32nd Parliament · 1st Session
Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That we protest most strongly against the Australian Postal Commission’s decision to phase out the Travelling Post Office (TPO)inNSW.
The TPO service has given the country people of NSW a reliable and efficient service for many years. To replace this service with a road system would be a backward step which we believe would result in long delays in mail going to and from country centres.
Your petitioners therefore humbly pray that the Government will look favourably on our petition to retain the TPO service in NSW.
And your petitioners as in duty bound will ever pray. by Mr Anthony, Mr Fife, Mr Hicks, Mr Hunt, Mr Mountford, Mr O’Keefe, Mr Sinclair and Mr Uren.
To the Honourable Speaker and Members of the House of Representatives of the Australian Parliament assembled. The petition of certain citizens respectfully showeth:
Taxpayers who incur child-care expenses in order to earn income should be able to have those expenses exempt from income taxation in the same way as other taxpayers can deduct business expenses from their assessable income.
And your petitioners as in duty bound will ever pray. by Mr Birney, Mr Lionel Bowen, Mr Les Johnson, Mrs Kelly, Dr Klugman, Mr MacKenzie and Mr Les McMahon.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth submits:
That off-shore oil exploration within the Great Barrier Reef Region constitutes a serious threat to the richest and most varied living system on earth.
Your petitioners request that your Honourable House will:
And your petitioners as in duty bound will ever pray. by Dr Blewett, Mr Chapman, Mr Dean, Mr Fry, Mr Garland and Mr Hodges.
To the Honourable the Speaker and Members of Parliament assembled in the House of Representatives and the Senate, Canberra: The humble petition of the undersigned members or organisations listed below and citizens of Australia respectfully showeth:
That current laws relating to sexual offences against women are discriminatory against all women, and in particular against married women; and that current laws relating to sexual offences are ineffective and inadequate to protect married and unmarried women; and that we believe that both married and unmarried women should be effectively and adequately protected by law against sexual abuse.
Your petitioners therefore humbly pray:
That laws relating to sexual offences against women must be redefined to include all forms of sexual abuse against married and unmarried women, including all forms of coercion - physical, psychological, exploitative, extortionary and authority-based, and including sexual harrassment in any form, particularly at work and in educational institutions.
That evidence laws applicable generally to assault crimes must be acknowledged as applicable to sexual offences and the rules relating to corroboration in assault crimes must be made applicable to sexual offences.
That laws must be reformed so that accused persons are not entitled to abuse the criminal justice system; and furthermore laws must be revised to give greater protection to the victim and to minimise her distress.
And your petitioners as in duty bound will ever pray. by Mr Les Johnson and Mr Les McMahon.
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 its objection to the removal from the Pharmaceutical Benefits Scheme of all goats milk formulae. We request that the Government restore to the Pharmaceutical Benefits Scheme this basic natural food which is essential to many babies who are allergic to both cows milk and soy and corn substitutes. The failure to do so will place an intolerable cost burden on their parents and no alternatives for the child as the only manufacturer will cease production if the product is withdrawn.
And your petitioners as in duty bound will ever pray. by Mr Bradfield.
To the Honourable Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That the humble petitioners respectfully believe that the Federal Government has the power conferred on it by the 1967 Referendum to intervene on behalf of Aboriginal people in any conflict with any State or Territory Government.
Your petitioners therefore pray:
That the Federal Government will assume its full responsibility for Aboriginal Affairs, and use the powers conferred on it by the people of Australia in the 1967 Referendum to intervene on behalf of Aboriginals in any conflict with any State or Territory Government.
That the Government respond to the report of the Senate Standing Committee on Constitutional and Legal Affairs on Aboriginal and Torres Strait Islanders on Queensland reserves which sets out precisely the Commonwealth Constitutional and legal position under Section 51 .
That in addition the Government fulfil its stated policy of self-determination and self-management for Aboriginal people, by funding all housing, health, education, legal, employment strategy and welfare matters concerning Aboriginal people directly through Aboriginal Community based Community controlled organisations.
And your petitioners as in duty bound will ever pray. byMrBradfield.
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 object in principle to Intensive Livestock Farming, namely the system of keeping animals in close confinement in artificial environments and feeding them entirely or partly on concentrated foods with a variety of artificial additives.
Your petitioners therefore humbly pray that:
Legislation be introduced to eliminate the existence of both the abovementioned practices, namely (I) the close confinement of animals in artificial environment, and (2) the feeding of animals entirely or partly on concentrated foods with a variety of artificial additives.
And your petitioners as in duty bound will ever pray. by Mr Cadman.
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:
Your petitioners therefore humbly pray that Parliament will reform income tax laws to allow the joint income of husband and wife to be equally divided between them for taxation purposes.
And your petitioners as in duty bound will ever pray. by Mr Carlton.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth:
That the implications of large-scale non-European Immigration into Australia are of grave national concern;
That unwise decisions in regard to immigration are irreversible;
Your petitioners most humbly pray that the House of Representatives, in Parliament assembled, should take action to have a national referendum on the subject of immigration in conjunction with the next Federal elections.
And your petitioners as in duty bound will ever pray. by Mr Cunningham.
To the Speaker and the Members of the House of Representatives in Parliament assembled; the undersigned citizens of Australia showeth:
That we protest at the decision of the Department of Social Security to terminate the operations of the Social Security office at Sandgate, Brisbane.
That this decision ignores the interests and needs of the people of Sandgate and surrounding areas, particularly those elderly who find travel to an alternative office physically difficult, and the destitute, poor and unemployed who find travel financially difficult.
We respectively request that the Minister reverse this decision in order to achieve greater decentralisation in the provision of services by the department and deal more effectively and personally with the Social Security beneficiaries and pensioners of the Sandgate area.
And your petitioners as in duty bound will ever pray. by Mrs Darling.
To the Honourable the Speaker and Members of the House of Representatives of the Australian Parliament in Canberra assembled. The petition of certain citizens respectfully showeth:
That the right to work without discrimination on any ground including, inter alia, discrimination on grounds of race, ethnic origin, pregnancy, marital status, sex and/or sexual preference, is a fundamental human right; and
That it is both the duty and the responsibility of society to fully support those denied work and therefore those who are unemployed as a result of society’s inability to provide full paid employment should be guaranteed an adequate income without discrimination on any ground, including inter alia discrimination on grounds of race, ethnic origin, marital status, sex and/or sexual preference, or pregnancy.
Your petitioners therefore humbly pray:
That appropriate and adequate laws be formulated and passed to outlaw discrimination in Commonwealth employment, in employment of persons by statutory bodies and quasi-governmental organisations, in employment of individuals under federal awards, and in employment of all persons in areas over which Commonwealth and Australian Capital
Territory equal opportunity legislation should have jurisdiction; and
That appropriate laws be formulated and passed to outlaw discrimination in the provision of unemployment benefits to all persons without regard to race, ethnic origin, marital status and/or sex.
And your petitioners as in duty bound will ever pray. byMrEllicott.
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 anti-social activities of certain organisations, in the main purporting to be religious and under foreign control, are causing increasing mental, physical and/or social distress to citizens throughout the Commonwealth of Australia.
Such adverse effects include drastic personality changes, alienation and severance from persons’ families and normal society, dispossession under undue influence of persons’ worldly assets, abandonment of socially useful occupations or career education, mental disorientation, and a common requirement to surrender their labour with little or no pay, working unduly long hours fund-raising for the exclusive benefit of the organisations’ leaderships.
Furthermore, a disturbing number of our country’s youth have died prematurely in unsatisfactorily explained circumstances or have become so mentally or physically debilitated as to require hospitalisation or treatment following their involvement with the subject organisations commonly, but erroneously, described as ‘religious’ cults.
All evidence points to the fact that the subject organisations are commercial enterprises which, for the purpose of evading tax and other business obligations, have falsely assumed the status of ‘religions’ in order to take advantage of the blanket protections provided by Section 116 of the Australian Constitution.
It is your petitioners’ sincere belief that proliferation of such organisations unchecked with their personalitydisorientating and family-divisive practices and effects, represents a serious threat to the health, welfare, and peace of the whole community.
Notwithstanding the decision of the combined Australian Attorneys-General at their October 1979 meeting, that no special action should be taken by Government /s to curb undesirable activities of religious cults and that these should be dealt with under existing laws, such laws as would provide protection against the aforementioned malpractices do not appear to exist.
For this reason, the Government should proceed with all haste to investigate the widely-alleged malpractices of the subject organisations which include the Hare Krishnas, the Unification Church (Moonies), and such other groups as are the subject of complaints, preparatory to introducing appropriate legislation to curtail the said malpractices to ensure citizens’ continuing enjoyment of peace and harmony.
And your petitioners as in duty bound will ever pray. by Mr Goodluck.
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 people of Flemington, request that work be found for the unemployed, especially for all unemployed school leavers in their first two years after school, and that all social security and welfare payments be adjusted to a guaranteed adequate minimum income above the poverty line.
And your petitioners as in duty bound will ever pray. by Mr Innes.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that:
Whereas a fully-accredited degree course in chiropractic has been established at Preston Institute of Technology, and
Whereas three hundred students who pay their own fees are in all five years of the programme, and
Whereas students and the profession can no longer carry the financial burden amounting to over $1,000,000 per year, and
Whereas a debt of$240,000 is being incurred in 1980, and
Whereas if funding is not approved by August the course will close and students’ careers placed in grave jeopardy, your Petitioners most humbly pray that the House of Representatives in Parliament assembled should ensure that funding of the Preston Institute of Technology Chiropractic Programme by the Tertiary Education Commission be no longer delayed.
And your petitioners as in duty bound will ever pray. by Mr Charles Jones.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth:
That the existence of a system of double taxation of personal incomes whereby both the Australian Government and State Governments had the power to vary personal income taxes would mean that taxpayers who worked in more than one State in any year would:
Your petitioners therefore humbly pray that a system of double income tax on personal incomes be not introduced.
And your petitioners as in duty bound will ever pray. by Mr Morris.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth:
Many Australians depend almost exclusively upon TransAustralia Airlines for the provision of essential air services.
The Federal Liberal Party policy objective of selling TransAustralia Airlines within5 years is contrary to the national interest.
Sale of Trans-Australia Airlines would inevitably result in:
the creation of a private monopoly of major airline services in Australia;
Your petitioners therefore humbly pray that the House of Representatives will reject outright any proposal to sell Trans-Australia Airlines.
And your petitioners as in duty bound will ever pray. by Mr Morris.
To the Honourable Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That Aboriginal people in the State of Queensland do not have a Lands Commissioner.
Your petitioners therefore pray:
That the Federal Government will appoint a Lands Commissioner for Queensland.
And your petitioners as in duty bound will ever pray. by Mr Shipton.
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 question of basic human rights in the Republic of Korea is a matter of widespread and increasing concern. Since the assassination of the late President Pak Chung Hi and the accession to power of Lt. General Chun Du Kwan the situation, already serious, has deteriorated rapidly.
That the issue is not simply one of basic human rights. The Korean Peninsula is one of the most explosive areas in the world. The collapse of the last vestiges of democracy in the Republic of Korea, the emergence of a military-police regime of unparallelled brutality, has convinced many moderate Korean reformers that peaceful political change is no longer possible. Renewed civil conflict in Korea would bring with it the terrifying prospect of Great Power involvement. Great Power involvement could precipitate a nuclear holocaust.
That Australia has a direct interest in what happens in Korea. The Australian Government, as a matter of urgency, should work positively towards a peaceful, long-term and just settlement of the problems of the Korean Peninsula by: using its good offices in Seoul, Washington, Tokyo and other capitals to secure the release of the South Korean Opposition Leader, Mr. Kim Dae Jung, and all other political prisoners, and the withdrawal of charges against them urging the speedy restoration of democratic political process in the Republic continually reviewing the economic, political and strategic implications of Australia’s extensive trade with the Republic of Korea suspending Australia’s uranium contracts with the Republic of Korea. The character of Lt. Gen. Chun Du Hwan’s Government suggests that it might not, given the opportunity, abide by either the letter or the spirit of the Nuclear Weapons Non-Proliferation Treaty, to which Australia is signatory. It has been estimated that within the next five years South Korea could be in a position to construct 36 plutonium bombs annually from the waste products of its civilian nuclear reactors working positively, both independently and in cooperation with other powers, to bring about conditions conducive to a peaceful, negotiated re-unification of the two halves of the Peninsula.
And your petitioners as in duty bound will ever pray. by Mr Street.
To the Honourable Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That we request a review of the Australian food aid to Ethiopia for the following reasons:
That we request that the Australian Government provide aid to victims of the Ethiopian disaster in Somalia, Djibouti and the Sudan, through their Governments and through the Eritrean Relief Association in Eritrea.
That we request that the Australian Government sends economic aid as well as food aid to allow the indigenous governments of Somalia, Djibouti and the Sudan to implement relief work, i.e. transportation, health infrastructure etc.
That we object to Australia giving aid to Ethiopia and the Sudan, whilst failing to give substantial aid to the refugee victims of the war.
That Australia’s involvement appears, to us, to be purely political- influenced by Australia’s alliance with the United States - and consequently, we request that Australia restricts this aid to the war victims in Eritrea and those refugees in Somalia, Djibouti and the Sudan and that such aid exist on a substantial level.
That we object to the present Australian Government involvement in Ethiopia as un-Christian and a violation of humane law.
And your petitioners as in duty bound will ever pray. by Mr Street.
To the Honourable the Speaker and Members of the House of Representatives, of the Australian Parliament assembled. The petition of certain citizens of New South Wales respectfully showeth that the Federal Government did not make increased funding available for government school programs such as:
But increased the money available to the non-government school sector by S.9 per cent.
Your petitioners therefore humbly pray that your honourable House will restore and increase substantially, in real terms, the allocation of funds for government school programs.
And your petitioners as in duty bound will ever pray. by Mr Carlton.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned members of the Order of the White Cross International, a humanitarian knighthood for the Defence and Protection of Life and residents of the Commonwealth of Australia, by this our humble petition respectfully showeth:
That we the undersigned petitioners are deeply concerned with certain developments in Gene-Manipulation, the financial exploitation of new life-form varieties by private companies and the attempts of companies to gain patentrights over such life-forms through Parliaments and Courts and that our concern must be also the concern of the people of Australia, indeed the entire population of the World at large including all forms of life, since:
Your petitioners therefore humbly pray that:
And your petitioners as in duty bound will ever pray. by Mr MacKellar.
– I give notice that, on the next day of sitting, I shall move:
That this House, noting the legitimate claims of the Australian media for freedom of the Press, expresses its concern that the privately owned media has exercised self-censorship in suppressing media coverage of an independent statement by over 50 Federal Labor parliamentarians in support of the efforts of workers in Poland to establish an independent trade union movement.
– I give notice that, on the next day of sitting, I shall move:
That this House -
welcomes the decision by the Federal Government and the Minister for Transport to introduce a direct air link between Hobart, Tasmania, and Christchurch, New Zealand, and
is of the opinion that the inaugural flight by Ansett Airlines of Australia, departing Hobart at 10.30 a.m. on Wednesday, 3 December 1 980, marks the beginning of a major tourist boom for the people of Tasmania.
– I give notice that, on the next day of sitting, I shall move:
That this House-
urges the Prime Minister and the Minister for Administrative Services to call for the intervention of the Australian Federal Police to assist the Queensland Police in apprehending those involved in the terrorist bombing of the Iwasaki Tourist Resort,
believes that the Government should offer a reward for the speedy detention of those guilty of this deplorable act of destruction, and
deplores terrorist activity and urges the Government to waste no time in having the guilty brought to justice, even though the Australian Labor Party cannot condone the circumstances under which Mr Iwasaki has been sold part of Australia’s heritage.
– I give notice that, on the next day of sitting, I shall move:
That this House condemns the Government for its callous refusal to consider the welfare of infirm ex-servicemen and women, as well as the disadvantaged and elderly of north Brisbane, as indicated by the recent government decisions to close the Sandgate Social Security Office and close the Rosemount Repatriation Hospital, Queensland, and calls on the Government to reverse these decisions.
– I ask the Minister for Housing and Construction whether his attention has been drawn to the comments of the Real Estate Institute of Australia in the November 1980 issue of Landline, which stated:
The Treasury seems to believe that the money for an impending resources boom will have to be found largely from our own pockets, that money currently attracted to the housing sector should be diverted to resource development.
Is this an accurate description of Treasury’s advice to the Government on housing policy? If so, how does the Government plan to prevent a tightening of housing finance which, according to the Real Estate Institute of Australia, could cause a fall in the home ownership rate of up to 2 per cent in the next five years?
– My attention has been drawn to the article. I remind the honourable member for Reid that this Government, led by the Prime Minister and the Deputy Prime Minister, is a government that makes decisions on its own judgment. Treasury officials are quite right in tendering advice to the Government, but we would be recreant to the trust that has been placed in us by the Australian people if we allowed ourselves to be dictated to by a Treasury report. Mr Speaker, I assure you that this Government will make decisions consistent with the best traditions of the Westminster system, wherein the elected representatives make the decisions.
In answer to the second part of the question, I remind the honourable member for Reid that the most recent statistics for the September quarter, which appeared today, indicate that home loans for September had increased by comparison with the figures for the previous month and had vastly increased by comparison with the figures for September 1979. This indicates that adequate finance was available for all Australian home seekers. Finally, I point out that, through assistance to the States under the Commonwealth-State Housing Agreement, help is available to people who want to purchase their own homes. Because this Government exercises economic sanity, stability has been created in the minds of the Australian people so that they can take advantage of sound economic policies to plan home ownership.
– I draw the attention of the Minister for Foreign Affairs to expressions of concern in the West about developments in Poland. Does the Minister’s Department have up-to-date information on recent developments? Has the Australian Government been active in using whatever diplomatic leverage it may have in that country? In particular, does the Government consider that there is any likelihood of the Soviet Union intervening with force in Poland? If that is the case, will the Government take steps to impress upon the Soviet Government that intervention in Poland would have a grave effect upon international peace and security?
– I am aware that there is very widespread concern about the trend of events in Poland and about the possible reaction to those events by the Soviet Union. I note that this concern has led to clear warnings being given to the Soviet Union, from a number of quarters about the far-reaching and very serious consequences that would arise were it to intervene in Poland with force. But given the Soviet Union’s record of behaviour in such matters, most recently, of course, in relation to Afghanistan, it is not surprising that there should be apprehension about the situation in Poland. I am not in a position to say whether or not Soviet intervention in Poland is imminent. All I can do is express in the strongest possible terms my hope that it is not. But at the same time we would be unwise to ignore that ominous possibility.
What is clear is that. a military intervention by the Soviet Union, either on its own or with any of its allies, would have . the most serious impact upon the international climate and upon EastWest relations. No country, including Australia, would be immune from those very serious consequences which would flow from such intervention. The Soviet Government can be in no doubt about what may be at stake in this regard and about the strength of international reaction to it. We, in Australia, do not accept that the Soviet Union has an automatic right to intervene in any country, whether or not it considers that country within its so-called sphere of influence. I reiterate the views which my predecessor expressed in September to the effect that the Polish Government and people should be allowed to resolve peacefully their own difficulties. Taking up the honourable member’s final suggestion, I will be glad to arrange for our views to be conveyed to the Soviet Government.
– I refer the Treasurer to persistent reports circulating in the money market that rates for Australian savings bonds could leap from 10.25 per cent to as high as 12 per cent, and perhaps higher, and that rates for Commonwealth bonds could soar above 13 per cent. Does the Treasurer recognise this evidence of serious instability and uncertainty in the money market which derive from the chaotic conditions which, in turn, arise from the Government monetary policy in recent months? Does he appreciate that, unless corrected, this utter confusion will seriously erode the national economy in the months ahead? What action has he in mind to restore immediately stability, effectiveness and confidence in the money market? In particular, in taking any such action, will he give a guarantee to safeguard the interests of hundreds of thousands of home owners, small business proprietors and farmers who otherwise will be showered with highly punitive costs because of Government mismanagement of monetary policy?
– I am aware that the Leader of the Opposition reacts very actively to rumours that circulate in the money market. The question he has asked is evidence of that. Last week, in answer to a question from the honourable member for Hunter I explained in general terms my view of the importance of monetary policy in achieving the Government’s anti-inflationary objectives. That remains very much my view. The Leader of the Opposition will be aware that I have, over a period of three years, refrained from making any quantitative predictions and from speculating about the level of individual interest rates. When I have something specific to say about the level of interest rates over which the Government has control or influence I will say it. Until such time, as that, I do not propose to join in his joyous speculation.
– Is the Minister for Housing and Construction aware of some doubts being expressed as to the progress of the redevelopment of the Brisbane International Airport? Can the Minister inform the House whether the development is still on schedule? Have there been any unforeseen problems with the redevelopment since the construction work was begun?
– I am aware of certain newspaper articles expressing concern that the Brisbane Airport redevelopment may not be on stream by 1986. The first contract, which is for $ 10.2m, has almost been completed and is on time. That involves the construction of floodways and a canal and the diversion of waters. Additionally, a contract for $30.5m has been let to Condreco Pty Ltd for the pumping of nine million cubic metres of sand from Moreton Bay. It is expected that that will be finished by the middle of 1981. A contract will be called in August 1981 for the establishment of airways pavements. That covers the first part of the development scheme as approved by the Parliament after a Public Works Committee inquiry.
It is anticipated that a Public Works Committee inquiry into the second part of the development program, which is estimated to cost $114m, will be held in April 1981. The second part of the program consists of the construction of cross-runways, airport control facilities, maintenance hangars, parkways and an administration building. It is estimated, subject to the minimum of industrial unrest, that the facilities will be brought on stream and functioning in 1985, so that the airport will be fully functional by 1986.
-I direct a question to the Prime Minister. Was the right honourable gentleman in error when he said in his policy speech that the Government was revitalising what he described as a five-power defence treaty as against the five-power arrangements, or does he envisage the arrangements being developed into a treaty? If so, does this signify that there will be a basic change in Australia’s defence strategy from one of continental defence to one of forward defence?
– It is quite plain from discussions with the partners in the fivepower arrangements that they would like a little more life breathed into those arrangements than has been the case over a considerable period. Singapore, for a fair while, had wanted access to some facilities in Australia for training purposes and, in consultation with Singapore and other countries, it was decided that that access ought to be given. It is likely that there will be more training exercises between Malaysia, Singapore and Australia in the future than there might have been in the past.
On Thursday my colleague the Minister for Defence will be making a statement which will be related in part to these matters. No new formal arrangements are envisaged, but a long-standing arrangement has existed between Britain, New Zealand, Malaysia, Singapore and Australia. I would hope that the honourable gentleman would applaud the measures which this Government has taken in concert, especially, with Singapore and Malaysia, and which exhibit a very high degree of co-operation.
– Would it be a treaty?
– There are no new formal arrangements. It comes under the umbrella of the arrangements that were formalised many years ago and involves undertaking a greater degree of co-operation under those arrangements than has been the case in the past. I believe that it will be very beneficial to Australia and to the other countries, which have certainly welcomed Australia’s willingness in relation to it.
– My question is directed to the Minister for Industrial Relations. Does the settlement of the dispute at the Loy Yang power station come within the Conciliation and Arbitration Commission’s wage indexation guidelines? What are the implications for the future of industrial relations in Australia if the terms of the settlement are allowed to proceed?
– As I recall, it has not yet been ratified by the Conciliation and Arbitration Commission but the honourable member will know that, after the announcement by the Premier of Victoria last Friday, I issued a statement and did interviews indicating the Commonwealth Government’s concern. I said then that I had been in contact with the Premier and various Ministers, in particular the Minister for Labour and Industry in Victoria, and that the Prime Minister also had indicated his concern at what was transpiring in Victoria. I said that, although the Commonwealth Government recognised the great cost of the dispute and understood that the Victorian Government was placed in a most difficult position by actions of some contractors and unions, nevertheless we had to deplore what was entered into. As I have already indicated, while recognising those factors and those costs, the Commonwealth cannot support the basis of the settlement that was announced by the Premier. The Government therefore strongly disagrees with the wisdom of the response of the Victorian Government.
– My question is directed to the Prime Minister. Is it a fact that Dr Desmond Ball of the Strategic and Defence Studies Centre of the Australian National University is the author of A Suitable Piece of Real Estate, American Installations in Australia, published by Hale and Iremonger? Is it also a fact that the Vice-Chancellor of the Australian National University, Professor Low, has asked for an explanation of reports that the Australian Security Intelligence Organisation searched Dr Ball’s campus office and kept him under surveillance? Is it also a fact that stocks of Dr Ball’s book were destroyed by fire on 15 November at the warehouse of Allbooks Distributors in Kent Street, Sydney, together with copies of the book Documents on Australian Defence and Foreign Policy 1968-1975 by J. R. Walsh and G. J. Munster? Are these matters being investigated by the same Commonwealth employees who dealt with the Hilton bombing incident after the Commonwealth Heads of Government Regional Meeting in 1978? If so, will he place the investigation in more competent and disinterested hands?
-The honourable gentleman asked a number of questions, or made a number of assertions addressed as questions. I will see whether there is any information that ought to be given to him.
– The Minister for Transport will be aware of the financial loss incurred by Qantas Airways Ltd for the financial year ended 31 March 1980. What action does the Minister contemplate to ensure that there is a compatibility between the requirements of Qantas and the interests of the taxpayers?
– Of course the Government is concerned at the loss incurred by Qantas for the financial year to 31 March 1980, but I think that that loss needs to be put in its proper perspective. The result is not too bad when we take into account the very serious losses that have occurred in international aviation throughout the world. Recently at the Composite Passenger and Cargo Tariff Co-ordinating Conference in Geneva it was revealed that International Air Transport Association members had incurred a loss of SI. 4 billion in the same financial year. Financially, in the last financial year Qantas has fared much better than most of its competitors. When we also take into account that the exchange rate loss of $ 15.6m arose from loans that were entered into in the 1970s, was no fault of Qantas’s and is shown as a loss in the most recent trading year, and when we take the $15.6m loss away from the total loss of $21m, the result is creditable.
I think that we should be proud of the wonderful service that Qantas performs and the task that it does. It is one of the best and certainly one of the safest airlines in the world. However, during the week I will be talking to the Chairman of Qantas - rather than to the honourable member for Reid who is trying to interject - to discuss with him what sorts of measures are available to ensure that Qantas improves its trading performance this financial year and in the years ahead. But rest assured that every action is being taken to ensure that Qantas does not become a burden on the Australian taxpayer.
– I direct my question to the Minister for Employment and Youth Affairs. Now that the Government has finally shown an interest in unemployment, and I hope not only a token one, can the Minister inform the House by what figures the Government plans to reduce the number of unemployed each month for the next three months? What figure is the Government expecting that unemployment will reach or will be reduced to by 1 March 1981?
– Like my colleague, the Treasurer, I have consistently refused to speculate on statistics month by month ahead, quite unlike my former shadow Minister, the honourable member for Port Adelaide, who has consistently forecast an unemployment level of over half a million, and his forecast has never been achieved. What I have done consistently has been to comment fairly and accurately on each month’s figures as they are published by the Australian Statistician.
– Can the Minister for Trade and Resources inform the House of progress with the North West Shelf project? Additionally, can he advise when export contracts for gas from the development will be finalised?
– In 1977 I gave a package to the North West Shelf venturers to enable them to proceed with their negotiations for the sale of liquefied natural gas from the North West Shelf. Since that time there has been steady progress. In November last year I was able to complete the legal formalities for them to enter into long term contracts. In September of this year the joint venturers, after concluding a domestic sales arrangement with the Western Australian Government, announced that they would be going ahead with the project. Recently the joint venturers have been negotiating with five Japanese power utilities and three gas companies to enter into these long term arrangements. I am told that a memorandum of intent is likely to be signed by the end of this month. That will enable them to get into the complex business of long term sales contracts. I am hoping that within the next nine months all of these contracts will be put into place. This will enable one of the largest projects in Australia to go ahead. It will mean annual sales of about $2 billion worth of gas and certainly it will be a milestone in the development of resource industries in this country.
– Is the Minister for Business and Consumer Affairs aware that the South Australian Liberal Government has recently reduced the wholesale price of petrol in that State by 3c a litre? Does the Minister agree that this action was taken as a result of the failure of the Commonwealth’s franchise legislation to have an appreciable impact on the petrol reselling industry? Will the Minister implement a review of this legislation? When can a report on the Prices Justification Tribunal inquiry into petroleum prices be expected? Finally, will the Government take action to reduce the extraordinary range of petrol prices, presently anything up to 15c a litre, faced by Australians?
– I thank the honourable member for Parramatta for his question. The whole area of petrol pricing has been of enormous concern for all petrol users in Australia. The action taken by the South Australian Government and the New South Wales Government in this matter relates completely to the retail price structure. The Federal Government is undertaking an inquiry through the Prices Justification Tribunal and the result of that inquiry should be in the hands of the Government by 31 March next year. I am hoping that we will then be able to discuss the matter with the State governments with a view to getting a common front to pricing in Australia. I think it is worth while pointing out that the freight equalisation component of the pricing structure introduced by the Government has been misunderstood by many people in country areas. I hope that we might give more publicity to this program so that people understand it.
– I ask the Treasurer whether he is aware that sporting goods are taxed. Does the Treasurer enjoy sport? Has he been an active participant in the ‘Life. Be in it’ campaign and does he see any inconsistency between taxing ‘Life. Be in it’ equipment and promoting an active life? Will he examine the amount of revenue collected from that area to ascertain whether it is possible to remove sales tax on sporting goods and hence bring them within the financial reach of even more Australians?
– I can assure the honourable member for Fadden that I am aware of the sales tax provisions relating to sporting equipment. I can assure him also that I enjoy many forms of sport. It would be enormously popular if I were to say that from this day all sales tax on sporting goods would be removed. That would be an extremely popular thing to do. Naturally, the Government would like to examine sympathetically requests for the removal of sales tax on a whole range of things in respect of which there is no doubt that, when looked at in isolation, a good case can be made for the removal of that sales tax. Unfortunately, the Government’s obligation to raise a certain amount of revenue means that it cannot give effect to those aspirations. I acknowledge the incessant campaign that the honourable member for Fadden has waged privately with me on this subject by way of correspondence and otherwise, and I acknowledge also the campaigns of a number of other honourable members. Without wishing to raise the honourable member’s expectations, I can assure him that the Government keeps under constant review the question of whether there are anomalies in the sales tax area. Frankly, I would not be honest if I did not say to him that I do see some problems, to put it mildly, in totally removing sales tax from sporting goods or significantly meeting the request that he has made.
– I refer the Prime Minister to the statement by the Minister for Employment and Youth Affairs on 18 November in which he said of Public Service staff ceilings: ‘There is not a blanket freeze’. I ask the Prime Minister: Did the Public Service Board ask departments on 6 November to freeze staff at the levels prevailing at the end of September, regardless of any progress made towards meeting their staff ceilings for the current year? How long will this temporary freeze last? Finally, does this mean that the Commonwealth Public Service will be recruiting fewer school leavers and graduates next year than it did last year?
– I have had a number of discussions with the Public Service Board in relation to this matter. The Government was concerned with what might flow from the examination of functions because obviously a decision that a Stale should undertake a function, that it should not be undertaken at all, or that it would be better done by private enterprise, has an implication for staff ceilings. We did not want departments to get into a position where they had committed themselves while the Government was undertaking an immediate review of all Government functions. I suspect that some things have not been reviewed for many decades. I am sure that the honourable member would understand the good sense of that.
I wish to make one or two general points about the policy on staff ceilings. There has never been a blanket freeze across all departments. There has never been one rule applied across the whole spectrum of the Commonwealth Public Service. Whilst the number of employees now is 10,000 fewer than it was five years ago, the Department of Social Security is employing 3,000 more people and the Commonwealth Employment Service is employing about 1,000 more people. Recently approval was given for government factories, defence factories in particular, to employ 700 or 800 more people so that defence orders can be filled properly from Australian supplies, rather than be forced to buy from overseas. So there has been a good deal of flexibility within the policy. In addition, there has been a standing instruction that it is not the Government’s wish that services to the public be depreciated as a result of the policy on staff ceilings. I am in the middle of some communications with the Public Service Board over the position that ought to apply until the Government’s review of functions is completed, because after that some adjustments might well need to be made. I think I need to leave the answer as it is at the moment. Maybe I can add to it towards the end of the week.
– I ask the Minister for the Capital Territory how long it will be before Canberra residents can purchase personalised number plates for their motor vehicles. Is the Minister aware that such number plates, as I am advised, are available in Tasmania for $1 1, in Victoria for $25, in Western Australia for $30, in New South Wales and South Australia for $50 and in Queensland for $100? Does the Minister agree that at a minimum price of about $50 substantial revenue could be raised in Canberra through this voluntary personal expenditure?
– In fact, ministerial approval was given by my predecessor to the proposed issuing of personalised number plates in the Australian Capital Territory but it was necessary to bring down an amendment to the Motor Traffic Ordinance to provide for the payment of a fee. Because of pressures on the legislative draftsmen that ordinance has not yet been completed, but I advise the honourable member that the fee which was being contemplated for the Australian Capital Territory for personalised number plates was of the order of $30 to $35. However, I should add that as a result of the action of the New South Wales Government in increasing the cost of personalised number plates from $35 to $50 we will perhaps have to look at an alternative figure. I agree with the spirit of the honourable member’s question and hope to be in a position to give him and other honourable members more detailed information as soon as a final decision is made as to price, availability and the capacity of the draftsmen to complete the ordinance.
– My question is addressed to the Treasurer. Does he, like his colleague the Minister for Communications, believe that large inflows, of overseas funds should be used to keep domestic interest rates down? If so, will he formally announce the Government’s repudiation of monetarism? If not, will he formally announce the Government’s repudiation of the doctrine of collective Cabinet responsibility?
– I have already indicated, I would have thought in quite clear terms, in answer to a question asked last week and also a question asked earlier today, my position so far as the relativity between controlling interest rates and controlling the money supply is concerned. I stand very much by the answer that I gave last week to the honourable member for Hunter.
– I ask the Minister for Communications whether he is aware of general concern, particularly in New South Wales, regarding mail services. Is it a fact that the Country Women’s Association and other bodies have expressed their concern about the possible abolition of the travelling post office? Can the Minister say what plans he has for improving the efficiency of Australia Post so far as mail deliveries are concerned?
– As the honourable gentleman would know, the travelling post office is more than an institution; it has been a very efficient and effective method of mail distribution in country areas. Unfortunately, in the establishing of the Redfern Mail Exchange there were some complications to the mail distribution system in New South Wales. This generated a good deal of emotion and, more than somewhat, a disproportionate level of industrial disturbance. As a result, Australia Post has felt it necessary to change the structure of mail sorting facilities in New South Wales. It is moving back to what I regard as a very commendable form of decentralisation, as a result of which I hope mail services throughout New South Wales will regain something like the reliability which I am assured they have elsewhere in Australia.
In the adjustments that flow from that reestablishment of decentralised mail sorting there will certainly be a maintenance of the travelling post office, at least for the time being. I am assured that the concern of Australia Post is to try to re-establish adequate, efficient and rapid mail distribution. If that can be achieved best by services other than the travelling post office, I think even the honourable member will accept that it should be replaced. In the meantime, I do not think that is so. I am told that it will be preserved for the next 12 months and perhaps longer- at least until such time as alternative and better services have been established to the advantage of the Australian public.
– I refer the Prime Minister to Mr Justice Mason’s ruling in the High Court yesterday and in particular to this remark: lt is unacceptable in our democratic society that there should be a restraint on the publication of information relating to Government when the only vice of that information is that it enables the public to discuss, review and criticise government action.
In view of His Honour’s findings rejecting the Government’s argument on public disclosure and in view of his pointed remarks on the system of security classification of government documents, will the Prime Minister direct a review of the guidelines relating to classification and reclassification so that these guidelines cannot be used by government or by the bureaucracy as a blanket device to prevent public discussion and criticism of government policy, or merely to hide the reasons behind contentious government action, or to preserve the government and/or the bureaucracy from justified public embarrassment for shortcomings in the discharge of their functions?
– At the outset, I would like to say that in some senses this case is still sub judice because it will have to flow on into the New South Wales Supreme Court. The honourable gentleman has asked a question and I will answer it as best I may. If the judgment of Mr Justice Mason is read closely it will be seen that a number of things come from it. For example, Mr Justice Mason also said:
If, however, it appears that disclosure will be inimical to the public interest because national security, relations with foreign countries or the ordinary business of Government will be prejudiced, disclosure will be restrained.
That is an argument which lies on the other side of the argument which the Leader of the Opposition put. It is obviously a very important argument. Without being dogmatic about it, it seems to me that part of Mr Justice Mason’s judgment stemmed from the fact that publication had already been made. Some difficulties might flow from that because, quite plainly, a matter could be highly injurious to the national interest and be something that ought to be restrained within government departments or within a government itself and I do not think that in the view of many people the mere publication of that would make further publication of that document or similar documents something which should be condoned in the national interest.
It might be pertinent to emphasise that the Government has not been seeking to restrain publication of its own documents in this case. There were a few documents relating to the period from 1968 to 1972 but they were not the documents of this Government. The larger part of the documents is documents of the Whitlam Government. So there was no wish on the part of this Government to prevent the publication of some documents which might be embarrassing to this Government, In that vein, I hope that this Parliament will be able to examine the very serious and important issues flowing from this case in a calm and restrained manner and try to come to a conclusion that will certainly be in the national interest.
– Does that mean you will institute a discussion in this Parliament on this matter subsequently?
– I would be surprised if at some stage there was not a debate on the matter. But I think it would be a better debate if it were held once the legal processes had been concluded. The honourable gentleman surely would be the first to concede that departments must have the capacity to advise a Minister for Defence or a Minister for Foreign Affairs fearlessly and without prejudice. Some of the documents which were published were briefing notes for Ministers going to South East Asia or to the United States for discussions with their counterparts. Quite plainly that advice has to come in a form which is without fear or prejudice. It has to give the Minister, no matter what government he might belong to, the best possible knowledge, background and information about the people with whom he will be dealing. One has only to state that proposition to understand that if that kind of advice is to be given to a Minister in the best possible way it can easily contain material that in the national interest ought not to be published. Indeed, some of the advices that appeared in the book were of that very character. In my own view some of the advice carries forward over a period. Counterparts are still around, and sensitivities might still be in existence.
That is only one level at which clearly a public service needs to be able to speak confidentially to Ministers. Many areas of communication between governments require confidentiality. I noted one point in the judgment: The conclusions that were reached in certain matters were ones that on the known and stated facts virtually anyone in the community could have reached. Sometimes the very fact that a government has come to a particular conclusion over a strategic or tactical defence matter is still a judgment that in the national interest is best kept to itself even though it might be the kind of judgment that many other people on the basis of public knowledge would have made. The sensitive matter concerning relations between nations is something which I am sure the Leader of the Opposition recognises needs to be handled with sensitivity and care.
It seems that over recent time there has come to be a view that if a document becomes available, by whatever means, it is appropriate, right and, indeed, some would even argue, moral to publish it, no matter what the impact on the national interest. That is not the view that this Government would take; it is not the view that this Government, I believe, will ever take. There are occasions - and very substantial ones - in the normal daily conduct of a nation’s affairs, when a government has to be able to conduct its business with discretion and with concern for its relations with other countries and at the same time to enable Ministers to represent, in the best possible way, the nation’s affairs with the best, frankest and plainest advice possible. Against that background I think a good deal of force is given to Mr Justice Mason’s sentence which I mentioned earlier: If a matter is to be against the national interest, disclosure will be restrained.
– But that is not in conflict with the proposition I put to you in the question.
– It is not in conflict with the question. Quite plainly, matters should not be restrained merely to avoid public debate. I believe that that would be quite wrong. That sentence, taken by itself, is an unexceptionable one. We need to look at the sentence that the Leader of the Opposition took and the sentence that I took, relate them to the categories of information, advice or material that might come to us from other friendly governments, and then judge which sentence should apply in each case. That is where matters of judgment and so on lie. I am sure that the honourable gentleman would not support one of the comments on AM this morning which allegedly gave reasons for the non-publication by the Labor Government of certain informations between 1972 and 1975. Admittedly the person who made the comment should have been in a position to know, but I am not taking that as categoric and necessarily accurate evidence. If the honourable gentleman supported that contention I think it is particularly unfortunate, and in the spirit of this discussion I hope he will repudiate it.
– My question is directed to the Minister for Administrative Services. During the recent 1 8 October election many anomalies again became evident. Will the Minister advise whether changes to the Commonwealth Electoral Act are proposed, firstly, to reduce the closing time for polling from 8 p.m. to 6 p.m.; secondly, to remove the necessity for polling clerks to ask each voter whether he or she has voted previously; and, thirdly, to include on the ballot papers the political party affiliations of the candidates?
– The honourable member for Dawson raises very important questions which concern the administration and the conduct of elections. I am sure that he and other honourable members also have noted comments that have been made by other individuals and parties. The sorts of things he asks about and the suggestions that have been made in the Press by various other people raise very important and complex matters which have wide ramifications. At present the Chief Electoral Officer and I are examining the Commonwealth Electoral Act and the conduct and the administration of elections. I am also looking at the comments printed in the Press. When that examination, which covers the issues raised by the honourable member for Dawson, has been completed, I will be in a position to report to the Government.
– Has the Minister for Defence seen a report appearing in the Canberra Times of 1 December 1980 concerning the existence of a network of underwater sensors off the Western Australian coast connected with an American project code named Caesar Sosus? The article maintains that there are hydrophones on the edge of the Western Australian continental shelf connected to shore stations by a system of strong cables. Can the Minister confirm the existence of that network? Can he say whether there are shore stations connected with it on the Western Australian coast? If there are, can he say whether the operation of the stations is under Australian control? If not, to what extent are Australian Service personnel associated with the project?
– I am informed that there is no foundation whatsoever for the article. I think that the author was probably confusing that matter with an operation carried out by the Royal Australian Navy Research Laboratory. I think that operation, based on Christmas Island, was called Flowerless’ and was in existence over a period of 10 years from 1968 to 1978. That is my clear understanding and, as I say, the article is without foundation.
– I direct a question to the Minister for Primary Industry and inform him that I have received many telegrams and approaches from primary producers in my electorate expressing great dissatisfaction with drought relief aid. I ask the Minister whether he has again approached the New South Wales Minister for Agriculture, Mr Hallam, and what has been the response.
– I certainly am aware of the honourable member’s concern for the effects of the drought that is ravaging parts of New South Wales because he has been forwarding to me copies of the worries and complaints his constituents have been sending him. Following a question asked by the honourable member for Macarthur last week, I did in fact, as I said I would do, telex the New South Wales Minister for Agriculture seeking confirmation of a Press story following his meeting with me regarding the easing of the requirements for farmers to obtain loans by way of deed of charge. As I explained last week, I understand that when an application is received by the Minister he will make some $5,000 available while the other procedures are being dealt with to see whether the farmer is eligible for a loan of $20,000. I have not had confirmation of Mr Hallam’s receipt of the telex or any information in regard to it. Following this question I will remind Mr Hallam that the Commonwealth stands ready to make it easy for New South Wales to agree to the proposals that I put to him a couple of weeks ago.
– Pursuant to section 28 of the Oilseeds Levy, Collection and Research Act 1977, I present the third annual report for 1979-80 of the Oilseeds Research Committee.
– For the information of honourable members I present a summary of resolutions and recommendations of the eighteenth meeting of the Australian Forestry Council held at Hobart on 1 August 1980.
– For the information of honourable members I present the annual report for 1979-80 of the Foreign Investment Review Board.
– For the information of honourable members I present the annual report for 1979-80 of the Department of Employment and Youth Affairs. Incorporated in the report is the annual report for 1979-80 of the Commonwealth Employment Service, which is presented pursuant to section 22 of the Commonwealth Employment Service Act 1978.
– For the information of honourable members I present papers and summary of discussions of the seventh International Trade Law Seminar held at Canberra on 28 and 29 June 1980.
– Pursuant to section 33 of the Commonwealth Legal Aid Commission Act 1977, I present the third annual report for 1979-80 of the Commonwealth Legal Aid Commission.
– For the information of honourable members I present the annual report of Aboriginal Hostels Ltd for 1979-80.
– For the information of honourable members I present the Aboriginal Land Commissioner’s report on the Utopia Aboriginal land claim.
– For the information of honourable members I present the annual report for 1979-80 of the Department of Aboriginal Affairs.
– Pursuant to section 30 of the Australian Institute of Aboriginal Studies Act 1964, 1 present the annual report for 1979-80 of the Australian Institute of Aboriginal Studies.
– Pursuant to section 29 of the Aboriginal Land Fund Act 1974, I present the annual report for 1979-80 of the Aboriginal Land Fund Commission.
– For the information of honourable members I present a report by Mr B. W. Rowland Q.C. on the examination of the Aboriginal Land Rights (Northern Territory) Act 1976-1980, together with a text of a statement by the Minister for Aboriginal Affairs relating to the report.
– For the information of honourable members I present a report of the 1979 work program on the management of former United Kingdom weapons test sites in Australia.
– Pursuant to section 45 of the Pipeline Authority Act 1973, I present the seventh annual report for 1979-80 of the Pipeline Authority.
– Pursuant to section 38 of the Australia Council Act, I present the annual report for 1979-80 of the Australia Council.
– For the information of honourable members I present the annual report for 1979-80 of the National Women’s Advisory Council.
– For the information of honourable members I present a report of the National Women’s Advisory Council entitled ‘My Child was Bom Disabled’.
– For the information of honourable members I present a report of the Bureau of Transport Economics entitled ‘Demand for Sea Passenger Transport Between Tasmania and the Australian Mainland’.
– Pursuant to section 7 of the National Railway Network (Financial Assistance) Act 1979, 1 present an agreement between the Commonwealth and the State of Western Australia. This agreement relates to the provision of financial assistance to upgrade a main railway line.
– Pursuant to section 44 of the Commonwealth Serum Laboratories Act 1961, I present the Commonwealth Serum Laboratories Commission’s annual report for 1979-80.
– For the information of honourable members I present the annual report of the Australian
National University for the period 1 January 1979 to 31 December 1979.
– For the information of honourable members I present the annual report for 1979-80 of the former Department of Science and the Environment.
– For the information of honourable members I present the annual report 1979-80 of the Commonwealth Fire Board.
– For the information of honourable members I present the report of the Industries Assistance Commission on electric motors, generators and rotary converters.
- Mr Speaker, I claim to have been misrepresented for the third time on a matter.
-Does the honourable gentleman wish to make a personal explanation?
– Yes, I do. In the article ‘Candid Comment’ of last Sunday’s Sun-Herald there was another article by the author, I suppose Maximilian Walsh, in which he complained about what happened between 1974 and recent times in relation to promises made or the philosophy of the Liberal Party and its failure to live up to that philosophy. He mentioned that the Government has not lived up to what should have been done in relation to increases in interest rates. He then goes on to say:
It was a victory for sectional politics over undeniable economic logic . . .
I object to the fact that he said:
The last time we had such an episode was in 1972 . . .
He has referred to this matter two or three times in his paper and on each occasion in the House I have stated what happened. Walsh went on to say:
When the Country Party held down a full revaluation of the Australian dollar . . .
At that time, you, Mr Speaker, were the Treasurer and I was the Prime Minister. Far from the National Country Party’s holding down a full re-evaluation you will remember the facts. You must and so do 1. 1 wanted a 6.32 per cent revaluation of the Australian dollar as Prime Minister and you wanted an 8.75 per cent revaluation as the Treasurer. But what about my friends in the Country Party? They wanted nothing. These are facts, not biased comment. This House has to make up its mind whether it believes Maximilian Walsh is right or whether I am right. I dislike saying this in your presence–
– Or perhaps I was right.
- Sir, I think it was I who won the victory. Then Maximilian Walsh goes on to talk about undeniable economic logic. Sir, as you know, the facts are that at the end of 1972 the economy was in better shape than it has ever been either before or since. The Australian Labor Party inherited a kingdom from which it was able to benefit for the next 18 months and which you, as Treasurer, left behind you as a memorable episode in your parliamentary life. Your success as Treasurer was backed by me as the Prime Minister. I only hope that he will stop writing these articles. They are not irritating; Walsh knows they are not true. He knows that he was defeated on television so he should resign himself to the facts.
-The right honourable gentleman has made his point. It was suggested to me that I interrupt earlier but I do give the right honourable gentleman more latitude than most, especially as he was saying nice things about me. I felt I ought not interfere.
- Sir, I took advantage of that.
-The first paragraph of the decision of Mr Justice Mason of the High Court of Australia in the case of the Commonwealth of Australia and John Fairfax and Sons and others reads:
This is a motion to continue ex parte injunctions which I granted at about I2.4S a.m. on Saturday, 8th November 1980, restraining the defendants from publishing (a) a book entitled Documents on Australian Defence and Foreign Policy 1968-75’ or the contents thereof or excerpts or extracts therefrom; and (b) documents entitled ‘The Strategic Basis of Australian Defence Policy’ written by the Department of Defence in 1968 and ‘The Regional Outlook in South East Asia’ produced by the Department of Foreign Affairs in 1 975 or the contents of either of them or any excerpts or extracts therefrom.
The case of the Commonwealth of Australia and Richard Walsh and George Munster was a companion case in which an ex parte interim injunction had been granted to prevent publication or distribution of the book by the publishers. In his decision Mr Justice Mason said:
In the circumstances the plaintiff is entitled to an interim injunction.
That decision of Mr Justice Mason declined to grant an injunction preventing publication of the book on the grounds of breach of confidentiality or a breach of the Crimes Act. We are left to consider the question as a matter concerning copyright upon which ground the injunction was granted. My further consideration since Thursday last, 27 November, when the matter was raised has led me to conclude that no issue of privilege is involved. My reading of Mr Justice Mason’s judgment does nothing to subtract from this conclusion. His Honour granted an interim injunction which will prevent the distribution of the book. However that injunction is not directed to the Parliament nor any officer. Specifically there is no injunction directed to the Parliamentary Librarian or any officer of the Parliamentary Library. It is apparent from the judgment of Justice Mason that the form of relief represented by the interim injunction, pending the determination of the issue of breach of copyright, is the best form of protecting the copyright owner as distinct from his being able later to obtain damages.
The issue here is whether members of Parliament should be deprived of material, namely a book, which they may put to use in the discharge of their parliamentary duties when that material is in the possession of the Library. The immediate answer to that question is on its face that honourable members should not be so deprived. There is however another consideration, namely the propriety of such publication to honourable members against the background of the relationship between the judiciary and the legislature. Such consideration leads me to conclude that the action of Parliament to allow its members to be informed should not have the effect of broadening the distribution or publication of the book or the contents of the book which the Court’s injunction is designed to arrest. It may be asked: To what use can the honourable member put his reading of the book if he cannot take copies? In the judgment of Mr Justice Mason he drew distinction between comment on the ideas and material of the copyright as distinct from reproducing the copyright. Accordingly, any honourable member would be entitled to make personal notes for use in debate should that arise. Members of Parliament can have access to the book without that consequence. Accordingly we, that is, the President and I, have directed the Parliamentary Librarian to put the book in the charge of the Head Librarian, Mr MacLean, to be available to any honourable senator or honourable member but will be not otherwise available. While honourable members or honourable senators have full freedom to read the book it is not to be copied because that would facilitate further publication which would be contrary to the spirit of the injunction. Because there is only one copy of the book for convenience of honourable members we have directed that it be not taken away from the reading room.
- Mr Speaker, having listened carefully to your decision and reasons I seek to raise a matter of privilege and I ask you to refer this issue to the Privileges Committee. In so doing–
-I interrupt the honourable gentleman. The honourable gentleman indicated to me that he may wish to raise a matter of privilege. The rules have been, and are, in fact, that it should be raised at the first available opportunity. But as I gave him indulgence last Thursday I indicated that I would give him indulgence consequently today, but not in any way to subtract from the rule about raising the matter at the first opportunity for ordinary matters of privilege.
– I do ask you to refer this matter to the Privileges Committee. Having listened carefully to the reasons which you have advanced to the House and which place honourable members in a situation where we can now read the book within the confines of the Parliamentary Library, but we must desist from making any copies or notes in respect of the book which may be relevant–
-I interrupt the honourable gentleman. He will be perfectly entitled to make notes.
– I see, sir. I still ask that this matter be referred to the Privileges Committee. I do so on this basis: Whilst the limited right granted by you and the President certainly marks a considerable step forward to that position which the House found itself in last week, it does seem to me that there is still a very basic issue involved and that is the rights of members of Parliament to have free access to all material that is in the possession of the Parliamentary Library as of right. I do not want to take up the time of the House in canvassing the issues that I addressed to you last Thursday. I will put my case in this way: The arguments which were addressed to Mr Justice Mason in the High Court were put at three levels. Firstly, it was argued that the documents were protected because they were confidential. Mr Justice Mason determined that confidentiality would be determined by the public interest. Unless disclosure is likely to injure the public interest, it is likely to be protected by the courts. The Commonwealth also had rejected the argument that publications could involve breaches of the Crimes Act. As you have indicated to the House, sir, basically the injunction was granted on the very narrow basis of copyright.
Mr Speaker, that has created a situation which I believe you, as the custodian of the rights and privileges of this House, ought to take into account. Both the Sydney Morning Herald and the Age have indicated their intention to publish further material relating to the book as soon as possible so that there can be no doubt that the issues, as canvassed in that publication, will be very much a matter of public knowledge and very much a matter of public debate. We find ourselves in the difficult situation that it will be easier for us, as a matter of convenience and work, to rely upon the second-hand account as published in the Age or the Sydney Morning Herald than to rely upon the material itself, which is available in the Parliament and ought, in my view, to be freely available to all members of the Parliament. It is not as if anybody in Australia or in this House can seriously assert that secrecy remains, or will remain, in respect of this publication. I invite you to look at that portion of Mr Justice Mason’s judgment where he pointed out that at least 100 copies of the book had been sold, including five copies to the Indonesian Embassy and one to the United States Embassy. It seems that foreign embassies in Australia will have greater freedom in their dealings with this publication than members of this House, even in the situation that you have now indicated.
The point I want to address to you most strongly is that the right of the Parliament as a whole to be in charge of itself is quite fundamental to the whole system of parliamentary privilege. The right of honourable members of the Parliament to unrestricted access to the material, publications and documents in the possession of the Parliamentary Library, which is our own library, is an integral part of that system. To put the case another way, if the Presiding Officers had been concerned right at the outset to assert the right of parliamentarians and had directed that this book be made available to any honourable member who required it, you, sir, with your legal background and knowledge, would feel quite confident that that right would not be challenged in any way, either by the Commonwealth or by any private citizen, in terms of our courts. Certainly, the courts would not have entertained it for the very simple reason that it would have been open to any member of the Parliament–
-I ask the honourable gentleman to speak in terms of the privilege issue which he is raising.
– I am coming to that.
-I would like the honourable gentleman to come to it quickly.
- Mr Speaker, the point I am making is that if you had been prepared to stand behind and assert the rights of members of the Parliament on this issue - I am talking about a situation last Thursday - rather than talk about the courtesies that ought to have been extended to the courts, any challenge to that position would have been protected by the courts themselves under the doctrine of the privileges of this Parliament. That would have been open to any honourable member in that situation. It is, indeed, a very odd view of parliamentary privilege for it to be invoked to protect a member in a situation in which a member’s rights are asserted and for it to be denied, and the existence of privileges to be denied when the member’s rights are denied.
– I raise a point of order. With due respect to the honourable gentleman, I suggest that he is now canvassing the ruling that you made last week on the matter of privilege rather than canvassing a new matter of privilege which he suggests has emerged from the ruling you have given today. In respect of the decision you have given today, you have ruled, as you have explained to the House, that the books are now available through the custody of the Parliamentary Librarian. As such, there can be no question of privilege because they are available to members of the Parliament. The only restraint you have imposed is one that flows from the decision of the court itself. If the honourable gentleman has a matter to raise, it can only be about a question of privilege that arises out of the statement you have made to the chamber. Nothing in the honourable gentleman’s speech is in any way related to anything that emerges from your statement to the House today. His points are related only to your decision last week which he is now canvassing. I suggest that there is no matter of privilege for you to hear or for the chamber to take time in considering.
-The right honourable gentleman is correct. I was giving the honourable member for Melbourne Ports considerable tolerance in raising the matters which he is canvassing. I ask him to raise a specific question of privilege relating to the ruling given today.
– I will narrow the specific way in which I put my case to the simplest possible form. Mr Speaker, today you have conceded to the House a limited right of access. I do not think that is denied either by you or by any member of the House. My assertion is, first of all, that the minute the book became the property of the House all honourable members had an unfettered right of access, a free right of access, which you saw fit to curtail in a ruling last Thursday, being of the view that that was part of an exercise in courtesy which ought to be exercised by the House in terras of its relationship with the Executive and the judiciary. Today, you have said that, having regard to the ruling of Mr Justice Mason, members of the House will now be entitled to a limited right of access. The point I am concerned to address to you is that once any material or book becomes the property of the Library it becomes the property of the Parliament and all honourable members have an automatic right to that material, that that right will be protected by the privileges and usage of the Parliament and that to grant members a limited right in this situation is, with great respect, to mistreat the spirit, intent and purport of Mr Justice Mason’s decision. On page 7 of the decision, Mr Justice Mason said:
It is unacceptable in our democratic society that there should be a restraint on the publication of information relating to Government when the only vice of that information is that it enables the public to discuss, review and criticise government action.
If that is true about the public, how much more true is it about the Parliament and members of the Parliament? To interpose words, the only vice of that information is that it enables the Parliament or members of the Parliament to discuss, review and criticise government action. Mr Speaker, if you are prepared to accept my basic proposition that privilege flows to protect the right of a member of the Parliament to access to material in his own Parliamentary Library, a limited right of access is a limitation upon that right and is therefore a limitation upon the privileges of the Parliament. As Speaker, you are the custodian of those privileges. I concede fully that on a matter–
-The honourable gentleman has surely covered his point now.
– There are a couple of other points I would like to put to you. After all, it is a fairly important matter. Whilst the Government might have some business to press on with, I would have thought that it could spare some time to debate this matter.
-The honourable gentleman will make his point and come to it quickly.
– I refer to the second aspect of the argument. I believe, Mr Speaker, that if you look at what Mr Justice Mason has done you will see that he has created a situation in which the principal heads of the Commonwealth Government’s arguments have been rejected. They have won on a narrow point which does not stop the substantive publication of the substance of this material. In this situation I believe that the right of access of the member, protected as it is by privilege, ought to be granted by you and that we should have no less rights than the public. On the radio today–
– I raise a point of order.
– If the right honourable member would let me finish–
– The honourable member for Melbourne Ports will resume his seat. A point of order has been raised by the right honourable gentleman.
– Mr Speaker, the honourable gentleman is again contesting your decision. There is no question of a limited right. The only limitation is on copying and copying is not a party to the right. The copying follows from the exercise of the right. I suggest, Mr Speaker, that you have placed no limitations on the right of access. The only limitation is that the book shall be held in the Library because only one copy is available. That does not produce a restricting of rights, other than for normal administrative reasons. The only limitation is one with respect to copying and it flows directly from the judgment. I suggest therefore that there is no basis whatsoever in the claim being made by the honourable gentleman.
-The right honourable gentleman is correct. I will come to that point in a moment. Would the honourable member for Melbourne Ports like to conclude with his third point?
– Yes, Mr Speaker. I conclude on this point: What is occurring in the community at large today is relevant. This morning on 2SM and 3K Y, on the basis of information contained in this book, Mr Oakes, a prominent political journalist, raised two issues. One was the security of Australian Mirages stationed at Butterworth and the other was that in 1975 Mr Pritchett, now the head of the Department of Defence, was of the view that, in the event of hostilities between Australia and Indonesia, the Government of the United States would not necessarily come to Australia’s assistance. Those points raise two issues which will be a matter of public concern and of debate. It was a–
-The honourable gentleman will state the relevance of that point to the issue of privilege.
– The relevance is that under your ruling, Mr Speaker, if I want to check those points I face a restriction in the way in which I do that whereas the other method that is available to me is to simply go to Mr Oakes and ask him to lend me a copy. If I have a copy or if I am given a copy, is there any limitation on the right to copy that particular material that has been provided to me? That is to say, if a member of parliament is in possession of this material, by virtue of the fact that he has purchased it, that he borrows it or goes to a journalist, he can copy as much of it as he likes and presumably use it in any way that he likes but, Mr Speaker, within the confines of your ruling, his rights in terms -f the use of his own facilities in his own Parliament are much more limited. That is the way I put it. I believe that the issue raises a matter of such general importance that it ought to be referred to the Committee of Privileges so that it can, in its wisdom, come back to the Parliament with a statement as to the rights, duties and obligations cast upon members in respect of the use of material available from the Library and the obligations upon the Library to see that such material as is in its possession is freely available to members of parliament under all circumstances.
– Firstly, I do not find that there is any prima facie issue of privilege here as would warrant the issue of privilege taking precedence over all other business. For there to be an issue of privilege it must be established, to my satisfaction, on a prima facie judgment, that a member of the Parliament is unable to exercise his duties within the Parliament. The fact that a member of the Parliament does not possess information has never been held to be such as would interfere with his capacity to fulfil his duties in the Parliament.
Secondly, I must point out to the honourable gentleman that there is no limited right of access at all. There is complete access, as I have indicated, to members and senators but not otherwise. Members and senators can take whatever notes they wish for use in debate, if debate ensues. I am not willing to allow photocopying of the book because to do so would only enable the person taking the photocopying to publish portions of the book or for that matter, carried to the end degree, the whole of the book, which would be quite contrary to the injunction which is being continued by His Honour Mr Justice Mason of the High Court of Australia after the ex parte injunction. After the hearing on motion he continued it on.
I had to balance the fact that this Parliament is bound by the law. If this Parliament attempts to put itself above the law, this Parliament will lose the respect of the people who elect the members to the Parliament. Never has privilege been used to put the Parliament above the law. It was attempted centuries ago but it was rejected. We cannot put ourselves above the law. As members of Parliament there are certain things which we are entitled to do so that we can carry out our duties as members. One thing we are not able to do is to insist that persons in possession of information must make it available to members of Parliament. The second is that we do not have the right to insist that orders of court, which apply to all the other citizens of this country, ought not to apply to citizens who happen to be members of the Parliament.
If there was a direct inference with the capacity of the honourable member for Melbourne Ports to carry out his duty, as a member of the Parliament, the matter would become an issue of privilege. He has not satisfied me of that, either on Thursday of last week or today. He has put his argument in a way which carries no strength at all. He said that there should be free access as of right. There is free access. Whether it is as of right must be qualified and that is that the honourable member will not be put above the law by me. When he seeks to be put above the law and not to be influenced, subject to the injunction process that has been delivered by a Justice of the High Court, I do not accept it.
As to the fact that the Age or the Sydney Morning Herald has announced that it will print some material, that is a matter for each newspaper and for the courts; it is not a matter for this Parliament. The fact that either or both may publish some or all of the material is a matter for the courts to deal with. If either publishes some material it may not be in breach of the injunction because His Honour Mr Justice Mason made the point that there is a difference between publishing the copyright and publishing material in relation to it. I have indicated to the honourable member that when he reads the book, if he chooses to do so, he may make notes. He will be perfectly in order, within the concepts of the injunction, to make comment as to the material but not to publish the copyright. That is why I will not permit photocopies to be made of it.
I refer to the convenience of access. There being one copy, it is, of course, much better for it to be kept in one place so that all members can have access which they can arrange cordially among themselves. I deny the request of the honourable gentleman to refer this matter to the Committee of Privileges because I am not satisfied that there is a prima facie issue of privilege.
– For the information of honourable members I present the report of the Industries Assistance Commission on certain goods made from certain carbon or graphite.
– For the information of honourable members, I present a report of the Industries Assistance Commission on musical instruments and parts and accessories therefore.
– In pursuance of section 30 (k) of the Industries Assistance Commission Act 1973, 1 present the annual report of the Temporary Assistance Authority for the year 1979-80.
-I have received a letter from the honourable member for Blaxland (Mr Keating) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the Fraser Government to ensure the most effective allocation of national resources by the use of its foreign investment and public infrastructure financial powers, as exemplified by the misallocation of resources in respect of the ALCOA project in Victoria and the subsidisation of the project by the community.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the Standing Orders having risen in their places -
– The Opposition proposes this matter of public importance to call into question the Government’s lack of policy in respect of national resource allocation, particularly in relation to the aluminium smelting industry at a time when the Government is poised to give financial approval to the Alcoa project in Victoria. This imminent decision by the Government will signal the start of the Alcoa smelting project at Portland with the beginning of site preparation and construction.
Australia is the largest producer of bauxite in the world. To maximise the benefits from the mining and export of this low valued commodity it makes sense for Australia to process this material into ingot aluminium. In doing so the value of the produce is increased at least 100-fold. Bauxite mining has produced some major environmental problems, particularly in Western Australia. It adds insult to injury to think that at considerable environmental cost bauxite is then exported from Australia at a price which virtually guarantees the Australian community no return for the dislocation of lands and the depletion of the resource. Bauxite mining with a sole view to export accompanied by transfer pricing practices makes no sense for Australia at all, nor does alumina exporting for that matter.
Alumina is sold within the integrated structures of international aluminium companies with the producing nation having no real guide as to its real worth. Under the Fraser Government’s policies there has been no attempt to come to terms with bauxite and alumina pricing for export. It is a case of Rafferty’s rules. The only certain way Australia can get its just value from the bauxite and alumina industries is to process these commodities into aluminium. Aluminium is a world traded commodity with a definable world price. The production of this metal should allow the Australian public to extract its rightful return from the mining of bauxite, the refining of alumina and the smelting of the metal, provided that the Government’s taxation policies are designed to reap the maximum benefit. It simply makes sense to smelt and sell aluminium. The question to be determined is on what basis and at what rate should the smelting industry be developed. Here the Fraser Government has let Australia down. It talks about a resources boom but it has abrogated its responsibilities to secure real and lasting economic benefits from such a boom.
In terms of a national approach to national development, particularly in respect of aluminium, the Government is lacking in four areas of policy: First, its failure to develop an integrated national energy policy with appropriate attention to power generation; second, its lack of economic planning to minimise competitive structural damage and to extract clear economic benefits; third, its irresponsibility in terms of physical resource use and depletion; and fourth, its incognisance of the social and regional implications of large rapid development programs. All the way along the Government has fumbled the ball. It is a case of letting it all - the good, the bad and the ugly consequences of its development policies - come out in the wash.
The Fraser Government has not had the courage or the forethought to lead the States into a national consensus on this issue. States with considerable concern for growth and employment in the wake of the mid-1970s recession have sought to develop industries on terms and at rates incongruous with the national interest. Canberra has constitutional charge over the national economy. Consistent with this it should have provided the policy framework and co-ordination necessary to allow the aluminium industry to grow in relative harmony with other sectors of the economy. As it is, the Commonwealth’s approvals for infrastructure borrowings will have dramatic effects upon the costs and availability of domestic money leading to a dramatic rise in interest rates and a movement of capital away from areas such as housing and public facilities. The more traditional areas of commerce and industry will face difficulties in securing capital on reasonable terms. The same will be the case with the price of skilled labour. Demand for skilled tradesmen will far outstrip the supply with the likelihood of higher wage rates resulting from this very acute demand.
The size of the public sector, which the Prime Minister (Mr Malcolm Fraser) pretends is the root cause of our economic problems, will expand under the Fraser Government as it has never done under any other government in our history. The expansion, though, will be for industrial infrastructure for industry owned by the public, financed by the public. It will not be the kind of public sector expansion which serves members of the public as individuals and generally lifts the quality of life. The public expansions that this Prime Minister has agreed to are not even on terms and conditions which guarantee the public a fair return on its money. In many cases it is a matter of subsidising large international corporations. There is no talk here about an adequate return on risk capital - that old refrain we so often hear from the Government benches. As far as the Fraser Government is concerned, the public can take any risk, bear any burden, in the interests of high corporate objectives. No wonder Mr Fraser is welcome at the exclusive financial clubs in New York and London. He governs Australia with the trappings of a responsible democracy but with the policies of a banana republic.
But nowhere has the Government’s financial promiscuity been more evident than in its dealings with its blood brothers in Victoria. I think it was Alfred P. Sloan, the President of the General Motors Corporation, who said: ‘What is good for General Motors is good for America’. Like Alfred P. Sloan, Mr Fraser believes that what is good for the Victorian Liberal Party is good for Victoria.
-I interrupt the honourable gentleman to ask him to use the parliamentary term for the Prime Minister.
- Mr Speaker, the Prime Minister believes that what is good for the Victorian Liberal Party is good for Victoria. It is on this basis that the Liberals will countenance any industrial proposal, no matter how risque, to underwrite the political longevity of Premier Hamer and his Government. This week we have news, via Premier Hamer, that the Treasurer (Mr Howard) is about to grant approval for the foreign investment arrangements associated with the Alcoa smelter at Portland. In granting such approval the foreign investment policy of the Government requires the Government to examine proposals’ in terms of ‘net economic benefits to Australia’.’ In the booklet entitled A Guide for Investors 1 979-80 it is stated:
The Government is required to judge a proposal on the following criteria.
This is criteria which have been outlined in the past in statements by former Treasurers on foreign investment policy. I will just read a couple of the points. Paragraph (b) states:
Whether the business or project concerned could be expected to be conducted in a manner consistent with Australia’s best interests in matters such as:
. Local processing of materials and the utilisation of Australian components and services.
Paragraph (d) states:
The extent to which Australian equity participation has been sought and the level of Australian management and control.
Paragraph (e) states:
Taxation considerations, including the manner in which the proposal is to be financed.
The booklet goes on to say:
Where proposals concern areas of the economy in which foreign ownership and control is already extensive or would become extensive as a result of the implementation of the proposal, the Government expects to see significant economic benefits and/or significant Australian equity participation before approval is granted.
Perhaps the Treasurer will refer to some of these criteria when he announces approval for Alcoa’s Portland smelter. Perhaps he will refer to the net economic benefits and give the Government’s view of the costs and benefits of the project. He may even refer to that part of the quotation I have already read in respect of the utilisation of Australian services such as the $700m cost to the Victorian public for the provision of 900 megawatts of power generation capacity for the smelter. The Treasurer may also explain the provision of Australian services in terms of the $79m currently projected to be outlayed on the provision of a transmission line between Geelong and Portland.
If one were to look at the cost of building the line from the La Trobe Valley to Geelong it would be as much as $250m to $300m. Perhaps the Treasurer might also explain why the State Electricity Commission of Victoria, which normally pays S.5 per cent of its turnover to the State Government as a turnover tax will be absolved of this responsibility for a 10-year period in the case of Alcoa. Is the Treasurer sure there is no denial of economic benefits here in the virtual subsidy by the Government of the State Electricity Commission so that the Commission may provide power discounts to large customers?
The Treasurer might talk about the provision of Australian services in the mindless burning of natural gas for power requirements in a State lousy with coal - gas from a very finite reserve in Bass Strait. The Minister for National Development and Energy (Senator Carrick) might explain why the Government permits this energy atrocity while it lectures everyone else on the need for high fuel prices to secure the correct allocation of fuels. Is it not a fact that the Victorian Government has been completely incompetent in its power development planning and that, in allowing the Portland project to go ahead, the whole of the Victorian grid will be straining to meet the demand? Is it not a fact that natural gasfired turbines will now be used for base load generation - I repeat, base load generation - to accommodate the demand of the aluminium industry, with large increases in power generation costs? Is it not also a fact that Premier Hamer has had the Prime Minister request the New South Wales Government to enter into joint powersharing discussions because of the looming power shortages in Victoria in the late 1980s? Is it not a fact that Victoria is the lowest common denominator among the States in the price of its electrical power for large customers, and that this policy of mere cost recovery has jeopardised the income of all other State electricity commissions? The Victorian State Electricity Commission is offering power to Alcoa at just on half the average rate charged to other industrial consumers. The Treasurer might mention the $4m outlaid by the Portland Harbour Trust for a new berth at Portland while the company will be required to build only an enclosed conveyor. Admittedly, some wharfies’ rates will need to be negotiated but, again, at what rate?
The House will be most interested in the Government’s enumeration of the clear economic benefits of the Portland project so that the Parliament may know upon which criteria the Government will permit the ongoing development of the aluminium industry. Further, the House will be interested in the enunciation of a national policy to facilitate development which provides clear and unassailable economic benefits to this country but which harmonises, as far as is practicable, the development of a burgeoning primary export sector in the company of the more traditional areas of the economy.
– I draw the attention of honourable members to the presence in the gallery of members of the Norwegian Shipping Delegation. I extend a welcome to the delegation.
Honourable members - Hear, hear!
– In responding to the matter of public importance raised by the honourable member for Blaxland (Mr Keating)-
– I wish to raise a point of order. I do not wish to take up the honourable member’s time, and I will not do so, but frankly it is a disgrace that a Minister is not answering this matter. It is a disgrace for a backbencher to answer a matter like this which has been raised by the Opposition.
-Order! There is no point of order.
– The point raised by the honourable member for Blaxland is of some relevance. As I will explain shortly, it is quite obvious that the matter he raised is totally out of order, anyway. The honourable member expressed concern about the supply of power to industry at cheap rates. It seems rather strange that in a matter of public importance he has raised specifically the question of the Alcoa of Australia Ltd project in Victoria. I am sure that, in reality, he was referring to the decision by his own party’s Government in New South Wales to provide power in that State at even cheaper rates.
– They are not doing that. That Government is not taking natural gas -
– The honourable member for Blaxland should be quiet because I was quiet while he was talking. He appeared to be complaining about the actions of State governments. It is interesting to note that the New South Wales Premier, Mr Wran, who no doubt is well known to the honourable member has recently made a strong defence of the practice of State governments seeking to attract this kind of industrial development. For example, when referring to the Hunter Valley smelter Mr Wran claimed that the industry would create at least 10,000 jobs and perhaps several thousand more. Of course, that is not of very great importance to the honourable member for Blaxland and his colleagues.
For some of the points that Mr Wran has made I refer to a report in the Sydney Morning Herald of 13 November. Mr Wran said that it was misleading to compare the domestic electricity tariff with bulk tariffs charged to big consumers because it costs much more to supply power through a 240 volt plug than to supply it in bulk at 50,000 volts; that contracts for supply of electricity to smelters are signed up to six years in advance; that power supplied to smelters could be interrupted for short periods at the discretion of the Electricity Commission, greatly reducing the need for reserve generating capacity; that power is supplied to smelters at a constant rate, 24 hours a day; that the smelters pay for an agreed amount of electricity whether they use it or not; and that the coal used to generate electricity is not of export grade and is not wanted by consumers in Japan. Those are some of the reasons advanced by a Labor State Premier in support of a policy and practices which the Labor spokesman we have just heard apparently wishes to attack.
The Commonwealth Government is laying, and has laid, a solid foundation for the prospective resource related developments for the current decade. This is a mammoth task and one which the Commonwealth Government is approaching carefully but, at the same time, confidently. It is a confidence based on the responsible economic management of the past five years. It is clear that the prospective upsurge in resource-related developments will place some pressures on the economy. That is only natural. The Government is endeavouring to minimise these pressures and enable all Australians to benefit from the devepments. We should not be frightened by these developments because they open the way for sustained economic development. To tackle this task the Government has a full array of economic policies and instruments, all of which will be used. However, foremost will be continued responsible fiscal and monetary policies. They will ensure a climate conducive to sustained and stable economic growth. Development cannot take place in a situation of economic disarray and uncertainty such as we had from 1973 to 1975.
However, it is also through its foreign investment policies and through the Loan Council infrastructure borrowing program that the Government will ensure these developments. The Government’s present policies have gained widespread acceptance from the business sector, including both Australian and overseas companies, and from the Australian community at large. This had led to the establishment of a stable investment climate, without in any way selling off Australia’s right to the benefit of these developments. It has been a fair and equitable policy and one of which this Government can be proud. The proposed new Alcoa aluminium smelter at Portland, to which the honourable member for Blaxland referred, is clear evidence of the success of these policies. In proposing the establishment of this smelter, or approximately $400m, Alcoa has demonstrated its confidence in the future of Australia. Without the responsible economic management of recent years and the equitable foreign investment policies observed by this Government, there would be no such proposal or smelter.
– Who wrote this rubbish?
– If the honourable member is patient he will know what it is all about and will better understand the situation. Then perhaps he will agree that, as usual, the honourable member for Blaxland was totally wrong. The proposal is under active consideration by Ministers and an announcement is expected shortly. I spoke to the Treasurer (Mr Howard) before this debate and I am under the impression that an announcement agreeing to the proposal will be made by him, possible later today. Let us look at the important issue regarding the Alcoa smelter. I think this House should congratulate the Victorian Government for its initiative in allowing to be created, and helping to create, this industrial project at Portland. The project will serve to expand the economic base, south-west of Victoria and will create new employment and business opportunities. The aluminium smelting industry has many attractions, including a secure future, high average wages, growth potential, and high technology. It employs a wide range of work skills and uses a wide range of services.
– You might as well have Mr Hamer here making your speech.
– The honourable member should be patient. The honourable member is upset because we are producing something in the State of Victoria that will create thousands of jobs. If he and his union buffs keep clear and allow the project to proceed without any work stoppages, it will be of great benefit to the State of Victoria and to the whole of Australia.
– Mr Hamer would be very enlightened.
– As the honourable member comes from Ballarat, he ought to agree that it will be good for the country areas of Victoria. Instead of knocking the Government of Victoria, as he has been doing so smartly in his few days in this place, he should look at how good the State is in which he lives and at benefits the Victorian Government has brought, and is bringing, to the State in this operation. So he should be patient and wait till he gets a little bit older in this place before he starts making comments that knock his own State. I realise that the honourable member is totally opposed to a government that is progressive. He wants to see industrial unrest and socialist takeovers and no new industries in the State of Victoria. I understand that. I ask him to be patient; he will have his turn. Let him put his name on the list and get up and say it then, rather than interrupt.
If I may return to my endeavour to explain to those honourable members who are interested the benefits of the Alcoa development at Portland, I am sure that they will understand that it will lead to a greatly increased utilisation of the port facilities. By 1990 almost two million tonnes of ingots per annum will be exported from the Portland area. There will be a greater potential for the introduction of a regular container shipping service which, obviously, will expand even further the development of that part of Victoria. With the planned developments of the town of Portland, better public facilities will be established through government provision in the areas of housing, health and education. This must result in benefit to the people of Portland, and to all the surrounding areas, even as far as Ballarat. The new industry in Portland will ensure the future growth of the town because, firstly, of the potential for expansion and, secondly, the creation of downstream industries.
– Tell us about the town rates.
– The smelter will be paying rates. I will come to that shortly; I ask the honourable member to be patient. Also to be considered is the availability of power, the expansion of service industries, the establishment of regular shipping services and the establishment of developmental infrastructure and planning which provides for future industrial development. Alcoa will generate large export earnings for Australia and will pay substantial amounts in taxation to the Federal Government. Employment and business generated by this development will be significant and not confined to Portland only. The proposed development will lead to the growth of the region, as well as of south-eastern South Australia, which is primarily dependent on the rural sector for its existence and prosperity.
Alcoa, and the industry that will inevitably follow, will greatly broaden and secure this base for the benefit of everyone in the region, including the people of the area represented by my friend from Ballarat, a seat that the Government will win back at the next election.
The Alcoa, Portland smelter will be the largest in the Western world when completed, and although a wide range of services will require improvement to cater adequately for the extra demands imposed by Alcoa and other developments at Portland, many of these appear capable of being dealt with under the normal process. Alcoa has the largest Australian ownership of any of the existing or proposed aluminium producers including the project that the Opposition is talking about in New South Wales. Alcoa’s ownership is as follows: Alcoa (United States), 51 per cent; Western Mining Corporation, 20 per cent; Broken Hill South, 13 per cent; North Broken Hill, 12 per cent; others, 4 per cent. The Alcoa project at Portland is the most important single industrial development in the history of Victoria. It represents a massive capital investment, with resultant benefits to the people in that State. As I said earlier, the Government of Victoria is to be highly congratulated on its initiative in providing to this company the services necessary so that the smelter can be built.
– Tell us about the 50-year lease.
Order! The honourable member for Batman will remain.silent.
– If the honourable member will only button his mouth, as he should have in relation to the car-rental services, I will give him the information he requires.
-Order! The honourable member for Bendigo will proceed and not invite interjections.
– As for electricity supply, the smelter will require about 220 megawatts per stage. The requirement will build up to about 880 megawatts at the final stage. The agreement between Alcoa and the Victorian State Electricity Commission provides for Alcoa to pay the standard high voltage tariff M, option 5. An appropriate allowance is made for interruptibility of the power supply up to the first 330 megawatts. As a result of this commercial agreement between the company and the SEC, the company will receive slightly cheaper electricity in return for the Commission’s being able to reduce or cease supply for short periods, should demand exceed supply for the total State system. That is a very fair and proper basis on which to supply large quantities of electricity to enable this business to get under way. It also ensures protection for the rest of the State. Of course, we cannot guarantee that there will be electricity while the honourable member’s people call strikes at every opportunity. Honourable members opposite who are interjecting would be far better off, as Victorians, if they were to go down and ask these people not to strike, rather to endeavour to work so that the State can progress and the thousands of people who are now unemployed can get jobs. The tariff paid to the SEC by Alcoa will be about $40m a year in the first year of smelter operation. It will rise to about $1 50m when all four stages are in operation. That estimate is based on 1980 prices.
Victoria is the only State which has agreed to supply power to a new aluminium smelter on the basis of a published standard tariff. Queensland and New South Wales have not announced the terms of their agreements. However, it is believed that these agreements are at rates which are far less than Victorian tariff M, and that the tariffs are fixed for the agreement. In other words, in New South Wales, despite the fact that the honourable member for Blaxland has criticised Victoria, the Premier is prepared to enter into a deal based on fixed rates and charges for the long term and on a much more subsidised basis than is the case in Victoria. Quite obviously, the Victorian Government has used a proper and fair basis in establishing its charges.
As the honourable member for Blaxland has mentioned, the Victorian Government has agreed to waive the 5.5 per cent transfer tax on all power consumed during the first 10 years of operation. That was an incentive to help this industry get going. Let us be honest about it. If there were no industry there would be no tax, so what the Opposition is talking about is utter nonsense. Turning to the coal aspect, the high moisture content of Victorian brown coal means that it is expensive to transport relative to its fuel value and therefore has little chance of being exported as a fuel. In fact, it is not required as an export fuel. The smelting of aluminium is the one way, in the absence of economic black coal deposits, in which Victoria is able to benefit from the export of energy. It is making the best use of its facilities and resources for the benefit of Victoria and Australia. At the expected level of brown coal consumption for power generation in the year 2000, Victoria has demonstrated economic reserves of coal sufficient for more than 300 years. Over a 50-year life the Portland smelter would consume less than two per cent of the demonstrated Latrobe Valley coal reserves.
Additional power requirements will be met by the SEC through extra generating power at Yallourn W plant in 1981 and 1982 and the progressive commissioning of the four 500 megawatt sets of the Loy Yang A station, which will commence operation in 1984 - provided again that the union boys, supported by honourable members opposite, can only get to work instead of causing strikes and stopping progress as they have done in the past. Honourable members opposite may smile and laugh. We know that they are totally opposed to progress in Victoria. You and your communist-backed unions -
Order! The honourable member will address the House through the Chair.
– I am sorry, Mr Deputy Speaker. Through the Chair I say that the Australian Labor Party supports communist-based unions that try to destroy industry in Victoria; they have done everything possible during the last 12 months to stop the progress of the Loy Yang station. Honourable members opposite are making sure in this House to do everything possible to stop the progress of the development in this country of industries which will employ thousands and thousands of workers. They have the hide to sit over there and support the honourable member for Blaxland. They are wasting their time here. They will never get any further than the Opposition benches.
– Australia is placed on the verge of a large-scale resource development boom. There is no doubt about that. The rapid expansion of aluminium processing projects is a major component of this development program. It has far-reaching implications for aluminium smelters require new power stations, coal mines and water supplies. We in the Opposition are not opposed to the balanced development of our resource-based industries, but we stand for planned development which includes obtaining the maximum national return and the protection of our environment. We insist upon a rational development program at a controlled rate and pace so as not to harm our important primary, heavy and manufacturing industries and so as not to restrict our capacity for self-reliance.
Australia currently produces 275,000 tonnes of aluminium annually from smelters owned by Comalco at Bell Bay in Tasmania, Alcoa at Point Henry in Victoria, and Alcan at Kurri Kurri in New South Wales. The rash of plans for upgrading existing smelters and the establishment of new ones is related to two major factors. Firstly, the various State governments are competing among themselves to offer cheap power supply deals and infrastructure provisions. Secondly, many pollution controls in Australia are less stringent than those in the United States of America and Europe, and aluminium smelting is not only high in its use of energy but also it is highly polluting. Current plans are to raise Australian aluminium production to a massive 1.8 million tonnes per annum before 1988 and the majority by 1985. I seek leave to incorporate in Hansard a table detailing proposed aluminium development projects.
The table read as follows:
– To increase aluminium smelting capacity to this degree will require vast sums of private capital expenditure for construction of the plants themselves and for the extension of bauxite mining and alumina refining plants to service them. The smelters will require vast blocks of extra power of around 2,500 megawatts, with at least 1,000 megawatts being required in New South Wales alone. The power stations will also require the opening of new coal mines to convert our coal to service them. An approximate total of required capital expenditure for these projects would be about $4,760m for aluminium, alumina and bauxite projects. Capital raisings by the Electricity Commission of New South Wales through its Loan Council borrowing programs and from its own revenues, probably on a 50-50 basis, will total $2.5 billion over the next seven years for the three new power stations at Eraring, Bayswater and Mount Piper. Between 15 per cent and 20 per cent of their capacity of 6,600 megawatts will be required for aluminium smelting; that is, the State will provide up to $500m to ensure power supply for aluminium smelting. Similarly, in Victoria, $1 billion will be provided by the SEC to produce and deliver power to Alcoa at Portland.
There is a need to ensure that such vast allocations of public and private capital will be in the best interests of the nation. There is a need for Federal Government involvement to ensure adequate arrangements for energy use and pricing and effective environmental protection. Let there be no doubt that only the Commonwealth can provide a co-ordinated national approach to these questions. Let there be no doubt also that the Commonwealth has powers available under the arrangements for Loan Council approval, under the role of the Foreign Investment Review Board, through the granting of export licences and by the development of resource rental taxation measures to plan more adequately the volume and pace of these development programs.
There is a need for .Federal Government involvement in regulating the environmental impact resulting from the emissions of fluoride, sulphur dioxide and acid rain. The present position is that the number, size and site of new smelters is decided in the States before the initiation of environmental impact statements. Firm decisions are taken and then the company is asked to outline the best possible anti-pollution measures. A United Nations environmental publication suggests restricting the smelting capacity in any one locality to 200,000 tonnes per annum, yet the Hunter Valley will produce almost 600,000 tonnes per annum from three smelters and Portland in Victoria will produce 500,000 tonnes. We can expect fluoride emission rates of one kilogram per tonne of aluminium while in Oregon in the United States the emission of fluoride is limited to 0.45 kilograms per tonne.
I turn now to allegations that State governments, through their State electricity commissions, will sell electricity at cut rate prices to aluminium smelters incorporating a coal component value at a fraction of ruling export prices. What are the facts? Overseas, the cost of power production ranges from 4c per kilowatt hour in the United States to 8c to 9c per kilowatt hour in Japan. In New South Wales it is proposed to sell power to the aluminium companies at approximately 1.2c to 1.4c per kilowatt hour. In Victoria, Alcoa will pay 1.8c per kilowatt hour while domestic users are asked to pay around 4c per kilowatt hour. Currently, county councils in New South Wales - I can be precise about the Illawarra County Council - purchase their electricity for approximately 2.5c per kilowatt hour and reticulate it at the following rates: At 3.7c per kilowatt hour for domestic use; 3c for light industrial; 2.6c for public lighting and 2.2c for the lowest continuous use industrial customer.
The steel industry and associated industries in Port Kembla, which directly employ upwards of 40,000 people in my electorate, pay between 70 per cent and 100 per cent more for their power than an industry which will eventually employ 2,000 permanent employees in the Hunter region. In Victoria the cost of producing and transmitting Alcoa’s electricity will amount to 2.4c per kilowatt hour, compared with the 1 .6c paid by Alcoa. Over 50 years the cash subsidy will be over $2,000m. The figures speak for themselves. It is very difficult to deny that domestic and industrial consumers will subsidise the aluminium industry. Even at 2.2c per kilowatt hour - the going industry rate - Australian electricity is a bargain compared with the 9c per kilowatt hour charged in Japan and 4c to 5c charged in the United States. I think overseas companies would still want to come to Australia at those rates.
In conclusion, let us look at the economic effects of this situation. Already we have seen the capital inflow increase markedly - $1 billion in October, which is nearly equal to the whole inflow for 1979-80. Interest rates will go up, a major reason being that State authorities, such as the State electricity commissions, are borrowing at 12.9 per cent and thus denuding from banks and building societies funds which should go to housing. The State electricity commissions fund their capital programs on a 50-50 basis from general revenue and authorised borrowing, but in the end the consumer pays the lot. It is certain that domestic consumers and industry generally will pay the piper for the aluminium industry’s cheap power bonanza. Limiting the money supply increase to the 1 1 per cent Treasury target this year has consequently required a squeeze on public housing, social security and funds for public transport and other areas of State expenditure. I do not often agree with Treasury but, really, the States should realise they cannot have their cake and eat it too. Excessive borrowing programs will inevitably mean cutbacks in these vital areas. No doubt Treasury will also argue for cuts in real wages as part of budgetary restraint.
Where are the plans for housing development in these areas? In the Latrobe Valley housing rentals are between $90 and $120 a week. They are between $100 and $135 a week at Gladstone. Less than six months ago Gladstone rents were between $45 and $60 a week. Old homes are currently selling for $85,000. Will the environments of Portland, Gladstone and the Hunter Valley become a dreary panorama of caravan parks? fs that what is in store for the workers there? What is the future for steel, steel products and primary industry if we simply allow State governments and aluminium companies to make decisions which are truly the responsibility of the Federal Government? I repeat, there must be mining development, minerals processing and fabrication of bauxite and aluminium but there is a limit and it must be rationalised. We are responsible for control of capital inflow, future export earnings and the value of the Australian dollar. Pressure for heavy tariff reductions may well become irresistable
Order! The honourable member’s time has expired.
– The Opposition, in proposing for discussion this matter of public importance, has made one of its worst attempts at attacking the Government that I can remember. I think the honourable member for Blaxland (Mr Keating) made the worst speech that I have heard since I have been in Parliament. When the honourable member concluded his remarks he sat down and spoke to the honourable member for Wills (Mr Hawke), who I am sure was pleased with the performance because it showed that he could write off another contender for the leadership of the Australian Labor Party. Both Opposition speakers showed that they did not understand the issues and that they could not decide whether they were for development or against it. The Opposition fumbled the figures in attempting to attack the Government’s economic policy. Let me make it clear that the Australian Labor Party, through the Opposition and its Victorian Parliamentary Party, is attacking the most important industrial development in Victoria’s history. The Labor Party is against development; it is attacking Victoria and trying to downgrade what is happening in Victoria today. The Opposition in Victoria is even worse than the Opposition in the Federal Parliament.
Let us look at the facts: Victoria is a growth State. Victoria is benefiting from the resources boom. People tend to look at other States - to Queensland, Western Australia and the north - but it is all happening in Victoria. Where is Australia’s oil and gas? It is in Victoria. Where is the magnificent brown coal deposit? It is at Yallourn in Victoria. Where is 36 per cent of Australian manufacturing industry based? It is based in Victoria. Victoria is a booming State and the Opposition in this place–
– It is pretty sick at the moment.
– We can hear them now, Mr Deputy Speaker. The honourable member for Batman is one of them. The Labor Party is against development in Victoria. It is trying to talk down and belittle what is happening in Victoria. Victoria is a growth State which the Labor Party is trying to deny. It tried to deny that in the speeches made in this place today. It is against growth.
– We are not against growth.
– The Labor Party is against growth. It is against the development of manufacturing industry. In Portland in Victoria there is a new processing-manufacturing industry and the Opposition is against that. It is against the jobs that industry will create. It is against the small businesses that will service that project. It is against small businesses, it is against growth and it is against development. Let us get that straight. The Labor Party is against the downstream development that will take place in relation to this project.
– How many jobs? Name them. You can use both hands to count if you like.
– The whiz kid wants to know how many jobs. I will answer the $64 question for him. The direct construction work force will exceed 1,500 by late 1981. Indirect employment throughout Australia as a result of the Portland smelter development is estimated at 4,500 jobs. They are just some of the jobs. The figures do not include jobs in service industries, professional organisations and small businesses.
Let us look at what is happening today. The discussion of this matter of public importance gives us the opportunity to analyse the Australian Labor Party. The people opposite who become silent when one talks of these things represent the parliamentary wing of the trade union movement in Australia. I repeat for the benefit of the people listening to the broadcast of these proceedings that the Australian Labor Party in this House is the parliamentary wing of the union movement. It is the union movement in parliament. Let us now look at the causes of inflation in this country. The Labor Party tries to obscure the issue by raising for discussion matters of public importance such as the one before the House today. The real causes of inflation in Australia are increased wage demands, abuse of union power by union officials and the failure of unions to abide by industrial law - by rulings of industrial tribunals, the Conciliation and Arbitration Commissions and commissioners’ decisions. Those are the basic causes of inflation in Australia today. I note the hushed silence from honourable members opposite. They try to obscure the issue by raising for discussion this matter of public importance which they do not understand at all.
Let me explain what is happening. In an energy-short world jobs are being created. Australia - and particularly Victoria - is fortunate. We are applying cheap power to Australian raw material. We are providing congealed or packaged energy which is cheap in world terms. All Australians benefit by cheap power. Australia’s resources are being taken advantage of for the benefit of all Australians. I have said before that Victoria is a growth State. Victorians have to be positive about what is happening in the State. The Labor Party is trying to downgrade and denigrate Victoria. The honourable member for Lalor (Mr Barry Jones) has played more that his fair part in talking Victoria down in the Victorian and Federal parliaments. I wish he would stop trying to interject and listen to the facts. Aluminium is a growth metal. It is a growth industry. There are growing world markets for it. Australia is poised to take advantage of them for the benefit of all Australians. Aluminium will create jobs for Australians. It will create new industry and downstream technology for Australians. The honourable member for Lalor denies that. He does not want jobs for Australia. He is not interested in the workers he claims to represent. He is under the power of the trade union officials. Let him deny that!
– You will stand judged on that statement, my friend. Let us look at the economic matters involved. This Government has established -
– Give us some facts.
– I will give the honourable member for Batman some facts. The honourable member interjected earlier. He said that no rates were being paid in the town of Portland. The town of Portland will levy rates of $2.6m on Alcoa -
– I wish to raise a point of order.
Order! The honourable member for Higgins will resume his seat.
– The honourable member is denying me my time; I make that point.
– A statement has been falsely attributed to me. I said not that there were no rates but that there were concessional rates.
– There is no point of order.
– The Opposition is trying to deny me speaking time. I would like to reply to the honourable member.
– You should get your facts straight.
– I will get the facts straight. I will give them to the honourable member if he listens. The people listening to the debate know the truth. They know that the Opposition is trying to hide it. In the construction period, the town of Portland will levy rates of $2.6m on Alcoa to upgrade town services. Alcoa will also contribute annual rates of $1.3m to the town of Portland during stage 1. This will rise to $2.8m when the development is completed. The Alcoa rate payments will represent almost half the total rates received by the town of Portland at the first stage. This will enable substantial rate relief to be given to the ratepayers of Portland as a direct result of the development. Those are the facts about rates.
This Government has established a climate in which domestic and overseas investors can plan with confidence for the future. The Government believes that much of the infrastructure can be provided by developers, as is happening in this case, to reduce the burden placed on the public sector. However, where private provision of infrastructure is not practicable the Government has adopted policies to ensure that State governments will be in a position to provide it. This Government is conscious of the importance of making the most efficient use possible of our natural resources and is determined to ensure that the opportunities now ahead of us are turned to the full advantage of all Australians.
Raw materials processing projects such as the Alcoa Portland smelter are examined by the Government under its foreign investment policy against the basic test of net economic benefit to Australia. In respect of such projects, the foreign investment policy is concerned to ensure that net benefits flow to Australia and that these are maximised. I believe that the Alcoa project which involves initial investment of approximately $400m is in the national interest because it makes an important contribution to Australian society. It will engage in local processing of raw material. It will contribute to exports. Initially this amount will be approximately $200m per annum. I have already spoken of the employment that will be created. The peak construction work force will amount to 1,500. Some 400 to 600 will be employed directly in the smelter.
– Will there be a net loss or a net gain?
– The honourable member should listen. An extra 800 to 1,200 jobs will be provided in service and allied industries. The project will contribute to regional development. Is the honourable member interested in the service industries that will be created and in the small businesses and allied industries that will benefit downstream from this project? 1 do not think the Labor Party is.
Let us look at some of the benefits that will flow from “Victoria. Let us analyse the project. Alcoa will pay for its electricity on published tariffs available to others. It will use large amounts of power. The honourable member for Blaxland talked about the rebate of turnover tax. There is a rebate for 10 years. It is an incentive for this development to create jobs. It is only for 10 years; after 10 years the company will pay $160m over the 30-year life of the project. Let us consider the power line. The Government is paying the cost of 21 per cent of the power line, but there is a lot of capacity for further development. Over one-third up to one-half of the capacity of that power line will be available to the people of Victoria for future development for about the cost of 21 per cent of the power line. There is a lot more capacity in that line. The line is a bargain. Additionally, the people–
– For whom?
– For the people of Victoria and for those who will get the jobs. The project will add to the revenue that will flow to Victoria and Australia generally. It will create additional export earnings for Australia.
-Order! The honourable member’s time has expired. The discussion is concluded.
Mr KEATING (Blaxland)- I claim to have been misrepresented by the honourable member.
-The honourable member may proceed on a personal explanation.
– The honourable member is so inconspicuous in this place that I cannot even remember his electorate. He made the claim that my colleague and I were opposed to development. That is untrue. I said in my speech that it made sense to smelt and sell aluminium. I believe that. I went on to say that the question to be determined is: On what basis and at what rate should the smelting industry be developed? An announcement is imminent from the Treasurer (Mr Howard) in respect of foreign investment approval for the Alcoa project. The Opposition, in raising this matter today, expected a Minister, at least the Treasurer, to reply.
-Order! The honourable member had indulgence to point out to the House the manner in which he was misrepresented. I believe he has done that. He will resume his seat.
– I have done that. I do not like being assailed by the drones of the back bench of the Government.
– I wish to take a point of order. I claim to have been misrepresented by the honourable member for Blaxland. He said that he was in favour of development. The Opposition does not know whether it is in favour of development.
– What is the misrepresentation ?
– I will answer the honourable member for Lalor. On the one hand the Opposition says that it is in favour of development. On the other hand, when a specific project is being debated, it speaks against it.
-Order! The honourable member is out of order. He will resume his seat.
Mr WEST (Cunningham)- Mr Deputy Speaker, I too claim to have been misrepresented by the previous speaker in the debate, the honourable member for Higgins (Mr Shipton). He suggested that I put up an anti-development argument. Of course, that is not true. I said that we stand for rationalised development incorporating the protection of the environment and the fact that Australia must maximise the best use of its resources in the interests of our people. During my speech I pointed out that even the Treasury - the adviser to this Government - agrees with the basic thrust of my argument, that Australian Loan Council borrowings have got completely out of hand.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member is debating the matter. I end the debate. He will resume his seat.
– Mr Deputy Speaker, I raise another point of order. I am flattered by the fact that after I finished my remarks two Opposition spokesmen have raised spurious points of order in an attempt to counter my arguments. I believe that the–
-Order! The honourable member will quickly state his point of order, if he has one.
– I believe that the honourable member for Cunningham has misrepresented me. He has repeated that on the one hand the Opposition is in favour of development but on the other hand it is knocking every project that comes up.
Mr DEPUTY SPEAKER (Mr Millar)Order! The honourable member will resume his seat.
Bill presented by Mr Moore, and read a first time.
– I move:
This Bill is the first of four Bills that I will be introducing today pursuant to the Commonwealth’s obligations under the co-operative companies and securities scheme. All four Bills were presented to this House on 27 August 1980 by my predecessor the honourable member for Curtin (Mr Garland), but were not debated before the termination of Parliament on 19 September 1980. Before I discuss the Bills I would like to outline for the benefit of honourable members, the administrative and legislative context in which these Bills will operate.
Formal Agreement on Companies and Securities
Background material on the formal agreement and on the four basic elements of the co-operative companies and securities scheme is contained in paragraphs four to 18 of the explanatory memorandum on the National Companies and Securities Commission Amendment Bill 1980 which has been circulated to honourable members. The aim is that, as far as possible, any person or company should be able to deal on all general companies and securities matters as if that person or company were only subject to one system of law and administration throughout Australia. The cooperative scheme thus provides a framework for uniform general laws on companies and securities matters that will apply throughout Australia. It was, however, never intended to fetter the sovereign right of any parliament to pass particular laws which are not inconsistent with the general legislation agreed to under the scheme.
The Substantive Codes
In addition to the legislation establishing the National Commission and supporting its operation in jurisdictions other than the Australian Capital Territory, the substantive legislation for the scheme at this stage will be contained in four codes: (a) a share acquisition code which will regulate the acquisition of company shares; (b) a securities industry code which will regulate the securities industry; (c) a companies code which will cover the remaining areas dealt with in the current companies and marketable securities legislation; and (d) an interpretation code which deals with the interpretation of the Commonwealth legislation under this scheme.
The formal agreement foreshadowed a major exercise in legislative uniformity and law reform where this was necessary. In embarking on this exercise, this Government and the other governments which are parties to the formal agreement have sought to ensure that there is at all times adequate opportunity for the proposed legislation to be considered by interested persons. Comments were sought and received on the proposed share acquisition code, the proposed securities industry code and the proposed companies code. Further comments are presently being sought on the companies code.
In addition, committees of interested Government and Opposition members have been regularly briefed on the scheme and the Commonwealth legislation under it. It was necessary that these briefings take place because of the nature of the co-operative scheme. Following exposure of the various Commonwealth Bills, public submissions were examined by the Ministerial Council which then approved the Bills in their final form for presentation to this Parliament in accordance with the procedures laid down in the formal agreement. Accordingly, it was necessary for any criticisms and review within the ranks of the Opposition and the members of the Government parties to take place in this rather unusual way.
The Present Position
We have now reached the stage where there is substantial and visible progress towards the completion of the co-operative companies and securities scheme. As is to be expected where seven governments are involved, there will from time to time be differences which require resolution at a political level. To date all differences have been resolved and I am hopeful that we will continue to be able to resolve any future differences that may arise.
There are, of course, many matters which remain to be attended to. First, there is the need to make certain amendments to the Commonwealth Acts which have already been passed to take account of the further work that has been done on the scheme legislation. The four Bills I am presenting today cover these amendments. Secondly, there is a need to finalise the content of the regulations that will be required under these Commonwealth Acts. Thirdly, there is a need to settle the form and content of the companies code which was introduced into the House of Representatives on 27 August 1980 to allow further study of the code’s provisions by honourable members and the public. Fourthly, each State will have to pass a series of Bills. There will be a National Companies and Securities Commission (State Provisions) Bill to support the National Commission in each State. There will also be an application of laws Bill for each of the four codes in each State. The State Bills other than the Companies (Application of Laws) Bill have been cleared by the Ministerial Council for introduction into individual State parliaments. However introduction and passage of the State Bills will depend on the programs of the individual State parliaments. Fifthly, the National Commission will have to proceed with its administrative arrangements for the administration of the scheme.
It is hoped that m the longer term it may be possible to provide for the establishment of automatic data processing facilities which will assist the National Commission and the State and Territory corporate affairs offices in maintaining a unified system of administration. Accordingly, Ministers have directed their advisers to examine a feasibility study prepared by the Commonwealth-State working group. This working group reported on ADP systems which could be used to assist with the administration of the cooperative scheme. It is the hope of Ministers that the new share acquisition code, the new securities industry code and the interpretation code will be able to be brought into operation by mid 1981. Following further community consultation in relation to the companies code we hope to have the Commonwealth companies Bill ready for introduction into the Commonwealth Parliament during the fi rst hal f of 1 98 1 .
I would now like to discuss very briefly the first of the Bills that I am presenting today, the National Companies and Securities Commission Amendment Bill. A detailed explanation of the amendments contained in this Bill is set out in the explanatory memorandum which has been circulated with the Bill.
The definition of ‘agreement’ will be amended so that references to the formal agreement made between the Commonwealth and the States on 22 December 1978 will cover that agreement as amended or affected by subsequent agreements. The provisions in the National Companies and Securities Commission Act relating to the application of moneys of the National Commission will be amended so that moneys that vest in the
National Commission under another law can be dealt with in accordance with that law. The provisions in the NCSC Act dealing with audit by the Auditor-General will be amended to ensure that the State governments participating in the cooperative scheme retain exclusive control over the auditing of the books or records kept by their authorities or officers where they are acting as delegates of the National Commission. The provisions in the NCSC Act relating to divisions of the National Commission will be amended to allow a division to be constituted by members other than the chairman of the National Commission.
The NCSC Act is also being amended to provide for the establishment of a secretariat for the Ministerial Council. Staff and facilities for the secretariat will be provided by the National Commission. The Bill will come into effect on the day on which it receives royal assent. The National Companies and Securities Commission Amendment Bill has been approved by the Ministerial Council for Companies and Securities for introduction into the Commonwealth Parliament. I commend this Bill to the House.
Debate (on motion by Mr John Brown) adjourned.
Bill presented by Mr Moore, and read a first time.
– I move:
The purpose of the Companies (Acquisition of Shares) Amendment Bill is to amend the Companies (Acquisition of Shares) Act 1980 which sets out the substantive law for the proposed new Australian code which will regulate the acquisition of company shares. A detailed explanation of the provisions of the Amendment Bill is contained in the explanatory memorandum which has been circulated with this Bill.
The first two clauses of the Bill deal with the short title and the Bill’s commencement of operation. The remainder of the Bill is concerned with substantive amendments and drafting changes to the Companies (Acquisition of Shares) Act. Among other things, the principal Act will not now apply to a compromise or arrangement under section 181 or section 183 of the existing companies legislation. Where an expert’s report accompanies a Part B statement, the target company will now lodge with the National Companies and Securities Commission a notice signed by the expert stating that the expert consents to his report accompanying the Part B statement. If such a report contains a profit forecast or a statement on the target company’s asset valuations then it may not accompany the Part B statement unless the National Commission consents. A new provision on the variation of formal takeover offers will be inserted into the principal Act. Variations are to be made only with the consent of the National Commission unless the variation is in accordance with the provisions of the relevant section or the regulations.
Finally, Part A and Part C statements will be required to set out the bidder’s intentions regarding continuing the target company business, any major changes to be made to that business, and also the future employment of its staff. The Companies (Acquisition of Shares) Amendment Bill has been approved by the Ministerial Council for Companies and Securities for introduction into the Commonwealth Parliament. I commend the Bill to the House.
Debate (on motion by Mr John Brown) adjourned.
Bill presented by Mr Moore, and read a first time.
– I move:
The purpose of the Securities Industry Amendment Bill is to amend the Securities Industry Act 1980 which regulates the securities industry in the Australian Capital Territory. The other jurisdictions that are covered by the formal agreement on companies and securities will pass legislation applying the securities industry code in those other jurisdictions. A detailed explanation of amendments in the Amendment Bill is set out in the explanatory memorandum which has been circulated with the Bill.
Among other things, the principal Act will be amended by the Bill to ensure that the National Companies and Securities Commission can exercise its powers of inspection only for the purposes of the co-operative scheme. The Commission will now be able to require information from a person only if that person is able to provide such information. Where a person takes possession of books under the provisions of the Act, any lien on those books will now be protected. There will now be a defence to a prosecution for offences relating to false or misleading information if the defendant had reasonable grounds to believe that the information was true and not misleading. Proven copies of extracts of books will now be allowable as evidence.
There are a number of amendments to the investigation provisions in the principal Act. The National Commission will now have additional powers to obtain information from certain persons in specific circumstances and subject to specified safeguards. Where the record of an examination under the investigation provisions is reduced to writing the inspector may require the person being examined to sign the record. Copies of the written record will be able to be provided by the National Commission to certain persons and they may be provided subject to conditions imposed by the National Commission. There are also a number of drafting changes made in the amending Bill. This amending Bill will come into operation on the same day on which the principal Act comes into operation.
The Securities Industry Amendment Bill 1980 has been approved by the Ministerial Council for Companies and Securities for introduction into the Commonwealth Parliament. I commend the Bill to the House.
Debate (on motion by Mr John Brown) adjourned.
Bill presented by Mr Moore, and read a first time.
– I move:
The purpose of the Companies and Securities (Interpretation and Miscellaneous Provisions) Amendment Bill is to amend the Companies and Securities (Interpretation and Miscellaneous Provisions) Act which provides for the interpretation of the Commonwealth legislation under the cooperative companies and securities scheme. This Amendment Bill will assist in the uniform interpretation of all of the legislation that is to be administered by the National Companies and Securities Commission. A detailed explanation of the Amendment Bill is contained in the explanatory memorandum which has been circulated with the Bill. Among other things this Bill will amend the definition of formal agreement to take account of amendments to that agreement before the principal Commonwealth Act comes into operation.
The definition of statutory declaration will be omitted as these declarations will not now be required under any of the provisions of any of the substantive codes. The Bill will ensure that the present law relating to the persons in each jurisdiction who are entitled to present indictments remains unaltered. The Bill also indicates which offences should be treated as indictable offences and which offences should be treated as summary offences under the co-operative scheme. Provision is also made in the Bill for recognition to be given for evidentiary purposes to corresponding laws in a State or another Territory.
The Bill will come into operation on the day on which the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 comes into operation. The Companies and Securities (Interpretation and Miscellaneous Provisions) Amendment Bill has been approved by the Ministerial Council for Companies and Securities for introduction into the Commonwealth Parliament. I commend the Bill to the House.
Debate (on motion by Mr John Brown) adjourned.
– I move:
The Customs Tariff Proposals I have just tabled relate to proposed alterations to the Customs Tariff Act 1966. Proposals 18 and 19 formally place before Parliament, as required by law, tariff changes introduced by Commonwealth of Australia Gazette notice during the last recess.
The changes contained in Tariff Proposals No. 18 which operate from 1 July 1980, implement the Government’s decision to add further goods to Schedule A of the New Zealand-Australia Free Trade Agreement. The Agreement provides that Australia and New Zealand shall from time to time review the trade between the two countries with a view to including additional goods in Schedule A, the list of goods traded under the free trade provisions of the Agreement. In this instance duty reductions apply to: Beer containing 1.15 per cent or less by volume of alcohol and cellular wood panels which are now free of duty; and windscreen wiper arms and blades, and wooden fans and handscreens which will phase to free over two years.
Proposals No. 19 which operate from 1 October 1980 contain tariff changes emanating from the Government’s decisions on recommendations made by the Industries Assistance Commission in its reports on: electric motors, generators and rotary converters; certain goods made from carbon or graphite; and musical instruments and parts and accessories therefor. The Government has accepted the Commission’s recommendations for certain motors, generators and rotary converters to be dutiable at 30 per cent for three years. After that time the goods will be dutiable at 25 per cent. Alternating current generators having a rating exceeding 500 kVA will remain duty free. The remainder of the goods under reference will be dutiable at 25 per cent.
Changes arising from the Commission’s report on certain goods made from carbon or graphite follow the Government’s partial acceptance of recommendations made by the Commission. The Government has accepted the recommendations by the Commission that the rate of duty on electrical carbon brushes and contacts be raised from free to 15 per cent. It has, however, not accepted the Commission’s recommendations that minimum rates be maintained on non-electrical carbon or graphite products. Because of the integration of the industries producing non-electrical and electrical carbon products, the Government believes that the application of a common modest tariff level of 1 5 per cent should encourage the industry to make sound investment decisions, which should ensure that the industry remains viable in the longer term. Other electrical carbon products generally not produced in Australia will remain dutiable at minimum rates.
Except for minor variations in respect of guitars and certain musical boxes the Government has adopted the levels of assistance for the musical instruments industry as proposed by the Commission in its report on musical instruments and parts and accessories therefor. The Commission found that existing levels of assistance for musical instruments and parts could not be justified but considered that complete removal of current assistance could disadvantage and disrupt the industry. To avoid disruption, the Government has decided that duties on drums, drum kits and guitars will be phased down from a general rate of 30 per cent to 15 per cent over the next three years. Necks and bodies for guitars will also phase from 30 per cent to 1 5 per cent over the same period. Other products under reference will be dutiable at minimum rates.
The changes in Proposals No. 20, which operate from tomorrow are new and cover: Firstly, the improved tariff treatment of certain products subject to the Australian System of Tariff Preferences for Developing Countries in respect of: Fatty alcohols which are to be reduced from 1 5 per cent to free; beer, containing more than 1.15 per cent by volume of alcohol which is to be reduced from 54.7c per litre to 52c per litre; fluorspar which is to be reduced from $2.22 per tonne to free; and wrist straps of leather or of composition leather which are to be reduced from 15 per cent to 10 per cent; and secondly, administrative changes within tariff items 48.16 and 85.19 to ensure that correct levels of assistance are maintained. The changes will not vary existing rates of duty. A comprehensive summary setting out the nature of the duty changes has been prepared and is being circulated to honourable members. I commend the Proposals to the House.
Debate (on motion by Mr Hurford) adjourned.
– I move:
1 ) That a Standing Committee be appointed to inquire into and report on such matters relating to the circumstances of Aboriginal and Torres Strait Island people and the effect of policies and programs on them as are referred to it by -
There are some modifications to the references and to some other aspects of each one of these motions which are about to be considered by the Parliament. They are, significantly, to try to improve the working of the committees. In this instance, however, the procedure suggested applies to resolutions that emerge from all the committees in the Senate that the proposed Standing Committee on Aboriginal Affairs should have the power to consider resolutions sent to it by the House or by the Minister for Aboriginal Affairs. The other details with respect to the proposed Aboriginal Affairs Committee and the membership of the Committee are, significantly, in a form which has been presented to the Opposition and which is designed to pick up some areas of what were felt to be defects in the earlier terms and conditions of appointment. For example, the procedure for electing a deputy chairman has been changed. In some instances there have also been references to the sub-committees. But I would be foolish if I tried to list them all.
The basis of the committee system in this Parliament is a very important one. It is a very important way by which the facilities of the Parliament can be extended. I think it is important that we, in this chamber, do not duplicate the procedures and practices of the Senate committees, as we have a role which is peculiar to the character of the House of Representatives. The proposed committees that are included in the bundle that are about to be considered by the Parliament, I believe to be in that category. I commend them in their present form to the House.
– The Opposition certainly approves of the election of standing committees in the areas about which notice has been given. But, of course, the Opposition is always in a position of trying to improve the situation on how committees may function. Whilst the Leader of the House (Mr Sinclair) has said that he is anxious that the committees improve their performance and that he does not really want to see them duplicate the position as it arises in respect of the Senate - I say this as a member who has been here for some years - the committee system has been dowgraded in this House. If anybody can claim credit for an effective committee system it is the Senate. The reasons for this go back to 1970-71 when the motion of this House that committees be established at the same time as the Senate was defeated. It was carried in the Senate. Ever since then the Senate has taken the initiative in a number of matters.
I say that at the outset because I think there is an effective role for committees to play. They have ready access to people who want to give evidence to them. As you know, Mr Deputy Speaker, a lot of information can be gained which could not otherwise be obtained by a parliament because of the sheer numbers in a parliament and the procedures of the parliament. The committee system has a very effective role to play. Accordingly, the Opposition has no basic objection to the thrust of what the proposed committees are about except to the detail of how the Government wants them to continue. I had a discussion with my colleague, the Leader of the House, as to whether he could see some advantage in what we have in mind. I do not know that he has been given a wide enough charter to agree with us. But the Opposition wants to go back to the aims and objectives of the Standing Committee on Aboriginal Affairs as were outlined in the resolution of the previous Parliament. Accordingly, I am in the position of having to move an amendment. The amendment is seconded by the honourable member for Melbourne Ports (Mr Holding). As the amendment is in two parts, I seek leave to move both parts together.
– I move:
That a Standing Committee be appointed to inquire into, take evidence and report on:
The Committee is losing the initiative to determine the matters which come before it for discussion. I think that detracts from the value of its work, bearing in mind that we are dealing with Aboriginals and Torres Strait Islanders. They are sensitive people. I understand that representations were made by their national council to the last Committee as to what the Committee might consider. The Committee felt that it ought to be able to consider matters that had been submitted to it by the national council of these people but it decided otherwise. Obviously it felt at the time that that might embarrass the Government or the then Minister for Aboriginal Affairs did not want to see it happen in that way.
We all agree that Ministers have their roles to play. Certainly, from my point of view, they would be entitled to attend any committee meeting in an ex officio capacity and watch the committees functioning, but to suggest that a committee of the Parliament should deal only with matters referred to it by the Parliament or by a Minister is really to suggest that the committee should be just an adjunct of the department which the Minister administers and to deny it the opportunity to get into new ground and take evidence on certain matters because the department feels, perhaps for no real reason at all, that that might be detrimental or because it does not know what will come out of it. Parliament is really in the supreme position here as a committee has a charter to report back to the Parliament. A Minister always has a change to rebut any suggestions made by a committee. It is important, given what happened with the last Aboriginal Affairs Committee, that we revert to the previous position and not weaken its powers of inquisition and ascertainment of evidence from the point of view of what recommendations should be made to the Parliament. I make the point that Ministers are subservient to the Parliament, as are their departments. One just cannot say: ‘You have another segment here. It can also be referred by resolution of the Parliament’. There is not always the procedure or the availability of time for the Parliament to be interrupted so that a new matter can be referred to a committee.
The submission I am making to the House at this stage is that the old format is more appropriate - that is, that the Committee should have the ability to initiate its own inquiries on matters relating to its terms of reference concerning the circumstances of Aboriginals and Torres Strait Islanders. I see no reason to debate this matter at length as it is very clear. I think that this motion will only weaken the standing of the Parliament, particularly in this case as the appropriate Minister resides in the Senate and there are problems from the point of view of how evidence will get through. I think it just means that we are subservient to somebody in the Executive rather than being answerable to the people.
In paragraph 2 I have suggested in all fairness that the Committee should consist of nine members instead of eight, five being nominated by the Government and four being nominated by the Opposition. I would like to see that acceded to. The Leader of the House felt that that presented a difficulty because precedence has it that it has to be five members nominated by the Government and three members nominated by the Opposition. If that is the precedent it is a bad precedent. The Opposition has a number of new members in this House. They are ready and willing to play their part and participate in matters of this type and they should be given a chance to do so. They learn in the process, which makes for a better Parliament and for better decision-making. In trying to find some substance in the Leader of the House’s objection, I looked at the next matter on the Notice Paper, which relates to the setting up of the House of Representatives Standing Committee on Expenditure. I was delighted to find that it provides for the appointment of six Government members and five Opposition members. If there can be six Government members and five Opposition members on the Expenditure Committee, surely there can be five Government members and four Opposition members on the Aboriginal Affairs Committee. I do not see any basic problem there. A bit further down - I do not want to deviate from the thrust of my argument in case I am called to order - there is reference to a committee concerning Parliament House having three Government members and three Opposition members, which is a remarkable situation. We have a new Leader of the House. I think he is much more flexible from the point of view of what we have to do in this Parliament.
– He has been here for a while.
– In saying that we have a new Leader of the House, I should have said that we have a person who has been restored to the position of Leader of the House. This is a serious matter and it will affect the Opposition’s attitude to committees. We shall press our amendment because we think it is of some significance. I make the point that it has been seconded by the honourable member for Melbourne Ports.
– I second the amendment moved by the Deputy Leader of the Opposition (Mr Lionel Bowen). It is simply not good enough, in producing the terms of reference of a parliamentary committee, for the Leader of the House (Mr Sinclair) to produce a motion which in fact contains a significant and substantive change to the way in which the committee has been traditionally constituted and not to offer an adequate explanation for doing so. The important change, which has been referred to by the Deputy Leader of the Opposition, is the right and power of the Standing Committee on Aboriginal Affairs to initiate an inquiry. If one looks at the history of that Committee one will find that this power was very pronounced when the Committee was first formed. It is interesting to note that most of the early inquiries of the Committee originated from within the Committee itself.
Presumably on the occasion when Mr Manfred Cross was its Chairman and the Honourable W. C. Wentworth was its Deputy Chairman and the Liberal and National Country parties were in opposition, there was no objection in principle to the Committee having a power to create a reference. When this Government came to power the resolution structuring the Committee was changed to the terms of the amendment moved by the Deputy Leader of the Opposition. Putting it simply, that still contained a power in the Committee to determine its own reference. This issue, in fact, arose before the Committee of which I had the honour to be the Deputy Chairman. The Committee approached the National Aboriginal Conference and asked it to indicate to the Committee what it felt ought to be the subject matter of inquiry being matters of concern to the Aboriginal community and which it felt ought properly to be a matter for examination. The National Aboriginal Conference, in a letter of 16 July 1979, indicated its priorities. It asked for an investigation by the House of Representatives Standing Committee on Aboriginal Affairs of, firstly, the Queensland Acts concerning Aboriginal and Torres Strait Islanders; secondly, the Western Australian Electoral Act; and thirdly, Aboriginal housing. I seek leave to have that letter incorporated in Hansard.
– Whom is the letter from?
– From the National Aboriginal Conference. I think it has been incorporated in Hansard before. There is nothing controversial about it.
The letter read as follows -
NATIONAL ABORIGINAL CONFERENCE
P.O. Box 259,
Woden, A.C.T. 2606 16th July, 1979
MrC. S. Boorman,
House of Representatives,
Joint Standing Committee on Aboriginal Affairs,
Canberra, A.C.T. 2600
Dear Mr Boorman,
As discussed, the NAC, at its annual conference in April and again at a recent Executive meeting, decided that the priorities for investigation by the Joint Standing Committee on Aboriginal Affairs should be:
The Queensland Acts (Aboriginal and Torres Strait Islanders);
The Western Australian Electoral Act;
The Executive considered asking the Committee to investigate the ‘totality’ of Aboriginal affairs in Australia, but felt that an ‘item’, rather than a ‘global’, approach would be more appropriate.
– For a variety of reasons the Committee never got round to resolving which of the matters referred to it would be inquired into. There was a genuine and, I believe, bona fide disagreement between the Chairman and myself as to the actual powers of the Committee. The Chairman was of the view that the Committee could act only on a matter referred to it by the Minister or the House of Representatives. I argued that the construction of the section meant that the Committee could in fact institute an inquiry in terms of its own motion. I must say that I am fortified in that view by the history of this
Committee and the way in which so many of its early references arose out of its own motions.
It was decided, by resolution of the Committee towards the end of this year, that the question of the interpretation of the terms of reference would be referred to the Clerks of the Parliament and, if necessary, to the Speaker if the Committee were in some disagreement about the view expressed by the Clerks. Although the reference was made to the Clerks and the matter was referred, no decision had been made when the recent Federal election took place. We now have this motion coming before the House with terms of reference which make it perfectly clear that the only way in which this Committee will now be able to function is by acting on a reference by the Minister or the Parliament. In the reality of the political situation in which we operate, that means that the Committee, instead of having the kind of flexibility of operation which I believe is necessary in any House of Representatives committee, will become just another creature of the Executive. It is the Executive which initiates these matters in this House.
If what we are saying of this Committee is that what it will examine will be ultimately the decision of either the Government or the Minister and that the Government will use its numbers to ensure that position, of course, we will see the sorts of problems which are now confronting these people and this nation in terms of Aboriginal affairs. Our parliamentary committee has not been prepared to grasp the nettle and this Parliament has not been prepared to face up to issues raised by the Aboriginal community regarding the attitudes of the governments of Western Australia and Queensland which have refused consistently to recognise the rights of the Commonwealth to legislate for the needs of Aboriginal people.
Those two governments have time and again refused to recognise the responsibility of the Commissioner for Community Relations regarding his duties to administer the Racial Discrimination Act. The reports brought into the Parliament by Mr Grassby, the Commissioner for Community Relations, have on three occasions in the last three years highlighted the extent to which Aboriginal citizens in Australia are the victims of racial discrimination. In his last report, Mr Grassby pointed out that in the last five years over 36 per cent of some 4,200 cases relating to racial discrimination involved Aboriginal Australians. The Commissioner has frequently pointed out that the governments of Queensland and Western Australia repeatedly called into question his responsibility to deal with matters under the Racial Discrimination Act. So, is it any wonder that the
National Aboriginal Conference, when asked what it saw as the priorities that ought to be taken up by this House of Representatives committee, indicated firstly, the situation in Western Australia and, secondly, the situation in Queensland.
It is all very well for the Government to use its numbers on the Committee and its numbers in this House to say: ‘We will not embarrass our political colleagues in those States. We will pretend that actions involving racial discrimination do not take place. We will close our eyes and ears to them’. The problem about that course of action is that it does not make the problem go away. It is now perfectly clear that, because of the attitude of the Government and the failure of this House of Representatives Committee to discharge its responsibilities to the Aboriginal people, the conditions of Aboriginal people have become part of a report on Human Rights Practices by the Committee on Foreign Affairs of the United States House of Representatives and the Committee on Foreign Relations of the United States Senate. Although that report indicates that the laws of the Commonwealth extend to provide protection to our Aboriginal citizens, it makes clear that there are acts of discrimination and acts denying civil liberties to our Aboriginal people, particularly in Queensland and Western Australia. I seek leave to have that comparatively short report incorporated in Hansard.
The report read as follows:
COUNTRY REPORTS ON HUMAN RIGHTS PRACTICES FOR 1979
SUBMITTED TO THE
COMMITTEE ON FOREIGN AFFAIRS U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON FOREIGN RELATIONS U.S. SENATE
DEPARTMENT OF STATE
IN ACCORDANCE WITH SECTIONS 116(d) AND 502 (b) OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED
FEBRUARY 4, 1980
EAST ASIA AND THE PACIFIC AUSTRALIA
Australia is committed to the principles of freedom and justice and full personal rights assured for all citizens. Australian society adheres firmly to the democratic traditions inherited from Great Britain. Political, economic and social rights are guaranteed under the Australian constitution, legislation and common law.
The Federal Racial Discrimination Act of 1975 prohibits all forms of racial discrimination based on color, race, ethnic background or place of birth. Concurrently with the passage of this Act, Australia ratified the International Convention on the Elimination of all Forms of Racial Discrimination, thereby undertaking a commitment to combat racism both at home and abroad. The Racial Discrimination Act of 1975 notwithstanding, which overrides any existing laws that may operate with a discriminatory effect, the Queensland Government has been accused of administering certain laws relating to aboriginals and Torres Strait Islanders in a way that has the effect of discriminating between the rights of white and black Australians. This fact is recognized by the Government of Australia which, through the Office of the Commissioner for Community Relations, is seeking to end such vestiges of discrimination.
Respect for the Integrity of the Person, Including Freedom from:
Torture is neither condoned nor practiced in Australia.
Cruel, Inhuman or Degrading Treatment or Punishment
Australian law prohibits such punishment and is respected in practice. Writs of habeas corpus are available. Preventive detention is not practiced.
Arbitrary Arrest or Imprisonment
Australian law prohibits such action and is respected in practice.
Denial of Fair Public Trial
Australian law guarantees the right to a fair hearing, the right to a fair public trial and the unimpeded right of counsel; these guarantees are respected in practice. Defendants are informed in advance of charges and have pre-trial access to evidence against them.
Invasion of the Home
Effective legal safeguards exist to prevent arbitrary invasion of the home in Australia. No search may be conducted without a judicially issued warrant.
Governmental Policies Relating to the Fulfillment of Such Vital Needs as Food, Shelter, Health Care and Education:
Australia has one of the most comprehensive social welfare systems among the Western democratic nations. Basic food, shelter, health care and social security benefits are guaranteed for the entire population, including recent immigrants. Social security and welfare accounts for the largest single part of the Australian Government’s budget expenditures, amounting to some 28 percent in the fiscal year ending June 10, 1979. Public education is universal and free and includes special facilities for the handicapped. There is a general right of ownership of private property which is protected by law.
Aboriginal rights and development are of constant and active concern in Australia. Because of deep cultural differences between the aboriginal and European populations, the Commonwealth Government experienced great difficulty in pursuing its former policy of assimilation through promoting social change among the aboriginals so that they would become indistinguishable from other Australians in standards of living, occupation, and participation in community affairs. By late 1975, government policy had changed to one of commitment to the principle that aboriginals should be as free as other Australians to determine their own varied futures. The policy of the Queensland Government, however, continues to promote the concept of full integration of all indigenous people.
The Government acknowledges that in general the aboriginal population is disadvantaged in such areas as education, housing, health and employment. Through the Department of Aboriginal Affairs and other federal and state agencies, the government has sought to secure for Aboriginals access to government service equal to that accorded other Australian citizens together with additional services appropriate to their disadvantaged state. Special programs have been undertaken to assist aboriginals in becoming self-sufficient. These include encouragement of land ownership, expansion of employment opportunities, training programs, support for small business acquisition, home ownership and involvement in other development projects. These policies are directed toward helping the aboriginals to become economically self-sufficient while preserving their distinctive culture.
Respect for Civil and Political Liberties, Including:
Freedom of Speech, Press, Region and Assembly
Australian law guarantees all of these basic rights and they are respected in practice. There is no government-owned press and no press censorship. Members of all religious sects are free to observe their practices without interference from the government. In West Australia, 1976 amendments to the Police Act restrict a person from organizing or conducting a procession, meeting, or assembly in a public place without the permission of the Commissioner of Police. The Commissioner may not, however, withhold such permission unless, he has reason to believe there will be a disturbance. A few trade unionists in West Australia have been arrested and fined for violations of this law. In Queensland, laws governing street marches have led to confrontation between the police and civil rights activists.
Freedom of Movement Within the Country, Foreign Travel and Emigration
There are no restrictions on movement within or outside Australia, including the right of emigration. Race is barred as a criterion for approval or rejection of an application to immigrate to Australia and, on a per capita basis, Australia’s acceptance of Indochinese refugees is the highest of any country in the world. Since 197S some 25,000 refugees from Indochina have been admitted for permanent residence in Australia.
Freedom to Participate in the Political Process
Commonwealth law guarantees this freedom, which is respected in practice. Complaints have been made that certain amendments to the electoral laws of West Australia have the effect of restricting the right of aboriginals to vote. These provisions relate to enrollment and voting procedures and could be applied in a manner to discourage voting by aboriginals and others not fluent in English. In at least one instance, illiterates were prevented from using “how to vote” cards and the outcome of the elections was overturned by the Australian courts. Women have enjoyed full political and civil rights in Australia since the turn of the century. In practice, however, they do not participate in the political and economic life of the country to the same extent as men. There are six women members of the federal Senate, but no woman serves currently in the House of Representatives. The Australian trade union is strong, well-organized and active both in politics and in industrial relations. The rights to organize, strike, bargain collectively and lobby are guaranteed in law and exercised in practice.
Government Attitude and Record Regarding International and Non-governmental Investigation of Alleged Violations of Human Rights:
The Department of State has no knowledge of any requests to investigate alleged violations of human rights in Australia by international or non-governmental organizations.
– I thank the House. It is a matter of concern to me, as it ought to be a matter of concern to every member of this Parliament, that, because of the Government’s refusal to move and that attitude being reflected in the House of Representatives Committee, a country such as the United States has a report before it dealing with the problems of our Aboriginal people. Surely this Government and this House are concerned about the matter. It is perfectly obvious that other nations, particularly European nations and the United States, are becoming increasingly concerned about this problem. It seems to me, given the complexities of the situation and given the fact that there will be continuing areas of confrontation, that there is a very vital role for the House of Representatives Standing Committee on Aboriginal Affairs to perform on behalf of the Parliament.
I appreciate the fact that there are problems of State rights and sensitivities involved. But if the House of Representatives Committee does not discharge its obligations to this Parliament as a fact gathering and fact finding body, capable of making recommendations and assessing some of the problems in that situation, it is perfectly clear that Australia’s reputation in the United Nations will suffer. Already there is talk of overseas nations not attending the Commonwealth Games in Queensland. There is clear evidence that that issue will become a matter of increasing concern in the United Nations. For a Government confronted with all those facts to say ‘Well, we will play it even safer than we played it in the past; we are not prepared to trust the fact we have the numbers on the Committee; we will change the constitution and structure of the Committee to see that it can act only as a public relations exercise for the Minister for Aboriginal Affairs performing functions as directed by the Minister or by the Government of the day’, is to deny the functions of a parliamentary committee.
If one looks at the motion before the House it is interesting to note that it has obviously been drafted with some haste. Paragraph (1) of the motion indicates that the only investigations that can be conducted by the Committee are dependent upon a resolution of the House or the Minister for Aboriginal Affairs. Paragraph (17) commences:
That the Committee in selecting particular matters for investigation . . .
That is the same paragraph as I would think was part of the original motion to create the Committee which then was given the power to initiate investigations. That paragraph remains. The House is asked to adopt a motion containing paragraph (17) which is somewhat contradictory and does not make any sense if paragraph (1), which provides for references by resolutions of the House or by the Minister for Aboriginal Affairs, is adopted.
I believe that this situation has arisen because the Government has been concerned to concentrate not on the history of this Committee, not on the functions and duties that it can perform and not on the realities of the problems that are confronting the Aboriginal community throughout Australia where the dominant issue tends to be land rights, civil liberties and the problems that confront many Aboriginal communities as a result of the coercive power of certain State governments. This Parliament can no longer go on ignoring that situation. I believe that the House of Representatives Committees will perform its functions properly and adequately, as it has since its inception, with the power to intitiate its own investigations. I point out that that power was not objected to by the Liberal or National Country parties when they were in opposition. But, now that they are in government, they are adopting a very short sighted policy, one which I think will lead to further cynicism and further despair in the Aboriginal community if this motion is passed in its present form.
I make it perfectly clear that if this motion is passed in this form, and I again am a member of the Committee, I will confer with Aboriginal leaders throughout Australia whom I have come to know and respect. If they take the view that this Committee, having ignored Aboriginal needs for some time, is no longer performing a useful and proper function in the interests of Aboriginal people, I will do what I would think under those circumstances to be the honourable thing - that is, I would resign from the Committee.
– I do not want to speak in respect of every proposed committee; so what remarks I have to make, I will make when speaking to the motion before the House at present. In this way ultimately the time of the House will be saved.
– I ask the honourable member to restrict his remarks to the proposed Standing Committee on Aboriginal Affairs.
– Yes, my remarks will be relevant to that Committee. First, I would like to refer to the number of Committee members. It is not correct to say that there is an historic balance of numbers on committees which is being maintained on this occasion. At the commencement of the previous Parliament the Government in fact reduced Opposition numbers on committees on the pretext of reflecting the then balance of the parties in the House of Representatives. If that was the case on that occasion, there is no reason why an adjustment in the other direction should not be made now. If this were done, the Government would still maintain a majority on the Committee but the composition of it would more accurately reflect the numbers and the interests in the House. I put it to the Government that by maintaining a restriction which is based on party numbers in the House of Representatives, the Government is in fact restricting the access of the Opposition to this and other committees of the Parliament.
There is also the question of referral. If the motion is passed in the form in which it has been presented to the House, the Government will have built-in a mechanism whereby any matter which may be an embarrassment to the government of the day - whether it be neglect or incompetence of the Minister or his department - will be beyond the investigation of a committee of this House which has been set up for the purposes of supervising the actions of the executive of the day.
The motion provides for the Minister to decide what the Committee may inquire into. Any member of parliament will be well and truly aware that Ministers are not going to refer to committees matters which could be embarrassing to their departments or to themselves. So the committee will be utilised as a public relations exercise under the direct control of the executive government. Whilst we hear a lot about parliamentary reform and the importance of the role of the Parliament in our affairs, honourable members opposite are about to vote for a motion which will take away from the Parliament all rights in respect of inquiries into the Aboriginal people of Australia. They will hand them all to the Minister who will be the only person to determine what the Committee will inquire into and what inquiries will be initiated by the Committee. The House does not have the power to refer.
– That is not so. Paragraph ( 1 ) (a) states that it is in the hands of the House.
– That sort of situation in which a committee is dominated by the executive government means that honourable members opposite are abrogating their responsibilities as members of this House and are certainly prepared to be totally subservient no matter what the interests of the Aboriginal people might be or what important matters might arise in which this House is in conflict with the Minister or his department. Regardless of what matters in that area may come to pass during the period of this Parliament, only the Minister, the person who may have a very serious problem of protecting himself or his department, will be able to bring them to the attention of the Committee. The Committee will not be able, of its own volition, to undertake any inquiries. That is a significant reduction in the authority of the Committee. I am aware that a resolution of this House can go to the Committee but that will not happen, because of the subservience of honourable members opposite, unless the Minister approves it. It will not even be debated in this House unless the Minister approves it. The honourable member for Dundas (Mr Ruddock) is as aware of that as I am.
One other question which I think the House should take into consideration is the independence of the operation of parliamentary committees per se. I want to mention this only briefly. However, in debate on at least one subsequent motion changes will be proposed to the operational functions of an important committee merely to meet the staff requirements of the Senate. It will be done for no other reason. I think that you, Mr Deputy Speaker, are aware that I am referring to the proposed limitation on the number of sub-committees of the Joint Committee on Foreign Affairs and Defence. I do not want to say any more about this matter. Other honourable members will raise this matter when it comes before the House for consideration. Rather than having to speak again, I protest strongly that this limitation is being placed on a committee, which I think has performed a valuable service, purely to meet the internal Senate staffing arrangements. If that is the reason- and it is the reason - it is about time the Government had a look at the staffing of joint committees to ensure that they are separate from the committees of the Senate or the House of Representatives. In effect, joint committees are vulnerable to the internal staffing machinations of either House of this Parliament. In this case the powers and authority of an important joint committee will be reduced so that staff can be transferred to committees of the Senate or the House of Representatives which are probably performing the same functions.
– Some comments have been made about the proposal to reestablish a House of Representatives Standing Committee on Aboriginal Affairs. In my view those comments have perhaps not sufficiently underlined the need for a parliamentary committee in this area. I wish to speak positively in favour of the Committee and its record. In my view, and no doubt in the Government’s view, the Committee is important. The committee has done very valuable work. It has prepared a number of reports for the Parliament in significant areas.
Honourable members may be interested to know that the Committee has reported on the alcohol problem of Aboriginals, the Aboriginal health problems and more recently on Aboriginal legal aid. In each of those areas it was possible to get significant agreement among members from both sides of the House. As a result, I believe constructive reports have been submitted to the Government. I believe also that those reports will be positively acted upon where that has not occurred already.
I think it has to be acknowledged, whether we like it or not, that there are very contentious and difficult issues in the Aboriginal affairs area. There are many issues which people want to fight out in a confrontationist way. That has been my experience in this House. I think it has also been the experience of other members. It is fair to say that when it comes to making a political point some members would not care whether that point was made in a committee, in the Parliament or by whatever other avenue could be availed of. I must say that I do not believe Aboriginals are well served when members of parliament find it difficult to get substantive agreement on Aboriginal issues and when political issues must be fought out to the last. I have said that in debates in which I have participated in this place in relation to the Aboriginal people of Mornington Island and Aurukun. I believe it has been in their interests that the issues have been settled, albeit perhaps not in the way that I would like them to be settled. However, at least they have been settled to the point where the confrontation and the heat have been minimised. If honourable members believe that we can work constructively rather than finding issues which use Aboriginal people as the basis for political divisions, I am sure that, as has been the case before in this Parliament, the issues raised will be debated and the result will be a reference to the Committee.
In the area of health, it ought not to be forgotten that the most significant report, I believe, of the House of Representatives Standing Committee on Aboriginal Affairs resulted from a motion moved in this House by the former member for Fremantle, Mr Beazley, which was accepted by the Government because it highlighted the health problems that existed. It was an area in which parliamentarians on both sides, not wanting to make political capital but wanting to find out the facts, could work constructively, and there was a very positive role for the Committee. I believe that that still can be the case if there is good will on both sides of the House. Certainly I am pleased that in this area there will be a committee which will be able to embark upon references that will make it possible to achieve a bipartisan approach and will allow members of the Parliament to work together constructively. That has to be seen as the important objective. If a committee such as this can work constructively in regard to Aboriginal affairs rather than be brought into a confrontationist environment, then I believe that it will strike a blow for the growth of parliamentary committees in the Australian political scene. If committees cannot work in a constructive way in areas such as this then the prospect of their working in the Australian political scene will be severely diminished.
– That is my view. Committees have worked well in this Parliament where that possibility of agreement has existed. Committees will not work if it is a matter of having a vote on every issue that is controversial, if it is a matter of dividing, or if it is a matter of creating division for the purpose of pursuing a political end, whether it is in the best interests of the people involved or not. I make those points frankly because they are my views. I wish to say that, in my considered opinion, the Aboriginal Affairs Committee can work. Certainly it can work with the motion proposed and can embark upon extraordinary useful tasks for the Aboriginal people of Australia. I believe that that, and nothing else, ought to be the Committee’s end and its objective. The objective ought to be to pursue what is in the best interests of the Australian Aboriginal people. I believe that that can be done positively by the Committee with the motion that has been proposed. Certainly I enjoin those honourable members opposite who have an interest in this subject to indicate that they will join in positively, with a willingness to work in the interests of Aboriginals and not be like the honourable member for Melbourne Ports (Mr Holding) who indicated that he will act in a particular way if the Committee does not work in the manner in which he wants it to work or on the questions he wants to examine, regardless of other people’s points of view.
– They are questions the Aboriginal people want to examine. Don’t be such a hypocrite.
– I heard the honourable member’s views. He made it quite clear that if the Committee is not prepared tq work in the manner in which he wants it to work he will consider his position in relation to membership of it. That is the point he made. Honourable members, in other places, have made the point that their continued membership of the Committee depends upon the issues that it is allowed to examine.
– Otherwise you get the runaround from the Minister.
– I do not believe that that confrontationist approach is in the best interests of the Aboriginal people. I believe that the interests of the Aboriginal people can best be served by our sitting down together and working positively, as we have shown is possible. Results have been achieved in the areas of Aboriginal health, Aboriginal legal aid and, I believe, with reference to the honourable member for Hughes (Mr Les Johnson), in the area of alcohol problems as they relate to Aboriginal people.
– I think the contribution of the honourable member for Dundas (Mr Ruddock) was extraordinarily insincere. He is really asking us to believe that the cause of the Aboriginal people of this country will be best served if the House of Representatives Standing Committee on Aboriginal Affairs investigates only those things which the Minister for Aboriginal Affairs (Senator Peter Baume) deems appropriate for investigation.
– The Parliament.
– The honourable member should not talk nonsense about the Parliament. The Minister happens to be in the Senate, and the Government dominates this House. The honourable member is saying that the Minister, who is in another place, or the Government majority in this House will determine what the Committee investigates. I agree with the honourable member that of course it is important for the interests of the Aboriginal people in this country that the Committee operates effectively. That is the Opposition’s sole purpose in putting this amendment. We ask simply: What are the best issues for this Committee to be investigating? Are they the issues which the Minister for Aboriginal Affairs thinks are the most important issues to investigate, or are they the issues which the Aboriginal people think should be the issues for investigation?
The honourable member for Dundas and a couple of others on his side of the House come in here and lecture us about the importance of selfmanagement amongst Aboriginal communities. It so happens that there is a great deal of agreement on that matter between his side of the House and our side of the House, but he and his colleagues baulk when there is an attempt or an opportunity to put the self-management principle into practice. Here is an opportunity for this Committee to act in great and direct service to the Aboriginal people. There is only one Aboriginal member of the Federal Parliament. The National Aboriginal Conference has no resources or powers of its own to conduct the sorts of investigations that have to be conducted in relation to the implementation of policy throughout this country. Therefore, one very important task which this Committee ought to take on board is the investigation, on behalf of the National Aboriginal Conference, of those issues which that truly representative body of Aboriginal people thinks are worthy of investigation.
The honourable member for Dundas knows that the Committee agreed that it would seek the advice of the National Aboriginal Conference on the issues it thought the Committee should investigate. As far as he was concerned, the National Aboriginal Conference came up with the wrong answers. The first two issues the Conference wanted the Committee to look at were too politically sensitive for the honourable member for Dundas and his colleagues. So the idea of selfmanagement has gone out the window and any notion of agreeing with the National Aboriginal Conference has gone out the window because there is a degree of sensitivity between the honourable member and the gang on that side of the House and the Premiers of Queensland and Western Australia. This whole matter is bogging down because he and his colleagues are prepared to kowtow to Bjelke-Petersen in Queensland and Court in Western Australia. They are not prepared to stand up for the interests of Aboriginal people if Court and Bjelke-Petersen get in the way. That is where the honourable member stands and that is where the whole issue of selfmanagement has foundered. We are offering an opportunity to resuscitate the whole area of selfmanagement to provide an avenue whereby Aboriginal people can propose areas which require investigation and this Committee, having looked at them and discussed the matter with the National Aboriginal Conference, would pursue those issues.
What is the point of this Committee investigating those issues which this all-white House thinks are important and worthy of investigation when there is an opportunity to take the advice of a representative group of Aboriginal people and investigate the issues which they think are important but have no opportunity to investigate? Consensus is vitally important if committees are to work. The Government has proposed that not only should it have a substantial majority on the Committee but also that it should have total control over what issues the Committee is prepared to undertake. With the greatest respect to the honourable member for Dundas, that is not the way to get concensus or co-operation from our side of the House. He is saying that not only are we a minority on the Committee and therefore are unable to direct the Committee, but also that we have to cop whatever the Minister for Aboriginal Affairs is prepared to give us to investigate. It is not unreasonable that we should cavil at that. Why should we simply be the lackeys of the Minister for Aboriginal Affairs? Why should we investigate just the things he thinks are important and which are politically tame enough for him to be able to deal comfortably with the reports? That is not the way in which we intend to see this Committee operate and it is not the basis on which our participation will proceed.
We are prepared to participate in this vitally important Committee, which has done useful work, but only if we are to operate on the basis of some consensus. I say again to the honourable member that a very great degree of bipartisanship exists in relation to a number of issues concerning Aboriginal affairs. It is only when the spectre of the Premiers of Queensland and Western Australia raises its vile and ugly head that we have a problem. Why should we allow ourselves simply to kowtow to them when the constitutional authority exists for this Parliament to make laws on behalf of all Aboriginal people throughout Australia. Why should we on this side of the House simply go along with the Government’s mealy-mouthed approach and cop whatever happens to be acceptable to the Premiers of those two States? That is not a basis for consensus or co-operation.
What is proposed is just an extension of the Government’s approach to this Committee as a whole. When the Committee does bring down reports, as it did in March 1979 in the case of the Aboriginal health report, there was a continuing promise, an old promise, by the Prime Minister (Mr Malcolm Fraser) that a response to that report, as to all committees’ reports, would be given within six months. We waited for 12 months with no response from the Government. It decided to set up a program effectiveness review. That investigation reported to the Prime Minister in April of this year, yet even by the end of the last Parliament no statement had been made to this House by the Government in response to the health report presented by the Aboriginal Affairs Committee. The honourable member for Dundas (Mr Ruddock) as the chairman of that Committee, knows that that report was a very important one, that it broke new ground and that it uncovered an absolute tragedy, an horrific tragedy, in relation to the health of Aboriginal people. Yet we have had to wait nearly two years for the Government to provide a mere response - not implementation of the recommendation - to the report of that Committee. I really must ask: Is it a basis on which one can expect to get co-operation from outside of the House, when the Government is not even prepared to act on what was a unanimous, and I think good, report. The Government, for whatever reasons - reasons of which I do not know - has not been prepared even to give this House the honour of a response to that report.
I think that the problem really is that this Committee has become too hot to handle; that the Government is really interested in seeing the Committee wind up. The Government is interested in following the course of action that the honourable member for Melbourne Ports (Mr Holding) has prophesied - that as a result of Government strangling the Committee will collapse, the Opposition will be forced to withdraw from it and it will then have no committee at all. When the Government could have a good committee, it is prepared to toss it all away.
– I would like to point to the terms of reference of the House of Representatives Standing Committee on Aboriginal Affairs back in 1973 when it was first set up. The Committee had power, by its own motion, to make its own investigations and to determine its own terms of reference. As previous speakers have pointed out, the first term of reference of the Committee is now to be the power to report on such matters relating to the circumstances of Aboriginal and Torres Strait Island people and the effect of policies and programs on them, as are referred to it by resolution of the House or the Minister for Aboriginal Affairs.
I point out that on 16 July of last year the National Aboriginal Conference, after being asked by the then standing committee as to its priorities for the inquiry next following that into legal aid, replied that its first priority concerned the Queensland Acts relating to Aboriginals and Torres Strait Islanders; the second was the Western Australian Electoral Act; the third was Aboriginal housing; and the fourth was Commonwealth-State funding. I must confess that, due to no fault of my own, I did not play a leading role on that Committee when I had shadow Ministerial responsibilities for some nine months of this year, but I did take part in the final preparation of the legal aid report and did have something to do with the clarification of federal Labor policies regarding Aboriginal affairs. However, at the several committee meetings that I did attend I noted quite a violent disagreement between Opposition and Government supporters on these matters. Even though the views of the
National Aboriginal Conference had been solicited, the wish of the chairman, and I take it of Government members of the Committee, was to select Aboriginal housing, the third priority of the Conference, instead of the first priority of the Conference, which was investigation of discrimination in Queensland.
Having visited some Aboriginal reserves in Queensland, I can see just why the Conference was so concerned. For instance, on Palm Island there is a long running dispute with the Department of Aboriginal and Islander Affairs of Queensland, and reserve managers, about who is entitled to stay on the reserve. The reserve manager has the power to kick anyone off the reserve. He also has the power, at his discretion, to enter people’s houses on the reserve to see that everything is in order and that sort of thing. There is no question that the civil liberties of Aboriginals of Queensland are virtually zero. I can see what has happened here. Because of the concern expressed by Opposition members of the Committee that the wishes of the National Aboriginal Conference would be overruled and its number three priority chosen instead of its first, the Government has sought to amend the terms of reference of the Committee so that there can be absolutely no doubt that it is the Minister and the party with the numbers in the House that will make the final decision, rather than the Committee. What the Government will do in these matters is perfectly obvious. If it has to choose between taking up the option of the National Aboriginal Conference and protecting the racist Government of Queensland, it will seek every time to protect that government.
I have reason to believe that this Government is out to dismantle the Federal Department of Aboriginal Affairs. Its first step in dismantling the Department was to set up this year the Aboriginal Development Commission. Opposition members supported that because they thought it was a good idea, as far as it went. It was proposed that the Aboriginal Development Commission should take over the functions of the Land Fund Commission, which had the responsibility of acquiring land on the open market for Aboriginal purposes; of the Loans Commission, which had the responsibility of making loans to Aboriginals for housing and enterprises; and also of the enterprise section of the Department of Aboriginal Affairs in regard to budgetary financial allocations. We supported all that but found, when we heard the Prime Minister’s election speech, that he had decided, without reference to this House, that he would give responsibility for all Aboriginal housing to the Aboriginal Development Commission. I was quite amazed to read that proposal. There is need for 11,000 houses for Aboriginals right now in Australia. The Government states that it will be necessary to provide over the next 10 years at least 14,000 houses to come anywhere near meeting the need. To this fledgling organisation, the Prime Minister said in his policy speech, all responsibility for Aboriginal housing would be given. That would relate to grants in aid for Aboriginal housing associations. Grants for Aboriginal housing to the States were to be cut back and responsibility given to the Aboriginal Development Commission. This was to be done without any full commitment at all being made to adequate ongoing funding.
The honourable member for Fremantle (Mr Dawkins) pointed to a similar situation in regard to Aboriginal health. We know what the situation is in regard to Aboriginal housing. The honourable member for Dundas (Mr Ruddock) is a great exponent of an inquiry into Aboriginal housing similar to that into Aboriginal health. All of this work has been done before, just as it has been done in regard to Aboriginal health. That report was a very good report. I have read it all the way through. Professor Hollows and his trachoma team from the Royal Australian College of Opthalmologists also produced a very good report. The only problem with these reports is that they are never acted on. We are very doubtful about spending time running around Australia compiling reports as they are pidgeon-holed and never acted on.
The honourable member for Fremantle pointed to this deficiency when he said that the priority effectiveness review program was brought down last April following this report. It has never been presented to this House. I will tell honourable members why. In line with this Government’s secret policy of dismantling the Department of Aboriginal Affairs, the recommendation of this report on Aboriginal health priority programs is to take away from the Department of Aboriginal Affairs responsibility for Aboriginal health programs and to give them to the Federal Department of Health. I believe that over the next few years there will be a gradual dismantling of the Department of Aboriginal Affairs and a handing back of its powers and the expertise accummulated so carefully in this area over a long period to other State and Federal departments. The Opposition will oppose that because it believes that there is a need to retain that expertise in one department.
This Government does not really care for Aboriginals or the programs they require. There has been a cut of at least 32 per cent, in real terms, between this year’s budgetary outlays and the Labor
Party’s budgetary outlays in 1975. With regard to land rights, it is true that the Federal Government implemented the Aboriginal Land Rights (Northern Territory) Act after considerably watering down the 1975 Labor Government legislation, which was, of course, introduced by the then Minister for Aboriginal Affairs, the Hon. Les Johnson, who is the honourable member for Hughes. This Government watered down the legislation concerning the power of veto in regard to mining projects on Aboriginal land in the Northern Territory. The Government has not been prepared to stand up to the States and say that even this legislation could be presented as a model to those States where such legislation is relevant, such as Queensland and Western Australia.
Of course, the worst example of the Government’s failure is something which occurred earlier this year and which has now been brought to such a disgraceful and futile conclusion. I refer to Noonkanbah and all the discriminatory horrors involved in that shocking exercise. All for what? There was the mad rush to Noonkanbah of a convoy of scabs, the use of a police escort and the use of police guards to crush the simple Aboriginal people of Noonkanbah simply to allow drilling to proceed on sacred Aboriginal sites at Noonkanbah. The Labor Party said all along that there was no oil there. I could have told the Parliament that because last April the Chairman of the Amax corporation, Max Reynolds, said: ‘Look, Mr West, it is not better than a 100 to 1 shot’. Quietly and virtually insignificantly the convoy stole away into the night after finding no hydrocarbons at Noonkanbah. But the responsibility is still there. At least 600 exploration licences held by 30 individuals and companies have been issued by the Court Government. This issue will appear again, that is for sure, because the Federal Government is not prepared to take on these discriminatory, racist State governments.
As we say in our policy, what is required is a whole package of Aboriginal land rights legislation involving lands rights legislation of the Northern Territory type that this Government implemented after the previous legislation had been tidied up. We need to ensure that the Aboriginal Development Commission gets proper funding for the jobs and programs that have been foisted on it by this Government. What is more, the Government needs to take a good, hard look at what the New South Wales Government has produced with its select committee into Aboriginal land rights, the most radical and significant reports on Aboriginal lands rights in this country’s history. It deals not only with unalienated Crown land but also with alienated land, including land currently owned by local councils. It proposes the setting up of an organised judicial structure to hear such claims. I hope that the New South Wales Government has the strength of the people who prepared that report’s recommendations and to implement them in the form of legislation. Only when we have introduced appropriate legislation concerning different types of land use in all the States will we as an Australian people and as governments throughout Australia, on a Federal and State level, be seen to have gone some way towards the repayment of our debt to the Aboriginal people - people who have inhabited this continent not for the last 200 years but for the last 30,000 to 40,000 years and who have had their land taken away from them by superior force by a more dominant culture.
Debate (on motion by Mr Connolly) adjourned.
Sitting suspended from 6.1 to 8 p.m. (Quorum formed).
Debate resumed from 26 November, on motion by Mr Howard:
That the Bill be now read a second time.
– There seems to be some confusion about the order of business today. I was not informed that the Crimes (Taxation Offences) Bill was to come on for debate at this time. The Opposition regards the Bill as extremely important. For the first time, detailed government legislation relating to tax evasion rather than tax avoidance has been introduced. The difference, of course, is that tax avoidance companies or individuals seek to put themselves into a position where they can claim a deduction which was not intended by this Parliament when passing tax legislation, while evasion is that situation where companies or individuals put themselves into a position where they do not pay a tax obligation which they have.
I note that the tax evasion scheme which this legislation seeks to eliminate is one to which the Opposition has drawn attention in the past. In the middle of this year, Senator Evans drew attention to the rip-off on sales tax which is one of the aspects covered by this Bill. On 12 October, in the course of the election campaign, I drew attention to the scheme which is legislated against by this Bill. I pointed out that the tax evasion scheme was costing Consolidated Revenue hundreds of millions of dollars. The fact that the Government has now introduced this legislation does not surprise the Opposition, although the Opposition is certainly surprised that the Government has taken so long to initiate this action. Clearly the scheme has been around for a long time. It has been known to us for some time. To my knowledge one aspect of it has been reported in the Press since about the beginning of this year.
The scheme was a variant of the so-called Slutzkin-type dividend stripping operation which has been in operation since the mid-60s and which the Government legislated against in 1972 and 1978. That scheme involved owners of companies with accumulated profits who sought to avoid tax on profits distributed as dividends. Companies were sold to a tax avoidance promoter with a tax free capital gain to the owner. The promoters paid the company tax, then took all the money out of the company by declaring a non-taxable dividend. In addition, the promoters claimed a contrived tax loss on the artificially reduced value of the shares. That scheme was upheld by the High Court of Australia in 1977 and, although legislative action has been taken against it since, it still allows considerable tax savings to people using the original scheme about which I will be able to give the Treasurer (Mr Howard) details should he need or desire them.
All that I have mentioned precedes the scheme now being legislated against by this Bill. The scheme seeks to avoid not only tax on dividends but also the company tax due. Let me give a simpler example than that contained in the explanatory memorandum. It works like this: A company with assets of, say, $50,000 and expected profits of, say, $100,000, which should pay half that amount in tax on profits and dividends, is sold to a tax avoidance promoter for $130,000 which is equal to the company’s pre-tax value less a commission of $20,000 to the promoter for his efforts. This amount is tax free to the original owner and saves him over $50,000 which should otherwise be paid in tax.
Rather than pay tax on the company’s profits, the promoter puts the company in a position where it has no funds to meet its assessment. This can be done in a number of ways. The money can simply be taken out illegally after fake directors whose addresses are given as vacant blocks of land have been appointed to the company and the records destroyed. A favourite method which has been reported in the Press is to dump the records in the Sydney harbour. Alternatively the company can, through a series of transactions, such as purchasing worthless non-voting shares, invest its money in other companies controlled by the promoter in such a way that the Australian
Taxation Office cannot get to the money. The Commissioner of Taxation has no chance of getting the tax due in either case. The best he can do is to liquidate the company, but he would find that it had no assets or funds to meet its tax. No tax would be payable on dividends as the promoter would either reinvest the money in further schemes or get hold of it in some other nontaxable form.
That outlines the scheme in a fairly simple way and demonstrates the extraordinary effectiveness of it. The Government not only loses tax on dividends but also loses the tax on company profits. Thus the Government is left in the situation where it is open to massive tax loss. I repeat that this scheme has been operating widely with enormous tax losses. The Treasurer said in his second reading speech that one promoter had stripped over 2,000 companies in a recent period and, in respect of 733 of those, there was no tax payable on an income of over $ 120m. Quite obviously this is a practice which is widespread. Knowledge of this scheme was given to me a month or two ago. I was told that hundreds of millions of dollars were at stake. It is obviously something which has to be stopped and which should have been stopped a long time ago. The Government has to answer to this House for not having taken some action against the scheme much sooner than it has.
The Bill seeks to stop this scheme and any other scheme which is designed to put any company or trust in a position where it cannot meet its tax obligation by applying severe penalties to those engaging in it either as people seeking to reduce their tax or promoters of such schemes. The penalties involved are substantial. A penalty of five years gaol or a fine of $50,000, or both, plus a requirement to pay all or part of the tax sought to be evaded may be regarded as a substantial penalty. Certainly these penalties are well above those usually applying for tax offences. For instance, under the tax legislation as it stands, fraudulent avoidance of tax involves fines of up to $1,000 plus payment of double the amount of tax sought to be avoided as a penalty. A false statement can bring a fine of up to $200 plus the payment of double the amount of tax sought to be avoided as a penalty. In fact, the Commissioner of Taxation rarely enforces the full penalties, usually opting for no more than a 50 per cent penalty. There are also penal sanctions in the tax law as it currently stands applying to declarations made falsely or willingly which involve imprisonment of up to four years. Failure to pay these fines and failure by employers to keep tax deduction sheets can result in a penalty of up to six months gaol.
Clearly all of the penalties provided for in this legislation are much more substantial and severe than those existing under the Income Tax Assessment Act. In our view, these penalties are not inappropriate, given the enormous tax loophole that has opened up. I note in that regard that fines of $50,000, although they may appear large, perhaps are small when compared with fines of $250,000 which can be imposed on unions or companies under the Trade Practices Act. In that context, a fine of $50,000 is not such a tremendously severe penalty. I note with approval that in this connection these penalties apply to the promoters of such a scheme as well as to those seeking to evade tax. This is the first time that the Government has sought to penalise the promoters of tax avoidance and tax evasion schemes. The Government should have done this long ago, especially by de-registering tax agents who promote tax avoidance and tax evasion schemes. It is absurd that they are not de-registered.
Persons who are registered with the Australian Taxation Office as tax agents are technically agents of the Office in collecting tax. Yet we have a situation in which some of them - probably many of them - are engaging in tax avoidance promotion and consultation and therefore, while they are supposed agents of the Government in collecting tax, they are in fact doing the opposite and doing their best to prevent the Government from collecting tax. It is absurd that people who are known to be acting in that way are not deregistered. Therefore, it has been part of our policy to de-register tax agents who have engaged in this type of activity. We draw that matter to the attention of the Government as a move which we feel it should adopt if it really is sincere in wishing to abolish the enormous extent of tax avoidance and evasion in this country.
As one would expect from what I have said, the Opposition views this Bill as one which is to be supported by this House. We do this on the basis that the Government believes the present provisions of the tax Act are inadequate in preventing the kind of scheme at issue. Perhaps that is something I could return to later, but on that supposition, we certainly support the giving of additional powers to the Government to prevent this kind of scheme operating. However, while the Opposition supports the legislation, I would like to mention a few points of concern. One relates to innocent persons - that is, company owners who enter a scheme unknowingly by selling their companies in good faith to a promoter of a tax avoidance or a tax evasion scheme. I cannot imagine that there are too many people in this position. I am referring to people who run companies and who sell those companies to a person who is in fact a tax evasion promoter and who are unaware of the fact that they are selling the companies to such a person. But, there are such people.
Long before this legislation was brought forward, it was brought to my knowledge that some promoters had sold schemes to company owners and that the price they obtained for their companies was far in excess of their expectation. These people were concerned that they may have done something wrong. Some of them have sought legal advice to find out whether they have done something wrong. Of course, as the law stands, they have not. Clearly this shows that there are people who are somewhat innocent in these transactions. If some people think that they may have done something wrong, others may be blissfully unaware of what they are involved in. Under the proposed legislation, the Tax Commissioner would have to show, before the courts could impose a penalty, that these people had entered into the transaction for the purpose of evading tax. If they had not done so, clearly they are not going to suffer any penalty. But that is something for a court to decide. Therefore it means that people would have to go through the court proceeding before that decision could be made. I would like the Treasurer to respond to this point by giving us some assurance that he feels innocent parties - although there may not be too many - will not be adversely affected by this legislation.
The matter of innocent parties raises an opposite point. If the Tax Commissioner finds it difficult to prove that guilty company owners did this-that is, that people who knowingly entered into such transactions as part of a tax avoidance scheme, and this would be most of them - this legislation will not be of much use. That is the Treasurer’s problem. The problem exists on both sides. There is the possibility on the one hand that innocent parties may be subject to a penalty and on the other hand there is the possibility that the Commissioner may find it very difficult to prove that persons entered into transactions for the purpose of avoiding tax, in which case this legislation is not going to be effective. We have this dual concern.
Although we support what the Treasurer is trying to do, we would like him to respond in this debate by telling us how he sees his way through that difficulty. We would particularly like to know whether this dual concern is correct because we also are concerned that the Commissioner may be unable to get at the promoters. If the tax avoidance promoter, having taken over a company, appoints fake directors then how can the Commissioner get at the promoter of the scheme? A company may have a tax liability but when the Commissioner looks more closely at it he may find, firstly, that there are no funds available and, secondly, that there are no known directors because they do not exist. They are fictitious and their address is a vacant block of land, so the Tax Commissioner cannot get the money and cannot penalise the directors or the promoter who owns that company, or who did own it, because he cannot find him. We see that as a potential problem and we would like to know whether the Government is of the same view? If it is a real problem, this legislation is going to be ineffective. We would ask the Treasurer to assure us that the Government has the answer to that difficulty.
A third concern is that the incredible extent to which this scheme has been utilised suggests that a considerable amount of revenue has already been lost. As I have mentioned, the Treasurer has quoted the case of one promoter who stripped over 2,000 companies. For 733 of those companies the loss amounted to some $128m. Quite obviously there is an enormous amount of revenue involved. The Australian Financial Review of 1 1 January this year stated that the Victorian Companies Auditors Board was investigating 933 such companies and that the New South Wales Corporate Affairs Commission was investigating 160 such companies. So they have been known about for a long time. At the beginning of this year there was public evidence of over a thousand of such companies.
What is the Government doing to recover the losses? Obviously the losses have been enormous, but in the legislation currently before us there is nothing which will enable the Government to get back any of the revenue that has been lost up to this point. Why has not the Government sought to take some action to get back that revenue? We are not suggesting in any way that there should be a retrospective application of penalty. We are in no way suggesting that a penalty of five years gaol should be applied to somebody who became involved in a scheme months and months ago. However, we do suggest, as we suggested all the way along the line in respect of tax avoidance schemes, that retrospective legislation ought to apply in respect of tax which has been evaded by these companies and which has been known by the Government to have been evaded.
Why has there not been any attempt by the application of retrospective legislation to ensure that that revenue can be gained? Other legislation presently before the House provides for retrospectivity, although certainly not in respect of a tax avoidance scheme. However, retrospective legislation in the tax area is not something to which this Government has been averse at any time. We believe that its refusal to apply retrospective legislation in respect of tax avoidance schemes generally makes this Government’s actions against tax avoidance schemes fairly meaningless. It means that the Government is always one or two years behind the tax avoidance industry. The fact that the case now before us concerns a tax evasion scheme involving the loss of hundreds of millions of dollars, is surely no reason not to apply retrospective legislation. We certainly cannot see why nothing has been done.
Another point’ of concern to us is that the advantages accruing to tax avoiders through various Slutzkin-type tax avoidance schemes, to which I referred previously - I specifically mentioned tax avoidance schemes - still apply to offer some tax benefit to participants, despite extensive legislative action which was taken against them in 1972 and 1978. In other words, the Slutzkin-type scheme from which this evasion scheme with which we are dealing in this legislation comes, also has various tax avoidance derivatives, and one of those is still operating. I will give that detail to the Treasurer later, and we would like the Government to do something about that.
Various objections have been raised to this legislation by what I might term vested interests. I think members of parliament have today been circulated with detailed opinions by Queen’s Counsel and letters from solicitors expressing concern about various aspects of this legislation, and in the time available to me I will briefly say something about that. One of the points raised relates to clause 6 of the legislation, which makes it an offence for any person to directly or indirectly aid, abet, counsel or procure another person to enter into an arrangement or transaction or even to be a party to, by act or omission, a person entering into such an arrangement. The definition of an arrangement or transaction under clause 5 is quite broad, covering anything with the purpose of reducing, generally or for a limited period, the capacity of a company or trustee to pay tax, or securing so that a company or trustee will be unable, or is likely to be unable, to pay tax.
These provisions raise doubt as to the position of professional advisers who are concerned that any form of consultation at all could be seen as making them indirectly concerned in the entry by some other person into such an arrangement. The advisers claim that this uncertainty restricts their right to explain the law to persons seeking advice. Presumably, however, they can advise clients not to enter into such an arrangement, in which case they will be free from prosecution. Frankly, we think that is the answer to this complaint. All that these people who are advising persons in respect of taxation have to do is advise them not to get involved in such schemes and there is no way that they can be lumbered under this law or hit with a penalty such as is provided by this legislation for in any way aiding, abetting or counselling a person to be involved in such a scheme. So I do not believe that there is anything in this point of concern which has been raised. All that they have to do is say: ‘Do not get involved. It is a tax evasion scheme and you are likely to get into great trouble for getting into it’. They themselves would then be free of any threat of penalty. In our view, if they advise a client to enter into such a scheme they deserve prosecution, and we have no sympathy for them in that situation.
Clause 10 states that a certificate signed by a Deputy Commissioner stating that an amount of sales tax is due is conclusive evidence that the amount is due, and this point has also been raised in the lobbying of members of parliament. On that basis prosecution can be commenced, but the lobbyists say that clause 10, sub-clause (2), provides that if it were later determined, after the issue of the certificate, that the said amount was not actually due then the certificate has no effect and the prosecution can be stayed. We see some problem about this provision in the sense that if clause 10 states that the mere fact of having a certificate from the Commissioner means that there is conclusive evidence that the amount of tax is due, and subsequently that can be changed in the court, then this puts the taxpayer at some disadvantage. Surely it would be preferable to say that there is prima facie evidence that the amount is due if the Commissioner of Taxation is able to show a certificate to the effect that such an amount of tax is due. I ask the Treasurer to give consideration to changing clause 10 to incorporate prima facie rather than conclusive evidence so that the possible detriment to taxpayers who could be in the situation of being adversely affected by this legislation will not occur.
Another matter which has been raised by lobbyists refers to the scope of the definitions of transaction’ and ‘arrangement’. It is an offence to enter into an arrangement for the purpose of reducing the capacity of a company or trustee to pay tax or ensuring that they will be unable or are likely to be unable to pay tax. It is claimed that any transaction which reduces a company’s assets will reduce its ability to pay tax - for instance, trust capital being distributed, company funds being placed on long term deposit, or a wide range of ordinary commercial transactions. It is said that all these kinds of actions could mean that the company was not able to pay tax and that, therefore, penalty could apply under this legislation, even though in many cases this would involve just normal commercial arrangments. If that were so, it would certainly be a point of considerable concern. As we see it, that is unlikely to be a point of concern, but perhaps the Treasurer ought to reassure us and the nation that that is the case. It seems to us that if persons were engaged in ordinary business transactions they would not be liable to penalty in this way.
Similar claims were made about earlier tax avoidance amendments with a wide definition of a tax avoidance scheme from which no calamitous consequences have yet resulted. Surely the onus should be on the persons responsible to make proper allowance for tax liabilities and not to follow business practices which would bring about results where they could not pay the tax due. It seems to us that any temporary diminution of company assets, especially if it were in the long term interest of the company, would hardly be treated as a tax evasion arrangement.
It has also been claimed that existing provisions in various Acts already cover the situation which this Bill attempts to cover, and that is the point to which I referred previously. We assume that the various sections of the Income Tax Assessment Act, such as section 231 in particular, which could be said to apply to this kind of scheme have in fact been considered by the Government to be not effective. Certainly the Government has had a long time in which to use that kind of section if it thought it could be effective. The fact that it has seen fit not to use it perhaps indicates some lethargy on the Government’s part. But I suggest that it also indicates, particularly now when we have this legislation in front of us, that it thought that that section would be quite ineffective. Of course, that section provides for a fine of up to only $ 1 ,000 plus double the tax thought to be evaded as a penalty. That is a far lesser penalty than applies under this legislation with five years gaol plus a possible $50,000 fine. But I think the Treasurer should, in the course of this debate, tell us why those sections, particularly section 231, is an inadequate provision for dealing with the scheme at hand.
Finally, the Opposition regards this whole area of tax avoidance and tax evasion as extremely important. We are aware that tax avoidance is currently costing this nation something in the order of $ 1,000m at least in lost tax revenue. If we then go into the area of tax evasion, there is certainly an enormous amount of revenue being lost in that way as well. Professor Mathews of the Australian National University, who is a pretty respected authority, has estimated that the combined loss per annum through tax avoidance and tax evasion at present is in the order of $3,000m which is an extraordinary sum to be losing. The fact that the Government has not been able to take effective action to prevent any of that occurring to this stage is an enormous black mark against this Government. Of course, the Government has always said that it has done more than previous governments in this area. But the fact is that although more legislation has been passed, more tax avoidance and more tax evasion is occurring now than ever before. The problem is getting greater year by year.
This Government has an obligation to the Australian people, having just been re-elected, to take much tougher action in both the areas of avoidance and of evasion than it has seen fit to take up to the present time. I would remind the Treasurer also of the fact that it is two and a half years since he announced that he would consider taking action in regard to tax evasion through the cash economy. He suggested action be taken in particular in relation to the building trades. He, in fact, then backed off that proposed legislation. But he said in the Estimates Committee a couple of months ago that an inquiry following his backing off from that legislation was still ensuing. That inquiry has been going on for over two years. How long does it take him to inquire into what is obviously a rife area of tax evasion before he comes up with some substantive legislation? He would do well to study the Australian Labor Party policy on this matter. He has to take much tougher action in areas of tax avoidance and tax evasion in respect of getting retrospectivity into this area. He has also got to take much wider action on tax evasion than is encompassed in this legislation which we support as far as it goes.
– I am glad that the honourable member for Gellibrand (Mr Willis), speaking on behalf of the Australian Labor Party, has come to exactly the same conclusions as we on this side of the House. But I think he is deserving of some criticism for four or five reasons. I want to go through these reasons fairly hurriedly because I regard the substance of the Bill as more important than the debate on these issues. He referred to the fact that two and a half years to complete an inquiry is too long. I do not agree with him. I believe it is better to introduce a Bill that we know will be successful and will have a big impact on the future than to go along dribbling in legislation which only opens up new opportunities for the devious to find another method for evading taxation. It must be obvious to the honourable member because he mentioned section 231. 1 agree that the Australian Taxation Office did not think section 231 in itself would be effective enough. Therefore the Treasurer (Mr Howard) felt that it was better to wait until we could get advice from various sections of the business world including the accountants. We have done this. Not only did the Solicitor-General and the Attorney-General’s Department have a look at this problem but we also have with us tonight some of the most talented young people in the Taxation Office. We have also had advice from the advisory council of accountants. That is a very prestigious organisation which stands behind the Bill and which will be able to give greater support to us in public. So I disagree with the honourable member. I believe that is immature thinking.
The honourable member asked how we could get to the promoter of tax avoidance because he cannot be found. There are always circumstances in which the Taxation Office cannot get to the promoters of tax avoidance schemes. That is not the point. Penalties are imposed if we get to the people who actually participate in the scheme and who are found not to be complying with the law. What the honourable gentleman seems to forget is that the problem he raises should not occur because this legislation is expected to be a deterrent for the future. The Bill will not apply retrospectively because, for the first time in a tax law, we are introducing penalties of a very severe kind. He then referred to the fact that Professor Mathews stated that about $3,000m might be collected from tax avoidance. Obviously the honourable gentleman has not read page 1 5 of the Taxation Commissioner’s report because there he puts the amount of tax avoidance which turns out to be less than 1 per cent of total collections resulting from what has been done by this Government. My time is going too rapidly. I do not deal now with the Commissioner’s certificate referred to in clause 10 of the Bill because I hope to be able to deal with the matter myself. I think the honourable member for Gellibrand will get an explanation which ought to be satisfying to him.
I wish now to refer to my attitude to the legislation. I am glad to see the honourable member for Hawker (Mr Jacobi) here tonight because he like me, for at least two years, has been one of those who has felt that in cases like this of the worst kind of conspiratorial or fraudulent evasion the time is right for the introduction of a criminal penalty. That penalty would have to be observed in accordance with the normal laws of procedure and evidence in criminal law. I now come down to the point of what do I think of this legislation. I will not mention retrospectivity other than to say that because of the criminal penalties involved the
Bill will apply only in relation to arrangements or transactions entered into after the Bill receives royal assent. Secondly - this answers one of the questions which was raised by the honourable member for Gellibrand - it has to be made very clear that the Bill will, in no way, expose to penalty persons involved in the management of companies or trusts who are unaware or unable to pay tax because of a commercial misjudgment or inadvertence. As well, proposed new clause 5 only applies if the person knows what is going on and does not apply to a person who does not know what it is all about.
Let me turn to what this legislation is all about. It applies both to sales tax and income tax. As I said, this has already been approved by the advisory taxation council. I must say that the Bill does not break new ground. It is true that we referred to section 23 1 of the Income Tax Assessment Act. But this legislation does fit in with this section and gives it much greater power. We also could, if we wished, look at section 86 (1) of the Crimes Act which this legislation is rather like. From what I read in the counsel’s advice sent to me this morning I do not think that we could have acted under section 124 of the Companies Act. What we are doing we are doing patiently and well. We believe that this legislation will now act as an impediment to people in the future from trying to devise similar or any other schemes of tax avoidance of a fraudulent kind. If evasion has an element of conspiracy or fraud then we can assume that action will be taken which will impose another disadvantage to those who insist on depriving the Government and therefore the people of this country of benefits that they should receive as a result of the Government’s receiving more in the way of taxation.
What, then, is the substance of the Bill? The Bill makes it an offence to be a party to a ‘straw’ company or a ‘straw’ trust arrangement designed - this is important - to evade the payment of sales or income tax which has already become lawfully payable. It also makes it an offence to aid, abet or counsel others to eliminate or reduce the capacity to pay tax properly due and payable, and relates to those who procure others to be parties to such arrangements but only when– this is important and it must be emphasised - they believe the arrangement is to evade or eliminate the capacity to pay in whole or in part. That is the substance of the Bill. It is set out very clearly in clause 10 and the comparable provision relating to the payment of income tax.
The evasion practices referred to in this Bill are of two main kinds. The first ensures that a company is stripped of its assets before tax is due and payable or tax which will become due and payable can be collected. The second is contrived to ensure that liability for tax falls from the outset on a straw company or trustee which does not have, and was never intended to have, sufficient funds to pay the income tax or sales tax liability. This is obviously fraudulent and conspiratorial. I shall keep repeating that to justify the introduction of the Bill. How serious is this problem? I do not think we know. I have mentioned the latest report of the Commissioner of Taxation in relation to tax avoidance. The Treasurer has stated some of the facts but it seems wise for me to emphasise them to those who are listening to the broadcast tonight.
One promoter in New South Wales stripped 2,086 companies of their assets during a period of about 18 months so that tax could not be collected. There were no assets. In 733 of these cases the result has been that the Commissioner of Taxation will be unable to collect tax on taxable incomes aggregating over $128m. We have heard of one Sydney man who has evaded at least $58m in tax over a period. Beyond any doubt, the time had to come when this type of legislation had to be introduced to prevent such actions now and in the future. I am glad that I am able to make the second speech on this Bill in support of the Government. It is no use hoping something will be done. It is better to prevent this kind of activity taking place in the future and to show, on behalf of the people of this country, how much we dislike it. We on this side of the House are, unlike the Opposition, including the honourable member for Gellibrand, because we want to reduce taxation. One way by which we can reduce taxation is by giving all the support we can to the Treasurer to enable him to collect the funds that have been improperly, incorrectly and illegally evaded by the kind of measure that we are now determined to prevent.
I come now to the resort to sanctions. I believe this is the first time criminal penalties of such a severe kind have been introduced in a tax Bill. I say positively, and I will keep saying so as much as I can in public, whether in this House or outside, that the fundamental principle of this Bill is a warning to those who would engage in this type of taxation evasion. I believe that this measure will in fact be a deterrent and a very serious deterrent in the future. Many members of the accountancy profession and other professions now know the seriousness with which this matter is viewed by the Government. .. They know of its determination to bring these practices to an end. They know how detestable it can appear in the minds of the public when the names of people who are participating in these matters, whether they happen to be professional advisers or the participants themselves, come to be known. I am pleased about one aspect of this Bill. I have never liked retrospectivity. On one occasion I crossed the floor of the House. I did so because I would not accept a retrospective Bill. Retrospectivity is contrary to my party’s principles and platform and the governing rules of the party. I am glad to see those governing rules being observed now. I hope that they will aways be observed in the future.
I turn now to objections which I have deeply considered and which I believe are of critical importance. I feel that too many objections have been raised. I do so on three counts. I refer firstly to an excellent article written by one of the financial advisers of the Sydney Morning Herald. He felt that there was something wrong insofar as clause 5 was concerned. What I have been able to point out and what I point out now is that there is a very big distinction between the problems that have been raised between tax avoidance and fraudulent evasion. Under the present proposal we have a clear case where tax in fact has become payable, but where assets have been disposed of so that the tax office cannot collect the tax legitimately imposed. This is fraudulent evasion. The other type is of avoidance as for example when a person advised by his auditors or accountants that if he took certain measures - say, if he happened to be on the land and spread superphosphate - he would be able to claim that as a deduction. In that case the man has reduced his taxable income. His tax return will be analysed by the tax office and if the tax office accepts his return a tax is imposed and he pays it. He has the money to pay it in accordance with the taxation as imposed by the law as it stands at the moment. The other person has not done that. He is still under an obligation to pay but because he has denuded the corporation or whatever it is of any funds there are no funds out of which the taxation can be collected. It is a totally different position.
I turn to the next matter that worried me; that is, the certificate of the Commissioner as to evidence. Criticism has been made of this aspect - I find this difficult to believe - not only by Garrick Gray and Co. but also by the Law Institute of Victoria. I am amazed because the purpose of clause 10 is to ensure that questions of tax liability are to be determined only in the conventional processes of objection, review by a Taxation Board of Review, and/or an appeal to the magistrate or to the court. How an objection can be raised is beyond my comprehension, except that one feels that some of the professional men who are writing to us are defending their own positions. They are, of course, advisers to those who have participated in the schemes. The loss of income to them might be great. I do not exactly sympathise with them, but I do not criticise them either. Tax liability alleged by the Commissioner may be challenged by the taxpayer concerned in the traditional way.
I go one stage further and say that the key answer to the criticism is clause 11. If a prosecution is brought while relevant tax liability has not been finally determined, the magistrate in committal proceedings, or the court at the trial, must stay the proceedings. A prosecution cannot be allowed to go ahead if tax liability has not been finally determined. What more can the Government, through the Treasurer, do than to provide those protections in the essential cases? It is argued that professional advisers will be improperly exposed to criminal prosecution. That is not so! That is true in certain circumstances only. Any objection, based on fact and the law, must be looked at in the light of clause 6 of the Bill. People are protected by that clause which states that a person will be guilty only where that person:
-(Hon. Ian Robinson) - Order! I call the honourable member for Hunter. I remind the House that this is the honourable member’s maiden speech and I assume that the normal courtesies will be extended to him.
- Mr Deputy Speaker, I would appreciate your indulgence and the indulgence of the House for a few minutes to allow me to make some remarks which I feel are probably more appropriately made at this time. May I say how privileged I feel in the first place to be able to represent the electors of Hunter and people in the wider community as the member for Hunter. I am proud to represent people with whom I have been personally associated for so long. I am here to represent people to whom I feel personally and politically committed because of their allegiance and loyalty to the Australian Labor Party and to the aspirations of the Labor movement.
With our magnificent victory on 18 October, the electors of Hunter have again proclaimed their loyalty and have reaffirmed the sound political judgment for which they are so well and favourably known throughout the Labor movement of Australia. I pay tribute to my predecessor, Albert William James, who represented the Hunter electorate for over 20 years. Bert James was one of the most forthright and courageous members of the Federal Parliament and, among many of those great issues which he pursued, probably the most courageous stand which he adopted was in relation to the horrific experience of the Vietnam War. The position which Bert James adopted has been completely vindicated. There is no one today in the Australian community who is not aware of the fact that Australia became involved in the Vietnam War on the basis of lies and deceit. The detail, brutality and futility of that war will stand as a permanent indictment of those shameful people who perpetrated it. It was one of the most brutalising experiences in the history of mankind.
I also pay tribute to Mrs Nora James, Bert’s wife, an outstanding and gracious lady who has provided immeasurable support and assistance to Bert in carrying out his responsibilities. Nora James never recoiled from the special responsibilities that were hers and she fulfilled those responsibilities with both charm and dignity. I thank the electors of Hunter as well as my political colleagues, that great band of loyal supporters and members of the Australian Labor Party, for allowing me the honour of representing them in this national forum.
The Crimes (Taxation Offences) Bill which is before the House should not be seen in isolation. Of course, the Opposition does not see it in isolation; it sees it as a matter of extreme importance - indeed of fundamental and general importance - to the whole question of the effectiveness with which the Government has approached the question of tax avoidance and tax evasion. Despite this Government’s claim of being a low tax government - and the right honourable member for Lowe (Sir William McMahon) who preceded me in this debate referred to the supposed fact that the Government was interested in reducing taxation - the fact remains that this Government is the highest taxing government in the history of the Commonwealth. For example, the last Budget provided for total taxation receipts equivalent to 26.7 per cent of the gross domestic product. That percentage has never been higher. In the period 1972 to 1975, when the claim was made frequently that the Government then in office was a high tax government, the amount of gross domestic product absorbed by government revenue during that period never exceeded the figure indicated in the current Budget of this Government. In fact between 1972 and 1975 25.1 per cent was the highest level of gross domestic product taken by taxation receipts compared with the figure for this financial year, 26.7 per cent. So much for the claim that this is a low tax government!
This question not only concerns the increase in the proportion of the gross domestic product going to the total tax grab in Australia. What has happened is that there has been a shift in the burden or incidence of that taxation. I will cite some figures because I think it is extremely important, particularly in light of the claims that are made by members of the Government, for some of these facts to go on record. I draw attention first to these figures. From 1954-55 to 1980-81, the proportion of total tax which came from income tax increased from 40.7 per cent to 54 per cent. But between those periods, the proportion of total tax which came from company taxation decreased from 19.3 per cent to 14 per cent. So what has happened is that there has been a shift in the burden of taxation from the private corporate sector in Australia, to essentially wage and salary earners, in the first instance to income tax.
Let us look at what has happened to the proportion of that total income tax which has been paid by wage and salary earners. Between 1965-66 and 1980-81, the proportion of total income tax paid by wage and salary earners in Australia increased from 67 per cent to 81 per cent. So, the burden has continually shifted to the shoulders of those people and those sections of the community less able to bear it. I point to a significant fact. I refer to the proportion of total income tax that was paid by wage and salary earners in Australia in 1965-66 and compare that with the proportion they are paying now. As I said, the amount of the contribution by non-wage and salary earners has declined. If that group - the non-wage and salary earners - were today making the same proportional contribution to our total tax revenue as it made in 1965-66, it. would be paying an additional $2,700m. The fact is that they are not paying that. Honourable members can account for that in any way that they wish but the point is that government revenue still has to be provided. In the 1979-80 annual report of the Commissioner of Taxation - the right honourable member for Lowe referred to this aspect, suggesting that this was the only area of tax avoidance that could be identified - the Commissioner stated:
Some $700m of tax assessed in tax avoidance schemes that are under administrative challenge remained uncollected at the end of June, 1980.
They are identifiable amounts of tax avoidance that remained uncollected. We are becoming increasingly aware of the fact that there are vast areas of uncollected tax in Australia not only under the various types of avoidance schemes but also more perniciously under various types of evasion schemes.
During the last financial year the Taxation Commissioner wrote off $280m from losses which arose from identified avoidance schemes. This year he will write off another $300m of identified amounts covered by tax avoidance schemes. Eric Risstrom from the Australian Taxpayers Association estimates that the cost of artificial tax avoidance schemes is $500m a year. This is quite clearly a very conservative figure. Other estimates range to over $ 1,000m every year. Eric Risstrom also suggests that tax evasion is unlikely to be less than $ 1,000m every year. Reference has been made to the fact - I think it is well worth repeating- that Professor Russell Mathews of the Australian National University at the Australian Institute of Political Science Summer School in January 1980 referred to the present ad hoc system of taxation which makes income tax ‘a voluntary tax for the wealthy non-salary earner’. He went further than that. He said that the essential problem of our income tax system ‘is not to make the rich pay higher rates of tax or even more tax than the poor; it is to make the rich pay any tax at all’. Mr Bruce Pascoe of the Taxation Institute of Australia said as early as 1978:
During the past year or two–
Remember this was said in 1978; he was referring to the years 1977 and 1976 and members of the Opposition were not in government during that period. He said:
During the past year or two tax avoidance became big business in Australia.
Tax avoidance became the biggest growth industry in Australia. This has happened particularly during the last five years. Let me give some figures that prove this. The number of individuals and companies identified as being involved in tax avoidance schemes has grown by almost 2,000 per cent since 1975-76. That is, for every one person involved in tax avoidance schemes in 1975-76 there are now 20 involved in tax avoidance schemes. Let me give the figures. The suggestion has been made that the Opposition when in government did nothing about tax avoidance. But in 1976-76 861 individuals and companies in Australia were identified by the Taxation Office as being involved in tax avoidance schemes. I ask honourable members to listen to these figures. For 1976-77, the first year of the present Government, the number was 2,227; in 1977-78 it was 10,244; in 1978-79 it was 11,253; and for the most recent year it was 17,233, and that figure included 14,313 individuals and 2,920 companies. The total amount under challenge was $71 lm, including almost $300m which related specifically to that year. This occurred despite the fact that in the past two years the Income Tax Assessment Act has been amended 18 times and related legislation has been amended on 24 occasions. From 1 January 1980 until 1 July 1980, 150 pages were added to the Income Tax Assessment Act.
I know that there might be some personal concern on the part of the present Treasurer (Mr Howard). But let me advise this House and the Australian community that the approach on the part of the present Government to this question has been half-hearted, it has been dishonest, it has been ineffective and it is not going to work. Those figures prove it. The Government can have as many amendments as it likes to the Income Tax Assessment Act but until it starts to deal with this question, and particularly the question of retrospectivity which has been raised by Opposition spokesmen on previous occasions, there will be no chance of this problem being overcome and of this massive ripoff from the Australian Treasury being reduced or hopefully eliminated.
The Bill before the House is concerned with two types of situation. As has been mentioned, it is concerned with straw trusts and straw companies. But there are two special ways in which these schemes operate. First, a company is stripped of its assets before the tax payable can be collected. Examples of this have been given. One promoter alone has stripped 2,086 companies in a recent period. Also, in 733 of the cases the tax lost on income was in excess of $ 1 28m. In the first case a company is stripped of its assets before it can pay the tax which it is legally liable to pay. The second case is where the tax-liable entity makes liable to pay tax a trust company which never had the financial resources and which was never intended to have the financial resources that were necessary to pay that tax.
Variations of these schemes have been known for months and years. So I was surprised when 1 read these words in the current report of the Commissioner of Taxation:
An alarming tactic much in evidence during 1 979-80–
These alarming tactics were much in evidence long before then - is stripping companies or trusts of their available assets without making provision for payment of tax assessed or to be assessed. This makes use of legal forms and procedures that would be regarded by most as pure tax evasion not really capable of passing under the euphemism of ‘avoidance’.
The Minister in his second reading speech admitted:
This is a measure–
That is, this Bill- directed against calculated and fraudulent evasion of tax.
The maximum penalties for this are a fine of up to $50,000 or five years in gaol. If I were responsible for writing the terms of the legislation the penalty would be considerably higher than that.
There is an important distinction between tax evasion and tax avoidance. We are dealing in this legislation with cases of tax evasion. Tax avoidance represents an attempt on the part of people who are trying to rip off the Commonwealth and the Australian people by finding legal loopholes. That is, they act within the law. They find the loopholes and they are able to reduce their taxable income. Hence they reduce their contribution to the Treasury. Tax evasion is even more insidious and more offensive because what it represents is an attempt on the part of people who have a tax legally assessed to remove from themselves the financial capacity to pay that tax. In fact what they do is to thieve or steal from the Treasury and indirectly from the Australian taxpayer and the Australian community.
The point I want to emphasise is that the money in respect of which these people are destroying their capacity to pay is not their money; they collect it, but it is not theirs. The worst case of all is when they remove their capacity to pay pay-as-you-earn tax. That means that they have collected the contribution from their employee. The wage plug has made his contribution; the employer has collected it and then he destroys his capacity to pay it and he keeps it. That money has already been paid by Australian employees and it should be directed, of course, to the Treasury. But it is not; it goes into the pockets or coffers of these smart alecks who devise the schemes or participate in the schemes.
In the time remaining to me I want to draw attention as quickly as I can to two major deficiencies in this legislation. The first matter - I have already made reference to this - is the fact that there is no retrospectivity. I know that the operation of the Act has been brought forward so that it will become operative 28 days prior to when it would normally start to operate - that is, on the day it receives royal assent. But it will apply only to arrangements or transactions of the prescribed kind that are entered into after the Bill becomes operative. There is a clear reluctance and refusal on the part of the Government to legislate for retrospectivity. The only way to destroy this rapid growth industry in Australia is to legislate for retrospectivity. If the Government is reluctant to legislate in that way, it is possible to devise legislation which would provide a blanket cover.
If I had time I would refer to the specific characteristics of these avoidance and evasion tactics to which the Commissioner refers in his report. They can be identified - they are identified - and it is possible for the Parliamentary Counsel, the legal draftsman, to devise legislation which would incorporate those characteristics and make it perfectly clear that any scheme which has one or all of those characteristics is illegal from the time that it starts to operate. It can then be followed up as soon as it is identified as being one of these schemes. The legislation would provide for it to be illegal from the time that it started to operate. The Government could do that. The continued refusal of the Government to act in this direction will continue to expose its piecemeal, ad hoc, hypocritical, ineffective approach. The whole credibility of the Government in relation to tax avoidance and evasion is under challenge as far as these questions are concerned.
The next major deficiency is that the legislation does not provide for even those identified amounts of sales tax or income tax that have been ripped off by these smart operators to be paid to the Treasury. That will be left to the discretion of the courts, and that is spelt out clearly within the legislation. This represents a repudiation of the responsibility of this Government to ensure the reimbursement to the Commonwealth of funds which have been stolen from it. The responsibility is passed to the courts. The courts can order repayments of those amounts if they think fit. The Minister said that, for anyone to be committed- -
-(Hon. Ian Robinson) - Order! The honourable member’s time has expired.
Question resolved in the affirmative.
Bill read a second time.
– I wish to raise a number of matters in the brief period that I have available, but first of all I should make an observation on the Crimes (Taxation Offences) Bill. I suggest that the legislation with which the Committee is dealing sets the scene for a skirmish. The real battle will be for the High Court. Although the Treasurer (Mr Howard) is not at the table, I want to ask a couple of questions, one of which is very pertinent. I understand that this legislation will outlaw structures such as that used in the Slutzkin case. Do I assume that if another Slutzkin-type case were taken to the High Court, because of this statute it would not be upheld by the High Court? The Government ought to prevail upon the Commissioner of Taxation to take another Slutzkin-type case to the High Court to test the credibility of this legislation.
The approach to tax evasion, as it is contained in this legislation, is multifactional to this extent. Whilst we can do what we may with this legislation - that is, apply the Crimes Act to certain classes of tax evasion - the Government has been negligent in effecting adequate company law. Unlike the situation under company law now applicable in western Europe, Australian companies do not have any minimum paid-up capital; there is no stringent regulation of the issue of shares for non-cash consideration; and there is no prohibition on the payment of dividends to shareholders if some or all of the share capital has been lost or if the revenue or trading losses remain unrecouped for a number of years. In short, the limited liability status of Australian companies is a licence for abuse that provides for greater comfort to tax evaders.
Whatever may be said by honourable members on the other side of the House, it is incredible that when company law is discussed we still give credibility to limited liability companies with a paid-up capital of 2c. Much of the disease in the area dealt with in the Bill with which the Committee is dealing can be sheeted home to an ineffective companies law. As I understand it, the provisions in the forthcoming co-operative companies legislation in no way will eliminate that problem. I believe that for the first time Britain is locked into the European Economic Community in regard to company law, so the United Kingdom will have to have adequate solvency provisions. That is not so in Australia. We have a plethora of limited liability companies. Most accountants and solicitors have shelf companies. I understand that there have been very few delistings of companies in Queensland. It is a national scandal.
The other matter I want to raise with the Minister for Employment and Youth Affairs (Mr Viner) involves the provisions of section 251 of the Income Tax Assessment Act, which refers to the registration of tax agents. I understand that in South Australia, at any rate, most registered tax agents are accountants. Very few are solicitors; solicitors are not bound to be registered. The question ought to be asked: Why are they not subject to fit and proper person provisions? Under the taxation Act, tax agents are governed by a board. I ask the Minister whether, in the case of convictions under this Act, we should take it that it is the intention of the Government to regulate, that is, to deregister or debar tax agents from taking part in underwriting or making representations on behalf of tax clients? Under the companies legislation, auditors and liquidators, so far as they are affected, are subject to fit and proper person provisions. Will an auditor or a liquidator who is convicted under this legislation be subject to any penalty under the Companies Act? Will he be debarred and delisted? Likewise, what happens to solicitors who are convicted under this legislation? Will a solicitor who is convicted be debarred or delisted? One notes that tax avoidance in the United States is taken very seriously. The National Times of 19-25 October states: . . the United States Internal Revenue Service is currently looking at proposals to disqualify from practice before the IRS any lawyer who says that a tax avoidance scheme is legal.
It is all very well for the Government to bring in legislation to apply penalties. I would like to know from the Minister what penalties the Government intends to apply to non-professional people or to professional people, whether accountants, lawyers or tax agents, who engage in this type of nefarious, fraudulent scheme. A number of tax agents are neither accountants nor lawyers; they have been registered under the old system. What action does the Government intend to take in those cases? Under a number of Acts of Parliament professional people are bound to be fit and proper persons. In that regard I wish to make a brief but telling observation. I have endeavoured, since the Insurance Act came into force in 1973 - similar to that which was carried over from the
British Companies Act - to have included a ‘fit and proper person’ provision.
I also suggest that a director who is indicted under this legislation should be deregistered and debarred under the Companies Act - the court can do it already - from acting as a director in the future.
The reason that was done in Britain is very simple. The insurance industry is a very important one and the downstream effect on contingent liability when a person takes coverage is extremely so. I recall a case which occurred in my area in 1973, when Vehicle and General insurance company went into liquidation. It is not good enough for the Treasurer to say: ‘There is no need to have a fit and proper persons provision in these respective Acts.’ In the case in question a young invalid pensioner had a foreclosure placed on his home because he could not meet his liability as a result of Vehicle and General’s having gone into liquidation. He received a summons to meet the extra liability of the person with whom he had an accident, and who was insured with another company. In Britain any director who, because of incompetence or mismanagement, is declared1 not to be a fit and proper person can no longer act in that capacity.
I suggest to the Minister that although it is important to pass legislation with punitive provisions such as we find in the Bill before us, the people who are charged with the responsibility of management have an obligation to exercise it in a competent fashion. If they do not they ought at least to attract the full rigour of the law. People in a professional capacity, at least, who engage in these nefarious and fraudulent practices, whether they be accountants, tax agents, company directors or solicitors ought to be subject to punitive provisions which apply to them professionally. In short, if they are not fit and proper persons they ought to be either deregistered or debarred.
– I call the honourable member for North Sydney.
– The tax lawyer.
– Thank you, Mr Chairman. I thank also the honourable member for his interjection. May I say that my work in taxation has been confined mainly to acting for the Deputy Commissioner for Taxation. I wish to draw to the attention of the Committee one aspect only of the Bill, of which, in general terms, I am wholeheartedly in favour in that it seeks to cut out a field of evasion which we need to cut out as soon as we possibly can. The matter to which I refer does perhaps create some difficulty and I wish to refer to it briefly.
Honourable members will be aware that, for the purposes of an assessment of income tax, one has first to go through the assessing process provided by the Income Tax Assessment Act. The Commissioner, upon making his assessment under section 166, causes it to be served upon the taxpayer, who then has a right of appeal or objection. The Commissioner considers the objection and it is either agreed to or disagreed to, or a qualification is made. The taxpayer may then, if he wishes, pursue a right of appeal. Clause 10 (1) of the Bill provides that a certificate shall be conclusive evidence of the matters stated therein. A situation could arise in which a taxpayer company, for whatever reason, perhaps incompetence - it has happened before - does not object to an income tax assessment although it has good ground for so doing. Let us assume that that takes place. Let us further assume that the Commissioner or person who exercises his authority, because that is what takes place, makes a mistake and issues a certificate in circumstances which, had he considered it carefully and been aware of certain matters, would have led him not to do so. However, he did so because no objection had been made to the assessment. In those circumstances a person could find himself at the receiving end of a criminal charge and at the receiving end of a certificate that could not be challenged by him. (Quorum formed).
I suggest that, to cover the situation where injustice could result from the issuance of a certificate which could not be challenged, consideration be given to a qualification being inserted in clause 10 to permit, in certain circumstances, courts to investigate the question of whether there is a bona fide answer to the certificate itself. Otherwise injustice, perhaps in a very few cases, perhaps in only one case, could result to a perfectly innocent person, simply because of an evidentiary provision which made a certificate conclusive evidence and which he was not allowed to challenge.
– I rise to make one point only. I condemn the Government for the way in which it has truncated this whole debate and treated the Parliament with contempt in the process. It has done so, firstly, by bringing on this Bill at a time when it was not listed. It took another Bill, which was in front of it, off the list and did so without giving any notice to the Opposition. Much more importantly, in the course of this debate many questions have been raised by myself and the honourable member for Hawker (Mr Jacobi), as well as one by the honourable member for North Sydney (Mr Spender), yet obviously there is no intention on the part of the
Government to answer any one of them. I find that utterly insulting not only to me and to the Opposition but also to the whole Parliament. Obviously the Executive is treating the Parliament with total contempt. Not one member of the Executive is prepared to come here and answer many of the important questions that have been raised by honourable members in this debate. These issues do not concern just us; they concern the whole nation. Many people outside the Parliament are concerned by this important legislation, but this Government is not going to give one answer to any of the important questions which have been raised. I think that is an utterly despicable way in which to conduct debate in this Parliament and is just evidence of the contemptuous way in which this Government generally conducts its affairs.
– I wish to ask a brief question about clause 11, although I doubt whether I will get an answer tonight. Frankly, I think the whole thing is a sham.
– Are you going to ask a question?
– This is the most serious debate we have had in this chamber for a long time, yet it has been an utter shambles. I have been waiting 20 minutes to speak. I wish to ask the Minister for Employment and Youth Affairs (Mr Viner), who is sitting at the table, a question in relation to clause 1 1 . Should a dispute arise, should the Commissioner of Taxation choose to prosecute, under this Bill, for tax evasion and should the proceedings commence with a Board of Review and then go to a court - the right honourable member for Lowe (Sir William McMahon) raised this matter earlier so I will be very brief- and an objection follows and therefore there is the granting of a stay of proceedings, which, I suppose, would be the normal procedure, it may well take three years and possibly four years before the matter gets to the High Court. Surely, some provision ought to be made for the lapse of three years from the committal of the offence. What happens if the money is not secured in the intervening period? What procedures will be taken under the Bill to secure the outstanding tax liability - that is what it is - as the company which commits the offence could drain off the money in the intervening period? I would like the Minister to answer that question. However, I think, like the honourable member for Gellibrand (Mr Willis), that we are not likely to get any answers tonight or in the future. I think it is a national scandal. Again I ask the Minister: What mechanism is to be vested in the Bill to secure the outstanding tax liability?
– I will refer the question asked by the honourable member for Hawker (Mr Jacobi) to the Treasurer (Mr Howard). It is an important question and I will ask the Treasurer to let the honourable member have a reply in writing. The Treasurer is presently engaged in important government business and for that reason is not able-
– More important than the House?
– It is important government business. One of the unfortunate features of the operation of this Parliament is that sometimes there is competition between government business which requires the attendance of the Minister and other business in this House. I point out, however, to the honourable member that the whole point of this legislation is to make it an offence for a taxpayer to enter upon a scheme which has as its purpose the stripping of the assets of a company so as deliberately to avoid meeting a tax liability. An individual who is a party to that conduct, which is regarded by the Government as offensive both to the revenue and to the public because, in effect, it is cheating the public deliberately of revenue that ought to be available to the Government of the Commonwealth for the purposes of supplying services to the public, is liable upon conviction to the penalties provided for in the Bill. So the assessment of tax liability and the meeting of that tax liability has to be seen in the context of the purpose of the Bill as I have described it. Beyond that explanation I will refer the honourable member’s question to my colleague and, as I have said, have my colleague provide a written answer.
– Can we get also answers on the earlier questions concerning the regulations-
– Order! The honourable member for Hawker has exhausted his entitlement to speak to the Bill. He is not free to speak again to the Bill.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Mr Viner) - by leave - read a third time.
Debate resumed from 27 November, on motion by Mr Howard:
That the Bill be now read a second time.
– This Bill contains four basic measures. Three of them give effect to Government election promises and one remedies a flaw in the drafting of an earlier tax Bill. The first of the three election promises relates to the depreciation of primary producers’ plant and provides for a higher depreciation rate for new agricultural machinery and fishing vessels. Prior to the last Budget, which was not so long ago, the depreciation rate applying to agricultural machinery varied from 5 per cent to 15 per cent of the prime cost basis, depending on the kind of machinery involved. After the Budget, with the 20 per cent increase in depreciation allowances, those rates moved to a range of 6 per cent to 18 per cent. With this legislation all the rates will be increased to 20 per cent.
In regard to fishing vessels, prior to the last Budget the rate was 7.5 per cent. With the 20 per cent increase in the rate it went to 9 per cent and now it will also be 20 per cent. In addition to that 20 per cent rate in most cases there will still be an entitlement to the investment allowance of 20 per cent. The second measure relates to soil conservation expenditure. An immediate write-off of capital costs incurred by primary producers on a range of supposed soil conservation measures is being applied. Such measures include the eradication of animal or vegetable pests, the prevention and combating of soil erosion, the draining of swamp or low lying land, and the erection of fences to exclude livestock or vermin from areas affected by erosion, excessive salinity and the construction of levee banks. The current provision relating to soil conservation measures are deductible over a 10-year period, but fences for the control of livestock or vermin are normally depreciable at 3.5 per cent per annum. So an immediate write-off is a very substantial change indeed. In fact, it means that costs can be written off over one year instead of 29 years as previously.
The third election promise covered in this legislation relates to the investment allowance. Of course, the investment allowance is an additional allowance enabling taxpayers to write off for tax purposes more than the total cost of various items used in producing an income. So, with a 20 per cent investment allowance, as it currently is, people can write off 120 per cent of the cost of new plant and machinery. The investment allowance under this legislation is being extended to cover new plant for use in amusement and recreation and some related activities. These activities include sport, gambling, gaming and various forms of public entertainment, such as theatres, circuses and so on. The fourth measure in this legislation relates to drafting errors in earlier legislation which provided a 40 per cent allowance for plant converted from oil-fired to some other form of fuel. This area involved the 40 per cent allowance having to be deducted from the cost of plant for the purposes of calculating the depreciation allowance. It was not intended that that should be the case. The amendment now rectifies that position by enabling depreciation allowances to be based on 100 per cent of the cost of the plant.
The Opposition has substantial reservations about this legislation. The first basis for our reservations is the great inadequacy of the second reading speech of the Treasurer (Mr Howard). I believe that this is an important point. The Treasurer has introduced legislation covering three election promises. Presumably he thinks that because the proposals were promised at the election, he does not need to give any justification whatever for them. In his second reading speech he gave no reason at all for introducing these amendments. He gave no backup at all for saying why they should be passed by this Parliament. Secondly, the Treasurer gave no costing for any of the amendments. Thirdly, he made no mention at all of the fact that the legislation was in part rectifying a mistake in previous legislation. That has to be ascertained by looking at the explanatory memorandum and the Bill itself. The first and second deficiencies which I mentioned in the Treasurer’s second reading speech are by far the most important. Why are no reasons given for these amendments? Clearly, these amendments will be of assistance to primary producers. But is it axiomatic that anything that is good for farmers is good for the nation? This Government apparently thinks so. It thinks that it does not have to justify in any way assistance for farmers. So, no reasons are given for introducing this legislation.
There is no costing for these amendments. Why is there no costing? The Government is constantly stressing the need to crack down on public expenditure, to use revenues effectively and to eliminate the deficit. In this case it is giving away revenue in that collection will be deferred by the primary production measures outlined. It will be lost completely in the case of the extended investment allowance. Now the Government apparently expects the Parliament to pass these measures without knowing the cost to revenue. There is a clear lack of consistency in this approach that amounts to little more than an insult to Parliament. The Government gives no reasons or costings. In fact some costings have been given by the Government but not by the Treasurer. The costings which we have ascertained were given in the background papers to the policy speech of the
Prime Minister (Mr Malcolm Fraser) which was delivered on 30 September this year. Those background papers reveal a costing, according to the Prime Minister, of the 20 per cent depreciation rate for primary producers as being $7m. They point out that soil conservation measures will cost Sim and the extension of the investment allowance will cost $5m.
The first of these costings seems to us to be very considerably understated. It is quite possible that the third one is too. We do not have a basis on which to make the assessment. In regard to the first two there is some sort of basis. In 1973 a review of the continuing policies of the previous Government found the cost of the 20 per cent investment allowance which had operated for the 20 years before that with respect to primary producers to be $12m. If the figure was $12m in 1973, how could it possibly be $7m now? It is more likely to be much more than $20m now. The Prime Minister would have us believe it is a mere $7m. He wanted to persuade the Australian people that he was introducing only minor concessions which would not cost the revenue much. He was stressing the need to eliminate deficits and tighten belts. Quite obviously the figure of $7m which he put forward is a furphy. The allowance will cost at least $20m. No wonder the Treasurer does not give the Parliament any costings. If he were to give a true costing he would have to expose the falseness of the Prime Minister’s costings given in the election speech.
A similar situation applies to the soil conservation costing. The amount of Sim which the Prime Minister gives us seems absurdly low for expenditures which cover a wide range of property improvements some of which, such as drainage of wetlands, seems to require a broad definition of soil conservation. The provision in respect of fences alone seems to us to have a potential cost in excess of Sim. Any farmer who can claim his fence was needed to exclude livestock or vermin from land affected by soil erosion or excessive salinity will be able to claim an immediate write off instead of the 3.5 per cent I mentioned as being the present rate. There is a tremendous change. One expects that many farmers around Australia will be able to claim that they require fencing to protect land affected by soil erosion or salinity from intrusion by livestock. Obviously, this seems to be opening Pandora’s box. The provision could easily cost $ 10m or $20m, let alone all the other deductible expenses in this area of so-called soil conservation measures such as pest eradication, weed destruction, draining of wetlands and building of levee banks. The sum of Sim looks like a massive understatement. In our view, the second reading speech is totally inadequate. It gives no reasons and no costings. The costings which can be ascertained elsewhere, such as from the Prime Minister, seem to be absurdly misleading.
A second reason for the Opposition’s reservation regarding this legislation is our concern at the continuous stream of tax concessions for farmers going through this Parliament at a time when most people are being hit by an ever higher tax burden. It is an undeniable fact, as the honourable member for Hunter (Mr Robert Brown) pointed out in his maiden speech earlier tonight, that the burden of taxation on the great majority of Australian people is continually increasing by way of ever increasing income tax and increased indirect taxation, particularly through the crude oil levy. For most people there is a much heavier tax burden to be borne all the time. At the same time that this is happening we have a continuous stream of Bills passing through the Parliament which provide concessions for primary producers, most of which are not justified in any detailed way; sometimes they are justified in a perfunctory way but mostly they are not justified at all. We find this very disturbing. Perhaps it is what we should expect from a government which is clearly a government based on squattocracy with the Prime Minister, the Deputy Prime Minister (Mr Anthony), the Minister for Foreign Affairs (Mr Street), the Minister for Communications (Mr Sinclair) and the Minister for Primary Industry (Mr Nixon) all being substantial landholders and primary producers in their own right. Obviously there is an incentive in terms of their personal position and also in terms of the people with whom they most closely identify. They look after those people and provide nice tax concessions for them.
– It is a bucolocracy
– I will accept the correction by the honourable member for Lalor. We already have a wide range of tax concessions applying to primary producers in this country. I have not time to go through all of them but they are substantial. I do not say that they should all be wiped out. There is already a substantial set of tax concessions. If new concessions are to be brought in some justification needs to be given. It is an absolute insult to the Parliament and the Australian people to bring in the concessions with no attempt whatever to justify them. At present there are very generous concessions. I refer to the tax averaging provisions which we most certainly support. They are made extremely generous by the fact that primary producers have a right to opt in and out as it suits them. It is extraordinarily generous. When a primary producer’s income is down he does not have to bother about tax averaging but when it is up he does. He wins both ways. Farmers get substantial tax deductions for the money they put into income equalisation deposits. They also get a 7 per cent interest rate on those deposits. The investment allowance of 20 per cent applies to most of their expenditure. There are many other concessions. I mention that only as a background to the things which have been happening recently and which, from what we can see, will continue.
Already this year we have had amendments to provide full deductibility in the year of expenditure for water conservation measures. This also attracted a 20 per cent investment allowance and the 40 per cent energy conversion allowance which, in association with income averaging, can result in farmers saving more income tax for converting from, say, a petrol driven water pump to an electric one than they paid for converting the pump. In other words, for the $100 they spent on converting a petrol driven water pump to an electrically operated water pump they get $105 back from the Government by way of tax concessions. We pointed that out at the time, and it is still the case. The allowance is absurdly generous. That is the kind of legislation which is without justification coming through this Parliament.
Also the water conservation measures are justified by a drought which is certainly very severe in some parts of Australia. We do not deny that and we certainly agree that the farmers affected by drought need assistance. But is the tax system the best way to give that assistance, particularly as the drought measures which were brought in earlier - the water conservation measures - applied to farmers whether or not they were in drought affected areas and will apply in future years whether or not there is a drought? What sort of drought assistance is this? It is assistance to farmers on an overall basis, regardless of whether they have been affected by drought. Where does all this stop? How long do we go on with these concessions without any evaluation of their benefit from the national point of view?
It is quite scandalous that this is happening. Every such concession is an inducement to change the allocation of resources and to put more capital into farm production rather than into other potential activities. We must ask ourselves: Is this always a good thing? What evaluation has there been of these expenditures to see how cost effective they are? If there has been an evaluation, it has never been revealed to this Parliament or produced by the Government in defending the introduction of further tax concessions. Certainly nothing has been done to justify the belief of the
Australian people that any of these measures before us are anything more than a straight handout to a favoured section of the community. These issues of cost effectiveness and resource allocation are simply not being taken up by the Government. Rather, it assumes that they are all good because it feels that what is good for the farmer is good for Australia. That is not necessarily so.
Every such concession makes it more difficult to achieve desirable expenditures elsewhere at a time when the Government is again reviewing its expenditures with an eye to hacking back all expenditures in areas like health, education and welfare. At the same time, these Bills provide unjustified concessions to farmers. It simply does not fit together. The Opposition finds it quite deplorable that that kind of thing is happening. The Government ought to be providing justification. If it does not, it has no justification for taking action in what I see as more desirable areas, such as assisting the two million people living in poverty in this country or the unemployed. These issues are of concern to us not only because this Bill is before the House but also because there are still more Bills in the pipeline.
More concessions were promised by the Government at the last election that have not been put forward yet. Doubtless, in future months we will see more concessions being introduced and perhaps in future years even more than were promised at the last election. Where does it all end? How long will this Government go on showering tax breaks on one section of the community, without attempting to demonstrate the need for such concessions, while continually increasing the tax burden on the great majority of the population, who are low and middle income earners not fortunate enough to own a farm?
We are also concerned that in its usual haste to look after primary producers the Government is failing to take account of environmental issues. The Bill provides a tax incentive to take action which is completely opposite to that which the South Australian Government is taking on environmental grounds. Let me draw the attention of the House to the fact that in June of this year the South Australian Government amended the South East Drainage Act to allow the South Eastern Drainage Board to take part in water conservation programs including the restoration of former wetlands. The South Eastern Drainage Board published an environmental impact study in that same month which, on page 3, states:
That resolution stated:
In August of this year the South Australian Government, through the Minister for the Environment, announced the formation of an interdepartmental wetlands committee. It is stated that: . . the objective of the Committee would be to investigate, identify and evaluate proposals to restore or create further wetland habitats in the South East for recreation and conservation purposes.
All of those points, and what follows, relate to the fact that there is a tax incentive in this legislation provided by the Fraser Government for farmers to drain their wetlands. Yet here we have the South Australian Government taking action to encourage people not only to retain what wetlands they have but also to restore them. In fact the South Australian Government has not only done what I have mentioned but also it has introduced legislation which has recently gone through the State Parliament as part of the Heritage Act. It provides assistance to farmers to maintain and rehabilitate their wetlands. The legislation provides tax concessions such as a reduction in rates and taxes and provision of subsidies for fencing to farmers who retain their wetlands areas.
That is an extraordinary contrast. The South Australian farmers have hit the jackpot. They get the concession whether or not they drain their wetlands. If they do, they get a 100 per cent write-off from the Fraser Government. If they do not, they get a tax concession from the South Australian Government. What an extraordinary situation. Whatever they do, they get nice assistance from government. We would all like to be in that situation. Whatever we did, we would get some government giving us tax concessions. This is the kind of thing that has happened because the whole matter has not been thought out. The Government has made this concession without thinking the consequences through. It clearly has not thought through the environmental aspects and therefore is doing exactly the opposite to what the South Australian Government is doing.
This Government is encouraging farmers to destroy areas which the South Australian Government thinks should be preserved for environmental reasons. We would support the State Government in that matter. Yet here we have the Commonwealth Government providing a tax measure which is a substantial inducement to do exactly the opposite. This is obviously an absurd shemozzle. The Government has made a last minute attempt to overcome this situation to show that it has some knowledge of the environmental aspects. An amendment has been circulated recently but in our view it will not overcome this problem.
The Opposition also has substantial reservations regarding this Bill because of the use of the tax system to provide these benefits to primary producers. This concern stems, firstly, from the inequity of tax concessions as a means of providing benefits. I am referring to tax deductions for soil conservation and so on which reduce the taxable income of farmers, most of whom pay tax as individuals. Because of varying marginal rates of tax the deductions provide a much greater benefit to farmers on high incomes than to those on low incomes. If one has a 60 per cent marginal tax rate and draws a tax concession, one can write off 60c in the dollar on $10,000. That is of much greater benefit than writing off 32c in the dollar on $10,000 if one is on the bottom rung of the tax scale. The fact that the tax system is used to provide these benefits to farmers through tax concessions means that there is much greater benefit given to wealthy farmers - who almost by definition are less in need of assistance - than to the poorer farmers. To the Opposition that seems to be an absurd situation.
That is one reason why the use of the tax system is not a sensible way in which to provide assistance, if indeed it is justified. The payment of water conservation benefits could be justified due to a drought. But the situation may arise where a farmer is so adversely affected by drought that he has no taxable income- he earns less than $4,000, which is the level at which one is deemed to earn a taxable income. If he has little or no taxable income then a tax deduction, a 100 per cent write-off in the year of expenditure, is of no use to him. The Government allows him to write off 100 per cent of his water conservation costs in the year of expenditure, but if he has no taxable income because he has been badly affected by drought, what is the use of the provision? Ironically it has the greatest use for those who are not affected by drought because they are in the highest income bracket - the 60c in the dollar marginal tax rate. Because they are not affected by drought they can write off their losses to the greatest benefit, although this is meant to be legislation to assist the farmers affected by drought.
What an absurd way this is to provide benefits to farmers. If the Government really wants to provide benefits to farmers affected by drought then it should do it directly, not by some round about way which gives least benefit to those most in need and most benefit to those who have no need. Of course, all of this could be overcome to some degree by making tax concessions by way of rebate rather than by a deduction. This would mean the same tax saving to a low income farmer as to a high income farmer for a given expenditure, but that would still not cover the position of a farmer with no taxable income at all. So turning the concession into a rebate is better than a deduction, but it still does not cover the problem of very low income farmers.
There is good reason to ask why such concession should be given by way of tax concession. It would be fairer if it were given by way of subsidy, that is, a direct grant legislated for by Parliament and providing the same benefit to all farmers for any given expenditure. Not only would this be fairer, but also it would be desirable for other reasons. It would bring the payment more into the open. It would bring into the open what this Parliament is actually doing. Of course, I suppose, one of the reasons why tax concessions are preferred to direct subsidies by many people not just by farmers, is that they are less easy to find out about, less easy to see. Also, we see some benefit in this because it would reduce the complication of the tax Act if we were to make the payment by way of subsidy rather than by using the tax system.
Returning to the issue of bringing into the open the cost of these concessions, this would occur because a subsidy is much more visible than a tax concession. It shows up in the expenditure of departments, whereas the cost of tax concessions shows up nowhere. It must be wrung from the Government by way of questions on notice or some other parliamentary device. The more obvious the cost the less likely it is that unjustified concessions will be made by governments, or at least it will force them to attempt to justify their actions. The Bill before us is to provide a subsidy for farmers which will show up in the expenditure of the Department of Primary Industry. It is much more likely that we would have had some attempt to justify the subsidy than has been the case with this Bill.
It is very desirable to reduce the complications of the Income Tax Assessment Act because it is already incredibly complex. It is already almost totally incomprehensible to all but the cognoscenti, that is, an expert group of lawyers and accountants around the country who earn their living from tax matters. Certainly it is far beyond the ability of the average citizen to understand the Act. Every amendment we make to it makes it even more difficult to understand. By adding new sections, sub-sections, and more and more pages, it becomes more and more unwieldy. Not only does this increasing complication mean that legislation that affects us all is understood by only an increasingly small percentage of the population, but it also makes it easier for those intent on tax avoidance to find a tax loophole. It makes it more and more difficult for the tax authorities to prevent tax avoidance.
The very essence of tax avoidance is the exploiting of a concession, written into the Act with a particular situation in mind, so that it can be taken advantage of by people who are in a quite different situation from those intended to benefit. The more concessions we write in the more likely it is that tax avoidance will occur. That is an undeniable fact. The more this Government writes in tax concessions of this kind, the more likely it is that it will be providing avenues for tax avoidance. For instance, in the area of drainage of wetlands there will be a substantial incentive for persons to drain their wetlands to get a very substantial tax concession from the Government. The concession will be by way of immediate write-off, and those people will be able to sell that improved land at a tax-free capital gain. That is one way in which a person can use this kind of legislation, not simply to improve the land for primary producing purposes but to make substantial tax-free benefits. I am sure there are many other ways in which that can be done.
No reason has been given by the Government for the extension of the investment allowance to the amusement and recreation industry, as mentioned previously. The real reason appears to be that the Government got itself into a very difficult situation, especially prior to the election in December 1975. The tourist companies were given advice by the office of the Treasurer (Mr Howard) that the investment allowance would apply to tourist or sightseeing buses. It was then found that this was not going to be the situation. The Commissioner of Taxation disallowed it because these areas were classified as coming under the category of amusement and recreation, which was excluded from the investment allowance. In the period immediately before this most recent election the Government seems to have decided that it had to live up to that promise of December 1975 by extending the investment allowance to the area of amusement and recreation. It also announced its intention to make retrospective to 1 January 1976 the application of that allowance in respect of sightseeing buses.
In the time remaining I wish to say briefly that the view of the Opposition is that, although there may well be justification for retrospective application in respect of tourist companies’ sightseeing buses because of the way in which the companies were misled by this Government, we do not view with favour the extension of the investment allowance because the allowance has not been justified by this Government. It again is a handout which has never been justified in any way in regard to its cost effectiveness. I move:
– I second the amendment and reserve my right to speak.
Original question resolved in the affirmative.
Bill read a second time.
– by leave - I move:
Having reviewed the range of measures that are to qualify, the Government has now decided to include drainage works carried out to control soil salinity or to assist in drainage control. This work is an important part of sound soil conservation practice and accelerated tax deductions for its cost will be an added incentive to primary producers to improve the drainage on their properties and to avoid a build-up of salinity in the soil. Accordingly, amendment (3) will authorise a full deduction in the year of expenditure for constructing surface or sub-surface drainage works on land used for primary production and for the purpose of controlling salinity or assisting in drainage control.
The opportunity is also being taken to include in the Bill provisions to allow an income tax deduction for donations to public appeals to assist victims of the Italian earthquakes. The Prime Minister (Mr Malcolm Fraser) announced the Government’s intention to introduce these measures in a statement on 25 November 1980 and this was expanded in a statement by the Treasurer (Mr Howard) on 27 November 1980. These measures reflect the Government’s strong support of efforts being made by groups in Australia to raise funds for the relief of the unfortunate victims of the earthquake in Italy.
By amendment (4) the gift provisions of the income tax law will be amended to allow as tax deductions donations of $2 or more made during the current financial year to any public fund set up in Australia exclusively for the relief of persons affected by the Italian earthquakes.
– The Opposition agrees with these additional amendments moved by the Minister for Employment and Youth Affairs (Mr Viner) to the Income Tax Assessment Amendment Bill (No. 6) 1980. In particular, the addition of amendment No. 3 on the operation consisting of construction with respect to salinity and drainage control in some way removes a bit of controversy from the Bill because, as it was, the drainage was unspecified. There was a real worry by many in the community that some of our precious wetlands could come under the scope of these measures. We were really seeking some assurance. As the honourable member for Gellibrand (Mr Willis) has pointed out, we have a perverse situation in South Australia where that Government has recognised the value of the wetlands and is doing something about it in the south-east of that State.
I would like to reinforce what the honourable member for Gellibrand has said. If only the Government had come forward with some reason and explanation about this measure. As it is we are somewhat in the dark. No reason or explanation is given. No costs are put forward. As no reason or explanation is put forward and as the goal or ambition of the Government has not been stated, we are in a situation where we cannot effectively debate the question of what is the best way to go about assisting primary industry or assisting with soil conservation. Quite plainly it would be a good thing for this House to have a debate about soil conservation. Quite, plainly it would be very good for the House to have a debate about measures of assistance to the rural industry, particularly at this time of drought which is affecting something like 30 per cent of the primary producers in this country. But no, we are given two bold items to consider. No explanation is given as to what they are all about. We have a whole heap of assumptions and we are also left up in the air. We only have the policy speech of the Prime Minister (Mr Malcolm Fraser) to go on. He says that the depreciation allowance will cost something like $5m. Well if we accept that there are 200,000 farmers and graziers in Australia that gives them about $25 a farm. So it is not a particularly magnificent measure. But as my colleague has pointed out, the loss to revenue in 1973 amounted to $12m. So it probably amounts to something like $25m now. If the figure were $25m, and if we do our sums, that does not really give much to each farm. With any items that by nature becomes tax decuctible, what we end up with, of course, is that only the very wealthy farmers can take advantage of the allowance. In a situation where so many farmers are affected by drought it is far more equitable and sensible if we want to help the farmers to apply rebates or direct subsidies if that is what the aim and ambition is all about.
We are not told anything in the National Country Party policy speech. It was said in that document that this measure is all about the reduction of costs. Well, it may reduce some costs for some farmers, but it will only reduce costs to those who have an income and who can actually afford to spend money on machinery this year. It does not affect all farmers equally. If we look at the past in terms of studies of these measures - after all they parallel what prevailed from 1952 to 1973 by and large - we see that there was quite a lot of information at that time. It was shown, for example in some of the studies, that there is a lot of differentiation between like farms as far as investment patterns are concerned. It was shown on other occasions that there is not a really large correlation between the investment in plant and efficiency on a farm. These sorts of measures cannot be used by farm enterprises in an equal fashion. The amount of investment in plant that goes into the pastoral holdings is quite different from other forms of farming. Some wheat farms wear out machinery very fast, others do not. In the Western Australian situation I would imagine that the tillage implements lasted a lot longer than those used in some of the clay soils in some of the other States.
The only study we have about this whole question of investment allowance and accelerated depreciation is a study by a chap called Glau. He made this study over 18 years prior to 1973. That study showed that 4.8 per cent of gross investment in the rural sector was due to the income tax policy prevailing at the time. In the first two years of the period he looked at, there was a 40 per cent initial depreciation allowance. That showed that there was a gross investment raised by 4.6 per cent. From 1951 to 1962 there was a 20 per cent accelerated appreciation allowance and that was seen to increase total gross investment in rural Australia by 3.2 per cent. If we added the 20 per cent initial investment allowance to the 1963 provision, it was shown that there was a 10 per cent increase over the four years. So if we say that those figures are correct, we can see that really a great deal of incentive was not provided. But we do not know whether the Government is trying to provide incentive or trying to cut costs or whether it was a simple election bribe. We can try to make estimates of the revenue forgone. One study I read showed that between 1949 and 1966 something like $700m in revenue was forgone to induce an additional rural investment of about $340m.
Time does not allow me to go through some of the arguments that really we should be canvassing. But this Parliament in this two weeks is a bit of a charade. Legislation is being rammed through. No reason is given for these soil conservation measures. The Opposition supports soil conservation. But this legislation is not really about soil conservation. It is a little tax measure. These, again, are measures that were there until pre-1973. They were not really about soil conservation; they were about agricultural production. I praise the Government for including the additional amendment because I think this question of drainage for salinity is about soil conservation. As I said earlier one factor in Australian soils that leads to the most degradation is the salinity in the soils. The Labor Government did try to get a national soil conservation program off the ground. In the 1974-75 Budget, it spent a little bit of money. In 1 975-76 we committed the government of the day to a two-year program involving $2.5m.
– The Chair is bound to draw the honourable member’s attention to the fact that the Bill is being considered in Committee. It would be helpful if the honourable member made some passing observation of the forms of debate in the committee stages.
– I would submit to you, Mr Chairman, that all clauses can be debated in Committee. I can direct myself, very clearly, to clause 9 and the following clauses in which it points out the various components of the soil conservation measures to which these tax concessions will apply. I think I can point out clearly to you, sir, that we are not talking so much about soil conservation as tax measures. What I was trying to point out was that it was a great pity that these soil conservation measures included in the speech by the Minister did not pick up some debate on soil conservation. I point out that no reason for these measures has been given. We do want soil conservation. We do want to have a national conservation program. This document entitled ‘A Basis for Soil Conservation Policy in Australia’ is about a national conservation program. Again it was stated in the National Country Party policy speech by the Leader of the Country Party (Mr Anthony) that the Government was intending spending $3m in 1981-82. It was a pity that that was not flagged in the Minister’s speech. Then people on farms would know that this Government is committed to some form of a national soil conservation program instead of being committed to just a few taxation measures that do not really touch on the question of soil conservation per se.
I think that if we are going to talk about soil conservation and measures for soil conservation we should talk about the problems Australia faces with respect to its soils. If we address Bills to the problems of soils in Australia and salinity matters then these matters should be discussed also. One of the parties in the coalition has indicated that some form of soil conservation program might be introduced in the future. It is a great pity that Government members have not seen fit to enter into debate at all on this matter. The only opportunity for the Opposition to raise any of the general questions has come in the Committee stage, apart from the speech which was made by my colleague, the honourable member for Gellibrand. I think that the Government should really give some assurances to rural Australia and people concerned about rural conservation, soil conservation and investment-
– Order! The honourable member’s time has expired.
- Mr Chairman, I must express great disappointment at the statement by the honourable member for Werriwa (Mr Kerin) that the soil conservation measures provided for in these amendments are only a little tax matter. I think the implication of that is very important. It really does contrast the attitude of the Opposition and the Government towards tax. Tax may be both a means of raising revenue and a very important means of providing an incentive to people to do things. What we have done by this measure, described by the honourable member for Werriwa in a rather deprecating tone as a little tax matter, has been to provide a very important incentive to the rural producers of this country to embark upon soil conservation measures, notably to avoid increasing the salinity of their land, so that they may increase the productivity of their land. I would have thought that the Opposition would applaud the Government for providing such an incentive as that to the rural producers of Australia. The honourable member for Gellibrand (Mr Willis) referred to measures available in South Australia. As I understood him, he sought to criticise if not condemn the measures being undertaken by these amendments to provide tax relief for expenditure on drainage by saying that it cut across measures being taken by the South Australian Government. I understand that the South Australian Government has offered incentives to farmers and rural producers to retain vegetation where that is beneficial to the land, but the incentive provided by the South Australian Government is dependent upon agreements being entered into between the owner of the property and the South Australian Government. So the criticism made by the honourable member for Gellibrand is quite fallacious. In no way does the incentive provided by the South Australian Government cut across the incentive provided by this Government to farmers who spend money on increasing productivity by embarking upon drainage. The criticisms mounted by the two Opposition speakers cannot in any way be accepted by the Government.
Amendments agreed to.
Bill, as amended, agreed to.
Bill reported with amendments; report - by leave - adopted.
Bill (on motion by Mr Viner)- by leave - read a third time.
Consideration resumed from 27 November.
Clause 17 agreed to.
Remainder of Bill - by leave - taken as a whole.
– As we come to the concluding stages of the consideration of this Bill, I want to express the Opposition’s profound disappointment that at this late stage not one word of justification has been advanced in support of what is an extremely radical measure. If we look back at what has been said by Government supporters we find that the propositions have constituted nothing more than an attack upon the Public Service in general and upon public servants in particular. I ask honourable members to consider the purported justifications which have been advanced in the first place and to consider the fact that we have shown that each of those purported justifications does not stand examination. Indeed, in respect of the attacks that we made, not one word has been forthcoming in support of the proposition.
The first purported justification advanced is that the legislation has been necessary to restore the common law position that was upset by Bennett’s case. As I have indicated, that is a total misreading of what happened in Bennett’s case. The findings there are in line with the facts; that is, for a very long period a total position and code of conduct has been established by the Public Service Act and the associated regulations and there was no operation of the common law principle to which the Minister for Employment and Youth Affairs (Mr Viner) adverted for any period before Bennett’s case. The first purported justification does not exist. Not one word has been advanced on behalf of the Government to meet the attack that I made in that regard.
The second purported justification is that the legislation is necessary to give to the Commonwealth as an employer in the public sector the same rights as exist in the private sector- that is the right of no work as directed-no pay. I have established that the most recent authority in that respect- the Gapes case - showed quite clearly that that purported argument simply does not hold water. That case authoritatively held in respect of the private sector there being considered - the banking industry - that, as with the public sector, the effect of the operation of the award, taken in conjunction with the employer’s action, was such as to eliminate any suggestion of the operation of the common law principle. That is the second purported justification which has been destroyed by our argument. Honourable members will recall that not one single word has been advanced to meet the argument which I put and which demolished the Government’s position in this regard.
The third purported justification is that .the legislation is necessary to give to the Government the appropriate powers to deal with industrial action by Commonwealth public servants which could fall short of a total withdrawal of labour: I pointed out in some detail, as honourable members will recall, that in fact the Bill goes far beyond that. It does not limit itself to a situation of industrial action. The major thrust of our complaint is that the proposed legislation opens up the possibility of punitive action in regard to attitudes or actions of individual employees of the Commonwealth in no way engaged in an industrial action situation. I have taken meticulously each purported justification which has been advanced by the Minister and demolished each of those purported justifications and at no stage of the debate has any supporter of the Government attempted to meet the arguments which I have put.
– Order! It being 10.30 p.m., I shall report progress.
– I propose the question:
That the House do now adjourn.
– Mr Deputy Speaker, I require that question to be put forthwith without debate.
Question resolved in the negative.
– Honourable members can see therefore that on this side of the Committee we have discharged our first obligation. We perceive that first obligation to be one of meeting the arguments advanced by the Government in purported justification of the measure. We have demolished each of those arguments and we regard it as a matter of extreme disappointment, as has been observed in regard to other matters before the House and the Committee earlier this evening, that the Government does not take these matters sufficiently seriously to meet the arguments and the debate which is advanced from this side. Again I make the point that, having demolished the arguments of the Government in purported justification of this measure, we have also discharged that other obligation which correctly rests upon us to show the additional arguments as to why this legislation should not be proceeded with.
Very briefly, I make the point that it must be a matter of very serious concern to all members of the House, whatever their affiliation, that legislation imposing very severe sanctions and penalties should come before the chamber and no provision at all for appeal of any kind or resort to independent arbitral tribunals is provided. Honourable members will recall that at one point honourable members tried to have us believe that we should simply satisfy ourselves and be content with the proposition that a body such as the Public Service Board would never do anything untoward. All we had to satisfy outselves, as members of this Parliament, was that these were honourable men, who would always act honourably and, because they were honourable men and would always act honourably, would never do anything untoward. Therefore, that was enough and there was no need to have any provision for appeal or resort to an independent tribunal to test them. That must be one of the most ridiculous arguments ever advanced in this House.
I invite honourable members to examine the logic of that proposition, and to ponder why we ever worry about having appeals of any sort, whether to a Full Bench of an arbitration court, an ombudsman or any authority like that. We should just be content with the meaningless observation from the other side that these are honourable men and would never do anything untoward. In any area when dealing with employer/employee relations the argument has never been heard that a significant sanction and penalty can be imposed upon an employee without that employee being provided with any opportunity of appeal or resort to an independent tribunal. But that is precisely what has been done in this case and it is done in circumstances where the employee concerned can be required to act in a way which may be in breach of other legislation. We say, quite unequivocally, that that position is totally unsatisfactory.
As I pointed out, it is not as though the Commonwealth, as an employer, in the absence of this legislation being passed by this Committee, would not be in possession of other legislation and other avenues to deal with an employee in respect of whom it was dissatisfied as to the nondischarge of his obligations. There are several avenues that would be open to it, including what would be normally used by employers in the private sector, that is to make application for a stand-down clause. That provision, of course, is one that operates through the normal processes and procedures of the arbitration tribunals which at one and the same time gives a right to the employer, but provides adequate protection to the employee who may be or may feel himself or herself to be aggrieved. So, honourable members can see that in these circumstances just about every cardinal principle of employer/employee relations has been broken and just about every principle that should govern the bringing of legislation into this chamber has been broken.
Let me briefly recap. Every argument that has been advanced by the Minister I have demolished as a matter of law and as a matter of argument. In respect of that demolition not one single word has been advanced by any speaker on the Government side to meet the arguments that I have put. In respect of trying to get comparability with the private sector, I have shown that the situation does not exist in the private sector. I have shown that the legislation is not required because the Government already has more than adequate provisions in existing legislation. For all those reasons we express very grave disappointment in the legislation itself and in the way in which this Government has handled the legislation to bring about a situation in which its employees will be significantly disadvantaged vis-a-vis employees in the private sector.
Remainder of Bill agreed to.
Bill reported without amendment; report adopted.
– by leave- I move:
In moving this motion I wish to answer some of the matters raised by the honourable member for Wills (Mr Hawke). He asserts that he and other members of the Opposition, in debating this Bill, have demolished all the arguments put forward by the Government in support of it. I leave the public to judge that because I would judge the public to be fed up with the partial performance of duties by public servants or by private employees when at the same time they demand of their employers that they be paid as if they had performed all the duties for which they had been engaged. I do not understand the honourable member for Wills to have demolished that proposition one iota. I would be quite prepared to stand on any platform in Australia and to assert the proposition which is behind this legislation, that if employees demand that they be paid their full wages the employer - in this case it really is the public of Australia - can expect that those employees perform all the duties for which they are engaged and for which in return they are to be paid the.ir wages.
I call upon all members of the Opposition to read my second reading speech again. In it I spoke of co-relative rights and duties. I think it is about time the Opposition understood that rights connote duties and that duties connote and give rise to rights. We cannot separate the two. The proposition mounted by the honourable member for Wills is that employees may demand the right to wages without performance of the duties which give rise to that right. With the greatest of respect to the honourable member for Wills, it is a trite matter of law that the common law may be altered by statute or by contract. The common law principle of no work as directed-no pay may in turn be altered by contract or by statute. What was said by the court in Bennett’s case was that that common law rule was altered by a statute of this Parliament, namely, the Public Service Act and the regulations made under it, to the extent that the Act and the regulations became an exclusive code substituting itself for both the common law and contract. So it is that the Government has brought in this legislation to make clear what was previously understood to be the authority of the Government through the Public Service Board.
I direct the attention of the honourable member for Wills to the following passage in my second reading speech:
To understand this I think it is important to appreciate the fact that the common law and statute law, on the one hand, and the industrial law, on the other hand, operate in different spheres.
I ask the honourable member to read the remainder of that paragraph. That is an elementary proposition of law. Whilst the honourable member for Wills may have a law degree, he has never been a lawyer. What the honourable member is doing is denying the simple truth that the Australian taxpayer, who pays the wages of Commonwealth public servants, expects those public servants to perform the duties for which they are to be paid. If an employee refuses to perform those duties expected or required of him or her that person can never be said to be doing, as my colleague the honourable member for Wilmot (Mr Burr) said, a fair day’s work in return for a fair day’s pay. How then can the honourable member for Wills say that an employee who performs 50 per cent or 75 per cent of his work should be entitled to 100 per cent of his pay? I have not understood the honourable gentleman to demolish that simple proposition in what he said in his speech at the second reading stage or in the Committee stage of this Bill. The weakness of the honourable gentleman’s understanding of both the law and this legislation is simply this: The direction that must be given in order to deprive an employee of his pay is a direction given under the lawful authority of the person in a superior position to the employee. That lawful authority must back up the direction to withhold pay. It is the lawfulness of that authority which can always be challenged in the courts.
The honourable member for Wills fell into a trap of his own making. I listened very carefully to him when he very stridently said there was no right of appeal under this legislation. He repeated that a number of times. Then he said there is no right of appeal or any redress available to an employee. Later he said there is no appeal of any kind or resort to an arbitral tribunal. Still later he said there is no appeal of any kind or resort to an independent tribunal. Let me inform the honourable member of what the legal rights of an employee are. There is no appeal, but there is clearly a right–
– Ha, ha!
– The honourable member for Melbourne Ports laughs. He is supposed to be a lawyer but he does not understand the law. What there is under the laws of the Commonwealth is a right of redress to any employee affected by a direction to withhold pay. That right of redress is under the Administrative Decisions (Judicial Review) Act 1977.
I know that the honourable member for Wills is a very new member of this Parliament. I suggest that, before he comes into this House making the kind of assertions that he has, he read the statutes of this Parliament. The Administrative Decisions (Judicial Review) Act 1977 gives any person affected by administrative decisions of the government of the Commonwealth the right to go to the Administrative Review Tribunal to challenge the lawfulness of the decision that has been made. The Act itself is intended to be a simplified review of an administrative decision. It replaces very deliberately the complicated processes of injunctions and writs of certiorari and mandamus previously available at common law. Very clearly, a right of redress is available to any public servant affected by a direction given under this legislation.
Let us also understand another point. The grievance that may have led to an employee deciding to adopt selective limitations or bans upon the work that he is required to perform may, clearly, be industrial in nature. Nothing in this legislation denies to an employee or his industrial association the right to take that grievance to an arbitral tribunal. Nothing in this legislation prevents his or her going to an arbitral tribunal to have the grievance tested and arbitrated. What the public of Australia objects to violently is that, in support of that grievance, an employee may refuse to perform all his duties and yet, at the same time, demand to be paid 100 per cent of his wages. That is the point of this legislation. The Australian public will not be compelled by industrial action of this kind - the selective performance of the duties for which a person is engaged - in support of a grievance when arbitral tribunals are readily available to that person.
The honourable member for Wills prides himself on having been involved in industrial relations for what he would probably say is a lifetime. I understand that he joined the Australian Council of Trade Unions as a research officer in 1958. 1 inform him that many other people in this House have had a long association with the union movement in Australia. I happen to be one of them.
– You charge a good fee too.
– I charged a good fee and the unions got a good result. Before I became a member of this Government I had been acting for unions since 1960. I even had the privilege of amalgamating the engineering union and the boilermakers society in Western Australia. I acted for all the metal trades unions in Australia in Western Australian jurisdictions and in the Australian Conciliation and Arbitration Commission.
Mr DEPUTY SPEAKER (Mr Millar)Order! I remind the Minister that in speaking to the third reading he is obliged to address himself to the clauses and schedules of the Bill.
– What I am saying is pertinent because the honourable member for Wills has had the privilege of adopting some of my arguments before the Australian Conciliation and Arbitration Commission. I make this point to him because for as long as I have been involved with unions I have heard the safety argument used to justify all sorts of things. Whatever might have been said by the honourable member for Corio (Mr Scholes), let alone the honourable member for Wills, in trying to demolish this legislation on the ground that it would deny to employees the right to challenge unsafe conditions of work, it is a palpably false proposition. Any employee and any industrial association to which he belongs has a right to take an industrial safety issue to an arbitral tribunal. There is also another fundamental rule that the honourable member for Melbourne Ports (Mr Holding) might not understand. It is implied as a matter of common law in any contract of employment that a person can refuse to act or to do a certain thing asked of him without reasonable excuse- the direction to perform that act. That is a simple proposition of common law. I suppose that neither the honourable member for Wills nor the honourable member for Melbourne Ports has ever understood that proposition.
The point then is simply this: The Australian taxpayer is not prepared to condone or allow the national government selective industrial action by employees of the Commonwealth of Australia and some of the instrumentalities of the Commonwealth in support of industrial grievance when those employees think that they are being astute or smart so that they can decline to perform all their duties but demand and receive all their wages. It is a very simple proposition which is supported by a very important piece of legislation. It is important that the Australian public recognises it as important, and I know that this Parliament will recognise it as important enough to pass it.
– I do not want to take up too much of the time of the House because I imagine that the Treasurer (Mr Howard) is waiting to tell Australia that interest rates are going up by a very considerable amount. As he wants to convey that news, after–
– After the election.
– Of course. After the election, as the honourable member for Port Adelaide has said, and after the terrible mess that has been made of the conduct of Australia’s financial affairs in the last few weeks, one should not deprive Australia of hearing the news. I can dispose very briefly of the pathetic performance that has just been delivered by the Minister for Employment and Youth Affairs (Mr Viner). The quality of that performance can be judged by the fact that he began with a deliberate misrepresentation. Mr Deputy Speaker, you may recall that he commenced his observations by saying that I had said that he had not answered the arguments I advanced in this House, and that he would leave the public to judge whether he had answered the arguments. He then went on to say that the public would judge whether it was right that a public servant should be paid if he did not perform his work. That is a complete distortion of what was said. I did not put that at all. I said that the Minister advanced certain arguments in justification of this Bill. The Minister is incapable of following an argument and dealing with it without misrepresentation. I will repeat it so that perhaps the next time he has an opportunity he will meet the argument.
The Minister advanced three arguments, and I met them. The first argument was that the legislation was necessary to restore the common law after Bennett’s case. I explained to him what Bennett’s case had done, and that it was not a question of Bennett’s case having upset the common law recently but that, quite clearly, common law had not operated for a considerable period. He advanced no answer at all to that. The second point he made in his speech, which he asked us to read, was that this legislation was necessary to restore in the public sector the same situation that applied in the private sector. That was his argument; we did not invent it. That argument was put by the Prime Minister (Mr Malcolm Fraser) in correspondence to the Council of Australian Government Employee Organisations. The argument put by the Prime Minister and by the Minister for Employment and Youth Affairs in justification of this Bill was that it was necessary so that the Commonwealth, as a public employer, could have the same right that existed in the private sector. I am not making up that argument. That is what the Prime Minister said in his letter of 13 October, and it is what the Minister advanced in this House. It is their argument. I have pointed out that that situation does not apply in the private sector, and I said that in no way and at no stage–
– Give it away. We have the numbers.
– The poor man is bubbling away about the fact that he has the numbers. He may have the numbers; it is the only argument that he has. It is no good the Minister coming into this House and saying that he has answered the arguments. He has not. It is true that he has one argument in this place, and that is that his numbers are greater than those of the Opposition.
– They always will be, too.
– The quality of his argument is judged by the fact that he says that they always will be. In the circumstances, there is no point in taking up any more time of the House, but the Opposition will not let this matter conclude with that misrepresentation lying upon the record of the House. We have answered every argument. Those arguments we have put have not been met by the Minister. We will not accept happily the situation in which employees of the Commonwealth are put into a significantly inferior situation to employees in the private sector. This legislation is an insult to Commonwealth employees, and it is something of which this Government should not be proud. Let it be quite clear that we on this side of the House do not justify a situation in which public employees are paid if they do not do their work. But we are saying there is ample existing legislation available in the Commonwealth to meet that situation. The Government does not have to impose upon public employees a standard which does not exist in any other area of employment in this country.
Question resolved in the affirmative.
Bill read a third time.
– For the information of honourable members I present a report entitled Taxation Statistics 1978-79’ dated 2 December 1980, the supplement to the 58th report of the Commissioner of Taxation which was presented to Parliament on 13 November 1979.
Ordered that the report be printed.
– by leave - Mr Deputy Speaker, I wish to inform the House of a number of decisions that have been taken by the Government regarding interest rates affecting certain loans charged by trading and savings banks in Australia. Firstly, the Government has concurred with a proposal to increase by 2 per cent the interest ceiling for overdrafts drawn to a limit of Si 00,000. Secondly, the Government has approved an increase of one per cent in the lending rate charged by savings banks for loans of under $100,000 for owner-occupied housing. Thirdly, the Government has decided to concur with the complete abolition of controls on deposit rates in respect of both savings and trading banks.
It is proposed to put to the Loan Council certain matters relating to the adjustment of the rate of interest charged on Australian Savings Bonds, as it is quite clear that that instrument is at present not attracting a reasonable share of funds from the household sector. In the meantime, sales of the present series of ASB, series 17, will be terminated as from tonight. It is proposed, on the basis of an understanding with the banks, that the increase in the overdraft rate of 2 per cent will not apply for the duration of the drought to those people affected by the drought. I will have something further to say by way of more precise definition regarding that matter tomorrow. It is also proposed to approach the Loan Council for approval to increase the borrowing capacity of the Commonwealth Development Bank of Australia from the existing amount of $20m to $40m.
I should say two things by way of general observation, Mr Deputy Speaker. It has become apparent that interest rate controls, which were designed primarily to assist small borrowers, in fact, because of increases which have occurred in other interest rates, are indeed having a counterproductive effect. Evidence has emerged that far from these controls effectively assisting small borrowers, they have resulted in many small borrowers being denied access to funds at concessional rates, and those small borrowers in fact are being forced into higher lending areas. Indeed, if the gentlemen sitting opposite tonight do not take my word on that subject I invite their attention to the words of Senator Walsh, the Opposition spokesman on primary industry and finance, who at least once or twice last week in another place argued that precisely what I have just said is indeed happening.
Secondly, I make it clear that previously I have indicated, and I repeat tonight, that the question of whether controls should remain on interest rates charged by banks or, indeed, by any other institutions in Australia, is a matter which properly should be addressed by the Campbell Committee when it reports, because interest rate controls are only one part of a series of controls upon banks in Australia and it is appropriate that all those controls be looked at together.
In the meantime, this increase of 2 per cent in the ceiling will give the trading banks considerably more flexibility and a greater capacity to offer a variety of interest rates to prospective borrowers. It should not be seen as a carte blanche for a general increase up to the ceiling of 2 per cent. We would hope that the additional flexibility would be used by the trading banks in a proper, sensible and responsible manner, as I know it will be, so that the future of interest rate controls as such can be considered in the context of the Campbell report when it is brought down during the course of next year.
May I simply conclude by saying that this Government, since its election to office in 1 975, has placed very considerable importance upon the effective use of monetary policy as a means of achieving its anti-inflationary objectives. As I said in the House last week, and repeated this morning, it is possible for a government to control either the money supply or interest rates but really not both at the same time. The Government has chosen a course of monetary responsibility in the decisions that have been announced tonight. In reality, we are also recognising what is increasingly becoming apparent, namely, that the interest rate controls, at their existing ceilings, are in fact not helping the people they are designed to help, the small borrowers. It is of little comfort to a small borrower to be told: ‘If we could give you the loan you could have it at 10* per cent,’ when the loan is not available because that interest rate is way out of line with market realities. This particular decision should be seen very much in the context of a recognition of that particular reality. No government, including this Government, welcomes increases in interest rates insofar as they affect people buying, or wanting to buy a home, or the operations of small businesses; but certain market realities have to be faced, and in the long run governments that pretend that those realities can be ignored, that one can achieve the Utopia of unrealistically low interest rates and firm monetary policy only bring much greater economic chaos to the people whom they are elected to serve and produce much higher inflation and interest rates. I commend the statement to the House. I seek leave to have incorporated in Hansard an extract from a speech made by Senator Walsh in the Senate on 26 November.
The extract read as follows -
If this Government persists with its present non-viable policy and attempts to hold interest rates on overdraft and on housing loan borrowings at 2 per cent or more below where they would settle if market forces were allowed or were an appropriate rate - given the level of interest rates in other areas - then the supply of funds in those areas would dry up . . . the people who want home loans, the farmers and the small businessmen - will be forced to go to the fringe financial institutions and to pay rates probably as high as 14 per cent or 1 5 per cent. This would have a highly undesirable and damaging result which would be quite unnecessary . .
– by leave - It is quite clear from the statements of the Treasurer (Mr Howard) that the Government’s monetary policy is a mess and an unmitigated confusion. In short, it is a total shambles. There can be no clearer evidence of this than the simple fact that the Treasurer was unable to give any advice that he was to make this statement tonight or, even more importantly, the fact that he has come into this House to make a profoundly important statement on a significant feature of monetary policy and has had to read from notes scribbled on the back of a used envelope. That is not the way in which one makes significant decisions about monetary management in this country, least of all the way in which to present a statement as a considered judgment of the mangement of the economy at a particularly difficult time in these sorts of circumstances.
The fact is that the Government cannot make up its mind about economic management. I repeat: The Government’s monetary management is a total shambles. The Treasurer has not given a comprehensive outline of the Government’s monetary management targets. He refrained from stating what new targets for the money supply might be. I put that to one side, except that I do remark for the record that the Government had set a target of between 9 per cent and 1 1 per cent for the money supply as measured by M3 for this year. The rate is running, annualised for October, well in excess of 13 per cent for the year. The measures outlined by the Treasurer are confused, imprecise and will not be adequate to respond to the concern which the money market is currently experiencing. For instance, there has been no definition of what the Commonwealth bond rates are to be. Yet these are one of the key factors in the overall money supply policy of the Government. The Government is unable to arrive at a policy on money supply upon which all its members agree. For instance, much less than a month ago, on 21 November–
– What is this–
– I would not blame the honourable member for bucking. I would buck too, if the Treasurer in a government of which I was a back bench member came forward with such a poorly presented statement on money supply targets and the general monetary policy in the period ahead.
– What would you do under the circumstances?
– If I had the assistance of the honourable member for Macarthur, even if I presented a picture that was not reliable at least it would be persuasive, even if it was likely to have me end up in the police courts for my efforts. Let us look at what the Minister for Communications (Mr Sinclair) said.
– Come on, talk about the issue.
– Yes, indeed.
– Come on, let us hear about it. Let us hear about the issue. Let us hear your point.
– I would buck, too. I would feel embarrassed if I were the Treasurer, because for more than three weeks he has been trounced by the National Country Party. Mr Sinclair, the Minister for Communications, in his statement on 21 November had this to say, and I quote him exactly:
While these issues are emerging so significantly in rural areas we are told by the trading banks that controls on interest rates must be loosened to improve their profits and make money more readily available.
He went on, I repeat, speaking for the Government:
Traditionally, high interest rates come with low availability of money.
Demonstrably, this is not so with high rates of capital investment in Australia and high returns from Australian exports. Neither can the present level of Australian overseas reserves justify increased interest rates.
So there we have it. Less than a fortnight ago the Deputy Leader of the National Country Party condemned the policies that have now been outlined by the Treasurer. The fact is that the policy now outlined by the Treasurer means dearer money. It means more expensive money for home buyers. It means that those people who are paying off the homes that they purchased some time ago will be paying a lot more for those homes. They will not get any more for the extra payments. The purchasing power of their pay packets will go down. It will mean that small businesses in this country will find it much more expensive to fund their operations. It will mean that, with the exception of those farms which are afflicted by drought and which have obtained some temporary relief from the Treasurer, companies will be paying much more for the funds they require to operate. So there we. have it. Australian home buyers, intending home buyers, small businesses and, generally, farmers are going to have to pay much more for the funds they require to continue their operations. This is a government not just of the highest taxing policies in the history of this country; it is a government responsible for the highest real interest rate policies this country has ever seen. That is the record of this Government. People will pay more for any given level of money than they have ever paid in the history of the nation.
Let us look at some of the facts in relation to the cost of money under this Government. The Government pretends that, it is concerned about small business, home buyers and farmers and that it wants to bring down inflation and costs, such as interest costs and so on, but the record shows beyond any doubt that people are paying more.
They are paying the highest in real terms for money that they have ever paid. Let us look at the overdraft rates. People are paying in real terms 7 per cent more in interest than they were paying five years ago. That is the record of this Government. I repeat: They are paying 7 per cent more in real terms than they were paying five years ago and, as honourable members know, real terms represent in terms of interest rates the difference between the nominal interest rate and the rate of inflation. Five years ago there was a negative real rate of interest because the rates of interest were below the rate of inflation. They will now be well ahead.
– Are you proud of that? Are you proud of the fact that you had a negative interest rate?
– So the Treasurer is pleased that small business will now be paying 7 per cent more on its overdrafts in real terms than it was paying five years ago. That is what the Treasurer is interjecting about. In terms of home mortgages, the rate of interest in real terms is now 8 per cent higher than it was five years ago. That is the record of this Government. Let us reduce that to terms that the average home buyer will understand. It will mean that the repayment rate of someone borrowing $28,000 on a first mortgage over 25 years with a second mortgage of $8,000 to be repaid over 7 years will rise by more than $24 a month. That person will have to pay more than $24 a month extra for his house without a commensurate increase in his pay packet and without a commensurate increase in the benefits available to him in terms of his accommodation. This Government is going to make the cost of living much higher for small business, for the home buyer and for the farmers of Australia, but the implications will be devastating for business generally. Let me quote from the November publication of Syntec Economic Services Pty Ltd. Under the section entitled ‘Money Brief it states:
But the market should consider whether the return, particularly the marginal return, on capital investment in this economy can really support or justify a real interest rate of 3.0 per cent.
A real interest rate of 3 per cent was forecast by Syntec for about the present time, and it was dead right. That is about where the interest rate will settle. Syntec goes on to say:
In our view the answer is no, with the exception of a limited number of highly profitable ventures in the resources area.
That report and other reports have gone on to point out that the sort of increase in interest rates that the Treasurer has announced tonight will result in the bankruptcy of a number of non-bank financial institutions in this country not involved in resources development. That will be the record of tonight’s decision - bankruptcy for a number of non-bank financial institutions. It will impose a cruel financial burden on home buyers, small business - this Government is supposed to be the special defender of small business - and innumerable farmers throughout Australia. The record of this Government has been one of unremitting imposition of cost burdens on the community regardless of where people happen to be in that community. This is going to be expensive money. It will mean reduced spending power for the people affected by it. It will mean less cash flow available for businesses to function with. It will mean more inflation. It will add to the problems generally of economic managment in the community. It will create considerable difficulties for some hundreds of thousands of people throughout Australia. It was very largely avoidable. That is enough of this issue. It is not a problem that cropped up in the last couple of weeks. As long ago as three to four months it was pointed out to the Government that its monetary policies were getting out of control and that suitable adjustments would have to be undertaken. General economic management would become unsettled. That is the result. The cause of this has been, of course, the spinelessness of the Liberal Party headed not by traditional Liberals but by a wealthy grazier who has more sympathy with the views of members of the National Country Party in the Government than he does with the people who have a better understanding of the needs of economic management at present.
– What would you have done?
– I would not have got into the mess which exists right now. By the proper management of monetary policy this could have been avoided. The simple facts are undeniable. They are these: The Government set itself a target in money supply increase of 9 per cent to 1 1 per cent this year. This has blown out. At present it is running somewhere above 13 per cent. The policies now outlined by the Government are still largely nebulous in important areas such as Commonwealth bonds. They still leave many matters unresolved. For instance, the Treasurer suggested that there will be no controls on deposit rates in savings and trading banks in the future, but he has made no statement on borrowing rates from those same financial institutions.
– I have. You were not here then.
– It was not clear that the Government intended to lift all controls on investment rates with those institutions but to maintain controls on their lending rates. The Government has policies which are in diametrical conflict. The Treasurer does not understand that. I suppose selling goldfish does not quite qualify him to understand some of the complications of monetary management. The fact is that the Government has failed dismally in monetary management. A high price will be paid by the Australian community. The Government did not seek to obtain a mandate for this at the last election. This was an issue which was raised at that time. It was an issue which should have been attended to well before the election. It was an issue which should have been attended to shortly after the election. It is to the eternal damnation of the Government that it has taken so long to respond to this very serious issue and that it has responded in such a tardy way, resulting in grave dislocation generally to economic management in this country. The price, I repeat, will be high cost of money; more inflation; reduced living standards and general instability in the economy. This is the result of these sorts of decisions.
The following notices were given:
Mr Moore to present a Bill for an Act to amend the Liquefied Petroleum Gas (Grants) Act 1980.
Mr McVeigh to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report, namely, the construction of a Commonwealth Office Building at Townsville, Queensland
Mr McVeigh to move:
That, in accordancewith the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report, namely, the development of RAAF Base, Learmonth, Western Australia.
The following papers were deemed to have been presented on 2 December 1980, pursuant to statute:
Administrative Appeals Tribunal Act- RegulationStatutory Rules 1980, No. 335.
Continental Shelf (Living Natural Resources) Act - Regulations- Statutory Rules 1980, No. 337.
Homes Savings Grant Act- Regulations- Statutory Rules 1980, No. 336.
Lands Acquisition Act - Statements (4) of lands acquired by agreement authorised under sub-section 7(1).
Seat of Government (Administration) Act - Ordinances- 1980-
No. 41 - Church of England in Australia.
No. 42 - Anglican Church of Australia
The following answer to a question was circulated:
Brisbane Airport Redevelopment: Canal at Nudgee Beach (Question No. 159)
Were undertakings made by the Commonwealth Government to the Federal, State and Local Governments Committee which oversights the Brisbane Airport Redevelopment project in respect of and construction of a canal at Nudgee Beach, Queensland; if so, what were they.
Is it a fact that the sides of the canal have become eroded since its construction, and that flooding caused by the canal would sever the only road access which Nudgee Beach residents have to Brisbane.
Will he investigate this matter and take what action is necessary to ensure Beach Road and Nudgee Beach is flood-free.
It was agreed within the Joint Government Coordinating Committee for the redevelopment of Brisbane Airport that the floodway works would be arranged such that flood levels resulting from any storm would not be higher outside land owned by the Commonwealth after construction of the airport and floodway works than they would have been prior to construction.
A specialist panel of eminent engineers from the private sector, the Department of Housing and Construction, the Brisbane City Council and the Queensland State Government was then established to develop specific criteria for the design and construction of the canal. It recommended that the design criteria for no worsening of flooding outside airport land as a result of airport construction should be any flood event of increasing severity up to that having an average period of recurrence of once in 200 years.
The Joint Government Committee endorsed the resultant canal design.
In its evidence to the Public Works Hearing on this project in October 1979 and also in correspondence to Commonwealth Departments, the Brisbane City Council indicated that the floodway as designed would not result in an increase in flood level for the design storm, provided certain conditions were met. These conditions were:
that the floodway and channel are constructed according to the plans and the design assumptions;
that in the future, no filling is allowed within the Flood Regulation Lines and the area is maintained so that roughness co-efficient assumed in design is sustained:
the Commonwealth Government ensures that the channel and floodway are maintained to the design dimensions shown on the drawings and the roughness coefficient assumed in design is maintained;
that a continuous monitoring system is instituted to ensure early detection of any channel deterioration which may be detrimental to the flow;
in order to ensure no worsening for storms in excess of the design storm that an overflow path be provided through the airport area
These requirements of the Council were acceptable to the Commonwealth, and the Departments of Housing and Construction conveyed this in evidence to the Public Works Committee.
Some minor erosion has occurred on the canal banks which are still under construction. Mangroves are being planted to stabilise the banks and prevent the undermining df the road.
The floodway has been designed to not worsen the flood levels at Nudgee Beach and Beach Road from those previously existing, i.e., in times of tidal surge association with cyclonic storms at high tide the road would continue to be subject to inundation.
I inspected the site, including the new section of Beach Road, on 13 November and have already instructed the Department of Housing and Construction to see if there is a need for additional bank protection work to be carried out before the mangroves become established and whether there are any other measures which should be taken to ensure that previous flooding conditions are not worsened and the road is protected .
If such measures are needed for this purpose they will be implemented.
House adjourned at 11.18 p.m.
Cite as: Australia, House of Representatives, Debates, 2 December 1980, viewed 22 October 2017, <http://historichansard.net/hofreps/1980/19801202_reps_32_hor120/>.