there are 9 such projects proposed but not yet under way. A couple of weeks ago I received a statement from Senator Guilfoyle, the Minister for Social Security, listing all the projects and what projects would be funded in this year. One of those 9 projects to which I have referred was to be funded. The statement also said that we would hear later on about the other projects. I repeat that of those 9 projects, one will be funded this year. Next year none will be funded. In the following year, 1978-79, one project for 8 beds will be funded. There has been a considerable cutback in the finance available in that area.

Of course, in addition to this is the fact that any subsidy, previously available for senior citizen clubs has been reduced and the amount of subsidy available to build the homes themselves has also been reduced. I submit that we are seeing a step back in this area. Of course, what we are doing is making the less fortunate people in our society carry the burden for the actions taken as a result of this Budget. This is the case with the aged persons’ homes which are designed for the aged and the infirm. I might say that many of them are in small country towns with populations ranging from 800 people to 1000 people. The people want their older folk to be able to reside in the towns in which they have lived all their lives. Many of these projects will be held back for possibly 3 or 4 years because of the policies this Government is establishing.

I mention yet another matter that affects many of pensioners. I refer to the fact that there was no adjustment made in the means test as it applies to the pensioner medical service. I have in my electorate many people who receive small superannuation payments. But what has happened? Most of those superannuation payments are made to people who are recipients of Commonwealth superannuation and those payments have been indexed. These people paid throughout their working lives a fair proportion of their income into the Commonwealth Superannuation Fund. With this indexation that has taken place, their income is above the permissible limit which is $33 for a single persons and $57 for married persons. Although the payments have been indexed, these people are going further behind because once they reach that line- $33 for a single person and $57 for a married person- they lose their pensioner medical cards. They lose all that goes with it- their telephone concessions, their concessions for water rates, general rates and all these sorts of concessions.

I have written to the Minister for Social Security about this matter. I hope that the Government will have a close look at it because the cut-out line for the entitlement to pensioner medical service cards has not been altered for a number of years. In fairness to those people the position should be rectified to ensure that because their superannuation pension is indexed, they are not deprived of the benefits to which they are entitled. The position is certainly very unfair at present. I should like to see the Minister for Social Security take this step to raise the level of pensioner entitlement card limit to ensure that those people who have an entitlement do not lose it because of an indexation payment. The means test itself should be either abolished or at least indexed.

The Government should also be ashamed of the fact that there has been no increase in the supplementary benefits paid to those people if they have to pay rent. It hits the people who are worse off- the widows, the supporting mothers and all those sorts of people. As I say, there has been no increase in this benefit. The Government expects a 12 per cent increase in wages because of inflation and so forth but it still has not altered the amount of the supplementary benefits. I will give honourable members some idea of just what effect this will have on the recipients of social security benefits. Fifty per cent of supporting mothers, 30 per cent of widows, 50 per cent of invalid pensioners and 14 per cent of age pensioners who receive that benefit will not receive an increase in supplementary benefit.

I realise my time is running out and I should like to conclude by quoting the amendment moved by the Leader of the Opposition. It asks the House to condemn the Budget because:

  1. it pursues a policy of unemployment as a weapon to reduce real wages and salaries;
  2. it abdicates federal government responsibilities and forces the State governments and local governments either to reduce their services or institute additional charges, or both;
  3. it introduces an additional tax in the form of the Medibank levy, thus further reducing consumer spending;
  4. it reduces the availability of services to the whole community but particularly to those most vulnerable to hardship notably Aborigines, the unemployed and migrants, and
  5. it fails to institute selective stimulatory expenditure to reduce unemployment and restore consumer confidence.

I support the amendment.


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


-I rise to support the Budget and to oppose the amendment moved by the Leader of the Opposition (Mr E. G. Whitlam). This is the first Budget brought down by this Government. It is a budget that keeps faith with the electorate. It is a budget that upholds the undertakings made by the Government to the electorate. It is a budget for recovery and confidence and, above all, it is a budget that is responsible. It indicates that this Government is prepared to exercise restraint, honesty and competence in its economic management. It is a budget which has been received very well by the media. It has been received very well by the people in my electorate. With a great sigh of relief many have said to me: ‘Thank goodness, now we can settle down to real restoration of the economy and sanity in the nation ‘. I have not received one serious complaint in my electoral office as a result of this Government’s Budget.

Mr Willis:

-Give it time.


– A certain period has elapsed since the Budget was presented and I would have imagined that if people were concerned about it they would have come forward immediately. I should like to congratulate the Prime Minister (Mr Malcolm Fraser), the Treasurer (Mr Lynch) and the Cabinet. I should also like to give due appreciation to the Treasury and officers of other departments that have been responsible for framing the Budget. The Budget confirms the judgment of the Australian people. On 13 December they overwhelmingly denied the Labor Government in an unprecedented swing away from socialism and its grandiose reforms, away from economic incompetence, away from deceitful dealings and away from big brother government. This Government has a record majority of 55 seats. This majority was brought home only too well in a recent division in this House- a division which I might add was brought about by the Opposition but the Opposition could muster no more than 1 8 members, which is half its strength. Despite the overwhelming vote of the Australian people and the electoral massacre of the Labor Party, the Leader of the Opposition has displayed unparalleled effrontery, stubbornness and incredible arrogance. The Leader of the Opposition blamed his Government’s defeat on a temporary aberration. He blamed it on Australia’s geographical isolation. In the National Times this week an interviewer asked Mr Whitlam:

Am I correct in assuming then that you don’t interpret the defeat as amounting to the electorate ‘s rejection of the Labor Government ‘s programs?

The Leader of the Opposition, with his characteristic modesty, said:

In no way whatsoever. The people were only just beginning to see the benefits of those programs. I interpret the result of last December as a one-off verdict flowing from 2 factors: One, the election took place half-way through our term. Secondly, Australia’s isolation from comparable countries enabled conservatives to assert that Australia’s economic difficulties were exceptional and due to local factors alone.

I find that statement incredible. It is incredible in that I believe the Leader of the Opposition implicitly believes it himself. Likewise, in his reply to the Budget and in his speech today, the Leader of the Opposition showed no recognition of any of the follies that his Government perpetrated. He showed not the slightest doubt about his policies, his programs, his manner of government or the manner of his leadership. He exhibits a backward-looking vision of grandeur with grandiloquent rhetoric, dire and unsubstantiated predictions of disaster and business bashing. The Leader of the Opposition having presided over the Government which got it all wrong in the first place and produced the mess from which we are now emerging, can gain few friends from the inflated pretence that he had just started to get it right at the end and that the attempt of the Treasurer to produce a solution at long last can bring only disaster. The great weakness of the Leader of the Opposition ‘s speech on the Budget was its failure to recognise that the Budget tried to do what the coalition parties were elected to do- to fix up the economy, to cut government spending and reduce taxes. In the debate on the matter of public importance this morning the Leader of the Opposition claimed that all promises had been broken by this Government. He displayed sheer effrontery to claim that the Prime Minister and this Government had deceived the people of Australia and that they had squandered and abused the trust given to this Government in its enormous electoral mandate. What arrant nonsense! Does he expect the Australian people to believe that? Does he expect the Australian people to believe that he can lead the Opposition back to government? Does he expect them to accept that he would do it all over again if his party were returned to government?

Let us look briefly at the record of the Labor Government. Let us examine what the Leader of the Opposition asks us to accept again. First, I refer to the enormously inflationary deficit that contributed so greatly to the increased interest rates which we have experienced. In 1973-74 the deficit was $290m. In 1974-75 it was $2,567m and in 1975-76 there was a budgeted deficit of $2,800m. It was soon realised and recognised that that deficit figure would be far exceeded partly due to the excessive expenditure on aspects such as unemployment. In fact, the deficit outlook for 1975-76 was more like $4,500m. It was this new government’s unenviable task to try to correct that, which it has done by a review of spending and by sensible cutbacks in Public Service growth. The result has been that for the first time since 1968-69 outlays were lower than budgeted. The deficit has been held to $3,585m and in 1976-77 it is expectd that the deficit will be reduced further to $2,608m. Let us look at Government expenditure overall. In 1974-75 we saw an enormous increase of 46 per cent in Government expenditure; in 1975-76 the figure was 22 per cent and I am pleased to see that in 1976-77 through sensible policies this Government will be able to hold Government expenditure to an 11.3 per cent increase. This is a remarkable achievement in 9 months. It will allow the private sector to recover- that sector which employs 75 per cent of the work force.

Let us turn to inflation, probably the greatest problem that Australia has seen in its history. When Labor came to power the inflation rate was of the order of 4Vi per cent a year, when it went out it was of the order of 14 per cent a year. What were the results? Savings and the capacity to save were seriously eroded. Persons such as the aged person, pensioners, the unemployed and those on fixed incomes were seriously affected by inflation. Industries which could not pass on costs, particularly rural industries, also were seriously affected. I should like to remind this House of the words of Sir John Crawford, that most eminent of Australia’s agricultural economists, who recently reminded us that inflation is the No. 1 problem for our rural industries. This Budget will reduce inflation by the middle of next year to below 10 per cent. That in itself is a remarkable achievement.

Inflation has been fueled by uncontrolled and unrealistic wage rises- wages and wage claims that are out of all proportion to productivity. Some honourable members no doubt will have seen the recent publication by the Institute of Public Affairs. It shows that in the last 3 years wages for process workers in Australia more than doubled, that our wages are among the highest in the world and that our labour costs over the 3 years between 1972 and 1975 have increased at an annual rate far in excess of that in most other countries. For example, the increase in hourly labour rates in the United States of America has been less than one per cent; in Canada the rate increased by 4 per cent; in Japan by 20 per cent and in Australia by 26 per cent. But we must also balance this with the increase in productivity. Again Australia’s record has been dismal. In Japan average productivity increase per year has been over this period of time of the order of 10 per cent. Australia’s has been a dismal 2V4 per cent. Australia was in grave danger of not surviving in a competitive world; it was in grave danger of not being able to earn foreign exchange through exports and it was in grave danger of not being able to extract the foreign capital and investment that are so essential for the development of our national resources.

Let us look at business. Under Labor ‘profit’ became a dirty word. Labor recognised that the private sector employed 75 per cent of the work force and yet it perpetuated its time honoured pastime of business bashing. Profits create investment, expansion and more jobs. Profits do go to workers. It is a fallacy to say that only wages go to workers and profits go to businessmen. Many wage earners of course have investments in shares and receive dividends- or at least they did prior to Labor corning to office. Wage earners have insurance policies and contribute to superannuation funds. These companies and funds in turn are the biggest investors in company shares. So their dividends determine the viability of the funds and the size of bonuses and pensions that they are able to pass on to contributors. Let us not forget that companies also pay tax- in fact at a rate of 42 per cent- and that shareholders also pay tax on their dividends. This in turn provides a major component of government revenue so that government can provide services in the areas of education, health and welfare and the other multitude of services that a government is expected to provide. Company profits are retained to expand plant and equipment, to provide jobs, to increase productivity and to provide the basis for improvement in our standard of living.

The sooner unions realise this the better. We have seen a period of continual disputes, whether it be on the waterfront, in the transport industries or in the communication services. I believe that these disputes are largely counterproductive, not only to national productivity and hence to jobs and wages, but also to the unionists. We only have to look at the recent situation where one caravan manufacturing company stood down 800 workers as a result of not being able, due to the waterfront dispute, to get its inputs and requirements to keep going.

Union disputes and industrial unrest have extremely grave consequences for our export industries. Australia will survive economically only if it has strong and viable export industries, which are primarily the agricultural export industries and those involving minerals and energy resources. Yet at this time we have great difficulty in competing on world markets because of our internal cost structures and because we cannot guarantee to supply our exports reliably. In fact, we cannot guarantee even to get our exports onto the wharves or onto the ships so they can go to the importing countries. Only today Japan has said that it cannot necessarily guarantee to continue to rely upon Australia as a source of meat or wool, primarily due to industrial disputes and union activity. We now see a union threatening on a political basis to place a black ban on New Zealand trade- a trade which is very much in our favour and a trade with one of our great allies and one of our major trading partners.

The rural sector is extremely hard pressed. Farm incomes are below the minimum wage, let alone coming anywhere near the average wage. The rural sector has been very hard hit by interest rates and has been crippled by high input costs, mainly as a result of inflation. Wage costs have increased enormously and now labour in agriculture is becoming a thing of the past. Product prices, due to both unstable markets and our own high internal cost-price structure, have been such that we have not been able to compete adequately on world markets. Coupled with this we have been through a period of disastrous drought, particularly in the southern areas. I quote again from the National Times article to which I referred earlier. The Leader of the Opposition was asked:

Is there a need for the Labor Party to revise its attitude towards the rural sector and country areas generally?

The Leader of the Opposition was reported to have replied:

No. The Labor Party has been basically right in its attitude to rural industry.

The Labor Party was so basically right that it no longer has a representative in a major rural electorate. It was so basically right that it has only one member in each of the great rural States of Queensland and Western Australia. It is not even represented in Tasmania and the Northern Territory. So much for Labor’s policy being basically right for rural industry.

This Budget will restore Australia to its rightful place in world trade. It will restore confidence to the private sector. It will encourage investment in and the development of our national resources and it will protect low income familes, the aged, the pensioners and the disabled. It will provide incentives to individuals through reduced taxation and through a wide variety of other measures. It will provide incentives to business, small and large alike. Despite the dire predictions of the Opposition, it will restore employment. It is somewhat ironic that the Opposition has a new found concern for unemployment. Its regime saw unemployment rise threefold to 330 000 people.

This figure would have been even higher if we had allowed for those employed under the illconceived, poorly administered and highly extravagant Regional Employment Development scheme. I believe that this Government has achieved remarkable results in a short 9 months. It will ensure that this country again becomes the sort of country that our forebears worked and fought for, a country that we can be proud to be part of and a country that we can proudly hand over to the next generation. I reject the amendment moved by the Opposition. I support the Bill wholeheartedly.


– I rise to support the amendment moved by the Leader of the Opposition (Mr E. G. Whitlam). Before considering the Budget in some depth I want firstly to analyse the circumstances in which the Budget has been introduced. This Government seized power last November substantially on the basis that it could manage the Australian economy more effectively than the Australian Labor Party could. It boasted continuously both before and during the election period of how it would soon set the economy to rights. Let me quote a couple of statements made by the leader of the LiberalNational Country Party coalition- the present Prime Minister (Mr Malcolm Fraser)- during the election campaign in November and

December of last year. In the Daily Telegraph of 27 November, Mr Fraser said:

Inflation and unemployment would drop under a LiberalNational Country Party government The changes in the direction of policies would start to have an immediate impact.

The Daily Telegraph of 8 December reported:

Australia’s unemployment figures could be slashed by up to 200 000 under a Liberal-National Country Party government, the Prime Minister, Mr Fraser, said yesterday. He said that at the same time he would try to cut inflation by 1 1 per cent.

Those were the kind of boasts that were being made during the election campaign. But what is the reality? The reality is that the self-proclaimed great economic managers have produced none of the promised results, nor are they in prospect.

I ask the honourable members to look at the evidence after three-quarters of a year of Liberal-National Country Party government. I will deal firstly with unemployment. The unemployment level was going down when the Government took office. In the 4 months after October of last year there was a downward trend in the figure. Over the last few months it has increased rapidly. The figure for August 1976 is 20 000 higher than the figure for August 1975. According to the Australia and New Zealand Bank index there has been a decline in factory production in the 3 months from March to June, which is the latest period for which figures are available. The Australian Bureau of Statistics has reported that in the month of July 1976 industrial production declined substantially in twentyone of the thirty-one basic items for which it produces figures.

There has not been an 1 1 per cent cut in the rate of inflation. The Budget estimate is for a 12 per cent increase in the rate of inflation for this, financial year compared with last financial year. With regard to business confidence, 2 surveys of business executives by management consultant firms were released on the day before the Budget was brought down. One of these surveys, which was conducted by P. A. Consulting Services, showed that over half the executives interviewed believed there were no signs of economic recovery. The other survey, which was conducted by W. D. Scott and Co, showed that less than 30 per cent of the executives interviewed believed there would be an economic recovery in the next year.

I refer now to consumer confidence. The survey by the Melbourne Institute of Applied Economic and Social Research of consumer sentiment, which is conducted every month and a half, has shown a steady decline in consumer confidence since March. In July only 23 per cent of the consumers interviewed expected good economic times in the next 12 months compared with a figure of 36 per cent in January. Retail sales are barely increasing at the rate of inflation. An article in the Australian of 2 September headed ‘Poor shop sales in July hit hopes for Budget’ quoted the Executive Director of the Retail Traders Association of New South Wales, Mr Lawrence, as saying:

The July sales increase had barely, if at all, kept pace with the increase in inflation.

The article goes on:

Mr Lawrence described July as a disappointment for retailers and said reports from the stores indicated there had been no increase in August. Mr Lawrence said many major retailers had recast their budgets for the August to February half year in anticipation of lower sales. The July retail sales had borne out their judgment.

The rate of registration of vehicles showed a notable improvement in the few months to June but the market has since collapsed. In July, the seasonally adjusted figure showed a fall of 14.5 per cent in registrations. The strong rise up to June was probably brought about by the requirement on manufacturers from 1 July to supply emission control equipment. There must have been some forward buying, giving a false figure for recovery in the period before the end of June.

To summarise, it is very difficult to see from those figures that there was any substantial economic recovery in sight before this Budget was brought down. Yet a basic premise of this Budget is that there is an underlying consumer recovery. All the evidence that we can see shows that there is no such underlying recovery. The figures used by the Treasurer to justify that claim were the figures for private consumption which included vehicle sales in respect of which there was a false figure for the period just before the end of the financial year.

So I suggest it is clear that the self-proclaimed great economic managers are not producing the goods. As I will explain later on, this has much to do with the fact that the key determinant of the economic strategy is the Government’s ideology rather than an objective analysis of what is needed. Unfortunately for the Government and for the country its gamble that it could pursue ideological objectives which would lead also to economic recovery has not succeeded and will not succeed. There are 2 basic objectives in the basic strategy as I see it. The first one is to transfer real income from the public sector to the private sector. There are a number of reasons for the Government wanting to do that. One is its ideological objection to an enlarged public sector. So the Government has cut the real level of Government expenditure. In fact, Government expenditure has increased by only 8 per cent and not 1 1 per cent as the Treasurer claims, because in that 1 1 per cent he includes the family allowance increases which were matched by cutbacks in the tax deductions. If we take that factor out, the increase is only 8 per cent. With inflation to increase at 12 per cent, there is a 4 per cent reduction in real government demand.

The second reason for wanting to transfer real income from the public sector to the private sector is to finance tax concessions for industry so as to improve its profitability. There are a number of tax concessions to which I will come. Thirdly, the Government wants to reduce the deficit. But in fact it has reduced the deficit much less than appears on the surface because it has fiddled with the accounts. As other speakers on this side of the House have shown, the pre-payments for hospitals under the Medibank arrangements for the September quarter were fiddled. The Telecom borrowing of $200m is a false deduction from the deficit as were the Australian Wool Corporation payment and the repayment from the Reserve Bank for the first time in many years. If one excludes all of those items which can be taken as a fiddling of the accounts, one gets a much different picture of what the real deficit is this year. It will be only slightly less than the deficit last year.

The second basic objective of the Budget strategy is to transfer real income from wage and salary earners to profit earners. The reasons for that action seem to me to be, firstly, that the Government says that the profit share of gross domestic product is too low and needs to be increased if industry is to be induced to expand investment. Secondly, the Government says that an important means of reducing inflation is to reduce the extent of the wage price push. Underlying this second basic objective of the Budget- that is, the transfer of real income from workers to profit earners- is a deliberate policy of not providing any immediate stimulus to the economy. Thus, unemployment will remain high.

We learn from the Budget papers that the Government expects that by the end of June next year the level of unemployment will be at about the same level as in June of this year- that is, about 265 000. By keeping unemployment high, the Government clearly hopes to maintain an environment in which its policy of reducing real wages will be capable of implementation. Many unions will find it difficult in those conditions to offset the real reduction in wages stemming from partial wage indexation. So it is difficult to conclude other than that the Government sees substantial advantage in maintaining a slack labour market. Especially is this so when one considers that the Government has made no attempt to stimulate consumer demand to encourage economic recovery. Yet it acknowledges in the Budget papers that without a recovery in consumer demand there can be no recovery in the economy generally. Instead the Government is content to rely on the continuance of a supposedly underlying recovery in consumer demand and to allow this mythical recovery to make up for the loss of demand stemming from the cutback in the Government sector.

There are a number of bases on which this Budget strategy can be criticised. Firstly, it has a quite vicious and callous attitude. It makes no effort to reduce unemployment. It coldbloodedly contemplates a continuance of economic misery for many people who are without jobs. As evidence of its unconcern, the Government has abolished all job creation programs such as the Regional Employment Development scheme and employment grants to the States, the combined cost of which was over $150m last financial year. It provides no job-creating programs this year, nor does it increase funds for other employment creating or job training purposes. For instance, the national apprenticeship assistance scheme funding increases only very slightly. In the total funding there is not one extra cent in subsidies for employers to take on apprentices. Under the National Employment and Training scheme funding has been cut back by $ 12m as compared with last year’s Budget. Here again a means of employing people and training them has been scrapped. The effect of the cutback is that at present only 7500 people are being trained under NEAT as compared with 14 000 at this time last year.

Nor is there any compassion for the unemployed victims of this Government’s policies. Instead of being treated considerately, they are being treated with suspicion and hostility and the eligibility for unemployment benefit is made more difficult- so much so that, despite the assumption of no reduction in the number of unemployed and the fact that the unemployment benefit has been increased, the allocation of funds for unemployment and sickness benefits is reduced by $33m. So it is clear that the proportion of unemployed who qualify for unemployment benefit is to be considerably reduced and the suffering and anxiety of the unemployed accordingly increased. Nor is there any apparent concern at the potentially devastating effect on young people of commencing their working life- I put the word ‘working’ in inverted commaswith a long period of unemployment. Young people not being wanted and rejected by society, we can hardly be surprised if they in turn become more hostile and bitter towards society or opt out altogether and turn to such anti-social behaviour as drug taking or criminal activity. This is becoming a major social issue of our time. Currently we have 100 000 teenage unemployed, and 200 000 teenagers will leave school in a couple of months’ time. Yet this Government regards all that with callous indifference. All it can come up with is the establishment of a committee to look at relating education to the needs of the labour market. It is certainly important that this matter be investigated, but the Government does nothing about the problem that confronts us now or that will confront us in the near future.

This heartless Budget also cuts back heavily on government assistance to a number of other disadvantaged groups. Expenditure on Aboriginal affairs is cut back by $33m. Expenditure on the child migrant education program is cut from $ 1 1 .5m to $700,000. Aged persons ‘ homes funding is cut by $27m. There are other items I could mention.

The second major criticism of this Budget is that it is confrontational. The strategy to slash real wages will undoubtedly bring about a higher level of industrial disputation. No union official can calmly acquiesce to such a policy. His members will eventually object very strongly and, if they have the industrial muscle, they will attempt to do something about the cut in their level of real wages. When those unions in a strong bargaining position- there are still quite a few, despite the recession- make a breakthrough they will spur others to follow. So the Government ‘s wage policy is a disaster for industrial relations. The Australian Council of Trade Unions has made it clear that it will give wage indexation one more chance despite the fact that real wages have been cut in the last 2 national wage decisions. But if the Australian Conciliation and Arbitration Commission continues to implement the Government’s wage policy, then the ACTU will be compelled to advise unions to seek the restoration of real wages through direct negotiations with employers. Of course this Government will then castigate the unions for not abiding by orderly wage fixing procedures, as indeed it did earlier this week; but it will be the Government that will be primarily responsible for having destroyed the orderly procedure of full wage indexation, which procedure was working well until the Government broke its election promise to support it and advocated instead a totally different concept of partial indexation.

The third criticism of this Budget is that it is far too generous to business. The counterpart to the Government’s policy of reducing real wages is its aim of increasing real profits. But under full wage indexation profits were already increasing substantially. Admittedly they are below normal levels, but that is to be expected in the middle of a recession. Company profits always drop substantially in a recession and increase substantially in a boom. At present they are at 83 per cent of their normal share of total income and are increasing rapidly. Details of this were given by me in a speech earlier this year, but I mention briefly again an article in the Age of 3 September headed ‘Company Profits are Soaring’. That showed that two-thirds of companies which so far had reported the results of the financial year had declared profit rises comfortably higher than the inflation rate. The article also said that the early rise was one of the strongest for years. All of this happened in the midst of recession with full wage indexation applying for all but the last five or six weeks of that year.

Of course, this increase in profitability came about through increased productivity, all of which went into profits and not into wages. So profitability of companies was inproving rapidly with full wage indexation applying, but the Government wants to put industry on a much better footing still by cutting real wages and so transferring real income from wage earners to profit earners. It seems to think that it is essential to get the companies profits share of total income up to its normal level whilst we are still in a recession. If that did happen and eventually an economic recovery occurred, company profits’ share of total income would shoot up to an unprecedented high.

But even this is not enough for the Government. It has also introduced or announced that it will introduce massive tax concessions for industry. Thus we have the investment allowance amounting to $600m to companies next year and a stock valuation adjustment amounting to $350m. The mining companies will get $100m-plus next year and private companies $30m-plus next year. So over $ 1,000m in tax concessions will be allowed for companies on income being earned this year. In after tax terms, industry is being put in an extraordinarily favourable position. This is shown particularly if one notes that the total of company tax income was only $2,500m last year. Yet we are talking of tax concessions of $ 1,000m. From what I stated earlier it is clear that the fundamental part of government strategy is to maintain the recession for another year. It is equally clear that this strategy is being made palatable to business by another aspect of government policy and that is to make recession comfortable for business.

Another criticism of this Budget is that it is far too optimistic about the prospects of recovery in the private sector this year. With a real reduction in the level of government demand the behaviour of consumer demand is crucial. Indeed we could describe this as the linchpin of this Budget. If consumer demand does not increase this Budget is going to be a total disaster. I have shown already that there is no recovery in sight; nor has this Budget brought about the likelihood that any will occur. An article in the Age on 25 August was headed ‘Retailers See No Recovery’. The article contained comment by major retailers in the post-Budget era and discussed the fact that there was no recovery in sight so far as they could see.

There are many reasons for believing that a recovery in consumer demand will not occur while the Government pursues its current policies. Firstly, reduction in real wages will not assist increases in consumer demand. If people have less real pay it is asking a lot of them to suddenly start increasing their total spending. If their real pay is down it is more likely they will cut back on their total spending rather than increase it. Secondly, reduced take-home paythe impact of the Government’s fiscal measures relating to the introduction of personal tax indexation, the increase in child allowances, the abolition of tax deductions for children and the imposition of the Medibank levy- will have the combined effect of disadvantaging many families. For instance, single taxpayers in the bracket of $80 to $180 will be worse off. Married working couples with no children in the area of $140 to $300 will be worse off. Couples with one child and receiving between $120 and $380 will be worse off. Even taxpayers with a dependent spouse and one or two children and receiving between $ 1 60 and $200 will be worse off.

The majority of taxpayers will be worse off as a result of those arrangements, and that does not take account of the fact that the mortgage interest payments have been abolished as a tax deduction thereby reducing people’s disposable income even further. The fact that unemployment will get worse and is continuing to get worse will not encourage people to rush into the streets and throw their money around. It is more likely that it will have the opposite effect. The ideology of self-reliance which this Government is trying to impose on this society will not encourage people to spend money.


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


– I rise somewhat belatedly, but at prime time, to congratulate the Government on a Budget which can be classified only as an extremely sound one. Certainly our great economic ills will not be solved overnight. I refer to the great economic ills created by the previous Labor Government. But there will be a gradual, steady recovery, and when it does come it will be a soundly based recovery. It will be genuine and it will be lasting. What a nerve honourable members opposite have to stand up and criticise. They had long years in which to try to do something about the situation, and they failed. What did they achieve? They achieved complete disaster. They let down the Australian nation. They were rejected by the people. I think it is fair to say that the Opposition claims to have 2 economic experts. They are the present spokesman on Treasury matters, the honourable member for Adelaide (Mr Hurford), and the former spokesman on Treasury matters and former Treasurer, the honourable member for Oxley (Mr Hayden).

Mr Sullivan:

– And the honourable member for Hunter.


– That is true, too. As one would expect, both those gentlemen made negative, critical speeches on the Budget. However, it is interesting that when one reads their speeches with some care, one sees that their criticism was lukewarm and half-hearted in relation to the general Budget strategy of the Government. In fact, I think it is fair to say that underneath these so-called experts really agree with the Government’s approach. The honourable member for Adelaide in particular recognises that there are now signs of recovery. I commend him for the honesty which he displayed in his speech and his frankness. Certainly the honourable member had to play out his particular role as Opposition spokesman on Treasury matters. So he piously criticised the Government for what he called ‘an obsession with inflation’. In his speech he also used the phrase ‘a fixation on the size of the deficit’. Perhaps his Government should have had that obsession and that fixation. If it had had these things it may have been more effective.

Neither the honourable member for Adelaide nor the honourable member for Oxley made any significant constructive suggestions. From my recollection, having read their speeches, they made perhaps a couple of suggestions. One was the scrapping of the investment allowance, and I think the honourable member for Adelaide suggested that the Medibank levy should be reduced but, of course, not abolished. Their speeches were heavy on political diatribe and humbug and light on helpful, positive comment.

This Government clearly recognises the need to control inflation. That is the Government’s prime objective. I give the honourable member for Oxley some slight credit in that he realises the need to concentrate on that particular issue. Indeed he realised that when he presented his first Budget- and I might say his last Budget- in August 1 975 when he said:

Economic recovery will only be restored by way of gradual policies firmly grounded upon an effective antiinflationary foundation.

He has changed his tack slightly since then, but I think he still realises underneath that we must control inflation. All Western nations, regardless of political persuasion, agree with our great objective, namely that the control of inflation is essential to economic recovery. How will we overcome inflation? That, of course, is the key question. Plainly Australia has been the victim of cost-push inflation, and one of the key elements of that push has been the excessive wage demands over the past 3 years. Wages make up a substantial part of the costs in any business, whether it be a small retail business, a large paper manufacturer- I have one in my electorateor a dairy factory. I have a few dairy factories in my electorate.

Mr Goodluck:

– Quite a few.


-Yes, quite a few. It could be any other type of business. All Australians know that wages have gone up dramatically since 1973. But the ordinary wage earner, the worker, is no better off- I think he realises that- because he cannot control the price of the things he buys, and that is unfortunate. He is the price taker and not the price maker. Normally increased wages can be adequately financed by growth and productivity. When there is real growth the workers who create that growth must share in the rewards, in the profits. That is only fair. There has been no growth, particularly between 1972 and 1975. So the excessive wage increases have been achieved at the expense of the jobs of other employees. If this Government is to tackle successfully the dual problems of inflation and unemployment it must slow down the rate of wage increases. I am sure that the workers of this country will see the sense in the Government’s strategy. They would rather have a lower rate of inflation in 12 months time, at the expense of completely illusory money wage increases. They would rather keep their jobs or have a better chance of getting a job.

On 13 December the Government was given a massive mandate to beat inflation and unemployment. It has pursued a consistent strategy to carry out that mandate. Australia now has a unique opportunity to take its place again as a country with one of the healthiest economies and highest living standards in the world. That opportunity will be lost unless we recognise the problem areas and unless there is co-operation from all sections of the Australian community. The Labor Government certainly did not recognise the problem areas. It deliberately encouraged the wage push. It unwittingly created today’s tragic level of unemployment It unwittingly caused its own staggering defeat or thrashing. The Labor Government’s attitude was expressed clearly when it sought to influence the Conciliation and Arbitration Commission at the hearing of the 1973 national wage case. The Commission, in its judgment, said:

It is the Commonwealth ‘s opinion that there is scope in the capacity and flexibility of the Australian economy for an appreciable increase in wages without undesirable inflationary consequences.

How wrong that opinion held by the then Commonwealth Government was. In addition, the Labor Government adopted a policy of making the Public Service a pacesetter in wage payments and other benefits. Knowing the Government’s attitude of supporting the unions at any cost, some trade unions- not all- felt free to pursue any wage claims that they chose. The desire to preserve wage and income relativities meant that one large settlement quickly spread to others and soon was transmitted through the entire economy. This was Labor’s greatest mistake. It was the primary cause of its shattering defeat last year- the greatest thrashing since Federation.

The Government’s wages policy is central to its approach to bringing inflation under control. It is central to reducing unemployment. Let me stress here and now that the Fraser Government and all Liberal Party and National Country Party back benchers are desperately concerned about the tragically high unemployment figures. We are genuinely concerned. These high figures were caused by Labor’s mismanagement. The issue of unemployment is under continual discussion by the Government, by the Government Parties and by back benchers, and is under constant examination. We take no joy in seeing the figures. We appreciate the terrible effect of unemployment upon a person. Nothing is more dehumanising that not having a job to go to.

Nothing is more shattering to a person’s character and personality than to be rejected time and time again be prospective employers.

Mr Goodluck:

– We must overcome it.


-We will. Unemployment is the key indicium of recovery. With high unemployment there is no recovery. This is why wage restraint is so critical and so essential. Of course, it cannot be all one way. The Government must provide some benefits to employees if they are to moderate their wage claims. It is arguable that the first vital momentum towards recovery has been created by the introduction of personal income tax indexation and the new family allowance scheme. Those schemes will mean more money in people’s pockets- something like $ 1,400m over 12 months- and therefore will reduce the wage-push pressure. In addition, they will increase the capacity of people to purchase consumer items, which is so vital to our recovery.

I refer very briefly to the family allowance scheme. It is one of this country’s most significant social reforms. It will assist greatly 300 000 families and 800 000 children in this country. Many of my colleagues, on this side in particular, have been advocating increases in child endowment for some time. Together we warmly welcome the decision of this Government. Let us look at the figures, because they are significant. They are very high figures. The scheme will make a great difference to many families, particularly the poorer families in the community. The payment for one child is $3.50 a week, for 2 children $8.50 a week, for 3 children $14.50 a week, for 4 children $20.50 a week, and thereafter $7 a week for each additional child. The Leader of the Opposition said that this Government has no concern for women and children. What utter rubbish that is. It is a matter of amazement to me that the Labor Government did not act on this aspect of the report of Professor Henderson’s commission of inquiry into poverty.

Mr Willis:

– What about the tax deductions?


– Those opposite who are now interjecting must surely regret that. Of course, child endowment has been with us for some decades. The true value of the endowment has been eroded by the reduced purchasing power of the dollar. The people who suffered from that erosion unfortunately were the poor, the underprivileged, the people in greatest need, the people who were ignored by the Labor Government.

Tax deductions previously given aided only the higher income earners and the wealthy. Those were the people with whom the Labor

Government was apparently concerned. The greater your income, the more assistance you received. How much more sensible and how much more equitable is a system of substantial tax repayments of the type recommended by Professor Henderson, now introduced by this Government. Professor Henderson did consider the question of making the family allowances taxable. Others have suggested that unless family allowances are means tested or made taxable, substantial sums of money will go to the welltodo and inequities will result. The fact is, of course, that endowment is paid to the mother in most cases and under our system people are taxed as individuals. The mother’s income is assessed and taxed separately from that of the father. Since only a minority of women earn separate incomes, naturally most pay no tax. If these allowances were taxable, little would be gained and there would be high administrative costs. I believe that the Government’s approach on this matter is the correct one. Generally the Budget is very well balanced. It will help to stimulate business whilst protecting the needy and protecting also the key areas of expenditure, health and welfare, including pensions of all kinds, education and defence. I mention in particular social welfare. Let us quickly look at the figures. The total expenditure for this financial year is $6, 187m; that is 25 per cent of the total Budget outlay. It is an increase of 23.5 per cent on last year. The increase alone is greater than the total allocation of only 6 years ago. Pensions are up to $43.50 for single pensioners; $72.50 is the married rate, an increase of $3 70m in the Budget outlays. These pensions are adjusted to increase automatically with the consumer price index figures; there is removal of the property means test on pensions; war pensions and service pensions have been increased significantly. This is an additional cost to the Government of $82m. Invalid pensions are increased, the handicapped children’s allowance is increased by 50 per cent. How important this is for those with handicapped children. The handicapped children’s benefit is up 43 per cent; the total of these 2 allowances and benefits is $6.4m additional cost to the Government.

This Government is genuinely concerned about the needy people in our community. I want to turn to farmers, people about whom I am most concerned, particularly in my electorate but also throughout this country. I must confess that I have some reservations in this area of the Budget. There is a lack of effective assistance for some sections of primary industry. Many rural industries are in a critical situation. I mention dairying and beef, apples and pears; each of these is a key industry in my electorate and in Tasmania. The problems are essentially tied with marketing.

I realise, as does the Government, that there are great difficulties in providing adequate and lasting solutions to these problems. But many of the forms of assistance that are provided in the Budget, and they are substantial for some people, do not do very much for other people within primary industries. I mentioned the superphosphate bounty, the income equalisation deposit scheme, the investment allowance, the dairy adjustment scheme and rural reconstruction. These, unfortunately, have not greatly assisted the smaller farmers on the north west coast of Tasmania and on King Island, especially the dairy farmers who are somehow, and I do not know quite how, managing to survive on extremely low, and even in some cases, nonexistent incomes. I want to stress their grave plight.

Mr Goodluck:

– A wonderful race of people.


– They are a wonderful race of people. They are decent hardworking Australians and they were ignored for 3 years by the Labor Government but they are in a grave plight. This Government must recognise it. In 1971-72 the price for butterfat was about 70c per lb or slightly more compared with a price now of about 45c and less per lb in some areas. But at the same time costs have risen alarmingly. In my view, to maintain parity with prices 4 years ago dairy farmers would now need about 95c per lb, and as I say, they are receiving 45c per lb. This is a desperate situation. Many farmers in the older age group are tied to dairying and cannot get out even if they wanted to. They cannot get buyers for their properties at fair values. They cannot get other employment and so must continue milking twice daily 7 days a week. We need to help these people out of the industry on a voluntary basis so that they may settle in reasonable comfort in their local towns.

At the present time production of dairy products is plainly excessive and this means that produce is given away at low prices, restricting and depressing the whole industry. There is a need for a greater sense of urgency- a greater understanding of the disappointment of those decent, hard working Australians that effective help has not been forthcoming. As I said earlier, these people were the victims of the Labor Government’s 3 years reign. We have to make sure that we do not let them down. I know this GovernmentI say this in fairness- is desperately concerned about this situation and is doing a great deal about it. I simply take this opportunity to stress the plight of these people. Apart from that reservation, I congratulate the Treasurer (Mr Lynch) and the Government on a sensible, sound Budget which will undoubtedly in timenot immediately- lead to a steady economic recovery in this country.

Smith · Kingsford

– I support the Opposition’s amendment for the simple reason that we have a Budget which exercises control over some $24,000m and fails miserably to give any hope to Australia for its future. The last speaker, the honourable member for Braddon (Mr Groom), virtually indicted the Budget when he asked what was going to happen about his poor farmers. Where is there anything in the Budget to help them? Then he tried to suggest that their problems were due to the 3 years in office of the Australian Labor Party. Let me remind the honourable member also that there are no real benefits in the Budget for the taxpayer with dependent children. If he looks at page 109 of Budget Paper No. 1 he will see that the Government has abolished the child rebate and this will take $700m from taxpayers. The Medibank levy will take from taxpayers another $430m. So there in one broad sweep the Government has extracted $1,1 30m from the taxpayers’ pockets. Honourable members opposite suggest that there is some benefit in this Budget.

It was suggested that the previous Labor Government could have done something about prices and wage claims. Not one honourable member opposite has referred to the fact that in 1973 the previous Government sought the powers in this Parliament to control prices and incomes. The legislation passed through the Senate and the question was taken to the people, but who opposed it? Those honourable members opposite who are now in Government said through their Leader- now Mr Speaker- ‘You do not need these powers. They are with the States. You have adequate powers in the Constitution to control prices and incomes.’ That is a complete fallacy in law and a complete fiction in economics. We are the one national parliament in the world without any economic discipline. We have to leave it to the States to fix matters such as rents and to worry about prices.

Why is it that the Government denied us these powers? Let me tell honourable members opposite the reason. In 1974 we saw massive wage claims soon after we lost the referendum. There was a crisis climate created in this Parliament. Even before Crean’s first Budget had run its term we were forced to the polls by a double dissolution on a theory that we were poor economic managers. We did not even get the first Budget through one year before we were rejected by the Senate, which was controlled by the party hacks opposite. There was no real appreciation of what had happened to our powers in the referendum of 1973 when we sought to control prices and incomes. Now let us look at the record of the wage claims. This afternoon the Public Service was mentioned as the pacesetter. The contrary is correct. Having lost the referendum, we then had to put up with the problems of the States.

The New South Wales Government increased public service salaries by 20 per cent from 1 January 1974. Victoria did very much the same and so did Queensland. This applied in all the States where honourable members opposite suggested there was going to be some economic management to control wages at the State level. Is it any wonder that the Conciliation and Arbitration Commission was inundated with wage claims to try to maintain parity with the wages paid to State public servants? We made urgent representations to the States. We said: ‘Look, please hold the line’. The honourable member for Hindmarsh (Mr Clyde Cameron), as the Minister responsible, had a special arrangement with the metal trades people not to seek an increase in wages above $15 a week but it was immediately broken under the transport workers award through private negotiation to give workers another $25.40. How could we possibly hold the economic line when you people sitting opposite manipulated the opinion of people in Australia and said there was no need to give the power to the national government to control prices and incomes. How stupid!

We now have massive unemployment in this country and it is getting worse. On a seasonally adjusted basis the figure is the worst it has been for some considerable time, much worse than last year. Is it any wonder that the Minister for Employment and Industrial Relations (Mr Street) does not wish to disclose the figures now on a seasonally adjusted basis? If he did they would show unemployment at 5.3 per cent of the work force as against 4.8 per cent for the equivalent period last year. Why is it that we have a Budget without a plan? We are faced with a problem now of not knowing what is going to happen to our work force. In Sydney recently apprentices were called for by Telecom Australia. There were 48 vacancies. Two thousand young Australians tried to get a job. School leavers are walking the streets in every capital city. Nobody is able to employ them. The people who sit opposite bear that indictment. If there was a wages explosion in 1974, as there was, it was due to the fact that we had no power to control it. The then Opposition created a crisis climate by rejecting our Budget in 1974.

Again in 1975 hysteria was worked up on the basis that there was inflation and economic mismanagement. So Supply was again refused. Is it any wonder that the Australian people began to wonder what was going to happen to their savings? We now find that because of a contraction in consumer spending the amount of money in savings banks is rising every month. Australians are going bankrupt by saving money. There is no confidence in consumer spending. I am associated with the Government Textile Committee. At a meeting of the Committee the people running the industry were saying: ‘Things are worse than ever. We will be sacking at least another 3000 in the textile industry by December because there is no demand for goods ‘. Of course it is true that a lot of jobs have gone to areas offshore. This is the new technique of a number of the manufacturing giants in Australia who suggest it is far better for them to move their manufacturing plant off-shore, employ cheap labour and thereby make greater profits. This is the problem we face in Australia.

Where is the plan for the shipbuilding industry? Where is the plan for the electronics industry? Where is the plan for the motor vehicle industry? One can cover the whole spectrum of this Budget and honourable members opposite will say: ‘We are hoping the private sector will pick it up’. The private sector is about as faithful to this country as BHP is with its shipbuilding policy. It was responsible for the set-up at Whyalla in South Australia. It is going to abandon the work force there because it would rather buy ships from Japan ostensibly on the basis that they are cheaper than Australian built ships but we all know that the Japanese are offering terms of credit over 7 years which our Treasury will not offer to people who want to buy our ships. It is not so much the subsidy factor; rather it is a matter of being able to negotiate a deal. Similarly, how can we sell the Nomad aircraft for cash when we are competing with other countries selling their planes on terms? It is about time we got into the business of being able to understand how to compete in the world Olympics of economic trade. We would not even finish in the qualifying trials if we were up against Japan or Germany.

Recently the Deputy Prime Minister (Mr Anthony) came back from overseas saying he was very worried about what Germany thought of us because of our uranium policy. Did he dare mention that Germany put a boycott on our beef and would not buy any part of it? The Germans are interested in uranium to make a profit. These are the same Germans we fought in 2 world wars. They slaughtered many Australians. I ask honourable members not to forget that. Recently the Deputy Prime Minister said: ‘I am very concerned about the Japanese because they might come and invade this country if we do not give them resources’. I suggest that we have a look at the war memorial cemeteries in New Guinea and see what happened there to Australians fighting for our resources.

We have this sort of craven fear complex in international trade and do we expect these people to treat us with any sympathy at all as Australians? They are out to get the best they can for their country. They are strong people. They have a national spirit. They have a national culture. They trade to the best advantage of their people. If they can exploit any weakness in us, as they have done with our rural products, they will send us to the wall. Where is the Government’s policy to help the farmer to market his product? It is utterly futile, ridiculous and untrue to suggest that we will get any break-through with the European Common Market. There is no chance at all. The Government can talk about the General Agreement on Tariffs and Trade and of all its other arrangements but it has no chance at all of breaking through to that market. Here we have the Budget. I ask: What does it do from the point of view of the work force?

Mr Baillieu:

– It gives them jobs.


-It does nothing for jobs. For example, it reduces the vote in the hospital field. It reduces the vote in the education field. It was said, no doubt with some honestly, by the Treasurer that he thought the education vote was a 2 per cent increase. He said that was a very good in real terms. But he faithfully omitted to mention that there will be a 1.1 per cent increase in school enrolments for which there has been no allowance. He also forgot to mention that the guidelines given to the Schools Commission now state that there is to be no automatic cost supplementation as regards education. There has to be something less than automatic cost supplementation. Therefore there will be some less concentration of financial resources in education with all its needs. I have here a statement from the Commission which shows that there is no possibility of being able to plan with any certainty or to fit the guidelines. With reference to the weekly non-government schools the Commission states that the funds they are allowed will be insufficient to allow them to reach the standard- the rather low standard- of the public schools sector. The Government had an opportunity to spend some $200m a year in upgrading education resources. But that amount is down to only $135 in the Government’s allocation.

We have massive unemployment in States because there is a building need which could well utilise those funds. It would be economic to use those funds now with this massive unemployment. But this was not done. We come now to other factors in the Budget. Why is it that when we talk about helping industry and creating more employment, we do not look at what industry feels should be looked at? It is not much good to talk about a stock appreciation adjustment which might have some merit and which certainly comes from the Mathews Committee report- we set up the Mathews Committee- and to forget altogether about the report of the Jackson Committee which we also set up. Of course, previous governments of which many honourable members on the Government side were members did nothing about industry for years. They set up no committees. I think they set up one on small business which was chaired by Mr Wiltshire. It was set up in 1967. He reported in 1971. We found the report in a pigeon-hole in 1973 and tabled it. That is the most active aspect of interest in small businesses which previous governments were able to encourage. Sir John McEwen set up the committee but he did not do anything about the recommendations.

When we come to small businesses and to other matters, let us look at what we are saying. If we are going to create any opportunity for a good climate there has to be an opportunity for confidence in the consumer. It is not there, as my colleague the honourable member for Gellibrand (Mr Willis) has stated. Because of the Government’s attitude to wage indexation cases it has virtually destroyed the social contract which we established in 1974 with the trade union movement. Members of this Government opposed wage indexation then. It was only through the efforts of the honourable member for Hindmarsh (Mr Clyde Cameron) and other honourable members like him, when they were Ministers of the previous Government that it was achieved. They worked hard to get the unions to accept the social contract on the basis that the government would do the right thing in respect of prices. Honourable members opposite opposed wage indexation. They deplore the Prices Justification Tribunal, as does the Broken Hill Proprietary Company Limited. Honourable members opposite want to do everything possible to give profits to the few and put the burden on the many. Their Budget shows up in this fashion.

The only benefits in this Budget will go to the mining interests who are well endowed to look after themselves. But the average small businessman is still going into bankruptcy. The person trying to trade on an international basis cannot obtain markets because the Government is not giving him the incentive of consumer demand in Australia. Let us look at what was stated in the Jackson Report. He said that there was a deep malaise in industry right throughout the 1960s. In fact, manufacturing industry was losing then, but nothing was done about it. The work force was certainly disenchanted. Jackson points out that it was mainly of migrant origin- and nobody cared anything about them. I ask: Where in this Budget is there a plan for the future of Australian industry or for the future of Australians? We have seen the Prime Minister (Mr Malcolm Fraser) running around the world suggesting that the Russians might invade us. I notice, in fact, that Russia is one of our best trading partners. I am mystified to understand how the Deputy Prime Minister could expect to sell any meat to Russia when we had the Minister for Defence (Mr Killen) apparently ready to declare war on that country at the same time. Luckily, some 3 hours after he had made his announcement, peace broke out. We have this problem of the Government creating a fear complex in the people. We ought to be an honest broker in the Pacific Ocean. The Prime Minister should be getting the Russians and the Americans together to work out how they can get their ships through without this crisis complex developing. The Prime Minister made certain suggestions in China that the Chinese Government is our friend- the present Prime Minister was Minister for Defence at the time of our sorry record in Vietnam. Mr Deputy Speaker, it would be a convenient stage for me to interrupt my remarks.

Sitting suspended from 5.58 to 8 p.m.


-In my concluding remarks I shall address myself basically to the Mathews proposal which is referred to in the Budget as valuation of trading stock and I want to suggest that perhaps that is not the most efficient way in which to help companies and reduce unemployment, particularly companies which do not have a lot of stock. The same can be said of the investment allowance in relation to companies which cannot afford to invest and are not utilising their present resources. What is needed to solve the problems of unemployment and inflation is a method of short circuiting the connection between wages and prices. Economic policies must have a dual effect. They must not concentrate on one problem to the detriment of the other. The perfect example of a policy which concentrates on one problem to the detriment of the other is the reduction in real wages. This can only worsen unemployment by stifling consumer demand and that is what we are saying this Budget will do.

We must find a means of breaking down the spiralling effect of wages chasing prices and prices chasing wages. I believe that we can sever the connection between wage increases and inflation through company taxation reforms, by adopting an alternative to this stock adjustment proposition which it is suggested will cost in excess of $700m. If companies were allowed as a tax deduction a percentage of their bill for wages and salaries which was equal to the rate of inflation there would be no need for them to increase prices to offset wage increases to the extent they do now. The Government would be subsidising companies for reasonable wage increases. This would have the effect of reversing the wages and prices spiral and locking us into a downward rate of inflation. Inflation would steadily and constantly decline and wage increases would become progressively smaller as the rate of inflation fell. The Prices Justification Tribunal could ensure that the benefits were passed on to the consumer. Whenever a company applied for a price increase based on wage increases it would have to justify that price increase in the light of the fact that wage increases of up to the rate of inflation in the preceding year were tax deductible.

This scheme would assist company recovery. There would be no reason to decrease real wages. In fact, it would be essential that full wage indexation continued. However, rises in money terms would decline as inflation fell and wage earners would have the assurance that their living standards were guaranteed. There would be a confidence created, they would begin to spend and, as the rate of inflation fell, so confidence would increase. Honourable members might question whether the cost of this scheme was justifiable, but in reply I would make this point: If inflation and unemployment can be reduced by taxation reform, it does not particularly matter that it will increase the deficit. The size of the deficit is not an end in itself; it is only that a large deficit tends to be inflationary. At present inflation is largely the result of inflationary expectations, and what we have to do is break the cycle between wage increases and prices rises. The effect of this will more than offset any inflationary pressures or tendencies.

We should not be so worried about the deficit or mesmerised by it. The cost of implementing a scheme of taxation reform such as I have outlined would not be as great as might be thought because inflation itself would be reduced.

There is no sound economic strategy in this Budget. It is what is called a Robin Hood in reverse Budget. It was hailed on the London Stock Exchange as BHP’s budget and that is no good for Australia. Yet the men who have produced this Budget are the same men who threw us out of office last year on the basis that we could not satisfactorily manage the Australian economy. On precedent, the Senate would have to reject this Budget as well.


– I rise to support the Budget and to congratulate the Treasurer (Mr Lynch) on its preparation and introduction. Unfortunately I have not got time to argue about the matter. I have watched with dismay over a period of many years an apparent lack of concern for an industry that has been thrown literally into chaos, particularly in Victoria. I refer to the petroleum industry, and believe quite firmly that certain recommendations of the Royal Commission on Petroleum, particularly in the area of marketing and pricing, should be the subject of close and careful scrutiny by this Parliament and should not be treated like some previous commissions recommendations have been treated- pidgeon-holed for the term of their natural life.

The industry’s marketing methods have for many years been the subject of substantial criticisms. The criticisms are familiar; they echo those made in many other countries. Through the years, the reports of a long list of commissions of inquiry of one kind or another have referred to them. Specifically the allegations are: Firstly, that there are far too many service stations and that the industry, and through it the community, is burdened by immense over investment in retail outlets; secondly, that motor spirit and other petroleum products are overpriced and that both wholesale and retail margins are excessively high; thirdly, that there are too many oil marketers and that the petroleum market in Australia is irrationally fragmented by up to 9 parallel marketers; fourthly, that the market is sometimes chaotic and often not price competitive; fifthly, that unfair competition and especially discriminatory price practices are rife; sixthly, that the tiers of pricing and the pricing structure generally are archaic and irrational, and, seventhly, that dealers are sometimes dealt with oppressively.

I believe that on page 2 of the report of the Royal Commission on Petroleum, the introductory paragraph sensibly indicates how the problem should be tackled, and I commend the Commissioners on their far-sightedness and competency in arriving at such an introduction. The report states:

The Commission finds that all these complaints contain certain signficant elements of truth. Let it be said in the interests of balance that there are elements of positive achievement. How the allegations came to be at least partly true is discussed in the Commission. Not to recriminate or to allot blame, but for the purpose of considering how the industry may be restructured on a basis once more rational and in better interests of the community, and of the oil companies, as well as those who find employment in the industry.

It would be an indictment on this Parliament to allow this industry to continue on a path of selfdestruction. The lack of apparent intervention and concern by previous governments is illustrated quite clearly in a letter received by the Commissioner of the Royal Commission on Petroleum, Mr Justice Collins, on 13 May 1975 from the then Minister for Minerals and Energy, the honourable member for Cunningham (Mr Connor). The letter states:

Dear Mr Justice Collins;

I refer to your letter of 24th March enquiring whether my Department is able to provide information about the various topics you have mentioned, namely the Motor Spirit Price War, the relationship between Oil Companies and Service Station Proprietors and the causes and remedies for the proliferation of Service Stations. In summary, these topics all relate to the Retailing of Petroleum products- a matter about which my Department has virtually no information and regrettably it cannot therefore be of any real assistance to you. Your Officers are of course welcome to consult mine to see if the little information they do have on file is of any assistance. *y

The real question which then emerges, is: Has Australia suffered adversely when compared with other countries with sophisticated administrations by the apparent neglect of its organ of public administration to intervene in this field of industry in any effective way? Regretfully, the answer must be a strong and definite affirmative. The situation in Victoria is one of absolute chaos. It may be said that the State of Victoria is being subsidised by other States in the respect that because of distinct price cutting areas other States are being disadvantaged price-wise. As at 25 August 1976 the price of super grade motor spirit in cents per imperial gallon was between 54.87 and 77.46 in Victoria; between 74.55 and 75 in New South Wales; between 58.55 and 72.74 in South Australia; 43.64 in Western Australia; between 75.00 and 79.55 in Tasmania and between 64.5 1 and 8 1 .8 in Queensland.

A recent claim by Mr Hawke that the operations in this State of the ACTU-Solo petrol company had saved Melbourne motorists $25m is absolute nonsense. The operations of ACTUSolo have been but an added participation in a pricing structure heavily criticised in the findings of the Royal Commission on Petroleum. All that Mr Hawke ‘s ACTU-Solo did was leap upon the already rotting corpse of stable marketing and, with certain exceptional bargaining advantages, join in the feast at the expense of the truly Australian part of the oil industry- the average service station proprietor. Notwithstanding the exaggerated nature of Mr Hawke ‘s claims, the Australian public must be grateful to ACTUSolo for highlighting and emphasising the chaotic and inequitable pricing structure in the petrol reselling industry and the exceptional bargaining advantages that companies such as ACTU-Solo are able to procure.

A growing awareness of the problems likely to be experienced by the introduction of ACTUSolo into the market is occurring in New South Wales. It is evidenced by the stand that the Transport Workers Union and various industry groups have taken. I sincerely trust that before this company makes inroads into that State, creating the problems that inevitably will follow, this Parliament will be able to intervene and remove the unfair competition, the especially discriminatory pricing practices and exceptional bargaining advantages enjoyed not only by ACTU-Solo but also by other price cutting companies in Australia, and, of course, the devious practices by the major oil companies, I do not deny them the right to sell their petrol more cheaply, but I do deny them the right to have an unfair advantage over other legitimate dealers, and, as a subsequence, to force them out of the market place.

The petroleum industry is a most complicated one, and in the time now left to me I will endeavour to paint a brief picture of the industry from its original growth in the Australian market. I shall refer to the problems that have beset the industry and the recommendations that I feel are essential for the future betterment of the industry for the benefit of the Australian public- the ultimate consumers of petrol. Prior to 1951 most retail outlets were owned and operated by independent dealers. Usually the oil companies installed the pumps and tanks and the dealer would agree to sell only the company’s product from those facilities; but the dealer was not tied to one particular brand of petrol. Normally the independent dealer would sell two or three brands. In August 1951 the Shell company initiated solus trading in Australia via contracts whereby the existing dealers agreed to sell only Shell motor spirit. Within 24 hours the Mobil company followed the Shell company’s lead. Faced with the loss of access to many existing retail outlets, other companies such as the British Petroleum company lost sales. In part they responded by increasing the emphasis on direct industrial and commercial sales, but inevitably they were forced to purchase sites and open new retail outlets. The Total, Amoco and Philips companies, which entered the Australian market after the introduction of solus trading, similarly were forced to open up new outlets.

In 1951 there were, according to the Shell company, 1 1 035 reseller outlets in Australia. This figure increased rapidly to more than 2 1 000 by 1 966. Increasingly, competition within the industry was focused on investment in retail outlets in order to acquire a greater share of the market. This imposed high costs on the consumer; but, from the viewpoint of the refining companies, the individual outlet did not need to be profitable. Rather they were concerned to increase total profits earned from the production, refining and distribution system. Profit maximisation in the total system was closely related to sales volume and implied the maintenance of marginal retail outlets. As pointed out by the BP company, the price of individual products is not determined by the mode of distribution and there is no consistent relationship between product price and distribution mode. Overall prices are determined so that the proceeds from the product mix derived from a barrel of crude cover total, costs. The Royal Commission has argued that the companies concerned knew that the introduction of solus trading would lead to a proliferation of outlets and thus to inflation of wholesale and retail distribution costs, as had been experienced previously in the United States of America, the United Kingdom and Canada.

There were 3 important pre-conditions for the introduction of solus trading. Firstly, the Shell company’s action in 1951 was dependent on the legality of exclusive dealing. It is my opinion that solus trading could not have been established with the same speed and probably would not have been introduced at all had the current Trade Practices Act been in force. Secondly, since proliferation of retail outlets increases total distribution costs, solus trading could not have been introduced if there had been a price control system which prevented companies from passing cost increases on to consumers. Unfortunately, the price control system has been based on the passing through of costs over a base level, provided that they can be shown to have been incurred. In general, the increases were accepted.

Costs were not critically examined to see whether price increases ought to have occurred. Thus, the whole expensive structure of proliferation and uneconomic fragmentation was brought as a cost raising factor into the price structure. Discounting commenced in Victoria around about 1966. It is not an isolated phenomena. Price wars, to some extent, have occurred in cycles throughout the history of the oil industry in Australia and elsewhere. The reasons for the escalation of the price war in Melbourne have been effectively presented during evidence at the Royal Commission and Prices Justification Tribunal hearings. There have always been resellers engaged in the petroleum industry who were prepared to reduce their profits margin and to increase volume, thereby maximising their overall earnings.

Discounting in Victoria however really accelerated in the late 1960s due to the surplus availability of gasoline from refiners in the Far East and also the availability of terminal tankage at Coote Island. These 2 factors enabled an independent operator to import gasoline and resell it at a price considerably less than the price to the resellers of the major companies. A characteristic price war then followed with some dealers discounting at high levels in order to increase volume followed by withdrawal from discounting in an attempt to restore profitability. During periods of high discounting many resellers approached their suppliers for some kind of financial support. Over the past 10 years or so additional independent companies have been involved in discounting.

Mr Groom:

– We realise that.


-Of course, my colleague. Some of them originally obtained their products from overseas and some of them now purchase refined products from major integrated companies. Some have purchased crude oil and have arranged processing deals with refiners in Australia. Discounting problems were aggravated when independent suppliers approached dealers of other major companies to negotiate supply contracts. In order to protect their businesses some companies entered into contractual commitments with their resellers at the high discounts which were necessary to compete with the independent suppliers. This again in turn gave the dealers of some major companies sufficient margin to commence discounting aggressively themselves. Evidence submitted in the Royal Commission suggested that one major company had entered into a fixed price contract which, consequent with the effects of subsequent price increases, gave this company’s dealer a concession of 12.5c per gallon, which in addition to the then dealer margin gave this dealer an effective 24.75c per gallon margin.

I wish to give a brief outline of the activities of the independent price discounters. These companies purchase in bulk for redistribution through their own chain of outlets. I wish to draw attention in particular to the Independent Oil Company Pty Ltd. IOC was established in 1969 and operated until 1974. Supplies appear to have been obtained primarily from Korea and installed in facilities owned by Allied Petrochemicals Pty Ltd. IOC may also have purchased supplies through the latter. At its peak in 1973 IOC had some 65 service stations plus 48 other outlets. The failure of the company appears to have been due to the company’s obligation to take over an allocation of indigenous crude oil and subsequent disputes over refinement of the same in Australia. IOC was wound up on Mobil’s petition on 8 May 1974 and it appears that former allocation of crude was refined and resold to Caltex Oil (Australia) Pty Ltd. The establishment of ACTU Solo enterprises resulted in expansion of retail outlets. Despite the loss of very favourable Mobil contracts ACTU Solo continued to offer off some 16c per gallon below the normal price. It is jointly supplied by Total Australia Ltd and Ampol Petroleum Ltd- the latter, having reached an agreement to process a parcel of indigenous crude oil which was purchased from Allied Petrochemicals who appear to have accrued an allocation as a result of their importing activities on behalf of another company.

To conclude, the established marketing structure was disrupted by discounters whose initial supply was derived from overseas refiners, distressed cargo and the middle men, such as Allied Petrochemicals Pty Ltd. However, it is interesting to note that Mobil, Ampol, Total, and Esso have all, on occasions, supplied discounters when other supplies have been disrupted. Naturally enough most of the major companies have a policy of supporting their resellers in the face of price cutting competition. The Royal Commission has made four broad recommendations:

A restructuring of the pricing system; a rationalisation of retail outlets with a consequent reduction in numbers; regulation of dealer-company relationships; and a program of crude oil conservation.

In the time left to me I should like to comment on the recommendations of the Royal Commission on Pricing. The recommendation of the Commission is that the motor pricing practices should be reformed. I think it is most evident to all honourable members and also to the public that something should be done in this area. The reform necessary would be to place pricing on a rational, economically based and examinable basis. This would involve elimination of gross subsidies and price discrimination which has led to unfair competition. The Commission suggests that an agency should be established and given responsibility for price determination. It further recommends price control, based on the actual demands of local refinery costs, and suggests that posted prices should be established for bulk purchases at the plant, delivered consumer prices and delivered dealer prices.

The Commission is firmly of the view that it is quite essential that Government retain a flow of organised and regular information relating to all aspects of the industry from all oil companies and other organisations within the industry so that the government is in a position to understand and to evaluate the needs and problems of the industry from the point of view of the Australian community as a whole. From a citizens’ viewpoint the industry is a vital, basic commodity industry and for governments the continued flow of energy in a convenient form at a minimum cost is essential to the prosperity and safety of the nation. The function of collecting and disseminating information is only the starting point. The oil industry, Australia wide is in need of reform in areas which have been described in the Royal Commission’s report. In all areas the Commission recommends that a system of public administration should be introduced at a national level. In all of the areas there is a body of opinion in favour of such an intervention. The findings and recommendations of the Royal Commission are the first step in obtaining fair and equitable conditions in an industry that has been prostituted for far too long. The ones responsible may rest assured that the fight is just commencing.


– We have just listened to a speech about the oil industry. One of the strange things about that industry is that none of the companies is prepared to reduce the price of oil but we can obtain anything upwards of 10c a gallon off the price. Notwithstanding what the honourable member for Franklin (Mr Goodluck) has said, I think it is an industry which bears close investigation. The commission that was set up by the Whitlam Labor Government set out to do just that- to expose the inequalities within that industry and try to put it on a decent footing whereby the Australian motorist, the user of the fuel and oil would at least get a fair go from it.

I rise to support the amendment proposed by the Opposition. So that every honourable member will know what that amendment is, I shall read it to the House. It is as follows: the House condemns the Budget because-

  1. it pursues a policy of unemployment as a weapon to reduce real wages and salaries;
  2. it abdicates federal government responsibilities and forces the State governments and local governments either to reduce their services or institute additional charges, or both;
  3. it introduces an additional tax in the form of the Medibank levy, thus further reducing consumer spending;
  4. it reduces the availability of services to the whole community but particularly to those most vulnerable to hardship notably Aborigines, the unemployed and migrants, and
  5. it fails to institute selective stimulatory expenditure to reduce unemployment and restore consumer confidence

I am certain that if this Government were put to an election today there would be a change of personnel in this place. Certainly we on this side of the House would be occupying the benches opposite. We all recall the manner in which the Labor Party was subjected to Press vilification in relation to unemployment and the increase in inflation in the year or 2 years prior to the general election and prior to the take-over by the Governor-General and the people who now form the Government. We were told that it was all the Labor Party’s fault. The Murdock Press was the loudest crier of opposition to the Government. I shall read the editorial of the Australian on Saturday, 5 June 1976. How marvellous it is that this newspaper changed its views after the power and wealth of this country had unloaded a government that was in the process of bringing greater equality and fairness to the people of this country. The first paragraph of this editorial states:

In 1974, led by the economic big six- America, Japan, West Germany, France, Britain and Italy- the world marched into the biggest slump since the 1 929 crash. It happened because the Arabs more than doubled the price of oil, the lifeblood of economic growth.

It happened not, as the Murdoch Press had been saying for months and months, because of the tilings that the Labor Government was doing. The truth came out after it had achieved its objective of defeating a Labor Government. We have seen this type of thing go on over the years. The second paragraph of the editorial reads:

Since then Australia, in common with most countries of the world, has suffered just on 2 years of recession, with low or nil growth, high interest rates, roaring inflation, low commodity prices and high unemployment It has been a terrible time and we have been among the more fortunate in that our standard of living has not dropped appreciably.

Is it not remarkable that, having removed the Labor Party from government, it then admitted that the things which had happened in this country at that time were not the result of the policies of the Whitlam Labor Government, which set out to improve the standard of living of the people of this country? So we have to contend with this phoney Government, which is led by one of the most conservative, class conscious persons that this country has been unfortunate enough to have as its Prime Minister since Federation. The Prime Minister (Mr Malcolm Fraser) went to the polls on an unfair and untruthful policy. He went throughout this country telling lies about what a Liberal-National Country Party government would do.

The policy he announced was supposedly designed to reduce the level of inflation and unemployment. Let us look at what has occurred in the period in which the Government has been in office. There has been no improvement in the inflation situation. There has been an increase in the number of unemployed. Figures which I will table in a moment clearly establish just what has happened. I seek leave to incorporate 2 tables in Hansard. They have been taken from publications issued by the Minister for Employment and Industrial Relations (Mr Street) and clearly show the position as far as the Australian unemployment situation is concerned. A comparison month by month of the figures this year as against last year reveals in every case that there has been an increase in the level of unemployment in the period in which this Government has been in office. In August of this year 267 886 people were unemployed. In August of last year the figure was 248 229. In July of this year the figure was 270 286 and for the same month last year the figure was 25 1 622. That is the trend for the whole of this year in comparison with last year. The policy announced by the Fraser Government at the last election of restoring employment and reducing unemployment was phoney. It is another of its broken election promises. This is shown clearly in those figures to which I have referred. If honourable members opposite take the time to sit down and read them they will see that they are the guilty people today. They have done absolutely nothing about the situation. In my electorate -

Mr DEPUTY SPEAKER (Mr Drummond)Order! Is the honourable member for Newcastle seeking leave to have documents incorporated in Hansard?


-Yes. I have sought it. I want to have incorporated both the document to which I have already referred and another one which spells out the unemployment situation in the Newcastle district.

Mr Sullivan:

– What a shocking member it has.


-It has the best member it has ever had. It is a pity the Riverina area does not have one as good.


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

The documents read as follows-


-The document concerning the unemployment situation in the Newcastle district takes in the electorate covered by my colleagues the honourable member for Hunter (Mr James) and the honourable member for Shortland (Mr Morris). It shows an even worse situation. In the month of August of this year there were 10 960 people unemployed. Last year the figure was 8204. Every month of this year there has been an increase in the number of unemployed. This has all been brought about by a government that was going to reduce unemployment and a government that was continually calling on the people to spend and spend. But nobody has any confidence in this Government. The July 1976 statistical bulletin of the Reserve Bank of Australia, which I received this week, contains information in which we are all interested. This publication shows that savings bank deposits in the 6 months of this year increased from $14, 126m to $ 14,828m. All told, the increase in savings is $702m. Is that an indication of confidence by the people in the Government?

Mr James:

– It is fear!


-As my colleague from Hunter says, it is fear. The people are afraid to spend their money because of the Government ‘s shocking record in dealing with unemployment.

The Government has put together a Budget with one objective in mind. That is to create a pool of unemployment and also a re-allocation of the wealth of this country from the lower income group to the higher income group. Honourable members should look at the way in which the Government is doling out funds to its supporters and its wealthy friends. I refer first to the partial removal of the coal excise which will cost $3 3m. This is happening at a time when communities in coal mining areas are crying out for the provision of amenities for those who work in the mines. The investment allowance introduced by the Government is to cost $200m this year and $600m in a full year. The cost of the handout in the form of the superphosphate bounty is about $50m a year. I would have no objection to the retention of that bounty if people on lower incomes in the farming community were able to get the advantage of it. But, in the main, it is the Frasers and the large pastoral companies which are getting the benefit of it. It would be interesting to know how much the Prime Minister gets out of the superphosphate bounty. I recall to the House the exposure in the New South Wales Parliament last week of what former Liberal and Country Party Ministers had received by retaining the milk zoning scheme. That demonstrated the dishonesty of the Country Party, the way in which it operates in government and the way in which its members look after themselves.

Mr Sullivan:

– Oh, rubbish!


-It is true. Why don ‘t you look at the figures. You would see how crook you are. I turn to the tax dodges which have been written into the Budget for the benefit of the Pitt and Collins Streets farmers and also the juggling of the stock balances to provide additional increases. What has this Government done for the average fellow? Housing loan funds have been reduced in total by some 13 per cent as against the allocation last year. What is the result of that action? A delegation from New South Wales came to Canberra recently and people from the building industry disclosed that at present in New South Wales between 1500 and 1600 apprentices are unemployed. The number of people working in the industry has dropped from approximately 60 000 to 38 000. That is an indication of what the Government ‘s policies are doing to the country. That is the responsibility of this Government now.

There is an alleged improvement in the provision of sewerage services. But a reduction of 60 per cent occurs in real money terms for sewerage projects. Who are the people who benefit most from such projects?

Mr Sullivan:

– You would.


-They are the people in the lower income groups.

Mr Sullivan:

– You would.


– You are the one who ought to be in it. Turning to the area improvement programs which once again are of assistance to under-privileged people and those in the under-privileged section of the community, I point out a reduction of $ 15m is made. The provision of money for growth centres is reduced by $41m. Let Government members examine the magnificent record of the Government demonstrated by the increase in indirect taxes. The Medibank levy represents in real money terms an increase in taxes for a person earning the average weekly wage of about $4 a week. The middle income earner will be paying up to anything like $7 or $8 a week if he seeks the full coverage. This is another of the devices which the Government has adopted to bring about an increase in taxation through the back door. But these are the methods that the Government parties have been accustomed to using over the years to achieve those ends. It is obvious that the amendment which has been moved by the Opposition is one which the average person in the street- indeed, the majority of people in Australiawould support wholeheartedly today if they had the opportunity to register their opinion at an election.

In dealing with other matters not contained in the Budget, I wish to turn to a subject that has been an interest that I have held for many years.

I refer to shipbuilding. Recently we saw demonstrated the bias of the Liberal and National Country Parties to the shipbuilding industry. This Government was prepared to put out of work some 2000 men in the State dockyard in Newcastle together with some 1900 men at the Whyalla shipyards. It was prepared to throw on the unemployment scrap heap also another 75 per cent of that figure, being those persons employed in industries associated with the shipbuilding industry- just to suit its policy, just to suit Broken Hill Pty Co. Ltd, which has adopted a shocking policy.

Mr Martyr:

– It was your policy.


-It has shown a shocking attitude to the shipbuilding industry It was prepared to get out so it could buy Japanese ships more cheaply than it could buy ships in Australia. But steel is a different matter. BHP wants maximum tariff protection for its steelmaking operations. I was interested in the interjection that it was our policy. It was our policy that was drawn up at a time when there was over-employment in Australia when there was over-employment throughout the world, when we could not get a ship built for love or money anywhere but Japan. I want to show the uninformed people what the real position is with the shipbuilding bounty. In July 1 975 the New South Wales State Dockyard lodged a tender which showed the price for 4 ships as $67.8m. That tender was on the basis that two of the ships would carry a 35 per cent subsidy and two would carry a 33 per cent subsidy. That would have meant the cost to the owner would be $44.7m. At the same time the Japanese put in a tender for $43m. Now, some 15 months later, when the bottom has fallen out of the world shipbuilding business,


-Now I want to give the facts- I hope those in cockies ‘ corner will listenjust to show that Ministers have been making untruthful statements over recent weeks to try to vilify the industry. The facts of the matter when their own country has high unemployment and when their own country’ has been subjected to an inflation rate of about 14 per cent, what price have the Japanese come up with? They have not added 14 per cent inflation to their $43m. They have knocked $5m off the price, cutting it back to $38m.

Mr Sullivan:

– That is productivity.


-Productivity, my eye. These Riverina cockies drive you mad on productivity. All that the honourable member for Riverina has ever been good for was killing people. Let us get the whole facts about the shipbuilding industry clear. Not only are the positions of State Dockyard workers in jeopardy but also the positions of the workers at the Commonwealth Marine Engine Works in Melbourne, which was to build the engines for the 4 ships. It is about time the Victorian members on the Government side got off their tails and started to do something about protecting their own industry and protecting their own workers from being thrown out of employment by their own people. Untruthful statements- I cannot say they are lying statements- have been made by responsible, or allegedly responsible, Ministers in this place claiming that there is a bounty of $13,000 per man in the shipbuilding industry. I seek leave to incorporate in Hansard a table- the source is the State Dockyard submission to the Industries Assistance Commission in August this yearwhich shows the bounty that is actually paid per man employed in the State dockyard and the amount that is payable overall.


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

The table read as follows-

are that the subsidy for the State Dockyard alone in 1976-77 is $6,291 per man. The projection for 1978-79 shows a drop to $3,381 per man. But based on the whole labour force throughout Australia projections show that the subsidy will

drop from $3,812 per man in 1976-77 to $2,049 in 1978-79. These are the facts that were presented to the LAC. They have not been challenged. They expose the extent to which the Liberal-National Country Party Ministers will go to try to justify the things which they do. Another thing they got up to was saying that the ships were going to cost $100m. Why does the Minister for Transport (Mr Nixon) not look at the real figures? They are available for him to examine the same as they were for me when I was Minister for Transport. In July 1975 the price of the ships was $67.8m and not $100m. Ministers should not tell lies. At least they should be prepared to tell the truth. I know that that is something that they find extremely difficult to do.

Government supporters- Oh!


-The lot of you. As far as the New South Wales Government is concerned, the Premier, Mr Neville Wran, came to Canberra a fortnight ago and put a proposition to the Prime Minister. I congratulate Mr Wran for doing what he did. What concerns me is this: What he put to the Prime Minister is going to cost the State Government some $7m. That $7m should not have been used as a subsidy for shipbuilding, which is not a State responsibility. That money should have been used to modernise that yard so as to make it more competitive with overseas yards that have had money spent on them and have been encouraged to improve their standards over the years. There has been very little capital improvement and capital investment at the Newcastle dockyard in the last 10 years. In fact a paltry sum of about $5m has been spent. If that dockyard was in Japan the Japanese would have been improving it at the rate of about $5m a year.

Sure, the Australian industry is inefficient at the moment. Basically it is inefficient because the New South Wales Liberal-National Country Party Government was not prepared to do anything about it, to put money into it and to build it up so as to make it competitive. The main machinery there was taken from the Walsh Island dockyard which closed in 1933. That just shows the garbage we have to put up with from the Government of this country.


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


-I welcome the opportunity to enter this debate following the honourable member for Newcastle (Mr Charles Jones).

Mr James:

– You cannot equal his speech.


-Oh, I will equal it. This gives me the opportunity to refute some of the fallacious criticisms and statistics which he used in relation to the Budget and the state of the economy. I want to speak about the economic management aspects of the Budget because essentially I think it was a Budget designed to attack the major problems of inflation and unemployment. We all know that both inflation and unemployment are old problems. It is the simultaneous occurrence of inflation and excessive unemployment which is relatively new. To understand the Budget strategy of the Government one requires an understanding of the nature of this problem and therefore I will speak briefly on this matter.

Traditionally, and certainly according to fairly recent behaviour in economies of countries such as Australia, there was an element of selfcorrection between unemployment and inflation, but this trade-off no longer exists. The incompatibility between the two relied on price and wage flexibility. This was relevant in a different age when the structure of the economy and the attitudes of the major decision makers from both labour and capital were very different from what they are today. Inflation and unemployment no longer can be seen as alternatives but as being entirely interdependent. There has at least been some consensus, both overseas and within Australia, in establishing a connection between inflation and unemployment which supports this Government’s Budget strategy. This connection was even recognised last year by the last Labor Treasurer when he brought down the final Budget of the Australian Labor Party. It certainly has been endorsed more recently by more reputable institutions and economists. The Reserve Bank of Australia stated in its annual report which it handed down last month:

For the community to countenance the persistence of inflation would be to hinder the growth of economic activity and prejudice national living standards.

The Secretary of the Treasury in the United States of America also agrees with this strategy. It should be remembered that the USA has successfully extricated itself from an economic position similar to ours. In addition, the communique from the recent meeting of the ministerial council of the Organisation for Economic Co-operation and Development also endorsed this approach by the Government. Therefore the strategy of the Government, to combat inflation as a prerequisite for economic growth, has been widely endorsed. But to understand the Government’s policies and the futility of the Opposition’s criticism of the economic aspects of the

Budget one requires a close understanding of the causes of inflation and, in particular, how this problem might be tackled when it is accompanied by high unemployment.

We hear the same causes being put forward often enough in relation to inflationary situations throughout the world. They usually include an over rapid increase in government expenditure, excessive wage demands, weakening of monetary discipline, monopolistic practices and increased international speculative capital flows. A number of other reasons are often put forward. In regard to Australia at least three of these causes have been significant. Notwithstanding that, I think it is essential to realise that all those factors which I have mentioned are more the symptoms of inflation than the causes. They are certainly closely related to inflation. I submit that more basic forces reside within the structure of our economy which allow these factors to exert their influence. Of these fundamental forces, two stand out in my mind. Firstly, community expectations of government have increased substantially in recent years. This is a problem only when the Government’s response bears no relationship to the nation’s resource capacity to meet these expectations. This has been Australia’s recent experience. Secondly this factor, when it is combined with the long-term changes to the structure of the economy, has produced the present economic dilemma. This structural factor is related to what I mentioned earlier about the disappearance of the classical incompatibilities between inflation and unemployment. No longer is the economy a fluid structure in which traditional economic relationships and responses can be automatically predicted. The economy is now more rigid. There are heavy concentrations of labour and capital. These developments have meant that well organised and powerful economic groups now have sufficient strength to pursue their own ends. Whether it is in accord with their relative bargaining position at any point in time- although I concede that this should not always be a consideration, particularly if the wages share of national income is too low- they can pursue their own ends, but whether it is in the national interests as put forward by the government of the day is another matter. It is this kind of fundamental structural change and the rigidities it has imposed on the economy which led to the disastrous economic events of 1974 from which we are now trying to recover. For example, in 1974, at a time of record unemployment, average weekly earnings increased by 28 per cent and consumer prices by 16 per cent. Therefore, real wages rose by some 10 per cent.

This occurred in a year in which average productivity fell as output contracted and when the gross operating surpluses of companies, as a percentage of gross domestic product, were at their lowest ever level of 10.6 per cent. This kind of imbalance, which was partially institutionalised by full wage indexation, led to further increases in both unemployment and inflation. With this sorry background in mind the Reserve Bank, in its annual report, suggested quite independently an economic management strategy for present circumstances which is totally in accord with what this Government has been doing since it took office. I quote from the report:

The story of economic management is essentially the story of measures to redress imbalances and to return the Australian economic framework to a condition from which it could resume normal growth and development.

To implement such a strategy the Reserve Bank stated that the need is for the main arms of stabilisation policy- that is, wages policy, monetary policy and fiscal policy- to keep moving firmly towards restraint so that the subsidence of inflation in Australia does not lag long after that of other countries. Ten or 15 years ago to contemplate such measures of restraint at a time of high unemployment would have been considered contrary to all conventional economic wisdom. What the Labor Party does not seem to realise in its constant criticism of this Government is that conventional economic policies are no longer relevant. We no longer have a conventional economic problem. It is a new problem, but the Opposition cannot and will not accept this.

As this is meant to be a debate, I take time to answer some of the criticisms of the economic management aspects of the Budget which have been put by members opposite. Their criticisms have suggested that they still do not fully understand the present economic problem facing policy makers. Their spokesmen have not as yet offered any positive alternatives to the Government’s approach. Let me take, for example, the criticism of the Government’s recognition of the need to exercise restraint in wages policy. This criticism does not recognise the fact that structural factors have meant that money wages in both Australia and overseas have, in recent years, developed a downside rigidity. Money wage increases have become totally unrelated to productivity and when combined with declining levels of economic activity have increased inflation, and therefore have made the solving of the unemployment question a more intractable problem through both its domestic influence on returns to other factors of production and through its influence on the internal cost structure of Australia in relation to our trading partners. Even the Reserve Bank said that the growth in real wages in 1974 crammed into 12 months the normal trend growth of real wages accruing in about 3 years.

There is nothing wrong in this in certain circumstances, but when this money wage rigidity is combined with falling productivity, and contracting total output, there is an inevitable impact on unemployment. To criticise the Government on the grounds that there will be a reduction in real wages and that this will have an adverse effect on consumption expenditure ignores some very important considerations. It also ignores the fact that in 1974 the Labor Government recommended a reduction in real wages by submitting to the Conciliation and Arbitration Commission that it should grant an indexed but flat rate increase derived by the application of the movement in consumer price index to the minimum wage.

Budget Statement No. 2 quite properly draws a distinction between award wages and real earnings both on average and in aggregate. To place total emphasis on award wages, as determined by the Conciliation and Arbitration Commission, and to ignore other earnings components is to distort the key issue in this area. Award wages are largely autonomous and do not reflect the level of economic activity. They reflect what have recently become independent variables in the system, such as price increases, and they certainly do not represent productivity changes.

The significance of over award increments and overtime payments which are more closely related to the level of economic activity has been ignored by the Opposition. There are indications already that these components of earnings are strengthening and will help offset the influence of partial indexation of award wages. It should also be remembered that with partial indexation, there is no decline in the real value of award wages for the low income earners. It is also important to realise, particularly with the projected gross non-farm product increase of 4 per cent, that award and over award payments are not totally independent. Any reduction in award wages certainly leads to increased pressure for non-award payments.

With these factors taken into account, together with the smaller projected increase in the consumer price index, I think it is reasonable to assume that real average earnings per employed person will not decline in the coming year. With the projected work force growth, of course aggregate real earnings will also increase. This is also ignored by the Opposition. It was ignored by the honourable member for Newcastle (Mr Charles Jones). The Opposition has ignored the fact that this Government has halted the decline in employment. Between the end of 197S and July 1976, the number of people unemployed as a percentage of the work force has remained the same. It is still far too high, but it must stop rising before it can begin to fall.

Budget Statement No. 2 also provides an answer to the Opposition criticism relating to the impact of disposable family incomes on consumption expenditure. In view of the combined impact of personal income tax indexation, increased pension and other welfare benefits, and in particular the effect of the family allowances scheme. I think it could at least be stated that real disposable household incomes will not decline in the year ahead. The family allowances program, after allowing for the abolition of the tax rebates for children, will provide a net income gain for low income families which have a relatively high propensity to consume, as do pensioners, who with full and automatic indexation are assured of having their incomes increased proportionately by at least as much, and probably more, than the general working population.

Even if all those assumptions were not true, I think it is quite incorrect to assume that any decline in real wages would automatically lead to a reduction in consumption expenditure. To suggest that an automatic relationship exists between these 2 factors is to ignore the lessons of the recent past. For example, between the March and December quarters in 1974, male award wages rose by 16 per cent but consumption increased by less than 1 per cent. So, this kind of argument which is put forward by the Opposition does not stand up to scrutiny.

The Budget also has been the subject of a quite amazing statement by the Leader of the Opposition (Mr E. G. Whitlam) that unemployment will be created deliberately by this Government as part of the strategy to defeat inflation. That is an argument without logic and it completely ignores the economic experience of Australia under his own Government. As I said earlier, structural rigidities which have emerged in many Western economies have meant that one no longer can impart a particular stimulus in order to extract a particular response. Traditional relationships have changed. To suggest, as the Leader of the Opposition does, that there is a trade-off between inflation and unemployment ignores this basic premise. The two are not alternatives; one is related to the other. To suggest otherwise is to revert to the economics of the 1960s. I well remember Pierre-Paul Schweitzer, the former Executive Director of the International Monetary Fund, constantly stating that international instability of major currencies in the 1960s resulted from the fact that all countries were seeking full employment, which automatically led to inflation which in turn automatically led to balance of payments difficulties. This same kind of relationship existed in Australia in the early 1960s; but it does not exist any longer, because of the factors which I mentioned earlier. The Opposition, in suggesting that we are creating unemployment to combat inflation, is ignoring the lessons of its own Administration when inflation and unemployment coexisted at record levels- not as alternatives, but as totally related factors. Even the then Treasurer, the honourable member for Oxley (Mr Hayden), recognised this in his Budget Speech last year. He realised that Keynes no longer was relevant. He recognised the problem but did nothing about it. Now the Leader of the Opposition has changed his Party’s attitude again, and again he is wrong.

The Opposition also has questioned the Government’s public sector expenditure cuts. In his reply to the Budget the Leader of the Opposition stated that stagnation would result from the Government ‘s cutting public sector spending. He advocated more government spending as a means of solving the unemployment problems. In the early 1960s he may have been correct, for then high unemployment was accompanied by low rates of inflation and could be remedied without putting pressure on prices. That was the age when prices reflected more fundamental values, such as demand and resource utilisation. But to suggest this now obviously is not appropriate. The past 3 years has shown that massive public sector expenditure as part of economic strategy does not reduce unemployment. Under the Labor Government the highest ever rates of increase in government spending occurred at the same time as record unemployment. The Reserve Bank also has supported the Government’s strategy in this area. So much for the quality of the Opposition’s criticism in that regard.

I also refer to the Opposition’s claim that we have increased pay-as-you-earn taxation. This completely distorts the true position of the individual taxpayer. Firstly, the increased receipts will be due partly to an increased number of people becoming employed. Secondly, part of this receipts figure contained in Budget Statement No. 4 is due to the loss of tax rebates for children, but this has been more than countered by the increased transfer payment to families through the family allowances scheme. Thirdly, it represents the Medibank levy- a concept which the Labor Party supported, although it would have financed the remainder of the Medibank scheme from a Consolidated Revenue swollen by inflationary income tax receipts. Fourthly, the Opposition ignores the fact that taxpayers are being saved $ 1,050m by the introduction of full personal income tax indexation which we all would have paid from our own pockets if Labor was still in power. Finally, the Opposition ignores the fact that in this Budget there will be no increases in major indirect taxes, although in the 3 years 1973-74 to 1975-76 Labor increased taxes in this area by more than $ 1000m.

In conclusion, I simply say that the Government in this Budget has acted responsibly. It has taken hard decisions, but it has ensured that the disadvantaged groups in society will not suffer. While the rate of increase in government expenditure has been cut, government expenditure on social security and welfare has increased by 23 per cent. The family allowances scheme has provided a massive redistribution of income from the wealthier families to the poorest families in the country. This Government has been the first in Australia ‘s history to introduce fully automatic adjustments to the pension so that pensioners will no longer be subjected to the possible abuses of political expediency. There has been a very substantial increase in the provision of assistance to handicapped people. In the next 3 years the Government will provide $225m under the aged and disabled persons accommodation program. Over the next 3 years approximately 15 000 beds will be provided under this program. This is almost 25 per cent of the total number of beds provided in the previous 22 years.

I have pleasure in supporting a Budget which is both responsible from an economic management point of view and which ensures that disadvantaged sections of the community will have their circumstances improved. In supporting the Bill I reject the amendment moved by the Leader of the Opposition.


-In rising to support this Budget brought forward by the Treasurer (Mr Lynch), I do so on a note of congratulation to the Treasurer and the Government as I believe the Budget went further in providing benefits and a climate for recovery than the public expected, particularly in view of the disastrous financial legacy left to it by the previous Labor Administration. In view of that legacy and in view of the record of Labor’s administration I have no intention of giving the amendment moved by the Leader of the Opposition (Mr E. G. Whitlam) my support.

I would like to enter this debate on the subject of the coal export duty, a levy that this Government has reduced by 25 per cent and intends to phase out over the next 3 years. It is certainly a subject that has been well aired in this House during this debate. Let us look at the Labor intention in introducing this levy. It is nothing more than a tax on profits; a device to rid Australia of multi-national participation in the coal industry and a tax applied so indiscriminately that it rids Australia of any further developmental opportunity while that levy exists. The previous Minister in charge of national resources, with the support of the Labor Cabinet, except one member, effectively brought in the policy of letting our wealth stay in the ground. I was interested in the comment made by the honourable member for Corio (Mr Scholes) in this House on Tuesday, 24 August, when he said:

You cannot fire a shotgun into a crowd and then apologise to the people you hit on the basis that they were not the ones at whom you were aiming.

Mr Connor’s shotgun blast aimed at the Utah Muring Co. Whilst it hit that company, it inflicted only a minor wound but it inflicted a mortal wound on many an Australian based company and killed outright developmental prospects in Australia up until this moment. Far from an apology the complaints now issuing forth from the Labor benches indicate that the Opposition would have persevered irrespective of the great damage it had inflicted and would have continued to inflict on the Australian coal mining industry. Unfortunately the charge in the shot was not sufficient. The multi-national survived, but this is typical of the shoddy workmanship and the methods adopted by the Labor Party.

Let us look at this question of multi-nationals. On Thursday 26 August we had a tirade in this House from the honourable member for Hunter (Mr James)- perhaps he will come back into the chamber- telling of the trials of unionists in the New South Wales mines and going back further into his history and describing the conditions his ancestors worked under in the mines in Wales where he intends to visit. His references to the Queensland coal industry were 13 years old. They are completely out of date. The honourable member is obviously unaware of the latest in mining techniques and conditions that have been pioneered in this country by the multi-nationals. Without a doubt, had not Utah Mining Co. been prepared to develop the Bowen Basin coal mines, to risk its capital, to use its know-how and marketing expertise that coal would be still where Mr Connor wanted it- in the ground. It was known to exist in the 1940s but no one with the local capital or Australian capital was prepared to take the great risks necessary to bring the venture to a successful reality. This is a story of a modern multinational- not exploitation of material and labour resources, but one of modern consideration, examination of risks, use of the most efficient methods and fitting in with local conditions.

The Labor Party says that we are better off without foreign capital, knowing that that capital has always been the source of the development of the great nations. England built America, Russia poured money into Egypt and even the Labor Party sought foreign credit from the Arabs. Local capital is not sufficient for the type of development we need. Nor is capital the only ingredient required. The experience and the expertise brought to Australia from overseas provides Australia with the most up to date techniques, the use of which makes the mining of these vast deposits of coal a viable proposition. In fact, today the highest standard of expertise in the world in relation to modern coal rnining methods is centred in Australia. This expertise is itself a valuable and saleable commodity. While we have companies such as the Utah Development Co. to provide this capital and expertise I have no hesitation in saying that I believe in the system, I believe in multinationals.

The Australian people are a blend of many nationalities. Why should our business activities also not profit from outside influences? In the instance of one area alone multinationals in their involvement in central Queensland coal have given employment to over 5000 persons. They have created and financed 3 townships at Blackwater, Dysart and Moranbah. They are currently catering for the needs of approximately 12 000 people, providing for rail and port facilities and they have established known reserves of over 2 billion tonnes of coal in the basin. The money used to create, develop and work these enterprises has flowed through the Queensland communities. It has given benefits further afield than those of direct employment, such as in railways, service and associated industries.

All of this is far removed from the hard times described by the honourable member for Hunter. Like his thoughts they are wed to the past. The removal of the levy is not a loss to this

Government. In the case of Utah, the Government recovers its 42.5 per cent in tax on money which would have been paid as levies. But in the broader sense the Government will profit from the development works of Hail Creek and Thiess Peabody Mitsui Coal Pty Ltd at Riverside, Por.trel and Wardswell mines. These mines could not have been established because of the great increase in the cost of development since 1972 unless the levies were removed. True to Mr Connor’s promise this vast wealth would have remained in the ground. Only now, with the anticipated removal of the levies and the application of accelerated depreciation to capital expenditure on mining development can we expect this anchor, the concrete shoes in which the mining industry has stood for over 3 years, to be removed. One should never forget that the duty was a tax intended to be on what was an imaginary superprofit. It was therefore discriminatory and unjust. Legalising the tax made it no less than an immoral imposition. I ask honourable members to consider the precedent as it would apply to any other export from an industry which could claim temporary prosperity, such as sugar and grain. One can only agree with the decision that it should be phased out.

I turn to comments made by honourable members opposite during this current debate, particularly to the announcement of Utah’s profits for the last 9 months. If one could relate this profit to a percentage of capital committed, then one would possibly find that it would not exceed the modest return which anyone would expect from an investment in the security of a bank or building society. Because the profit is earned by a multinationalremember it has a percentage of Australian equity- the Labor Party expects that the company should necessarily have a lesser return or, preferably, a loss. Certainly Utah’s profit, measured in millions, appears to be a large amount, particularly in comparison with the reduced profits and bankruptcy of business under Labor’s administration over the last 3 years. The profit is a figure to which we are unaccustomed but related to the size and cost of the enterprise, related to the pressure from inflationary costs and related to the risks involved, the return, as I mentioned earlier is reasonable. Without a doubt Mr Connor’s attempt at nationalisation was both clumsy and harsh. Nationalisation means a 100 per cent ownership in a loss as compared to a 42.5 per cent participation through tax on profit which is a certainty. Multinational companies have provided us with such a certainty.

Mr Stewart:

– What is Anthony’s policy?


– This is my policy. Opposition spokesmen have laboured the point that Utah’s profits will be taken out of the country. This disregards altogether the Australian equity and the profits retained in reserves.

Mr Stewart:

– We did the footslogging.


– Footslogging? Honourable members opposite put the concrete around their ankles. The principal point is not what Utah has taken out of this country but what it has left in this country. What the company has left in Australia is considerable and this is the principal point. The contribution to Australia has been major. On the central Queensland coal fields, the evidence is in the form of wages and salaries retained in Australia to provide a living for the 5000 working people who would have been unemployed under a Labor Government. Comfortable communities have been established in which 12 000 Australians currently live. There is also the benefit of payroll tax paid to State governments, royalties paid to States, freight to pay for railway lines, impeccable restoration of mined land, service and port facilities, the 42.5 per cent paid by way of tax collections on net profits and, until 17 August this year, $6 per tonne paid on coal exported. This is a tremendous contribution to Australia. It is evidence of thriving enterprise where the alternative under Labor would have been wastelands, hidden wealth, lesser economic growth but, worse still, lost opportunities.

One way out of the present perilous economic situation lies greatly with a vibrant and prosperous rnining industry. We should not only welcome help from these multinational companies who can assist towards this end, we should positively encourage it. Even now, our equity guidelines on mining development do not always carry the same percentage of responsibility on Australians to raise the necessary capital. The burden for this is still falling heavily on overseas sources which are not encouraged by a small participation in profit. I hope the Treasurer and the Minister for National Resources will closely monitor this situation to ensure that our continuation of present equity guidelines does not slow down a return to full development.

The mining industry is in its infancy, especially so on the huge Bowen basin projects. After an initial testing or trial period, the position in regard to royalties and freights will need review, just as will the expansion of our exports and the release of additional mining leases. I have been advised that in Queensland the equity question was intended at all times to provide for increased

Australian participation in return for extended leases so that the Government and the Australian people would always be in increasing participation in income and management. This Government, through the Budget, has set the economic climate in the coal industry by declaring its intention to phase out the coal levy and in the mining industry generally- in exploration and development- it has set the climate by introducing tax incentives. It is now up to the industry and Australians to respond to the opportunities.

While congratulating the Government on the presentation of the Budget, I would like to make mention of the prophets of gloom on the Labor benches who made wild forecasts of the contents of the Budget prior to its announcement. The chief leader in the chorus was none other than the previous Treasurer, the honourable member for Oxley (Mr Hayden). His forecasts were of massive increases in indirect taxes on spirits, cigarettes and petrol- commodities viciously attacked by increases during his Government’s period in office. This attack was coupled with the withdrawal of support for the equalisation of petrol prices in country areas. Such a person, being the perpetrator of such measures and a member of a government that introduced these measures, as the Party’s commentator, could be excused for being wrong once again. The Budget contained no such increases, direct or indirect, in such taxes. But did we hear an apology from this prophet? Of course we did not.

The fact that has become obvious is that the honourable member for Oxley in the presentation of his 1975 Budget perpetrated the greatest ever fraud on the Australian taxpayer. The inflated wages were levied with more than inflated rates of tax, as also were overtime earnings. Those taxpayers now receiving demands for payment instead of refund cheques in respect of their taxation returns now bear painful witness to this fact. At a time when he boasted that his Budget gave tax concessions to the worker, including people in the middle class, in actual fact he was imposing a greater burden. The result has been that the will of the Australian worker to maintain productivity or increase it through overtime has been lost. In spite of indexation introduced by this Government, the will to work and the morals of the workforce are being adulterated. What is the purpose of overtime if taxation will take more than the worker himself will receive? I see this in my own area. It is a common view unfortunately adopted by too many Australiansemployee and self-employed alike. We believe that the road to recovery includes a return to productivity. But with intermediate income tax rates so high, the moral fibre of our workforce is being eroded.

I believe that there is a strong case for the Government to provide a suitable climate and I agree with the Treasurer that the suitable climate possibly would be achieved best by providing partial tax relief on overtime wages or by a general reduction on tax rates of at least 5c in the $1 on incomes from $5,000 to $20,000. Quite apart from incentives, the wage brackets consisting of incomes of $5,000 to $8,000 are urgently in need of review because families in these brackets face a daily battle for survival and can ill afford the inroads taken into this bracket of income by taxes at the rate of 35 per cent. Such reductions could be of assistance in a situation where it is agreed that Australians are overtaxed. If in response the Australian people could accept productivity as their goal and if they could adopt a different approach to self-help as an alternative to Government handouts, we would be on the way back to recovery.

An industry that has not been particularly assisted in this Budget is the tourist industry. Our Government’s termination of the office of the Minister for Tourism has left a vacuum that even Senator Cotton ‘s deep interest in the subject cannot fill, in view of his commitments to his total portfolio.

Mr Stewart:

– Did you have a ministry for tourism before?


– I am referring to the previous Government and I pay tribute to it. The challenge that the tourist industry in Australia faces today is great. Overheads in the accommodation industry because of wage conditions are greater than in most other industries. Tourism is not a 5-day week industry. It is a 7-day week industry and the award conditions applicable to a 5-day week provided a formidable hurdle for owners when it comes to maintaining profits and competing with overseas attractions. New Zealand has attempted to assist its industry by penalising overseas travellers by charging a levy. I hope that this is not the answer to our industry’s problems. There has to be a way in which we can encourage Australians to opt for a national holiday in preference to an overseas holiday.

I believe that several avenues could be investigated to give local holidays a boost and the Australian tourist industry a chance to compete. Firstly, we would need a 7-day award, divorcing a 40-hour week from the penalty of high overtime rates. This would offset the little return to proprietors that is presently received on the cost of employees’ meals and of providing the required standards of staff accommodation. Secondly, the buildings of the tourist and accommodation industries should be regarded as necessary items of plant for tax depreciation purposes. It is unfair and unjust that taxation depreciation is not allowed on business buildings for any purpose other than rural. This principle is accepted by accountants and it should be accepted by the Taxation Office. The tourist industry has a higher claim than most and a claim equal to that of the rural industry for a taxation depreciation allowance on buildings. Even a 5 per cent allowance would give some degree of recognition to its special difficulties and high rate of capital expenditure and would stilumlate the industry.

Internal air fares are yet another problem and the cost is accentuated in so many ways by this Government’s increase of licensing fees and landing charges. The current difficulties brought about and highlighted by air traffic controllers this week with their outlandish claims, strikes and work-to-regulations policies of its airline employees do not enhance the reputation of our air services or improve efficiency or reduce costs. The cost of the doubtful service of those who are expected to perform their duties is all part of a high air fare which makes it cheaper to holiday overseas than in Australia. Nor will anyone convince me that the accepted practice of parallel flights by the major domestic airlines does anything to cheapen air fares. The tourist industry received little benefit from the investment allowance because of the unit-of-plant interpretation placing too low a cost value on individual units for those expenditures to qualify the $500 minimum basis. Positive assistance would provide encouragement and economies to an industry with great potential but presently struggling under great difficulties. I give this Bill presented by the Treasurer my full support.


-It gives me much pleasure to support the Government on Appropriation Bill (No. 1 ). I must confess that I am extremely disappointed that more Opposition members have not preceded me in this debate.

Mr Stewart:

– We have run out.


– Yes, they have run out, and the Opposition is just not there. This Budget has been well received by the Australian public. There is not the slightest doubt about that. Press reports indicate that the Australian people in all communities and in all walks of life have accepted this Budget as being a good and responsible Budget. The Budget is one that maximises the benefits to the people while at the same time, through more efficient management in the government departments, it is able to reduce income tax rates and to hold those taxes that usually rise year after year with regular monotony. I refer to those items on which duties are usually increased in a Budget, such as beer, cigarettes and wine. There was speculation in the Press about such items prior to the Budget. I think it was a disappointment to our friends on the Opposition benches that we did not conform to the usual practice of increasing duties on those items, as is regularly done.

The Budget is a brave one- brave because the Treasurer (Mr Lynch) has realised the need to continue with a reduced but still sizeable deficit. We all know of the steady increase in deficit during the 3 years of Labor rule. I am so pleased that our Treasurer, in his Budget, has seen fit and seen the necessity to carry on with at least some deficit. To try to wipe out a deficit of almost $5,000m in one year would be disastrous to the economy. Too much damage has been done. Our task in the future is to make sure that we gradually reduce that deficit to get the Australian economy back on a sound footing without hurting the Australian people. I am pleased to see that this year the Treasurer has budgeted for a deficit of $2, 600m. That is a very big improvement on last year’s deficit of almost $3,600m and a deficit that was heading towards $5,000m had we not won the election on 13 December and saved Australia from a very desperate situation.

I should also like to congratulate both the Prime Minister (Mr Malcolm Fraser) and the Treasurer on their excellent Budget security. A member of the Opposition talked about Budget leaks in connection with this year’s Budget. In reality there were no Budget leaks, and any claim that information had been leaked was completely false. This Budget has involved one of the best security exercises in many years, far better, considering especially the leaks from the previous Labor Government Budgets last year and the year before. Only last Tuesday, the Leader of the Opposition (Mr E. G. Whitlam) talked about the ‘well informed Press speculation’, to use his term. All I can say is that these leaks just did not exist.

I know that members of the Opposition have had some difficulty in comprehending the figures in the Budget because it is rather lengthy and a little bit thick for them to read. It is very difficult for them to digest.

Mr Martyr:

– Can they read?


– I do not think they can. I think their past performance has proved that they just do not understand the economy. But most Government supporters are able to go through these figures and size up all the advantages to the Australian people. Regardless of what is said by members of the Opposition, built into the Budget is our intention to bring inflation in Australia down to a single digit figure- 9 per cent- in 12 months time. That is a lot better than the inflation level when we came to power. It is a long way towards making life more bearable for the average Australian person, and in fact for all Australian people.

Along with the downturn in inflation which we expect and which will eventuate, we have automatically reduced interest rates. This reduction will allow young Australian people to obtain loans at interest rates they can afford to repay to buy houses. It will also increase investment because as anyone who understands any basic facts about the economy will know, if we are to get investment going returns marginally will have to exceed the inflation rate. Nobody is going to invest money at a 10 per cent return when inflation is running at 14 per cent or IS per cent. In such circumstances one only goes backwards each year. I do not think anyone with any sense would do that. So when we get our inflation rate down to 9 per cent there will be a very large amount of investment.

I think many honourable members have covered the effects of a high rate of inflation. We have already seen what happens- massive unemployment and hardship for many people. We disadvantage those people who are on fixed incomes and pensions. In fact very few people escape from being casualties of high inflation. I do not want to repeat the history of unemployment in Australia over the last 3 years. I am sure that this has been adequately covered by many of my colleagues. I do not wish our cries about this subject to be repeated with the monotonous regularity that the Opposition displays with respect to its dismissal last November by the Governor-General.

The Budget is based on a Vi per cent fall in Australia’s unemployment. Unemployment is running at a little under 5 per cent at present. In 12 months it will be down Vi per cent. That 1 ¥i per cent fall will be achieved after accommodating the 200 000 school leavers who will come onto the employment market at the end of this year. I am pleased to say that according to the statistics in the back of the Budget document, in almost every case expenditure has been increased. However, expenditure has not been increased in the unemployment area. This is not because we are going to pay the unemployed less but because we intend to have fewer unemployed. As a result there will be a saving of about $40m. I might add that there is strong evidence now that indicates that this fall in unemployment will eventuate. Recent statistics on the average overtime per employee worked indicate that average overtime has gone from 1.8 man hours per week to 2.5 man hours per week.

What is happening in industry today is that before more staff are put on employers are taking full advantage of their present staff and are building up the overtime rate worked by employees. When the overtime reaches a certain level obviously the next step is to put on more employees. I might also add that the average rate of overtime at the height of the boom period when the Liberal-Country Party was in power in 1972 was 4 man hours per employee per week. So we are approaching the stage where overtime will reach its maximum level and the next step will be for manufacturing industry and industry in general to put on more employees.

I am pleased to tell the people of Australia that this Budget will assist many people in my Sydney electorate of Barton as it will the majority of the Australian people. The Budget helps children, students, mothers, wage earners, pensioners, owners and operators of small businesses and private companies, local councils and shires, and all State governments, regardless of their political philosophies. I am both mystified and amused by the comment made by the Leader of the Opposition in his Budget speech when he said:

Big business comes first in the Fraser Government- the people come last

I can assure the people of Australia- many of them are listening to the broadcast of these proceedings this evening- that they come first. All the Australian people come first with this Government. We wish to help, and we realise our responsibility to help, all people and all pans of the Australian community. I should like to deal with some of the outstanding items of the Budget. I think the item that has received the most generous comment is that relating to social welfare. Total expenditure on social welfare is $6, 187m- almost 25 per cent of the total Budget outlay, and a 23.5 per cent increase on last year’s budgetary item. The increase alone is greater than the total allocation for social welfare just a few short years ago. In fact the amount allocated for social welfare in this Budget makes the amount allocated for it only 5 years ago look like petty cash. It will be the policy of this Government, as the economy improves and as more funds become available, to channel much of these funds into this worthwhile field.

I have heard previous speakers, including the honourable member for Braddon (Mr Groom), mention that pensions have risen to $43.50 a week for single pensioners and $72.50 a week for married couples. This will cost the Australian people or this Government an additional $370m. Whether considered against the basic wage, the minimum wage or the average wage, age pensions have never been as high as they are under this Budget. That is not the end. This Government intends to increase pension rates further, when the country can afford it. We have also honoured our promise to adjust pensions automatically according to the consumer price index. We have removed the property means test associated with pensions which was unfair to many pensioners. We have increased war pensions and service pensions at a cost of an additional $82m. We have increased invalid pensions at a cost of an additional $88m. We have increased the handicapped children’s allowance by 50 per cent and the children’s benefit by 43 percent.

Other speakers have mentioned the very generous new family allowances, because they deserve to be mentioned. As the Budget shows, before young families and people in need benefited under the generosity of our Government, family allowances were very small and under the inflation that exists today did not do very much. Now, under the new rates a family with one child gets $3.50 a week; before it got 50c. For a family with 2 children the allowance is $8.50 a week; before it was $ 1.50. That is a massive increase of hundreds of per cent. The allowances increase according to the number of children in the family. There are many 4 children families which receive $20.50 a week. The honourable member for Swan (Mr Martyr) has 7 children. I would hate to work out how much he gets in family allowances. He probably would not be able to carry it home. We can all have our little fun about child allowances but they hit home in the right place.

Mr Scholes:

– I bet he gets less money in actual cash than he did before.


– How many children does the honourable member have? These allowances hit home in the right place. If there are people who need help in Australia they are the mothers and young families. To think that the Leader of the Opposition said that we do not care about people! The total cost of these new family allowances will be $ 1,000m this year, and next year it will be more. Another thing I should like to mention is a small item but I think a most important item in the Budget. It certainly helps the people in my electorate of Barton. I refer to the $4m allocated for construction of additional senior citizen centres. I have had the pleasure of visiting many senior citizen centres in my electorate. We have them at Mortdale, Oatley, Allawah, Ramsgate, Brighton-Le-Sands and Kogarah. I know the pleasure that these centres bring to elderly people and the comradeship that is developed there. I realise the importance of such centres to the community. We have allocated $4m for further construction of these centres. That is money that is well worth spending and which will bring a lot of pleasure to aged people.

Let us look at education because people continually claim that we do not allocate enough money for education. We have been most generous. As with social welfare, we have generously recognised the continuing need for a high priority for education expenditure. Both funds provided to the States to meet their obligations for educating our children and funds provided to colleges and universities to ensure increasing facilities for our young men and women, tike the allocations for social welfare, make allocations a few years ago seem like petty cash. We have been most generous in this field. Let us look at health. Only a few years ago we spent $300m a year on health. This year we will spend $3000m. I might add that we are honouring our promises to maintain Medibank. We are not only maintaining it but are also improving it. We are giving the people a wider choice. We are ensuring that everybody has the opportunity of free health services and that people have a far greater choice now than they had before.

I should like to spend a little time on the new housing voucher system, something that has been introduced into the Budget for the first time. I know only a small allocation of $75,000 has been made but it is the forerunner of something that will be tremendously important to the people of Australia. A recent survey revealed that money for housing that is channelled through the States is not reaching families most in need. This study disclosed that in Australia 144 000 families are in need. Of these, 123 000 are not receiving help from the States. As I said, $75,000 has been set aside in the Budget to set up a pilot workable system which will eventually provide rent assistance for families in need. This will allow families some personal choice in selecting premises in which to live. I think that is tremendously important. This pilot scheme will go a long way towards alleviating many hardships in the future. Many people for some reason or other have not been able to purchase their own homes; they have had to rely on rented premises. Of course, with inflation rents are now completely beyond their reach.

What about personal tax indexation? I do not think enough noise has been made about that. It has cost us $ 1000m a year to alter the tax scale. Once again, at page 1 10 of the Budget Papers we find that not only is the tax scale being indexed and altered to overcome the need for people who get rises in pay to pay exceptionally high taxes, but also that the deduction of $540 which existed last year and other deductions have been increased. The $540 general deduction has been increased to $610. Whereas under the previous tax scale people were obliged to pay tax at the rate of 20 cents in the dollar for earnings of up to $2000 now as a result of indexation they will have to pay a rate of 20 cents in the dollar for up to $2260. The whole scale has been revised to the extent of 13 per cent. That certainly will help a lot of people and will stop the spiralling of government tax collections year after year.


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


-When the Fraser Government was elected on 13 December last it was given a clear mandate by the Australian people to put the economy of this country on its feet. This Budget aims to do just that. It represents a further stage in the continuing economic strategy which the Fraser Government has pursued and developed since coming to office. The Whitlam Labor Government gained power in December 1972. At that time unemployment was running at approximately 1.5 per cent of the work force. In actual terms it was about 136 000 people. When the Labor Government was thrown out of office by the Australian people last December the number of unemployed had risen to 328 000, which is close to 5 per cent of the work force. The rate of inflation was 4.5 per cent in December 1972. In December 1975 it was close to 17 per cent. So let there be no doubt about which government presided over the economic catastrophe which has befallen Australia during the past 3 years or so. Let there be no doubt about the basic cause of our high unemployment and high inflation rates. Like Micawber, the Whitlam Government overspent. As a result, Australia found itself with its worst recession since the 1930s.

The Fraser Government has been handed the task of putting the economy back into shape. Decisions that will need to be made may not be palatable or popular, but the Government will not turn back from such decisions on those grounds. As one section of the media has said, the long, slow haul has begun: Australia is pointed towards a slow but steady recovery. A significant factor in this recovery has been the existence, both during the election campaign and since, of a definite Government economic strategy- a carefully considered and rigidly adhered to plan to combat the problems besetting the economy. For the first time in 3 years the Australian people have been able to see that they have a government in Canberra that is accepting responsibility and that possesses the competence and the expertise to restore the nation to prosperity. That belief has been reinforced by this Budget.

It is gratifying to note that in the June quarter the rate of inflation dropped to 12.3 per cent from the peak of 17 per cent in 1974-75. However, unemployment figures continue at an unacceptably high level and the reduction of unemployment will take time. I share the concern of the Government and of the Australian people that we continue to have a large number of people unemployed. I do not go along with the belief that a significant number of the unemployed are dole bludgers, as they have been called in the Press. The great majority do want to work. For example, the formation by some people of a group called Youth Organisation for the Unemployed- YOU, as it is called- and the action of groups such as the Young Christian Workers prove that the young people do not want to be dole bludgers and that they do want to work. These young people suffer a severe financial loss as well as a severe loss of human dignity by receiving unemployment benefit. Regrettable as the high levels of unemployment are, however, it is important to understand that they are a result and not a cause of our current economic situation.

Full employment can be obtained only when we achieve economic recovery. We cannot expect a significant drop in unemployment until that time. The Government has stressed repeatedly that its entire plan for economic recovery revolves around the curbing of inflation as its first priority. The Treasurer (Mr Lynch) enumerated some of the effects of inflation in his statement to the House on 20 May, when delivering the Government’s economic package, and again in his Budget Speech on 17 August. He pointed out that if inflation continues at the crippling levels that we have experienced in recent years businesses will be forced to place emphasis on survival rather than development. Accordingly, they will cut inventory and employment to the bone and will find themselves unable to create any new opportunities for employment until there is a significant reduction in the rate of inflation. In addition consumers, fearing for the future, will save rather than spend and an increasing proportion of the local demand will be met from overseas as Australia’s international competitiveness progressively declines because we are pricing ourselves out of the market through continuing wage increases.

An inflationary spiral such as we have experienced in recent years eats away at the living standards of all Australians. It hits hardest at those in the community who can afford it least. I refer to those on fixed incomes, the poor, the disadvantaged, pensioners, the sick and others in similar circumstances. The Government has stressed again and again that only when inflation is brought back to acceptable levels will we achieve recovery. This approach has been endorsed on numerous occasions, recently and most significantly by the conference of Ministers of the 24 member nations of the Organisation for Economic Co-operation and Development of which Australia is a member.

I wish to quote 2 statements originating from that conference. The first is a statement made by the United States Secretary of the Treasury, Mr Simon, who said:

The policy errors of the past and our hopes for the future force us to recognise a basic reality: Inflation is the greatest threat to sustained economic development and the ultimate survival of our basic institutions.

The second quotation is an extract from the communique agreed to and issued to all the Ministers attending the conference. It is:

The basic premise on which this strategy rests is that the steady growth needed to restore full employment and satisfy rising economic and social aspirations Will not prove sustainable unless all member countries make further progress towards eradicating inflation.

I emphasise the ambitious objective of eradicating inflation rather than merely reducing it. Within our own community, there has been widespread endorsement of the Government’s approach to our economic problems. It is well recognised that, whilst measures such as the introduction of the investment allowance and now company tax indexation have great merit, they fade into insignificance when compared with the advantages which would accrue from a major reduction in inflation. Again and again in statements by business leaders, economists and others in the community, a common denominator is evident; it is almost universally agreed that attacking the high rate of inflation should be the Government’s first priority.

The Government acknowledges, however, as the Treasurer pointed out on 20 May and again on 1 7 August, that there is a need to move slowly to achieve a moderate balanced recovery. Again, this view has been widely endorsed. The communique of the Organisation for Economic Cooperation and Development records that Ministers accepted as an important corollary of thenstrategy that ‘restoration of full employment will be progressive and take a number of years’. Despite the understandable desires of many to achieve a return to economic prosperity and full employment in a short period, it is clear that the situation in which we find ourselves is not one which lends itself to a quick fix. We must ensure that the recovery is a sustained and lasting one that does not merely establish a base for a further and more severe bout of inflation. This could well occur if, for example, demand increases too quickly while insufficient investment continues, thus creating a bottleneck.

A principal method employed by the Government in its attack on inflation has been its efforts to cut public expenditure, to reduce the former projected Budget deficit of approximately $5,000m. Naturally there have been critics of this tactic. It is a method which must result in unpopularity as it removes or reduces funds in many areas, from many projects which unquestionably are deserving of government financial assistance. But a government cannot continue for long to spend money it does not have. This Government simply cannot afford all it would like to afford at present. It is very true that cuts in Government spending will add, in the short term, to the numbers of unemployed, and this will naturally create unpopularity. However, the Government has demonstrated it is willing to accept any ensuing unpopularity in the belief its approach is essential to achieve a return to economic stability. Moneys which the Government sector spends are generated from the private sector. If governments intrude too far into that private sector, then these moneys begin to dry up, inflation occurs and development stagnates. That is largely what has happened in this country. The Government has decided, in my view quite correctly, that any short term unpopularity resulting from expenditure cuts is far outweighed by the future benefits which will accrue if it stands aside and encourages the private sector to expand. This approach has been widely endorsed by the Australian business community. Sir Ian Potter, writing in the Age of 26 July last, said:

Apart from improving the availability of resources to the private sector, the reduction in public expenditure and the subsequent deficit has a major bearing on financial stability, which in turn is of great importance to the private sector if it is to occupy the room in the overall economy vacated by Government spending.

The Government having committed itself to this course then, let us look at just how successful it has been in its first 8 months in office. Many initiatives and other methods have been employed by the Government in its fight against inflation. Unquestionably, one of the most important has been the continuing call for the Australian community to exercise wage restraint. The Australian Conciliation and Arbitration Commission has recently handed down a wage decision which goes some of the way towards establishing this moderation. It does not, I believe, go far enough. However, I do not believe that it is tenable for the Government merely to blame the left wing and militant unions for the failure to achieve the degree of moderation required. I believe the Government, and all of us who are supporters of it, must accept a share of the responsibility, for it is clear that we have failed to communicate to the Australian public the seriousness of the situation which faces us and the essential requirement for recovery that all of us- businessmen, workers and parliamentarians alike- must work together, must make sacrifices now in the short term, if we are to achieve a return to prosperity in the longer term.

That brings me to my final point. I urge the Government to take steps immediately to mount an extensive advertising and communication campaign, at whatever cost, explaining the seriousness of the economic situation, explaining the Government’s economic strategy as I have briefly outlined it here and explaining why it is absolutely vital that we all work together in this crisis. I believe there are signs that the Government is doing just that. When in government, the Australian Labor Party proposed such an advertising campaign. It was opposed by the then Liberal-Country Party Opposition as a propaganda exercise. In my view, it was quite wrong that it was opposed. No doubt my suggestion now that the plan be revived will meet with similar opposition from the ALP. I sincerely hope that this will not be the case. I do not believe that this exercise in communication should include political recriminations. I propose that it should be designed merely to communicate to the Australian people the fact that this Government has a coherent economic strategy which can and will work, but only if it has the active support of all members of the community.

I take the area of wage restraint as an example of the need for communication. Part of the Labor campaign was to be the slogan ‘one man’s wage rise is another man’s job’. How much more applicable is that statement today? During the first three-quarters of 1974 the share of the gross national product going to wages rose from 6 1 per cent to 68 per cent. At the same time the share going to profits dropped from a long term average of 15 per cent to around 10 per cent. Also at the same time hundreds of Australian companies went into liquidation and the number of unemployed leapt to over 300 000. The connection is undeniably clear. The Australian work force must be shown that ‘profits’ is not a dirty word but that profits are the life blood of the businesses which provide their jobs, their pay packets and their standard of living.

Wage restraint is by no means the only area where communication is needed. All aspects of the Government’s economic strategy, of the motives behind the initiatives it takes, should be made clear. Such publicity campaigns have been used to great effect over recent years in West German, Britain and the United States of America which are all facing similar problems to Australia. In each case co-operation has been achieved from the community in moderating wage demands and price increases. In each case, as a direct result, the inflation rate has been lowered significantly. As to the method which such a campaign would employ, I leave that to the experts but I do offer one suggestion and that is that greater use could be made of backbenchers on both sides of the House to get the message across at a local level.

In conclusion I say that we now have a Budget which reflects a sound and coherent economic strategy, a long range plan to return this country to economic prosperity. We, as a Parliament, must get the message across to the Australian people to get behind the Government and ensure that this plan works for the benefit of the whole community.

Mr Donald Cameron:

– In following the honourable member for Deakin (Mr Jarman) in this debate I do not want to spend too much time talking about yesterday because it is my view that the vast majority of Australians are more interested in what is going to happen tomorrow. There is no escaping the fact that when the Liberal-National Country Party Government came to power half-way through December it took over a depressed nation- a nation that was suffering from its highest inflation and unemployment rate since the Great Depression of over 40 years ago. In that situation we on this side took over the management and the reins of government.

This year’s Budget outlay is in excess of $24,000m, an increase of 1 1.3 per cent on that for the previous year when we had the one and only Hayden Budget. The year before that government expenditure had rocketed by some 23 per cent. That 23 per cent rocket was but half the rocket of the previous year. There were so many Labor Treasurers over the last 3 years that it is hard to recall them. Either the honourable member for Melbourne Ports (Mr Crean) or the honourable member for Lalor (Dr J. F. Cairns) was Treasurer when government expenditure in the 1974-75 Budget was increased by some 46 per cent. The key point is that the Labor Government was spending madly and spending badly.

At the time of the 1975-76 Budget the Labor Government recognised that it was on a disaster course and it halved the growth rate of expenditure when compared with that for the previous year. This Government, because of the situation which still exists, was forced to cut that growth rate again by half. When we consider what this Government has done, such as the indexation of direct taxes, I believe that the first Fraser Government, and its Treasurer (Mr Lynch), have achieved a remarkable result. When people outside this place say to me: ‘When are you going to do something about cutting taxation?’, I understand what they are saying and I sympathise with them. Regrettably, people frequently forget what has been done. They reach out simply for what is going to be done, without acknowledging or perhaps realising that the introduction of indexation of taxation, which was promised by the Government when in Opposition, was something that we promised to do over a period of 3 years. But recognising that incentive in this country was being destroyed by high taxation, we introduced indexation in one sweep. By the introduction of that indexation the Government is losing $ 1,200m in income, or- put in another way, a more pleasing waythe Australian taxpayers are gaining $ 1,200m because they are not being taxed as highly as they would have been if the Labor Government had still been in power.

This makes even more amazing the fact that the present Government, a government which is portrayed by its opponents as having been heartless, has managed to increase expenditure in the field of social welfare from the previous Labor Government expenditure of $5,000m to more than $6,000m. That means that this so-called heartless Liberal Government, in times of great economic difficulty, has through good management been able to increase the expenditure in the field of social welfare by some 25 per cent to over $6,000m. I think it is appropriate to remind all working Australians that today more than 1.5 million Australians are on the pension. That is a lot of people to be reliant upon a work force which is not very much more than 4.5 million. Pensioners or people reliant on social security or welfare payments equal almost one-third of the work force. I believe it is a mighty effort for those who are fortunate enough or young enough to continue to play a role in the work force to support such a large number of people who are reliant on the Government for subsistence.

I wish to speak tonight mainly on the subject of the Fraser Government or the LiberalNational Party approach to centralism and federalism. The Labor Party had a policy of centralism. The Liberals promised an alternative of true federalism. During the reign of the previous Government I, as a Federal member, became involved in such things as where zebra crossings or street lights were to be placed in my electorate. All Federal members spend half of the year in Canberra. Each represents about 60 000 constituents. I know that in my electorate of Griffith in Brisbane there are some 1200 streets. There would be 6000 to 7000 crossings or intersections. The Labor Government philosophy in relation to centralism meant that Federal members were supposed to tell State politicians and local aldermen in the lower levels of government exactly where these facilities should be placed. That was centralism.

Mr MacKenzie:

– Garbage disposal and dog licensing too.

Mr Donald Cameron:

-Garbage disposal and dog licensing too, as I am reminded by the honourable member for Calare. We were supposed to be looking at so many things when the big issues were running riot. At the Premiers Conference held in February 1976 the Prime Minister (Mr Malcolm Fraser) said:

There are some programs- or parts of programs- which represent areas of expenditure which clearly deserve continuing Commonwealth support but in which there is no obvious need that my Government can see for the Commonwealth to be involved in a specific way. These are matters in respect of which priorities should appropriately be left to the States and their authorities to determine.

In relation to local government he said:

The same principle of absorption could apply in the local government area. Again we would welcome the Premiers’ views on the scope of absorption of specific purpose assistance into the general revenue assistance to be provided for local government.

The nub of all that was that it was time this Government looked at what it was doing to enable the State Governments and local governments to take back some of their responsibilities. The question of transfer of responsibility for particular programs was examined in detail by the Administrative Review Committee headed by Sir Henry Bland. However, although that report is in the hands of members of the Cabinet, regrettably it is not in the hands of us here in the back benches, nor is it available to the public. I hope that it will not be too long before it becomes generally available. But because it is still largely under review, it is impossible to provide a list of those areas in which financial responsibilities are likely to be transferred to the States. Therefore I have to indulge in projection, which is always dangerous at the best of times.

When we look at possible shifts in responsibility, we see the strong possibility that in the urban and regional development area, in areas such as growth centres, area improvement programs, land acquisition and development in urban areas and national sewerage programs, the Government will be handing a lot of this back to the States- and it is appropriate that it should do so. The Budget recently introduced shows a trend to cut expenditure in many of these areas.

For instance, in the growth centres, Commonwealth involvement has fallen from $60m to $19m; in the area improvement program from $ 15m to just over $500,000; in land acquisition from $53m to $15m; and in national sewerage programs from $113m to $50m. This does not mean that the Liberals believe that these things are not important, but what the Liberals do believe is that there are levels of government which are more properly equipped and which have better local knowledge, so that they are more able to look after these projects. In the field of social welfare it has already been announced that we would fund the Australian Assistance Plan for another 12 months and that it would then be handed over to the States for them to decide the future and for them to fund it.

Of course, employment grants have been looked at again, as has the Regional Employment Development scheme, but we all recall that that was something that the Labor Government in the closing stages of 1975 could not get rid of quickly enough. lit was a red-hot potato; that is what the RED scheme was all about. Labor was in the process of dramatically dismantling the RED scheme when it- fortunately, for Australia’s sake- was pushed from office. In the field of education, the present Government has stated that it will provide greater State representation on the Schools Commission; greater responsibility both in terms of funding and administration may be transferred to the States in the area of education, particularly in relation to schools.

Every time we mention education we find 100 000 teachers throughout the country going into a mad spin saying: ‘Spend more, more, more; do what Labor did’. But, Mr Deputy Speaker, you are a Labor politician, and you would know the truth of what I am about to say. What the Whitlam Government did was withhold money that the McMahon and Gorton government had been giving to the States for education, and say: ‘No, you are not having that any more. We are keeping it; we are going to spend it’. Then they said: ‘Look what great fellows we are. We have increased expenditure on education from a few million dollars to well into the hundreds of millions of dollars ‘. That was not fair play. To those who may be concerned about educational expenditure let me say that the sum set aside in this Budget for the forthcoming year is in excess of $2, 000m. That is a far cry from a government supposedly not interested in education.

In the remaining minutes I want to refer to the way in which people dislike centralism. The Australian Labor Party Government was kicked out of office because of its indulgence, its whims and its wishes to get hold of every string of authority in this country, to set it up here in Canberra and to tell the people of Australia that it knew what was best. I too dislike centralism. We saw the amusing spectacle yesterday of the Deputy Leader of the Opposition (Mr Uren) standing up here and saying that he was not a centralist. The people of Australia expect the States to accept their full responsibility. There is little mileage in the long term in the States continuing to wring out their handkerchiefs and again place them upon their eyes to wipe away the crocodile tears, saying: ‘The Commonwealth is not giving us a fair go’. The formulas which have been struck by the present Government are more generous to the States than those of any previous government.

When we look at the State Budgets we see that Tasmania, in these difficult times, has a surplus of over $4m from the previous year and it still has a credit of over $ 1 7m in its own loan fund. Its overall spending in this financial year will go up by 2 1 . 1 per cent, which is almost twice the rate of increase in expenditure by the Federal Government. Its capital spending will be increased by 2 1 per cent. When we look at the Budgets for Tasmania, South Australia and Victoria- the 3 States which have produced Budgets to date- we see that there has been no increase in indirect taxes. In fact each State has reduced its taxes in some area. In these times of need for expanded expenditure, if the States were receiving such a raw deal from the Federal Government I ask you, Mr Deputy Speaker, how they could possibly be reducing their indirect tax if things were as tough as some of them would have us believe.

Mr DEPUTY SPEAKER (Mr Armitage)That depends on which State you come from.

Mr Donald Cameron:

– It is unusual for a Deputy Speaker to intervene in a speech. The Victorian Government granted probate, payroll tax and land tax concessions. The Tasmanian Premier, Mr Neilson, described his Budget as ‘the best State Budget in 30 years’. South Australia, the State which is governed by Mr Dunstan and his Australian Labor Party, is also clearly in a favourable position. It started 1976-77 with a large credit balance on revenue account and has budgeted to retain this balance at the end of this financial year. There are real increases in both recurrent and capital expenditure, especially taking into account large sums$55m that Mr Dunstan set aside last June to be available this year. To quote that Labor Premier, ‘South Australia has entered 1976-77 in a better financial position than any other State ‘.

I could go on but I have only a few minutes left, and that is unfortunate. I am reminded that in my own State of Queensland the Premier has slashed death duties and has made Queensland the place in which to live- at a cost of $20m to $30m. He has promised that payroll tax will be cut Mr Wran, the Premier of New South Wales, has promised the people of New South Wales that he will reduce transport costs by 20 per cent. This is the situation throughout Australia. The States appear to have never had it so good. The Commonwealth is pulling in the reins, yet every time the States are handed some of the responsibility for which they have craved over the last two or three years and for which they condemned the previous Government for not handing over they throw up their arms and say: ‘How can we possibly afford to finance these extra schemes which you have thrust at our feet?’

Time does not permit me in this debate to give the figures on how Fraser federalism has shifted a far greater percentage of the nations revenue to State responsibility than ever before. My Government improved the formula that the State Premiers presented earlier this year. I think my Government gave them something like another $93m. They have the wherewithal. They have been given back responsibility. My advice to the various State governments is to get on with the job and act responsibly, because everyone has to adopt a responsible attitude in order to get this nation back on its feet. Let us all stop playing politics for the sake of this country which is still reeling from 3 years of Labor administration but which has the capacity to get on its feet if it is given the chance.


-We have arrived at a rather interesting situation. Although it is late on Thursday evening my Whip spoke to me a few minutes ago, and informed me that there were insufficient Opposition speakers and asked me whether, at very short notice, I would speak in this debate. I suppose if one stopped to analyse what has been said by Opposition speakers in recent days one would ask: Is it any wonder the Opposition is struggling to get supporters to back its amendment? The amendment is interesting because after all -

Mr Scholes:

– I take a point of order. The honourable member is entitled to say what he wishes in the debate on the Budget, but I think he is not entitled to make deliberately untrue statements. The position is that with the number of members on the Opposition side we are unable to provide the same number of speakers as the Government does. If the Government is prepared to give leave for honourable members to speak a second time we will provide speakers.


– I do not think that is a point of order.


– A rather amusing point of order has been raised by the Opposition leader of the House. Surely he is well aware of the fact that the Opposition has limited numbers in this House. The point I was about to make concerned the amendment moved by the Leader of the Opposition (Mr E. G. Whitlam) which criticises the Budget introduced by the Treasurer (Mr Lynch). The amendment refers to the Government pursuing a policy of unemployment and introducing additional tax in the form of Medibank. This is rather amusing because after all who introduced Medibank? It was not this Government that introduced Medibank. It was the present Opposition. Surely no one is foolish enough to believe that if people do not pay direct taxes- if they can get away with it- they do not have to pay indirect taxes. I have not had time to make a close study of the figures because I am speaking at very short notice.

Another interesting point is that Opposition supporters have been somewhat critical of the Government assisting primary industry by the payment of subsidies. This is not something new coming from Opposition supporters. They have been doing this for quite some time. It they look at the Treasurer’s speech they will find that sufficient funds are being allocated to primary industry. The fundamental principle of support for primary industry, in which we on our side of politics believe, is that an industry is assisted when it is in trouble, not when it is going along smoothly. The principle of stabilisation schemes is that growers, in many instances, contribute when times are good. They expect to get some of the money back, with perhaps a little more, depending on the circumstances, when times are bad. If honourable members look at the speech they will find that there is a very big drop in wool marketing assistance. Of course, that is a story on its own. I shall not go into it. That position has been brought about because of the increased price of wool. So, when we look at subsidies and hear all the groans and moans that come from Opposition members, it makes us wonder whether we should not make some mention of the matter. Every time we hear the word ‘subsidy’ mentioned in this House, most Opposition members who are prepared to speak up on the matter groan, as I have said, and carry on as though the Government were just handing out money to all and sundry. Of course, they have much criticism to offer. They will not believe in the principle, which I outlined a few minutes ago, of giving everybody a fair go.

I remember that when the question of subsidies was brought up earlier this year one of the national farming leaders asked the question: ‘What subsidies?’ That is what he thought of the subsidies. I think I can answer his question, although Opposition members may not like what I have to say. For instance, the automobile industry, in which the honourable member for Corio (Mr Scholes) who is now at the table is so interested, as we all know is propped up by tariffs equal to something like $4,000 a year for every worker it employs. I am told that the subsidy for many university students is close to double that figure. The workers in the shipbuilding industrywe have heard plenty about that over recent weeks- show no shyness where subsidies are concerned. They want to keep something like $13,000 a year per employee. So, how can Opposition members turn around and criticise the socalled handouts to the primary industries?

Of course, subsidies do not stop there. Every time a suburban housewife turns on a tap she is pouring out taxpayers’ money, even if the water is poured on to the lawn. Every time a person travels in a train he uses some form of subsidy, as I heard one honourable member say the other day, in much the same way as a farmer uses a chaff cutter. There are many other services, such as the Commonwealth Employment Service. One could go on at great length when talking about assistance. If anyone wants to query the thought of subsidising communications to farmers, I think I can answer him with one very telling point: I remind him that one industry with which I have been closely associated, the wheat industry, subsidised the consumers of wheat for 20 years. When the price of wheat on the export market was high the grower made sure that there were ample supplies in this country at low rates to the consumers. So it is nonsense to talk about farmers’ handouts.

I realise that Opposition members will judge me by their own principles, or perhaps I should say the lack of them, and try to make out that I am opposed to helping these people. In fact, all I have done is to point out what actually exists. Even if subsidies in relation to communications in outlying areas are opposed by the Opposition, at least I can prove that we should not have to listen to any more of this nauseating rubbish about farmers being subsidised, or that the Party of which I am a member, the National Country Party, puts the screws on the Liberal Party to try to get a handout.

Mr Shipton:

– Never.

Mr Baillieu:

– There we have it at first hand from members of the Liberal Party. They do not believe that we put the screws on. But many Opposition members and also some of my friends in the Press Gallery are very quick to try to drive a wedge between these 2 great political organisations. When we are talking of subsidies for various people and organisations, I think of the word ‘communications’ again. I interpret that to mean such bodies as the Australian Telecommunications Commission and the Australian Postal Commission. I think we can agree that in an economic system characterised by protection, particularly to secondary industries, we can quite responsibly consider giving some assistance to these 2 commissions. Of course, Opposition members object to a subsidy for communications of all sorts. They might decide to be consistent just for once and drop all forms of tariffs.

Of course, if honourable members opposite approached the trade unions with such a proposal, I think they would get the order of the boot. I would not blame the trade union movement for that. However, the rural sector would not be alarmed at such a proposal because farmers are used to being self-supporting. In fact, export industries are disadvantaged by subsidies and tariffs handed out to secondary industries. Anyone who has heard the honourable member for Wakefield (Mr Kelly) talk on the subject would certainly appreciate this point. I throw out the challenge to members of the Australian Labor Party on this issue. If they want to attempt to obstruct the development of communications such as postal and telephone services, I am sure that the rural sector would be quite happy to hurl the challenge right back at the members of the Opposition. The challenge will be pretty simple because the position is as simple as this: If you drop one subsidy or tariff, you should drop the lot. In other words, if one tariff is cut out, all tariffs should be cut out. Frankly, I believe that the Labor Party would not have to go to that much trouble to get the boot from the trade union movement because we see this developing week by week. After losing their jobs and having watched the purchasing power disappear from their pay packets under the previous government, the workers are ready to put in the boot. Anyone can guess where the boot ought to go.

On the other hand, the workers are beginning to see the benefits of the coalition Governments’ policies of taking the Government’s hand out of the workers’ pockets and putting purchasing power into their pay packets. As a result, we are building up a very valuable store of mutual trust and respect with the communications unions which, ultimately, will bring benefit to the whole community. The benefits of this industrial harmony are already visible in the way that we have kept most postage and telephone charges at the same rate as applied a year or more ago. I think that everyone expected to see charges such as telephone and postal charges increase in accordance with the general increase in costs over the last 12 months. But this has not been the case. While achieving this reversal of industrial unrest and related rocketing charges, we have been able to press on with a massive expansion of programming designed to improve facilities and services offered to the public. I give as an illustration the decentralisation of mail sorting such as is in operation already at Geelong and Ballarat in Victoria. This has speeded up the mail movements in the region. It is only a matter of time before this service will spread to isolated areas right throughout the Commonwealth. Of course, this will improve the mail sorting facilities, give a better service to the members of the community and, as has been said by a number of the commissioners of the Australian Postal Commission and by the Minister for Post and Telecommunications (Mr Eric Robinson), give an overnight mail delivery service in most areas.

The growth rate in these 2 commissions has increased considerably. We hope to see this growth rate increase further this year. It has been forecast that the growth rate in Telecom will be up by approximately 8 per cent, that the installation of telephone services will rise by over 5 per cent, that local telephone traffic will increase by 5.8 per cent and trunk line services by approximately 1 1 per cent. One could go on to expand. Having said that, I should point out that we have been doing this at a time when we have been able to reduce the percentage of labour involved. After all, this is what we have to do if we are ever to get out of this problem of inflation. If we can reduce the number of staff being employed by the commissions and at the same time give a better service, which I believe is now the trend, inside 12 months we will see a greatly improved position. If this occurs, it will represent an added contribution towards developing opposition to and enabling the reduction of the present inflation.

Debate interrupted.

page 946


Lebanese Immigrants- Union Black Bans- Purchase of Historic Articles- Family Allowances


-Order! It being 10.30 p.m. and in accordance with the order of the House of 18 Feburary 1976, I propose the question:

That the House do now adjourn.


-My electorate of Lang happens to be one of those with a number of people who came from Lebanon residing within its boundaries and for the past few months, because of the conflict- perhaps one should say the civil war- that is raging in that country, I have had a great number of those people coming into my office asking for assistance to get some of their immediate family, other relatives and friends out to Australia. I use the usual course of representation by first trying through the Sydney office. Then, not having a great deal of success, trying through the Central Office and, still not having any success, trying through the office of the Minister for Immigration and Ethnic Affairs (Mr MacKellar). On 19 July I sent this telegram to the Minister:

Am being inundated by Lebanese nationals desiring to bring to Australia relatives residing outside the Lebanon.

Would be pleased if you would give me immediately the current position on (1) policy guidelines, (2) procedure being adopted in Australia and (3) procedure being adopted overseas for processing of applications. Are we dealing with these applications as sympathetically and expeditiously as possible?

I received virtually an immediate acknowledgment of that telegram but that was about all. I sent a further telegram a few days later on 28 July in which I made my request more general by saying:

Extremely dissatisfied with delay involved in processing applications for entry to Australia. Dissatisfaction directed mainly towards applicants ex Lebanon. Unable to obtain any definite information on progress of cases. Would appreciate immediate review of procedure for dealing with Ministerial representations.

Still having received no reply, on 6 August I wrote to the Minister. I must admit that I received a reply from him dated 6 August answering my 2 telegrams. The letters perhaps crossed in the mail. However, I still am not satisfied with the procedures that are being adopted with people who have left the Lebanon to go to other countries and are now trying to come to Australia. They are all being sponsored by relatives, in most instances immediate relatives, in Australia. I want to give a couple of examples of events which I think demonstrate either a lack of administrative ability in the Department of Immigration and Ethnic Affairs or a lack of sympathy for and understanding of those people who have had to flee their own country.

One case involved a wife and 4 children. They were nominated by the husband on 25 May 1976. A cable of approval was sent to an overseas post in 16 June 1976. The husband then travelled to Lebanon to get his family out to another country. He was told by our officials in that country that they had received no advice from Australia regarding his family. On 25 August my advice was that he was still being told that no information had been received at our overseas post. I have confirmed with the Department in Sydney that the cable was sent to the overseas post on 1 6 June. Another case involved 4 children ranging in age from 18 years down to 12 years. The application for the eldest child was approved by letter from Canberra on 26 January. The applications for the three other children were approved by letter on 18 March. A cable of approval was sent to Cyprus on 20 August. Up to 30 August, the children, who are alone in that country, had been told on 2 occasions that our authorities in that country had no knowledge of the matter.


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


– I wish to bring to the attention of the House 2 union actions which have taken place in the City of Ballarat in recent days and which directly threaten the jobs of at least 60 people and, indirectly, the jobs of many others. Both actions involve the imposition of black bans by unions.

The first case relates to the largest electrical retailing and repair firm in Ballarat- John and L. Lewis Discounts. The firm employs 22 persons, having been built up from a minimal staff over the last five or so years. Industrial relations in the firm are excellent; so too are the terms and conditions of employment. Members of the staff do not belong to a union and have signed a document to the effect that no pressure has been put on them by the proprietor, Mr Lewis, to prevent them from joining a union. Of their own volition they are adamantly opposed to joining a union because they wish to have no truck with the growing involvement of unions in political matters. They have said so publicly. The men have been under strong pressure from the Trades and Labor Council in Ballarat and from outside union organisers to join the Electrical Trades Union. On 5 occasions union officials have visited the firm. On all 5 occasions their demands that the staff join the ETU have been clearly rejected by the men themselves.

After the second visit the union placed a black ban on the supply of Sanyo equipment to the firm. After the fourth visit a further black ban was placed on a Ballarat carrying firm- Kennedy Murray (Ballarat) Pty Ltd- which delivers to John and L. Lewis. After the fifth visit the black bans were extended to 2 other firms of carriers, including one of Ballarat ‘s largest carriers, Rixon Transport. The union officials have made no bones of the fact that if the staff of John and L. Lewis do not submit to these tactics of blackmail and intimidation, they will do all in their power to close the firm down completely.

The second case relates to the firm of Stan Farquhar Pty Ltd, potato and produce merchants. The firm employs 35 to 40 persons. It is neither fully unionised nor non-unionised. Without any direct contact with management, this week the Storemen and Packers Union placed a black ban on the delivery of Farquhar’s onions and potatoes. The Managing Director has heard second hand that the ban has been imposed because of the dismissal of an employee, but there has not been one dismissal from the firm in the past 6 months. The Managing Director has informed me that the firm will close down completely if the black ban is not lifted. Not only will 35 to 40 people be thrown out of work, but the closure will also have an employment effect on those companies and persons supplying and receiving supplies from Farquhars.

I raise these matters before the House as yet two more examples of the victimisation that certain trade union officials in this country are wreaking not only on the Australian nation but on the overwhelming majority of hard-working, responsible workers in this country. It is a course of action which is repugnant to all thinking Australians and it must be stopped.


– I rise to speak on a matter similar to that raised by the honourable member for Lang (Mr Stewart). However, in regard to the argument put forward by the honourable member for Ballaarat (Mr Short) I should like to say in passing that last year when the Australian Medical Association was doing exactly the same thing to salaried doctors in the Canberra area I did not notice any support being given to those salaried doctors by honourable gentlemen opposite. Apparently if you are in the professions, black bans are different.

I wish to raise a specific matter which is highlighted by the entry of certain Vietnamese refugees into Australia- to which I do not object -and the manner in which that entry was facilitated in the last couple of weeks. This differential treatment has caused problems and is causing concern to large numbers of Lebanese families who are seeking to have relatives enter Australia from the Lebanon. I deal with a specific case because I think it highlights problems with which most members of this House are confronted and which are frustrating many families almost beyond endurance. A gentleman in Geelong is seeking to have his brother return to Australia from the Lebanon. Like this gentleman in Geelong, the brother in the Lebanon is also an Australian citizen and therefore there are no problems in respect of entry or immigration but, unfortunately, he is crippled and unable to travel alone. The brothers have sought permission to have their sister accompany them to Australiathe sister is or was an air hostess- so she can attend to the needs of the crippled brother. The sister has applied for temporary residence. Quite obviously she would prefer permanent residence for herself, as would her 2 brothers, both of whom would be resident in Australia, but she has been refused temporary or permanent residence by the Minister for Immigration and Ethnic Affairs (Mr MacKellar) on the ground that if she comes to Australia as a temporary resident she may seek to stay and that would constitute a future embarrassment.

This is a normal procedure of the Department, and I do not query it, but it is a procedure that is being applied in this case to what is a refugee situation. The Department is preventing an Australian citizen from returning to Australia. The best advice that we are able to get is that if these people go to Cyprus or some other place their application will be considered. That is an unsatisfactory position because they are not in a position to take that sort of risk and then, if the sister’s application is rejected, have to try to get back into Lebanon. The brother in Geelong is extremely concerned because this matter has been going on for a considerable time- much longer than should be the case. I believe that in this instance the strict interpretation of the immigration guidelines should not necessarily be applied. The girl, if she comes to Australia will be joining 2 brothers already resident here. She will be caring for an Australian citizen who is not able to care for himself, and therefore performing a useful service for the community. But more importantly, different standards of treatment are being applied as between persons who in every sense are refugees.

It is time that consistency was observed in this type of operation where the strictest interpretations of the immigration criteria are being applied to people who are in tragic circumstances. The Minister’s office is aware of the names of the persons concerned which I do not want to mention in the House. We are dealing with a family reunion situation. It is a situation in which an Australian citizen is seeking to return to Australia but is not able to do so without some form of assistance. I would ask that the matter be brought to the Minister’s attention and that a satisfactory solution be sought.


-I daresay that honourable members will have noticed that in the King’s Hall recently Governor Macquarie’s sword and dirk have been exhibited. They were purchased for the nation and have an honoured place in the hall just outside the chamber. Earlier this week the Press in a report of proceedings of the Public Accounts Committee used the headline ‘Illegal’ to describe this purchase. However, the Committee’s criticism was directed solely to Treasury mechanics and not in any sense to the substance of this transaction. I want to let the House know that there were matters of speed and urgency in this transaction and that the transaction was in substance entirely proper, although the mechanics were in some respects wrong. On 31 May last Major Miller of the Victoria Barracks in Sydney contacted me and advised me that Macquarie’s sword and dirk were coming up for auction in Sydney in the following week and asked whether I would assist in acquiring these articles for a military museum or some other historical repository. I was able to find an authority in Sydney who could verify the authenticity of these relics. I contacted the Prime Minister who arranged for appropriate action to be taken by Senator Withers which resulted in the purchase of the articles at auction for $7,500.

I am sure that the House and all those outside it who have any sense of history will join me in congratulating the Prime Minister and the Government on the prompt action which they took and on its successful outcome. I now come to the mechanics of the matter. Before the purchase was made funds apparently were authorised through a Treasury warrant on the advance account. Unfortunately by some departmental oversight this warrant was not presented until after the end of the financial year. In the meantime the payment was debited to the wrong line in the accounts. This irregularity in procedure was the matter brought to the attention of the Public Accounts Committee. This was the sole reason for criticism.

The sword and dirk unquestionably belonged to Macquarie. I have ascertained that after his death they passed to the possession of a Mr Drummond, who was the executor of his will, and who subsequently became Lord Strathallan. They remained in the Strathallan family for about a century and were then acquired by the late Sir John Ferguson, the famous collector of Australiana. The curved sword would have been worn by Macquarie as Colonel of his regiment while serving in India and it would have been brought by him to Australia. It is fitting that these relics of the Governor who first had the vision of Australia as a nation- the Old Viceroy as he was known- should now rest in the central hall of the Australian Parliament.

There are 3 things of note in that hall. We have a copy of Magna Carta which is very rightly described as the foundation of our parliamentary liberties and really the foundation of the British and Australian democracies. We have the table on which Queen Victoria signed the proclamation for our Constitution, and that set up this Parliament as the federation of the Australian colonies. But co-ordinate with them, and I would think of parallel or comparable importance with them, are the relics of Governor Macquarie. We all know and we all admit- I think with some pride- that our origins come from the British Constitution, from the British people. This is what Australia as a nation comes from. We have

Magna Carta which, as I have said, is the foundation stone on which parliamentary liberties were founded. We have the proclamation which sets up the Australian Constitution.


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


-Yes sir. I beg your pardon. We also have this sword of Macquarie which in some way symbolises the way in which Britain has contributed- we as British people are grateful- to the foudation of this Australian nation.

Melbourne Ports

-In the absence of the Chairman of the Public Accounts Committee I wish simply to say- I am sure the honourable member for Mackellar (Mr Wentworth) will agree- that there is some conflict of interest here as to how this was done. Nobody is debating the tribute due to him for getting these relics here, but he has bragged before about being an expert in Treasury procedure, and I think there was some irregularity in the way the financial transaction was carried out. I simply indicate on behalf of the Committee that all we were doing was observing how the thing should have been done.

Monaro · Eden

– On 2 occasions in the last week of sitting there was discussion during the adjournment debate about family allowances. I am afraid that there are some flaws in the Labor Party, difficult though it may be to recognise the fact. One of the mathematical flaws in the brains of the Labor Party appears to be in the mind of the honourable member for Prospect (Dr Klugman). As I said when I had an opportunity to speak about family allowances, I do not really think that there is any prospect for Prospect. On the night after I had made a statement about the net gains to families due to the very forward thinking family allowances, the honourable member for Prospect was very rude about my engineering training and claimed that as a member of the House of Representatives Select Committee on Specific Learning Difficulties he probably had a great deal to offer. I am certainly pleased that he is a member of that Committee because maybe he will learn a little about arithmetic.

He attacked what I said about the net effect of family allowances. I feel very seriously about the fact that family allowances are one of the greatest social reforms to have been effected in this country for a number of years. In working out his arithmetic the honourable member for Prospect introduced a red herring. He introduced some hypothesis that rebates for dependants this year would have been indexed if they had not been removed. This is an absolute red herring. If the honourable member was prepared to introduce that red herring he should have been honest enough to introduce also the read herring of tax indexation which will have pumped more than $ 1,000m into the pockets of the wage earners of this country in the next financial year.

Mr Martyr:

– How much was that?


– One thousand million dollars. The people of Australia have not realised the effect of tax indexation, but they must do so because it is a great deal of money. But even with the red herring removed, the arithmetic of the honourable member for Prospect was still bad. He had not read the tax scales of the Hayden Budget. He was under some strange misapprehension that for every child of a family there was a $200 rebate; he said that in his speech. There is a $200 rebate for the first child and a $ 1 50 rebate for each succeeding child. I presented the figures. They are printed in Hansard and they are well known in my electorate. I can tell honourable members that the people in my electorate, especially the women, are very much aware of the family allowances contained in this latest Budget. I shall not go right through the figures for this member of the Select Committee on Specific Learning Difficulties, the honourable member for Prospect. I simply reiterate that in my case, with 5 children, I lost $800 in tax rebates, which is $15.40 a week. I also lost the old child endowment of $8.25 a week. On the other hand my wife will gain $27.50 a week. If the honourable member for Prospect cares to add up the figures he will find that in my case with 5 children- city members probably do not quite realise that there are still a lot of fertile people in the country- we will gain $3.85 a week. I wish the honourable member for Prospect would not engage in such mendacious statements as he made last Thursday week. I wish that he would not talk about engineers in the most disparaging way that he does

Mr Antony Whitlam:

– Did you index the rebate?


– There is another lawyer who cannot add up either.

Mr Antony Whitlam:

– But did you?


-Of course we did. There was no rebate this year. The honourable member knows that. As I have said, honourable members opposite also refuse to talk about tax indexation, which is a very material thing.


-The honourable member for Eden-Monaro (Mr Sainsbury) has proved tonight that he is fertile in mind as well as body. Having listened to him, I can well understand why the honourable member for Prospect (Dr Klugman) suggested that there would be some value if he were to attend some meetings of the House of Representatives Select Committee on Specific Learning Difficulties. The facts are, as the honourable member for Prospect has undoubtedly pointed out, that most people are worse off as a result of the adjustments that were made earlier this year and then subsequently in the recent Budget with the sorts of benefits that are available to people and the sorts of outlays that they have to make. The so-called family allowance scheme is largely nothing more than a shifting sideways of the children’s rebate. It was not introduced for any great reason of virtue. It was introduced because the Government wanted to avoid expense. It was introduced because the Government wanted to avoid indexing the allowance for children under the new tax scheme.

The honourable member for Sturt (Mr Wilson) put his finger on the point during question time today, to the great embarrassment of the Treasurer (Mr Lynch), when he raised a query as to when, if at all, the Government will index the family allowance payments. Although I am a little unclear as to whether he pointed out directly or implied it, the inferences to be drawn from his question were clear. He realises something that few members of the Liberal Party of Australia realise- he will have to say it to them 50 times before they understand it, although it is a relatively simple proposition- that is, that the family allowance was created at the expense of the child rebate allowance solely to avoid indexing that child rebate allowance. The saving to the Government by shifting this payment sideways is something like $90m a year and each year, with the erosion of the value of money caused by inflation, the value of the new family allowance will diminish. That is wholly and solely the reason for the introduction of the family allowance scheme. The Government wanted to avoid liability.

The most significant redistribution in terms of personal benefits took place when the previous Government introduced the new tax system and initiated a system of child rebates. It meant that wealthy people like the honourable member for St George (Mr Neil), who made money by failing to keep people out of gaol- as an advocate in the courts- were receiving about 60c to 66c in each dollar for each child for whom they claimed, if they claimed for all the children for whom they should have claimed, whereas the average income earner was receiving only about 35c to 40c in the dollar. That means that people like the honourable member for St George, if they acknowledged all their responsibilities and claimed them in the annual period in which they paid all their taxes, if they paid all their taxes- I do not know whether the honourable member for St George pays all bis taxes; he is, after all, a lawyer- were about 70 per cent better off in money terms under the old system of concessional allowances.

We changed the system and quite a few people were less well off as a result of the change. Many of the members of this Parliament were less well off as a result of the change. They received less in cash benefits. But many more people were a lot better off as a result of the change. They were the sort of middle income people and the lower income people. That was a substantial redistribution at the expense of the people who were better off. That was the most substantial redistribution that we have seen in this country for a very long time. All the Government has done is to take that system, move it sideways and give it a little bit of padding as sugar coating to get it over this year to avoid- this is the sole motivation behind what the Government did- the cost that would have flowed as a result of the indexing of these child rebates if they had been left in the tax system. There is no virtue in what the Government did; there is total humbug.

La Trobe

-Mr Acting Speaker, I thought it was fascinating to hear the honourable member for Oxley (Mr Hayden) spend that time deprecating the profession of lawyers. Not everybody in this country knows that although at present the honourable member for Oxley is being paid as a politician he is spending his time studying law.


-Order! It being 11 p.m., the debate is interrupted. Does the Minister for Immigration and Ethnic Affairs require the debate to be extended?

Minister for Immigration and Ethnic Affairs · Warringah · LP

- Mr Acting Speaker, I require the debate to be extended. Earlier this evening, the honourable member for Lang (Mr Stewart) took the opportunity of speaking on the adjournment motion in relation to Lebanese migration to Australia. He took both my Department and me to task for what he alleged was an unsympathetic attitude. I have the relevant documents with me. It is correct that the honourable member for Lang telegrammed me in July. I acknowledged that telegram, and I gave him a detailed reply on 6 August. The honourable member did not pay me the courtesy of informing the House of what was contained in that detailed reply by letter on 6 August. Let me quote from it:

On 1 April this year I made a statement to the Parliament pointing out the Government’s sympathetic attitude to the victims of the present crisis, particularly those with relatives in Australia, and outlining special arrangements which were being put in train to assist them.

Subsequently I issued news releases on 14 April, 20 May and 26 June announcing changes to these arrangements to deal with the situation as it developed. I am attaching copies of these releases.

It does not say much for the honourable member for Lang if he is insufficiently aware of ministerial statements or statements in relation to matters of great interest to his constituents if he was not aware of those releases before I sent copies of them to him.

This evening, I announced new procedures and initiatives in relation to assisting those people who have been rendered homeless or have been totally inconvenienced by the appalling events in The Lebanon. Let me quote from that news release:

Every effort is being made to ensure that applications are dealt with as speedily as possible in the difficult circumstances in which processing has to take place . . .

Since 1 January this year visas covering more than 2200 Lebanese had been issued. The number issued had increased recently with some 390 persons being issued with visas in the month of August. SOS of these were issued in Nicosia alone.

At present more than 8000 Lebanese in Cyprus where Australia’s Lebanese immigration operation has been concentrated.

A senior officer of my Department with wide immigration experience in Australia and overseas was sent to Nicosia last weekend. He has extensive terms of reference to report on the most effective way in which the Lebanese immigration operation can be organised. A first report has already been received and I shall be placing proposals based on his recommendations before Cabinet at the earliest opportunity . . .

Additionally, as a result of close and continuing discussions we are assisting members of the Lebanese community in Sydney and Melbourne in a special project. Lists of spouses, dependent children and parents of Australian residents will be made available and the applications assessed speedily by my Department.

Members oi the Lebanese community will shortly be travelling overseas to arrange for group movements of those accepted.

I believe that these initiatives are firmly in line with the Government’s continuing concern to effect the reunion of close family relatives overseas with Lebanese residents in Australia. I think it is worth while pointing out to the House the difficulty under which Australian officers have been working. Firstly, during the crisis in Lebanon, we maintained a presence in Beirut sometimes under conditions of quite extreme danger. Immigration officers did stay there and did process applications. They ensured that those people who had received permission to come to Australia had their applications processed with the minimum possible delay. Following that action, we set up a special initiative in Damascus with the agreement of the Syrian Government and the close co-operation of the Dutch Government. That exercise lasted for some months and we again processed a considerable number of cases through that exercise. On 24 August, the honourable member for Lang asked me a question in the House about Lebanese migration. I concluded my reply by saying:

If the honourable member for Lang has any specific cases that he wishes to bring to my attention, I assure him that I will give them my close consideration.

He did not bring to me personally those cases which he mentioned this evening. I believe that the record of the Department is a very good one. I believe that the officers have worked long, hard and well and have displayed great consideration and co-operation with members of the Lebanese community in Australia. I believe that the Government has displayed continuing concern and consideration for what is, after all, a most tragic series of circumstances affecting the lives of a great number of people.


-The debate having concluded, the House stands adjourned until 2. 15 p.m. on Tuesday next.

House adjourned at 1 1.6 p.m.

page 953


The following answers toquestions upon notice were circulated:

Recruitment of Staff (Question No. 588)

Mr Macphee:

asked the Treasurer, upon notice:

  1. How many persons are employed by bis Department or by agencies responsible to him or his Department in a staff recruiting capacity and what amounts are chargeable to his Department or such agencies in respect of their annual salaries.
  2. To what extent does his Department or any such agency engage private employment agencies to assist in the recruitment of staff.
  3. What sum was spent by his Department or any such agency in engaging private employment agencies in the financial year 1974-75.
  4. To what extent does his Department or any such agency engage or otherwise obtain assistance from the Commonwealth Employment Service in the recruitment of staff and what sum has been paid to the Commonwealth Employment Service in respect of such assistance.
Mr Lynch:

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

page 953


page 953


page 953


page 953


The Commonwealth Banking Corporation has provided the following information:

The Reserve Bank of Australia has provided the following information:

The Australian Industry Development Corporation has provided the following information:

Tarcoola to Alice Springs Railway (Question No. 899)

Mr Morris:

asked the Minister for Transport, upon notice:

  1. What is the estimated cost per kilometre, in 1976 prices, of the standard guage railway from Tarcoola to Alice Springs.
  2. What funds were appropriated for this project in 1975-76.
  3. What was the actual expenditure on the project in 1975-76.
Mr Nixon:

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

  1. 1 ) $ 149,000 per kilometre based on July 1 976 prices.
  2. $51,900,000 was appropriated in 1975-76 for Capital Works and Services’ expenditure under the Australian National Railways Act. This included provision for the Tarcoola to Alice Springs Railway Project.
  3. $13,275,000

Working Tourist Visas (Question No. 968)

Mr Innes:

asked the Minister for Immigration and Ethnic Affairs, upon notice:

  1. 1 ) Is there a policy on working tourist visas; if so, which ethnic groups are permitted to come to Australia as working tourists.
  2. Which ethnic groups are involved, and how many of each group or nationality are at present in Australia.
Mr MacKellar:

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

  1. 1 ) and (2 ) Under the provisions of the long standing global visitor policy, people entering Australia on tourist visas are not permitted to engage in employment.

However, in conjunction with the introduction on 1 . 1 . 75 of visa requirements for Commonwealth and Irish citizens of European descent, the Government decided that provision should be made for young citizens of the United Kingdom, Canada and Ireland to be granted temporary residence visas for the purposes of working holidays in Australia. Before 1.1.75 such persons required no prior authority to enter Australia for that purpose; in fact until that date Commonwealth and Irish citizens of European descent required no prior authority to come to Australia for any purpose.

Young Australians enjoy the facility of entering Britain for working holiday purposes and it was decided that in reciprocation young citizens of the United Kingdom should have a similar facility under the visa conditions introduced on 1 January 1975. At the same time the facility was extended to young Irish and Canadian citizens. Under the decision eligibility was confined to young United Kingdom citizens applying in the United Kingdom, young Irish citizens applying in Ireland or the United Kingdom and young Canadian citizens applying in Canada.

Statistics are not maintained on working holiday makers in Australia at a given time. In the first full year of operation of the scheme 1408 United Kingdom citizens, 248 Canadian citizens and 36 Irish citizens were admitted to Australia as working holiday makers.

Legal Aid Service (Question No. 989)

Mr Garrick:

asked the Attorney-General, upon notice:

  1. 1 ) Does the Government plan to establish a legal aid service in the Electoral Division of Batman.
  2. If not, will he undertake to look seriously at the possibility, as there is a great need for such facilities in the area.
Mr Ellicott:

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

  1. and (2) I announced on 15 January 1976 that I had begun a review of legal aid services in Australia. I have since had detailed discussions with State Attorneys-General to establish an independent Legal Aid Commission in each State and these discussions are continuing. The establishment of offices of the Australian Legal Aid Office has been deferred pending my review. The attention of the honourable member is drawn to my answer to Question No. 163 (Hansard, 19 May 1976, pages 2252-3) in which I said that the selection of locations for new legal aid offices and the opening of new legal aid offices will be matters for consideration within any new framework for the provision of legal aid that is established as a result of the review. I shall keep the honourable member’s request in mind during my review of the provision of legal aid in Australia.

Cite as: Australia, House of Representatives, Debates, 9 September 1976, viewed 22 October 2017, <>.