House of Representatives
28 February 1979

31st Parliament · 1st Session

Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.

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The Clerk:

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

Medical Benefits: Abortions

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 provision of payments for abortion through items of the Medical Benefits Schedule is an unacceptable endorsement of abortion which has now reached the levels of a national tragedy with at least 60,000 unborn babies being killed in 1977.

Your petitioners therefore humbly pray that the Government will so amend the Medical Benefits Schedule as to preclude the payment of any benefit for abortion.

And your petitioners as in duty bound will ever pray. by Mr Anthony, Mr Bourchier, Mr Cadman, Mr Dobie, Mr Gillard, Mr Hunt, Mr Charles Jones, Mr Lusher, Mr MacKellar, Mr Martin and Mr Sainsbury.

Petitions received.


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

That restoration of provisions of the Social Security Act that applied prior to the 1978-79 Budget is of vital concern to offset the rising cost of goods and services.

The reason advanced by the Government for yearly payments ‘that the lower level of inflation made twice-yearly payments inappropriate ‘ is not valid.

Great injury will be caused to 920,000 aged, invalid, widows and supporting parents, who rely solely on the pension or whose income, other than the pension, is $6 or less per week. Once-a-year payments strike a cruel blow to their expectation and make a mockery of a solemn election pledge.

Accordingly, your petitioners call upon their legislators to:

  1. . Restore twice-yearly pension payments in the Autumn session.
  2. Raise pensions and unemployed benefits above the poverty level to 30 per cent of A.W.E.

And your petitioners as in duty bound will ever pray. by Sir William McMahon, Mr Lionel Bowen, Mr N. A. Brown, Dr Jenkins, Mr MacKenzie, Mr Morris, Mr Ian Robinson, Mr Scholes and Mr West.

Petitions received.

Medical Benefits: Abortions

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

The undersigned citizens of Australia humbly pray that you reject the motion to be moved by Stephen Lusher MHR which proposes:

*“to remove items from the standard medical benefits table which currently permit medical benefits for abortion” and

*“to cease the funding of medical benefits schemes through which claims for termination of pregnancies can be made”.

Your petitioners humbly pray that you support:

*a woman ‘s right to choose

*abortion as a claimable item under all health benefits schemes.

And your petitioners as in duty bound will ever pray. by Dr Cass, Mr Hunt, Mr Street and Mr Uren.

Petitions received.

Royal Commission on Human Relationships

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

That because the Report of the Royal Commission on Human Relationships and its Recommendations-

  1. contain matters of substance which ought to be pursued.
  2. result from a wide range of submissions made by Australians from all walks of life.
  3. identify many problem areas requiring attention.
  4. have been given media coverage which grossly distorts the contents.
  5. have thus far been ignored in Parliament.

Your petitioners therefore humbly pray:

That the Australian Parliament will:

  1. debate the Report and its Recommendations.
  2. make provision for rational public debate on the Report and its Recommendations.
  3. encourage its Members to support such public debate in their electorates.

Your petitioners therefore humbly pray that your honourable House will implement such measures to maintain the Commissioners’“belief in the right and integrity of the individual to make free choices in the context of human relationships, and to have access to the knowledge and skills which give such a free choice meaning”.

And your petitioners as in duty bound will ever pray. by Dr Cass and Mr Holding.

Petitions received.

Pornographic Publications

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

That we the undersigned, having great concern at the way in which children are now being used in the production of pornography call upon the Government to introduce immediate legislation:

  1. To prevent the sexual exploitation of children by way of photography for commercial purposes;
  2. To penalise parents/guardians who knowingly allow their children to be used in the production of such pornographic or obscene material depicting children;
  3. To make specifically illegal the importation, publication, distribution and sale of such pornographic child-abuse material in any form whatsoever such as magazines, novels, papers or films;
  4. To take immediate police action to confiscate and destroy all child pornography in Australia and urgent appropriate legal action against all those involved or profiting from this sordid exploitation of children.

Your petitioners therefore humbly pray that your honourable House will protect all children and immediately prohibit pornographic child-abuse materials, publications or films.

And your petitioners as in duty bound will ever pray. by Mr Dobie and Mr Martyr.

Petitions received.

Medical Benefits: Abortions

To the Honourable Speaker and Members of the House of Representatives in Parliament assembled, the petitioning of the undersigned citizens of Australia respectfully showeth:

  1. As Section 6469 on Health Refunds is the number for curette and abortion, to remove medical rebate for No. 6469 would be penalising thousands of women, (particularly those aged50 years and over) who must have a curette for medical reasons having nothing to do with pregnancy.
  2. Furthermore your petitioners desire to draw to the Government’s attention that removal of No. 6469 would transgress a woman’s right to the rebate available via medical health insurance.
  3. Furthermore, the removal of No. 6469 would be a discrimination against women, as rebates are paid for vasectomy and prostate operations for males.

Your petitioners strongly oppose the removal of No. 6469 from the Medical Rebate list and your petitioners, in duty bound will ever pray. by Dr Everingham.

Petition received.

Medical Benefits: Abortions

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

That access to medical abortion services needs to be available to all women regardless of their economic means, as despite contraceptive services, unwanted pregnancies still occur and socio-economic problems are grounds for legal abortions in New South Wales. To ensure that access to legal medical abortion is not denied to poor and underprivileged women.

Your petitioners most humbly pray that parliament should:

Maintain item 6469 unchanged on the medical benefits schedule.

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

Petition received.

South Australian Country Rail Services

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:

  1. That any downgrading or closures of Country Rail Services in South Australia would have grave consequences for the Railway Industry, Primary Industry, Individual Country Communities and the State as a whole and calls on the Parliament to ensure that the Federal Minister for Transport takes the necessary action to maintain all existing services.
  2. That continued and increased Public Subsidy is fully justified in the long term National Interest. by Mr Giles and Mr Porter.

Petitions received.


To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of B. Aronfeld and M. Aronfeld respectfully showeth:

That current requirements of the Commissioner of Taxation for the lodgement of Income Tax Returns by Registered Tax Agents restricts the trading of such agents to a period of 8 months in any fiscal year. The demands by the Commissioner for lodgement of Income Tax Returns before the 28 February following the tax year is an imposition and a restriction, limiting the trading from twelve to eight months.

Your petitioners therefore humbly pray that the law should be amended to permit any registered tax agent to trade for a full year and lodge Income Tax returns to the close of the respective tax year.

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

Petition received.

Aboriginal Land Rights

To the Honourable the Speaker and Honourable Members of the House of Representatives in Parliament assembled. This Petition of citizens of Australia respectfully sheweth that:

  1. Australia’s Aboriginal and Islander peoples have not been compensated for the loss of their traditional land, social and cultural independence and self-respect.
  2. Australia lags behind other nations with white majorities in providing a Treaty of Commitment to its indigenous peoples giving them ° a defined proportion of national income for a defined period ° freehold title to traditional land, waterways and seaboards ° control over related resources and over the introduction of alcohol and other alien cultural influences in their regions.

Your Petitioners therefore humbly pray that your honourable House will take urgent steps to concur with the wishes of a majority of electors at every polling booth in Australia at the 1967 referendum by resumption from the States of the major traditional Aboriginal land areas and reserves and former reserves as at 31/3/78, to become federal Crown land pending prompt determination of freehold title for Land Trusts and eventually for defined community co-operatives.

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

Petition received.


To the Honourable, the Speaker, and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of South Australia respectfully showeth that we humbly pray:

That the level of Government funding for Education be increased so that:

  1. grants to schools are not decreased,
  2. additional staff may be employed in schools to give greater assistance to children with learning difficulties.
  3. numbers of advisory and specialist teachers in all areas are maintained.

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

Petition received.

Atomic Reactor

To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of the Sutherland Shire respectfully showeth:

That they oppose the construction of any additional reactor at the Australian Atomic Energy Establishment at Lucas Heights in N.S.W.

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

Petition received.


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

That we believe the Federal Government changes to the health insurance system are unjustified, costly and artificially bureaucratic.

The planned abolition of bulk billing will place an unnecessary burden on the poor and the disadvantaged in our community. The decision to reduce the rebate paid from 85 per cent to 75 per cent of the scheduled fee is an attack on real wages.

Your petitioners therefore humbly pray that the Government should reverse it decisions on these matters and develop proper consultation with the trade unions and the community.

And your petitioners as in duty bound will ever pray. byDrKlugman.

Petition received.

Medical Benefits: Abortions

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

That abortion is the deliberate killing of a human beinganathema to God and man.

Your petitioners therefore humbly pray that this house direct the Government:

  1. . to remove items from the Standard Medical Benefits Table which currently permit Medical Benefits for Abolition and
  2. to cease funding of Medical Benefits Scheme through which claims for terminating pregnancy can be made.

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

Petition received.

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Prime Minister · Wannon · LP

- Mr Speaker, I inform the House that the Minister for Productivity (Mr Macphee) leaves Australia today to attend a meeting of Commonwealth industry Ministers in India. He is expected to return on 10 March. During his absence the Minister for Business and Consumer Affairs (Mr Fife) will act as Minister for Productivity.

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– I refer the Prime Minister to his speech of resignation in this House as Minister for Defence on 9 March 1 97 1 in which he said in part:

  1. . my responsibility through the Government is to this Parliament and, through it, to the people of Australia.

I ask: Does the Prime Minister still support this view of ministerial responsibility to Parliament? If so, when will he stop evading his responsibility and provide this House with a detailed explanation of his differences with the Minister for Finance and how they were resolved?


-The earlier statement from which the honourable gentleman quoted was and remains accurate. The reasons for the Minister’s actions have been given in the Minister’s own terms.

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-Is the Minister for Industry and Commerce aware that the recent new agreement signed between the Government and General Motors-Holden’s Ltd for the manufacture of an international four-cylinder engine has been welcomed by Australians as an export winner? Will he inform the House now what progress he has made in explaining that agreement to motor component manufacturers? Has he been able to allay the anxieties of these companies, including companies in my electorate such as the Torrington Bearing Company, and, no doubt, other companies in other honourable members’ electorates?

Minister for Industry and Commerce · FLINDERS, VICTORIA · LP

– The decision which the Government took recently concerning export complementation has, I believe, been widely welcomed throughout the automotive industry. I am, of course, aware of the particular concerns which some component manufacturers have expressed and I recognise the honourable gentleman ‘s interest in raising this question. I might say for the information of the House that, notwithstanding earlier comments to the contrary by the Federation of Automotive Products Manufacturers, the President of that group, Mr Norman Jackson, announced on Sunday that the automotive components industry would give its qualified support to the GMH complementation plan as now specified by the Federal Government. That industry’s qualified support is, of course, on the basis that certain important elements of the scheme have yet to be determined.

I assure the honourable gentleman and the House that the concerns which have been expressed are very much appreciated by the Government. Those representations will have full opportunity for expression through the normal process of the Industries Assistance Commission inquiry which the Government has foreshadowed in taking the basic decision as to the principle of export complementation. I will not speculate here or elsewhere on the impact of the decision on particular firms. We recognise that the decision may cause some difficulties to some sections of the component industry but I think that the broad thrust of what I said in the statement to the House was that this decision is very signficant over the longer haul for the automotive industry. In fact I believe that, notwithstanding anything the Government may have said in earlier days, it was the only decision right for the industry and right for Australia.

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Mr Keith Johnson proceeding to address a question to the Minister for Administrative Services-


-Order! The honourable member’s question is out of order. The Minister is not responsible for any political activity.

Mr Hayden:

- Mr Speaker, the question is related to the Electoral Act. I submit that the Minister is responsible for the Electoral Act. Therefore, you ought to hear the question and then make a determination as to whether or not it is out of order. I believe that it is in order.


-I think that the honourable gentleman had better rephrase his question.

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– Can the Minister for Primary Industry say what effect the present troubled political climate in Iran is having on Australia’s agricultural trade with that country, particularly on live .sheep shipments which have proved so valuable to producers? Are there trading opportunities for live sheep and sheep meats in Middle Eastern countries other than Iran that could be developed?

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

-It is certainly true that the live sheep trade has been a very valuable addition to the sheep meats trade m recent years. Perhaps more to producers in Western Australia, but in the eastern States too, it has given a solid base to sales of cast for age sheep which in past years were almost unsalable. The size of the Iranian market is such that, given the political and economic instability there at the moment, were it to be closed completely it would have a very profound effect on the demand for live sheep. We have maintained quite significant exports to Saudi Arabia and Kuwait. My colleague the Deputy Prime Minister has reported to this House on the prospects that he sees in general for the trade in agricultural and other commodities with other countries in the Middle East.

Iran, with its population of nearly 40 million people, is of course a very major market. We hope that it might be possible again to ship in quantity into that market in the near future. However, the market is still taking some live sheep. Statistics I have been given show that in the period from November 1978 to January 1979 about 552,000 live sheep were shipped. Whilst that compares with 736,000 live sheep shipped for the same period in 1977-78, it still is a very significant market and one which is of tremendous importance to Australia.

It is not, of course, only a live sheep market. Concern has been expressed by some members of the trade union movement in the past about the effect of the maintenance of the live sheep exports. We in fact believe that because we have been shipping live sheep into the area we have been able to expand our carcass exports to a significant degree. The long-term prospects seem to lie in an even greater growth in the carcass trade than in the live sheep trade. The combination of both is very much in the interest not just of Australian primary producers and the sheep men in particular but of the whole Australian community. The employment that is engendered is certainly very important in ensuring the maintenance of the present economic recovery in the rural sector.

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-Does the Minister for Defence accept the Westminster doctrine of ministerial accountability to the Parliament? Does the Minister still stand by his statement during last weekend in regard to ministerial resignations?

Minister for Defence · MORETON, QUEENSLAND · LP

– I must confess that I am surprised that the honourable gentleman should hold any curiosity as to what my attitude may be regarding the Westminster system or the authority of this Parliament. I would seek to remind the honourable gentleman that when I offered some observations last weekend concerning the honourable member for McPherson, I did so in relation to an entirely different capacity from his capacity as Minister for Finance. The position is quite clear. I hold a clear obligation to every Minister who serves in the Government led by the Prime Minister.

I accept without the slightest equivocation the doctrine of collective responsibility. That responsibility is to be sharply distinguished from the responsibility that I owe to a private member of this House. If the honourable gentleman should be in any doubt as to how I would discharge that responsibility then I invite him to attack the Minister for Finance.

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– Is the Minister for Industrial Relations aware of the serious nature of the industrial problem in the airline industry at present? Can the Minister indicate what steps are being taken to resolve this dispute in the airline industry before its effect on domestic and overseas airline services becomes most severe?

Minister for Industrial Relations · CORANGAMITE, VICTORIA · LP

– Yes, I am well aware of the serious situation facing the airline industry at present. Of course the Government is most concerned at any prospect that the airline services may have to be terminated due to a continuation of strike action or bans action. The industrial action to which the airlines are being subjected at the present time springs from claims made by certain ground staff unions for wage increases, which in turn can be traced back to a Full Bench decision of the Commonwealth Conciliation and Arbitration Commission in the middle of last year and a later decision by Mr Commissioner Deverall.

I am sure the House will appreciate the potential for disruption and not only the inconvenience to Australian travellers but also the possibility of substantial revenue losses to the Australian tourist industry which could flow from this dispute if overseas and internal services are seriously disrupted. I regret to say that the serious disruption which the airline industry faces will be with us very soon if the present strike action and bans action continue. I should point out that the airline operators have been actively seeking, through the proper tribunals, a solution to this dispute. They have met under the chairmanship of Mr Justice Coldham and they have also met by themselves. They have discussed the wage claims and proposals have been put by the operators. These involve wage increases to a large number of the ground staff who are now on strike.

I should also point out that in making these proposals the operators were very conscious of the attitude of the Commission and the need to work within the principles of the Commission for wage determination. In other words, the airlines have genuinely sought a resolution of this dispute. I regret to say that their proposals were rejected by the employees and the strike continues. Of course, two of the operators concerned are Commonwealth bodies. Both my colleague, the Minister for Transport, and I have been kept fully informed of developments and the efforts that have been made to settle the strike. Further attempts to settle what is potentially a very serious dispute will proceed, I understand, the day after tomorrow, before Mr Justice Coldham in the Commission. I emphasise that this is the proper place for the resolution of this dispute. I hope that the further conferences will provide a responsible settlement of the dispute and that the union members concerned will have regard to the threat to the jobs of many of their fellow workers as well as to the inconvenience possibly caused to the community.


-Order! I ask the honourable gentleman to draw his answer to a conclusion.


– I further urge the union members concerned to resume work immediately.

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Mr Barry Jones:

-I direct my question to the Minister for Finance. I refer to the Minister’s statement to the House yesterday, recorded on page 346 of Hansard, in which he said in part:

I am deeply conscious of my responsibilities to the Liberal Party, to the Government and to the Prime Minister.

Earlier he said that his reappointment would be: far the best course for the well being of the Liberal Party and the Government of Australia.

I ask: What place, if any, does the Parliament have, in the Minister’s order of priorities concerning his ministerial responsibilities? Why does he believe that his first responsibility is to the Liberal Party and to the Prime Minister rather than to the Parliament?

Mr Eric Robinson:

-If the honourable member reads into my statement that I have not a recognition of my responsibility to the Parliament he is very misguided. I discharged that responsibility to the Parliament yesterday.

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-Has the attention of the Minister for Defence been drawn to a news report today which stated that the Royal Australian Air Force is converting four of its F111s into spy planes? Will the Minister inform the House whether this is a correct report? If so, for what are the planes to be used?


– I did hear a comment on the Australian Broadcasting Commission news this morning that four RAAF aircraft were being converted- I thought it was rather exuberantly described- to possess a spy capability. The word spy’ seems to me to have a sinister, improper, clandestine overtone about it. That is not the role of the retro-fitting of the four aircraft which will provide the RAAF with a strategic and tactical reconnaissance capability. It is a very expensive retro-fitting. It will enable the aircraft to photograph by day and by night, no matter what conditions may be in existence, and to detect and to record emissions from missiles and from radar. Few as the aircraft involved may be, they nevertheless will provide the RAAF with a much needed and very valuable asset indeed.

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-Will the Treasurer confirm or deny the validity of reports that the Government is seeking to prevail upon the trading banks to finance part of the first advance payment to wheat growers this year instead of continuing normal financing through the Reserve Bank’s rural credit fund? If so, will the new financing arrangements involve higher interest payments by the Australian Wheat Board and lower final returns to wheat growers than would otherwise have been the case? Can he also advise the House whether these new arrangements will have the effect of restricting credit to other borrowers and pushing up the short-term level of interest rates?


– Last week in answer to a question from the honourable member for Murray I indicated that the finance facility of the Rural Credits Department would remain an integral part of the financing arrangements for the Australian wheat industry and that any suggestion that that situation was to be altered or that the repayments period was to be altered was quite false. I confirm what I said in that answer. I also say to the honourable gentleman that in examining from time to time the situation of the rural credits advance facility, the Government not only must take heavy cognisance of the integral role of that Rural Credits Department but also must have regard to general money supply considerations. That remains the situation. In due course the honourable gentleman will see a reflection of the Government’s consideration against the background of those two criteria.

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– I direct my question to the Minister for Business and Consumer Affairs. In view of the great concern expressed by newsagents at the recent determination of the Trade Practices Commission, will the Minister inform the House what measures may be adopted to protect the livelihood of newsagents and to ensure that full newsagency services are maintained within the community, particularly in country areas?

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

– The question raised by the honourable member for Wide Bay refers to the draft determination recently handed down by the Trade Practices Commission dismissing applications for authorisation of certain restrictive agreements relating to the supply and distribution of newspapers and magazines. It also relates to a draft notice of intention to give notice under section 93 (3) of the Trade Practices Act with respect to practices of exclusive dealing. There are processes that can be and, I understand, are being followed. For example, there is a capacity for the parties interested in this particular case to confer with the Trade Practices Commission in respect of the draft determination and draft notice. I believe that this form of consultation will take place.

It is also important to record that a large number of people have made representations to me. Those people include newsagents and members of Parliament on both sides of this House who have expressed great concern on behalf of their constituents. I am looking very closely at the position. I repeat that due processes are provided for within the legislation. First of all, there may be consultation with the Trade

Practices Commission and, ultimately, when a final determination is made and if one or more of the parties disagrees with that determination, there is recourse to appeal to the Trade Practices Tribunal. However, notwithstanding that process, I am examining the matter in detail in the light of the representations that I have received from members of this House and from affected parties.

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– My question, which I direct to the Minister for Business and Consumer Affairs, refers to the furniture industry which has a turnover of $600m, directly employs 23,000 people and indirectly supports another 50,000 people. Have manufacturers told the Minister that if the draft recommendations of the Industries Assistance Commission are accepted, they will move off-shore to take advantage of the taxfree holidays and other incentives provided to other multinational investors in Malaysia and elsewhere? Is the Minister aware that for the last several years imports have focused on sections of the furniture industry and sections have increased as a percentage of the market, for example, from 5 per cent to 50 per cent? Does he acknowledge that the rates proposed by the IAC are inadequate in these circumstances and that assistance in the form of quota or tariff quota is essential to maintain the furniture industry in Australia?


– I am, of course, aware that representations have been made by the industry. Indeed there has been consultation between the industry, the Minister for Industry and Commerce and me. The Industries Assistance Commission has reported to the Government and that report has been considered by the standing committee on industry assistance. In the very near future the report of that committee and the report of the IAC will be considered by the Government. At that time the representations that have been made by the industry and all other relevant factors will be considered very carefully by the Government.

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-I ask the Prime Minister: Has he seen reports that the Government should introduce a tax on capital? Has the Government given consideration to this matter and will the Prime Minister tell the House whether the Government is contemplating such a tax?


– I was asked this question yesterday not in the public domain.

Apparently in one or two of the States the suggestion that the Government was considering the introduction of a capital gains tax had some currency. The Government is not considering, and has no intention of considering the introduction of a capital gains tax. We all know, of course, that the Australian Labor Party wants a capital gains tax. The honourable member for Gellibrand has said that he wants a capital gains tax and that he intends to introduce a capital gains tax.

Mr Hayden:

– Of course.


-The Leader of the Opposition is saying: ‘ Of course ‘.

Mr Hayden:

– That is right.


-The Leader of the Opposition now says: ‘That is right’.

Mr Hayden:

– It is better than ripping it off the people you have been ripping off, the average person in the community. This might be as dishonest as your other undertakings.


-Order! I ask the Leader of the Opposition to cease that constant interjection.


– I am glad that the fact that the honourable member for Gellibrand indicated that the Labor Party would introduce a capital gains tax has now been confirmed on behalf of the whole of the Labor Party by the Leader of the Opposition himself. It is good to have that confirmation clearly out in the open. We know quite well that a former Labor Treasurer tried to introduce a capital gains tax, found it too complex and abandoned it. We now know that the complexities are to be brushed away with all the inequities that would be involved. Who is Labor going to tax? It is going to tax home owners, obviously- they own capital- shop keepers, small businesses and farmers. Everyone this Government has relieved of paying death and probate duties will now have a capital gains tax lumped on top of them. I think it ought to be noted that we have abandoned the capital test as part of the pension means test. Presumably, a capital gains tax would be placed also on pensioners who own capital. It is plain, Mr Speaker, that Labor has not changed. The Labor Party has also made it quite plain -

Opposition members interjecting.


-Labor members come in very warmly and generously. Long may it continue from that side of the House.

Mr Innes:

– Why don’t you stand up in debate and say that? You are a coward. You hide behind Question Time.


-Order! There is too much interjection. The House needs to consult its dignity and behave with dignity. I ask all sections of the House to remain silent while the answer is given.


-Mr Speaker, it is worth noting that the Australian Labor Party -

Mr Charles Jones:

– I raise a point of order. How can the Prime Minister state what a capital gains tax would entail under a Labor Government when there is no such legislation?


-There is no point of order.


– It is worth noting that the Australian Labor Party has also indicated that it would abandon the investment allowance. It has indicated that there would be a resource tax. Indeed, it would revert to the policies of previous times which stifled growth -

Mr Scholes:

– I raise a point of order.


-A point of order. The Prime Minister will resume his seat.


-. . . and began the great period of unemployment in Australia.

Mr Scholes:

– I can wait, Mr Speaker. If we have hillbillies running the country that is our bad luck. Mr Speaker, on a serious point of order -


-Before the honourable gentleman proceeds with the point of order, let me say that I did not hear what he said, mainly because there was too much interjection from the front bench on my right.

Mr Scholes:

– Mainly because the Prime Minister would not cease speaking when you called on him to do so.


-I think that the honourable member used some offensive words. I ask him to withdraw them.

Mr Scholes:

– I withdraw, Mr Speaker, but I think you ought to know that all I said was that we had a hillbilly running the country -


-The honourable member will now proceed.

Mr Scholes:

– . . . and I withdraw it.


-The honourable member complained that the Prime Minister spoke while I was speaking. Now he is doing exactly the same thing.

Mr Scholes:

– I apologise, Mr Speaker.


-I expect example to be given by both honourable gentlemen. The honourable member for Corio will make his point of order succinctly.

Mr Scholes:

– My point of order is that the question asked was whether the Government intended to introduce a capital gains test. For the last seven or eight minutes -

Government members- Tax.

Mr Scholes:

– Tax- I apologise again. For the last five minutes, the Prime Minister has been engaging in a fantasy of wishful thinking for his next election campaign which has no relevance to the question asked in the House, that is, about a test.


-The answer being given by the Prime Minister is relevant to the question.


– It is interesting to see the honourable member rise to his feet to contradict so vigorously the Leader of the Opposition. The Leader of the Opposition has said that Labor would introduce a capital gains tax. The honourable member who has just interjected by taking a point of order made it perfectly plain that he thought that was a fantasy. Who does run the front bench of the Opposition? We know perfectly well that the Australian Labor Party has many spokesmen on many different subjects. That is why I was so interested to get confirmation by the Leader of the Opposition of the statement by the honourable member for Gellibrand that there would be a capital gains tax. Relevant to that is the fact that Labor supporters have also said that the investment allowance, which has done so much for industry which is now starting to move forward and looking to the future with confidence, would also be abandoned and there would be a resource tax on top of all of that. Quite plainly the policies of the Labor Party would be the policies that it pursued before. They would lead to total inflation, and that has been made quite plain by the Leader of the Opposition. In addition to that, they would stop initiative, enterprise, investment and development in a way that would do grievous and grave harm to Australia just as Labor’s policies did from 1972 to 1975. Again I thank the Leader of the Opposition for his interjections on this occasion.

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-I direct my question to the Treasurer. Is he aware that in seasonally adjusted terms the number of new housing commencements has fallen in the September quarter 1978 by seven per cent below the June quarter number and by 12.2 per cent below the September quarter number in 1 977? Is he also aware that money supply is currently running at 1 1 per cent, which is well above the Government’s Budget target of six per cent to eight per cent? Will a tightening of liquidity show a real impact on the housing sector? Will it further aggravate the decline in the building industry? Will such a further decline have repercussions across the rest of the economy?


-I think the figures that the honourable member gave are broadly correct so far as the number of new commencements are concerned. On that point I would remind the honourable member- and I do not think that the point can be emphasised too much- that as a barometer of activity in the building industry and in the housing sector the number of new commencements is of declining significance because of the very significant shift which for a combination of reasons has occurred in recent years between new dwelling commencements and additions in the purchase of existing dwellings. So, for honourable members to point to new commencements as being the sole or overwhelming barometer of activity in this area is to misunderstand the very real changes that have occurred in the industry. The honourable member did not acknowledge in his question that the lending figures for both the banks and the building societies in recent months have been at significantly higher levels than has been the case at any time, I think, over the past two years. One of the reasons for these levels is the measures announced in the last Budget regarding LGS arrangements for the banks. This was a deliberate decision by the Government to make it possible for the major lending institutions to make more money available for housing. There can be no suggestion that the amount of money available for housing from the major lending institutions at the present time is anything other than adequate. For the honourable member to suggest otherwise is to misunderstand the facts completely.

Once again, the honourable gentleman raised, as members of the Opposition are wont to do at this time of the year, the spectre of tightening of credit. I have said before and I will say again to the House that the management of liquidity in the banking and financial system generally over the past three years has been such that it has made a significant contribution to reducing the inflation rate whilst, at the same time, it has underwritten sustained economic recovery. It is the sort of economic recovery which is daily becoming more apparent through the release not only of reliable economic indicators but also of a large number of significant business surveys.

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– Has the Minister for Employment and Youth Affairs seen reports in yesterday’s Australian Financial Review about certain administrative changes to the Special Youth Employment Training program? Can the Minister assure the House that the general effectiveness and availability of the program are not being reduced or rendered ineffective by any such changes?

Minister for Employment and Youth Affairs · STIRLING, WESTERN AUSTRALIA · LP

– I thank the honourable gentleman for the question. I did see the report to which he referred and, as a result, I put out a Press statement yesterday to make it quite clear that there is no restriction on the availability of work experience opportunities in State government employment by reason of the changed administrative arrangements for the Special Youth Employment Training program. The arrangements applying to State departments are exactly the same as those applying to private employment. The intent of those arrangements is to provide special opportunity for young people who are disadvantaged in the employment market so that, through the work experience they obtain, they are better able to obtain employment, either with the employer with whom they receive training or with other employers to whom they can transfer their skills.

The States have made some complaints to me which I feel are unfounded because the true intent of the program is to provide training opportunities. It is not intended to provide States with a pool of people who would otherwise be qualified under the States’ ordinary standards to obtain employment with their Public Services. So I ask all the States to take advantage of the money which the Commonwealth is making available to them so that they can provide all the work experience opportunities which the young people need today.

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– I address my question to the Minister for National Development and preface it by saying that the Minister will be aware that, if salinity is not contained, ultimately it will destroy the economic viability of the River Murray basin. Further, he will appreciate that the problem can be overcome only by major construction projects and financial assistance. Is the Minister aware of the recent South Australian Salinity Control Program, which it is estimated will save $80m over the next 30 years? If so, will he make a firm financial commitment in two areas: firstly, a commitment for the whole of the proposed salinity control and drainage program and, secondly, a commitment on the level of financial assistance to be provided for a forward program of at least three years?

Minister for National Development · BASS, TASMANIA · LP

– I thank the honourable member for his question. The Government is most concerned about the problems of drainage and salinity in the River Murray basin. Not only the Government shares that concern, but also other members of this chamber, including the honourable member for Riverina, the honourable member for Murray and the honourable member for Mallee. The governments which are concerned with the Murray Valley- New South Wales, Victoria and South Australia- are also involved in solving these problems. Consequently, in October 1977 the three governments decided to employ consultants to recommend a coordinated attack on salinity and drainage. I understand that the consultants reported three or four months later and recommended that urgent salinity work should be undertaken immediately. The Commonwealth Government, on a dollar for dollar basis with the other governments involved, has invested $2.2m, I think, in effecting the recommendations contained in the urgent report of the consultants. The consultants then will recommend to the Government the long term measures that might be taken in the future.

Mr Jacobi:

– You have allocated only $2 Im for the national program.


– I ask the honourable member to let me finish my answer. The report is due in May 1979. When the report relating to long term solutions is received, the Government will decide what to do about the problem. The answer to the specific question asked by the honourable member is yes, the Government is quite happy to give a commitment to complete those urgent works which were recommended at a cost of approximately $9.Sm. This year the Government will expend $2.2m. Next year the work will be completed. The long term commitment will depend on the recommendation of the consultants which is expected in May.

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Mr Ian Robinson:

-I direct a question to the Minister for Primary Industry. Is the Pig Industry Research Committee constituted to advise the Government on fund allocations for research in the pig industry? Can the Minister advise whether there have been any difficulties in the appointment of members to the Committee?


– A considerable number of bodies in the primary industry field are responsible largely for administering funds which are contributed by way of levy imposed on several primary industries. The Pig Industry Research Committee is one such body. It has just come to my notice that under the terms of the Pig Industry Research Act 1971 new appointments to that Committee are required, after nomination by a group of designated bodies, to be approved by me. In fact, by an administrative oversight, those appointments made post 1 July 1 977 were not referred to me. However, I am told that the members of the Committee acted in good faith, believing that they were performing their duties in accordance with the terms of a properly constituted appointment. Of course, legal precedents exist to show that in similar circumstances the actions of public officers, when challenged, have been held to have full force and effect.

On becoming aware that the appointments had not been formally notified to me, I immediately took action to ensure that these members of the Committee were correctly appointed. This was done on 9 February 1979. 1 believe that the steps I have asked my Department to take will ensure that in future there will be no recurrence of omissions of this kind, in view of the very important work that members of such committees undertake. They ensure that value is gained for the funds contributed by producers. They also ensure that research across the whole field of primary industry is undertaken in a manner best suited to the practical requirements of the people who make the contribution, who are, of course, the members of the industry itself.

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– My question is directed to the Minister for Trade and Resources. The Minister will remember saying during Question Time on Wednesday of last week, when speaking about live sheep export bans and his visit to the Middle East, that he was ‘taken into one cool room to be shown chilled lamb from New Zealand, Chile, Argentina and Uruguay’. The Minister will also recall pointing out that the chilled lamb exports from those countries were substitutes for live sheep exports from Australia. I ask the Minister: If chilled meat from the several countries he enumerated is acceptable to the Middle East countries visited by him, why cannot he assure the supply of Australian chilled meat in such places instead of seeking to provoke what is, on the basis of his statement, clearly avoidable confrontation on the issue of live sheep exports?

Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

-Unfortunately, the Leader of the Opposition did not get the significance of my answer last week which was that the supply of sheep meat to Middle East countries having been threatened, agents in those countries had to ensure that they had regular supplies of sheep meat and looked further afield than Australia as a supplier of either slaughtered sheep meats or live sheep meats. If they had not had a confrontation or been frightened by the bans that were imposed by the Australian meat industry workers, they would not have looked elsewhere. As a result of having supplies disrupted they had to ensure that they got meat from elsewhere, and if they could not get live sheep they looked for other types of meat. If one wants to look at the make-up of our availability of sheep meat one will find that if customers tend towards the purchase of chilled sheep meats they are not going to get slaughtered wethers or old ewes but are going to get lambs; and there is a limited amount of lamb available. If that is the type of chilled meat that they want they will not go and get chilled mutton.

If the honourable member took an interest in the matter he would know that there is no such thing as chilled mutton in the market place and that there is only frozen mutton. All I want to emphasise to the Leader of the Opposition and to members of the Opposition is that if they want to build up the trade that is available in the Middle East they should try to meet the demand of the market place; and the demand of the market is for live sheep, chilled meat and frozen meat. The market wants all those types of meat and it is not up to the Australian meatworkers to determine what the ratios will be.

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-I ask the Minister for Employment and Youth Affairs whether he has seen reports from the Murray and Goulburn Valley areas of Victoria that thousands of tonnes of fruit may go to waste because growers cannot get enough people to pick the annual harvest. Is it correct that nearly 2,000 people are registered for work at the Shepparton Commonwealth Employment Service office but there are 400 job vacancies in the Shepparton area for fruit pickers? What is the explanation for this position? Will the Minister ensure that the work test is applied when determining whether unemployed people in the areas mentioned should qualify for the unemployment benefit?


– I have seen reports of the kind to which the honourable gentleman has referred regarding the Shepparton district and also regarding Mildura. I know that the honourable member for Murray is interested in this question concerning Shepparton. I think the question asked of me reflects a concern, certainly on the Government side of the House, that there are jobs available and that there are seeking jobs people who regrettably do not seem to be taking up those opportunities. At the same time as they are not taking up the opportunities they are receiving unemployment benefits, which of course are coming out of the taxpayers’ purse. I think that honourable gentlemen on the Government side of the House quite properly are asking why the taxpayer should bear that burden when these jobs are available.

Having said that, however, I want to assure the House that the Commonwealth Employment Service has been very active in this area. Let me just briefly give some statistics. For example, the current position at Shepparton is that 4,016 vacancies have been notified for this kind of work and that 3,653 of those vacancies have been filled. There are currently 433 vacancies and up to now adverse work tests have been applied to 173 persons, that is, they have been denied unemployment benefit because they have not taken jobs that are available to them.

I am informed that in the Mildura area the CES has had 5,135 vacancies, of which 2,385 have been filled. About 700 of these have been referred from offices of the CES in other districts of Victoria. The work test is applied to locally unemployed people and that, of course, is perfectly understandable. However, the work test has not been applied to other unemployed people outside the local district. I have expressed concern to my Department about that fact because one of the conditions upon which people are offered this kind of seasonal, casual work is that they are provided with expenses to go to the place of work. Therefore, it is not unreasonable to ask whether persons who refuse the opportunity to take the travel expenses and to travel to the Mildura or Shepparton districts should nevertheless continue to receive unemployment benefit. I think there are many people in Australia at the present time who see able bodied men and women not responding to these kinds of work opportunities.


-I ask the honourable gentleman to draw his answer to a conclusion.


-So, Mr Speaker, I have asked for a report from my Department and I will be reporting to the Government in the very near future.

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Mr McLeay:
Minister for Administrative Services · BOOTHBY, SOUTH AUSTRALIA · LP

- Mr Speaker, I seek your indulgence to correct certain cost figures that I gave to the House last Thursday, 22 February, in answer to a question.


-The honourable gentleman has my indulgence.

Mr McLeay:

– Thank you. The figures were given in the course of an intervention I made on a question asked by the honourable member for Melbourne (Mr Innes) about telephone accounts submitted by Mr Harry M. Miller. The figures I quoted were supplied by my Department. On subsequent checking the departmental accountants concluded that an amount of $702.93 in respect of telephone services and $173.60 in respect of car hire ought more properly to be apportioned to the 1977-78 period of the Silver Jublilee Commemorative Organisation. Accordingly the figures were amended to that extent. The amended figures were included in the answer to Senate question No. 1051 on 22 February put down in the Senate subsequent to my reference in the House. At the time I gave the information to the House I had not been advised that the accounting amendments were to be made.

The figures given in the reply to Senate question No. 1051 are for expenditures brought to account during the period 1 July 1978-31 December 1978 in respect of Mr Miller’s position as Special Adviser in relation to preparations for the 1988 Australian Bicentenary. They exclude the cost of facilities referred to in the October meeting of the Estimates Committee relating to the July meeting of the Bureau of International Expositions in Paris.

I call to the attention of honourable members the fact that these are the amounts actually brought to account in the period. I am advised by my Department to expect some further payments relating to that period and subsequent periods which will have to be brought to account. This arises from the time lag in the presentation of accounts, particularly for telephone services. The telephone services in question refer to one in each of Mr Miller’s office in Sydney, his private residence in Sydney and his country residence at Manilla. His company pays the accounts and seeks reimbursement from the Department.

There is a number of questions on notice relating to the Silver Jubilee Commemorative Organisation and the preparations for the 1988 Australian Bicentenary. I have called for full details in respect of these questions and will put down answers as soon as possible.

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Leader of the Opposition · Oxley

- Mr Speaker, I claim to have been misrepresented.


-The honourable member wishes to make a personal explanation?


– Yes, I do.


-He may proceed.


-During Question Time, the Prime Minister (Mr Malcolm Fraser) referred to the Australian Labor Party’s commitment to introduce some sort of capitals tax. I have stated on a number of occasions that it would be a capital gains tax. Where he has misrepresented our commitment is his claim that among other people who would be affected by it would be pensioners, householders, small business people and so on. I have made it abundantly clear that we are talking about capital gains arising from capital accumulations in excess of some $200,000. So it would not include many people although it would generate a considerable additional amount of revenue in the community. Finally, Mr Speaker, it is based on the principle that those who are best able to pay or to make a contribution to the revenue needs of the community, instead of ripping it off income earners, people with accumulations of long service and annual leave which are subject to punitive rates of tax as was done in the last Budget and undoubtedly will be exemplified in the next Budget given the fiscal problems of the Government.


-Yesterday, Mr Speaker, I raised a point of order because I got rather hot under the collar when the Leader of Her Majesty’s Opposition (Mr Hayden) referred in his speech to private discussions that he had with honourable members; and he used those private discussions to taunt us. You, Mr Speaker, and many honourable members obviously heard what he said. I realise that Hansard reporters often experience difficulties because of the noise level in the chamber, but I have searched Hansard very carefully today for this reference and I cannot find it. Mr Speaker, before any innuendos are made, would you please ask the Hansard staff to check the record to see whether those remarks were made or whether I was wrong?


-I will check with Hansard.

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Report of Joint Parliamentary Committee on Publications

Ministerial Statement

Minister for Employment and Youth Affairs · Stirling · LP

– by leave- The Joint Parliamentary Committee on Publications in its report recommended, in particular, that greater priority be attached to the reprinting in pamphlet form of Acts, statutory rules and legislation of the Territories, as amendedrecommendation 1 of the report. The Joint Committee raised for consideration whether there was a more practicable method of producing consolidated pamphlet reprints- paragraph 27 of the report- and recommended that bound general reprints- consolidations- be produced more frequently- recommendations 2-6. The Joint Committee’s recommendations on reprints- recommendations 1-6- will be met by a new continuously updated pamphlet reprint system which is being introduced by the Attorney-General’s Department.

Under the system, complete sets of reprints in pamphlet form of Acts, statutory rules and Territory ordinances and regulations will be regularly updated and arranged alphabetically in special binders. New principal, non-amending, legislation will be placed in the binders in alphabetical order, and amending legislation will be placed behind the last reprint or principal legislation until an updated reprint incorporating the amendments is produced. The separate pamphlets will replace the bound general reprintsconsolidations hitherto published. Bound annual volumes will continue to be published as the permanent historical record of Commonwealth and Territory legislation to supplement the separate pamphlet general reprints. When completed, the separate pamphlet system will contain, in separate sets of substantially made binders for each body of law, the complete set of all Commonwealth and Territory legislation as currently in force. The pamphlets can also be used separately if required. The pamphlet system of reprinting is now used or proposed to be used in all Australian States, and the United Kingdom is also producing reprints in a similar form. The Law Council of Australia has expressed on behalf of its constituent bodies its view in favour of a separate pamphlet reprinting system.

A general reprint of Australian Capital Territory ordinances and regulations as at 31

December 1977 had reached an advanced stage when the decision to change to a pamphlet reprint system was reached. It is proposed, therefore, to commence the pamphlet reprint system with the production of Australian Capital Territory ordinances and regulations updated to incorporate amendments to the time of reprinting of each separate pamphlet reprint. At the same time, work is to be undertaken on producing pamphlet reprints of Acts and statutory rules. In the first instance, pamphlets will be produced in order of priority of need to make up a basic set. Others will be prepared later to complete the set. It is estimated that it will take about two years to complete a set. Regularly-produced companion tables booklets, with monthly supplements, will show what has been reprinted, dates of reprints and details of amendments. This will meet the Joint Committee’s recommendation 8. The tables booklets for Australian Capital Territory laws and statutory rules are in the course of preparation.

The Joint Committee also recommended that annual volumes be undertaken on a regular basis and be available within one year of the year to which they refer- recommendation 7. Now that the backlog of annual volumes of Acts and statutory rules is being overtaken following a concentration of effort in the Attorney-General’s Department the Attorney-General is sure that this recommendation can be met. The Joint Committee asked for an investigation of resources, including a task force, to achieve adherence to the Committee ‘s recommendations- recommendations 1 1 and 12. The Public Service Board and the Attorney-General’s Department conducted an investigation as recommended by the Committee with a view to overtaking arrears and otherwise meeting the Committee’s recommendations.

Arrears had built up gradually from a variety of causes over the last few years. In particular, the staff established in Sydney to prepare the 1901-1973 general reprint of Acts was relocated to Canberra for more efficient operations but there were resultant losses of staff and it took time to refill the positions and train new staff. Further arrears occurred owing to the imposition of additional functions on publications staff until new positions were created for the additional functions; but there has always been difficulty in obtaining and retaining suitable persons for publication work, which requires great concentration and attention to detail. Further, there has been an increasing workload of proof-reading of draft legislation prepared by the Legislative Drafting Division of the Attorney-General ‘s Department and additional proof-reading resulting from the use of the Government Printer’s computerised phototypesetting process for printing of annual volumes of Acts. As recommended by the Joint Committee in recommendation 10, material for annual volumes of Acts and reprints is produced by this process. The text of legislation, which is printed originally by a hot-metal process, is rekeyed into the computer typesetting process for reproduction in the annual volumes and reprints. As the Committee noted, when fully developed, legislation should be able to be more readily produced in its consolidated form by the computerised process. A benefit by-product of this process is that the tape can be used in the legal information retrieval system that is currently being developed by the Attorney-General’s Department.

The investigating team recommended a relocation of the publications functions within the Department to allow for more effective management, and supported the replacing of bound general reprints by the separate pamphlet reprint system for all Commonwealth and Territory legislation. In accordance with recommendations of the investigating team, the existing staff now engaged on bound general reprints and on pamphlet reprints will be amalgamated to work on the general pamphlet reprint system. By using existing staff on a continuous separate pamphlet system a task force as recommended by the Joint Committee in recommendation 12 that would redeploy staff from other parts of the Department should now not be necessary. The investigating team, as recommended by the Joint Committee in recommendation 13, also discussed with the Australian Government Publishing Service the systems relating to the copy prepared for and produced by the Government Printer and their recommendations are being implemented in the Department. A separate report on the AGPS was presented by the Joint Committee on 24 November 1978. The Attorney-General’s Department has arranged with AGPS for it to be advised whenever updated reprints of Acts, Statutory Rules and Territory legislation are needed in accordance with the recommendation of the Joint Committee in recommendation 14. Details of printing and the design of binders and methods of stock-holding for the new separate pamphlet reprinting system are currently being worked out in consultation with AGPS.

Following recommendation 9 of the Joint Committee, the responsibility for publishing Northern Territory laws has been transferred to the Northern Territory Government. In accordance with recommendation 15 of the Joint Committee, the Attorney-General’s Department will make a further report to the Committee within 12 months of its report in relation to matters within the Department’s responsibility and into which the Committee has said that further inquiry by the Committee is warranted, and on other relevant matters. I present the following paper:

Publication of Commonwealth Legislation- Ministerial Statement, 28 February 1979.

Motion (by Mr Fife) proposed:

That the House take note of the paper.

Smith · Kingsford

– The Opposition welcomes the statement of the Minister for Employment and Youth Affairs (Mr Viner) on behalf of the AttorneyGeneral (Senator Durack) which sets out the Government’s response to the report of the Joint Committee on Publications put down on 8 June last year. The new system to be introduced by the Attorney-General’s Department- the continuously updated pamphlet reprint system arranged alphabetically in binders- is to be particularly welcomed.

This Parliament is really a busy place. Might I say that it always seems to be busier in times of a Labor government, whether there is Senate obstruction or otherwise. But even during times of conservative government there is normally a fairly heavy legislative program and there is never a shortage in the number of regulations that are made. Legislation passed by this Parliament and regulations made under that legislation should be readily and quickly accessible to us as legislators, to the judiciary, to the legal profession and, most importantly, to the public. The regular, or not so regular, consolidation of legislation which has occurred in the past has been far too slow a system and could well deny to the people the accessibility to legislation that they require. The new system, which already operates in most of the Australian States, is favoured also by the Law Council of Australia. It is a very desirable system. Certain Acts of this Parliament, such as the Conciliation and Arbitration Act, the Income Tax Assessment Act, or the various social security Acts, are amended so often that consolidation never presents an accurate picture for very long.

Certain legislation is also subject to very major surgery on changes of government. I refer particularly to legislation in regard to the Prices Justification Tribunal, the Commonwealth Conciliation and Arbitration Commission and the Trade

Practices Commission which fall into that category. The Opposition also welcomes the fact that in future annual volumes of Acts of Parliament and Statutory Rules will be available within 12 months of the year to which they refer. There is a considerable delay in this area at the present time.

Question resolved in the affirmative.

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Assent to the following Bills reported:

Quarantine Amendment Bill 1979.

Commonwealth Authorities (Northern Territory PayRoll Tax) Bill 1979.

Sales Tax (Exemptions and Classifications) Amendment Bill 1979.

Poultry Industry Assistance Amendment Bill 1 979.

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Discussion of Matter of Public Importance


Speaker has received letters from the honourable member for Blaxland (Mr Keating) and the honourable member for Indi (Mr Ewen Cameron) proposing that definite matters of public importance be submitted to the House for discussion today. As required by Standing Order 107, Mr Speaker has selected one matter for discussion, that is, that proposed by the honourable member for Blaxland, namely:

The economic burden of the Fraser Government’s petrol pricing policies.

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

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


-Since the Fraser Government came to power in 1975 petrol prices have increased by 50c a gallon. In 1 975 the price of petrol was just over 60 cents a gallon. It is now over $ 1 . 1 0 a gallon and it is $ 1 . 20 a gallon in some parts of the country. In this city it is $1.20. There has been an 80 per cent increase in three years as an express result of the decisions of the Fraser Government taken in the 1977 and 1978 Budgets, but more particularly the 1978 Budget which raised the excise, or what is called the import parity levy, on old oil by $ 10.26 a barrel, which amount accrues to the Commonwealth of Australia. In the 1977 Budget the Government instituted a policy to gradually raise the producer price of Australian domestically produced petroleum. The increase was to 1 0 per cent of import parity in 1978; it is 20 per cent in 1979; it will be 3 5 per cent in 1 980 and up to 50 per cent in 1 98 1 . Whilst the Opposition had reservations about some of the questions concerning the distribution of this transfer of wealth from the community to the corporations, it nevertheless supported the concept of movement in the producer price because it was obvious, if we were to develop some of the more marginal pools of oil in Bass Strait, that we had to pay the producers more than $2.33 a barrel. However, we had some reservations about the direction of the windfalls. In 1 978 there was this outrageous policy introduced by the Government to take the whole lot from 20 per cent to 100 per cent of import parity in 1979. That has nothing to do with the producers; it is all to do with revenue for the Government. The result is that in the last six months there has been a 40 per cent increase in the price of petrol. Because of projected increases in costs, many service station proprietors and other people in the oil industry are predicting a price of $1.60 a gallon towards the end of this year.

This policy has imposed an enormous economic burden on the Australian public, Australian industry and Australian agriculture and is contrary to the advice given to the Government by the Industries Assistance Commission and any other body interested in energy policy. The pure and simple reason for the imposition of this crude oil levy in 1978 was to gain revenue to reduce the size of the Commonwealth Budget deficit. This gets back to the obsession of the Prime Minister (Mr Malcolm Fraser) with the Budget deficit. In this financial year the Commonwealth will collect by way of the crude oil levy, the $3 a barrel excise and the company tax which the producers pay from those three sources $ 1,100m. So the Government cannot put the blame for this problem on the producer price. It cannot say that the Opposition does not want to increase the price in order to develop marginal fields. The Government has brought in this policy purely to raise revenue. It comes as a result of this obsession with the deficit.

The Minister for National Development (Mr Newman) seems to be confused whenever he speaks about this policy. He always calls it ‘the import parity policy’. He seems to believe, mistakenly, that the import parity policy has something to do with the producers. It has very little to do with the producers. The stepped increase which the producers receive, in stages of 10 per cent, 20 per cent, 35 per cent and 50 per cent, represents only a very small proportion of the import parity price. It is true that import parity or opportunity cost is the only yardstick of measurement; but, given that there was a certain amount of unanimity between the major parties on the stepping of the increase to producers relative to import parity, why did the Government take the price to import parity immediately? There was no reason.

The Minister tried to market the increases as an energy conservation policy. He said that the increases would reduce the consumption of petrol. Petrol is a very inelastic commodity in terms of price. People require petrol. Certainly people in rural industry and most people in the cities require it. In a city such as Canberra, which is designed for the private motor vehicle, people will not buy less petrol because the price has gone up to $1.10 a gallon. A United States of America transport economics group suggested on the basis of private studies that the price would need to go beyond $4 a gallon in 1978 prices before there would be any sizable let-up in demand in that country. We must bear in mind that the price of petroleum in the United States increased by 400 per cent between 1973 and 1975. Yet per capita consumption of petroleum did not drop at all. In fact it increased. So this demand management policy is very dubious. I will admit that over a long period of time price is an important determinant in the production of alternative energy. We on this side of the House are not taking the approach that we can afford to have a cheap energy policy in terms of production. But this is not what the question is about. This dear energy policy has been foisted on Australia by the Government purely for budgetary reasons, because of the deficit. It has nothing to do with allocation reasons or demand management reasons.

The Government could have done things such as were done by the United States Senate and House of Representatives or by the Canadians. If it was worried about consumption it could have taken direct measures, such as requiring Australian motor vehicle manufacturers to meet certain consumption standards. In the United States in a period of seven years the consumption of the average motor vehicle will go from something like 14 miles a gallon to 28 miles a gallon. The US motor car fleet will have a consumption of 28 to 30 miles a gallon some time in the mid-1980s. Yet what has this Government done? Not a thing. These measures are all marketed as an energy conservation policy. It is really a question of the Budget deficit and giving the oil companies additional revenue. All the Government has done about conservation so far is to poll newspapers and look at a publicity campaign. Given the fact that the Government had done nothing previously and very little this year, one can only take the view that these moves will not come to much. The Government urges conservation but will take no hard decisions about it.

On the other side of the ledger, the Government says that this policy encourages exploration activity. I agree that this is certainly so in terms of the producer price under the 1 977 policy. It is obvious that if oil can be produced at $2.33 a barrel in Bass Strait the price per barrel must rise for the production of oil from the small pools such as West Kingfish, Cobia or some of the other small pools because infrastructure costs are pretty much the same whether there is a big pool or a small pool underneath the production platforms and what-have-you. Therefore there must be an incremental price scale to allow for the difference.

Increased exploration activity is more a consequence of the Labor Government’s policy of import parity for new discoveries which was made in September 1975 and- I will give the Government this point- reiterated in 1976. That was the new discoveries policy. Price is a determinant in exploration. But, in terms of old oil, Esso-BHP particularly will try to do what it can in Bass Strait with additional revenues. The Government gave it a golden handshake without any specific guarantees of exploration expenditure. I put it to you, Mr Deputy Speaker, that the revenues to this conglomerate far outstrip any current expenditure plans that it has for exploration in Bass Strait. It is true that Esso-BHP will do things in other parts of the country, and for that it is to be applauded; but to say that the policy rests on conservation and exploration is twaddle, and the Minister knows it. He might think that he can fool most of the people most of the time, but he certainly cannot fool us on this side of the House.

In this debate I want to make the simple distinction that the 1978 policy which pushes the price to import parity has nothing to do with the producer price; it is about the Government getting revenue. The Opposition does not object to the incremental 1977 policy; we do object to the 1978 policy. Of course, what we are seeing now is that, with the Iranian situation, prices are moving up because of a shortage of oil in the world and because the spot price spills into long term prices. On the front page of the Australian Financial Review today is a story of an increase of $2 a barrel for Venezuelan oil. There will be a 9.35 per cent increase in the price of oil from Kuwait, which flows straight into import parity prices because the Government is caught up with the import parity program. The Minister for National Development shakes his head. In the middle of this year he will have to adjust the import parity pricing mechanism again to set the standard for excise, and by then the price will be immeasurably higher. No doubt in the latter part of this year we will hear him say: ‘Do not blame us for the increases in energy costs and petrol prices. They have come from that dreadful Iranian crisis and from the member states of the Organisation of Petroleum Exporting Countries’. They have come from the 1978 Budget. They have come from the stupidity of linking Australia to an import parity situation when it did not need to be.

The policy has had a questionable exploration stimulus and very little to do with conservation, but it has a lot to do with inflation. If one looks at the fuel component of inflation in the consumer price index for the December quarter one finds that petrol plays a very large part. The Industries Assistance Commission says that import parity pricing will increase the CPI by 2.1 per cent in the next one to two years. Inflation is already at 7.9 per cent and that increase could push it to 10 per cent. Reducing inflation from 12 per cent for the year ended 1975 to 9 per cent for the year ended 1978 has been advertised as the great achievement of the Fraser Government in office. Inflation could be back up to a rate of 10 per cent because of this question of energy. Why should we have this policy? What is the benefit to us? The only reason for the policy is this Government ‘s obsession with the Budget deficit.

Australia was once shielded from international energy prices. In 1973, when the world was stood on its ear by the OPEC states, 65 to 67 per cent of our oil production came from Bass Strait and we were not caught up in the fracas. We are not involved even today. But, of course, we must give the producers more to develop marginal pools and so keep that self-sufficiency, and we must stand by import parity pricing for new discoveries to encourage exploration. We are handed this nonsense by the Government that it has a right to collect $ 1,100m on the way through and then market this as an energy policy. It is just so much bunkum.

The Prime Minister is talking a lot about exports these days but every agricultural industry will be damaged by the increase in the fuel price. A couple of years ago the sycophants in the National Country Party supported the then Opposition in running down the Labor Government for lifting the 2c or 3c differential under the old fuel equalisation scheme for rural centres. What are they saying today about the increase in the price of petrol of 40c and 50c a gallon, and even more in some centres? It is not a 2c or 3c increase now but we hear very little from them. All those rural spokesmen who expressed such mock indignation at the former Labor Government’s shift in policy are saying very little now. Of course, they very often talk from the point of view of their politics rather than about the effect on the industries they claim to represent.

Today’s Financial Review published a letter from Mr Stewart of the Western Mining Corporation stating that the Government’s action will discriminate against export industries, against the mining industry and against the agricultural industries. They will have to pay, but why? Why should we, a country with 70 per cent selfsufficiency and a realistic relativity price for producers, get caught up with import parity? Because the Government dreamed it up. It was Mr Fraser’s obsession, and no doubt an invention of the Treasury. The Treasury would have had its hands in it somewhere along the way. The Industries Assistance Commission’s estimate of unemployment is that aggregate employment will decrease by 0.8 per cent and rural employment by 2.8 per cent. This is an increase in total unemployment of 48,000 people, and in rural unemployment of 8,400 people. So, the rural community will be really hit by this change in policy. Mr Fraser said last week -

Mr DEPUTY SPEAKER (Mr Jarman)Order! The honourable member should not persist in referring to the Prime Minister by name.


– The Prime Minister said last week:

With inflation under control, the farming community is well able to compete effectively and very efficiently.

In other words, he is not going to help the primary industry community at all. We on this side of the House say that the Government must urgently review the import parity levy policy, retain a realistic pricing policy to producers and drop its obsession with the Budget deficit.


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

Minister for National Development · Bass · LP

– The one aim that any government in this country should have in developing an energy policy is to promote selfsufficiency in oil supplies. That is a fundamental tenet of the energy policy persued by any government. Why is it so? At a time when the world faces another Middle East crisis, when supplies of export oil to many countries are in jeopardy, when many countries, some of them close neighbours, are now faced with not only trying to find alternative supplies of oil and associated products but also having to pay enormous prices when they happen to find a market in which they can buy, the importance of selfsufficiency is emphasised once again. Take the example of New Zealand. If Australia were in the position that New Zealand is in, it too would be taking serious measures to ration oil supplies. It too would be closing petrol stations on weekends and paying spot prices three or four times the normal amount for a product. That is the reality of the present situation.

What impeccable timing the Opposition has, coming into this chamber at a time when the world faces an oil crisis to complain about oil prices for short term political effect. A fundamental tenet of any rational energy policy -

Mr Keating:

– Do not walk around the question. We put it honestly. Answer it.

Mr DEPUTY SPEAKER (Mr Jarman)Order! The honourable member for Blaxland has had the opportunity to address the House. He was heard in silence. I ask him to accord the Minister the same courtesy.

Mr Keating:

– He will be heard in silence. I claim to be misrepresented by the things the Minister is saying. We are not cavilling about the producer price; we are not moving away from realistic energy pricing. I want him to address himself to the excise levy. It is a Government take.


-Order! The honourable member for Blaxland will resume his seat.


– I repeat that a fundamental of rational energy policy is rational energy pricing.

Mr Keating:

– That is right.


– I am glad that the honourable member agrees. A rational energy policy depends on a rational pricing policy. That is what this Government has provided. The honourable member can cavil about where the Government attempts to apply its rational energy policy, whether at the producer end or at the consumer end, but whichever way one looks at it Australia now pays market price for the oil that it consumes. The honourable member usually is a forceful man who puts forward vigorous, rational arguments in debates in this place. Today, as every honourable member who sat here and listened would have heard, he was hesitant and contradictory and his speech really did not hold up at all. The very fact that the honourable member, after 15 minutes of hesitant argument, now says, actually, I agree, leads me to ask what it is we are debating. I think the only difference in attitude is whether we should move to a rational price now or spread it over a period of time. It is quite odd that the honourable member, who usually has impeccable debating power, should have come in here today with such a weak case.

What is the effect of rational pricing? The honourable member well knows what it is. Firstly, it wilL encourage people to use substitute fuels wherever they can because they will have a proper price measurement by which to cost their substitution. Secondly, it will encourage the use of alternative fuels on a commercial basis. Thirdly, it will encourage conservation and I will say a little more about that in a moment. Finally, and most importantly, it will encourage exploration and development and I will refer to this last point first of all. The honourable member had the hide to say that it was Labor Party policy that encouraged exploration and development in this country. Nothing is further from the truth. The record is absolutely clear on this matter. At the end of the Labor Party’s era in office in 1975, exploration in this country had stopped. It had stopped dead, and he knows it. Since then, under wise energy policies associated with taxation measures, foreign investment policies, decisions on the North West Shelf and all the rest, we have given confidence to the exploration companies in this country and we have given confidence to those who already operate fields to develop them to the absolute extent of their economic life.

The record is clear. In 1975 there were one or two exploration wells being sunk in this country and applications for permits were falling away. Since March 1977, 25 exploration permits have been granted and in 1978, 53 wells were sunk. The expectations of the Australian Petroleum Exploration Association- although someone might disagree with the figures- is a very optimistic outlook for people searching for oil in this country and putting money into their search. But, more importantly, it has meant that we are developing our existing fields to try to get every drop of oil out of them because every ounce of oil that we can get improves our self-sufficiency now and extends it in the future.

Again, the record is very clear. Two or three years ago when the Labor Party was in office we were looking at 30 per cent or 35 per cent selfsufficiency by 1985. Honourable members will remember that I began this speech by saying that the fundamental of an energy policy is selfsufficiency. In 1975 there was 30 per cent or 35 per cent self-sufficiency but under the guidance of this Government and through the introduction of proper rational policies, of which pricing is a fundamental, we are now looking at a level of self-sufficiency in 1985 calculated at around 50 per cent. If that is not a vivid illustration of what the Government has achieved in its energy policies, of which pricing is so important a part I do not know what is. So much for exploration, although I should add that in the Bass Strait -

Mr Keating:

– What about the levy?


-We will talk about the levy and the profits of the producers. One has to search hard to find any comment that the Opposition has made about its energy policy. I think that the Leader of the Opposition has made two speeches on the subject.

Mr Jacobi:

– Many other speeches have been made on the subject.


– If you have any more, I would love to see them.

Mr Jacobi:

– I will bring in a copy of our policy and the speeches on it.


– I will tell the house what that energy policy is. It is a negative policy. It is a policy that we have heard today -

Mr Jacobi:

– Let us have a debate on the matter. That is what we have not had yet.

Mr DEPUTY SPEAKER (Mr MillarOrder!


– I do not really understand what this man is all about. He would first of all take away the pricing policy that we have instituted, which he agrees is fundamental to the energy policy. There is a contradiction there which I do not understand. But, secondly and more importantly, Labor would introduce a resources tax and, as we heard suggested at Question Time, a capital tax, and that action would remove all the incentive for any oil explorer or producer in this country to go ahead and develop. Why? Well, there are two problems in Australia. One is the problem of low prospectivity and the other is high risk. This means that people need to have incentives. They have to have guts. They must have the money to put in to overcome those two major obstacles. Because of our policy- and pricing is essential to that policy- we have found that the Bass Strait producers are prepared to put $ 1,000m into new exploration and production of new wells this year or development of existing wells. That is what free enterprise is all about and that is what Government policy is designed to do. It is designed to allow people to make a quid and get on, to develop and to invest in the country.

Mr Keating:

– We are not opposed to that.


-The honourable member says that he is not opposed to that.

Mr Keating:

– Of course we are not opposed to that. Address yourself to the levy. We are not arguing about producers. Get on to the levy.


-As I said, what a contradiction. Where do we go. I have never seen such a confused chamber. I have never heard such tommyrot from the Opposition. The honourable member for Blaxland wastes the time of the people in this chamber on proposing this matter for discussion when he agrees with every point that I have made.

Mr Keating:

- Mr Deputy Speaker, I claim to have been misrepresented. This trite -

Mr DEPUTY SPEAKER (Mr Millar)Order! Is the honourable member raising a point of order?

Mr Keating:

– I claim to have been misrepresented. This trite diversion around the leading question will not suffice as debate.


-Order! The honourable member for Blaxland will resume his seat.

Mr Keating:

– Either we get an honest answer or we don’t.


-Order! If the honourable member claims to have been misrepresented, he can seek the indulgence of the Chair at the appropriate time. In the meantime I ask him to remain silent and not to provoke the Chair to take action that it would not wish to elect to take. I call the Minister for National Development.


-Let me continue. I have made several points. One related to oil exploration and development. There were three others. I refer first of all to substitution. Unless the people around this country who use energy have a benchmark upon which they can decide the energy they will use they will not make rational or efficient decisions. Does the Leader of the Opposition (Mr Hayden) or his man who is sitting opposite believe that people will make efficient substitution decisions when oil is priced below what the rest of the world pays? I just do not believe that they would believe such a proposition.

Mr Keating:

– What substitution?


– I will explain what I mean by substitution’. As the honourable member well knows, in Sydney right now the problem of distributing natural gas to the city was inhibited by the fact that diesel fuel and other fuel oils were priced at silly prices. Honourable members opposite know that. The reason why prices are now moving upwards and allowing natural gas to have some penetration is that the cost of fuel oil, diesel and all the rest, is gradually -

Mr Keating:

– They are still priced at silly prices.


-Of course they are. I am not saying that it has happened overnight but I am saying that, right at this very moment, natural gas is achieving a penetration in the Sydney market because gradually and surely the cost of fuel oil is responding to the Government’s decision to price the crude oil product at parity price. That has happened. Another example is liquid petroleum gas. Right now LPG is moving towards a parity price as against the cost of motor spirit that comes out of crude oil. I confidently predict that within the next three to five years LPG will be sold to the motorist at around about a world price. That will mean the distribution of LPG, the use of LPG by motorists, and perhaps even the production of LPG motor vehicles in this country. People now recognise that we can make a proper substitution of an LPG product for motor spirit. I am glad to see that a man for whom I have a great respect, especially for his knowledge and what he has to say about energy, the honourable member for Hawker (Mr Jacobi) agrees.

I turn to investment in alternative energy sources. I say briefly that crude oil having been priced at what is the opportunity cost, the market cost, or whatever one wants to call it, people can now start to take proper efficient, economical decisions on whether and when oil will be able to be obtained from coal and when we will be able to produce agricultural gas, in turn producing ethane.

Mr Jacobi:

– You will have to start doing that now.


-Of course. They are alternative energy fuels. The investment decisions that go with them, the research and development that is required to make those decisions, again depend on rational pricing.

Finally, I come to conservation. I do not wish to argue too hard with the honourable member opposite. There is a price elasticity in the way in which people buy and use motor fuel. It is unfortunate. But he does not really believe that we should allow that to stop us moving to a proper pricing mechanism. For heaven’s sake! Would honourable members opposite just surrender to that at a time when, as I said, we are facing a Middle East crisis. Would they allow that to happen? Would they shrug their shoulders and say: Well, we should not try’. Of course not. We are not going to shirk the decision either. So we took a hard decision. We took that hard decision saying that we would develop for this country a national conservation policy. Today or tomorrow- I am not sure which day- I will be receiving from Eric White and Associates, a plan- a concept- which has been funded by the Commonwealth Government, that we will be able to put to the Australian Energy Council on 9 March, next week, so that we will be able to discuss with the States a national publicity campaign and a concept which we will be able to put to the Australian people along with our pricing decisions. We will put an argument that will show the people that we must do something about the matter and more importantly, to show them constructively how we can do something about it.

I shall just deal with one point about the inflationary effects of our decision. The honourable member for Blaxland was quoting the Industries Commission report. Let me just correct one point that he made. He made it in passing only but I wish to correct any misapprehension that may have resulted. That report was an impact report to the Australian Agricultural Council. It has nothing to do with any advice that was given to this Government when it made its Budget decisions on pricing. Let us make no mistake about that. I believe that there are several aspects of the IAC decision which can be challenged. My Department is in the process of consulting with the IAC authors and trying to sort out those assumptions that we believe are wrong. The Government made the assessment that there would be an inflationary effect. We took that decision knowing that all the other matters that I have explained would be more important. The effect will be an increase of about 3.8c per litre over the full period of this year. That means an indirect increase of about .6 per cent. I really believe that the Opposition’s energy policy has never been explained and that its attitude here today is utter economic madness.


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


– In a time of critical crisis, a suggestion that we would renege on our pricing situation -


-Order! The Minister will resume his seat.

Mr KEATING ( Blaxland )-Mr Deputy Speaker, I claim to have been misrepresented.


-Does the honourable member wish to make a personal explanation?


– Yes. The Minister for National Development (Mr Newman) implied in the course of the debate that the Opposition was opposed to the development of margin pools. I said quite plainly that the Opposition wanted self-sufficiency to be raised and that it did not cavil at the incremental price to producers. However, the Minister, in a trite circumvention of the levy question- $ 1,100m to the Government- did not attend to this issue. I just make the point that the Government has enjoyed -


-Order! The honourable member for Blaxland may not debate the point. He will proceed immediately to indicate where he was personally misrepresented.


– I was personally misrepresented inasmuch as the Minister had said that I and others were following a policy line which was opposed to increasing self-sufficiency and the development of marginal pools. That is not right. I said quite plainly in this speech that we supported an incremental price to producers. The debate is about the levy and the benefits and inflationary impact of the levy. The Minister did not address himself adequately to this question.


-I wholeheartedly support the motion put so ably by the honourable member for Blaxland (Mr Keating). I say to the Minister for National Development (Mr Newman) that the question of the oil pricing structure is what is at issue. From the time that commercial quantities of oil were discovered in Australia, the pricing of petroleum products has been a disaster area thanks to the incompetence of the Liberal-National Country Party. The original formula was evolved in 1969 at a time when Australian crude oil was the dearest in the world and oil companies were forced to use it. When oil prices soared in 1974 the world became more aware of the scarcity of oil reserves and Australia continued with a pricing structure designed to encourage consumption of crude oil. This structure contained anomolies which were quite inappropriate to the changed circumstances. They now need a thorough overhaul. The Prices Justification Tribunal has considered only piecemeal increases in costs in the oil industry. It assumed the historical base price for petrol as that originally determined by the South Australian Prices Commissioner prior to the establishment of the Prices Justification Tribunal. The validity of the historical base price has never been examined by the Tribunal. The South Australian Government, in conjunction with the New South Wales Government, is at present challenging the basis of the price determination by the Tribunal. This approach has been confirmed by the Australian Council of Trade Unions, the Australian Automobile Chamber of Commerce and the Australian Automobile Association. In fact, only certain segments of the oil industry are opposed to a thorough examination of costs within the industry.

The oil companies have always tried to conceal from public scrutiny the operation of their industry. The number of anomalies in the formula for allocation of indigenous crude oil, the vast overcapitalisation in the retail side of the oil industry that has developed in the last 30 years, the cross-subsidisation of products and the use of transfer pricing to minimise taxation are all good reasons why some light ought to be shed on these matters in the public interest. What is required is a separation of the basic costs that are involved in each step of the petroleum chain. This Government has never been prepared to tackle the question. For instance, the cost of raw materials, distribution and marketing should be separately dealt with by the Prices Justification Tribunal or preferably by some independent body, as suggested by the Royal Commission on Petroleum. Unless a pricing mechanism is established to examine continually the costs at each of the separate stages of the petroleum industry a question mark will always surround the price of petroleum products. The determination of a distinct price at each step in the petroleum chain could also lead to greater competition in the oil industry. The Government will never tackle that one.

If the companies within Australia were taking advantage of” their monopoly situation the way would be open for independents to import refined products to compete with locally refined crude in much the same way as XL Petroleum Pty Ltd originally began the petrol pricing war 10 years ago. In this way genuine competition could be introduced in place of the market monopoly situation at present. The Government can now establish a price framework which encourages competition and acts in the public interest to contain costs or it can continue the conspiracy with big business to exploit monopoly control against the interests of consumers. The establishment of a price mechanism would reveal whether the Government believes in free enterprise, as it claims, or in monopoly enterprise, which it undoubtedly supports. The 011 companies, in an attempt to preserve their non-competitive position, have consistently refused to break down costs within their industry. This Government will never tackle this problem. While the oil companies can conceal the costs they have no fear of any competitors within the industry.

The fourth report of the Royal Commission on Petroleum produced irrefutable evidence that oil companies were overcharging on petrol to subsidise other oil products such as fuel oil. it also concluded that oil companies had behaved like dictators- certainly not benevolent ones- in their dealings with service station operators. The proprietors of company-owned service stations often have to sign contracts which in effect give total control to oil companies over every aspect of the station’s operations. Often the stations have to buy petrol at a higher price than that at which nearby stations are able to sell it, although both are supplied by the same oil company. The Commission detailed a series of measures to solve the problems which the Government rejected in the interest of monopoly. As the problems failed to go away and as these industry and disadvantaged motorist groups failed to accept the Government’s rhetoric as sufficient action, the Government played its next card; it called an industry conference. When the conference failed to close the gap between the oil companies and the other industry groups the Government was unable to defer the problem any further. The Government through the Minister for Business and Consumer Affairs (Mr Fife) announced a package which includes four measures which, if implemented, would I must confess go some way towards terminating many of the anomalies in the industry.

Mr Porter:

– Hear, hear!


– I agree; but it depends on whether the Government can withstand the extensive pressure from the oil companies which is now being mounted to oppose the measures. The four measures which the Minister has announced represent a persistent retreat by the Government on the implementation of the measures announced by the Royal Commission.

Mr Goodluck:

– But that is old now.


-Oh, no, it is not. The recent inquiry into the sale and distribution of motor spirits in Tasmania has also recommended similar measures. The honourable member ought to read it. Basically the Minister’s proposals, if they proceed, would end price discrimination by ensuring that the oil industry could not sell petrol at different prices to different stations. In addition, oil companies would also be excluded from directly operating service stations and they would be unable unjustly to terminate the lease of lessee dealers. This Government is not prepared to tackle that one. These measures could end some of the worst abuses in the industry over many decades.

The oil industry is one of the most important industries in Australia and in the future, when oil supplies are likely to become extremely tight, it is clearly an industry in which inefficiency and waste ought not to be tolerated. There will be an urgent need for increased investment in secondary refining capacity and general refining capacity. This Government has dodged this issue. The oil companies will be in the best position to find this finance if they are not engaged in the counter-productive marketing war which has resulted in the present overcapitalisation of the distribution sector.

The national interest demands that the Government take initiatives to end the wasteful and unsavoury practices which have grown in the industry. If the Government will not establish an independent agency to oversee the industry then it should at least see that genuine competition takes place within the industry. To achieve this it must, firstly, proceed with the legislative measures to end price discrimination that it announced last year and, secondly, it must enable the Prices Justification Tribunal to shed some of the much needed light on the whole spectrum of the petroleum price structure. This Government will never tackle that one. That is the linchpin of an oil pricing policy.

What beneficial results could be expected from reforms such as these? Firstly, there could be possibly cheaper petrol as a result of a more competitive marketing system with reduced capitalisation in the retailing sector. Secondly, there could be more sensible prices of petroleum products, to improve the allocation of energy resources from an economic point of view. The Government talks of sensible fuel pricing but does, I must confess, little about it. The Minister for National Development said nothing today about what this Government intends to do to fix the structure which determines the price of oil. Thirdly, there could be a more rational allocation of crude oil and its products following the use of secondary refining. This would overcome the wasteful overproduction of, for example, fuel oil. I suggest that the Government cannot put off that dilemma for very much longer, as the Minister well knows.

I have been talking about this matter in this place for the last 10 years. I must say, in all sincerity, that unless Government, whichever party is in office, tackles the question of the component structure which determines the price of petroleum products it will never be able to determine what the price level should be. For almost 50 years no government has been prepared to tackle that problem. The only way to tackle it, Mr Minister, is to take to pieces the components that make up the structure for determining the price of oil, examine them and fix the criteria. In all sincerity I must say that the Government’s whole oil policy is nothing but a public relations exercise; it is a sham and it is a fraud. What the Minister and the Government have to do is to have the courage to bite the bullet. Until that happens I regret to say that consumers in this country will continue to be taken to the cleaners by the oil companies.


-There have been two very curious speeches from the Opposition. The latest one sounded like it came from a hawker of second-hand cliches. The second speech from the honourable member for Blaxland (Mr Keating)- the one that was made by way of interjection- was in fact slightly less incoherent than the first which was made free of interjections. But in his second speech he conveyed the impression that he was not in fact talking to the matter of public importance. The subject of this debate is the economic burden of the Fraser Government’s petrol pricing policies. According to the honourable member for Blaxland, the only feature of this policy which interested him, certainly in his second speech, was the matter of government revenues raised by way of excise.

Mr Keating:

– And inflation.


– I beg his pardon, and the matter of inflation, which he mentioned in passing in the second speech. The key point on which he pursued the Minister for National Development (Mr Newman), irrelevantly, was the matter of excise. There is no doubt that the Government’s petroleum pricing policy rests on two basic objectives. One of the objectives is to reduce demand for a material which is in very short supply and the second is to increase production of that material. It is a two-pronged attack. Unfortunately, the honourable member for Blaxland, who should know better, managed to avoid altogether the two-pronged reality of the Government’s policies. That is apparent from what he said. He said that the Australian public does not have to pay the full price. That omits facing up to the reality of the second half of the Government’s policy, which is to reduce demand by imposing on the market place the realities of the market place.

Mr Keating:

– It is inelastic.


– It is interesting to notice that the Australian Labor Party’s solution to this problem is to impose restrictions, controls, directions and regulations. If honourable members look at the speech of the honourable member for Blaxland they will see that those are the words he used. He said: ‘We want direction. We will direct’. That sort of attitude is totally in opposition-

Mr Keating:

– I claim to have been misrepresented, Mr Deputy Speaker. I said no such thing and the Hansard record will show that that is so.


-If the honourable member wishes to claim that he has been misrepresented, he should do so at the end of the speech.


– I have written down the words direction’ and ‘instruction’. If the honourable member for Blaxland denies that the Labor Party’s policy involves price direction, price control and price instruction, I would be grateful if he would say so in his personal explanation afterwards. But he has said that he wants a petrol policy that involves a petrol price below the market price, below the price that is available. The only way a price below the world market price can be obtained is by imposing restrictions and controls on the export, for example, of Australian petrol. If we wish to isolate Australia from the reality of the supply and demand situation of oil in the world, we have no alternative but to impose the restrictions and controls which the honourable member for Blaxland now claims, curiously enough, that he is not in favour of imposing. How he would achieve a cheaper price only he and God would know. The facts are that in America it is now being established very clearly that the only way to meet the requirements of what constitutes the second half of the Government’s thrust- namely, reducing demand- is to allow market forces to work. Repeated discussion on this issue appears in the journals. For example, an article in the Oil and Gas Journal of 6 November 1978 states:

Market forces are braking -

The word ‘braking’ is used in the American sense, namely, as in bringing to a halt- energy consumption in the US even before the conservationoriented national energy plan takes effect.

And market forces, if allowed to operate, will help the nation meet the other dimension of its energy challengeincreasing production, says Citibank, New York.

Throughout the literature on this issue there is a stated requirement that allowing market forces to operate- that is, meeting the world market situation- is the only way to achieve the double thrust that this Government is seeking to achieve with its policy. The honourable member for Blaxland, in his third speech, which was made by way of interjection while I was speaking, asked: What about price elasticity?’ I thank him for the interjection because he totally distorted the elasticity situation by referring to present consumers with their present motor vehicles. There is no doubt that once a consumer has invested in a motor vehicle which has a performance capacity he will keep using that car and, as a result, will keep using petrol. However, when he makes his choice of a replacement for that vehicle he makes decisions relating to a vehicle’s petrol consumption. If only the honourable member for Blaxland had turned up at a most useful debate on this subject which was held in Canberra by the Australian Institute of Political Science perhaps he would have applauded the proposition put by me and by the South Australian Minister, Mr Hudson, which I maintain is accurate; namely, that it would be a good idea if cars were hit with sales tax on the basis of their petrol consumption rather than their price so that when the time came for elasticity to have an impact on the purchase of new equipment there would be a greater incentive for the reality of elasticity to be allowed to exist. The fact is that, even if elasticity is as small as the honourable member for Blaxland claims it is- as I understand it is in the vicinity of about 0.2 per cent -

Mr Keating:

– That is right.


– The honourable member for Blaxland agrees with me. If that is the elasticity of demand for petroleum products, a SO per cent increase in price- say, from 80c to $ 1 .20 a gallon, which is happening- would reduce demand in Australia by 10 per cent. The honourable member for Blaxland has agreed with that basic proposition. That represents about 20 million barrels per annum, which constitutes a saving of $300m worth of petrol per annum. The honourable member for Blaxland agrees with the basis on which these statistics are presented. That is a very significant figure. It would be worth about another Fortescue Field. I thank the honourable member for Blaxland for his very helpful third speech, made by way of interjection while I was speaking, because elasticity of demand in Australia now is enough to respond very effectively indeed to the very positive policy being established by this Government. It is even more interesting to go back a little and to quote what was said by Mr Hugh Hudson, the Labor Minsiter for Energy in South Australia, at the conference in Canberra which was run by the Australian Institute of Political Science, when he quoted approvingly what was said by Mr Ron Sharpe of the Commonwealth Scientific and Industrial Research Organisation, when he said:

Escaping the OPEC rise was unfortunate in one respect, since it created a false sense of security and has delayed growth of public awareness of the need to conserve oil and to develop other energy options.

That was a very sensible statement from Mr Hugh Hudson, who is given to bursts of sensible statements when outside South Australia. It states the reality of the situation. The Australian situation was an isolated and insulated one, with the result that, when reality was imposed on the situation by the present Government, which clearly was supported by Mr Hudson in his comment, there was greater trauma than there should have been. When did the price rise for oil burst forth and when did a government protect its own position in the inflation stakes? When did it- dishonestly, if honourable members likepretend that there was no such thing as an oil crisis? Of course, that occurred in 1973. It was the Labor Government which, by burying its head in the sand in 1973, 1974 and 1975 and pretending that there was no oil crisis, pretending that there never would be an oil crisis and pretending that it would get away with cheating on the companies looking for oil, with the result that oil exploration stopped in this nation- through a combination of those factors- caused the severe trauma which all of a sudden was involved in Australia catching up with the real world situation.


Order! The honourable member’s has expired. The discussion is concluded.

page 446


Second Reading

Debate resumed from 2 1 February, on motion by Mr Macphee:

That the Bill be now read a second time.


-The Patents Amendment Bill represents a further step taken by this Government in exercising its constitutional responsibility to provide efficient and effective patent laws for the protection of inventions in Australia. I make it clear at the outset that in this second reading debate it is not my intention to enter into a long analysis of the many individual details of this Bill. I understand that my friend, the honourable member for Tangney (Mr Shack), will address himself to the Bill in more detail at a later stage. However, it is appropriate to emphasise that one of the most notable features of the Bill is the fact that basically it is directed at increasing the effectiveness of the Australian patent system for the users of the system. Those users are the inventors as the originators of technological development, Australian industry as the potential employer of such development and the members of the public themselves as the consumers and ultimate beneficiaries of those developments.

It is inevitable that the patent system and, indeed, any aspect of industrial property will be looked at in a legislative context. This Bill appears to be formidable and it is quite lengthy. When the patent system is examined in its legislative context it appears to be esoteric and confusing and is something which the ordinary layman finds difficult to understand. In my view, that is a pity, because that legislative clothing tends to conceal the basic practical purpose behind the patent system. I stress that it does have a basic practical purpose.

It is clear from the experience of countries, such as Japan, which have a very high usage of patent systems that the Australian patent system has the potential to play an increasingly important role in our future industrial development. Regrettably, the full extent of that role and the contribution which instrumentalities such as the Patent Office established by this Parliament can make to fulfilling it are only now beginning to be fully appreciated.

One of the most notable recent developments of this growing role is the development of the Patent Office as a mechanism for transferring the technical information in patent documents to industry. As honourable members will appreciate, a basic feature of the patent system is the requirement that the patentee- that is the person applying for the grant of a patent monopolymust disclose sufficient information about the invention protected by the patent to enable it to be exploited once the patent term has expired. In fact, the information is available at a far earlier stage and obviously can be exploited under licence arrangements. In that context, I refer to the amendment to the Patent Act passed by Parliament last year in which, effectively, the publication date for patents was brought forward. Of course, that makes the information which is available in patent literature held by the Patent Office available more readily and at an earlier point in time.

By virtue of the short term of a petty patent monopoly the petty patent system introduced in the present Bill will accelerate the availability to industry of the information contained in petty patent documents. Moreover, experience with the present patent system suggests that the new petty patent system, by providing a form of protection adapted to assist the commercial exploitation of simple, consumer orientated inventions, has considerable potential for increasing the information available to industry about inventions conceived in Australia. For many years, the number of patent applications made by Australian inventors has remained static at about 4,000 applications a year. Approximately 3,000 of those applications are abandoned without maturing into a patent and without the documents being published. If the petty patent system encourages those applicants to obtain a petty patent, the resulting publication associated with the grant of the petty patent will make considerably more information available to Australian industry. The fact that the information concerns developments originating in Australia can be expected to give such publication added significance to industry.

The provision of technical information of a kind specifically intended for exploitation by industry is an integral feature of the patent system. Nevertheless, I believe that that information has not yet been sufficiently disseminated to industry or put to industrial use. As a result of the central role of the Patent Office in the operation of the patent system, the physical resources are available to make a greater contribution to these activities. In saying that, I have in mind the activities of many overseas patent offices in developing communication with their national industries and assisting those industries to extract and assess the information available in the patent offices. If we take into account the tremendous amount of information available worldwide, which incidentally is now increasing at the rate of approximately one million documents a year, and also the fact that most of that information concerns new technological advances developed by industry in the major industrialised countries, it is obvious that continued failure to exploit that information must have adverse effects on the future competitiveness of Australian industries.

Many countries are already exploiting the information in both their own and foreign patent documents for the benefit of local industries. For example, let us consider the position in countries comparable to Australia. The Swedish patent office established an information centre as long ago as 1972 in response to the wishes of industry. Industry in Sweden now uses that centre to undertake approximately 3,000 searches a year. I will explain a little later what I mean by the word searches’. The Danish patent office in 1974 established a special service section to assist industry with searches of patent documents. Austria has made a major advance in making available information from patent documents by the establishment of an international patent documentation centre. An important example of international co-operation is that the Australian Patent Office contributes to the information made available by the Austrian centre and in turn makes the information from those services available to Australian industry.

The large industrialised countries have well developed information services for industry. For example, Japan, which has a highly active patent system with over 300,000 applications lodged annually, has created the Japanese Patent Information Centre. In Europe, co-operation between a number of countries, including the Benelux countries, France, Italy and Switzerland, led to the establishment of the International Patent Institute. One of the major and continuing tasks of this Institute, which now forms part of the European Patent Office, is to provide search information for industry. The establishment by the present Government of the Australian Patent Information Service within the Patent Office is an important step in assisting industry to obtain useful information from patent documents.

Australian industries, particularly the smaller industries which lack research facilities and have only limited financial resources for development, should be encouraged to make greater use of this service. However, it is important that industry be fully acquainted with the facilities provided by the service. Apropos of that, I recently had the pleasure as the representative of the Minister for Productivity (Mr MacPhee), of participating in a seminar organised by a major industry body, the Confederation of Australian Industry, in conjunction with the Patent Office. This seminar was aimed at improving industry’s awareness of the facilities and the service of the Patent Office. Let me explain what is meant by a search procedure which can be requested as part of the Patent Office’s service. It simply means that an industry or a person who wants information about an invention in a certain area or of a certain type can go to the Patent Office and request that a search be carried out in order to obtain the information required.

Many difficulties are involved in transferring the information in patent documents to industry.

It is obvious that the mere provision of information will not necessarily result in its commercial utilisation. The huge number of patent documents involved makes information retrieval a difficult and specialised operation. It is significant that the Australian Patent Office possesses the facilities for retrieving information from the patent documents of most countries. It is directing its attention to improving the efficiency and capacity of those facilities. When we consider that over 15 million documents have been generated by the patent systems of the various countries, the magnitude of the task of retrieval becomes evident. It is compounded and made more difficult by the inward looking nature of the patent systems of most countries, resulting in the development of the multitude of individual retrieval systems. It is therefore an important development that the nature of individual retrieval systems is being changed. There is a realisation of the need to develop a rationalised system for retrieving technical information from patent documents worldwide. This has led to the establishment of an international union within the framework of the United Nations agency, a union responsible for industrial property and known as the World Intellectual Property Organisation. This organisation co-ordinates and controls the development of a uniform information retrieval system. Australia is a member of the union, has contributed to the development of that system and is participating in its further development. It is a measure of Australian initiative that it was one of the first countries to abandon its own national retrieval system and adopt the international system.

In discussing this Bill, I have directed my attention to one of the less obvious aspects of the patents system to which the petty patents system proposed in the Bill will make a positive contribution. The provision of technical information is such a fundamental feature of the patents system that in ignoring it we tend to lose sight of the extent of the contribution which the system can make to industrial development. I urge Australian industry to take advantage of it. Invention and technological change are essential elements in the continuing and increasing competitiveness of industry, and industry must learn about and make use of all relevant information, in particular that information available through the patents system. I commend the initiative of the Government in introducing this Bill as a significant step in making the Australian patents system a more effective mechanism for assisting industrial development in this country.


-This is a technical subject and I congratulate the honourable member for Herbert (Mr Dean), who has just resumed his seat, for his great industry and for studying the Bill in great detail. We in the Opposition do not have the services of a Government department behind us to assist us with these matters. I do not want to suggest that the honourable member had such a department behind him. But I think it is important, before giving the Opposition’s attitude to the Bill, for me to state what I believe the Bill contains or at least its salient points so that if I have misunderstood the Bill I can be told about it by the Minister for Foreign Affairs (Mr Peacock), who is at the table and no doubt will be replying on behalf of the Government.

The purpose of this Bill is to bring into operation an optional form of patent protection by creating a new short-term patent to be known as a petty patent. In contrast, of course, with the standard patent, which has a 16-year term, the petty patent will have a minimum term of one year and, with suitable extensions, could have a term as long as six years. As I understand it, the aim of the new petty patents system is to encourage commercial exploitation of inventions which now go largely unexploited or unprotected because of deficiencies in the existing system. Also as I understand it, the existing law is based on a system of uniform, relatively long-term protection for inventions. The system provides certainty, but at the cost of delays and expense. This penalises particularly those inventions which have only one inventive characteristic and which, therefore, have short commercially exploitable lives. These involve mainly consumer oriented products such as household accessories, gadgets and so on.

The Designs Law Revision Committee or the Franki Committee recommended as long ago as 1973 the introduction of a petty patents system, but the report did not receive complete support from the business community generally. The Industrial Property Advisory Committee set up by the Minister for Productivity (Mr Macphee) had a further look at the issue last year and its recommendations, with one exception, are incorporated in this Bill. The Patents Amendment Bill, by amending the Patents Act of as long ago as 1952, allows for a greatly reduced period of examination by making an application for a patent no longer automatically subject to rigorous examination as are applications for standard patents. The benefits which will result from this include two which I have picked out- the inventor will be able to market or licence his petty patent more quickly and, secondly, the costs involved will be greatly reduced.

As I understand it also- and I repeat that I state all this so that I can be corrected if I am wrong before giving the Opposition’s attitude to the Bill- at the same time the Bill preserves the rights of competitors and consumers by limiting the initial term of a petty patent to 12 months with, as I mentioned earlier, those extensions to six years. Whilst not opposing this Bill, the Opposition wishes to express some concern about some aspects of the legislation. From the evidence that we have today, we cannot be sure that the Government has considered sufficiently a number of questions. Let me list some of the questions which we want to raise.

Firstly, will the new system really give a much needed boost to inventive activity? It is not clear to us that it will. I would like to make a few points about this question. The Inventors Association, for example, is not convinced that the proposed petty patents system will directly aid individual inventors but believes instead that it may be of value only to small manufacturers. In addition, all interested groups have strongly urged consideration of a lower standard of inventiveness for petty patents so that the system may be more effective. But the Industrial Property Advisory Committee apparently did not feel itself to be in the position to determine whether different levels of inventiveness should be required or to identify an appropriate basis for defining such differences. However, rather in a contradictory way that Committee felt that it may not be long before it becomes accepted that a two-tier system should be introduced involving differences in the level of inventiveness for standard patents on the one hand and petty patents on the other hand. Therefore, we would question whether it would not have been better to wait until this significant issue had been sorted out so that we could all have been more confident that the system introduced would be effective in achieving its aims. I might add that the two-tier system is, of course, operating in a number of other countries.

The second question which I wish to raise for the Minister to answer is whether we can be guaranteed that the new system achieves a proper balance between the need to stimulate inventive activity on the one hand and freedom of access to all publicly available technology on the other hand. The Minister in his second reading speech and, I believe, on other occasions has placed great emphasis on the role of his Industrial Property Advisory Committee, but on the Committee’s own admission we are fearful that its advice may have been hastily put together and so somewhat suspect in quality. I make that plain, of course, from reading the Advisory Committee’s own documents. It has confessed that its deliberations, unlike the Franki Committee’s deliberations, consisted only of individual members perusing written background material, culminating in two days of meetings. As a result of this, the members of this Advisory Committee expressed considerable reservations whether they could reasonably propose any significant departure from the substance of the recommendations of the Franki Committee, which recommendations the Minister himself acknowledged did not receive unqualified support from industry in Australia. So we have to ask what weight we should attach to the recommendations from the Advisory Committee? What guarantees have we that the new system will achieve the proper balance between the incentive to invest on the one hand and the need to have access to technology on the other hand.

I come to my third question to the Minister. I hasten to say that I recognise that the Minister for Productivity is not able to be present as he has left for overseas on Government business. But I have no doubt that these questions will reach him one day and that, being a courteous fellow, he will reply to me one day, if only in writing. My third question is whether the Government is justified in claiming that the system of petty patents outlined in this Bill is something new. After all, many other countries have had, as I mentioned earlier, a two-tiered system for some time. I would like to know more about why our legislation differs from the two-tiered systems elsewhere.

I realise that something is needed urgently in this country to boost industrial research and development generally. The Government’s performance in this area has been woeful Only last Monday, 26 February 1979, the Australian Bureau of Statistics released figures on the industrial research and development activity in Australia over the period 1973-74 to 1976-77. The results are nothing less than a national disgrace. Research and development work in Australia has dropped by 18 per cent in current prices, representing a drop of at least 55 per cent in real terms over the period. Total work time spent on industrial research and development projects has dropped by 40 per cent. This dismal industrial research and development performance is largely the consequence of reduced and erratic funding of industrial research and development in Australia by the Fraser Government; in contrast, may I say, to the higher, more stable levels of expenditure during the time of the Labor Government between 1972 and 1975. The last Labor Government’s Budget allocation was $ 19m- an all time high. The Fraser Government reduced this allocation to $ 15m in 1976-77 and reduced it again to $ 14m in 1977-78. This was in spite of increases in the cost of materials used in manufacturing which had gone up by 2 1 per cent during the two-year period.

These policies have meant a run down of industrial research and development facilities in this country over that period. Companies are now less and less geared up for undertaking this important research and development work. The Government should not take solace in the much publicised $24m allocation in the most recent Budget, for 1978-79. Of this sum of $24m at least $8m will be required to bale out the Industrial Research and Development Grants Board because of the excess of applications over the amount that it had been able to grant in the previous financial year. This sum will enable the Board to pay off existing debts- that is, grants which have been awarded but not yet paid over to qualifying companies.

For this reason alone the grandstanding by Ministers of the Government generally, but in particular, frankly, the Minister for Productivity as he has gone around this country, is not justified. This grandstanding is associated with a real 40 per cent decrease. There has been an adjustment of figures. That is the kindest way I can put it. The Minister has referred to it as a 75 per cent increase. In other words, I believe that some of that grandstanding borders on deception because it relates to the $24m appropriated in the current financial year, compared with the very low figure in the previous financial year to which the Fraser Government had allowed the allocation to decline. In reality the Government has allocated only $ 16m for new grants this year, an increase of only $2m over the previous year. This figure is still short of the allocation in the last Labor Government’s final Budget.

Finally I raise the question as to whether it was necessary in this Bill to leave so much to the Commissioner’s discretion. Senator Cavanagh, my colleague in another place, is a tireless worker in seeing that legislation has certainty and is not left to the discretion of public servants- in this case the Commissioner of Patents. The honourable senator has drawn to my attention the large extent to which such discretion is given to the Commissioner in this Bill. I support the honourable senator because I believe too that there ought to be as much certainty as possible. I raise this matter in the form of a question because it is possible that although the Minister and his Department have tried hard to see that as much certainty as possible is written into the legislation they have come to the conclusion that if the legislation were much more detailed it could become a jungle such as the tax legislation has become a jungle.

I raise all these questions in the hope that the Government will give me satisfactory answers at some stage. I believe that all in all the Government has no reason to be proud at all of its policies in the industrial research and development field. Let us hope that this legislation will do something to remedy the situation, encourage the inventiveness of Australians and assist the creation of new Australian industries built on Australian inventiveness.


-I welcome the opportunity to follow the honourable member for Adelaide (Mr Hurford) in this debate. We are both parliamentary delegates to the Electronics Industry Advisory Council. The honourable member carries the Opposition’s responsibilities in the field of industry and commerce. As a young player in this parliamentary scene I have welcomed the opportunities to listen to the reasoned bipartisan approach that the honourable member takes on that council. I want to assure him that he has raised some very important points relating to this Bill this afternoon. His contribution was good and sound before he drifted off into an unreasoned attack on the Government’s activities and achievements in the area of industrial research and development. Presumptuously, perhaps, I want to address myself also to some of those points and hopefully, together, we may be able to clear the air so far as those points are concerned.

I welcome the Patents Amendment Bill and I want to identify myself with its aims. Firstly, it is proposed to bring into operation an optional form of patent protection that has been devised specifically to assist small Australian industries and businesses and in doing so to encourage the inventive activity of Australians in fields that are particularly suited to commercial exploitation by small Australian enterprises. I see the legislation as part of a process by this Government to upgrade Australia’s industrial property laws through a process of reform which the Government believes- I certainly share that belief- will make those laws more responsive to the economic needs of the nation.

I think as legislation comes forward in this place we should always ask ourselves whether it is necessary. I believe this legislation is necessary for it aims to provide what has been lacking in the past, namely, access by inventors and entrepreneurs to quick, easily obtainable and inexpensive patent protection. From my contacts in industry and commerce, from patent attorneys through to small business and larger concerns, this BUI is a welcome initiative.

The major features of the Bill- the last speaker touched on some of them- include the availability of the petty patent as an optional form of protection to the grant of a patent as already provided for under the present Patents Act. A petty patent will have a six-year term and it is to be contrasted with the longer patent, now to be known as the standard patent, which has a term of 16 years. The scope of protection for an invention to qualify as a petty patent is to be directed to those inventions with a single claim, that is, inventions which have only one inventive characteristic and which can be applied usually in respect of only one product.

It is envisaged that the nature of the invention which will be covered by a petty patent will be those in the mechanical and electrical fields with some chemical type of inventions. It is expected that it will be relatively easy to have quick examination of such applications for petty patents, with the result that a petty patent will issue well within a year of lodgment. This will enable a manufacturer or an inventor to market or license his petty patent that much more expeditiously and hopefully with a higher degree of confidence at that time than he would if he had lodged an application for a standard patent. It is important to realise that now it can take up to five years for letters patent for a standard patent to be granted. It is also important to note that it is an optional system and that one can convert from a petty patent to a standard patent and vice versa.

There is one further welcome initiative from the Western Australian point of view that I want to mention specifically and that is the provision for the establishment of sub-offices of the Patents Office in each State. In future the documentation that needs to be lodged with the Patents Office in Canberra can be lodged in the various State offices. I think this is a welcome move. I want now to deal more closely with a major feature of the Bill, one which was raised by the honourable member for Adelaide. I reiterate that I appreciate the aims of the Bill and I welcome them, but I think the proof of whether they can actually be achieved will be found in practice. I raise this note of caution because I am concerned about a central point of the proposed legislation. That central point is that the existing standard of inventiveness required for an invention to be patentable has not been changed, whether for a standard patent or a petty patent. However, as I mentioned earlier, to give effect to the aims of the Bill, to give quick and easy access to a petty patent, in the case of the petty patent system an application for such a patent will not automatically be subjected to the same rigorous examination as is applied to applications for standard patents. I believe there are two problems with this. Firstly, it is the concern of larger industriesthey have expressed that concern- who patent extensively under the standard patent system that there will be a possible proliferation of petty patents of doubtful validity. One can answer that concern by saying that the Bill imposes certain obligations on the Commissioner. Here I refer to proposed new section 49A. (2) of the Bill which states:

The Commissioner shall not accept an application for the grant of a petty patent if he is satisfied that there is lawful ground of objection to the grant of the petty patent or that the application or petty patent specification does not comply with the requirements of this Act.

Proposed new section 49A (3) states:

For the purposes of considering an application for a petty patent and a petty patent specification, the Commissioner may make, or direct the conduct of, such investigations as he thinks fit.

It is that obligation which I believe raises the second concern. In order to satisfy the first concern, the possibility of a proliferation of petty patents of doubtful validity, the Bill provides that the Commissioner is required to conduct a level of investigation which may in fact deny easy access. We may well end up in the situation of petty patents legislation amounting to nothing more than the grant of a standard patent for a shorter term. Conversely the opposite case may occur. A conscious or subconscious relaxation by patent examiners as to the level of inventiveness required for petty patents could bring about the danger of court proceedings declaring invalid such petty patents. Again this would defeat the object of the Bill.

This proposed legislation is the result of a long consultative process, as was mentioned by the honourable member for Adelaide. This consultative process was commenced back in 1973 by the Franki Committee. In December last year we saw the appearance of the draft Bill and as a result of some criticisms and complaints about that draft Bill it was referred to the Industrial Property Advisory Committee which in turn reported to the Minister for Productivity (Mr Macphee). Common to those three steps and common to this Bill is an inability to define the level of inventiveness, to define different levels- one for a standard patent and one for a petty patent. This difficulty was recognised by the Industrial Property Advisory Committee. At page 4 of the report of the Committee it is stated:

  1. . recognises that a need may exist for an alternative form of protection for inventions of lower inventive merit.

The report also recognises the attitude of the Institute of Patent Attorneys who suggested that this might be achieved by introducing a difference in the respective levels of invention required to sustain a patent and a petty patent by removing obviousness as a ground of invalidity of a petty patent. Further on the report mentions the possibility of a twin system, one system for the petty patent and one system for the standard patent. In my wisdom- limited as it is- I suggest that perhaps the Bill could have contained a clause or a provision which would read as follows:

In considering whether or not an invention is proper subject matter for the grant of a petty patent ‘he Commissioner shall apply a lower standard of inventiveness than is required for the grant of a standard patent.

Alternatively or additionally the Act could clearly specify the level of inventiveness necessary to justify the grant of a standard patent by using a definition of an inventive step, as incorporated in the British Patents Act 1977. 1 agree that this is a very difficult question but I do not propose to move any amendments to the Bill. It is recognised that it is a difficult question and in the light of the comments of the honourable member for Adelaide I would say that we would do best to see the Bill in action. I believe that the Minister realises the problems. In fact the last paragraph of the Minister’s second reading speech states: . . and I assure honourable members of my intention that the system will be continuously monitored with a view to making such alterations as from time to time appear necessary to ensure that the basic aim of assisting innovation and productivity in Australia is fulfilled.

It may well be that once this Bill has been in operation for some time, once patent attorneys are used to working with it and once industry, inventors, entrepreneurs and small businesses see how it works, difficulties may arise and we may have to come back into this place and amend it. Notwithstanding the problem of the level of inventiveness I welcome the Bill as being an attempt to meet the needs of Australian industry. I welcome it because I believe that if it is successful- if it is not successful it can be amended to be successful- it will be particularly useful to small businesses which invent a new product or service which has a short life.

I close by saying simply that 48 hours ago I had several other questions on the Bill which I wanted to raise in the Committee stage. I wrote to the Minister and he sought an urgent reply to my representations and questions from the Patents Office. While I am in the chamber I would like to thank the officers of the Patent Office, especially the Commissioner of Patents, for providing me, through the Minister, with such a prompt reply to the points I raised.

Minister for Foreign Affairs · Kooyong · LP

– I have taken note of the questions that have been raised on both sides of the House, in particular by the honourable member for Adelaide (Mr Hurford). In the absence of the Minister for Productivity (Mr Macphee) who is on his way to India I have asked his advisers to ensure that these matters are brought to his attention and answered. I am certain that the Minister will do so.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 453


Second Reading

Debate resumed from 21 February, on motion by Mr Sinclair:

That the Bill be now read a second time.


-This Bill seeks to amend the principal Act to deal with a technicality. The Opposition is in fact very glad that the Minister for Primary Industry (Mr Sinclair) has ‘mooved’ it. The Opposition does not oppose the measure. However, a further amendment has been circulated. The original provisions of the Bill struck me as being relatively simple when only about three or four lines were to be changed. It was not a question of defining when milk is milk or when milk is not milk; but the question arose whether milk is a product of milk. This Bill was drafted and introduced and today the Government will move an amendment to try to clarify the situation further. We do hope that the Government and the Minister have it right this time.

The Bill is very simple indeed. Its purpose is to define what ‘dairy produce’ means and what the Australian Dairy Corporation can promote. The

Bill gives us a chance to speak on dairy promotion in general. I am also quite sure that other members will comment briefly on the state of the dairy industry, particularly those members from dairying electorates. I do not think that it would be a bad idea to set out what the Dairy Corporation does. It is in its third year. It is one of the statutory authorities established by the Australian Government to carry out regulatory marketing and to take promotional responsibilities in the agricultural sector. The authority was established under the Dairy Produce Act 1924, and following an amending Bill in 1975 the Corporation replaced the Dairy Produce Board. The main functions of the Corporation provided by that Act are:

  1. to promote the export from Australia of dairy produce;
  2. to control the export from Australia of dairy produce;
  3. to control the sale and distribution of dairy produce after its export from Australia;
  4. to promote trade and commerce in dairy produce amongst the States, between States and Territories and within the Territories;
  5. to improve the production and encourage the consumption of dairy produce in the Territories; and
  6. such other functions in connexion with dairy produce as are provided by the regulations.

On 1 July 1977, new marketing arrangements commenced in the dairy industry, which were aimed at progressively encouraging and enabling the manufacturer of products to find a viable market- hence an adequate return to the farmer. The Corporation’s authority has been broadened to administer the new arrangements. These arrangements include the operation of a compulsory revenue distribution system for certain prescribed manufactured dairy products, the replacement of the voluntary equalisation scheme operated by the Commonwealth Dairy Produce Equalisation Committee Ltd which had operated for over 40 years. The dairy industry owes a debt of gratitude to this company which is now in voluntary liquidation- which I think is the arrangement- because it had played an invaluable role during it existence.

In 1977-78, the Corporation continued to provide a link between Rural Credits Department finance and the manufacturers. Through this arrangement funds are provided under ministerial guarantee to enable payment to manufacturers and hence farmers prior to the receipt of sales, proceeds from domestic and export markets. In general we can say that the Corporation’s activities include: Marketing Australian dairy produce overseas; assistance to manufacturers of Australian butter, cheese, casein, skim milk powder and whole milk powder; in finance, storing, shipping, insurance and market information; and in taking initiatives to achieve the highest quality standards. It also negotiates bulk export sales where licensed exporters find that they are unable to meet massive international competition or cannot negotiate government to government sales. It administers the revenue distribution system. The Corporation advertises, promotes and utilises publicity for Austraiian dairy produce in overseas markets. It has operated joint venture milk plants in South East Asia in partnership with Asian businessmen. It undertakes national umbrella advertising, promotion, publicity and public relations for butter, cheese, milk and other dairy products in Australia. It attempts and indeed succeeds in developing and establishing new markets. In general, it regulates Australian dairy produce exports.

The situation this year is a little bit happier for the dairy industry. Things are certainly better in 1978-79. I think that we can put this down to higher levels of underwriting by the Government- I am sure that the industry is grateful for that- seasonal conditions, an increase in exports, and a slower rise in costs. But it must be accepted that the basic underlying cost price pressures still prevail in the dairy industry, as do the world surplus stocks of butter and skim milk powder. These stocks are particularly high at present and look like remaining so, particularly in the European Economic Community. The problem with the dairy industry in terms of exports is that so little is really traded upon the international markets compared with what is produced world wide and the change in the volume that is traded in the international markets provokes a more than proportional increase or decrease in prices. Production in Australia is declining, but not at an exceptional rate. I saw one set of figures in which it was estimated at 6,497 millilitres in 1974-75 down to 5,300 millilitres in 1978-79. Similarly, the number of holdings has been declining, probably at a greater rate than that of production. The Australian Dairy Corporation has said that the number of dairy farmers is now less than 24,000. The Australian Bureau of Statistics classifies dairy farmers by holdings. It says that the figure is something like 32,200. But I think that is holdings where there are dairy cows. It is certainly a big decline on former years. The Corporation calculates a decline of 2,500 farmers a year which is a decline since the early 1970s of 8 per cent a year.

The fluid milk market which accounts for 30 per cent of whole milk production and over 50 per cent of industry revenue is controlled by local and State authorities. Prices are set at levels well above returns from manufacturing milk and are adjusted periodically to reflect partly or wholly changes in cost. In some areas the revenue from fluid milk sales is distributed amongst all dairy farmers, whilst in other regions only producers with a fluid milk quota receive returns from this market. Levies are imposed on butter and cheese and some other manufactured products for the domestic market so that prices are effectively set at above world market levels. In addition as I have said before, in 1976-77, 1977-78 and 1978-79 returns to producers have been underwritten for the bulk of manufactured output.

I was speaking about the international market. I think that we can say quite clearly that the continued vagaries of the international market place have meant that the Australian market still remains the most significant market for the dairying industry. However, increasing production and promotion of substitutes for some dairy products, particularly butter, have meant that the growth of even maintenance of the local market cannot be assured without a great deal of effort on the part of the industry.

The policies and priorities which have guided the work of the Australian Dairy Corporation during 1977-78, for which I have information, were basically participation in the promotion of dairy products to the Australian consumer and retailer, supplementing the existing activities of those marketers actively engaged in marketing and promoting within Australia; also the encouragement of the development of new dairy products and the development of relatively neglected markets which showed potential and which deserve cultivation. For example, food service and industrial usages. In addition, the Corporation has a long-term interest in the promotion of dairy products that are likely to receive little attention from marketers concerned with the day to day needs of the market place. As an example I mention retail staff training.

If we look at some of the national promotional activities by the Australian Dairy Corporation, we find that from October 1977 onwards marketers and retailers were introduced to a virtually continuous program of nationally advertised promotions for dairy products covering the following 1 5 months. Each promotion was designed to feature one or more dairy products with the object of expanding the market. That program was dubbed the ‘Dairy Year’. It grew out of discussions with retailers and marketers. It was designed to assist marketers in their brand promotion advertising activities under the umbrella of each promotional theme of the Corporation. The ‘Dairy Year’ program expenditure of $ 1.1m during 1977-78 embraced television advertising, colour magazine advertisements, support and provision of display material featuring the promotional themes. This material was placed in over 1,700 supermarkets for each promotion by an auxiliary merchandising force.

Sales results of six major segments of this promotion have now been monitored. Independent market studies showed that in the period of the October 1977 cheese promotion cheese sales rose by 8 per cent on those for the period a year earlier. This is a traditionally high period of cheese sales but thanks to the united efforts of cheese marketers, retailers and promotion, a similar result was achieved for the May-June period. An Australian cheese symbol has been designed and is now used for all cheese advertising. A number of marketers and retailers are now using the symbol in their own promotional material for Australian cheeses.

In recent years domestic table butter sales have fallen at a rate of 15 per cent per annum. It has been very important that promotion be directed to stopping this fall. During the six months, January to June 1978, the rate of decline slowed to 10 per cent. I believe that the Australian Dairy Corporation hopes to slow this decline and to keep it well into single figures. During and immediately after the Corporation’s butter promotion an independent market audit showed that butter’s share of the edible fats market rose by 1.3 percentage points nationally. This was in the face of the margarine price cutting war which ran during those six months. So, as long as Australian Dairy Corporation promotes vigorously it certainly can achieve positive results with respect to cheese promotion and it can halt the decline in the usage of butter in Australian homes.

There are many other facets of the Australian Dairy Corporation marketing. These relate to the practical co-operation between the Corporation’s National Marketing Department and individual companies manufacturing and marketing dairy products. Following the redefinition of the job specifications for the Corporation’s State promotion managers the Australian Dairy Corporation has now developed a close relationship with the retail trade at all levels. The dairy industry is now seen by its retail trade as taking a positive attitude towards national promotion. The Australian Dairy Corporation also has now set up a Dairy Foods Advisory Bureau. It has specialist staff with a parctical knowledge of home economics, particularly in the areas of food, food usage and nutritive values.

In the last 12 months or more the bureau has been busy helping to create the advertising material for various expanded programs of promotion. An example of this is that some new educational material was developed during the year and offered to schools throughout Australia through the annual catalogue. I understand that about 1,500 schools now regularly obtain from the bureau material on cookery teaching and information on dairying and dairy products. This bureau involves itself in quite a few areas. I do not think I need to mention them all today.

The development, promotional and marketing part of the Corporation also appointed a development manager specifically to endeavour to further the use of dairy products in the industrial and food service markets. The people appointed assessed the industries which represented the most potential for new or expanded dairy sales and assisted in gaining a number of additional major contracts for the supply of industrial dairy ingredients. Work is still continuing on the market testing of a dairy based spread with improved spreadability with the objects of holding or increasing total sales of butterfat. Legal and technical problems were overcome during 1977-78. A manufacturer was chosen to test the market in the Adelaide area in the present financial year. We await the results of that test.

The Corporation also liaises closely with the State dairy industry authorities and milk boards on ways in which they and the Corporation could work together to promote market milk. As I understand it, it still has not been possible to agree on the form of a national milk promotion during the year, but this objective will be actively pursued in the future. By and large, the Dairy Corporation’s promotional activities are wide ranging and, I am sure, would meet with the approval of most honourable members. But, of course, we are always interested in the Corporation doing more and achieving more.

I think it would be apt to touch on the marketing arrangements in the industry that flowed from the Industries Assistance Commission report of September 1976. The first stage came into play on 1 July 1977. That was known as the date of implementation of Stage I of a staged marketing scheme for the manufacturing sector of the dairy industry. The scheme, aimed at achieving a stable and viable base for current and future operations of the industry, as I said, was recommended in the IAC report. Stage I established a compulsory levy-disbursement system for certain classes of dairy products- namely, butter, cheese, skim milk powder, casein and wholemilk powder- designed to protect the domestic pricing structure. Under this system manufacturers receive an equalised market return for production of prescribed dairy products irrespective of whether that production is sold on domestic or export markets.

An essential element of the level of return received by manufacturers under the new marketing arrangements was the Commonwealth Government’s commitment to underwrite production of butter, skim milk and buttermilk powder, cheese and casein in 1977-78. This underwriting scheme provided for contributions from State governments on the basis of the Commonwealth providing $2 and the States $1 for casein, skim milk and buttermilk powder. Not all State governments accepted the commitment and in the States that did not do so the underwritten level of those products was reduced. Additionally, the Commonwealth Government agreed to underwrite certain approved sales of wholemilk powder in non-traditional markets.

Assisted by the Australian Dairy Industry Advisory Committee, the Corporation reviewed the system of allowances for domestic and export sales which had become a feature of the previous voluntary equalisation scheme. This review resulted in significant changes designed to obtain, where possible, certain costs, relating to the manufacture and sale of dairy products, from the market place. The precondition for the establishment of Stage I was that the Commonwealth Government provide for the establishment of Stage II by 1 July 1978. The 1976 IAC report recommended that Stage II provide for a national market entitlement scheme at farm level which would ensure that market signals were more effectively passed back to producers and processors in order to encourage production to be in line with viable market outlets. However, failure to obtain unanimity among the State governments on the form of the entitlement scheme resulted in the Commonwealth Government establishing Stage II as a system of selective underwriting aimed at achieving a result similar to the entitlement scheme but at factory rather than farm level.

Under the system of selective underwriting provision is made to limit the quantity of prescribed dairy products which is underwritten according to the production and market circumstances obtaining for each product. The Stage I pooling arrangements were modified from 1 July 1978 to provide that production in excess of the underwriting ceilings that are fixed for prescribed products will receive only the average export pool return established for each product.

Obviously Stage III will never be achieved because Stage II has been aborted in terms of the original IAC recommendations. My information is that even some members of the IAC who made those original recommendations- and certainly most of the people to whom I have talkedbelieve that the time has passed when Stage II, a market entitlement scheme, will solve the problems of the industry. I understand that an industry conference held in Canberra some two weeks ago by the Australian Dairy Farmers Federation strongly favoured the continuation of selective underwriting. So we have reached the stae where the present system, as we understand it, will be continued.

Mr Webster, the Chairman of the Australian Dairy Corporation, is reported to have said at the most recent Bureau of Agricultural Economics Outlook Conference that he could see the need for some expansion in production. I find this reasonably hard to understand because we are faced with a situation in which world export markets are declining and world stocks of dairy products are extremely high. However, I think that what Mr Webster was more sensibly referring to was the fact that to be a reliable supplier on the export market one always needs a fair level of stocks of dairy products. One has to calculate how much production should be in excess of local consumption or local supply and demand. As a marketer he may be in a better position to judge that. However, I am sure that production will continue to decline over the next four or five years regardless of what people in the industry in individual States would like to see happen for marketing or selfish reasons. That view was recently backed by some studies carried out by the Bureau of Agricultural Economics which forecast a decline in production of some 3 per cent per annum over the next four or five years even though this year has seen an expansion in production due to seasonal factors.

The Opposition does not oppose this Bill. It agreed with the original Government amendment to the Act and agrees now with the further amendment. It feels sure that ‘dairy products’ have now finally been defined.


– I congratulate the honourable member for Werriwa (Mr Kerin) on his excellent summary of the state of the dairying industry in Australia. I do not intend to waste the time of the House by going over some of the material which he has covered today. Before the House is the Dairy Produce Sales Promotion Amendment Bill- in itself, a very simple Bill- which basically extends the definition of dairy produce’ in section 4 of the Act. Of course, it is noted from the second reading speech of the Minister for Primary Industry (Mr Sinclair) that the Dairy Produce Sales Promotion Act 1958 provides that the Australian Dairy Corporation has the charter of promoting the sale of dairy produce in Australia.

I would like to look briefly at the situation as it was three years ago, at the position as it is today, at what sort of future the dairy industry may or may not have, and at whether governments should be doing more to assist the industry in stabilising the dairy farmer and his expectations. I have said in this place before that the dairy industry in 1975-76 was at an all time low, that the farmers were moving away from the country areas, that families were being broken up and that young people who normally would have gone on to the dairy farms of their parents had decided that they could not get a living out of it, and therefore, had moved away from the farms. That was the situation all over Australia, but particularly in Victoria. Now the average age of dairy farmers is in the fifties. The industry ought to be very concerned about encouraging young people to come back into the industry if the industry is to be stabilised and the expectation of a stable income realised.

In 1978, 1, 100 farmers left the industry in Victoria. As Mr Bill Pyle, the Chairman of the United Dairyfarmers of Victoria, said in his annual report to the conference of that organisation in the middle of 1978, that represented three families going out of country areas in Victoria each day. It does not need too much intelligence to see what impact that will have on rural Victoria and particularly on the major towns which supply the goods and services for the country areas. There has been a sociological change of some magnitude in those areas, particularly in rural Victoria where the dairy farmers are the majority interest in the rural pursuits. Three years ago the industry was in a state of great flux. The various industry organisations could not seem to reach agreement and there was a world market situation which meant that the prices being received for products, particularly skim milk powder, were below the costs of production. Generally, there was major chaos in the industry. It was fortunate that after a lot of good work by many people still associated with the industry that the United Dairyfarmers of Victoria was formed and we started to see some stability.

There was also a time when the dairy farmers turned, perhaps reluctantly, to the Government for assistance. I think it would be conceded that the Government would not want to interfere with the promotion of products from the rural industry, but we did have a situation where that became necessary because so many people were facing bankruptcy or were virtually in a bankrupt position. The whole industry was in a state of collapse and it needed Commonwealth Government intervention and support. That was forthcoming. However, the question of the industry and its future was recently highlighted by the Chairman of the Australian Dairy Corporation, Mr Tony Webster, when he addressed a workshop seminar in Canberra earlier this year. One of the points Mr Webster made was that it was a matter of major difficulty for the Corporation in the current financial year to administer the marketing arrangements because of the tension between pricing for both domestic and export markets and because of the return to the pool for export markets and the level of Commonwealth input to reach the underwritten level. He then gave the example that, on the domestic market this financial year, the price for butter oil is currently $1,060 per tonne compared with an underwritten level for butter of $ 1 ,240 per tonne. In other words, there is a gross subsidy of $180 before pool costs are deducted. On the other hand, on the export market butter oil at $750 per tonne attracts an export subsidy of $490 gross.

That highlights the difficulty which the Australian Dairy Corporation will have in making projections for future years. It will also make it very difficult for governments to make decisions which will bring stability to the industry. Other figures that are worthwhile looking at to illustrate the difficulty of preparing budgets in this context are the production figures for dairy products in 1978 and the previous year. For example, in 1977 there were 76,032 tonnes of butter produced, whereas in 1978 there were 75,790 tonnes- down 0.3 per cent. Also in 1977 there were 68,070 tonnes of skim milk produced compared with 7 1 ,296 tonnes in 1 978- an increase of 4.7 per cent. In 1977 there were 60,828 tonnes of cheddar gouda cheese produced compared with 71,748 tonnes in 1978- an increase of 18 per cent. They highlight the problems which the Australian Dairy Corporation will face when it tries to make projections and bring some stability to the industry.

I suppose that promotion is what we should be talking about in this discussion on a Bill dealing with promotion to be undertaken by the Australian Dairy Corporation. Speaking at the Outlook Conference in Canberra, Mr Tony Webster said that in 1978 there was an 80:20 blended product called ‘Dairy Soft’ test marketed. The Minister in his second reading speech referred to that particular product being tested on the market in South Australia, and we should see the result of that particular promotion in June this year. It is something which is likely to cause quite an impact on the use of butter at the consumer level. Hopefully, it will be a success for the dairy industry in other States. Mr Webster also referred to cheese consumption. Although there has been an increase in cheese consumption, I think there is enormous scope for additional consumer education in regard to the consumption of Australian cheese. For example, the Commonwealth Scientific and Industrial Research Organisation undertakes an enormous amount of research into the preparation of exotic cheeses, or cheeses other than cheddar cheeses, and these cheeses ought to be promoted much more. I can talk here about a product from my own electorate, a very tasty cheese from the Drouin Cooperative Company. I gave a slice of that cheese to the honourable member for the Northern Territory (Mr Calder) and I understand it has made such an enormous impact in the Northern Territory that we ought to be having a great sales promotion of that product in the Territory.

In Japan there has been an increase in the cosumption of cheese, particularly Australian cheese. That is the result of what is expected to be a long-range change in the dietary habits of the Japanese people. We can anticipate that, with proper marketing, and as a consequence of government to government negotiations, there will be a greater use of cheese by the Japanese people.

Perhaps the biggest sales success of all is the Big M’ campaign in Victoria which is being undertaken by the Victorian Dairy Industry Authority. That campaign, as I understand it, commenced on 1 January 1978. The figures for the 12 months from that date speak for themselves. An additional 30 million litres of ‘Big M’ milk has been sold in Victoria. The gross value of retail return to the industry is $20m. In terms of total milk consumption there has been an increase of 28 million litres. That is a 6.84 per cent increase in total milk sales for the year ended 3 1 December 1978. ‘Big M’ represents 8.6 per cent of all milk sales. Not only has it meant an increase in actual sales but also, I think it can be safely said, the success of its promotion has stopped a further decline in milk sales in Victoria. One needs only to go into the supermarkets in Victoria and look at the shelves and the freezers- the cold areas- and see what is now promoted on those shelves. We see much more promotion of cream, yoghurt, butter and cheese. We see better packaging. We see a whole new impact being made by promoters of dairy products.

If we compare the ‘Big M’ campaign in Victoria with the campaign in Tasmania we see even more startling statistics. The franchise for ‘Big M’ is operated through the Victorian Dairy Industry Authority to Tasmania. It was launched on 22 October 1978. If we look at the progressive sales totals to the end of January 1979, we see that ‘Big M’ sales amount to 1,584,646 litres and that the sales of whole milk amount to 10,643,339 litres. ‘Big M’ has therefore represented an increase of 14.9 per cent of total liquid milk sales in that State. That is almost a total add-on to what is called the white milk sales in Tasmania. The campaign has been a quite incredible success. Those who have not had the pleasure of looking at the ‘Big M’ advertising on television should do so. I think it might even replace the Coca Cola advertisements in the awards for the current year. That would be good for the health and well-being of young people in Australia. One other promotion that has been undertaken in co-operation between the Victorian Dairy Industry Authority and the Dairy Corporation is the ‘Milk It Instead’ campaign. That campaign can now be said to be national. It is starting to have an impact on the sales of white milk throughout Australia.

The final matter to which I would refer relates to the selective underwriting which was battled through at a time when the industry was crying for help from government. I was very pleased that the Victorian Minister of Agriculture, Mr Smith, made an announcement on 20 February which removed many of the doubts that were starting to creep back into the minds of the dairy farmers as to whether the Government would let them down in relation to underwriting. On that day the Victorian Minister stated quite categorically that Victorian dairy farmers would receive a State Government grant of $3.2m during March of this year. He stated: an interim payment of the underwriting of dairy products, promised by the State Government to raise dairy farmer returns from $1.65 a kg, which was promised by the Federal Government, to $ 1 .76 a kg.

That represented the total return to the Victorian farmer. I understand that Victoria is the only State which is underwriting dairy products. I shall quote the Victorian Minister because I think it should be well known that this decision has been taken by the Victorian Government. Every dairy farmer in Victoria should be aware that there has been a joint co-operative effort by the Commonwealth and State governments in underwriting products of dairy farmers. Mr Smith said:

The interim payment of S3.2m will be on production from 1 July to 3 1 December 1 978 and the balance of about $ 1 .8m will be paid in two payments- one as soon as the production figures to the end of June this year are known, and the other when the equalisation pools run by the Australian Dairy Corporation, are wound up and the prices obtained for the various dairy products are known.

The question of promotion of dairy products is one which must be pursued vigorously by the Australian Dairy Corporation and by anybody who has any interest in the welfare of dairy farmers in Australia. The amendment which will be moved in Committee amplifies the definition of ‘dairy produce’ and ought to be welcomed by those in the industry. It ought to be welcomed by the consumers because it means that a much greater impact will be made on the consumer by the advertising and promotion of products which are healthy and helpful to the Australian population.

Mr John Brown:

– We certainly do not have any dairies in Parramatta; that is true. But given the fact that we are very clean living people, one of our biggest selling products is milk shakes. So that gives me some vested interest in this Bill. Members of my family were dairy farmers on the North Coast and I was brought up in a scenario of paspalum, mud, hand milking and hardship. So I have great sympathy for the dairy farmers and for the situation in which they find themselves at the moment. Their industry is fairly non-profitable and is certainly downtrodden to a great extent. I regret the fact that many of the small holdings of dairy farmers have disappeared to be replaced by the big monopolies, particularly in New South Wales, but even with the monopolies the profitability rate is still fairly low. I applaud the fact that this Bill does to some extent help promote the products of dairy farms.

I shall make just a few general comments on dairies and my interests in them. Unfortunately, I do not think the dairy industry in Australia has yet realised how well it could diversify into the production of high class vealers. I am talking about vealers in the European sense. In Yugoslavia and Holland particularly the production of veal is one of the biggest industries. It is really an eye-opener for an Australian person to go to Europe, as I have done recently and before then, and see the sort of veal that is available for sale in butchers’ shops. I am glad that the Minister for Primary Industry (Mr Sinclair) happens to be sitting at the table. I hope he is taking note of what I have to say. I would like to think that the Australian Meat and Livestock Corporation would try to encourage the dairy industry to look at the possibility of a European-type veal production, particularly in Sydney where we have an enormous continental population as a result of the immigration program that has been operating since the Great War. I think there is a very great opportunity for the dairy industry to integrate itself into the veal industry. I am sure that the market is there for the high class veal which is available in Europe and which is not available in Australia. I would suggest to members of the industry that perhaps they should look at the stall breeding of vealers especially for the high class veal market. I am sure that is another way that they could return themselves to profitability.

The Bill proposes to amend the Dairy Produce Sales Promotion Act 1958 in order to widen the definition of ‘dairy produce’ to include products such as market milk, cream and fresh milk products. Market milk and fresh milk products represent the most profitable outlet for milk in Australia and it is therefore important that the Australian Dairy Corporation should be able to promote these produtcs, thus benefiting the dairy industry as a whole. The dairy industry has for years been in a state of severe depression. I do not think anybody would deny that. A poll by the paper the National Farmer last year found the dairy industry more dissatisfied than any other farm group. Of course, there are plenty of farm groups that are dissatisfied. That seems to be fairly traditional, with all due respect to the farmers sitting at the table. But the dairy industry seems to be more dissatisfied than most, probably for good reasons.

Mr Cohen:

– You knew that I was a farmer, did you?

Mr John Brown:

-The honourable member is not bad at the bull so I suppose that gives him a start on the dairy farmers’ operations. The majority of dairy farmers find themselves working long hours for an income which is significantly below the national average. Many of them and their wives and children are forced to take outside jobs in order to keep their farms. It is little wonder that morale is low in the industry. Farmers have been forced to leave the industry at an average annual rate of about 8 per cent since 1970. In that year Australia supported nearly 60,000 dairy farmers. Today the total is about half that number. In the 1977-78 financial year alone the number of dairy farms declined by 2,500. Those who are forced to leave their farms are faced with a difficult decision. Their fathers and grandfathers battled to make a living from their farms and for many of them farming is the only life they know, which of course makes it very difficult for them to take on jobs in other occupations.

The depressed condition of the dairy industry has been produced by a number of factors. In all areas of farming and particularly in many dairying areas adverse climatic conditions result in up to eight months of bad weather in a year. It is therefore necessary for farmers to struggle to grow enough feed to tide them over the bad times, and often a period of prolonged drought is followed by severe flooding. Soaring costs of commodities such as winter feed and fertilisers have meant that farm costs are in many cases increasing at a greater rate than farm revenue, thereby producing declining net returns to farmers. The international market for dairy products has for some time been unstable and very sensitive to change in the volume of supplies traded, thus giving low export returns. The situation is little better on the domestic market where declining population growth and changes in demand patterns coupled with poor prices, have significantly reduced returns to dairy farmers.


– Order! It is rather difficult for the honourable member for Parramatta to be heard because of the high level of conversation at the table.

Mr Cohen:

– It is a good speech. I apologise profusely both to you, Mr Deputy Speaker, and to the honourable member for Parramatta.

Mr John Brown:

-With conditions like these as many as 25 per cent of dairy farmers may be fighting for survival. Given this situation it is clear that any form of assistance to promote the sale of dairy products is vital to the industry. In recent times it has been seen that advertising campaigns directed at the increased consumption of dairy products have been very successful. For instance, I know that in Europe the movie Last Tango in Paris performed wonders for the butter industry. I think that is a fairly good example of how high pressure advertising could help the dairy industry.

Mr Sinclair:

– So the Dairy Corporation ought to consider doing likewise?

Mr John Brown:

-I agree. The Victorian Dairy Industry Authority campaign to market the ‘Big M’ flavoured milk is a notable example. During the summer of 1977-78, the first season of its campaign, ‘Big M’ captured a 13 per cent share of the non-alcoholic beverage market. It exceeded even the campaign’s own target. I do not think that ‘Big M’ refers to the Prime Minister (Mr Malcolm Fraser) because he is usually referred to as the ‘Big B’. The ‘Big M’ is the milk product which is marketed in Victoria. The campaign has been so successful that it has spread to other States. In Tasmania the promotion is expected to give a $600,000 boost to the industry and will benefit all sectors from the farmers to the vendors. So successful has the campaign been that negotiations are being made with America, Japan, Canada, France and Scotland to launch Big M’ as an international product. It should be noted that the ‘Big B’ is also an international product at times; he is very rarely here. In November of last year an advertising and market research executive from the United Kingdom visited Australia to study the Australian campaign with a view to boosting flavoured milk sales in Britain.

This is just one example of a successful promotional campaign involving dairy produce. Others have been launched to promote a variety of products including cream, long life milk and a spreadable butter mix. The success of such campaigns gives a much needed fillip to the dairy industry. The definition of ‘dairy produce’ should be as wide as possible to allow the Australian Dairy Corporation to promote as wide a range of dairy products as possible to help the industry recover from its present depressed state. On those grounds, on behalf of the Labor Party, I support the Bill.


-As other speakers in this debate have said already, this amending legislation will remove any doubt about the power of the Australian Dairy Corporation to promote milk and fresh milk products as well as the more traditional dairy products such as cheese on the domestic market. A new definition of ‘dairy produce’ is required to include milk and or its constituent parts as well as products derived from milk. I just hope that the amending legislation is sufficient to cover the situation. In the 1960s and more particularly in the 1970s the role of national commodity marketing boards changed increasingly from bulk exporters to marketers of a particular commodity in the domestic market. The loss of traditional export markets such as the European Economic community for dairy produce and fruit is a good reason for this change, together with a larger, more affluent and more discerning Australian population. This has brought about a reassessment of strategy for the marketing of these commodities. The emphasis is now very much on domestic promotion, but I believe more emphasis will still be required in future than is given now.

The various boards and corporations are still acquiring the necessary skills and evaluating techniques, and of course the finance necessary to cope adequately with the new task. In the 1977-78 annual report of the Austraiian Dairy Corporation details are given of the criteria to be used in the promotion of dairy products by the Corporation. As I read the report, they include support for and supplement to existing promotional arrangements by others in the industry, to encourage new products and end uses for dairy products and to promote those products where at the present time this not being done. The Corporation now believes that it can produce a response to the promotion of any dairy product it desires to promote and that its evaluation techniques are sufficiently developed to place a cost benefit value on any such promotion. As these skills have been developed its marketing techniques have become more aggressive. The Corporation hopes to average two butter, two cheese, one fresh milk product, or, if you like, cream, and one market milk promotion each year within the existing criteria which in particular in the marketing of milk is to assist the State milk marketing authorities as required. In addition, there are the general promotions such as Easy Summer Living’, ‘Winter Snacks’, et cetera.

Butter consumption has fallen dramatically in Australia. Butter, which was the basis of the dairy industry in Australia both in exports and in domestic consumption is no longer the basis of the industry and this, together with the loss of the EEC market, is the major reason for the dramatic reassessment that has been required in the dairy industry for its future marketing strategy. Butter consumption has been falling by between 15 per cent and 17 per cent a year. It is down to 50,000 tonnes or 55,000 tonnes this year but the rate of decline, I am advised, has slowed to under 10 per cent this year.

There are two points of interest, both of which I believe were mentioned by previous speakers. The first is Dairy Soft. This is the 80 per cent: 20 per cent mixture of dairy fat and vegetable fat. It is being test marketed in Adelaide for six months. It is still being evaluated but it is believed that it could have gained six per cent to eight per cent of the spread market in Adelaide. The question still to be answered is: At whose expense has the six per cent to eight per cent been gained- butter or margarine? Better packs, such as tubs and foil which have replaced the old parchment packs for the sale of table butter, have at last come to the fore. At last we now have in Australia a better availability of genuine easy spread butters by using such processes as the Alnarp process.

This year cheese production is up 20 per cent on last year. In spite of this 20 per cent increase there will be a 4,000 tonne shortfall in cheese sales from Australia to Japan. Although the figures are not available yet for domestic cheese consumption in the current year it is obvious that cheese consumption is continuing to rise at a very healthy rate. It is obvious that cheese promotion is successful, but I think in the future there will be an even better basis for cheese promotion when we overcome this temporary shortfall in cheese. In the electorate of Murray, which is the one I am proud to represent in this place and which has more dairy cows than any other electorate in Australia, which sometimes worries the Minister for Primary Industry (Mr Sinclair), there has been a dramatic transformation in cheese production. The electorate of Murray will now produce close to half of Australia’s cheese production. Cheese production in this electorate will again increase next year following the complete transfer of the Rochester factory of Murray Goulburn Co-operative Company Ltd from the production of butter, skim milk, et cetera, to cheese production. This will be additional to the other cheese factories including the Murray Goulburn cheese factory at Cobram, the two Kraft Foods Ltd factories at Leitchville and Strathmerton, the Ibis Milk Products Ltd factory at Stanhope and the Nestle factory at Girgarre. These factories are all producing increasing quantities of cheese.

Mr McVeigh:

– Good quality cheese too.


– I think the Japanese have given their affirmation to the point made by the honourable member for Darling Downs because I believe Australia has a better quality rating with the Japanese, the most quality conscious importers of Australian cheese, than New Zealand and other competitors. With fresh milk the Victorian Dairy Industry Authority, to its credit, developed the ‘Milk It Instead’ promotion for white milk and the ‘Big M’ campaign for flavoured milk, which lifted the level of consumption of flavoured milk in Melbourne from the lowest in any of the capital cities in Australia to probably the highest. The point is that in Melbourne before the advent of that campaign nothing was being done to promote milk. The Australian Dairy Corporation has purchased the Milk It Instead ‘-that is, the white milkcampaign for three State authorities, which have been carrying that promotion this summer. Other States have developed their own flavoured milk promotional campaigns or in one or two cases, have bought ‘Big M’ material.

It appears that the market for flavoured milk will stabilise at about 8 per cent of the total milk market, that is, of human milk consumption or of the market milk market. However, strict quality control is essential for a consumer consistently to prefer carton milk to soft drink or fruit juice. Poor flavouring or stale milk cannot be tolerated if the drive for the consumption of flavoured milk and, for that matter, of white milk is to continue. Fresh milk products appear, with cheese, to have the greatest potential for future promotion. I understand that the ‘cream and fruit’ promotion this summer was the first national promotion for cream and sales have expanded generally throughout Australia. So far, hardly any promotion has been done for other fresh milk products, such as yoghurts, special desserts, et cetera.

I am pleased to see that the significance of the school tuckshop has been recognised by the dairy industry. The tuckshop is very important in modifying the dietary habits or dietary choice of young people, as an aid to good nutrition, and dental hygiene. Milk fits all the criteria. I commend the work that has been done in Victoria. The same could be being done in other States- it is just that I know the Victorian situation. Professor Storey, of the School of Dentistry at the University of Melbourne and the Victorian Dairy Industry Authority have worked on school tuckshop seminars, et cetera.

Dr Jenkins:

– The Health Education Centre does that too.


– The honourable member makes a fair point. I think it is a pity that the excellent work that the Victorian Dairy Industry Authority is doing in the promotion of milk products in Victoria is being sullied by it being moved into political debate by certain people in that Authority. The role of statutory corporations is to market their products. Politics should be left to the politicians and the industry organisations. Two recent conferences in which dairying was a significant matter of discussion- the Agricultural Outlook Conference and the Dairy Industry Workshop- confirmed the reviving selfconfidence which is now very much apparent in the dairy industry. These conferences made the points that the dairying industry has a viable future in this country, both on the domestic and export markets; that production has fallen as low as it should be allowed to fall; and that the industry also appears to be prepared to discuss its problems on a more national and rational basis than in the past.

At the Workshop, the Chairman of the Australian Dairy Corporation paid tribute to the value of the Commonwealth Government’s underwriting commitment in sustaining the industry and providing a basis for its recovery. The Chairman also made the point- I certainly make it anyway- that the Minister for Primary Industry is playing a predominant part in continuing that underwriting commitment. I believe that the Minister deserves the congratulations of all dairy farmers in Australia for what he has done to provide a base from which they can operate. It is the belief of the industry that $1.80 a kilogram, or 82c per lb, is a reasonable request for underwriting to put to the Commonwealth Government for the 1979-80 financial year. At that level of underwriting of 82c per lb, the guesstimate, or forward estimate, at this stage is that only $3.Sm of Commonwealth underwriting funds would be necessary. This can be compared with the estimate at this stage of about $ 1 5m for the far lower underwriting figure of $1.65 a kilogram, or 75c per lb. So, from the figures for this year and the estimates for next year, the way in which the dairy industry is providing its own commercial return on a reasonable basis, through the development of markets and through the necessary readjustment that has taken place, can be seen. I repeat for the benefit of the Minister, who has just returned to the chamber, that the Workshop also considered the need for an 82c per lb underwriting commitment by the Commonwealth Government next year.

The Workshop also believed that there was no need for selective underwriting to continue into next year because this year’s selective underwriting, together with the significantly better financial return for cheese rather than butter, has made the necessary readjustment. Next year, in the Murray electorate alone, because of the previously mentioned switch to cheese production, between 6,000 and 7,000 tonnes less butter will be produced than will be produced this year. I support the recommendation of the Workshop that the Commonwealth Government should provide a significantly increased level of underwriting for next year at the $1.80 a kilogram level, compared with the $1.65 a kilogram level for this year, and that it could do so at far less cost to it. In addition, there is no need for the continuation of selective underwriting because the necessary adjustment to market forces has taken place. I also support the more positive and favourable assessment that the industry now has of itself and, I believe, that commentators and experts outside the industry also have of the industry and of the important part that promotion is playing in this more optimistic assessment.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

In Committee

The Bill.

Minister for Primary Industry · New England · NCP/NP

– I move the following amendment:

In clause 3, page 2, lines 3 to 8, omit paragraphs (b), (c), (d) and (e) of the definition of ‘dairy produce’, substitute the following:

any constituent pan of cow ‘s milk; and

any product derived from cow’s milk or from any constituent pan of cow’s milk, whether or not any other substance has been added; ‘.

The definition of ‘dairy produce’ contained in the Dairy Produce Sales Promotion Amendment Bill, as introduced, covers cows milk, butter, cheese and such other dairy products as may be prescribed. As I mentioned in my second reading speech, the levy for domestic promotion is imposed on all whole milk produce in Australia. Accordingly, the promotional activities of the Australian Dairy Corporation apply to the promotion of whole milk and all dairy products derived from whole milk. The purpose of this amendment is to avoid the need for the prescription of individual dairy products for promotional purposes. I apologise to honourable members that this was not included in the Bill distributed to them. The breakdown which occurred in the printing of what was an original earlier draft and its presentation to the House would have left the industry in a position where it would not have been possible for the desired change to embrace all cows milk products and by-products. Therefore, it is felt preferable that this amendment should be introduced to ensure that there is a complete coverage.

I commend honourable members who took part in the debate on this Bill. Each of them, from both sides of the chamber, made a worthwhile contribution. I have little doubt that many of the past problems of the dairy industry have been eased significantly, both through the policies that have been pursued in the pastdairy adjustment and so on- which have enabled some change in the pattern of dairying in this country and, significantly, in the last 12 months through the introduction of dairy underwriting. But none of those forms of financial assistance will succeed unless the markets are there to take at an economic level the products of the dairy industry. This Bill is directed essentially at marketing. The Government is very strongly behind assisting the industry, not just in trying to underwrite its products and aiding adjustment in the production sector but also in promoting to the maximum the products which are still highly saleable, which we believe are highly desirable and which, with the backing of the Government and the industry, should get the Australian dairy industry back into the position of being a continually profitable and worthwhile Australian industry contributing to the well-being of those many communities that are dependent on the dairy farmer and also to the lives and livelihood of those Australians who like to consume dairy products. I commend this amendment and the Bill to the Committee.

Amendment agreed to.

Bill, as amended, agreed to.

Bill reported with an amendment; report- by leave- adopted.

Third Reading

Bill (on motion by Mr Sinclair)- by leaveread a third time.

Sitting suspended from 5.57 to 8 p.m.

page 463



Ministerial Statement

Debate resumed from 22 February, on the following paper presented by Mr Lynch:

Motor Vehicle Plan- Ministerial Statement, 22 February 1979. and on motion by Mr Sinclair:

That the House take note of the paper.


-The question is: ‘That the House take note of the paper’. I call the honourable member for Berowra.

Mr Young:

– It is our side, is it not?


– I called the honourable member for Berowra. Would the honourable member like to cede? The question was put and I called -

Mr Young:

– Were you not looking this way? I am hard to see.


– I have not noticed the honourable gentleman being inconspicuous in this House. The honourable member for Berowra has the call.


-Mr Deputy Speaker - (Quorum formed).

Mr Killen:

- Mr Deputy Speaker, may I have your indulgence? I understand from my friend the honourable member for Berowra that he would find it agreeable that the honourable member for Adelaide precede him in this debate. It is a mild misunderstanding. I am sure that the House ‘s generosity will extend to encompass it.


-The Chair will accede to the proposition. I call the honourable member for Adelaide.


-Thank you, Mr Deputy Speaker. My thanks go also to the honourable member for Berowra (Dr Edwards) and to the Minister for Defence (Mr Killen) for arranging my being able to lead for the Opposition on this matter of the statement by the Minister for Industry and Commerce (Mr Lynch) concerning the export facilitation measures introduced into the motor vehicle local content plan. I have an amendment to the motion ‘That the House take note of the paper’. I move:

That all words after ‘That’ be omitted with a view to substituting the following words: this House, while recognising the need for volume production to achieve lower priced Australian made vehicles, condemns the Government for entering into an agreement for an export credit/international complementation scheme of vehicle production with unnecessary haste and, for its failure to-

1 ) provide for close monitoring and control of component rationalisation;

2 ) provide details of total labour force and industry impact of proposed changes both short and long term;

outline job security, training, retraining and relocation programs;

achieve firm long term undertakings from overseas motor vehicle builders about continuing performance in Australia;

5 ) consider alternative schemes of vehicle production in Australia that would enable economies of scale to be achieved whilst retaining a comprehensive range of vehicle manufacturing capacities and skills;

consider regional economic/social effects of the proposal;

7 ) consider the effect on the balance of payments;

8 ) consult fully with trades union and industry representatives; and

comply with the requirements of the Environmental Impact Statement legislation’.

In short, the Fraser Government has shown once again its inability to plan properly for increased international competitiveness in our industries, its inability to minimise adverse effects of change on thousands of working people and its inability to build up techniques to negotiate meaningfully on behalf of the Australian people with great and powerful transnational corporations whose interests are not necessarily the same as those of our nation.

In the short time available to me I want to make about eight points in relation to this. Firstly, Labor- I am now referring to the industrial wing as well as the political wing of the labour movement; in other words, the Australian Labor Party and the unions- recognises only too well the vital necessity to strike a balance between the need to maintain a labour intensive industry with high technology and the rights of consumers to the best and cheapest cars. If cars are not relatively cheap and if we continue to require high levels of protection the industry will continue to stagnate and there will be no security of employment for those working in this industry. With our relatively small population we in this country suffer from a cost disadvantage. Because we provide our people with a reasonably wide choice of Australian-made cars, with only 14 million people, we suffer from a lack of volume production in each make and each model. So we have no economies of scale, and unit costs and prices are high. If we seek to effect mergers or arrange consortia of builders, which is suggested by some as a means of achieving the economies of scale, and thereby limit the number of makes to achieve that volume production, it is, I believe, incumbent on those who advocate this as one of the policy options to state which makes they intend to phase out, which motor vehicle companies are going to be affected, which parts manufacturers will be penalised- and there will be many- which regions will be disadvantaged, how they are going to achieve such a policy, and so on. The Labor Party is not committed to such a policy.

Just to dwell on the last question for a moment, namely, how we are going to achieve such a policy of mergers or arranging consortia, we need to know from those who advocate this as a solution details of the powers they are going to use to achieve this aim. Is it suggested that the Government threaten to withdraw depreciation allowances, export grants or research and development subsidies to bring about its wishes? If so, in a free society such as ours, what is to prevent companies sacking some of their employees, if not all of them, in retaliation? I do not like facing this possibility. I do not like the fact that it is a possibility. I do not defend the fact that it could happen, but I believe that we have to be realistic and to cast that aside as an option. Other pertinent questions are these: What the effect will be of these mergers on the consumers. How will they react to having fewer makes from which to choose? What research has been done to determine whether consumers will buy more of the remaining fewer Australian-made makes and models to make up for the ones phased out? How do we know that the result will not be less Australian production and less Australian employment? I believe that that might be one of the effects of such a policy. The situation is bad enough now. I am appalled by the number of parliamentarians, Federal and State, who are buying imported cars.

Let us look at the employment figures in the industry. In May 1974 103,000 people were employed in the Australian motor manufacturing industry. In July 1978 the figure was down to 79,300. This shows the extent of the stagnation if we continue with the policies as they are now. Until some solid submissions are put before us answering the questions I have raised I remain wary about mergers or consortia as a feasible solution. We shall formulate our policies in the Labor Party in the hard practical world we know to exist. We shall not take risks with this vitally important motor manufacturing industry, not only because of the thousands it employs in its various facets- I am referring to the parts industry, the motor builders’ industry and the car distribution industry- but also because it is ‘the engine ‘ of the Australian manufacturing industry generally. It gives us so much technology, for a start.

The second point I want to make is that change in the motor vehicle industry, whatever decisions are taken by Government, is inevitable. This is a free and enterprising society in which we live. The aim of democratic socialists or social democrats- honourable members can refer to me in either of those terms- is to make our society freer, fairer and more enterprising and to recognise that enterprise does not have to be solely in the private sector any more than it should be solely in the public sector. We need it in both. There will not be freedom and fairness unless it is in both the public and private sector.

One of the values of this mixed economy society of ours is that industry should respond readily as people’s tastes change. We do not want the dull and dreary world of communist societies where such responses are slow and where the consumer’s choice is limited. Changes come about because of shortages of certain materials or increased prices of those inputs or because of new technology. Such changes are taking place at a fast pace in the motor vehicle manufacturing industry right now. Oil prices have gone up. People are consequently moving to four-cylinder engines. Aluminium is becoming competitive with steel. There is a strong possibility of aluminium rather than steel vehicle panels in the future. So many parts manufacturers live in this uncertain world anyway. It is not only governments which bring about disruption through changes. It is the job of governments to seek to lessen the pains of change.

So arising out of the two points that I have raised so far, we must recognise that change is inevitable if the industry is not to continue to stagnate and give an uncertain future to its workers, and that such change must be in the direction of volume production, preferably without reducing the choice available to Australian consumers and thus risking buyer resistance.

So my third point is that the Australian Labor Government sought to achieve these aims by persuading on the industry rationalisation of component production. Using the facilities of Chrysler Australia Ltd’s Tonsley plant in Adelaide to build four cylinder engines for more than just Chrysler was one example of this policy. The Fraser Government must be condemned for scuttling this policy. It would have resulted in far fewer dangers and difficulties than the alternative complementation scheme being pursued by the Government as announced in the statement which we are debating tonight. There was an alternative way to bring about lower costs of cars and more stability in the industry without threatening thousands of jobs as are threatened in this Fraser Government plan. The Fraser Government rejected and discarded that alternative way and it must be condemned for doing so. Now we are left with this export credit complementation scheme which the Government is intent on pursuing. It threatens thousands of jobs because there are insufficient safeguards in its implementation.

The remaining points I want to make are positive ones as to how these safeguards, if we are to have this scheme, should be improved. So my fourth point must be, as indicated in the amendment that I have already read to the chamber, that there must be close monitoring and control of component rationalisation. This should be done through a system of reversion controls as existed in the Labor Government plans. I have been stating this- it is on the public record- since the General Motors-Holden’s Ltd J car changes were first suggested. I am flattered to note that the parts manufacturers through their Federation of Automotive Products Manufacturers have now taken up this call in their qualified support for the local content changes.

The fifth point is that, of course, we must have better job security, better training schemes, retraining and relocation programs. The Labor Government had started such programs. They have been terminated by the Fraser Government. Almost every other advanced country in the world has such programs. We have nothing to speak of in this country at all thanks to what the Fraser Government has done. I have a document from the United States of America entitled Trade Adjustment Assistance for Workers: Questions and Answers’. I would like to quote some questions and answers from this document because they give an indication of the sort of things that are available in just that one country. The document states:

  1. What is trade adjustment assistance for workers?
  2. Trade adjustment assistance for workers is a Federal program administered by the US Department of Labor and co-operating State employment security agencies under provisions of the Trade Act of 1974. Established to help American workers who become totally or partially unemployed as a result of increased imports, the program provides eligible workers with trade readjustment allowances during the periods of unemployment or underemployment . . .
  3. What are trade readjustment allowances?
  4. Trade readjustment allowances (TRA) are weekly payments.

The document points out that these allowances give enormous help to workers- up to 70 per cent of average weekly earnings. The document continues:

  1. How long may a worker receive trade readjustment allowances?
  2. A worker may receive basic TRA for up to 52 weeks. . .

There is nothing comparable in this country to these restructuring assistance schemes. The document also states:

  1. Who may file a petition for adjustment assistance?
  2. Any group of three or more workers of a firm or subdivision of a firm, their union, or their duly authorised representative, who feel that increased import competition has contributed importantly to the workers’ unemployment or underemployment may petition the United States Department of Labor for a determination of eligibility to apply for adjustment assistance.

This is what is available from the United States alone. It is the sort of readjustment program we ought to have in this country. This is the fifth point I was hoping to make.

Sixthly, as point (4) of our amendment indicates, of course we should have some long term undertakings from the overseas motor vehicle builders that they are going to stay in this country and not hold us over a barrel in, say, five years time. It is totally intolerable that we put ourselves so greatly into the hands of overseas decision makers. We need sovereignty here. We need to be masters over the decisions which affect our lives by making those decisions ourselves and not being in the hands of others to such a great extent as is implied in locking into this particular scheme of the world car concept. One way of mitigating the adverse effects of plugging into this world car concept is to get some signed guarantees from the overseas car companies that they will have continuing performance in Australia. But it needs a government which is nationalistic in outlook- not lapdogs, not sycophants of large companies- to exert our rights in this way and obtain signed guarantees.

Another point I want to make relates to the retaining of Australian technology and skills. This point also is contained in our amendment as are so many of the other points which I will not have time to make.


Order! The honourable member’s time has expired. Is the amendment seconded?

Mr Keating:

– I second the amendment.


– I have no intention of addressing myself point by point to the speech made by the honourable member for Adelaide (Mr Hurford) who led for the Opposition. The whole thrust of my remarks will rebut the inadequate and largely negative remarks that he has made. The Government rejects the Opposition’s amendment which, specifically, fails to offer any feasible alternative. I will come back to that.

The key emphasis in the proposal is the setting up in Australia of a world scale engine plant by General Motors-Holden’s Ltd, a plant of world scale meaning one with an annual volume of production sufficient to ensure a unit cost which is competitive with overseas manufacturers and which will put Australia in the same league as the major industrial countries. This is the way to achieve the very international competitiveness that the honourable member leading for the Opposition was talking about. I might say in passing that since this Government has come to power the index of our international competitiveness generally is up about 30 per cent on what it was when Labor left office.

This proposal is a forward looking development, indeed breakthrough, a new dimension for this sector of Australian manufacturing. I do not blink the fact that there are problems; there are and they are serious. But I submit that they are of a lesser order than the eventual problems of not accommodating this General Motors-Holden’s

Ltd proposal; and that is the key point. What it is all about is the long term health and viability of the Australian motor industry and that industry, in all its ramifications, is the biggest single industry in manufacturing. It is all about the health and viability of this industry five and ten years hence. Health and viability mean capacity to employ and to provide meaningful jobs for Australians. That in a nutshell is what it is all aboutthe health and very capacity to provide large scale employment in this major industry, not just tomorrow or next year, but five or ten years on.

There can be no real doubt that without significant change- change along lines that this engine development is a good first step towards, specifically, a more export oriented industry- the industry and its very capacity to employ would go steadily downhill. The root problem stems from the small size of the Australian market which is about 600,000 units per annum, much less for passenger cars, compared with 14 million units per annum in the United States of America or the European Economic Community and 6.5 million in Japan and the sheer inability because of fundamental technological factors for five major manufacturers to produce at low cost when operating within the limits of such a small market. Everybody recognises this. I suggest that the spokesman for the Opposition, the honourable member for Adelaide who has just resumed his seat knows this as well as I do. Yet the Parliament was treated to his long disquisition and to this amendment in his attempt to have a bit each way. He said in effect: ‘Yes, the Australian market is too small. Something has to be done, but not this proposal; anything but this present proposal’.

Let me spend a few moments going over just what is proposed. To put it as simply as possible, it is this: For a start there is the General Motors engine plant, a world scale plant, which is to produce 240,000 engines per annum with a capacity for 300,000 and at that volume, costs are minimised. Two-thirds of the output is to be exported to other countries manufacturing the proposed world car, the J car. The other side of the coin is that some other parts of the car, when it is produced and sold here, are to be imported with some duty concessions from other countries with world scale plants able to produce those parts- and, hence, low costs. As the car is assembled here from more parts produced at world scale and low cost, the finished car will be more competitive and available at a lower cost. In time finished cars, too, should be able to be exported.

The spokesman for the Opposition will not have it this way. Yet recognising, as the Government does, the need for a new direction he says, as embraced in this amendment, that the answer is rationalisation. He says that we should get production down by having fewer manufacturers or at least fewer plants. He says that that is the answer. That would be great if the honourable member would give us any indication of how that could be brought about as a main thrust, short of a system of socialisation in which the Government directs which companies will produce, where they will produce, the lot. That is not on. So, while rationalisation sounds great and will undoubtedly take place in various ways and in varying degrees, in fact no workable alternative proposal is made. So much for number five of the Opposition amendment. Meanwhile the inexorable trends to declining competitiveness in the Australian industry with all its long term implications for a declining capacity of the Australian industry to employ people, would go on.

In this context I make it clear that I am not averse to the reasonable protection of Australian manufacturing industry by the use of tariffs and other measures. But one must come to terms with the facts, and the facts are that in respect of this industry protection now has risen to a duty at the rate of 57.5 per cent, that is, the normal 45 per cent- if one can put it that way- plus the 12.5 per cent introduced in the last August Budget. Further there is a market sharing arrangement in force by quotas restricting imports- 80 per cent for Australian produced vehicles, and 20 per cent for imported- and there is an 85 per cent Australian content Plan further encouraging production in Australia. It is a formidable and growing structure of assistance and protection. I think that as one reflects on these trends the conclusion is inevitable. There has to be a change of direction and the present proposal is the only practicable one around- despite all the fulminations of the Opposition. It is the only route not only to lower car prices for consumers or at all events to containing further price rises, but also to enable the very survival of a viable industry and hence future employment levels at anything like the present scale. That is what this matter is all about.

I have said that there are problems and we do not blink that fact. For one the proposal does involve a change to the motor car Plan which the Government has stated was to remain in place until 1984. 1 do not deny that. I do say, however, that the Government’s commitment was made in the light of foreseeable circumstances and in the event those circumstances have changed.

Specifically, trends in technology and production methods on the world scene, not only in Australia, have moved faster and somewhat differently from what could have been foreseen. It is agreed in all quarters- all sections of the industry as well as the Australian trade unions involved- that the world car concept is inevitable. The world is moving to it faster than could have been anticipated and it predicates action even faster because of the investment lead times involved. So I put it to the House that this Government would be remiss in its duty to the Austraiian people and especially to the workers in Australian industry if it did not modify the Plan. It is not remiss in bringing forward the change that is now before the House.

As I have said it does create very serious problems for some manufacturers and employees. That is acknowledged. As the honourable member for Adelaide has said, it raises issues of adjustment assistance. The Crawford report on that very subject currently with the Government is therefore very topical. Indeed one might say that we have here a first class, concrete, practical case study for the Crawford group to get its teeth into.

On this question of change to the plan, I draw particular attention to the point in the Minister’s statement that the proposed export complementation facilitation arrangement will operate from 1 March 1982. Export complementation was bound to be introduced into the post- 1984 arrangements, that is, the arrangements for the industry to follow the expiry of the present Plan. They are to be negotiated anyhow. Since that is the case the present proposal thus is a change that anticipates an inevitable development by a year and a half or a year and three-quarters. This is coming into play in a limited way 20 months before time. That is what we are talking aboutand that change does not start to come into effect for three years. The start is three years away. I say that that is a much less significant change than would appear at first blush and that should be understood. With that change the plan stands in place.

That having been said, however, the major difficulty that remains is the threat that stems from this proposal for export facilitation or complementation to the independent car component manufacturers. It means that as General Motors-Holden’s exports engines from the new plant it is to be permitted to import duty-free other components to the value of the exports up to a limit of 5 per cent of its Australian content value. The issue then is the extent to which these additional duty free imports will displace production and employment in Australia by the independent components manufacturers.

I want to make two comments. My first comment is that without doubt the potential impact is very large when it is recognised that the independent components manufacturers account for only about 25 to 30 per centage points of the 85 points of Australian content. However, as against the business that may be lost to imports under the complementation arrangements, it has to be recognised that, firstly, some engine components manufacturers will, hopefully, plug into the GMH engine operation and thereby benefit from the large scale, large volume operation that the Opposition was talking about; and, secondly, some part of the additional imports will displace in-house production by the car companies themesleves, and to that extent the impact will not be on the components manufacturers.

The second comment I want to make is that the components manufacture itself must adapt and become export-oriented. In this respect I direct attention to another key point in the Minister’s statement; namely, that among the matters to be resolved is ‘whether both Plan participants’- that is to say, the car companiesand components manufacturers should participate in the scheme’. In a word, the door is open for the export complementation arrangements and import concessions to be extended to the components manufacturers themselves, which is a very important point.

I conclude by saying that I do not blink the difficulties that face the industry in accommodating this proposal. For some firms it is indeed an issue of very survival. Therefore, the statement by the president of the Federation of Automotive Product Manufacturers last Thursday is all the more welcome. He said:

The new scheme has good potential to bring new overall benefits to the local components industry, although we must face the fact that some manufacturers will experience difficulty.

He went on:

This process of change will not be easy. It calls for the fullest and most sympathetic understanding by governments when they are deciding policies for the motor industry affecting the components sector.

The essential point is that it has, to quote again, good potential to bring new overall benefits to the local components industry’. That statement faces reality. I say that the only perspective that this Government can adopt with integrity and a proper sense of responsibility to Australia and the Australian people as a whole is that this development must be seen as a breakthrough for

Australian manufacturing, a breakthrough towards manufacturing operations in Australia on a world scale, a forward looking proposal, which when taken along with other current industrial initiatives, notably plans for new, worldscale plants in the chemical industry, adds a new dimension to the structure and face of Australian industry, the start, indeed, of a new and exciting era for Australian manufacturing.

Smith · Kingsford

– I immediately place on record that the honourable member for Berowra (Dr Edwards) has suddenly realised the merits of a plan not devised by the Government but devised by General Motors-Holden’s Ltd. He could not have possibly made his speech tonight unless somebody in Detroit had made a decision some weeks ago. We suggest that it was some years ago. It is ridiculous for a Government member to say that he now applauds this brilliant scheme which his own Government knew nothing about until a few weeks ago, or was it trying to hide the facts from us? There has been no explanation given. It is as unexplained as the resignation of the Minister for Finance ( Mr Eric Robinson).

Let us look at the situation. The Government speaks of the Australian interest. What is going to happen to the Australian interests in the component industries? They will go to the wall. That is the position. They do not own one share of the motor vehicle industry in Australia. The Government has said what it is going to do for Australia. I make it clear, when I talk about protection, that General Motors-Holden’s was given protection and still has protection for 80 per cent of the market, for its benefit. Where did it get the capital to start? It received the capital from the Labor Government at the time. Has there been an introduction of profits from overseas? No. They have been remitted overseas. I make it clear that this is an unexplained and ill-considered statement that has no regard for the interests of the Austraiian worker. It is a knockout blow to the Australian manufacturing industry. If this can be done in this industry, how many other industries are going to suffer the same fate? What about the people who voted for the Liberal-National Country Party Government thinking that it was going to protect their jobs? Did the Government see an analysis of what it was doing in this most recent arrangement? The position is fraught with all the dangers of what can happen by not looking at the considerations.

Let us look at the precedent. At the moment we have 90,000 workers in the motor vehicle industry, with another 150,000 workers in the subsidiary industries, whether they be dealing with steel, glass, plastics or other products. One in 10 Australians is dependent upon the motor vehicle industry. It will set a precedent. If this can be done in a complementation scheme, it can be done with agricultural implements, tractors, commercial vehicles, machinery and the white goods industry. Why not do the lot? That is the position. Where is the Government going from the point of view of satisfying the unemployment situation. What about General Motors? It informed the Prime Minister (Mr Malcolm Fraser) on 4 January that the Government had until 28 February to make up its mind. That was the ultimatum. General Motors dictated to the Government. If the Government did not succumb to that ultimatum General Motors said that it would not put a $130m plant in Victoria. That was the ‘gun at the head’ situation. General Motors could not care less about the Australian worker.

On 23 January Cabinet was due to consider a departmental submission on the question of complementation. That submission was never considered. Instead, Cabinet set public servants the task of rushing through proposals to give approval to the GMH deadline. Is it any wonder that this Government has the worst record of any government for being a weak government, with this sort of action? The Government allowed departmental officers seven working days to examine the ultimatum from General MotorsHolden’s. The advisory council set up by the Government was not consulted until 13 February. The Minister made no attempt to consult that council until he was publicly requested to do so. The trade unions have not been adequately consulted. Components manufacturers have not been adequately consulted. In fact, one major components manufacturer said to me: ‘We have never yet received a document from the Government ‘. What sort of secrecy is this?

The advisory body set up some time ago was given a task 12 months ago, I remind the honourable member for Berowra, to work out a plan for the industry from 1985 onwards. The Government over-rode that body altogether. It was working on a plan about which it knew nothing. I put on record that General Motors knew about its plan 3’/2 years ago. It could not put this engine on a production line unless it had that idea in mind some time ago. The Government is just a tool of General Motors if it enters this scheme on the present basis. There has been no adequate explanation of the sudden urgency. General Motors has had it in mind for years, but it was not prepared to press it until recently because it knew that this Government would cave in. This is the important point. General Motors now has the march over every other competitor in the field. If the Ford Motor Co. had known about this proposal, it would have been involved as well. If the Japanese had known about it they would have been worried about building up their complementation in South Australia. Why would they worry about it if they knew there was going to be a reduction in the complementation scheme?

The Government has talked about investment proposals. Does the Government think that any company will invest in an area when it knows that there will be less protection? The master of economics opposite should know that. A company will not invest in a losing industry. Why does the Government not be open and fair with the people in the industry? There have been a series of back-door manoeuvres. It is gross irresponsibility. That is the point. The honourable member for Holt (Mr Yates) who is trying to interject has a brief for General Motors. It is in his electorate. He is suspect from that point of view.

I make it very clear that Sir Brian Inglis does not even agree with the proposals and that makes it very serious indeed from the Government point of view. We have been to the Department of Industry and Commerce and said to it: What sort of a survey have you taken of the 1,400 component manufacturers?’ It said: ‘Well, quite frankly, we have not had time to complete it. We knew nothing about the exact scheme until recently. We are still waiting on the survey. It will be available in four weeks’ time’. What sort of a government can put over this message? That is the point.

GMH makes the claim that the proposal will generate 3,000 jobs directly and a further 4,000 jobs indirectly. Let us have a look at this analysis. The cost of the products of component manufacturers represents 15 to 20 per cent of the wholesale costs of car manufacturers. The Federation of Automotive Parts Manufacturers estimates that there will be a 5 per cent reduction in the local content. That will mean a one-quarter to one-third loss of business. In terms of jobs, that will mean 7,000 to 10,000 jobs directly because there are 30,000 jobs in the component industry. But this loss of business will also reduce demand for steel, glass and plastics. So, on the mathematics of the component manufacturers, there will be a multiplier effect, with 20,000 jobs being lost by the component manufacturers and suppliers. The number could be even larger. The Industries Assistance Commission terms of reference are for a minimum reduction of 5 per cent. The IAC perhaps could well favour a 10 per cent reduction. With that sort of reduction there would be a multiplier effect on the number of jobs lost. And this is at a time when half a million people are unemployed. Where will the displaced people find work? Does the Government expect them to sell books or to pick fruit- as was suggested today- as an alternative occupation? What has this Government ever done on manpower policies and retraining programs?

There are other serious considerations. How will the proposal affect the other car manufacturers? Certainly GMH will go to the front, but what about the Ford and Chrysler companies? If GMH goes to the front the market will not get any bigger. The market remains the same. Therefore the residue for other manufacturers will be smaller. What will they do? They will cut their production. That would increase unemployment and the costs and prices of the other manufacturers. If GMH starts sourcing one component from overseas, will the other manufacturers not do the same? So there will be a spiralling factor from this Government’s ill-considered decision. We should consider what will happen to the firms if the local component demand is cut. There is no guarantee that the Australian component companies will make the remainder; but even if they did they would be forced to make significant changes, because if they lose the volume they still have to try to keep their business going. This is the position we now face. Component manufacturers are going off-shore. The honourable member for Berowra stated that they also might be entitled to complementation. That question will be referred to the IAC. So there could be two complementation factors on this question. It might suit the managing director of Repco Ltd to say that he favours the scheme, because he has a factory in South East Asia and can bring in parts from where the labourers are paid only $ 1 a day. We could well find that firms become importers of components and their Australian manufacturers just stores operations. Smiths Industries Pty Ltd at Guildford is already a classic example of this.

I turn now to the question of automation. GMH claims that the increased employment will give many opportunities. Let us have a look at the situation with the Nissan Motor Co. in Tokyo. It assembles 420,000 cars a year and it employs 5,500 people. This is how automation is used there. So we should consider the problems of the future and not just accept what GMH has said will be the situation. What guarantee does the Government have that this company will abide by what it has promised? There is no penalty; there can be no legally enforced agreement.

The situation relies totally on decisions made in Detroit which have no concern for Australian industry. The dominant factor is self-interest.

The Minister for Business and Consumer Affairs (Mr Fife) gave an undertaking as late as November that local content plans would not be disturbed before 1984. Many component suppliers have undertaken investment on that basis. Borg- Warner Australia Ltd has been planning a $25m expansion of its plant at Albury. This will not necessarily go ahead. These ad hoc decisions concern people such as Mr Ian Spicer. He said:

If the Government submits to pressure and changes this plan to suit one section of industry, then it will severely damage its credibility with manufacturers.

Detroit has a hot line to the Fraser Ministry. These days one has to telephone to get results. It is a shame that the Ford and Nissan companies did not think to do this. That is the way to do it. It is a great disaster for Australia to lose the chance of helping our own people technologically. We will lose our technological sovereignty, which we need. Honourable members opposite may laugh. They are not worried about fellow Australians. What about our inventors and our design engineers? What chance will they get if there are no cars on the production line?

Mr Dean:

– You have the whole system wrong.


-The Government ought to look at the whole system which is wrong. There are 2,820 of these people employed by vehicle manufacturers and assemblers. They estimate that Australian design costs are two-thirds of overseas design costs. The honourable member for Herbert (Mr Dean) talks about Australian industry. He should be an Australian for once, instead of a lackey of the Prime Minister. What is happening to our fellow Australians? We are spending much money on education in the tertiary field to produce design engineers and good technology. Why are we not using that? GMH will not do it. It could not care less. There have been no technical advances in the present four-cylinder engine design in the last 16 years.

We should also understand the risks that we face with tax concessions and trade-offs. The honourable member for Berowra would know about them. This proposal could be the greatest tax avoidance scheme ever. The manufacturers could gain advantages by exporting some goods and importing others so that no profits would be made in Australia. Exports could be made to low taxation countries. Australia would not gain any tax and the companies would get the tax benefit. It is a great switch which is readily done. How could Australia control the situation? The manufacturers could make decisions to produce certain parts in other countries and we could be stifled. They could do all sorts of things and we would lose the opportunity to produce a total package. The manufacturers could run their businesses here to make no profits at all. We could find a situation in which there is no car manufacturing industry of any intelligence- just a mass of parts manufactured overseas and assembled here, with all profits going overseas. The manufacturers would make the plea: ‘Please protect us. We want 80 per cent of the market. You have to give us that; otherwise we will sack more men’.

The Government does not understand the problems of the car industry from the point of view of Australians. It will not have a look at them. There is a viable market for 600,000 cars. Why is the Government not talking about our technology?

Dr Edwards:

-The honourable member says: ‘Rubbish!’ The Government could not care less about Australians. Australians can make the best cars if they are given the chance. We do not need all these foreign people telling us what to do. What about the intelligence of Austraiian workers? The manufacturers lay off workers because that is decided in the board rooms of Detroit or somewhere else. Australia is a very small part of their market. Why is the Government not prepared to talk to the trade unions about the problems, instead of accepting the complementation scheme dictated by General Motors-Holden’s Ltd? We should be talking to the trade union movement and to the people in the industry, such as the engineers, about what we can do as Australians.

Mr Yates:

– Do nothing as usual.


-The honourable member would not understand. He is a broken down pommie. He would not understand what happens in the car industry. Let us look at the question as Australians and understand what we can do to back the workers in the industry. This proposal will cost Australia jobs, technology, skills and economic sovereignty. It is a poor consolation.

Mr Dean:

– You are wrong on all points.


-I am right. I will meet the people to whom the honourable member wants to introduce me at any time, and I invite him to meet the workers who will be unemployed.


– It appears from the speech of the previous speaker, the honourable member for Kingsford-Smith (Mr Lionel Bowen), that he does not want a $200m world competitive engine plant in Melbourne. Is that what he is really saying?

Mr Lionel Bowen:

-I want an Australian one.


-However, the new motor vehicle plant announced by the Minister for Industry and Commerce (Mr Lynch) on 22 February has been received with approval, although perhaps qualified approval. Final approval of course must await final plans. From the time of the first announcement by General Motors-Holden’s Ltd there has been a great deal of discussion. This discussion has been broad and wide-ranging, particularly in my electorate of Hotham. I have a plant of the Nissan company - one of the big five car manufacturers- there and I also have many dozens of component manufacturers.

I suggest that there are more component manufacturers in Moorabbin than in any other city, and there are many others in adjacent areas. Therefore, I would probably represent more component manufacturers than does any other member. It would be interesting to hear from the honourable member for Melbourne Ports (Mr Holding) whose electorate contains the GMH plant at Fishermen’s Bend and the Australian Motor Industries Ltd plant at Port Melbourne. He must be torn between representing GMH, component manufacturers and Australian Motor Industries Ltd, which does not stand to make so much from the deal, in his electorate, and the unions to which he has to answer. Normally very good at the back flip, he would be forced to throw in the towel. One also wonders about the honourable member in whose electorate the Ford plant at Broadmeadows is situated. Not being good at the back flip, he has not even stripped for this fray.

In spite of the wide range of products and interests, there was complete agreement in principle that a change in the automobile industry was necessary. There was fairly general agreement that complementation would be part of this change. As more of the General-Motors Holden ‘s plan came out and assessments were made, it became obvious that the details of this change would probably cause some heartburn to various manufacturers. I suppose that the Nissan company would support the General-Motors Holden ‘s proposal more than most because world supply has been an act of faith with the

Japanese automobile industry. Even though the Japanese manufacturers may not be set up to take advantage of the new proposals immediately, they will look into the future and make decisions to fit in with the new ideas. Nevertheless, Nissan must have its concerns. Primarily, its opposition has gained a jump on it. Also, along with all car manufacturers, Nissan has troubles with suppliers, quality, delivery and cost. How it works this out will depend on the final plan and how it assesses the situation at that time.

So, while there is support for a change in the industry, there are concerns. Let us look first at these concerns and see how they affect the component manufacturers and then let us look at how these concerns have been overcome already or can be overcome in the future. The first concern is about the timing and, more particularly, the ‘demand’ by GMH that the Government give a reply by 28 February. On wonders what the planning department of this mighty company is up to when major decisions have to be made so quickly. Perhaps to some extent the answer lies in the fact that Australia and an engine line are pretty minor parts of General-Motors’ world concept. Then one is painted a picture of the GMH boss successfully selling Australia’s part in the world scheme. However, there is more behind the scene than just last month’s frantic wheeling and dealing. The Minister for Industry and Commerce has been actively engaged in the automobile industry for years, and for at least one year has been looking for answers. Last year he visited the automotive centres of the world and heard at first hand the principle of the world car- not a new principle, but one which was, by then, moving out of the realm of dreams and into planning and action. The overall concept of General-Motors Holden ‘s was not really the surprise to the Government that the Press would have us believe. However, it was a surprise to some component manufacturers and, therefore, the Government and GMH should take them into account when the final plans are drawn up.

The next concern of the component manufacturers was the indication given in late 1978 that there would be no change in the present plan until after 1984. The industry was just starting to recover from the last three or four years. In some cases it was starting to be competitive with overseas suppliers. Plans based on the present plan had meant investments which could now suffer. I believe that the Minister has appreciated this situation and has been able to help by negotiating a new operational date, 1 March 1982. Nevertheless, the final arrangements of the plan must take notice of certain upsets to the industry and provide for compensation in some way to the component manufacturers. Of course, this would not be by way of cash adjustments but probably by way of allowing them to get into the world car plan.

Whilst the two concerns mentioned so far are fairly specific, it is the general lack of knowledgewhich seems to pervade the industry which hurts the most. There is a lack of knowledge about the details of the General Motor-Holden plan and doubts have arisen from General Motors-Holden Press releases and media speculation. Obviously, too, the number of jobs involved causes wide speculation. Whilst General Motors-Holden engine component manufacturers will increase some aspects of their trade and, thus, provide more jobs, and the General Motors-Holden engine works will employ more also, other component manufacturers could be hit. It will therefore be essential in discussions on future plan details that all this be taken into account. Again, to ensure that Australia comes out ahead, it will be necessary for the component manufacturers to be involved with complementation. We all hope that General Motors-Holden’s talk of cheaper cars is not ‘pie in the sky’. We hope that its figure of $ 1000 per car is realistic. The pressure is now on GMH to back its words, and I am sure it will.

The Australian public must have a concern for the prices of spare parts. There have been previous inquiries into the prices of spare parts but they still seem to be very high. It has to be established whether spare parts will be complemented as well so that, hopefully, their price will be held down accordingly. As the industry is aware, but honourable gentlemen may not be, the car makers keep control of components, of spare parts and of the makers of spare parts by owning the tools required to manufacture these parts. Thus, they say where these parts go and, in effect, control the situation. In this future plan we should look to expanding the area in which our component manufacturers can work. I believe that Ford in Australia can sell only to New Zealand, Papua New Guinea and Indonesia. Under the future plan I hope that the parts franchise is greatly widened. Further discussion will obviously be necessary to ensure that spare parts prices do not take up the savings that are to be made on the car price.

We applaud the new capital investment in Australia by General-Motors Holden ‘s. The true figure of $1 10m will be nearly as welcome as the announced figure of $2 10m, which is the total investment in the whole project. It would have also helped in assessments if the lost investments by component manufacturers had been known. Of course, if component manufacturers get a reasonable share in their own complementation schemes, this would be a real plus on the investment scene.

There are still many details to be worked out particularly in respect of the dollar for dollar concept. I have no doubt that much effort will go into this side of the matter to ensure that Australia benefits overall. We will have to look at transfer pricing arrangements, transport costing, marginal costing possibilities, currency exchange changes and other ‘invisibles’. There will also need to be changes to the export incentives Bill. Just as there are difficulties with the 85 per cent local content plan, there will be difficulties with this plan. There must be great emphasis placed on devising a plan which will cover most eventualities. For example, what happens if a country importing GMH motors changes its laws and insists on a $2 to $ 1 arrangement its way?

The elements of the plan as detailed in the Minister’s statement are as follows: Firstly, the dollar for dollar off setting of exports and imports for by-law entitlements; secondly, the scheme starting on 1 May 1982; thirdly, complementation starting at five per cent with increases determined at an Industries Assistance Commission inquiry; and fourthly, the plan to continue after 1984 with no less favourable assistance. It is this IAC inquiry which of course is now of great importance to all those interested in the automotive industry- vehicle builders, trade unions, component manufacturers and consumer groups. The Government has said that within a few weeks it will give the IAC a reference seeking: ‘advice within 12 months on post- 1984 assistance arrangements . . . and an interim report within six months on the remaining elements of the export credit scheme, to be introduced into the present Plan’.

It is now up to the interested parties to prepare their cases and to work to a viable plan to rationalise the industry. They all have their chance now. I am sure that the Government will appreciate the advantages that certain groups and individual companies have gained and will be looking to see that those groups and companies which have been disadvantaged will gain the opportunity to find other markets or gain offsetting advantages. The Government does not in principle want to get involved in industry, but it has to do so in this case because of the small Australian sales in a large capital industry. I am sure that the Government appreciates that it will be judged by industry as a whole and that it will look to its laurels to ensure that it maintains the confidence that industry presently has in it.

Port Adelaide

-I have been a member of Parliament for only five years but this is the fifth car plan that we have had before us in that very short period. All those plans were predicted to last for a number of yearsbetween four and eight years. The present plan has been inforce for only a matter of months. It was to go until 1984 and already changes are being made. In correct circumstances this may have been very good news for Australia. We are getting a major expansion in the engine building field, we are going to get economy of scale- a term that we all use- we are going to get some export industry and we are going to be tied into the world car. But no one in this House, including the Minister for Industry and Commerce (Mr Lynch) who is pretty vague in the information he gives, really knows what it all means. No one really knows. The reason is that Australia, like so many other small countries, does not know how to deal with multi-national companies, and multi-national companies treat us as second class citizens.

Mr Dean:

– This sounds predictable.


– It is predictable because so many countries around the world, some of which are very much larger than Australia, are asking for the recipe- perhaps it is co-operation between all of the countries concerned- so that we can get the answers from some of these companies which indeed are far more powerful than the countries in which they operate. It is extraordinary that we have had all these reports handed down over the years. As I said, just in the five years that I have been here one could fill one’s library with the reports of the Industries Assistance Commission and the Department of Industry and Commerce about the car industry and with the debates that have taken place in this House on that industry. But never before has such a scandalous measure been taken to alter plans laid down for the car industry as has been taken on this occasion. One has to ask oneself why General Motors-Holden’s Ltd, operating as it does with so many governments in the western world, would tend to use the tactic that it has used in Australia. Why would General Motors do something here which it would not dare to do in the United States of America and which it certainly would not do in West Germany, France or the United Kingdom? I have searched for some sort of answer to that question. The only answer that I can come up with is that the company felt that it had to push the change through because of the very close relationship between the Ford Motor Company of Australia Ltd and the Prime Minister (Mr Malcolm Fraser). It was felt that, given time, perhaps the general manager of Ford, who is looked upon as the closest adviser to the Prime Minister on the automotive industry in this country, may have been able to talk the Government out of taking this action.

Mr Carlton:

- Mr Carlton thinks it is not true. Perhaps honourable members opposite can give some explanation of this very weird behaviour by General Motors. It has done something here which it has not dared do in any other country. We have to be cognisant of the power of these companies and, irrespective of what side of politics we stand on, we have to have some mode of dealing with them so that they respect what we say. There are people in Australia who believe that if we tighten the rules of activity and behaviour of multinational companies in this country they are going to pack up and go home. They operate in other countries under far tougher rules than they operate under in Australia. I do not believe that any honourable member opposite thinks for one instant that General Motors would have done in any other country what it has tried to do in Australia and has done successfully in the last six weeks.

As I said at the outset, in the long term this decision may prove to be in the best interests of Australia. But one cannot say that the evidence is there to substantiate that statement at the moment. I was surprised to hear the honourable member for Hotham (Mr Roger Johnston) talking about all the component part industries in his electorate. The representatives of General Motors whom I met with Mr Dunstan several weeks ago did not have the answers to some of the questions that were raised in the discussion. They did not tell us what goods the company would bring in under by-law for the five per cent credit it intends to build up after March 1982. That is a simple enough question. They must have analysed that. They must know what parts they intend to bring in from overseas. One could say off the cuff that they would be the most expensive parts the company could bring in and that they are also being built in Australia. We should be able to identify immediately the companies that are affected by this decision.

The Minister has made a very grave mistake, as has the Government, in the way it has dealt with this measure. We are not now dealing with the industry; we are dealing with company by company. General Motors has made a very large breakthrough in the way this whole matter has been handled. As the Deputy Leader of the Opposition (Mr Lionel Bowen) has pointed out to the Parliament, the whole new car plan is based on submissions by one company. There are other companies in this country in the same field which are equally as powerful. I refer to the Ford Motor Company, Chrysler Australia Ltd, which is perhaps a little less powerful, and the Japanese manufacturers, Nissan and Toyota. As I have said, I have spoken in a number of debates on car plans, all of which plans were to last a number of years and none of which did. None of those discussions took the place of a debate about what the consumers may have wanted in Australia. Basically we concern ourselves about what is good for the companies and how best we can protect the employment opportunities of people in the industry.

The Minister has pointed out in his statement that this engine plant will provide new employment opportunities. Of course it will. This is a new engine plant and there will be new jobs there, but they will be filled by people who are displaced from other industries as a result of this move. In fact, every honourable member knows that many more people will lose their jobs than will be placed in the new jobs at the General Motors engine plant. If the automated engine plants of Datsun through which I walked at Yokohama are anything like the engine plant that will be built here in Australia, it will be a highly automated plant and will not employ very many people at all. The investment for that type of plant will be enormous and the number of people who work in it will not be anything like the number we may have seen in the old engine plants of the past. For the sake of the Australian workforce we should know where people will lose jobs. We are talking about six per cent of all the people who work in the manufacturing industry in Australia. We are talking about 14 per cent of all the people who work in the manufacturing industry in my own State of South Australia. This is a very heavy decision for the future of the car industry. Whilst all the previous plans we have discussed- we have normally been discussing the reports on which they are based- were to start almost forthwith, this is the first plan we have put before us that is to be put into operation three years hence. The three years that have been described as the lead up to the new car plan in my opinion belong in an industrial no man’s land.

I do not believe that the Government, any Government member, any honourable member on this side of the House or the industry itself really knows what is going to happen. All we know, leaving aside the engine plant, is that the John McEwen plan for 95 per cent Australian content, which was a grossly stupid industrial and political decision taken years ago, is now an 80 per cent Australian content plan. We do know that a vast share of the ownership of manufacturing industry and a good deal of the share of the ownership in the larger component industry are in the hands of the overseas companies where the decisions are being made. I put it to this Parliament that we are going to have to be tougher with these companies if we want the answers, and those answers should be given. If this Plan is carried out to the letter, as announced by the Minister, until March 1 982, what powers will this Government have to monitor and police the carrying out of the new plan? If this Government were to conduct a search in other countries in which these companies operate it would find that there are powers used by the governments in those countries to monitor the activities of these companies to make sure that they live by the letter of the law. But in this country there is no such mechanism. How will the Public Service of Australia monitor the activities of GMH, the Ford Motor Co, Nissan, Datsun or Chrysler? Obviously the company policy of GMH will become the policy to be adopted not only by the Australian Government but by all Australian manufacturing industry. All of it will be affected. It will become the policy of all the other companies. The company heads are sitting at their drawing boards seeing how best they can manipulate the new plan, how best they will be able to compete with what GMH has announced. They will all be bringing in the parts which are too dear to buy in Australia. Some of those parts are now produced in the more decentralised areas of Australia. Those areas will be the first to suffer. Those companies that have the investment available to them in the component industry to produce in line with what GMH is doing will probably survive and take part in the complementation plan. No one is able to say from the Minister’s statement that everything is clear and above board. I invite honourable members to have a look at the statement in respect of the Industries Assistance Commission. The Minister said:

In the course of the next few weeks a reference will be sent to the Industries Assistance Commission . . .

We do not even know the reference to the IAC. We were not told when the Government announced this new plan. In the statement the Minister said that the reference will seek:

  1. Advice within 12 months on post 1984 assistance arrangements for the motor vehicle industry; and
  2. An interim report within six months on the remaining elements of the export credit scheme to be introduced into the present Plan.

What will happen if the IAC, having been given a reference which we will have a look at in a few weeks tells us something quite different, which has been its wont in the last few years in respect of the car industry? What will happen then? There is no way in the world that someone will put up his hand and stop the proposed construction of the GMH engine plant. The people who will be left crying will be those people whom it will be too late to help. If this Government had alongside its industry policy a policy to effect the manpower of this country one could perhaps sleep a little easier but there is no such thing with this Government. This Government is deliberately building up the number of unemployed people. The fact that it can introduce a plan which puts a question mark over the heads of many other people in the component industry, the manufacturing industry and the automotive industry in this country at the moment means that it will put more people out of work. If the Government were serious about the matter, obviously it would be saying that there has to be some sort of structural adjustment looked at in terms of the livelihood of the people who will be affected by this decision. But there is no such plan. There is no manpower planning running parallel with the decision of GMH.

We have heard from the Minister that the trade union movement was consulted. It was advisable for him to use that term- it had been consulted. The trade union movement represents almost 100 per cent of the people who work in the industry. There has been an arrangement between the unions and the employers for a long time. They almost have a closed shop in the automobile industry of this country. The unions are entitled to be heard on this question. They hold great fears about what all this means. Perhaps some of those fears could be put to rest if the Government knew what was happening, but fortunately, as is evident from the statement made to the House by the Minister, the statements that have been made outside the House, the amount of information being given by the company itself and the meanderings of the component industry which has swung backwards and forwards in the last fortnight the information which the trade union movement requires is not available to be given. Everything is up in the air. I do not wish to predict doomsday for the new plan but I will be really surprised if another three years passes in this Parliament without a debate on a new car plan because another company will have another idea about what it wants to do. Enormous industrial development will take place in that three years in those countries in which industries are moving and perhaps the world concept of a car will move a few more steps along the road. I do not pretend for one moment that any decision taken by this Government can prevent it. One has only to look at the design of the latest models available to the consumers in this country to know that we are already locked in. One had only to read the 1974 report of the IAC on the automobile industry to realise that we were going to be locked in but we did not have to be a patsy and a pansy to the demands of one company to turn this industry upside down without being able to give us the professional, sophisticated answers to which the Australian people are entitled.


– I share some of the concerns that Opposition members have expressed in this debate this evening. But one thing that I cannot share with them and one thing that they all have in common is the continual knocking of the multinational or overseas companies that operate in Australia. Might I suggest that if this knocking of this foreign investment in this country is continued it will cause the same trouble that Labor caused in 1972 when it came into office. Foreign investment lost under Labor’s policies threw hundreds of thousands of Australians out of work.

When the Deputy Leader of the Opposition (Mr Lionel Bowen) spoke earlier, he said that these companies can do all sort of things. He said that they can manufacture what they like. I know that this Government monitors the activities of these companies in the same way as Labor monitored their activities when it was in office between 1972 and 1975. Labor did not do anything then. It is all right for honourable members opposite to stand up and say: ‘You do not know what they will do. They can do all sorts of things’. When Labor was in office it took no action. We are certainly monitoring the operations of these companies and we will continue to monitor their operations. We will make these companies honour their obligations to Australia.

The Deputy Leader of the Opposition also mentioned how international companies can transfer profits, and I have a concern about this. I want to see these companies show a fair profit in Australia. I want to see these companies pay their fair tax to Consolidated Revenue. As a result of my concern, I was pleased to find from some inquiries that Australian officials overseas have a pretty fair indication of the value of goods that are imported. I am talking about car manufacturers such as General Motors-Holden’s Ltd that can import component parts from GMH subsidiaries. Our officials check to ensure that the value put on those parts is the true and correct value in the country of origin. So fair tax is paid; fair duty is paid. I invite any members of the Opposition to inspect thoroughly the comprehensive customs declarations that have to be signed and the information on the inquiries made to establish that imported goods are transferred at fair and reasonable profit.

I am all for Australian manufacture. I am all for an Australian car. But one has to remember that Australia is a young country. Our country has a small population. It has a small production potential for cars. Australia does not have the facilities, nor is it economical for us, to design our own car completely. We do not have the facilities to test completely all component parts or a finished car in Australia. I might add that if honourable members looked at the tremendously increased industrialisation of Japan since World War II and studied how Japan was industrialised and made great strides forward, they would find that the Japanese too did not do their own design work. They crawled before they walked. They brought in design work from other countries. They had other countries test their manufactured products and then went ahead with production. Japan has now built itself up to a stage where it is strong industrially. Australia can reach that stage also, but we have not quite reached it yet. Nevertheless, I agree that we should strive to achieve it.

The Australian market is very limited. If honourable members looked at the production of Australian cars over the past IS years they would find that the growth rate in the number produced has not averaged more than 3 per cent a year. It has stayed at that low level despite the high level of protection provided against fully imported cars- protection in the form of duty and in respect of the freight charges which have to be paid to get the cars to Australia. Massive protection has been provided, yet the Australian car industry has not been able to expand at any greater rate than 3 per cent per annum. Do these figures in themselves not tell us that reorganisation of the industry is necessary? That is exactly what this Government is doing. That is exactly why this Government has taken the decision to allow General Motors to go ahead with its $2 10m four-cylinder engine plant, a plant that will have the capacity to produce annually 240,000 engines, two-thirds of which General Motors says will be exported. Through our monitoring system this Government will be looking closely at the situation to make sure that that happens.

This situation has been brought about by the high and rising cost of fuel and by the increasing demand for four-cylinder motors. As the Minister for Industry and Commerce (Mr Lynch) explained in his statement, an export credit scheme that can be offset against imports will operate from March 1982. Within the arrangements allowing General Motors to go ahead with this scheme is the provision that, once the offsetting of credits for imports reaches a stage where it lowers the Australian content by only 5 per cent, an Industries Assistance Inquiry will be held before the situation goes any further. So there is an inbuilt safeguard in the arrangements which we have made with General Motors.

I have some reservations and concerns about the whole situation. I have some concern about the haste in which the decision was made and I have some concern for the people engaged in the automotive components industry. I know full well that the Minister for Business and Consumer Affairs (Mr Fife) who is sitting at the table, will listen to these words and will make sure that the people in that industry are affected as little as possible. Jobs are involved and we must be sure that the people in this industry are protected by the new scheme and the arrangements that are made with General Motors.

A lot of information still must come forward and hopefully it will emerge over the next few months. We want to know and the Australian component manufacturers want to know which of the component parts of the engine, parts such as valves, rings, pistons, conrods and crank shafts, are to be manufactured locally. All this information is vital to the Australian components industry. I know full well that the components industry is a large employer of people, but it is not going to be destroyed by this decision. Plants throughout Australia employ many thousands of people. One that is dear to me in my electorate of Barton- namely, the Bendix company- recently had the misfortune of having one of its customers alter its imported component. The company lost some contracts for carburettors, but it has been able to regroup and is still a major components supplier to the Australian industry.

As I have said, this is a good scheme and it will be good for the future of Australia. It will be monitored closely and in a manner which shows concern for the Australian components industry. I know that members of the Opposition tonight have expressed concern for the components industry and I appreciate their doing so. I welcome the decision by the Government in favour of the establishment of this plant. I am sure that in the long run it will help Australia to remain competitive in the Australian car manufacturing industry and, as many honourable members have said , by being competitive in the Australian car manufacturing industry it will put a stop to the tremendous number of cars which are coming into Australia today. I welcome the decision.


– I do not welcome the decision. I might have welcomed the changes in the basis of car manufacture in Australia if those changes had been made as a result of a proper examination of the proposal, if the facts had been placed before us and had been before the people responsible for making the decision and if it were known that they had the capacity to make such a decision. It is of serious concern that as late as Monday last week officers of the department responsible for advising the Government on this matter were not in a position to give detailed projections of the likely effects on the whole Australian car industry of the changes proposed by General Motors-Holden’s Ltd to the motor vehicle plans.

Honourable members opposite who have spoken on this matter seem to be beguiled by big numbers and by the General Motors proposal. Their justification of the change in the plans is based substantially on the General Motors proposal. They are hopeful that the components industry will survive and that large sections of it will not go to the wall. Faith and hope are about all they have because there is no statistical basis for that hope. There has been no adequate examination and no capacity to carry out an adequate examination exists within the advisers to the Government. It is not their fault that this is so. Because the Department concerned is so bereft of staff and technical capacity as a result of the imposition of staff ceilings and other restrictions that have been placed upon it, it would be humanly impossible, irrespective of goodwill, for that work to be done. The Industries Assistance Commission is far better staffed in a technical capacity to assess these matters than is the Department which initially advises the Government on such issues. It is all right to say that substantial proportions of the plan Will be referred to the IAC, but that will happen after the ball. The major decisions have already been announced in this statement.

The honourable member for Barton (Mr Bradfield) mentioned how easy it is to find out the cost of imported components- how available those figures are. I can tell this House that the House of Representatives Standing Committee on Road Safety had to threaten General Motors with contempt of Parliament in order to obtain the cost of imported components related to road safety. That shows how difficult it was to get that sort of information. The figures were provided under protest and only under threat of such action being taken.

There is more than one motor manufacturer in Australia. The Government has decided that the proposal which General Motors sees as being in its best business interests will be adopted as the new motor car plan after the end of 1982. The life of the existing plan has been shortened to that date and the existing plan has been modified in the way announced in the statement. The result is that these companies have been foolish enough- I think one has to say that now- to depend upon undertakings given by the Government at an earlier time that the plans would operate until a fixed date and that new plans would be negotiated before that date, which would allow the companies to plan future investment and development and to state the way in which they saw the industry developing after that date.

One company has seen fit to press its business interests. I make no complaint about the company pressing its interests. That is what it is all about in the free enterprise system. However, the Government has pursued or accommodated the business interests of that company, without taking into account the effect that will have on the business interests of other companies competing in the same field. These companies are possibly planning a different form of development or different forms of operation for the duration of the present plan. What will happen when those other companies reach a situation in which they plan to enter or are forced to enter into a complementation scheme? We have received at least some indication of what will happen when General Motors-Holden’s Ltd makes the move. It will cease to place orders with Australian manufacturers and will proceed with large volume engine manufacturing. It can be predicted that GMH will cease purchasing the parts it is currently purchasing in Australia because those components will no longer be manufactured in Australia. What will happen when the Ford Motor Co. of Australia Ltd, Chrysler Australia Ltd, and the Toyota-Nissan company change their parts sourcing, or their intended parts sourcing, because in some cases that is more relevant? What parts will be involved in the reversion?

I think it is fair to say to the House- it is not often said- that the reason for the failure of the consortium which intended to build an engine plant in South Australia was that it involved a combination plan which would have added to the local Australian content. At that stage there was an offset proposal in the plan which was dropped by this Government, as was the nonreversion plan. Under the proposal, fourcylinder engines would have been supplied to Australian manufacturers at volume capacity. But when it came to the crunch the Japanese manufacturers were all right because they were entering the market place. Therefore, they had no existing commitment. The major motor car manufacturers were placed in a position in which, whenever they suggested that they might be able to revert overseas some section of thencurrent Australian supply in order to take up the additional Australian content which would be involved in producing an engine in Australia, they were told that they could not revert that supply because that would affect employment in a certain area and it could affect some other company. They were left in a situation in which reversion was possible only in respect of parts produced within their own companies. In other words, they were asked to obtain from outside their plants an additional amount of Australian content but they were not able to reduce orders for parts from outside their plants, substantially for political reasons, because of the effect that would have.

What will happen? We have no reversion committee at the moment and no ban on the reversion of the sources of supply. When those other companies move into the same stream, what will happen to the existing component productions of the major companies? They are not all in the same place and they are not automatically interchangeable in relation to jobs. This may or may not be the way in which the future development of the Australian motor industry should proceed. It is certainly not the way in which Australia should make decisions about what is in Australia’s best interests. It is very doubtful whether the Government first found out about the General Motors proposal only four weeks ago. I would be surprised if the Minister for Industry and Commerce (Mr Lynch) was not apprised of the outline of the proposal when he visited the General Motors plant in Detroit last year. Before returning to Australia he made a number of public statements relating to export offsets, world car concepts and complementation schemes. It is certain that, at the Minister’s request, the representatives of the Federation of Automotive Products Manufacturers were not permitted to discuss any of the details of this matter on Monday of last week. It is certain that the Department was not able -

Mr Fife:

– That is not right.


– The Minister requested that no detailed discussions take place at that meeting.

Mr Fife:

– I was present.


-So was the honourable member for Lalor (Mr Barry Jones), and his memory is almost infallible. He made a lot of money out of it. If the Minister is prepared to challenge him, I am prepared to put on a show in King’s Hall. It is also important for us to understand the reason we are in this difficulty in relation to car plans. The McEwen plans were economically unsound. They forced the Australian car manufacturing industry into uneconomic situations in which it was vulnerable to imported cars. They locked the car industry in Australia into a six-cylinder engine cycle when such engines were moving out of public demand, with the result that the locally manufactured content of the Australian car industry dropped from approximately 72 per cent of all passenger car sales in 1968 to about 35 per cent in 1975. Those plans were modified, to the disadvantage of the industry.

In 1974 and 1975 the Government held long discussions with all the companies. I still have copies of the submissions made by those companies on the plans. On that occasion, General Motors asked that local manufacturers be given the exclusive right to 90 per cent of the total Australian market, that 10 per cent of passenger motor vehicles be imported and that only those companies involved in the manufacturers’ plan have the right to import vehicles. The position is a little different now. A plan was devised and announced. It was modified in a number of ways by the present Government, but it was finally stated that it would run until 1984. It will now be dropped two years earlier than planned. We now hear talk of a 5 per cent complementation and offset program. That does not sound much if it is not known what 5 per cent means in terms of the car plans. I doubt very much whether many honourable members or people generally know what it means.

If we are talking of an 85 per cent content plan, that does not relate to 85 per cent of the motor vehicle; it relates to 85 per cent of the wholesale cost of the motor vehicle. The remaining 15 per cent relates to the imported cost of components, which can amount to 15 per cent of the wholesale price of the vehicle. That represents almost 40 per cent of the actual retail cost of the vehicle. The 85 per cent content includes costs such as payroll tax, workers compensation, wharfage dues, freight costs and all the other costs which are related to production, assembly, storage, servicing and construction of a motor vehicle in Australia. The 5 per cent calculation, made on the basis of the straight out cost of imported parts, represents between 10 and 15 per cent additional components in the actual motor car. That is a big hole in the components industry. I pick one example out of the air. If the Ford Motor Company of Australia Ltd goes into a complementation scheme and decides to drop, say, transmissions, which it does not make in its own factory, Borg- Warner (Australia) Ltd will be in trouble. If Chrysler Australia Ltd drops some of the major components it buys in an attempt to bring its cars up to 85 per cent local content, the suppliers of those components will be out of business. There is no alternative market and the investment of those companies is not in the machinery and the capacity to produce some other forms of goods. The Minister’s statement contains no details, no statistical evidence and no indication that the Government has any statistical evidence, projections or assessments of the effects of this plan on the total industry and on industry in general in Australia. It is a plan which has been devised because it suits the particular political requirements of the day and the pressure to which the Government is prepared to succumb. The long-term Australian interest has not been considered.


-(Hon. Ian Robinson) - Order! The honourable member’s time has expired.


-Australia’s manufacturing industry is in a crisis. Since 1974 more than 200,000 jobs have been lost in the manufacturing sector. Many of those jobs have been lost as a result of reduced production in Australia as a consequence of increased imports of finished goods and component parts. Many jobs have been lost as a result of increased merger activities within industries which have led to an increasing concentration of production in the hands of a relatively few very large and mostly foreigncontrolled corporations. Many jobs have been lost as a result of the kind of technology used by these firms in their production plants that are moving towards a greater degree of specialisation. Many jobs have been lost because these international firms have diversified their investments out of manufacturing into the mining and tertiary sectors. Many jobs have been lost because these international firms- and in some cases even Australian-owned firms such as the Repco company- have moved part of or all their production overseas to countries such as the Philippines where workers receive an average of $2 a day, where governments offer large incentives such as the Bataang free trade zone, where imported components are tariff free, where the state pays the cost of infrastructure and where trade union organisations are effectively prohibited. Many of the manufacturing jobs lost in Australia have been in labour intensive industries, such as the clothing, textiles, footwear and furniture industries where around 75,000 jobs have been lost since 1974. A further 47,000 jobs have been lost in the industrial machinery and equipment and household appliance industries. In the highly capital intensive manufacturing industries, such as the chemical production industries, around 10,000 jobs have been lost and in the motor vehicle and parts industries about 25,000 jobs have been lost.

This loss of jobs in manufacturing industries is the core of Australia’s worsening unemployment crisis. It is a crisis caused largely by investment decisions of large corporations here in Australia but especially overseas. It is a crisis that has now been used by these corporations to strengthen their international control of production, to weaken the control of organised labour and to increase the corporations’ profitability on a global scale regardless of the devastating impact on the various nations and their work forces. We see no clearer example of the emerging global control of production by a few firms and a new international division of labour than in the vehicle industry. We see no clearer example of the ability of transnational corporations to play off governments and workers in one country against those in another country and we see no clearer example of government collusion with the interests of these transnational corporations to implement their devastating global plans than the Fraser Government’s hasty subservience to the demands of the General Motors Corporation for the public subsidy of its production of a world car. We see no clearer example of corporate blackmail of a national government. We see no clearer example of a government willing to sell out the workers of this country, to sell out Australian component parts manufacturers and to sell out the national interests to the advantage of the General Motors Corporation.

The General Motors Corporation is one of the largest transnational corporations in the world. Its sales volume in 1977 was more than half Australia’s total gross domestic product. Its potential power to destabilise the national economy of countries such as Australia, Chile or Thailand is considerable. That destabilisation potential is apparent in the ability of General Motors internationally to make transfer pricing arrangements across its subsidies in 33 countries, to take high profits in tax havens and to declare low profits or even losses in countries where company taxes are slightly higher. That destabilisation power is apparent in the huge deficit in the current account of the balance of payments which in Australia in 1977-78 was in the red by $2,500m, of which $1,1 lim was made up of profits sent overseas by foreign parent companies.

The international complementation plan put forward by the General Motors Corporation in Australia has been hastily agreed to by the Fraser Government without adequate information to assess its short-term and long-term impact on the vehicle and related industries and the Australian economy generally, without appropriate consultation with the trade unions and the businessmen in industry and without the extraction of any guarantees from that company for the future. It represents the driving of a wedge between sections of the whole manufacturing sector in Australia. It signals a further loss of jobs in manufacturing. It signals reduced national power to control production. It signals a deterioration of the ability of workers to participate in their industries as the decision power gets transferred to Detroit. It signals a further decline in the importance of research, design and development activities in Australia and a greater dependence on imported technological know-how. The General Motors Corporation’s complementation plan is an attempt to exploit the current unemployment crisis in this country. It is an attempt to capitalise on the vulnerability of the depressed vehicle industry. Employment in the motor vehicle and parts industries has dropped from a peak of 103,000 in 1974 to 80,000 in 1978. This downturn has been particularly noticeable in South Australia where there has been a 25 per cent loss of jobs in the manufacturing industries over the 1971-78 period.

We have recently seen ICI Australia Ltd play off one State against another in its deals to get the highest possible subsidies from a State government. Now we see the General Motors Corporation playing off nation against nation- in this case West Germany against Australia- for the best bargains. What will be the social and economic costs of this deal? It is to our amazement and to the Government’s shame that that question cannot be answered. To clinch a deal with the General Motors Corporation without such knowledge is a most irresponsible act on the part of this Government. To have failed to consider alternatives to General Motors’ plan for motor vehicle production in Australia is a sign of the incompetence of this Government.

The size of the passenger vehicle market in Australia has been recently estimated at about 560,000 units. That size allows the industry to be restructured along more efficient lines. That volume allows Australia to maintain full motor vehicle component manufacturing. That volume allows the Government to plan a more rational organisation of the industry involving the merger into large consortia of relatively small-scale manufacturers currently experiencing difficulties. The rationalisation of the industry along these lines would imply keeping control of total vehicle production in Australia. With the spin-off of supporting employment in the related industries, such rationalisation would mean that in the future Australian industry would be in a position to design and build alternative vehicle products in view of changing energy and environmental requirements. If control of production is lost, Australia becomes increasingly dependent on decisions made elsewhere, decisions made only on the basis of what is profitable and not based on social and environmental needs.

The history of General Motors in Australia is the story of the great rip-off. Not one United States dollar was invested in the Holden project but millions of dollars were sent back as profits to the United States. The Australian Government over the years has treated General Motors very favourably- reducing its company tax requirements, providing it with huge subsidies on plant and equipment and servicing it with infrastructure. We are now seeing that organisation being given further generous treatment and this time at the obvious expense of workers in the vehicle industry and the Australian people generally.

Let us look at the impact of the General Motors complementation deal. The wholesale percentage cost of a car is made up as follows: Imported components, 15 percent; declared car company profits, 15 percent; in plant labour, 20 per cent; in house production, 15 per cent; machinery costs, tooling and imported materials, 1 5 per cent; and local content, including New Zealand manufacture, 20 per cent. If the socalled 85 per cent of non-imported content is reduced by five per cent, that means a five per cent cut in the 20 per cent local content component. The five per cent reduction is in fact a 25 per cent cut in the business of local parts manufacturers. On that basis, we are faced with the prospect of a loss of around 20,000 jobs in the vehicle industry over the next three years. The Amalgamated Metal Workers and Shipwrights

Union has estimated that over a 10-year period there will be around 40,000 jobs lost in the manufacturing industry. It is clear that what is a gain to General Motors is a loss to the Australian workers. It is clear that General Motors does not care about the consequences for Australia and it is clear that the Fraser Government does not care for the people of Australia but only for the profits of big corporations which this Government really represents.

I want to make a final point in this debate. The way this Government has made its decision without information, without consultation and without planning signifies a shift away from planning of industrial development to laissez-faire ad hockery. That approach spells disaster for Australia. It invites more blackmail and more back door dealing. It means the national Government has yielded to the transnational corporations its powers for determining Australia’s future.

I note that I have only a limited amount of time in which to complete my remarks. On behalf of the honourable member for Lalor (Mr Barry Jones), I seek leave to incorporate in Hansard a report of a special meeting of the Automotive Industry Advisory Council which that honourable member attended on behalf of my party.

Leave granted.

The document read as follows-


Special meeting: held in Canberra 19 February- day before Parliament resumed (although the list of those attending gives the meeting date as 12 February- presumably it was deferred). The meeting was chaired by the Minister for Industry and Commerce and attended by the Minister for Business and Consumer Affairs, two Liberal backbenchers (Messrs Edwards and Dean), myself- representing the Opposition and the Shadow Minister for Manufacturing Industry (Chris Hurford), the Secretary of the Department of Industry and Commerce and two of his officers, Mr Laurie Carmichael of the AMWSU, Mr Len Townsend, Federal Secretary of the Vehicle Builders Employees Federation of Australia, Mr Ron Luckman, Assistant Secretary of the ETU, representatives of manufacturers, components makers, the Federation of Automotive Products Manufactures.

The minister began by stressing that the discussion was to be regarded as confidential- and this raises the dilemma which any participant in such meetings is faced with. If there is a discrepancy between what you are told in confidence at such a meeting and what is subsequently announced by those who impose the rule of confidentiality, does one have a moral obligation to stand up and point out the discrepancy or is one obliged to be a consenting adult and go along, in silence, with what one believes to be misleading.

Lynch stressed that the big question facing the Australian car industry was not the GMH complementation plan but the future of the industry after 1984- and the problems which arose from Australia being a very small market ( 1 per cent of the world) in a time of changing technology- and that despite 57 per cent protection and a guaranteed 80/20 share of the domestic market Australia’s motor industry was still unhealthy. He also said that we would not be considerV.g the GMH plan in any detail- only the broad, general principle of complementation and that he hoped the meeting would be over by lunchtime. (We began just after 10.00 a.m.). He also said that no decisions had been made on the GMH plan and that there had been no Cabinet discussion.

Lynch: ‘I do not want the meeting to be devoted to a definitive analysis of the GM plan’.

The GM representative stressed his company’s belief that complementation would generate jobs and help ensure the survival of the industry but that it would be ‘wrong to get down to the detailed issues yet’.


-I thank the House. I think that the debate on this industry is most important. The implications are so far reaching that it is disturbing that so little information has been given to members of this House. The honourable member for Lalor attended the special meeting of the Automotive Industry Advisory Council and reported to our caucus that information which was sought from General Motors could not be given to him or trade union representatives. As I have said, it is disturbing that so little information has been given. The proposal is a political deal. It is a sell out of the Australian workers in the interests of the corporate sector which is the real enemy of the Australian people as a whole and which in the long term we have to defeat.

Question put:

That the words proposed to be omitted (Mr Hurford’s amendment) stand part of the question.

The House divided. (Mr Deputy Speaker- Hon. Ian Robinson)

AYES: 74

NOES: 34

Majority……. 40



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

page 483


Ministerial Statement

Debate resumed from 27 February, on the following paper presented by Mr Peacock:

The Geo-Political Situation: A Pattern of InstabilityMinisterial Statement, 27 February 1979 and on the motion by Mr Sinclair:

That the House take note of the paper.


– I welcome the opportunity to take part in this foreign affairs debate tonight. I congratulate the Minister for Foreign Affairs (Mr Peacock) on a well prepared and comprehensive statement. During the past two or three weeks the whole world has held up its hands in horror at a possible confrontation between two giant nations, the Soviet Union and the People’s Republic of China. Major disasters for the Western world have occurred in rapid succession on the international scene- in the Horn of Africa, in southern Africa, in the Middle East and, in the past few weeks, in Indo-China. But all of these events surely pale into insignificance when compared with the dormant disaster which is Jimmy Carter in Washington. As one commentator Creighton Burns remarked at the weekend, for Jimmy Carter it is a world out of control.

Carter is in the position of heading the most powerful nation in the world, but he seems incapable of taking any concrete initiatives of any sort to deal with the problems facing the Western world. This latter day Nero continues to fiddle and fumble. He took enormous kudos and credit for the Camp David talks between Begin and Sadat, but the record shows that it was the behind the scenes manipulation of Israeli and Egyptian intelligence services which led to the address by Sadat to the Israeli Parliament, the Knesset.

The only concrete result from the Camp David talks is that Sadat and Begin are still talking, but they were doing that anyway before the Camp David talks. Other than that, no concrete results have been achieved. On all fronts we have seen the Soviet Union take the initiative: In IndoChina with the Vietnamese in Kampuchea, with the Cubans, in Africa and in Iran where the leftist forces helped set the stage for the toppling of the pro-Western Shah. Iran, which once produced one-tenth of the world’s supply of oil, some 6 million barrels per day, now produces only 700,000 barrels per day. If Iran becomes a precedent for the rest of the Middle East, the Western World could be virtually starved of oil supplies or, if not starved, at least put on a subsistence diet, which could well cripple the West’s industries and make it impotent.

It should be noted that one of the first acts of the new Iranian Government was to break off relations with Israel and ban oil supplies to Israel and South Africa. What will this act do to enhance stability in the already volatile Middle East arena? What will be the effect on the policies of South Africa?

Turning to Africa, President Carter seems to believe that with a United Nations peacekeeping force going into Namibia the West has had a victory. It must be a very dubious victory indeed. The question facing the West is whether the situation created by President Carter’s initiatives in Namibia will result in a stable situation. I believe there are very grave doubts that this will occur. We have already witnessed in Angola the takeover of a Soviet orientated government with the assistance of would be Cuban mercenaries armed and supplied by the Soviet Union. Will Namibia be next? In Zimbabwe, formerly Rhodesia, we have seen the Carter Administration, together with the British socialist Government, reject the moderate multi-racial interim governments of Bishop Muzorewa, the Reverend

Sithole, Chief Chirau and Mr Ian Smith. The Carter Administration prefers to continue dialogue with the Communist backed, so-called Patriotic Front of Nkomo and Mugabe, who refuse to face the people at elections and who want to seize power by force and only by force. The Carter Administration has refused to take part in the supervision or even observation of the elections to be held in Zimbabwe in March.

If Rhodesia follows Angola and Mozambique into the Communist camp, it will only be a matter of time before the whole of Southern Africa, with all its vast wealth and potential, is alienated to the West. To state this is in no way to align myself with the policies of any Government in southern Africa. But we should be aware that a moderate government’s basic interests are more compatible with those of the Western World than any which would be set up by the Communist backed Nkomo or Mugabe.

Let us now look at the Soviet’s Cubans in Asia. For a little over a fortnight the world has sat with bated breath wondering whether the invasion of Kampuchea by the Vietnamese was the flashpoint which could well spark off the beginning of World War III. One could be forgiven for wondering, if I may comment in passing, where now are Jim Cairns and his Labor Party friends who led thousands into the streets in earlier times in the interest of peace in Vietnam? The streets are strangely silent today.

With the Soviet Union spreading its influence in Asia, Chinese intervention was inevitable. It is not that the People’s Republic of China was prompted by territorial ambitions in Vietnam, but they wished, probably naturally enough, to make sure that they were not outflanked by the Soviet Union in Asia. The Chinese intervention in Vietnam aimed at showing to the Soviet that China would not sit idly by while her interests were put in jeopardy. It was also obviously a calculated military exercise to let the Vietnamese know, quite clearly, that they could not afford to commit more divisions to Kampuchea. Overall the situation in Indo-China seems to indicate that here is another explosive situation, sparked by the Soviet Union, which has caught Jimmy Carter once again with his pants down. And so the Soviet interests advance. Meanwhile the Western World led by Jimmy Carter and his Administration muddles on.

Let us for a moment compare ‘Clean Carter’, the peanut farmer, with Richard Nixon, the used car salesman, whom no one would trust. If it was not for Watergate, Nixon would be remembered today as the man who pulled the United States out of a disastrous Asian war, and who made the first overtures by the United States to the People ‘s Republic of China, after nearly 30 years of non-existent communication. Nixon took initiatives. Carter has only reacted- or failed to react. Nixon’s foreign policies were a success. Carter has failed all along the line. Carter seems always to back the wrong horse to the detriment not only of the United States but also to the detriment of the whole Western World, whether it be Africa, the Middle East or Asia. Let us hope that the people of the United States elect as their next President, a man who has a better grasp of international realities than the present incumbent.

When I first entered this Parliament in 1966 the Prime Minister of the day had said that, as far as Australia was concerned, we were all the way with LBJ. Thank goodness that is no longer completely the case. But if we were to look for a slogan today, surely the most apt would be: “There must be someone smarter than Clean Old Jimmy Carter’. To date the ones who have proved themselves smarter than Carter are, unfortunately for the western world, the Russians.


-A moment ago the Acting Whip for the Government side spoke to me and said that this debate was going to be adjourned, but I note that he is not here so I will proceed. I take up from where the honourable member for Deakin (Mr Jarman) left off. His remarks appeared to be a jeremiad rather than an address to this House. I cannot understand why he would bother to come into this House on a significant debate such as this and spend his time dealing with omissions or commissions of the President of the United States. This debate is about Australia’s participation in foreign affairs. I do not know what the President of the United States or anybody else could do, because I believe in this idea: If a nation believes that it is large and powerful, that it has some strings it can pull and some influence it can exert on the people, that belief belongs to the past. I will add to that in a moment or two.

Of course, from the Government side we have heard laudatory comments about the speech from the Minister for Foreign Affairs (Mr Peacock). What did the Minister say? He described events in Africa. He described events in Indo-China. He described events in the Middle East. He taked about oil. He had descriptions but no prescriptions. His speech was a combination of hand wringing, which was rather discreet, and there was a slightly condescending attitude towards America with the suggestion that it was not really doing what it ought to do. The Minister did not indicate how the United States should do what it ought to do or whether it would get any results if it attempted to do something. Then there was some complacency. In the last page of the Minister’s speech he did mention that we could stimulate interest. From the Government side we have heard this rather sad commentary on the approach to foreign affairs that now we are suddenly facing a threat of war.

The honourable member for Leichhardt (Mr Thomson) said that there was a chilling message for us in the events in Indo-China. It is a chilling message but it is not of the sort he mentions. The honourable member for Higgins (Mr Shipton) referred to the cold war as did my colleague the honourable member for St George (Mr Neil). I realise that one has to approach this with more pessimism than one would ordinarily have in approaching a debate on foreign affairs in this place. I am with the people who believe that you have to put your trust in something, whether it is God, humanity, or the United Nations, but you do of course keep your powder dry. But is there a threat to Australia in this?

I want to raise some of the questions involved. First, consider for a moment the present situation. There is a fairly still sort of war. It seems to me to be reminiscent of the first phases of the 1939 war in France between the Germans and the French, a sort of stand-off situation in which, probably, many people are hurt unnecessarily and many people are killed and unsettled, but there is no great push. But in 1 9 1 4 when an event such as this stirred the world there was a global war. In 1939 when events such as this occurred there was a global war. In 1956 when the British and the French invaded Egyptian territory- in conjunction with the Israelis- to capture the Suez canal there was an immediate threat of war from the Russians. Those forces withdrew. What do we have in 1979? It seems to me that there is a totally different quality in the state of human affairs. We have a stand-off situation. We should be asking: How do we capitalise on this? I venture to suggest that if these events had occurred in this way 20-odd years ago, or a little later, the Russians already would have invaded China. I venture to suggest that the Americans or somebody else would have come in on the southern side involved in the dispute and that we would have been confronted with a global war. There is a different climate and different environment. I think we should be setting out to capitalise on that.

Perhaps there is not much that one can say or do in a 1 5-minute speech in a debate such as this. I am grateful for the opportunity- so rare today- to speak on foreign affairs. What can a small country such as Australia do? Let us look at the problems. Disarmament is one of the great challenges to the modern world. It is true that the Union of Soviet Socialist Republics and the United States of America are producing enormous quantifies of arms. I have a feeling that their societies are so structured around the military complex that they cannot really stop. Sitting around a table and talking they will never come to a solution. Somebody else has to start to arbitrate. In the United Nations Security Council the power of veto is in the hands of the British, the French, the United States, the USSR and China. The Council is not going to intervene successfully. We have to face up to that. How can we initiate effective disarmament in the world? Are we prepared to negotiate with, say, the Indonesians, for whom I have the greatest possible contempt because of some aspects of their behaviour over the last four or five years, and say: ‘Let us cut down our arms in relation to the people around us’? It would take a great deal of trust on our part and, I have no doubt, a great deal on the part of Indonesia and its neighbours.

Another question is: How do we expand the democratic institutions of the world? I believe that there is more security in democratic nations than in undemocratic nations. How do we proceed to expand human rights and how do we overcome the obsession with sovereignty which, of course, stops us from acting over most of the world? I do not agree with my colleague from Deakin. I think South Africa offers a principal challenge to this concept. If the world eventually takes effective action against South Africa- I hope not by invasion of forces which destroy the countryside or kill people or anything of that sort but by effective sanctions- we will have broken the sacred faith in sovereignty and shown the people of the world that we are our brother’s keeper. It is tragic and a commentary on the whole of humanity that what happened in Kampuchea should have been allowed to continue and that we could do nothing about it.

In the last three or four years there has been a disheartening increase in hostility and suspicion in the USSR. I think that of the great nations the USSR is one of the most difficult to get along with. China has managed to create a different atmosphere about itself I do not know that the Government of China is so much more free but most of us feel that we can talk to the Chinese and come to some sort of negotiating position with them more easily than with the Russians. I do not think our distrust or suspicion of Russia is so justified. I cannot see any possibility of the Americans and the Russians coming to war.

What would be the result, after all, if we had around the table in the middle of the chamber the leader of Russia, Mr Brezhnev, Mr Carterlittle as my friend from Deakin thinks of himand Mr Deng Xiaoping, the Chinese Deputy Premier. I apologise for not pronouncing Chinese words as well as Chinese people handle English. If those people were sitting at that table they would all say: ‘We do not want war’. That is the universal message of humanity. We have to learn to capitalise on this by some means or other.

I belong to the school of thought that says that one’s influence on the world in general and around the tables will be related not to the number of battalions one can command or one ‘s weight in battleships but to the kind of integrity and spirit one can bring. That is a message we ought to take up. People are inclined to say: ‘We are so small, what can we do?’ Is that the way the rest of the world thinks? Why are we so cravenperhaps this is out of context with the theme of my speech- in the face of some the behaviour of Indonesia? What is the situation with Vietnam and China, a small nation and a huge one? The Vietnamese do not seem to quail. What is the position in the Middle East? Israel is surrounded by a host of enemies. It does not seem to flinch. What is the position of Yugoslavia? For 25 years or more it has stood firm and steady against what appeared to be the forces of Russia. A heartening aspect was the behaviour of Albania, which attacked everybody- the Russians the Americans and the Chinese, and all its neighbours also.

Australia is out of character with modern times if we believe that power will decide issues. I- do not support the Metternichian view of the world, that there has to be an equilibrium of power enforced against people’s will. I have a list of 1 5 or 20 difficulties in the world. I do not know which one of them is the one that the world could tackle best with the resources at its disposal. Take the situation in Cyprus. Over the last five or six years the United Nations has moved resolutions on Cyprus, demanding, asking, requesting that the Turks withdraw and they have not withdrawn. Why will they not do that? In the few minutes left to me I shall suggest that we have to look at the structure of the United Nations. What has to be done? We must change the structure. I sat in on the Security Council debate a few weeks ago when the Kampuchea and Vietnam fracas was discussed. Thirteen representatives voted yes and two voted no. But the resolution still did not have the numbers because the Russians had to be part of the unanimity of the system. It is a totally absurd, irrelevant, anachronistic, gerrymander, a relic of 1945. So we have reached the situation in which 50 million Britons, or 50 million Frenchmen, or 250 million Americans or Russians, or even 800 million Chinese can stop over 4,000 million people of the world by having their representatives act in this way.

I suggest that this House and the relevant committees of the Parliament and the parties start to examine the situation of the United Nations and its structure, its total inability to act in the political arena. It is very effective on some administrative matters. The World Health Organisation of the United Nations has been partly instrumental in eradicating smallpox. Great co-operative systems have been developed in aviation and other fields but until we change the political structure of the United Nations, give it a great political input and power, and remove the obstruction that comes from the people who presently hold the power of veto, we will not make progress. The challenge for Australia is to initiate internationally such debate and such movement of ideas. I believe that over history the movement of ideas has flowed not from the weight of battleships but from the integrity in power and thought that one can bring to debates when people meet around tables and in conference rooms.

Debate interrupted.

page 486


Drug Rehabilitation Program- Brisbane City Council - Liberal Party- Unemployment

Mr DEPUTY SPEAKER (Mr Millar)Order! It being 10.30 p.m., I propose the question:

That the House do now adjourn.


– I want to use my few minutes tonight to express my very deep concern at reports that have been going around Canberra in the last few days that the methadone program carried out by the Capital Territory Health Commission is about to be wound down. This is of great concern not only to the 1 50 to 200 known heroin addicts but also to those many bodies that are working on this very grave and serious problem in the Australian Capital Territory. This program was undertaken only late last year. It followed the introduction of legislation in the Australian Capital Territory which provided for the registration of heroin addicts as the basis for the methadone treatment. The legislation for the program was acknowledged not as an answer to the problem of heroin addiction but as something that was necessary to overcome some of the abuses of the use of methadone for the treatment of heroin addiction.

It became well known in Canberra last year- I know the honourable member for Canberra (Mr Haslem) referred to this one night- that addicts who were endeavouring to beat the heroin habit were able to secure prescriptions for methadone from several medical practioners by using different names. They would get the methadone in tablet form. Many of them then dissolved the tablets and were able to inject massive overdoses of methadone into their veins in the same way as they used heroin. In addition, some of them were reselling it to pushers or to heroin addicts, and the use of methadone was greatly abused. When the program was set up by the Government the need for it was well demonstrated by the fact that 120 people came along and registered for the program. The program consisted of daily doses taken by mouth, under supervision so the methadone could not be taken away from the premises, and there was a gradual reduction of the dose rate consistent with the patient’s capacity to cope with that reduction. I am under no illusion about the inadequencies of methadone as a cure for drug addiction. We know it has grave limitations and, in itself, has been only marginally effective. However, the methadone program did have many very positive side benefits. It certainly exposed these unfortunate people to counselling services, to group therapy and to group support. They got together and were able to support each other in their problems and were able to give each other moral and physical support. It also allowed the health authorities to exercise some monitoring of the problem of heroin in the Australian Capital Territory and some control over the misuse of methadone. In addition, it stopped trafficking in methadone and its use by those participating in the program. I understood that as another side effect it reduced the demand for heroin and the cost of heroin in the street dropped from $50 to $30 a deal.

I wish to cite a report to support my view that there is a lot going for the methadone program, even though we acknowledge that it is not a cure for the problem. The National Health and Medical Research Council, in a paper issued the year before last, concluded that methadone programs, although still in need of further study and refinement, can be extremely valuable for a small group of chronically addicted individuals and should be made available to them. The use of the methadone program did offer hope for some addicts. Some were able to beat the habit and be cured. It also enabled others to better hold down jobs- many of these people hold responsible jobs both in private enterprise and in Public Service- and gave them some reasonable hope of a normal life. There is considerable evidence of improved job performance and less crime than when they were on heroin.

If the report is true, I think that the people are entitled to ask why this program, which was undertaken only a few weeks ago with the full knowledge of the limitations of methadone, is now being scaled down. What will happen to these heroin addicts when the program has run down? Will they be thrown back to the old system which was open to abuse, will they be forced back into crime to feed the heroin habit, or will they be forced back into the unsatisfactory situation in which they were when they were dependent on the private practitioners to prescribe for them?

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


-During the 1978 autumn session of this Parliament legislation was carried to give retroactive effect to prevent certain income tax deductions being made under what were generally known as the Curran schemes. It might be remembered that the action caused quite some discussion, particularly among Government members at that time. It was defended by myself, amongst others, on the grounds that the Government’s decision had been pre-announced and that the taxpayer could not place himself inadvertently at a disadvantage. The intention to legislate to prevent Curran ‘s arrangements had, .in fact, been announced twice- once on 1 December 1974 by the then Treasurer, Mr Frank Crean, and again by Treasurer Lynch during the 1977 Budget Speech. Three and a half years elapsed after the first Crean announcement and nearly eight months after the second Lynch announcement before the legislation was introduced.

The Parliament passes many retroactive laws. The Budget legislation contains many of them. The practice of Parliament to back date legislation to the time when earlier announcements by the Government were made is hallowed by long and quite frequent practice. I think this is necessary. Nonetheless, it is not without its drawbacks. Following the Lynch announcement, Curran scheming almost stopped, until there was an event which many saw as a parallel and a precedent, namely, the refusal of the Party to give retroactive effect to section 36 of the Income

Tax Act. For quite long periods the announcement of impending retroactive legislation had a similar effect to the legislation itself. This has been characterised as legislation by Press release and has several attendant problems. Firstly, it is a denial of the authority of Parliament. Parliament neither itself changed the law for which it is ultimately responsible nor subordinated that authority to the Executive, yet for a long period the effect of the threat of enactment was as though the law had been carried. Secondly, the specifics of the legislation cannot be known until it is carried and anyone dealing even peripherally with the intended legislation places himself at risk. Thirdly, a government might go cold on something that it has merely announced, thereby placing some taxpayers at a very considerable disadvantage to others who might have judged that the Government would go cold and, thus, acted differently.

Mr Justice Mason said to the Eighteenth Australian Legal Convention that the technique of the ministerial statement by which it is announced that at some time in the future the law will be amended to take effect from the date of the statement had obvious dangers. I do not have time to read the whole of what he said, but he made the points that I have just made. He also said that the technique was calculated to encourage people to disregard and, indeed, to disobey the law. When a government pre-announces impending legislation which is to be given retroactive effect it should do so explicitly- far more explicitly than the Lynch Budget pronouncements concerning Curran schemes- and it should seek to enact the legislation promptly, certainly far more promptly than eight months later. If it should decide not to go ahead it should say so clearly and as soon as possible. Retrospective legislation should never be enacted without good reason and, of course, it should never impose a penalty on the unwitting citizen.


– I was disturbed to read in yesterday’s Courier-Mail that the Queensland Treasurer and Queensland Minister for Transport are ‘heavying’ the Brisbane City Council by threatening to reduce the State’s commitment in meeting future Council costs, including the Council’s administration of public transport. Now, I say I am disturbed, but I am not the least surprised, for in less than one month Brisbane rate payers go to the polls to decide the direction their city takes for the next three years.

The Brisbane City Council has been corralled by cow cockies. These bully tactics and threats are nothing more than the sort of pre-election huffing and puffing’ that we in Queensland have come to expect from our State Government. If the State insists on applying unseemly pressures on the Council and intruding into the municipal election, its record of assistance to Brisbane public transport ought to be revealed to Brisbane rate payers for their scrutiny.

Brisbane- Australia’s largest government authority and one of the largest in the world- is the only capital city authority assuming control over public transport. Running a large metropolitan bus service like Brisbane’s is a complex management exercise which requires careful and informed handling of sensitive local issues with a responsible eye to equity considerations. Clearly the local authority is a proper democratic body to handle such matters. The aldermen are directly responsible to their constituents for the standard of their bus service. But, while it can be undeniably demonstrated that Brisbane’s bus service is best administered by the City Council, it is most difficult to justify the Council’s having to bear from the general rate the majority of costs associated with providing this fundamental service. The State Government is practicing the fine old art of political blackmail.

The value of my party’s conviction that these sorts of services are best funded from the national coffers and administered by regional or local government bodies is completely confirmed and vindicated by Brisbane’s experience. That experience has been that the State, as the conduit for the flow of funds to Brisbane’s buses, has taken the opportunity of our out-dated feudalistic Federal system to frustrate- indeed to sabotage- public transport in Brisbane. Every metropolitan public transport undertaking in the other States, and the suburban passenger division of Queensland Railways, derive their funding support from Consolidated Revenue accounts of their respective States. For the year 1977-78, the State contribution to Brisbane’s buses amounted only to 36 per cent of the anticipated revenue shortfall. The remaining shortfall, estimated at $8.7m, has had to be met by the Council from the general rate.

Because the State Government’s arrangement fails to provide adequate support, rate payers are still required to supply nearly two-thirds of the cost of providing Brisbane, at present fare and wage levels, with its standard of bus services. Furthermore it does not have any inbuilt mechanism allowing for the unavoidable Council expenditure increases, resulting from a variety of cost factors, whose escalation will be at a higher rate than could possibly be absorbed by fare increases.

Going back several years, I indicate that the Queensland Government applied to the Grant Commission for assistance and based its case for support substantially on Brisbane’s public transport. As a result of this factor, Queensland ‘s grant was increased by more than $7m in 1974-75, more than $6m in 1975-76 and more than $9m in 1976-77. The Queensland Government flatly refused to acknowledge that one cent of that Grants Commission money should have gone to the Brisbane City Council. That is on record. Again the Australian Federal structure has been undermined by the petty politics of a State government.

The Queensland Government’s deceit and duplicity in denying the flow-on from the Grant Commission to the City Council must surely be the most eloquent and convincing argument for the type of national-regional cooperation, and the sort of urban and regional planning, both of which were fostered by the previous Labor Administration. The Queensland Transport Minister’s latest incursion into Metropolitan affairs by holding the Council to ransom is cheap politics. As for this Government, its decision to defer the $20m for this year under section 8 of the Urban Public Transport Act is another blow to the Brisbane rate payer. The money is muchneeded, although I hope I have pointed out by now that there is never any guarantee, when working with the Queensland Government, that it will pass on such moneys as the Commonwealth intends to the rightful recipients.

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


– It has become almost traditional in this Parliament that tributes to great Australians are paid only when they are either dead or retired from their duty. Tonight I briefly pay a tribute to a great Australian who is very much alive and who holds a most important office in the Commonwealth. I refer to Australia’s Director-General of Security and the head of the Australian Security Intelligence Organisation. His Honour Mr Justice Albert Edward Woodward. I refer to him because, due to the machinery and the process of government, I have had the opportunity of seeing His Honour in company with colleagues on the Government benches over the last two weeks in a situation which has given me an ideal opportunity to make an assessment of this man. All honourable members in this House will know that His Honour came to the office that he now holds as the result of a recommended appointment by the previous Government, the Whitlam

Government, which appointment was approved entirely by the then Opposition which is now the present Government.

His Honour is the son of the late LieutenantGeneral Sir Eric Woodward. He was admitted to the Bar in the State of Victoria in 195 1, became a judge in 1972 and was appointed Australia’s Director-General of Security in 1976. 1 am more convinced than ever before, after observing the man at close quarters following two intensive meetings involving a deliberation in excess of six hours, that in that office he combines a judicial appreciation of the rule of law under a parliamentary democracy, together with an understanding of the rights of the individual Australian and of the necessity to ensure the national security of Australia. He brings to that office a judgment, a frankness, a candour and a patent integrity which in my judgment are exceptional. But above all his patriotic determination to ensure and protect the national security of the Commonwealth sets an example which I believe many who wish to emulate him could follow to great advantage.

It is not coincidental that I speak on this matter tonight. I suppose that all honourable members would be aware that for some time this Government- and no doubt the previous Government- has considered the role and the specific functions of ASIO. Whatever might come before the Parliament in the weeks ahead, I believe I would be failing in my duty if I did not place on record, before the debate on ASIO starts, the admiration, in which I hold this man. I believe that many members on both sides of this Parliament in both Houses feel similarly. I hope that His Honour Mr Justice Woodward will be available for many years to serve this nation as Director-General of Security. I met the man only as recently as two weeks ago but having had the opportunity to cross-examine him and to hear him answer a wide range of questions directed to the national security of Australia, he is in my judgment a fine Australian and a most worthy trustee of the nation ‘s security.

Mr Barry Jones:

-Not for the first time, I find myself in agreement with the honourable member for Denison (Mr Hodgman). I only hope that when Mr Justice Woodward was cross-examined by the honourable member His Honour had the assistance of counsel to represent him. I wish to draw the attention of the House to a remarkable article on the 1977 Federal election campaign. This article is extraordinarily instructive but it seems to have been largely ignored in debate both in this chamber and outside in the electorate. In the Australian Financial Review of 14 December 1977, on page one, the words ‘How the job was done’ appeared above a photograph of Mr Len Reason. The article was headed ‘The selling of Malcolm Fraser’. It was written by Valerie Lawson. I think the article is instructive because it illustrates very clearly the basic differences between the philosophical approaches of the Liberal Party and the Labor Party and the two competing value systems that run through those parties. The article by Valerie Lawson states:

The Liberal Party’s $ 1.6m ‘hip pocket nerve’ advertising campaign was based on a unique appeal of selfishness combined with altruism, according to a booklet to be published next week by the party’s advertising agency.

Backing tax cuts all the way, the Liberal Party took a punt by discarding research results showing unemployment as the major issue.

You can’t take everything everyone says at face value,’ says agency Masius in the publication.

Research didn’t immediately surface tax as an issue after the Labor Party policy speech, but that didn’t worry us . . .

If someone with a clipboard and horn-rimmed glasses knocks at your front door and asks your favourite pastime, you are more likely to say reading historical novels than having sex.

And if someone asks you what the key issue in an election is, you are more likely to attest to your virtue by tut-tutting “unemployment” than by confessing your avarice with a vote for tax cuts.’

The booklet, written by Masius chairman Mr Len Reason, -

I interpolate that he will be the gentleman who will be directing the Liberal Party campaign in the State election in Victoria for his friend Mr Hamer- outlines how the Liberals’ campaign appealed directly to the hip pocket nerve’ and how the Liberals were ‘merchandised’ through the establishment of an answering service pandering to the electorate ‘s greed for tax concessions.

They are not ashamed about it. They are quite pleased about it. The article continues:

Mr Reason states in the publication that the Liberals’ campaign offered voters an opportunity to be selfish and altruistic at the same time -

That is a classic example of a contradiction in terms. I notice that in the Oxford English Dictionary the definition of altruism is ‘devotion to the welfare of others; regard for others, as a principle of action; opposed to egoism or selfishness’. But in this article the Liberal Party advisers talk about a combination of being selfish and altruistic at the same time- altruistic because they can support their financial motivation while giving help to the unemployed by taking money.

The article continues:

He claims people became ‘franker’ as they grasped this very acceptable proposition ‘.

Next, the booklet says, the problem was how to communicate that comforting thought to the populace at large.

Conventional advertising was too passive.

At this point our commercial experience took over, and we remembered a word one should never forgetmerchandising! ‘ it says.

That is ‘the an of taking a step from the advertising towards the consumer, so that he needs only one step to reach you instead of two.

The answer leapt at us- set up an answering service where people could ring and find out how much the tax cuts would mean to them individually.’

In the Masius booklet, titled ‘The anatomy of a political merchandising idea’, Mr Reason says the agency’s major problem was overcoming the boredom of the uncommitted voter faced with yet another election.

This, however, was not a new experience for advertising men, who ‘spend a great deal of their lives giving the kiss of life to commercial propositions that often look very blue in the face indeed’.

Almost the only aspect of the Liberals’ campaign which remained set throughout the entire election period was its deliberate lack of sophistication Mr Reason says.

How well they know their market. I hope that the same success that was achieved in 1977 will not be achieved in the Victorian election on 5 May.


– I do not wish to speak about the Victorian campaign tonight, other than to say that I would agree with the honourable member for Lalor (Mr Barry Jones) that the Australian Labor Party in Victoria has its best chance for quite a few years of winning an election for no other reason than that it is no longer burdened by the present honourable member for Lalor, a former Victorian State member, and more importantly by the present honourable member for Melbourne Ports (Mr Holding), who is also a former State member. It is in relation to the honourable member for Melbourne Ports that I wish to speak tonight because in the adjournment debate on Tuesday of last week the honourable member claimed that job seekers were being discriminated against because of alleged changes in the method of notifying job seekers of vacancies registered with the Commonwealth Employment Service. The honourable member claimed that the Service is no longer permitted to send telegrams to unemployed people to notify them of job vacancies. This allegation is untrue. It is correct that the CES has been asked to exercise restraint in the use of telegrams. However I am advised that the manager and the assistant manager at CES offices have the authority to send telegrams and they do send telegrams where necessary.

The honourable member for Melbourne Ports claimed that job seekers who do not have telephones are discriminated against. This allegation is also untrue. There has been no major change at all in this area. Telephone contact with persons registered for employment is still the number one method of contact, as it always has been. However, if the job seeker is not on the telephone he is advised of a job vacancy either by the Australian Post courier service or, as in the past, by telegram. On some occasions, but only when the advice is not urgent and only in a very small proportion of cases, the job seeker is contacted by letter through the normal Australia Post channels. The increasing use of the courier service- it is certainly a fact that it is being increasingly used- has streamlined the previous procedures and has improved the service provided by the CES. If there is no one at home when the telegram is delivered then the CES simply does not know whether the person has been contacted or not. On the other hand, by using the Australia Post courier service, if the person is not home the courier service reports back to the CES.

This has been a major improvement in the service which benefits not only the CES but also job seekers themselves. It also has considerably reduced the cost of notifying job seekers of vacancies. It therefore has increased the efficient use of taxpayers’ money. For example, in my area the average cost of sending a telegram to a job seeker notifying him of a vacancy is $3 to $4. Over recent months the average cost of notification- the figures are taken out weekly at my local CES Office- has been running at between $1.10 and $1.35 per notification. It could well be that, given some of the statements by the honourable member for Melbourne Ports, he does not object to the profligacy of spending taxpayers’ money willy-nilly without any consideration for cost efficiency. All I can say is that there are many taxpayers and job seekers who do.

The statement by the honourable member for Melbourne Ports also ignored the fact that the introduction of self-service into CES offices has much improved the circulation of vacancies between officers and has therefore reduced the need for telegrams. It is to be deplored that the honourable member did not check his facts before making his statement. He referred to a report in the Melbourne Age of 19 February which referred to the CES statement. I am advised that both spokesmen who were quoted claim that they have been misrepresented. More importantly, it is to be deplored that the honourable member used the cowardly cloak of parliamentary privilege to call an officer of the CES a liar. It is an insult to the hard-working officers of the CES. It is also an abuse of reasonable and proper parliamentary procedure.

Mr DEPUTY SPEAKER (Mr Millar)Order! It being 1 1 p.m., the debate is interrupted.

Mr Howard:

– I ask that the debate be extended.


-The debate may continue until 11.10p.m.

Treasurer · Bennelong · LP

– I would like to respond briefly to the remarks of the honourable member for Moore (Mr Hyde) on a subject which is not completely unknown to me. I would like to say to the honourable member that in effect his remarks contain three injunctions on the atypical procedure that the Government has been adopting in coping with the problem of prescribing individual tax avoidance schemes for the past nine or ten months.

The first of those three injunctions was that announcements proscribing schemes should be explicit. I accept that. In fact, it has been my intention and, I hope the House would agree, it has been the practice during that time for such announcements to be explicit. The second injunction was that legislation giving effect to those announcements should be introduced with a minimum of delay. The situation is that all announcements made under this procedure prior to 30 June have been the subject of legislation that has either been passed by or introduced into this Parliament. Some announcements made in September last year which must be embodied in legislation remain and it is the intention of the Government to embody them in legislation to be introduced into the Parliament during this session. I think it is important that the legislation should be brought in as quickly as possible. It is desirable in the interests not only of avoiding any lack of deference to Parliament but also of avoiding confusion that that should be done. Thirdly, the honourable member suggested that if the Government at some stage had a change of heart on the substance of the announcement it ought to make that clear immediately. I accept that also as a reasonable condition attaching to this procedure. It would be my intention that that procedure should be followed.

I conclude simply by saying that it is an atypical procedure but it is an atypical procedure which, in my very strong belief, is totally justified to deal with an atypical problem which, despite the very energetic action of the Government over the past 12 months, is still very much with us. I believe that it will remain with us until such time as it is possible for the Government effectively to rewrite a general anti-avoidance section into the income tax legislation. That is a matter which is receiving very active attention from the Government at the present time in accordance with an undertaking I gave this House during a debate last year. Until that is achieved, there is no practicable, equitable or fair alternative to the procedure which we are adopting. It is a procedure from which the Government does not intend to resile in any way.


-The debate having concluded, the House stands adjourned until 10.30 a.m. tomorrow.

House adjourned at 11.3 p.m.

page 492


The following notice was given:

That the House is of the opinion that the Prime Minister should make a full statement on the resignation and reinstatement of the Minister for Finance, the statement to include details of the ‘difficulties’ which led to ‘terseness’ in the relationship between the Minister and the Prime Minister and, eventually, the Minister’s resignation, details of the terms and /or understandings by which the difficulties were, apparently, resolved so that the Minister’s reinstatement was possible after only three days, precedents for the resignation of a Minister under the Westminster system of Government without an explanation of reasons to the Parliament, a summary of current expert opinion on the accountability of Ministers to Parliament in a matter such as resignation.

page 493


The following answers to questions upon notice were circulated:

Government Contract: Offset Arrangements (Question No. 1790)

Mr Holding:

asked the Minister representing the Minister for Science and the Environment, upon notice, on 22 August 1978:

  1. 1 ) How many contracts entered into by departments and statutory corporations under the Minister’s control for the purchase of equipment, contained clauses specifying an offset arrangement with the vendor for the purchase of Australian manufactured goods, components and /or technology during the last 10 years.
  2. What were those contracts.
  3. What was the sum involved in each offset clause and what were the terms of its discharge.
  4. What is the extent to which the terms of these clauses have been implemented specifying in each case the monetary value of the implementation.
  5. What sum is currently available under these clauses for the purchase of relevant Australian manufactured goods, components and /or technology.
Mr Groom:
Minister for Housing and Construction · BRADDON, TASMANIA · LP

– The Minister for Science and the Environment has provided the following answer to the honourable member’s question:

I refer the honourable member to the answer given by the Minister for Productivity to Question No. 1974 (Hansard, 23-24 November 1978, page 3389).

Motor Spirit (Question No. 2376)

Mr Hayden:

asked the Minister for National Development, upon notice, on 28 September 1978:

  1. Is it a fact that, in its report ‘Motor Spirit: Octane Ratings and Lead Additives’, the National Energy Advisory Committee found that an increase in the research octane rating of regular grade motor spirit from 89 to 92 and an increase in the level of lead in motor spirit to 0.65 grams/litre would save approximately 2 million barrels of crude oil per annum.
  2. Is it also a fact that Australia’s consumption of crude oil is in excess of 200 million barrels per annum.
  3. If so, would the adoption of these recommendations of the National Energy Advisory Committee conserve less than 1 per cent of Australia ‘s crude oil consumption.
  4. Has the Government adopted or proposed to the Australian Minerals and Energy Council, programs likely to lead to the conservation of crude oil at levels greater than 1 per cent of consumption.
Mr Newman:

– The answer to the honourable members question is as follows:

  1. Yes.
  2. Yes.
  3. The adoption of the National Energy Advisory Committee’s recommendations on this particular matter would probably decrease Australia’s crude oil consumption by about 1 per cent, and save the nation about $30m per annum.
  4. The Government is presently in the process of formulating, in consultation with the Australian Minerals and Energy Council, a national energy conservation campaign. Agreement has been reached on the national energy conservation publicity campaign, and a planning study for that campaign will be completed by the end of February 1979. Other conservation measures to complement the publicity campaign are under examination by the Council.

The Government has, of course, through its various pricing and taxation initiatives concerning indigenous crude oil and LPG, and through its assistance to a wide range of research into alternatives to crude oil, taken measures which are likely to have a very significant effect on the demand for crude oil. At this stage it is not possible to quantify these effects.

Housing (Question No. 2416)

Mr Uren:

asked the Minister for Housing and Construction, upon notice, on 10 October 1978:

  1. What sum has been made available by the Commonwealth to each State under the Commonwealth-State Housing Agreement in each financial year since 1970-7 1 .
  2. What sum was made available to (a) the State Housing Commission and (b) the Home Builders Account in each case.
  3. How many dwellings were constructed with these Commonwealth funds in each case.
  4. How many loans were made through the Builders Account and what was the average value of loans in each case.
  5. What percentage of funds channelled through the Home Builders Account went to the construction of new dwellings.
Mr Groom:

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

Radio and Television Station Licences (Question No. 2572)

Mr Jull:

asked the Minister for Post and Telecommunications, upon notice, on 19 October 1978:

  1. Which commercial (a) radio and (b) television stations are due to appear before the Broadcasting Tribunal for public hearings for licence renewals before 30 June 1 979?
  2. On which dates and in which cities will these licence applications be heard?
Mr Staley:
Minister for Post and Telecommunications · CHISHOLM, VICTORIA · LP

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

  1. and (2) The following commercial radio and television stations are scheduled to appear before the Tribunal at public hearings for licence renewals before 30 June 1979.

Immigrant Doctors (Question No. 2655)

Mr Lloyd:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 26 October 1978:

  1. How many general practitioners and specialists were granted permanent residence during the last 12 months for which figures are available?
  2. Has his attention been drawn to the recent Australian Medical Association Federal Council resolution that immigration of doctors be controlled and to previous projections that Australia suffers from an over-supply of doctors?
  3. If so, what is being done to restrict the entry of overseas doctors?
Mr MacKellar:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP

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

  1. During the financial year 1977-78, 721 general practitioners and specialists arrived in Australia with migrant visas. A further 1 10 who had come to Australia with temporary entry visas were granted resident status. This group included 60 former students. There is considerable movement of medical practitioners into and out of Australia. Based on information on incoming and outgoing passenger cards, the total numbers of permanent and long-term arrivals and departures of medical practitioners in 1977-78 were 1,519 and 982 respectively with a net gain of 537. The total number of short-term movements in the same year were 5,972 arrivals and 6,334 departures, a net loss of 362.
  2. ) Yes. Whether the facts are as stated there is at issue.
  3. An Inter-Departmental Committee has been investigating the supply of medical practitioners. In the light of the committee’s recommendations, consideration will be given to whether any restriction on the entry of doctors from overseas countries is necessary.

I emphasise that entry of medical practitioners, as of migrants generally, is controlled. Virtually all doctors who have entered Australia in recent times have been approved because they have firm job offers extended either by health authorities or private medical practitioners. Some others have entered under family reunion categories or as refugees. They have largely entered Australia to fill vacancies. I continue to receive requests for assistance in bringing medical practitioners from overseas to occupy positions which cannot be filled from within Australia.

I emphasise also that medical practitioners resident overseas but registered in Australia are not guaranteed migrant entry to Australia. Whether they are approved for migrant entry depends on whether they meet entry requirements at the time of application.

Finally it should be noted that medical practitioners granted resident status as medical practitioners form only a proportion of total applications to immigrate to Australia from medical practitioners. A large number of applications from practitioners are rejected because their qualifications are not recognised here and/or they do not possess suitable employment offers.

Cheese Imports (Question No. 2768)

Mr Lloyd:

asked the Minister for Health, upon notice, on 1 4 November 1 978:

  1. How many cheese importers have been granted exemptions from the 120 day quarantine period.
  2. How much cheese is being imported by this method by (a) variety and (b) country of export.
Mr Hunt:
Minister for Health · GWYDIR, NEW SOUTH WALES · NCP/NP

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

  1. Exemptions from the 120 day quarantine period are not granted to importers. Exemptions are granted to manufacturers of individual brands of cheese for each specific type of cheese, after examination of the protocol of manufacture has demonstrated that no quarantine risk is involved. Several importers may import the same cheese.

The total number of cheeses for which manufacturing protocols have been received is 582. Of these 509 have been granted quarantine exemption, 54 have been refused exemption and 1 9 are under consideration.

  1. Figures showing total amounts of cheese imported are listed below. Figures are not kept on amounts imported either by country or by variety. Exemptions have been granted to certain manufacturers for specific cheeses from Austria, Belgium, Bulgaria, France, Germany, Greece, Holland, Italy, Romania, Switzerland and South Africa. All cheeses from foot and mouth disease free countries are exempt from the quarantine.

The Bureau of Statistics advises that imports of cheese during the period 1 1 November 1976 to 30 September 1978 totalled 20,948 tonnes. During this period the amount of cheese imported that had been granted quarantine exemption on Permits to Import was 5,721.19 tonnes. The amount of cheese that had to undergo the 120 days quarantine period was 1,576.77 tonnes.

The remaining 13,650.04 tonnes was cheese imported from the countries recognised by Australia as being free of foot and mouth disease and consequently unaffected by quarantine restrictions.

Solar Heating of Houses (Question No. 2796)

Mr Uren:

asked the Minister for Housing and Construction, upon notice, on 15 November 1978:

What proportion of dwellings constructed in each State under the Commonwealth-State Housing Agreement was:

a ) fitted with a solar water heating system and

insulated, during each of the last five years.

Mr Groom:

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

The required information has been obtained from each of the States as follows:

no dwellings constructed during the last five financial years under the Commonwealth-State Housing Agreement have been fitted with solar water heating systems,

the proportion of dwellings constructed in each State during the last five financial years under the Commonwealth-State Housing Agreement which have been insulated is as follows:

Australian Broadcasting Commission (Question No. 2806)

Mr Humphreys:

asked the Minister for Post and Telecommunications, upon notice, on 16 November 1978:

  1. 1 ) Has his attention been drawn to a report in the Courier Mail of 3 November 1 978 in which he is quoted as informing a delegation of ABC staff that the staff-elected commissioner was a dead issue and the Federal Government did not consider it the best way of improving management-staff relations; if so, is there any substance to the report.
  2. What does he propose as a better way of improving management-staff relations.
  3. Who is reviewing the present staff ceilings at the ABC, a process which the ABC Staff Association claims will seriously threaten the operations of the Commission.
  4. When will the review be completed.

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

  1. 1 ) As I have stated publicly the Government does not believe that the election of members of staff to commissions is the most appropriate way, either to ensure an effective Commission or to further the relationship between staff and management.
  2. The ABC management, together with those unions representing the staff, have developed a joint statement of their position on this issue. This was discussed by the Commission at its meeting on 8 December 1978, and the Chairman issued a media release on the matter on that day.
  3. Government consultation with the ABC on staff ceilings is proceeding.
  4. See (3) above.

Immigration (Question No. 2954)

Dr Cass:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 22 November 1978:

  1. 1 ) With reference to his answer to my Question No. 1 735 (Hansard, 10 October 1978, page 1669), is information about departures yet available for the full year 1 977-78.
  2. If so, what was the net migrant intake for 1 977-78.
  3. If the figures for the full year are not available, will he provide the most recent figures for departures for the months of 1977-78 that are available.
Mr MacKellar:

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

A total of 13,972 former settlers departed Australia permanently in 1977-78. However, it is not possible to break down this number into the migration categories under which they entered Australia. Therefore, net figures by category cannot be calculated. Net figures for all movements are given in answer to Question No. 1 736.

Women’s Health Centres (Question No. 2996)

Mr Kerin:

asked the Minister for Health, upon notice, on 23 November 1978:

  1. How many Women’s Health Centres are there in New South Wales, and where are they located.
  2. When was each centre built or established.
  3. What were the staff levels of each centre during each of the last 4 years and what is the current staff level of each centre.
  4. What has been the (a) allocation and (b) expenditure of funds to the centres in New South Wales during each of the last 4 years and in 1978 to date for (i) current and (ii) capital expenditure.
  5. 5 ) Is he able to say what has been the amount of the New South Wales Government’s financial (a) allocation to and (b) expenditure on the Women’s Health Centre program during each of the last 4 years and in 1 978 to date.
  6. Is he able to say whether the services being provided by the Women’s Health Centres in New South Wales are being cut back; if so, what effect is this having on those persons using the services.
Mr Hunt:

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

The following information is provided following consultation with the Health Commission of New South Wales.

Four, viz, women’s health centres at Leichhardt, Liverpool, Bankstown and Mayfield (Newcastle). In addition to these projects, the Rape Crisis Centre (Surry Hills), the Pregnancy Help Centre (Strathfield) and the Central Coast Women’s Health Services Co-ordinator (Gosford) also receive financial assistance under the Community Health Program, but the latter projects are not classified as women’s health centres.

  1. See attached table.
  2. The New South Wales Government’s financial allocations and expenditures on women’s health centres for each of the last four years, and to 3 1 December 1 978 in respect of expenditure in the current financial year, were as follows:
  1. Under the Community Health Program, the State authorities are regarded as having immediate responsibility for the provision or supervision of projects funded under the Program, including the levels of services provided. I understand that the levels of activity of some women’s health centres in New South Wales have been affected recently, but I do not have detailed information on this matter.

However, the honourable member may be aware that I recently announced a special additional Commonwealth grant of $250,000 for community health projects in New South Wales. It is intended that this special grant be matched by a similar additional allocation by the State. This further $500,000 will assist in maintaining staffing of community health services in New South Wales at a viable level during the remainder of this financial year. In particular, it is intended to assist in providing services in high need areas such as under-serviced urban areas and isolated rural areas, as well as services to disadvantaged groups such as the intellectually handicapped.

  1. The following table details Commonwealth allocations and expenditures, by operating and capital cost components, in respect of women’s health centres in New South Wales:

Exports to New Zealand (Question No. 3047)

Mr Lloyd:

asked the Minister for Trade and Resources, upon notice, on 24 November 1 978:

  1. 1 ) What Australian agricultural exports (a) are presently subject to import quota control by New Zealand, in the different categories of NAFTA or (b) are not included in NAFTA.
  2. Of these quota restrictions (a) which are overt and generally acknowledged and (b) which are covert but apply nevertheless.
  3. What are the present arrangements for Australian (a) wheat, (b) canned temperate fruit and tropical fruit, (c) citrus juice, (d) wine and (e) tomatoes.
Mr Anthony:

– The answer to the honourable member’s question is as follows: 1. (a) The following Australian agricultural exports subject to import quota control by New Zealand are on Schedule A of NAFTA which lists those goods to which the free trade provisions of NAFTA apply, or are covered by special NAFTA arrangements which provide for special access into New Zealand for limited quantities. Goods in the latter category are marked with an asterisk:

Certain dried, dehydrated or evaporated vegetables

Certain nuts


Wheat and meslin





Rice flour

Cereal groats and meal

Sweetened forage



Certain fixed vegetable oils


Certain prepared and preserved vegetables

Fruit juices, unsweetened

Prepared and preserved prunes

Canned pineapple*

Wine.* 1. (b) The following major Australian agricultural exports are not included in Schedule A or special NAFTA arrangements:


Beef and veal


Certain other meats

Canned meat



Milk, dried or condensed

Wheat flour



Some rice products

Certain fresh fruits

Certain canned fruits.

  1. Administrative details of the New Zealand import licensing system are published in the New Zealand Import

Licensing Schedule. I am unaware of any covert import quota restrictions applied by New Zealand.

  1. Arrangements under NAFTA for each of these products are as follows:

    1. Wheat is on Schedule A and is subject to New Zealand import licensing. Imports are subject to individual application to the New Zealand licensing authorities. It is understood that imports are normally permitted only when New Zealand has a shortage There are no special NAFTA arrangements covering exports of Austraiian wheat to New Zealand.
    2. Canned temperate and tropical fruit (other than prunes) are not on Schedule A and are subject to import licensing into New Zealand. Imports of canned apricots, apples, berry fruit, fruit salad, peaches, pears and plums are subject to individual application to the New Zealand licensing authorities. It is understood that imports are normally permitted only when New Zealand has a shortage. Other types of canned fruits may be imported against basic global licenses which are issued to New Zealand importers at the commencement of each licensing year. In addition, Australia has limited special access for canned pineapple negotiated under NAFTA arrangements. There are no special NAFTA arrangements covering exports of other Australian canned temperate and tropical fruit to New Zealand.
    3. Citrus juices are not on Schedule A and, with the exception of lime juice not containing added sugar, are subject to New Zealand import licensing. Depending on the size of the container and the mixture, citrus juices may be imported under basic global licences or subject to individual applications to the licensing authorities. There are no special NAFTA arrangements covering exports of Australian citrus juices to New Zealand.
    4. Wine is not on Schedule A and is subject to New Zealand import licensing. Imports of wine into New Zealand are made against basic global licences. Some wine is exported to New Zealand under an intercompany arrangement covered by Article 3 : 7 of NAFTA.
    5. ‘Tomatoes provisionally preserved in brine, in sulphur water or other preservative solutions but not specifically prepared for immediate consumption’ and ‘tomatoes prepared or preserved otherwise than by acetic acid not including tomato paste, pulp, puree or juice having a dry weight content of 7% or more’, are on Schedule A. Tomatoes provisionally preserved in brine etc., as described above are exempt from import licensing into New Zealand while Australian canned tomatoes prepared or preserved as described above may be exported to New Zealand under special Schedule A import licences for canned vegetables negotiated with New Zealand. Other imports of tomatoes are subject to basic global licences.

Hansard’ Index (Question No. 3101)

Mr Morris:

asked the Minister representing the Minister for Science and the Environment, upon notice, on 24 November 1978:

  1. 1 ) Does the Department of Science and the Environment or any agency under the Minister’s control prepare an index of Hansard.
  2. What is the form of each index.
  3. How recent is each index.
  4. To what persons, Department or agencies are the indices made available.
Mr Groom:

-The Minister for Science and the Environment has provided the following answer to the honourable member’s question.

  1. No.
  2. to (4) Not applicable.

Cite as: Australia, House of Representatives, Debates, 28 February 1979, viewed 22 October 2017, <>.