25th Parliament · 1st Session
Iiic PRESIDENT (Senator the Hon. Sir Alister McMulIin) took the chair at 2. J 5 p.m., and read prayers.
page 1425
– 1 desire to ask the Minister representing the Prime Minister whether he has seen in today’s edition of the ‘ Australian “ an article by reporter Michael Clowes stating that the Prime Minister has promised an extra 3,000 troops for Vietnam if he wins the coming election by a large majority. As a guide to voters, f ask the Minister to confirm or deny the report.
– Apparently the honorable senator did not read the statement yesterday by the Acting Prime Minister, which came factually from him, in which he categorically denied that the Government has given any consideration to increasing our forces in Vietnam, in any shape or form.
page 1425
– I address a question to the Minister representing the Minister for the Interior. In view of the present political atmosphere generated by the approaching general elections and the resulting interest in and requirement for authoritative information on Commonwealth electoral law, will the Minister suggest to the Minister for the Interior that immediate action be taken by him and his Department to publicise and to make readily available to the public the excellent booklet entitled “ Explanation of the Commonwealth Electoral Law”, published in August .1966 and circulated in Parliament House during the lunch hour today?
– [ have before me a copy of the booklet referred to by the honorable senator, but J have not yet had an opportunity to peruse it. 1 will certainly convey his request to the Minister for the Interior.
page 1425
– Is the Leader of the Government in the Senate aware of an article which appeared in yesterday’s edition of the “ Daily Mirror “, which stated that the Common wealth Public Service Board has made a S7 million blunder in ordering computer equipment for the Department of Social Services? Will the computerised programme of the Department of Social Services be set back for two years? Was the equipment ordered by the Board despite strong criticism? Will the Government have to pay all expenses incurred by tendering companies? What will be the cost of such payments? Will the Minister explain to the Senate how the blunder came about?
– I have not read the article to which the honorable senator has referred, and as it does not concern my Department, I am not aware of any of the allegations which the honorable senator has made. The question calls for a lot of detail which 1 have not got at my fingertips. I suggest that he place the question on the notice paper and I shall see what information I can obtain for him.
page 1425
– My question, which is directed to the Minister representing the Minister for Civil Aviation, refers to the international air terminal at Sydney. In August 1964 the then Minister for Civil Aviation informed the Senate that the runways at Mascot would be completed in mid- .1966 and that the international terminal area was scheduled to be finished in mid-1968. Last night in a written answer the present Minister stated that the approximate date for the completion of the terminal building is about the middle of 1969. Why has completion of the terminal been delayed an extra year?
– I cannot give a precise answer to the honorable senator’s question, but I think it is within the general knowledge of every person, including honorable senators, that it is not unique for the expected time of completion of a project to be exceeded. This could happen for a variety of reasons. There would be nothing sinister in that situation. I therefore ask the honorable senator to put his question on the notice paper and I shall get a detailed reply from the Minister for Civil Aviation.
page 1425
– My question is directed to the Leader of the Government in the Senate. Yesterday I asked the Minister whether he had any information concerning the question of American manufacturers having rights over such things as missiles, electronic equipment and so on, which prevented Australia from taking part in either the control or development of these devices. Is the Minister in a position to reply to my question of yesterday?
– -As I told the honorable senator yesterday, I hoped to have the answer today, but I have not yet obtained the details. As there are probably two more days of this session to go, I hope to have the answer before the session concludes.
page 1426
– I desire to ask a question of the Acting Minister for External Affairs. As it is just 10 years since the Hungarian rising for freedom was crushed in blood by the Red Army, does the Minister agree that those in Australia who are so active in demanding free elections and the end of imperialistic interference in Vietnam might well seize the occasion of the anniversary of the Hungarian rising to make a plea for freedom in Hungary and so prove their sincerity and impartiality?
– From the evidence of the sort of things that the people to whom the honorable senator has referred say, I think it is extremely unlikely that they would adopt the course which he suggests.
page 1426
– 1 direct a question to_ the Leader of the Government in the Senate. Will a statement be made to the Senate on the Manila Conference on the war in Vietnam? If so, will the Senate have an opportunity to debate the statement before the rising of the Senate at the end of this week?
– 1 do not know when a statement is to be made. If a statement is made in another place by the Prime Minister, I will take the opportunity to follow the normal course and introduce it in the Senate. The opportunity to debate it will be entirely in the hands of the Senate. Much will depend on when the statement is made and the time available in which to debate it, but I think we should debate it.
page 1426
– My question is directed to the Minister representing the Acting Prime Minister. Will the Minister inform the Parliament whether a newspaper report attributed to an American journalist, implying that the Australian Prime Minister had given a promise to President L. B. Johnson that 3,000 additional troops would be made available ‘ for service in South Vietnam immediately if the Government secured a sufficiently large majority at the coming Federal elections, is true? Will the Minister advise the size of the majority required, if by accident the Government is successful at the polls, and the date of departure of the first group of additional troops for Vietnam?
– it is amazing how honorable senators opposite prefer to rely on foreign correspondents for information and the basis of their questions and to ignore entirely the answer given to them in Australia by the Acting Prime Minister. He made a complete and categorical denial of the statement that the Government was considering this position. There is only one part of the honorable senator’s question with which I agree and that is his reference to the Government having a majority after the next election. I think that the majority will be astronomical and that it will be a great disappointment to the honorable senator.
page 1426
– My question is addressed to the Acting Minister for External Affairs. As the Minister is aware, there has been considerable disturbance in the minds of heads of overseas missions in Australia about functions attended by President Johnson. Can the Minister explain to the Senate why heads of missions were not presented to the President of the United States of America?
– I do not know whether the honorable senator is referring to the luncheon that was held in Parliament House.
– I mean any function.
– There were not many heads of missions at that function. The accommodation that is available in the main dining room is such that if the full
Diplomatic Corps had been asked, there would nol have been room for all the members of the Australian Parliament. I believe that on such an historic occasion it was necessary for the members of the Australian Parliament to be present.
page 1427
– I preface my question, which is directed to the Minister representing the Treasurer, by reminding him that on I I th May last, when introducing the Loan (Defence) Bill, the Minister said that additional credit amounting to SUSI00 million over and above the original sum of SUS350 million had been obtained for I he purchase of equipment from the United States and that the terms of the additional loans were still under discussion in Washington but would be announced as soon as practicable. Has the Minister any information about the stage that negotiations have reached in an effort lo finalise the terms’? If not, is the Government likely to be in a position to inform the Parliament prior to its rising at the end of this session?
– I am not aware of negotiations having been concluded as yet. I have had no information to that effect. I shall seek the information from the Treasurer and see whether I can satisfy the honorable senator within the next day or so.
page 1427
– I direct to the Acting Minister for External Affairs a question which arises from the fact that members of the Australian Labour Party seem to bc reading foreign Press reports about our defence policy. 1 ask the Minister: .ls it not a fact that the only bad and regrettable image of Australia that appeared in the American Press following the visit to Australia of President Johnson resulted from the anti-Vietnam protests that were seen and heard in some Australian cities? ls any opportunity to be taken by the Minister to inform the. American people and the people of Australia that the blame for the fierceness and content of the antiVietnam protests stems from questions asked in the Parliament and Press statements released to the public of Australia by Senator Keeffe, the Federal President of the Australian Labour Party?
– i believe it is true to say that if any bad image of Australia were presented in United States newspapers in connection with the visit of President Johnson, it could only have been presented by a concentration of a small, bearded, violent, undemocratic, extreme minority who screamed hatred until they were drowned out by the hundreds of thousands who screamed acclamation. I do not know whether the members of the Opposition who are now screaming align themselves with those we all saw on television, but if they do - and some apparently do - let I hem say so. I would say in answer to the honorable senator’s question that all who saw personally, or by television, the progress of the United States President through the great cities of Melbourne and Sydney will know that it is true that hundreds of thousands cheered and some hundreds shouted hatred, fought with the police and exhibited violence in a form of demonstration which must not be permitted in this country. This was a denial of democracy which may well have been helped, though not directly incited, by the calls for demonstrations made by the President of the Australian Labour Party, Senator Keeffe.
page 1427
– ls the
Minister for Supply aware that there is a strike at the munitions factory, Gordon Street, Footscray, in the electorate of Gellibrand? ls the Minister acquainted with the reasons for this stoppage? If so, will the Minister explain the reasons that prompt the authorities at the munitions factory, Gordon Street, to refuse to accept a formula from the Amalgamated Engineering Union to settle this dispute although a like formula was accepted by the authorities at the Government Aircraft Factory, Fisherman’s Bend. Port Melbourne, to settle a dispute of a similar nature at the aircraft factory?
– Yes, 1 am aware of the dispute, and as 1 thought a question might arise on this matter 1 took the opportunity to obtain details which 1 propose to give to the Senate. A dispute between management and employees at the Department of Supply’s Ammunitions Factory, Footscray, Victoria, has arisen over the payment of a production performance allowance of 1 2-1- per cent. over award rates to employees in the tool room and machine shop. These are the only sections in the factory where the production performance allowance is not as yet paid. The employees concerned carried a ‘resolution that all gauge and tool contract work from outside sources, both new and rectification work, be banned until the allowance was paid. Representatives of the employees were told by the management that industrial engineering studies in connection with the claim could begin on J 4th November and would take about four months. An allowance of 2i per cent, would be paid until the studies were completed.
Employees were addressed by the management on Friday, 2 J st October, and informed that unless they were prepared to carry out the work to be done their services would not be required. At this stage the work involved affected three adult toolmakers, who refused to carry out the management’s instructions. They were accordingly stood down - not dismissed, as reported in the Press. All members of the Amalgamated Engineering Union and the Australian Society of Engineers decided to stop work. At present about 980 employees have stopped work, and most production sections are affected. These employees have said they will remain on strike and will hold another meeting at 7.30 a.m. on Thursday. Five hundred employees remain at work. My Department has notified the Commonwealth Conciliation and Arbitration Commission of the dispute under section 28 of the Commonwealth Conciliation and Arbitration Act.
page 1428
– I direct a question to the Leader of the Government in the Senate. Is the Minister aware that yesterday, 25th October, was the 350th anniversary of the discovery of Australia by Dirk Hartog who, on 25th October 1616, landed on the Western Australian coast, being the first white man to do so? Apart from the issue of a commemorative stamp, has the Government or the Parliament recognised in any way this important occasion in Australia’s history?
Senator HENTY__ Not that I am aware of.
page 1428
– My question is directed to the Minister representing the Treasurer. I refer to the latest quarterly statistics of retail sales other than motor vehicles issued by the Commonwealth Statistician. These show a fall in the growth of retail sales from that in the same quarter last year, and the fall has occurred in every State of the Commonwealth. What is the Commonwealth doing about this immense indication of a run down in the economy?
– I have not studied closely the statistics to which the honorable senator has referred but I accept that what he has said is largely factual. There is still growth but it is not as great as it has been in the past two or three years. I have been busy reading the prognostications of some of the commercial leaders, particularly the chairmen of the great chain stores throughout Australia, who have said that the slacker period through which we are going is about to end. They look to a continuous growth in the retail trade in the future. 1 am very much heartened to know that these practical men who have had a lifelong interest in this field prophesy increased growth and 1 believe this indicates that the Government’s policies at last are taking effect.
page 1428
– I direct a question to the Acting Minister for External Affairs supplementary to my previous question. I am genuinely seeking information because the matter to which 1 have referred apparently has puzzled many of the heads of missions to Australia. The Acting Minister for External Affairs directed his reply to the luncheon given to President Johnson; he did not hear my later interjection that 1 was referring also to the President’s arrival at the aerodrome. What I am trying to ascertain is why the heads of missions from countries that have representatives in the United States of America were not presented to President Johnson on his arrival at the Canberra aerodrome? 1 understand this is the custom according to protocol in every other country. I think it is quite wrong that this was not done in Canberra. I do not know why they were not presented. The heads of missions do not know and they are puzzled. 1 am genuinely trying to £et an’ answer.
– Now the honorable senator has indicated exactly what he was talking about. He wants to know whether there was any reason why all the heads of missions in Australia representing countries which also have missions in the United States of America were not presented to President Johnson at the Canberra airport on his arrival. I do not know whether there was any reason or whether there is any need to give a reason. No doubt the arrangements fitted in with the requirements of President Johnson’s tour. 1 understand that the Dean of the Diplomatic Corps in Canberra, representing the Corps, was presented and I should think that would be enough.
page 1429
– J direct a question to the Minister representing the Minister for Immigration. Has the Minister’s attention been drawn to a report published on 1st July 1966 in the “Barrow News”, an English provincial newspaper, that a nian named Terry Robson was making arrangements to emigrate to Australia? Docs the report describe this man as a dedicated member of the Nazi movement who is leaving Britain because his Fascist views are unacceptable there? Can the Minister confirm whether the report is accurate and if it is will he give an assurance that this man will not be permitted to come to Australia? Will the Minister further indicate what screening procedures are followed by the representatives of the Department of Immigration in Britain and other countries to exclude persons with Nazi or racist views? I might add that I have personally brought this matter under the notice of the Minister for Immigration and have asked that these inquiries bc made and proper assurances given.
– The attention of the Minister for Immigration was directed to the newspaper report to which the honorable senator has referred. The Minister directed that inquiries be made immediately to establish the facts. The Minister for Immigration is now awaiting a report which is on its way from the Chief Immigration Officer in London. When the report is received, the Minister will decide what action is to be taken. The answer to the last pari of the honorable senator’s question, is that the immigration officers over seas have instructions to reject any application for admission to Australia when there is evidence that the applicant is associated with an extremist organisation or holds extreme views likely to be prejucidial to the security and welfare of Australia.
page 1429
(Question No. 1001.)
asked the Minister for the Interior, upon notice -
Will the Commonwealth, as virtual landlord of the industrial estate at St. Mary’s, New South Wales, accept major responsibility for ensuring that reasonable terms are offered to the Hardie Rubber Company in order [hat the company might be able to provide adequate employment opportunities in this area where many employees have to [ravel exceptionally long distances to their places of employment?
– The Minister has supplied the following answer -
As a matter of policy the Commonwealth Government has given, and will continue to give, every consideration to sales to industrialists, on reasonable terms, of properties in the St. Mary’s Industrial Estate. In the event of the Hardie Rubber Company being interested in negotiating the purchase of a properly in the Estate, Iiic Company may bc assured that similar consideration will be given it.
page 1429
(Question No. 1050.)
asked the Minister representing the Minister for Labour and National Service, upon notice -
– -The Minister for Labour and National Service has supplied the following answer - 1 and 2. The “Courier-Mail” of 10th October reported the Stale Chairman of the Australian Diesel Engineers’ Institute as saying [hat there were many men in Queensland skilled in servicing particular items of diesel equipment, but that these were motor mechanics or fitters and turners who had studied diesels at their own expense. It stated that there was no course for men wishing to specialise in diesel servicing.
I am informed that the major distributors of equipment in Queensland are, as the “ CourierMail “ mentioned, conducting their own diesel servicing schools. The Education Department’s Automotive Trade School in Brisbane is also conducting, for motor mechanics and fitters and turners who have completed their apprenticeship trade course, a special certificate course covering diesel engines.
I understand that the question of arranging for further training in this field is now under consideration by the Queensland authorities concerned.
page 1430
– I have received from Senator Turnbull an intimation that he desires to move the adjournment of the Senate for the purpose of discussing a definite matter of public importance, namely -
The failure of the Government to recognise the Verolme United Shipyards N.V. as a shipbuilding authority for the purpose of attracting Government subsidies.
. -I move -
That the Senate, at its rising, adjourn till tomorrow at 11.30 a.m.
– Is the motion supported? (More than the number of senators required by the Standing Orders having risen in their places) -
– I am very pleased to see the warmth of the support that I have received from all parties in regard to this motion. I am thankful to the Democratic Labour Party for supporting the Australian Labour Parly and some senators on the other side. I do not bring anything new to this question. I am raising the matter of shipbuilding in Tasmania because I hope that as a result of my doing so Government speakers will explain why the Minister for Shipping and Transport (Mr. Freeth) has seen fit to refuse to recognise the Verolme United Shipyards N.V. as a shipbuilding authority for the purpose of attracting subsidies if and when it starts to build ships.I think the position is that if it is recognised and it does build ships, the Commonwealth Government will subsidise it to the extent of approximately one third of the cost of the ships. This is a matter that does affect the economy and the industrial life of Tasmania and from just reading what was stated in the Press the position seems peculiar to us.
This is an industry which could go a long way towards helping the economic and industrial growth of Tasmania. These people are not just fly by night shipbuilders. This is a Dutch firm of exceedingly high repute and efficiency. When a firm of that kind is prepared to come to Tasmania to set up an industry - it is a matter for the company where it decides to commence operations but I can think of a better place than Margate for this - it is extremely hard for Tasmanians to follow the Government’s reasoning behind its refusal to recognise this firm which has such a high reputation overseas for shipbuilding. The firm is prepared to invest$5 million immediately in Tasmania at the commencement of the first stage of this project. It does not intend to confine its operation to the construction of shipbuilding yards: it hopes also to introduce a heavy machinery industry in Tasmania. The company can do those two things because it has the money, the knowhow and the will to do so.
Another factor which must be considered is that in the first stage of this project the company would provide employment for about . 1,000 men. If there is a shortage of labour in Tasmania it is prepared to import labour. In other words, it is preparedto bring 1,000 migrants to Tasmania if the necessary number of men is not forthcoming. For every male worker the company bringsto Tasmania there will also be wives and children. This would be a big boost to our immigration policy, particularly as there is a very large Dutch community in Tasmania. We would welcome even more.
This firm does not ask for any special advantages. It is prepared to compete on the open market by tendering for shipbuilding jobs, especially for the supply of the oil rigs which are used in the search for oil in the sea. It is prepared to stand on its merits. In fact, it claims that it can build far more efficiently than can the four big shipbuilding companies at present operating in Australia. The Minister, Mr. Freeth. claims that there are so many small shipbuilding companies wanting to be recognised that he feels he cannot approve the company’s application. Then he says that there is enough capacity in the shipyards operating at present, but he contradicts himself by claiming that the industry is expanding at a great rate.
– The two are quite compatible, of course.
– Yes, they arc compatible but if the industry is expanding there must come a time when J.he rate of expansion is greater than the capacity of the industry. Why not allow other efficient shipbuilders to join in this shipbuilding campaign in Australia? ft has also been suggested, I think by the Minister himself - at least so 1 read in the “ Mercury “ - that many shipbuilding firms are not performing their work to the highest degree of efficiency. If a far more efficient shipbuilding firm was operating perhaps” costs could be reduced. What surprises me is that we have a Government which allegedly believes in free enterprise but does everything it can to slop free enterprise, and not only in the field of activity at present under discussion. One wonders whether the Government is not guilty of allowing a restriction of trade by preventing another firm from operating in this industry. What is more, this Government is protecting inefficient industry. If a firm wants to start up an industry or a manufacturing process or wants to sell anything, I am quite happy for it to do so. If people want to go broke, that is their business.
These are not stupid people. This company has shareholders and has to pay dividends. It is not likely to engage in an industry in which it will not make a profit. If il thinks it can make a profit, I cannot see what argument the Government has for saying to it: “ We do not think you will make a profit.” Of course, the Government, being next to God, knows more than anyone else knows. But if hard headed business people who want to put their money into this concern feel that they can make a success of it. 1 believe that we should allow them to make a success of it. If they happen to fail, it will be no-one’s fault but their own.
The Government has often talked about decentralisation. Here is a chance to have a new shipbuilding yard established right away from the heavy industries on the mainland of Australia. I also attack the Government on this point. If we are to have shipbuilding yards, surely it is an exceedingly good idea to have a yard in Tasmania rather than to have all our shipbuilding yards associated with Brisbane and Sydney. I have mentioned that it will help, from the immigration point of view, if this firm imports its own labour. I stress, too, that such a yard would help the Commonwealth considerably because the sooner Tasmania gets on its own feet industrially the less it will have to come, as a beggar State, to the Commonwealth for assistance through the Grants Commission. lt was suggested in one of the articles that I read - I hope the Government will answer this because I do not know anything about it - that some pressure was applied by the Minister for Shipping and Transport to get the Verolme Shipyards company to go over to Western Australia. It did not want to go to that State.
– Why not?
– We have many Dutch people in Tasmania. I admit that Western Australia is not a bad place. If the yard were established there it would also help decentralisation. If there is any truth in the suggestion to which I have referred, I think the Minister representing the Minister for Shipping and Transport should clarify the matter.
That is briefly the case that I want to put. I am really seeking information for Tasmanians. I want to find out the reasons behind the Government’s opposition to granting a status of recognition to the Verolme company, so that we can assess for ourselves how much value there is in those reasons. Finally, I quote the following from the leader in the “ Mercury “ of 24th October, which was headed “ An industry lost “ -
Tasmanians will be bitterly disappointed and deeply resentful that by a decision - almost contemptuous - by the Commonwealth Government this State is almost certain to lose a major shipbuilding industry. lt is not good enough to say that the Tariff Board or some body like that will discuss this question in two or three years’ time. This firm must get going now. It is prepared to start in three months’ time, lt is exceedingly difficult lo understand why we cannot have it operating in Tasmania now. That is why I moved this motion and raised this matter, i hope that all Tasmanian senators will support me. After all, as people keep telling me, this is a States House. That being so, I hope that Tasmanian senators will be very positive in relation to an industry of such magnitude being lost to Tasmania by the action of the Minister for Shipping and Transport.
– Senator Turnbull has raised a matter of urgent public importance in relation to the decision of the Government not to give subsidy to a shipbuilding company which, in conjunction with the Tasmanian Government, seeks permission to operate in that State. The policy of the Government for the establishment and preservation of the Australian shipbuilding industry is soundly based. Contrary to what Senator Turnbull said, the Tariff Board is a traditional authority that is used by government in seeking knowledge and information from industry. Inherent in the establishment of an Austraiian shipbuilding industry is the question of customs duty and the like, lt is true to say that, following a Tariff Board report in 1959, the Government accorded assistance to the shipbuilding industry to enable it to become established. In addition to the tariff proposals, the Government accepted a recommendation for payment of a subsidy of not less than 33-J- per cent, to provide assistance to the industry.
A further Tariff Board report on shipbuilding was issued in May 1964. It was tabled in this Parliament and through its recommendations tremendous assistance has been given to the shipbuilding industry in Australia. Following the Tariff Board report of May 1964, subsidy assistance is provided up to 33i per cent, on construction in Australia of vessels of 200 tons gross and over for use on the Australian coast and inland waterways. Vessels of Australian construction of less than 200 tons gross are protected by a duty of 40 per cent, ad valorem most favoured nation and 30 per cent, ad valorem British preferential tariff. The subsidy is limited to vessels built in recognised shipyards. In order to make the subsidy an effective form of assistance, the importation of vessels over 200 tons gross is generally prohibited. The customs law in relation to prohibition is used to give effect to that decision. There were other provisions for duty in relation to vessels imported for temporary purposes.
The point 1 want to make at the outset is that the Government has not adopted a come by chance approach to the Australian shipbuilding industry. Its Poi icy is soundly based on evidence taken by the Tariff Board throughout Australia before it issued its reports in 1959 and 1964, and is calculated to encourage the whole of the shipbuilding industry in Australia. The success of the Government’s policy can be judged by the fact that in 1964-65 ships to the value of §19 million were completed in Australia. In 1965-66, the value of ships built in Australia had increased to $29 million. Included in the figure of $29 million is a subsidy of about $71 million, calculated at the rate of 33i per cent. The reports of the Tariff Board on shipbuilding are very revealing. Given the time, I might have an opportunity to refer to some of the observations made by the Board in enunciating principles for the preservation of the industry.
The Verolme Shipyards company of Holland was founded in 1945. lt has been considering the establishment of a shipyard in Australia and has received the support of the Tasmanian Government. I would deprecate - and 1 am sure every honorable senator except Senator Turnbull would deprecate - his reference to the Minister for Shipping and Transport (Mr. Freeth).
– lt appeared in a newspaper.
– The honorable senator should not have repeated it. I often read things in the Press which I am prevented from repeating by certain elements in my makeup. The honorable senator questioned the motive of the Minister, by inference and innuendo, in his reference to Western Australia. It was unworthy of him. The Tasmanian Government presented a case in support of the Verolme Shipyards company and suggested that there would be a demand for a heavy engineering industry and for a ship repair works. In discussions with the company, it had been pointed out that the Commonwealth Government would not hinder or obstruct the company in the establishment of an engineering organisation in Tasmania, the activities of which would extend to the construction of small ships.
Indeed, in any consideration of an application for subsidy the company’s position would have been infinitely stronger from the Government’s point of view and so far as the maintenance of a viable economic industry was concerned, if in fact it already had an engineering establishment. But this is a proposition which, if I may use a colloquialism, is to start from taws. The Commonwealth Government has given every assistance it can by way of information and suggestions, [t has given an undertaking that it will allow a floating dock into Australia for the company concerned. In that respect approval has to be obtained from the Minister for Shipping and Transport, and I understand that it has been given. I understand also that the question of the duty involved has been made clear to the company. The Government has made every contribution it can short of agreeing to this question of subsidy, lt has gone out of its way to be of assistance in the establishment of an industry in Hobart.
– Will the floating dock be allowed to come in completely duty free?
– My understanding is that subject to the approval of the Minister for Snipping and Transport, the dock would be allowed in duty free. If I am wrong in that information-
– The rate of duty would be 7i per cent.
Senator ANDERSON__ The entry would be free of the preferential rate but the 7£ per cent, general rate would apply. That is my understanding of the position. If there is any doubt about it, 1 shall check it during the course of the debate.
The question of the establishment of an industry is not in dispute. The question which is in dispute is whether the company should receive assistance by way of a subsidy of 33i per cent, which is given to certain other Australian companies. In a survey recently conducted it was proved that no major shipyard in Australia, even with the large increase in shipbuilding, has been able to operate on a really economic level of production for any length of time. I think that the Tariff Board’s reports make the point that in fact some limitations should be placed upon the payment of a subsidy of this order. Because the Government accepts the evidence that has been put before it by the Tariff Board, it has said: “ We are not prepared out of the blue to say that we will accept this company for the purpose of the payment of a subsidy. We have made a decision based upon the Tariff Board’s reports. These reports have shown that certain industries have been established. We therefore wish to wait until the matter is again reviewed by the Tariff Board before approving of the payment of a subsidy to this company.” lt should be borne in mind that the request for subsidy is not a unique happening. It is on record that over the years some six or seven Australian companies have sought from the Government approval for the payment of a subsidy. In the past these applications for subsidy have been refused on the basis that if we are going to establish a shipbuilding industry in Australia, it is essential that as far as practicable we should have an industry which is reasonably placed economically and reasonably assured of continuity of employment. If we have not that assurance, we put in jeopardy the people who are already in the industry. As 1 said earlier, over the years certain companies have sought a subsidy but their request has been refused. Those companies include Carrington Slipways Pty. Ltd. in New South Wales, G. H. & J. A. Watson Pty. Ltd., in New South Wales, Dillingham Shipyards Pty. Ltd., in Western Australia, A. B. Rhea and Co. Pty. Ltd. in New South Wales, Bundeng Limited in Queensland, Prince Launch Service Pty. Ltd. in Western Australia and M. R. Hornibrook (Pty.) Ltd. in Queensland. They are not companies having overseas capital, which honorable senators opposite at all times suggest should be frowned upon: they are Australian companies. Their applications were refused as a matter of broad policy because of the need to ensure that the industry was on an economic basis and to afford to organisations already engaged in the industry some prospect of continuity of employment and engagement.
Now an overseas company, which I admit is recognised in the shipbuilding industry but which has not any shipyards in Australia, says, according to Senator Turnbull, that it is ready to start operations within three months. How anybody could commence shipbuilding activities as quickly as that I. do not know. 1 suppose the honorable senator would say that they would have to make a start at some time.
– That is right.
– The point 1 am making is that the firm has no existing establishment in Australia and so is not in as strong a position as it would have been in if it had an engineering undertaking or small shipbuilding yard on which it could base the employment of staff and from which it could build up to the stage, perhaps by 1969, where it could properly seek a subsidy. The Government has adopted the policy, based not only on our ordinary civilian needs but also on our defence needs, that we need a shipbuilding industry that is secure and which has an expectation of reasonably full order books. In the light of the Tariff Board’s report, which was based on evidence taken from the industry, the Government is of the opinion that it should not allow a development which would tend to weaken the position of the industry, lt is an integral part of our policy, as recommended by the Tariff Board, that existing shipbuilding yards should have sufficient business to maintain continuous and profitable activity. To achieve this end it is recommended that a limit should be placed on the number of yards that attract a subsidy. This is a fundamental aspect of policy. There are seven small shipyards in Australia financed with Australian capital which have been seeking from time to time to be recognised but on the basis of the policy 1 have enunciated they have nol been recognised for the purpose of obtaining a subsidy.
– Are they actually engaged in shipbuilding?
– My understanding of the position is that they are operating as small shipbuilding concerns. The Government’s policy does not prevent a company setting up in the shipbuilding business but it must be clearly understood that the Government’s policy is that it is not prepared to pay a subsidy of 33-J per cent, to such companies. With great respect to the Tasmanian Government, 1 should think that it would be aware of the policy of the Commonwealth Government in regard to subsidies and of the principles that have been laid down. These are not new principles that the Government is initiating in regard to shipbuilding; they have been in existence for some time as indicated by the two Tariff Board reports to which I referred. lt is understandable that the Tasmanian Government would want to encourage the establishment of a shipyard in Tasmania. There is no policy or decision of this Government which would prevent that from happening. What the Government has said, in effect, is that until 1969 when, through its tariff mechanism it again looks at the shipbuilding industry, it is not prepared to depart from the policy which is in operation at the present lime. That is the simple position and 1 think I have spelt it out in fairly clear and simple language. The Government is not prepared to allow other organisations to come in and attract subsidy which would have the effect of making increased demands on those in the industry, many of whom have special skills. Orders that have been received in past years certainly do not make it clear that there is an opportunity for other shipbuilding yards to commence. The effect of guaranteeing a subsidy to another shipbuilding yard would bc that the existing organisations which are in the shipbuilding business and are attracting a subsidy would receive less orders. Their position would be weakened. The new organisation would also be in a weak position because it would not obtain sufficient orders to operate on a long term basis. The all over effect would be to weaken the industry and the Government would be acting in the teeth of the reports of the Tariff Board and of records which indicate that, right from the start, there has been a degree of success in the shipbuilding industry. Last year the Government provided subsidy to the order of $7,500,000 and work was completed to the value of $29 million.
There is not much more I can say. I want to make the point that the policy of the Government is not a casual one. It is a policy which has been deliberately decided upon and has stood the test of time. It has been an effective policy which has enabled the Australian fleet to be built up in Australian yards employing Australian people and using Australian capital. The Government is not prepared at this stage to put that position in jeopardy or to prejudice the present situation. This firm which seeks to operate in Tasmania can, if it chooses, with the co-operation of this Government, commence an engineering works or a shipyard. It can bring people out from the United Kingdom or Holland. This would place it in a much stronger position, when the industry is being reviewed in 1969, to seek a subsidy and to obtain assistance from the Government.
– Senator Turnbull is to be commended for bringing to the attention of the Senate this important matter relating to a decision of the Commonwealth Government to deprive Tasmania of a shipbuilding industry. Tasmania has the opportunity to have a shipbuilding industry established by the Dutch shipbuilders, Verolme United Shipyards N.V., and should be able to expect the cooperation and assistance of the Commonwealth Government. But the Minister for Customs and Excise (Senator Anderson) has said that the Government is not prepared to allow outside industries to come into Australia and that there should be a limit on the number of shipyards established here.
This illustrates the paucity of the Government’s thinking. Australia is involved in extensive defence activities. Distinguished visitors to Australia have said that we are on the threshold of a new era; yet the Minister for Customs and Excise has put forward views expressed as far back as 1964, in a report which followed an earlier report on the same subject in 1959. Both those reports are out of date now yet the Senate is supposed to accept them. The Minister, along with the Minister for Trade and Industry (Mr. McEwen) and the Minister for Shipping and Transport (Mr. Freeth) has sought to justify the decision of the Government to refuse a subsidy to the Verolme company which planned to set up a major shipbuilding industry in Tasmania. This Dutch company was not seeking any concessions. It was merely asking the Government to assist it on the same basis as the Government has given assistance to Other companies. It was asking that the Government be long sighted enough to allow the company with its knowhow and its technicians to establish an industry in Tasmania. If there was a shortage of technical men in Australia, the compamy was prepared to bring technical men here. If we needed immigrants, the company was prepared to bring them. This would have been a most desirable industry in every way. The excuses for the Government’s decision, and particularly those advanced by Senator Anderson, were so thin and transparent that they would delude no one. The Government certainly has under-estimated the intelligence of the people of Tasmania and particularly those in the electorates of Franklin and Denison.
– That is the answer. This is political.
– I do not know whether the Minister for Supply (Senator Henty), the Minister for Customs and Excise, the Minister for Trade and Industry and the Minister for Shipping and Transport take Tasmanians for a bunch of hill billies. That seems to be their attitude judging by the thin argument they have advanced in an attempt to justify themselves.
The Government has referred to the need for a stable shipbuilding industry in Australia and the Minister for Customs and Excise has referred to the buoyant state of the shipbuilding industry. He admitted that the existing yards would be fully employed for the next three years. But who can anticipate accurately the demands in the next three years in the fluid circumstances that exist today? It is well known that one shipping organisation is talking of importing two bulk carriers from Japan because they cannot be built in Australia in time.
The Minister for Customs and Excise has backed up the Minister for Shipping and Transport but at the same time he has admitted that the existing shipbuilding industry is inefficient. On the one hand, supporters of the Government criticise the Australian shipbuilding industry for being inefficient and then on the other hand they say there must not be a proliferation of shipbuilding. I shall have something to say about the nature of the Verolme company in a few minutes to illustrate its efficiency and the knowhow it could bring to the industry. Evidently the Government is prepared to protect an industry which, in its own words, is not as efficient as the Minister would like it to be. This is strange, coming from a Government whose stock in trade has been the freedom of private enterprise.
Its war cries are “ Give private enterprise an opportunity to do the job “, and “ Keep the Government away from private enterprise “. Yet this shipbuilding industry is a branch of private enterprise if ever there was one.
– What is the Labour Party’s policy on private enterprise?
– Senator Marriott will have an opportunity to go into this later. He will have an opportunity to try to justify to his friends in Tasmania, better than th,e Minister has done, the Government’s attitude to this Dutch company. I am sure all his friends in Tasmania will be waiting to hear him. The Minister for Trade and Industry has been an apostle of decentralisation. This project is the very essence of decentralisation. The proposal is to establish a shipbuilding industry on the River Derwent estuary near Margate. The Derwent River was the great anchorage used during the Second World War because it was furthest away from any line of attack. Here is an opportunity to set up a shipbuilding industry in that area but the Minister for Trade and Industry is afraid of proliferation. How can he equate proliferation wilh setting up a new industry in another State? In my view, there should be a shipbuilding industry in every State and particularly in Tasmania which has a great industrial future. Tasmania has vast iron deposits. At the moment it has to send the ore overseas. But Tasmania lends itself ideally to a steel industry and nothing is more compatible with or complementary to a steel industry than a shipbuilding industry.
The Government’s attitude to this project exposes the Government’s so called policy of decentralisation as nothing but a sham. No explanation has been given for the decision of the Government. All the Government, has said is that it wants to confine shipbuilding in Australia to the existing yards. Lt has said that proliferation is undesirable. Now we are really getting down to tin tacks. The Government is speaking with two tongues, lt has deluded the people about many facets of its policy. Now we can see the Government in its true light.
Senator Turnbull talked about the delay of the Government in reaching a decision on this proposed shipbuilding industry. Negotiations have been proceeding since last March. Even last December the Minis ter said the whole shipbuilding industry would bc reviewed consequent upon a report by the Tariff Board. In March when the Dutch company first approached the Government it was told that a review of the matter would be undertaken. In June further representations were made and the first official negotiations were commenced. The company was told that the matter was being reviewed. Now we have reached the last week of October and we are informed that the Government is not prepared to go along with the proposal.
Senator Turnbull was probably closer to the truth than he realised when he said a certain amount of pressure was coming from Western Australia. Personally, 1 would like to see a vast naval establishment in Cockburn Sound in Western Australia associated with a shipbuilding industry. We should have a vision of this industry as an accomplished fact. The sooner we get on to the establishment of a naval base with a complementary shipbuilding industry the better. In mid September it was reported in the Australian press that Mr. Court, who I believe is the Deputy Premier of Western Australia, went to Holland and interviewed the Verolme company with regard to negotiations for the establishment of a shipbuilding industry in Western Australia. Of course, there is nothing wrong with it, but does it not appear that Western Australia is anxious to obtain this industry? With the Minister for Shipping and Transport being from Western Australia, and having it within his power to say “ Yea “ or “ Nay “ in his recommendations to Cabinet in this matter, anyone with half an eye could see that Tasmania, being the smallest State and not having a strong enough voice in the Cabinet, would not be able to counteract the strength of the Western Australian lobby on this matter.
– Does the honorable senator suggest, that a subsidy would be granted to the industry if it went to Western Australia?
– I would most certainly support a subsidy for a shipbuilding industry in Western Australia. When Mr. Court journeys to Holland specifically to interview people on shipping, it indicates the interest of Western Australia in obtaining a shipbuilding industry. During this time negotiations were going on between this company and the Government. The company was being stalled and fobbed off, and the wool was pulled over its eyes. It would appear that the Government has taken the attitude that Tasmania is expendable - Tasmania be damned - that there is a Labour government over there, that the Commonwealth Government is not’ indebted to it in any way and will not help Tasmania’s interests at all. There is a very big element of that in this matter and 1 believe it is a disgrace because this company has an amazing record.
People speak of overseas capital, but there is one shareholder in this company, Mrs. Verolme. It has been established since 1945, when a modest engineering shop was founded for the repair of marine engines.
– It is still overseas capital, for all that.
– I know that. These people would welcome whatever participation on a Government or private level was available. They do not wish to come here to exploit this country. As a matter of fact, after it started in Holland in 1945 the company sunk all of its capital back into the enterprise. No dividends were paid. The profits were put back into the company by Mrs. Verolme, the widow of the founder. It is one of those really private enterprise small companies that have done well and accumulated people with knowhow and a high level of intelligence and skill who could only be a great asset to industry here. There are other instrumentalities in Tasmania which are most interested in this proposition from the point of view of repairs. The Hobart Marine Board has gone so far as to negotiate with this company to buy a floating dock of up to 20,000 tons, which is a great requirement for Tasmania and for Australia generally. In conjunction with the Hobart Marine Board and this company we would have something of very great value and importance to Tasmania. The position that has been put by Senator Turnbull has not been answered by the Minister, who has evaded the main issue. He cited the Tariff Board report of 1964 and the Government’s decision, and he has tried to excuse the Government’s decision in rejecting this application.
– Order! The honorable senator’s time has expired.
.- I rise to support, with other Liberal members, the motion by Senator Turnbull that the Senate debate as a matter of urgency, the failure of the Government to recognise the Verolme United Shipyards N.V. as a shipbuilding industry for the purpose of attracting Government subsidies. 1 hope that Senator Turnbull will now acknowledge that the Senate is a place in which matters of State importance can be really debated and discussed. 1 hope that his urge to demonstrate that does not arise because his term of office is growing to a close. I decline to debate this matter upon mere partisan attitudes such as Senator O’Byrne evinced in a marked degree when he sought to give the impression that any decision that had been made in Canberra on this matter was motivated by the fact that the Commonwealth Government has a lack of appreciation for Tasmanian interests and that it discriminates against the Labour Government which holds office in Tasmania. One of the things which should illustrate that the last point which Senator O’Byrne urges be denied is to be found in the papers that we had during the Budget debate, wherein it is shown that over the period 1951 to 1967 the average Commonwealth payments to or for the States per head run in this way: New South Wales $92, Victoria $84, Queensland $115, South Australia §120, Western Australia $199 and Tasmania $185. So of all of the States of the Commonwealth Tasmania gets more than is received by any of the others, except Western Australia. We get $185 per head as against $84 in Victoria and $92 in New South Wales.
The idea that this is a decision that is based upon insincere, insufficient or discriminatory considerations should be rejected by every honest mind when one reflects upon the provisions that we have made in respect of the ferry services between the mainland and Tasmania. Probably one of the contributions to the shipbuilding programme at present that is of import is the third ferry, plans for which were announced within the last two or three months. On this theme, too, it should be recognised that the subsidy which we will be asked to vote in respect of nitrogenous fertiliser manufacture in the electorate of Denison in the State of Tasmania within the next two days will make an important contribution not only to the workers of Denison unci Franklin but also the farmers and orchardists of Franklin as well as the agricultural industry of Tasmania generally. I hope that nobody will go along with the idea that there is any lack of championship of truly Tasmanian interests in this place or that the Government, in Cabinet or in the House of Representatives where the State is represented by, amongst others, distinguished men such as Mr. Falkinder and Mr. Adrian Gibson, or even in this chamber, would allow Tasmanian interests to bc denigrated.
The fact is that we are debating a proposal sponsored by the Tasmanian Minister for Development to establish a shipbuilding industry at Margate, one of the outlying ports of Hobart. As I understand it, he has had the proposal in hand although he has never shared any of his information with or sought any assistance from any of the Tasmanian senators. At least, he has not shared any information with me. However, that is the sponsorship of this proposal. Senator Turnbull told us that the company would have capital from overseas amounting to $5 million. I know nothing about it but I would have thought that that was not an enormous amount of capital to found a shipbuilding industry, especially when I put it in focus with the amount of $20 million which Senator O’Byrne said is the cost of the dry dock alone.
On the other hand. I do not disparage the economic base of the industry or its efficiency. All I want to point out is that the Minister for Shipping and Transport in another place has said in debates - this has not been denied by anybody although the information has not been amplified to me by anybody - that as soon as a request was made he gave the company permission to import a floating dock and he understood that the company had some arrangement with the Tasmanian Government whereby the Tasmanian Government would buy the dock and lease it to the company for ship repair work as required. All I want to say is frit if the Tasmanian Government has underwritten a floating dock worth $20 million-
– To the extent of S3 million.
– My colleague informs me the amount is $3 million. Even if the Tasmanian Government has underwritten the project only to the extent of $3 million by purchasing a floating dock, I want to see that the Government’s action is economically based. There is the position. On payment of the general preferential rate of 7i per cent., the dock is immediately available to come to Australia. Senator O’Byrne who usually deprecates the import of foreign capital simply says in this case: “ 1 do not care about the condition of other shipyards operating in Australia.” That is a very irresponsible attitude to adopt especially as he, with others, obviously speaks with two voices in this matter.
As to the capacity of the shipbuilding industry, the Minister for Shipping and Transport made the following statement in the House of Representatives on Friday, 21st October, in reply to a question -
In a survey recently conducted by my Department it was proved that no major shipyard in Australia, even with the large increase in shipbuilding, has been able to operate al an economic level of production for any length of time, lt would be sheer folly at this singe to recognise an additional major shipyard.
That brought forward an interjection from the honorable member for Newcastle, Mr. Jones, a member of the Australian Labour Party, to this effect -
That is right.
I think Mr. Jones should be credited with a knowledge of the capacity of the shipbuilding industry in Australia having regard to the importance of the dock which operates in the port of Newcastle in the electorate he represents. There we have a direct assertion, and I guarantee if this matter were taken to the Australian Labour Party caucus Senator O’Byrne would come into this chamber controlled by the majority vole of the caucus which would give expression to Mr. Jones’ view. Let me couple Mr. Jones’ statement affirming the Minister’s proposition which I think is rather too widely stated, with the statement of the Tariff Board in its report on the shipbuilding industry, actually made in October 1963 and presented to us in April 1964. The Board noted that in the previous four years there had been an increase of almost 50 per cent, in the capacity of shipyards but it said -
Despite this spectacular increase in activity in Australian shipyards, evidence presented at the current inquiry showed that unused capacity still constitutes the shipbuilding industry’s principal problem.
I emphasise the point by repeating the words -
Unused capacity Still constitutes the shipbuilding industry’s principal problem.
The report then demonstrates that having regard lo the large units which occupy the construction programme, it is continuity of orders alone which will guarantee a reasonable effort on the part of the men to finish a job with the knowledge that there is another one on the drawing board to go on to the slips in duc course.
I have said that not for the purpose of insisting upon this interstate artificial bidding for uneconomic industries, as illustrated by the alleged visit by Mr. Court to Holland and Mi. Fagan’s visit to North West Bay. All that nonsense bedevils the very basis upon which an industry and real employment can be founded. I have said it for the purpose of insisting on a guarantee that an efficient shipbuilding industry in Tasmania will get equal recognition wilh any other unit in the industry from the point of view of sharing in Federal subsidies. Section 47 of the Australian Coastal Shipping Commission Act guarantees thai when that situation confronts us as a fact and the industry concerned has contracts, or is able to show that it can compete with others lo secure contracts, the subsidy shall bc administered under the terms that the Minister with the concurrence of the Treasury may, on behalf of the Commonwealth and for purposes of the Commonweatlh, purchase ships and dispose of ships so purchased to the Commission or to any other person. Section 99 of the Constitution provides -
The Commonwealth shall nol, by any law or regulation of trade, commerce or revenue, give preference lo one State or any part thereof over another State or any part thereof.
If this company is capable of establishing efficient competition in the shipbuilding industry, nothing can deny its right of recognition to subsidy for any ship that it constructs.
– Once it is established.
– Exactly, once it is able to demonstrate that the foundations of its yard have been laid and it is able lo compete efficiently in the industry. In those circumstances nothing can deny it the subsidy. If this industry can properly be established at North West Bay in Tasmania all that is required is for it to show that it has an efficient base. 1 would deprecate the establishment of that industry in that locality if it will prove to be a white elephant. I would much more eagerly embrace a proposition which would give direct aid to the fruit industry and the adjuncts of the fruit industry which are economically based in that environ to ensure that the difficulties that are immediately besetting them are met in some substantial and really efficient manner. I am glad that the Senate has been given the opportunity to debate this mailer. Whatever our differing points of view may be, the public should know them.
– Order! The honorable senator’s lim£ has expired.
Senator POKE (Tasmania) 1.3.45].- I expected to hear from Senator Wright a much better contribution to this debate than I have just heard. He accused Senator O’Byrne of speaking with two voices on various matters. If anybody spoke with two voices on any issue, Senator Wright did so on this occasion. In one voice he supported Senator Turnbull in bringing this matter forward, and in the next voice he condemned Senator Turnbull. I am concerned that the Commonwealth Government has not seen fit to give its complete support to the proposed establishment of this industry in Tasmania. .Senator Turnbull quoted a passage from an editorial in the “ Mercury “. I quote the following passage from the same editorial -
The company, which is one of the major shipbuilders in the world, would have employed 1,000 men in ils early stages, and intended eventually to build ships of up to 60,000 (ons.
The Tariff Board report on shipbuilding, which was ordered to be printed on 20lh May 1964, sets out the largest ships built by the Broken Hill Pty. Co. Limited, the Slate Dockyard at Newcastle, Evans Deakin and Co. Pty. Ltd., Cockatoo Docks and Engineering Co. Pty. Ltd., Walkers Ltd., Adelaide Ship Construction Ltd. and the Phoenix Shipbuilding and Engineering Co. Pty. Ltd. in Tasmania. The largest ship was between 45,000 and 50,000 tons dead weight. That indicates that the Verolme United Shipyards company proposes to build ships that will be larger than the ships built by any other shipbuilding yard in Australia.
The other point that interests me in the passage that I read from the editorial is the number of people who would be employed in this industry. It is very reasonable to suppose that, if 1,000 persons are to be directly employed in this industry, that will have an immediate effect on 4,000 people. Actually, one could not forecast the number of people who could be assisted indirectly. They include the business people of Hobart - in fact, of the whole of Tasmania.
What the Minister for Shipping and Transport (Mr. Freeth) has done on this occasion, is, in one fell swoop, to wipe out all the efforts of the Tasmanian Minister for Industrial Development, Mr. Fagan. Let me pay a tribute to Mr. Fagan for the work that he has put into getting new industries established in Tasmania. He has been untiring in his efforts, and he has been very successful. He has been closely associated with the Verolme company in bringing the proposal to the stage that it has reached. Quite a number of other industries would be assisted considerably by the establishment of this industry. I can think of the pulp and paper mills, the Bell Bay aluminium works, the zinc works, the Savage River and other mining works, the timber industry and the primary industries. Here I agree with Senator Wright. Although he did not actually use the words “ primary industries “, he referred to the fruit industry. Let me say that I would support wholeheartedly any effort that the Government might make to give some relief to the fruit growing districts of Tasmania.
If this matter were not as serious as it is, perhaps I would be thankful that the Government had decided not to give the Verolme company a boost because, in company with the editors of the “ Mercury “, I am quite confident that the Government, by refusing to assist the establishment of this industry in Tasmania, has made our task of winning the seat of Franklin very easy and has increased considerably our chances of winning the seat of Denison. 1 believe that Senator O’Byrne laid it right on the line when he said that in many cases we Tasmanians are treated as hillbillies. A very critical editorial appeared in today’s “ Mercury “. It says, in part -
The so-called Federal policy of decentralisation is exposed as a sham.
No explanation has been given for the seven months of delay in making known that the industry would be killed. During that time, of course, the industry was being pressed to go to West Australia.
Mr. McEwen said the Federal Government’s policy is clear and the Tasmanian Government must have been aware of it. lt must b; admitted that on this matter the Government’s attitude has been made very clear: To hell wilh Tasmania.
I believe that that sums the position up pretty well. One would gather from that that this Government is not prepared to give support to an industry which it knows would prove to be an efficient industry but which is being established by a Labour government. Let me digress for a moment or two to say that at the Hobart Show only last week the Liberal Party distributed propaganda which was printed in red and which said that the two backward Stales of Australia were Tasmania and South Australia. Because they both have Labour governments, they are allegedly the two backward States of Australia. But. if South Australia is a backward State - which 1 do not accept - it is due to Liberal government and not to Labour government.
The whole of the Tasmanian economy is tied up in industry and primary production. Over the past few years quite a number of good and efficient industries have been established in that State. The establishment of a shipbuilding industry, such as is proposed, would assist the other industries. There is and always has been a migration of people from Tasmania to the mainland in order to find employment. This industry would assist Tasmania to keep its children, who are born and reared in the State, working in the State. In the few minutes that remain at my disposal, let me say that the Commonwealth Grants Commission has penalised Tasmania on a number of occasions because of various matters in respect of which wc cannot comply to the same extent as can the standard States. As a result of the establishment of a shipbuilding industry, such as is proposed, we would overcome many of the problems that we have in relation to the Commonwealth Grants Commission. At present, protest meetings are being held in Tasmania against the attitude of the Federal Government toward the establishment of the shipbuilding industry in Tasmania.
I could go on for a considerable time on these issues. I turn now to consider the subsidies paid to the shipbuilding industry in other countries such as the United Slates of America, France, Italy and Japan. In France, shipping construction and operation subsidies are paid, and interest on construction loans is subsidised. In Italy, shipping construction and operation are subsidised. A scrapping subsidy is paid, and a subsidy is also paid on interest on bank loans for shipping construction. In the United States of America, subsidies are paid on United Slates owned vessels, by paying the difference between the cost of operating an American vessel and the cost of operating a vessel under competitive foreign Hags on routes essential to United Slates commerce.
I could continue quoting the benefits extended to the shipbuilding industries in other parts of the world. I point out that the Verolme United Shipyards company, in seeking to become established in Tasmania, is not asking for any more assistance than is enjoyed by shipbuilding companies throughout Australia; that is, the payment of a subsidy on the construction of vessels of 200 tons or over. We are asking the Federal Government to give the green light to the company to go ahead. I sincerely trust that every senator and every Tasmanian member of another place will wholeheartedly support the establishment of the shipbuilding industry in Tasmania.
– I rise not to bury Verolme United Shipyards company or to praise it. At this moment, all I know of that company is that it is of good repute as to its stability and its ability in the important shipbuilding industry. I want to refer only briefly to Senator Poke’s speech. He said - possibly quoting from the Hobart “ Mercury “, which appears to be the current bible on shipbuilding in Australia - that it was expected that the new shipyard when constructed in Tasmania would employ 1,000 men. I shall quote from the Tariff Board’s report of 4th October 1963 -
Employment in shipbuilding provided by the seven shipbuilders appearing at the inquiry was estimated by the A.S.B. to be 3,100 employees.
I do not believe, and I do not think that the Verolme United Shipyards company believes, that if it were able to establish a shipbuilding yard in Tasmania, employment would reach anywhere near 1,000 people in the early stages. In addressing the Senate during the debate on the Budget, 1 devoted most of my time to a discussion of shipping, particularly because of the coming era of containerisation. I referred obliquely to shipbuilding construction. 1 say “ obliquely “ because at that time I was privileged to know of details of negotiations. 1 was speaking with the knowledge that I had certain confidential information.
My statements on this subject follow some thought and work brought about by my interest in the establishment of a shipbuilding yard in Tasmania. I want to preface my remarks by saying that this is not a storm in the Tasmanian political teacup, lt is a question of immense importance to shipping, shipbuilding and the economic and trading life of Australia, if taken wisely with a view to the future. For a long period in Tasmania numerous Press leaks have occurred. Statements have appeared in the Press - some clouded by political content, I admit - informing the people that the Tasmanian Government was sincerely working to attract a company to start the construction of a shipbuilding yard in Tasmania. 1 believed that the prospective site was in northern Tasmania at the start, but then thoughts turned to Margate. 1 followed developments with interest, because I realised that at Margate on North West Bay there was everything required for a modern shipbuilding yard. There was more than adequate depth of water, a small rise and flow of tide, a very good foreshore and an excellent hinterland for the industry and the allied industries it would attract. I believe that Margate was the best site Australia could offer near other essential facilities.
Then in Tasmania a feeling got abroad that the company - then unknown by name to me - had lost its interest. I knew of a company that had previously come and gone. Approaches were made to me officially by men of repute and standing in southern Tasmania. I was asked, as a Federal member representing Tasmania, to take some interest to try to attract the shipbuilding industry to Tasmania. Over a long period I have had discussions on this matter. They started with conferences with Mr. Bethume, Leader of the Opposition in Tasmania. Naturally, I had discussions with the honorable member for Denison (Mr. Gibson) and the honorable ‘member for Franklin (Mr. Falkinder). When Mr. Pearsall was to be a Liberal Party candidate, he also came into discussions. I set off following up inquiries and leads given to me and obtained through contacts. My approach was to try to get an Australian consortium of companies to provide 51 per cent, capital interest, and then to try to attract foreign capital. Australia today needs foreign capital, knowhow and trade skills.
However, I found in Melbourne, Sydney and Canberra no enthusiasm in the shipping world for the establishment of another shipbuilding yard in Australia. I was told of the difficulties that the main shipbuilding yards have had in getting orders sufficient to keep their men employed, lt was then obvious to me, and it is still obvious to me today, that moneyed interests in Australia do not think they would be making a good investment by putting money into a shipbuilding yard in Australia. However, my discussions brought to light a representative of a foreign firm. Negotiations were proceeding. The foreign firm was getting all the information that I and others could supply on the Australian situation, lt was about to adopt a suggestion I had made to them: “ Before you spend any real money, let us go to the Federal Government and see what is its policy in regard to capital content and other matters so that we can establish whether you will qualify for a shipping subsidy.” Those approaches were never made - although the people were prepared to do so - because I was sent from Holland a paper which showed a photograph of the proposed shipbuilding industry to be constructed at Margate in Tasmania. I then made my own inquiries in State and Federal spheres. That is when I became aware of negotiations which I had to keep confidential. The people whom I had alerted were asked to take no further action, because I felt that if a foreign based and owned shipping company was to be allowed to come to Australia and rate for the subsidy, the Verolme company would be there, too, as it was a very reputable firm. lt is well for the Senate to remind itself of the Australian Government’s policy on this question. It is set out clearly and briefly at page 2152 of “ Hansard” of the
House of Representatives for 20th May 1964. It is as follows -
The present subsidy on vessels built in Australia for the Australian coastal trade, or for use on Australian inland waters, will be continued on vessels over SOO tons gross and will be extended to cover vessels over 200 tons gross and not exceeding SOO tons gross, which are built in Australia in existing recognised shipyards.
This was the Australian Government’s policy when the first approaches were made and the State Government’s enthusiasm was evident. I believe that the first question that should have been asked before any money was spent on inquiries was: What do we have to do to have the policy altered or expanded? However, there is no doubt that negotiations continued and reached the point where, all other things being equal, I believe the company was willing to go ahead.
At the present time I believe that Australian firms are not interested in establishing a shipbuilding industry in Australia because they do not think there is sufficient work for the next two or three years or even longer. I do not believe a shipbuilding yard can be established for $5 million. Much more than that is required. For a shipbuilding industry to be economical and before a company begins to spend big money work has to be guaranteed for a longer period than I have just mentioned. There must be a guarantee of continuity of employment for the first six years after the establishment of the industry, lt is my belief that Australian shipping people and the moneyed people who alone can provide the finance, do not believe this to be the case.
Foreign interests have been looking to Australia not because they feel that the shipbuilding industry is the best industry for them to engage in, but because it is not a bad industry to have going in order to get a foothold in this wealthy, developing and go ahead country. Do not think that the Verolme people are the only foreign people who would like to start talking turkey about establishing a shipbuilding industry in Australia today. Another reason why I believe that Australian interests were not keen to go into this matter fully - and this is not being critical at all - is that they were aware that the State Labour Government in Tasmania had openly declared that it was negotiating with the Verolme company. We saw the headline in the Press: “ Hobart (o be the Clyde of. Australia “. That did its little bit to soften what could have been a healthy interest by Australian people in this enterprise.
If the first inquiries had been made regarding the possible expansion of the Commonwealth’s shipping policy to allow another shipyard to rate for a subsidy and a case had been put, T feel certain that the Government would have said: “ The Tariff Board is the body on which we rely for our authoritative information in this sort of thing. Wc will get it to consider the matter “. Time passed and a specific request was not made until, I think, March of this year. The Government has said that this question is going to the Tariff Board and will be the object of a Tariff Board report by 1969. ‘I believe that the more enthusiasm that is shown for and the more argument that is advanced in favour of the establishment of another shipping yard in Australia, the sooner will the Government, whichever party is in power after 26th November, put to the Tariff Board an earnest request for a quick assessment of the present position. I believe that some time next year private enterprise in Australia - the people with money and the shipping interests - will be looking for new ships for the Australian trade. I hope that the new ships will provide the basis of an Australian owned overseas shipping line. That will be the time to put to the Government a case for the establishment of another shipbuilding yard in Australia. No Government, particularly the present one which is helpful in the development of Australia, would refuse such a request unless it could prove conclusively thai the request was ill founded.
Having said that, 1 want to point out that there is one aspect of the Government’s policy which causes me dire concern. The Minister slated recently that there is sufficient work to keep Australian shipyards busy for a given period of time and that therefore we do not need another shipyard. I am frightened that that will put in the minds of prospective purchasers of new ships in Australia, the thought that if they want new ships and if the Australian shipyards are busy, they should go to Japan, the United Kingdom, Ireland or somewhere else to purchase the ships.
The ACTING DEPUTY PRESIDENT (Senator Wedgwood). - Order! The honorable senator’s time has expired.
.- I wish to join with those honorable senators who have expressed their deep disappointment at the Government’s decision to refuse to provide a subsidy to this company, which has been negotiating for some months. We have heard that the problems which have arisen will sound the death knell of a proposed shipbuilding industry in Tasmania, at least for the next three years. We have heard many comments about aspects of this proposed industry. In some instances the comments have been based largely on conjecture, and in other instances on hopes regarding the potentialities of the proposed industry.
I have before me some figures which may help the Senate to appreciate the full significance of the decision which has been announced by the Government and which wc on this side of the chamber so very much regret, lt has been stated officially, I believe, thai the present shipbuilding yards in Australia arc committed 10 their maximum capacity for the next three years. That is the point that ought to be borne in mind when we are considering the desirability or otherwise of establishing a new shipbuilding undertaking in Australia. We have been told that two bulk carriers have been ordered from Japan because Australian shipbuilding yards have not the capacity to fulfil such orders. We should bear clearly in mind the comment by the Minister for Shipping and Transport (Mr. Freeth) within the last week or so that inefficiency existed in Australian shipbuilding yards. That is very significant. The Verolme company has displayed all the hallmarks of efficiency in the areas in which it is at present operating, yet the Government has decided, in its payment of subsidies, to ensure the continued existence of inefficient undertakings. The Deputy Prime Minister (Mr. McEwen), when dealing with the subject of decentralisation, made some most interesting observations.
– Did the honorable senator say that two bulk carriers had been ordered in Japan?
– 1 understand that two bulk carriers are to be ordered from Japan because Australia cannot build them in time.
– Who has said that?
– 1 cannot indicate the exact source.
– The Department will tell the honorable senator that no such thing has happened.
– The Minister will get a chance to say something about, this in due course. The Government sits on these things pretty tightly. It is only by probing and asking questions that one ultimately gels an answer of some kind.
– The “ Mercury “ of today’s dale states that two bulk carriers are to be ordered from Japan.
– The Department should know, lt issues the permits.
– Let me continue. I understand thai the company in question proposes to employ capital amounting to $20 million to establish at or near Margate, an undertaking which ultimately would provide employment for 2,500 people. This is a worldwide organisation; it has shipbuilding interests in Holland, Ireland and Norway, and 1 believe that it is establishing shipbuilding yards in Brazil at the present time. I would expect a company of its magnitude and with such wide ramifications to go carefully into all the pros and cons of establishing a shipbuilding yard in Australia before it decided to establish one. The report of the organisation indicates that no problem will be experienced in providing for skilled employment. Indeed, the company is so well established and so well run that it even has its own training schools for its employees. As far as I know, that is quite new to this type of industry in Australia. The company ultimately would provide local skills through its own training establishment and thus make us independent of overseas organisations. At the present time Australian industry is dependent upon overseas organisations for the necessary skills and technical labour.
In its examination of the situation in Australia, the Verolme company looked at other sites. It examined Cockburn Sound in Western Australia and checked the facilities that are available there. Its examination of the Margate area in southern Tasmania indicated that the climate there is near perfect, that the site is sheltered, that flat land is available nearby, and that there is a sandstone base. I repeat that a company which has such wide ramifications would arrive at a decision only after making a full and complete examination of all factors. It is to be regretted that the Government, which up to this stage has subsidised Australian undertakings, has decided not to provide a subsidy to another undertaking whose activities could mean much to the economy of Tasmania. I ask honorable senators to bear in mind that Tasmania is a claimant State and that the Tasmanian Government is doing its utmost to boost industry and to provide greater employment so that the State may get away from its annual wrangle with the Commonwealth Grants Commission. The State Government has made a genuine attempt to establish industry in Tasmania. The Federal Government, on the other hand, has decided not to make available to the company in question the form of assistance that it has extended to every other shipbuilding yard in Australia.
From time to time Tasmanian senators have drawn attention to the economic difficulties that are experienced by people who live in southern Tasmania and who are bedevilled by the problem of getting their fruit to continental markets, shipping freight rates and that sort of thing. We are now presented with an opportunity to establish an industry which would provide for diversification in that area and which would be a backstop to the economy of that part of Tasmania. 1 suppose that, as in this case, the Government makes its decisions on such matters on the basis of recommendations submitted by the Tariff Board. Presumably the Government is bound to adopt the recommendations of the Board. If, as has been suggested in the information that has been supplied to the Senate by speakers on the Government side, including the Minister for Customs and Excise (Senator Anderson), that is the basis that the Government adopts, then the Lord help us when the establishment of any other industry in Tasmania is proposed.
A variable, active, soundly based shipbuilding industry is an essential ingredient in an adequate defence system for Australia. From time to time when an opportunity has been afforded to the Government to get behind Australian industries so that we will not be so dependent upon overseas undertakings for our defence equipment, the Government has sidestepped the issue, lt stands condemned for doing so. It should be encouraging the establishment of an undertaking of the kind in question to provide us with some protection against any assault upon our sovereignty, irrespective of where it comes from.
– We should be building destroyers.
– There comes to my mind the construction of the Charles F. Adams destroyers. 1 mentioned in my opening remarks that Australian yards are committed with orders for the next three years. Somebody has said - I forget who it was - that we should not establish more shipbuilding yards in this country because of the capacity of existing yards to meet Australia’s requirements. If that is so, why did we place orders overseas for our Charles F. Adams destroyers? Will somebody be good enough to answer that question? Recently it was stated in a reply to a question that Australia had built frigates, bulk carriers of one kind or another, and ferries for the Bass Strait service. If that is so. why did we purchase three Charles F. Adams destroyers overseas? Senator Wright said that, rather than provide a subsidy for a new shipbuilding yard in Tasmania, we ought to do more to ensure the economic stability of the fruit industry. I would like the honorable senator to provide us wilh some proof of what the Government is doing in that direction. I have not heard of any such assistance being given. I am sure that the fruitgrowers of southern Tasmania would be very eager to know what positive steps the Government proposes to take to ensure the economic stability and viability of the fruit industry. I think we are indebted to Senator Turnbull for raising this matter and that we in Tasmania ought to put up the strongest possible fight in view of the fact that we have seen from time to time the Tasmanian Government assailed by the policies of this Government. In the pea growing industry the New Zealand-Australia Trade Agreement is having a serious effect on the growers on the north west coast of Tasmania. We have seen an overseas shipping committee giving sole rights to the conference lines without any attempt being made to obtain ships from other companies, while all the time costs are mounting day by day in the fruit industry. We see no positive moves at all on the part of this Government to help those sections of the Tasmanian economy which are so much in need of assistance. The answers given by honorable senators opposite to the questions that have been put to them today have been lamentably weak. I thought that some reasonable answer would have been provided by Senator Anderson and more positive reasons given why an industry of this kind could not be established.
A worthwhile organisation is prepared to establish an industry in this area of southern Tasmania, asking nothing more than to benefit under the provision which has already been made for shipbuilding industries in this country. The organisation is prepared to bring in skilled labour, to establish workshops and train men in the skills and high techniques of shipbuilding. It is prepared to provide in this area of Tasmania a diversification of industry which Will ensure the economic stability and the development of that part of Tasmania.
Senator LILLICO (Tasmania) 1.4.27]. - I say at the outset that 1 hope I will live long enough in this country to see the day when we have the technical ability, the equipment and the expert knowledge necessary to build a Charles F. Adams class destroyer, but that day is not yet. Perforce we must go to the people who possess those things that are so necessary for the construction of such ships and gel them to build them for us. Senator Devitt had a good deal to say about the Verolme United Shipyards. He said that it had all the hallmarks of efficiency and slated that the company had shipbuilding yards not only in Holland but also in other parts of the world. That is so. lt may be just one of those unfortunate things that happen to any company, but in the “Norwegian Shipping News” of 12th April 1966 the following report appears -
The Verolme Ship Yard in Sarpsborg, Norway, which has been paying small dividends could not finish the 4,000 t.d.w. cargo vessel under construction for Swedish account. The hull was lowed to the Verolme Dock and Shipbuilding Company in the Rotterdam Botlek urea and will be finished there.
The report goes on to say - and this is basically significant -
This Norwegian Verolme yard does not come up to expectations and for this reason it was decided to sell the yard to a Norwegian Danish group.
For the time being, however, it cannot be said wilh certainty when the activities of Verolme.Sarpsborg will come to an end.
I repeat that this may be one of the unforunate things that might well happen to any company but, on the face of it, when honorable senators opposite speak about the company’s tremendous efficiency and how fortunate we would be if we could induce it to come to this country - L hope that it will come - I have some reservations when 1. read an extract such as I have just quoted.
If the decision of the Government were an isolated one or a snap decision - I refer to the decision reported in the “ Mercury “ - and applied only to this company, so far as the building of ships in Australia was concerned, then you could look askance at it. One might then ask why Tasmania cannot receive a licence for a company that’ is prepared to set up a shipbuilding yard in that State and commence building ships. But that is not the correct question to ask. In point of fact, as Senator Anderson pointed out, the Government’s attitude at the present time is part and parcel of a carefully planned policy that has been operating for several years past. It is aimed at bringing the shipbuilding industry in Australia up to a stale of efficiency which we all so much desire. This is not a snap decision or an isolated decision. I repeat that it is part of a carefully planned and laid down policy that has been operating for several years. It is not right to go to the excess to which Senator O’Byrne went, and to which the leading article in the “ Mercury “ went, and suggest Chat the Commonwealth Government has an obsession against Tasmania because for years past is has elected a State Labour Government. Honorable senators opposite are scraping the bottom of the barrel to try to find something evil to say about the people who are responsible for making these decisions. The facts speak for themselves. In my time in this place, I have never heard one Tasmanian representative condemn the Commonwealth Government for its treatment of Tasmania. Tasmanian senators have not done that for the reason that the ground for such a proposition is entirely absent. In fact Tasmania - not beyond its desserts - has been treated more generously by the present Commonwealth Government than ever before in its history. In fact, a lot of people in Tasmania will tell you that the reason it is impossible to displace the present State Government is that it has so much money to throw about just prior to an election time that it can make its position secure at the ballot. You can hear such suggestions everywhere and there is quite a lot of truth in them. There is not one iota of evidence to substantiate the argument that this decision is aimed at Tasmania because the Commonwealth Government is obsessed with the idea that the State of Tasmania always elects a Labour Government.
The shipbuilding industry for years past - ever since it was established in the Commonwealth - has been a kind of stop and go industry. It has been plagued with high costs. In the last report of the Tariff Board on this subject which went exhaustively into the shipbuilding industry in Australia it was stated that a shipyard in Australia required one third more time to complete an order than a British yard; that Australian prices were 1.00 per cent, higher than those quoted by British yards; and that the majority of comparisons showed that prices were 25 per cent, to 60 per cent, higher in Australia than those operating overseas. The report went on to indicate other factors that have dogged the industry in Australia ever since it has been established. Reference was made to the length of time it took to build a ship and the high cost of building a ship. Comparisons were drawn with the industry in Great Britain. The United Kingdom has to import steel. But. in Australia we have adequate supplies of steel. If we take the comparison beyond Great Britain, we find that the Australian industry compares even less favourably with the shipbuilding industries of Sweden and Japan. Japan has to import steel. The shipbuilding industry in Australia has been struggling against these factors for a long time. The Tariff Board stated in its report on shipbuilding dated 4th October 1963 -
Witnesses at the inquiry placed considerable emphasis on the Australian industry’s labour cost disadvantage. On the other hand, the Board’s examination of shipbuilding techniques - and this bears on the efficiency of the Australian industry - employed in overseas and Australian shipyards, suggested that the major part of the Australian industry is technically efficient. Little, if any of the Australian industry’s cost disadvantage appears to be attributable to failure to adopt up-to-date labour and material saving techniques, particularly by the larger yards with capacity and through-puts sufficient to justify the equipment and techniques involved.
That is a Tariff Board report of three years ago. If all this is true - ‘and I do not doubt it for one moment - these are competent people in the shipbuilding industry. The Board believes that the industry’s techniques, equipment and so on are efficient. If that is so, there is something definitely wrong with the Australian shipbuilding industry. It has been pointed out that an adequate through-put is essential if the industry is to reach maximum efficiency. Therefore, there must be continuity of orders. The industry cannot operate efficiently on a stop and go basis. It is reported in either the report of the Tariff Board I have cited or the one before it that two firms said they could have dealt with all the shipbuilding orders in Australia themselves, without other companies.
The aim of the Tariff Board, endorsed by the Government, is to develop the shipbuilding industry in Australia to such a peak that there will be continuity of orders and the yards building larger ships will be working to capacity. So it has been laid down that the subsidy is to be payable only to shipyards that are in operation and measure up to the required standard of efficiency. The Verolme company represents .100 per cent, foreign investment. It is an overseas company with no Australian capital. What would be the position if the Commonwealth Government ignored the claims of seven Australian companies two of which are building ships and decided to give the subsidy to this foreign company which has not yet embarked upon the construction of its shipbuilding yards in Tasmania? If that were done, as has been suggested in the Senate today, the Commonwealth Government would be in an untenable position. If the Minister for Shipping and Transport decided to grant the subsidy to this one overseas company, perforce the same conditions would have to be applied to the seven Australian companies. In other words, the whole house would be pulled down. It would mean destruction of a policy that has been built up over the past several years to encourage efficiency in the shipbuilding industry in Australia. If such a change of policy were carried out, it would have dire results for the Australian industry.
– Order! The honorable senator’s time has expired.
– At the outset I want to make two comments to Senator Wright who opened up several matters. I indicate to him through you, Mr. President, that the decision to support the matter of urgency raised by Senator Turnbull was a decision of the whole of the Federal Parliamentary Labour Party. It was a decision made as recently as this morning. So the whole weight of the Federal Parliamentary Labour Party is behind the matter of urgency raised by Senator Turnbull. The second thought 1 want to express to Senator Wright is that I shall be exceedingly happy if the responsible Minister on the Government side will say what Senator Wright said, namely, that once the Verolme company is established in the shipbuilding industry in Tasmania, nothing can deny it the right of eligibility for subsidy. That would be a very helpful comment if it proceeded from the lips of a Minister of the Crown because it might enable the Minister for Industrial Development in Tasmania to persuade the Verolme company to make a start. Without some such assurance and others, there is little prospect that it will consider starling in Australia.
I want to review a little of the history of this matter. I come back to a position with which the Minister for Supply (Senator Henty) will be familiar. At the end of last year, Senator Henty was invited to make representations on behalf of another Dutch company on a similar proposal. He received a letter dated 1 7th December last year from the Minister for Shipping and Transport (Mr. Freeth) pointing out what was Government policy and concluding wilh this paragraph - 1 am having a survey made of existing shipyard capacity and t should bc able to give Cabinet some detailed advice on this should the Tasmanian proposal proceed further.
My purpose in quoting that is merely to direct attention to the fact that the Minister for Shipping and Transport was making a survey in 1965. Then the application of this company was lodged on 4th March with the Minister for Shipping and Transport. He indicated to me in March, because I. was invited to follow the matter up then, that he was having a survey made. After repeated representations, a letter was sent by the Minister to the company, indicating that Cabinet had considered the matter and warned further information. Again. 1 was informed by the Minister for Shipping and Transport that a survey was being made. He invited the representatives of the company to talk lo the Australian Coastal Shipping Commission, which they did. They were told that the survey would probably take three or four months. So the survey apparently was not completed.
When, in August, I was informed by the Minister for Shipping and Transport that he was doubtful whether he would be able lo get his submission to Cabinet this year, J reported that: and realising the effect that that would have upon the applicant, the Verolme company, it was decided - wisely, 1 think - to ask the Premier of Tasmania to communicate directly with the Prime Minister (Mr. Harold Holt). That was done and a decision has been communicated, orally only al the moment by telephone, by the Minister for Shipping and Transport to the Tasmanian Minister for Industrial Development. A letter is to follow from the Prime Minister. Up to lunchtime today, it had not been received. The decision was based on the ground that has been canvassed here today, upon the decision made in 1964, upon a Tariff Board decision made in 1959 and upon another, 1 think, in 1963. both of which are as outdated as the decision is today. It is obvious that there has been long and completely unnecessary delay in determining the capacity of the shipbuilding industry in Australia, where there are only four major shipyards and three or four small ones. The Government has to face the fact that there has been great procrastination on its part, and only enormous patience on the part of the Tasmanian Minister for Industrial Development and a representative of the company who has been in Australia continuously, waiting for a simple answer, “ yes “ or “ no “, to a very simple proposition.
Now I should like, if I may, to address a comment lo Senator Anderson, through you. Mr. President. 1 think I heard the Minister say that it was not possible for the Government to give a guarantee of subsidy. The company has never asked for a guarantee of subsidy, lt is merely asking to be included in the very short list of those who are eligible for subsidy. It has asked for nothing more.
– What is the difference?
– The big difference is that with a guarantee of subsidy, if the company builds ships for the coastal trade it will be assured of subsidy. The one thing that it wants to do is to compete with other shipbuilders in submitting a tender, and only if ils tender is better than the others will it get a subsidy. It is quite wrong to say that the company is asking for a subsidy: it is not. It is in effect asking merely that it be eligible for subsidy, which means that it must win a tender in the face of competition.
– If it has not any work in the yard, it obviously will not get any subsidy.
– lt has to tender. I put it to the Government that there has been far too long a delay and it is a miracle of patience on the part of everybody in Tasmania that the application remains alive in view of that delay. The decision is outmoded. I heard Senator Devitt put the argument that a shipbuilding industry is badly needed for defence. The need for it ought lo he acknowledged by those at top Government level who are advocating today - following Labour policy - the need for an Australian overseas shipping line. The prospects of shipbuilding in Australia were never better. As the Minister himself acknowledged. the value of ships built last year was §29 million. The value in the year before was $19 million. So there was a tremendous improvement. Associated shipowners are talking of building container vessels. Containers are being built. Oil rigs are being required for operations out in the sea. A vast area is opening up in activity for ships. Quite obviously the Government lacks confidence and all faith in the development of this country. The Tariff Board, in the report to which we have been referred, said -
By world standards the Australian shipbuilding industry is very small.
Surely in any economy that wants to have a proper spread, particularly in an island continent so heavily dependent on shipping, so grossly at the mercy of overseas shipowners, we should round off our economy with a vigorous, thriving and developing shipbuilding industry.
I can well understand that it is proper for the Government, looking at the shipbuilding industry in Australia today, to ask how this will affect the employment of other shipbuilding yards. That is quite a proper inquiry, but it is certainly not the only one. The Government must look at defence. It must look at the whole of the economy. It must look at the position of a State that most badly needs an industry of this kind, as Tasmania does. What is proposed is not merely to build ships, but commencing with 10,000 to 15,000 tonners in the first instance to go on, in the second place, to build ships and tankers up to 55,000 and 60,000 tons. This would be a major industry that would also expand exports. This company is world wide. Nothing can be said against it from the viewpoint of efficiency or finance, or on any other count at all. It is wanted in many parts of the world. If we say “ no “, these people, as was said in Longel low’s poem -
Shall fold their tents, like the Arabs, And as silently steal away.
Why should this company stay here if it is unwelcome? Why should it open up here in a perfectly modest way, perhaps to build 200 tonners? It wants to do three things. It wants to build larger vessels. It wants to establish conjointly a heavy engineering industry; and it wants to have a floating dock. These would be vastly important developments to Tasmania. If time permits, I shall come back to the need for heavy engineering to support the great developments in this field in Tasmania at the present time.
The company has also had an association of 10 years with Indonesia, it is at the moment building shipyards for Indonesia and also heavy engineering works, lt is even in Djakarta building two special ships for Indonesia, and, knowing the trade there, it hopes to supply that type of thing from Australia. It knows the trade and it is favorably known in that place. A further consideration that the Government has not taken into account in relation to establishing this industry in Australia, and in Tasmania in particular, is its potential for increasing our exports, a matter of very great interest to our balance of payments position.
It has been mentioned that there are some seven other applicants. One reason for rejection was that if we were to give permission to this company, how could we refuse it to others. One quick answer to that is that none of the others that would be refused is on such a scale as to contemplate anything like this. Every one of them is of small capacity. At the time when the Premier of Tasmania wrote, shaking the Prime Minister up over the delay, Mr. Court, the Western Australian Minister for Industrial Development, made a rush trip to Holland and interviewed the Verolme organisation in an attempt to attract that company to Western Australia. Quite clearly Mr. Court was not in the least worried about what would happen to other small shipyards in his State which are applicants. He did not worry about that. He considered it of vast importance to get into his State an industry of this magnitude and with these proposals. Of course, that is perfectly good sense. One can discard the argument that has been raised because it is a relatively minor matter compared with the major contribution to be made to the economy generally, to heavy industry and to export trade in this country.
Employment is important. If we have any faith in Australia, which, according to world standards, has one of the smallest shipbuilding industries in the world, why do we not take off our coats and go ahead? How will we ever gain a shipbuilding industry in this country unless we first build shipyards? That is what this company wants to do. lt wants to build a shipyard and then, in competition with others, become eligible for whatever subsidy the Government cares to give. It has the necessary finance, lt needs none; it asks for none. It. is completely willing for the Tasmanian Government to go into partnership with it but Tasmania has not the money to do so. It is completely willing to allow Australians in on a 50-50 basis now or at any other time, so that answers what has been said about our objection to overseas capital being imported into Australia. In fact, we have never objected to it where it is necessary for an essential project such as this and where adequate Australian participation is permitted.
The Tasmanian Government is keenly interested in this project because it can make a vital contribution to the economy of that State in the fields I have indicated. That contribution will go beyond shipbuilding into a terrific support for all the major works that are coming up, such as our paper mills, and our hydro-electric project.
– Order! The honorable senator’s time has expired.
– I welcome this opportunity to join in the debate because, being a Tasmanian. I have followed this matter closely for some considerable time. As Senator McKenna has mentioned, I first came into this nearly 18 months ago in communication with the Tasmanian Government. We are allotted only 15 minutes in this debate so 1 will refer to some matters which have been raised and correct some of the statements which have been made. lt has been stated that two bulk carriers arc on order for the Australian trade. The Department of Shipping and Transport has assured me that no application has been received lo import ore carriers for the Australian trade. They are the only ones which are subsidised. At present we have a surplus capacity of ore carriers.
Tariff policy has been mentioned. Let me point out that Australian tariff policy has been clear for many years, irrespective of the government in office. It can be stated in this way: “ We will not give you any indication of what duties shall accrue to you until you come to Australia and establish your industry and your costs “. That is the basis of our tariff policy, lt is a policy of sound and proper administration. We say lo any applicant industry: “ Come to Australia, establish your costs and then we can talk about the subsidy.” I hope the industry in question will do that.
– Why ask the industry to wail until 1969 before the Government looks al it?
– That matter was covered admirably by Senator Lillico. The Commonwealth Government has adopted this policy for some years. Previously we were bedevilled by lack of work in the Australian shipbuilding industry. We had 400 or 500 men idle because our shipyards had no orders. We were hunting here, there and everywhere for an order. One shipyard would be working and then there would be a breakdown somewhere else and men would be thrown out of work. We were constantly bedevilled.
No industry has been referred more often to the Tariff Board than has this industry. The Tariff Board - an independent body, not a Government or an Opposition body - has made independent surveys of the industry and has covered the situation three or four time since 1955. Because of the difficulties confronting the industry the Government established the policy that the subsidy would be limited for a period of five years to the number of shipyards existing in Australia at that time. At the expiration of five years it would be referred again to the Tariff Board for review and recommendation as to future policy. The Government’s policy has been successful. There has not been unemployment cropping up in shipyards all over the Commonwealth. Employees have had constant stable employment. That is one of the great advantages of this policy, lt has been of benefit mainly because skilled workers have remained in the industry knowing that employment will be constant.
Senator McKenna referred lo a review. This has been completed. The Minister for Shipping and Transport (Mr. Freeth), when opening the Shipbuilding Conference quite recently, had this lo say -
Within the last lew Jays I have hail strong representations to recognise a shipyard financed by foreign capital which wants to set up in Australia. They propose to bring in new capital, they propose lo bring in their know-how, their skills, and it becomes increasingly difficult for a Government which believes in free enterprise and competition to say that it would not bc wise lo sci up more capacity, when all our surveys show that in spite of the increasing size in shipbuilding orders, really no existing shipyard is able to operate at an economic level of production.
That statement has been transposed, lt does not say the shipyards are not economic; it says there is not the volume of trade to keep them constantly engaged and this is necessary to make the shipbuilding industry, not a shipyard, economic. Senator Lillico read an extract from the Tariff Board’s report which J should like to read again to show up those who have been decrying the Australian shipbuilding industry and running it down. It is in these terms -
On the other hand, the Board’s examination of shipbuilding techniques employed in overseas and Australian shipyards, suggested that the major part or the Australian industry is technically efficient.
– The Minister did not say that.
– Yes, he did. He said the industry generally could not bc efficient until it had a sufficient number of orders to keep it fully employed. That is a different matter altogether. 1 would have thought the Tariff Board would know more about the industry than would Senator Devitt, having made more investigations into it than has the honorable senator. The Tariff Board has said -
Austalian industry is technically efficient. Little, if any, of the Australian industry’s cost disadvantage appears to be attributable to failure to adopt up to date labour and material saving techniques, particularly by the larger yards with capacity and throughputs sufficient to justify the equipment and techniques involved.
Do not let us run away with the idea that the Australian shipbuilding industry and those who work in it are not efficient. They are. The Commonwealth Government has given every assistance to the industry by way of information and suggestions, lt has given an undertaking that it will allow a floating clock to be built overseas by the Verolme company and imported to Hobart for use in ship repair work.
Senator McKenna raised the matter of duty. As I understand the position - 1 was Minister for Customs and Excise for seven and a half years - the permission to import carries with it no application of the Australian duty but we have an agreement with the United Kingdom Government that we must consult with it before anything made in another country can escape the 71 per cent, preferential duty. The Minister has said that he will give an import licence to bring in the dock. That carries with it, to the best of my judgment, a freedom from Australian duty but the Government will make representations, as it normally does, to the British Board of Trade in these terms: “ We wish to apply the next section of our agreement and import this dock duty free. We seek the approval of the United Kingdom Government to forgo the 7) per cent, duty.” That is the position as 1 see it. It has been decided that permission will bc given to import this dock, which I understand will cost S3 million. But I believe that the conditions under which it is being imported should be made clear to the people of Australia. Those conditions are very relevant. As 1 understand the position, the dock is being imported either by the Tasmanian Government or the Hobart Marine Board-
– The Hobart Marine Board.
– Yes, by the Hobart Marine Board. It proposes to import this S3 million dock and to make it available as and when this Dutch company has orders that require its use. I take it that the Hobart Marine Board will carry the baby - this $3 million investment. If the company does not receive many orders, the Board might be carrying the baby for a considerable time. If anything like that happened, the cost of this floating dock would be debited against the Board. That would mean an increase in port dues in the beautiful port of Hobart. The people of Tasmania would not look upon that with much favour. These are matters that have to be taken into consideration. I believe that the Tasmanian Government should make clear the conditions under which this $3 million floating dock is to be built in Holland and sold to the Hobart Marine Board. The Dutch company will make a profit straight away on the dock that it builds and sends to Australia. The conditions under which the Hobart Marine Board will pay for and use this dock should be made plain when we are arriving at a balanced judgment on this matter.
The Government’s decision is not an idle one or just an ad hoc one. It is in line wilh the Government’s policy in respect of the shipbuilding industry. That policy has worked successfully; it covers the industry in all States and it has maintained full employment and continuity of work in the shipyards. For the last year or two we have not been bedevilled by the unemployment that we saw in the shipyards in earlier years. The Tariff Board, on page 13 of its report on shipbuilding, stated -
However, even allowing for an expansion in demand that may result from extension of the subsidy, and any orders for the construction of oil tankers, the Board is of the opinion that the volume of orders available for the industry as at present constituted would still not be sufficient for all existing shipyards to work at optimum capacity.
– That report was made three years ago.
– All right. We have made a survey since then. Now I will read what the Minister for Shipping and Transport has said in relation to that survey. He said -
Current orders, in the main, will be completed by the end of 1968. lt will be necessary in the early future for additional firm orders to be placed to ensure that the present position will be maintained beyond that dale.
– Then why did we order our destroyers overseas?
– The honorable senator was out of the chamber when J. said that no applications have been made and no permits have been given for the importation of bulk carriers for use on the Australian coast. Vessels to be used on the Australian coast are the only ones that are subject to subsidy. In fact, I went further and said that the Department of Shipping and Transport had advised me that there is a surplus of bulk carriers on the coast at the present lime. 1 corrected the honorable senator in that respect.
This was not an easy decision for the Government to make. Of course it was not. This shipbuilding company should establish itself and establish its bona fides, lt should set up its engineering works and ship repair works, and then, on the basis of having established itself in Australia, proceed to apply to join the subsidy scheme. It would l hen be able to give evidence to the Tariff Board at the next inquiry into this matter. lt would be able to place its case before an independent tribunal and have it examined along with that of the other seven shipbuilding firms. 1 must correct, above all. one statement that I read in the Press to the effect that a member of the Tasmanian Legislative Council - which 1. believe is a very responsible and trustworthy body in the parliamentary life of Australia - said that this shipbuilding company would not be subsidised if it came to Tasmania, but it would bc subsidised if it went to Western Australia. That is completely false.
– Who said that?
– 1 will not mention any names. If the honorable senator likes to read the “ Mercury “, he will see that a member of the Tasmanian Legislative Council said that. I say that it is completely false. The policy of the Australian Government on subsidies for the shipbuilding industry applies wherever the ships are built in Australia. Some very wild statements on this matter have been made in the Press. Disappointed as Tasmanians are and have a right to be, there is no justification for making the despicable false assertions that have been made. The position is that a Western Australian shipyard has just been extended and has made application for subsidy, and that application has been refused by the Minister for Shipping and Transport, who is a Western Australian. That is laying the facts on the line. I deplore these despicable assertions.
This is no time to risk losing this valuable industry for all time. Just four weeks before an election, there is too much temptation to try to exert political pressure and too much temptation for honorable senators opposite to try to make political capital out of things. This is not the lime for that to be done. If this industry is to come to Tasmania - 1 hope it will do so - it should establish itself and its bona fides. It should get cracking wilh its engineering works and ship repair works. Then, having established itself, it should join wilh the seven Australian firms - their capital is provided by Australians; they are financed by Australians; and they are employing Australian labour - in the application for a review of the tariff policy. That application should come before the Tariff Board in 1969.
– Could that inquiry be accelerated? Could it be held next year?
– An application has been made; but I do not know the answer to Senator McKenna’s question.
– Order! The Minister’s time has expired.
– If a Western Australian may make a contribution to this debate, which so far has been almost completely a Tasmanian debate, I propose to do so. That becomes necessary because some speakers, such as Senators Turnbull and Anderson, did not lake full advantage of the time allowed to them under the Standing Orders. Although our attention is concentrated on Tasmania, some pretty big general questions of principle are involved in this matter. The Government’s attitude to those general principles is also involved. The Australian Labour Party is interested in this matter not only through its Tasmanian members but also through its interest in decentralisation in the smaller States. As a Western Australian I am particularly interested in that. The whole general principle of development is involved.
This debute seems to have overtones of the Liberal Party policy of competition. Wc have heard about it before and we undoubtedly will hear about it in the next few weeks. We hear a lot about letting competition run along freely and encouraging private enterprise to come from all over the world and to operate all over Australia. According to members of the Liberal Party, that is the way to get the best deal. Here was an opportunity in a small State and one which could very well do with a secondary industry such as a shipbuilding yard. Here was a company, which obviously is efficient and which has a great record in heavy industry, particularly shipbuilding, offering to come to one of the States that needs decentralisation and secondary industry. Yet it receives a Hat refusal from the Government. The Australian Labour Party is very clear on what it wants in these matters.
We make no bones about it. We believe that there should be a Government shipyard and we make no apologies for that belief. Australia is an island continent and our strategic situation is such, that shipbuilding has definite overtones of defence. There is no reason in the world why the Commonwealth Government should not. operate its own shipyard. If that is not possible - and under this Government evidently it is not - we would certainly settle for the second preference of a shipbuilding yard owned by Australian capital. We will be talking about preferences in the next few months.
Senator Lillico set the lone for honorable senators opposite by throwing up his hands in horror at the suggestion of a shipbuilding yard in Australia financed by Dutch capital. He was followed by other honorable senators opposite, particularly Senator Henty.
– That was only ironical.
– That was the honorable senator’s interpretation of the Minister’s remarks. 1 notice that he waited until the Minister left the chamber to make his analysis. If a government owned shipyard is not possible, the Labour Party certainly favours a shipyard financed at least partly by Australian capital. We have always held that view. 1 do not wish to be sidetracked from my argument, but this aspect was introduced by honorable senators opposite. We want to see Australian capital invested in shipbuilding because in future in these big industries that ought to be established in Australia today we want to ensure that the next generation and later Australian born sons will have opportunity to reach the top jobs in engineering and administration equally with the people whose capital is coming here from overseas.
We have discussed this matter on other occasions, but. our views have always fallen on deaf ears. It seems that only at this stage are we able to make our views heard. We want an industry established away from the main centres - away from the SydneyMelbourne axis. That is why we are disappointed today- that the opportunity to set up the shipbuilding industry in Tasmania has been ignored. It has been stated that 1,000 men would have been employed. That is a very valuable industry in a State the size of Tasmania. Of that number, 75 skilled workers were to be brought into this country. That is migration at its very best, when top skilled men can be brought into this country to work in their own industry.
The Minister for Shipping and Transport (Mr. Freeth) took a very curious objection to the proposal. He said that if a Dutch company . vere to bring skilled workers to build ships in Australia, it might easily lose its workers to other industries if continuity of work were not available to the shipyard. What a peculiar viewpoint to adopt. He was saying that we should not bring skilled workers here because, if there is a temporary recession, they would be inconvenienced. They would have to leave the shipbuilding industry. The fact is that when a skilled worker is brought to Australia, he is a gain, no matter what industry he works in. The
Government’s vision on this matter has been completely myopic. The argument advanced by honorable senators opposite - particularly by Senator Henty - has been that there is a certain amount of work to be done in the shipbuilding industry and that it would not be wise to look beyond that point. Honorable senators opposite speak as though they are regarding a completely static position. The Labour Party rejects that attitude completely. At present 28 ships working on the Australian coast are obsolescent or obsolete. Some of them will be obsolete in the next few years. The period of obsolescence could be shortened by the introduction of containerisation. Shipyards throughout the world will be turning to the construction of different types of shipping. The design of trading ships is changing. On the Australian coast 28 ships are already obsolescent. Their average life of about 25 years could easily be shortened. The Government’s view is myopic in regarding the chipping industry as static.
Surely no Australian Government ought to be boggling at saying to the world shipping lines: “ We are entitled lo own 50 per cent, of the shipping coming to or going from Australia.” If we buy goods in other countries of the world, surely there is nothing wrong with Australian ships picking up those goods and bringing them to Australia’s shores. That is the practice adopted by other countries when they buy outgoods. Their ships take the produce away from Australia to their shores. Quite apart from the free enterprise ideology or the laisse faire policy that honorable senators opposite favour, there is no reason why the Government should not say: “ Within outrange, we will build approximately 50 per cent, of the shipping operating overseas from Australia.” By adopting that policy the Government would be assured of a continuity of demand for shipping over a long period of years. Our need for ships lo operate on overseas lines would combat any danger of slackness in the industry. The shipbuilding industry could be developed gradually towards attaining the goal of producing 50 per cent, of the shipping needed. I believe that when that point was reached, we would have such a virile Australian shipbuilding industry that we would not be worrying about debates such as we are engaged in today.
On the eve of an election, at long last, the Government has stated that an examination will be made into the desirability of the very obvious place of Cockburn Sound for the establishment of a naval depot. Surely nobody with a knowledge of the Western Australian coastline would argue that we ought not to be moving towards the establishment of some form of shipbuilding yard or a ship repair yard to provide naval support in that area; first, because of the industrial development taking place in Western Australia; secondly, because of the changed situation since the days when the British navy had a naval base at Simonstown in South Africa, and another one at Trincomalee in Ceylon. Al that lime ‘India, Pakistan. Ceylon and Singapore were all in the hands of the British Government, which controlled the naval situation in the Indian Ocean.
That situation has altered in our lifetime. Simonstown is no longer available to us. South Africa has moved outside the Commonwealth of Nations. Trincomalee is no longer in use and British naval bases in other countries have been taken over by the people of those countries. I am not saying that this change makes any difference. Nevertheless, it alters the setup as we knew it in those days. Recently, great pressures have” been exerted on Singapore. Honorable senators are aware of the disillusionment brought about by the fall of Singapore in 1942. In spite of the changes that have taken place, Australia has never moved to rectify the situation by providing naval support on the Western Australian coast.
– The Australian Labour Party opposed the establishment of a naval communication station at North West Cape.
– The A.L.P. will nol oppose the selling up of a naval base on the Western Australian coast. The Democratic Labour Party probably will, but we will not. I ask Senator Gair not to introduce foreign matter into this debate.
– Why did the honorable senator say that the D.L.P. will oppose a naval base?
– I said that it probably will.
– The honorable senator should not make accusations that are not true.
– I did not make accusations. I made a prognostication. In the honorable senator’s usual way, he threw in a subject that is completely removed from the subject of this debate. I will not be sidetracked any further. If the Government were to raise its vision toward the establishment of the proposed type of shipbuilding industry in Australia, it would not be turning its back on the present situation. Senator Lillico said that he wants to live to see the day when we will have in Australia the skill necessary to build a Charles F. Adams class destroyer. Honorable senators said: “ Hear, hear.” What is the best way to achieve that objective? ls it by failing to expand our shipbuilding industry, or by knocking back the skilled workers who are prepared to come here? Is the best way to achieve that objective to say: “ No. Wc must keep the industry static and then some day, somehow - goodness knows how - out of heaven will fall these skilled people.”? Of course, the honorable senator answered his own question. If he wants to live to see that day, the only possible course to follow is to expand the Australian shipbuilding industry, and not to discourage skilled workers from coming here. They should be encouraged to come here and employ their skills, as they want to do in Tasmania.
I was very pleased to hear (hat the Verolme United- Shipyards company had experience of shipbuilding in Indonesia. It already has conducted surveys of the possible market in that country. If the Government wanted to encourage shipbuilding in Australia, it could do so by building ships for other countries, particularly Indonesia. As wc heard recently in a debate in this chamber, there is a golden opportunity for Australia to move in and assist Indonesia in the struggle that lies before it. The Verolme company has lifted its sights above all the things that I have mentioned. If it can establish itself quickly enough it sees the opportunity to develop an efficient shipbuilding industry in Australia, not only to build ships for the Australian static market and to cater for the expansion that must take place along the Australian coast and from the Australian coast, but also to give skills to countries, such as Indonesia, that will not possess them for some time.
I do not see that it would have to stop there. I noticed that one of the Tariff Board reports suggested that we could build ships for New Zealand. Obviously, if we are to build ships for Indonesia, it would not be impossible to look for markets in other places, particularly the countries which comprise Malaysia. This Government should stand completely condemned for its decision on this occasion. Here was an opportunity that involved many factors, not the least of them being decentralisation. Tasmania is a small State. An experienced shipbuilding company wanted to come to Australia and to bring its skills here. The Government has refused a golden opportunity. It has confirmed its static view on shipbuilding which ought not to have a place in the present expansionary period in Australia.
Sena:or CORMACK (Victoria) [5.27].- There are two factors that have emerged from the debate. If honorable senators cast their minds back they will remember that Senator O’Byrne, who supported Senator Turnbull, the mover of the motion, let the cat out of the bag. He was not so very much concerned with the Verolme company, but he indicated in the clearest possible terms that the purpose of the motion was to excite the attention of the electorate in Tasmania in the hope that the Labour Party might win the seats of Denison and Franklin.
– Did 1 say that?
– That is what Senator O’Byrne said. He supported Senator Turnbull. Heaven forbid that I should ever subscribe motives of that nature to Senator Turnbull. If Senator Turnbull feels that by implication 1 did in fact do that, I wish to assure him that nothing was further from my thoughts. That is what Senator O’Byrne indicated in the most clear and positive terms, and Senator Poke as well. The exercise is to try to force the Commonwealth Government into a position of electoral odium and to provide ammunition by means of which the Government held seats of Denison and Franklin may be placed in some sort of jeopardy. I suggest that a very interesting debate has emerged from this exercise. It has brought into the light the grave problem which this Government or any other government holding the seals of office in the Commonwealth jurisdiction would face regarding the shipbuilding industry in Australia.
I follow Senator Willesee, the distinguished Leader of the Opposition, in the debate. He tried to cast a shadow of doubt on the Government’s intention by making fun of Senator Lillico who appeared to be, in Senator Willesee’s words, holding up his hands in horror at the idea of outside capital coming into Australia. I heard Senator Lillico say in the most clear and ironical terms that he could command - and no senator is better able to do this - that he was teasing the Labour Party Opposition on its well known attitude of dislike of foreign capital coming into Australia. Senator Willesee concluded his speech by saying, in relation to the Charles F. Adams class destroyers which were mentioned by another honorable senator that this proposal offered us an easy way to acquire the knowhow and the expertise involved in the building of Charles F. Adams destroyers. As I stated on an earlier occasion when Senator Keeffe raised this matter, the whole problem with the Charles F. Adams destroyers is that we have not got in Australia at the present time the technical knowhow to put inside the Charles F. Adams destroyers the equipment which makes them the efficient weapons systems that they are. Any Labour member of Parliament, whether in the Senate or in another place, who saw something of the Royal Australian Navy’s exercise off the Queensland coast last weekend will be among the first to say that the best deal that we ever made was to purchase these ships complete from the United States of America. I have mentioned Senator O’Byrne, Senator Willesee and a few other honorable senators who have come within my sights, merely to clear the air of a lot of verbiage that has been used this afternoon.
I move on to the crux of this problem. The dead weight tonnage requirement for the Australian shipping trade is in the vicinity of 800,000 tons of various categories. The technical changes that are taking place in shipbuilding mean that fewer ships and ships of greater size are being built. Senator Willesee mentioned that ships have a life of, say, 25 years. For tax deduction purposes they have a life of 20 years. He suggested that the period of their obsolescence could be shortened. What happens if it is shortened? As I have tried to describe to the Senate, there is the norm of Australia’s replacement requirements in shipping, in addition to what might be expected to come from the growth of trade as Australia’s economy expands. If the object of the Australian shipbuilding industry is to supply the Australian domestic requirements in the first instance - which I believe it must be - then this sets a limit on the amount of tonnage and yard space we allow under subsidy for the production of ships in Australia.
Under the existing system of the rationalisation of the existing shipyards that are able to attract subsidies, we find that these shipyards have tended to improve their quality, technical knowhow and technological capacity. Of course, this is verified by the Tariff Board’s report. I shall mention an illustration to show that this policy is successful. Evans Deakin and Co. Pty. Ltd. in Queensland has spent over $2 million in building a wet dock for the building of ships in the modern way. Here is a wholly owned Australian domestic firm which under the rationalisation plan has been able not only lo put away reserves for future expansion, but to establish a margin of profit which enables it to borrow the necessary finance required in order to carry out modernisation of its own yards. This is one illustration of many that I could give which indicates that the Government’s policy in relation lo existing shipyards that attract subsidies is the correct one.
An additional shipyard in Australia could operate only on the basis of its ability lo build tonnage and to attract a subsidy from the Commonwealth Government. But when we come back to my original thesis, which I think cannot be argued against, and say that the foreseeable and projected tonnage required in Australia sets the pattern for the amount of yardage which has to be made available for the domestic shipbuilding industry, we see at once that the establishment of an additional yard by the Verolme company would merely put the company into the position of being able to move in on the future subsidies that will be available to the shipbuilding industry.
Shipbuilding requires not only the bare yards and wet docks in which to build ships, but also ancillary industries; not only heavy machinery industries, but also plumbing and joinery industries and so on. So the establishment of a yard as proposed to gain subsidies from the Commonwealth Government would mean that a great number of ancillary industries would be required to sustain and support it. Those ancillary industries are available already at the existing dockyards at Newcastle, Sydney and Whyalla, and in Queensland. lt is all very well to say, as did Senator Willesee, that this shipyard, attracting a subsidy, could move into the export area. He said that the company had had some dealings in Indonesia. To the best of my knowledge, those dealings have not been highly successful. If we built ships for Indonesia, as surely as night will fall we would not be selling ships to Indonesia but would be giving them to her. What we would be doing would be to divert funds from other areas of Commonwealth need to finance aid under the Colombo Plan. If we were to establish a new shipbuilding yard in these circumstances it should be known as the “ Colombo Plan shipyard “; the subsidy would bc paid to produce ships for countries that receive aid under the Colombo Plan. That is the real essence of that argument.
The Australian shipbuilding industry has in prospect the building of approximately 125,000 deadweight tons of shipping. My information is that the programme includes two 8.000 d.w. ton container ships, one 45.000 lon bulk carrier, one 19,000 ton tanker, one 22,500 ton tanker, two 7.000 ton tankers, one 500 ton passenger ferry presumably for the Tasmanian run, one bulk container and one hopper barge. That will take us up to about 1969-70. What is in prospect for the Australian shipbuilding yards for the five years following 1970? All the orders that are in prospect for the next 10 years - they include a few drilling rigs and so forth - could be fulfilled by the Whyalla shipyard and any other dockyard in Australia.
Any attempt by this Government to increase the competitive capacity of our shipbuilding industry would set in being the very circumstance that the Australian Labour Party deprecates every time it has an opportunity during debate to do so. In other words, we would set in being a stop and go system. It is the policy of the Government not to have a stop and go system but to attempt to ensure the greatest possible flow of production for the foreseeable future. A continuous flow of production ensures continuity of employment for
Australian employees in the various categories that are needed to cope with the complexities of shipbuilding. A continuous flow of production offers a reasonable chance of keeping costs within reasonable bounds. Activities of a stop and go nature lead to the additional costs which put Australian shipyards in a non-competitive position and which necessitate the payment of a large subsidy.
I conclude by saying, as J said at the outset, that the raising of this matter has not been a genuine attempt to meet the needs of Tasmania but has been an attempt to embarrass the Government for electoral purposes. I do not condemn honorable senators on this side of the chamber who have spoken during this debate. Obviously they have attempted to put forward, quite properly and as they always have during the time I have been a member of the Senate, the needs of Tasmania in a loyal and devoted way.
.- I would be remiss if I did not lend my support to the proposal that has been advanced by other Tasmanian senators. I would not like it to be thought that I was the only Tasmanian Labour senator who had not voiced -an opinion during this debate. 1 want to correct the impression that was created by Senator Henty that a Labour man made a statement in the Tasmanian Legislative Council to the effect that if a shipbuilding industry were established in Western Australia it would be subsidised but that if such an industry were established in Tasmania it would not be subsidised, lt was Mr. Michael Hodgman, the Independent member for Huon, who made that statement. Several other members of the Legislative Council also criticised the decision of the Federal Government. They are withholding their final judgment until the facts are better known.
I deprecate the action of Senator Cormack in referring to the activities of the shipbuilding industry for the next five years or the next decade only. To do that is not to look sufficiently far ahead. We should be preparing plans, commensurate with Australia’s importance, to provide shipbuilding facilities for the rest of this century.
– We would then be running around for orders.
– If we had the facilities, we would search for orders. We would provide not only for Australia’s needs; orders would come from other countries also. Surely to goodness we could get to the stage where we subsidised such shipbuilding activities, as is done in France, Japan and Italy. Surely we could subsidise the moneys that were borrowed for shipbuilding purposes by subsidising interest payments, and so play a bigger part in world affairs. Government senators have been fighting in defence of an obvious mistake made by the Minister for Shipping and Transport (Mr. Freeth) and those who are in charge of the shipbuilding industry.
The DEPUTY PRESIDENT (Senator Drake-Brockman). - Order! The time permitted under the Standing Orders for the discussion of this matter having expired, the business of the day will be proceeded with.
page 1458
-I present the following reports of the Public Accounts Committee -
Eighty-fifth Report - Automatic Data Processing.
Eighty-sixth Report - Automatic Data Processing (The Bureau of Census and Statistics Network).
I seek leave to make a short statement.
The DEPUTY PRESIDENT. - There being no objection, leave is granted.
– These reports relate to a very extensive inquiry conducted by your Committee into the subject of automatic data processing. Since 1962 when specific evidence relating to this subject was first taken by your Committee, it has been apparent that this new technique would be sought by a wide range of departments throughout the Commonwealth administra- tion. The more recent reports of the Auditor-General and the Public Service Board have confirmed this trend and have highlighted the comparatively high levels of expenditure involved in the conversion of data processing to computer operations. Your Committee noted also, from a variety of reports available from overseas countries, particularly Great Britain and the United Stales of America, that conversion to A.D.P. is not a simple operation and is, in fact, fraught with many pitfalls unless computers and their ancillary equipment are acquired and programmed in terms of a carefully conceived and efficiently implemented plan.
In determining the scope of its inquiry, your Committee felt that it should widen its terms of reference to include the technological changes that have already occurred in the Australian community following the introduction of A.D.P. equipment and the changes which might ‘be expected to occur as the number of installations and range of applications increases. Accordingly, your Committee sought evidence from suppliers of computer equipment to the Australian market and other acknowledged experts in the field. At the same time, your Committee considered that specific attention should be directed to co-ordination and general management processes for A.D.P. within the Commonwealth service. This approach to the inquiry, which enabled a wide variety of evidence to be taken and points of view expressed on relevant areas of Commonwealth administration, greatly enriched our examination in this challenging field.
The Eighty-fifth Report is general in nature.It relates to computer technology in Australia; staffing and the associated field of education; criteria by which computer installations may be justified and their efficient usage measured; and the introduction and co-ordination of A.D.P. in the Commonwealth service. As the evidence taken in the present inquiry does not, by design, cover all of the computer applications within the Commonwealth service there are areas of evidence recorded in the Eighty-fifth Report on which your Committee would not, at this stage, feel bound to reach firm conclusions. At the sametime, however, some of these areas are of such tremendous importance and the evidence taken sufficiently conclusive for us to offer conclusions which, it is hoped, might serve as guidelines to theadministration in the acquisition and opera- tion of computers in future years.
In reaching its decision to undertake this inquiry, your Committee recognised that its task could not be completed during 1966 but felt that the inquiry should be taken to the stage where a detailed examination had been made of one large departmental computer network. As the information available showed that the installations made by the Bureau of Census and Statistics arc the most significant in terms of capital cost, that network was selected for examination. The Eighty-sixth Report relates specifically to the Bureau’s installations and embraces not only the computers and ancillary equipment installed, but also evidence submitted by the Departments of the Treasury and Health, the Taxation Branch and the Superannuation and Defence Forces Retirement Benefits Boards which are currently operating on that network. In this phase of its examination your Committee has been able to examine the history, development and implementation of A.D.P. by each of the authorities concerned, their recruitment and training problems and the benefits which each of them has obtained from conversion to computer processing. In addition, we have been able to assess the capital and operating costs of the network as a whole and obtain an appreciation of problems beginning to emerge. Your Committee has achieved the objective that it had in mind when it embarked on this inquiry and considers, on the basis of its experience, that future committees could, wilh great advantage, examine other facets of automatic data processing in the years ahead. 1 commend the reports to honorable senators.
Ordered to be printed.
page 1459
15.52.1. - 1 move -
That iiic Hill be now read a second lime.
In 1961 the then Menzies Government introduced legislation to grant long service leave to waterside workers, lt provided for 13 weeks’ long service leave to waterside workers who had accumulated 20 years’ qualifying service in the industry. In 1961 this was. putting aside the different approach of South Australia, the standard pattern of Slate long service leave legislation. Since 1961 I he legislative pattern has become 13 weeks’ long service leave after 15 years’ service. As well, since 1964 the Commonwealth Conciliation and Arbitration Commission has made awards in a number of industries providing for long service leave on this basis.
Following the Commission’s decision, the Waterside Workers’ Federation made representations to my colleague, the (hen Minister lor Labour and National Service, to apply this new general standard to the stevedoring industry and to widen considerably the application of the long service leave scheme. However, the situation in the stevedoring industry was then such that my colleague was not prepared at that time to recommend the introduction of legislation to improve the long service leave scheme. For some time now, to the great credit of all concerned, the climate is vastly different. In part, this draws something from the national conferences of all the parties associated with the stevedoring industry which have been meeting, under the chairmanship of Mr. A. E. Woodward, Q.C., lor just about twelve months.
Here (et me pause (o note (hat in the 12 months to September this year man hours lost because of stoppages in the industry have been of the order of 25.000. If I tell honorable senators that in the 20 years back to 1946-47 for which we have comparable figures, the loss in the best previous year, 1957-58, was 346,000 man hours, and the loss in the worst year nearly ten limes that, the change in climate is the more noteworthy. These figures demonstrate very clearly that the stevedoring industry need not be any more difficult from an industrial relations point of view than any other industry.
Now. during the course of the national conferences to which I have referred, the Waterside Workers’ Federation, supported by the Australian Council of Trade Unions, asked that the Government consider its earlier request for improvements in the long service leave scheme. In the light of progress being made by the conferences and the changed situation on the waterfront, the Government was pleased to accede. Indeed it felt that the circumstances warranted its going in some respects beyond what had been sought. In fact, it concluded that the quite unique circumstances of the stevedoring industry justified in some respects somewhat more favorable provisions than are generally applicable to industry at large. In the first place, provision is made enabling those waterside workers who maintain continuity of work to earn additional long service leave - to get, as it were, a bonus.
In short, the Bill provides that for each period of a fortnight’s continuity of work a waterside worker will accumulate additional credits. The net effect is that a waterside worker in an “ A “ class port who completes 15 years’ qualifying service without any stoppages will accrue a bonus of long service leave of roughly 2i weeks in addition to his normal 13 weeks’ long service leave. Because of the rather different circumstances of. “ B “ class ports - those ports where work is not continuous - special provisions applicable to men at them are made, but their general purpose is the same.
Secondly, up to the present, waterside workers in “ B “ class ports have been under a considerable disadvantage. At present, a man has to accumulate 13 weeks’ long service leave before he can take such leave. This concept is quite satisfactory in industry at large and also in “ A “ class ports where each day a man works or is eligible for attendance money counts to qualifying service. However, in “ B “ class ports where work is intermittent, a waterside worker only receives credit towards long service leave for days when stevedoring operations are actually taking place in the port, and the man works or is available for work. This means that in some B “ class ports a waterside worker could spend a lifetime in the industry without ever accumulating sufficient qualifying service to enable him to qualify for 13 weeks long service leave. In fact, some would never qualify for leave.
We felt we should ameliorate the position of these “ B “ class port men. Having taken that decision we considered that it would be best to have one approach to the stevedoring industry at large. So this Bill will now enable a man to take whatever leave he has accumulated after 15 years’ qualifying service. It may be that, in the case of waterside workers at “B “ class ports, the quantum of leave may amount to only 3 or 4 weeks but at least for the future they will get whatever leave they have accumulated over that period of service. The same rule will apply in relation to the pro-rata provisions.
Part 111a of the Stevedoring Industry Act, which provides the code of long service leave for the industry, is extremely complicated. If we had grafted on to it the amendments necessary to give effect to the
Government’s decisions in relation to the Federation’s request, Part 1 1.1. a would have been even more complicated. So we have taken the course of re-making the whole of Part 1 1 1 a. This is done in the very lengthy Clause 4.
Apart from the points to which I have already alluded, the main alterations introduced by the Bill are as follows -
The period of qualifying service which will entitle a worker to long service leave will in future be 15 years and not 20 years. As with the State legislation and the Commission’s awards, a man with 15 years’ service now does not qualify straight away for 13 weeks’ leave. On the other hand, as I have explained, to meet the unique circumstances of this industry a man with 15 years’ service will be able to lake whatever leave he has accumulated.
In future, Sundays will be excluded in assessing entitlements to long service leave and these will be based on a six-day week Monday to Saturday. Hence the repeated reference in the Bill to 78 days instead of 13 weeks. These provisions will remove a further disadvantage that has been operating against workers in “B “ class ports.
The basis of ascertaining the amount of long service leave to which a waterside worker is entitled has been changed from “ qualifying service “ to “qualifying days “. Under the Bill all the days described in the definition of “ qualifying days” appearing in what will be the new section 45a will be counted in assessing leave entitlements. For every 80 qualifying days up to 1st January, 1966, one day’s long service leave will accrue. For every 60 such days after that date one day’s leave entitlement will accrue.
The provision dealing with pro-rata leave has been altered to bring it into line with the awards of the Commission by substituting the phrase “ domestic or other pressing necessity” for “ pressing necessity” as a ground on which a person may obtain pro-rata leave on leaving the industry after 10 years’ service.
The present limit of 15 days of absences on sick leave and on workers’ compensation in counting qualifying days will be removed.
Days absent on jury service or as witnesses before courts or tribunals will be counted as qualifying days.
Where suspensions of registration are set aside the days restored will count as qualifying days.
A waterside worker who works for at least 7 consecutive days and is then granted recuperative lime off by the Authority will have that time credited to qualifying days.
Waterside workers who de-register to become members of the Sydney Waterfront First Aid Service will not have their continuity of service broken if they should subsequently be re-registered., though, of course, long service leave entitlements will not accrue while they are with the Service. i must confess that, the description 1 have given of the Bill is a highly simplified account of its provisions. In essentials it provides benefits no less generous than those applying under the Commission’s awards and State legislation, and in the several respects I have indicated is rather more generous because of the unique circumstances of this industry. Of course, the bonus provision - the provision for extra long service leave where (here is continuity of work - is a quite novel concept, possible of introduction only because of the peculiar circumstances of this industry.
It had been the hope of the Minister for Labour and National Service that this legislation could be brought down earlier this year. Because this proved impracticable, the Government decided that a measure of retroactivity to the new provisions was warranted. So the major changes in the long service leave scheme are designed to operate from 1st January 1966. The Government believes that this Bill will be seen as a contribution to the future progress of this industry and to the negotiations at present proceeding in the National Conference. I commend the Bill to the Senate.
Debate (on motion by Senator Bishop) adjourned.
Sitting suspended from 6.1 lo 8 p.m.
page 1461
Debate resumed from 25th October .1966 (vide page 1416). on motion bv Senator McKellar-
Tli.it the Bill bc now read a second lime.
.- The purpose of this Bill is stated by the Government to be to remedy what it considers to be an anomaly in the Act as it relates to the election of senators to fill casual vacancies when more than one casual vacancy occurs. That will be the case in the election to be held on 26th November next. Regrettably, two senators from the State of Western Australia have died since the last Senate election and two senators from the Stale of Victoria have died since the last Senate election. The Constitution provides that in those cases the seats shall be filled by an election of the parliaments in the particular States until there is an election of the House of Representatives or the Senate. The position, therefore, is that these vacancies caused by the deaths of two senators in each of those States have been filled in the case of Western Australia; one of them has been filled in the case of Victoria and a certificate for the filling of the other has been issued. But as I said before, the position is that two senators will have to be elected in Victoria and two will have to bc elected in Western Australia at the House of Representatives election on 26th November.
The Government proposes that the election of the two senators shall be one election. 1 am informed that as the law stands at present it would bc possible that two separate elections be held in each State, that is, that there would be a ballot paper to elect one senator and then a ballot paper to elect another senator. That is what I have been told. Those who study the political complexions of those States will realise that if there were separate elections for the position, then the Government would be likely to win the two positions in both Slates. If that happened the Government would be. after the election, in the position of having a majority of 31 to 29 in the Senate- But the Government, with singular unselfishness and without regard to Senator Withers, a member of one of its own parties, who is to be the sacrificial offering, is determined that there shall be a single election for the two positions, which will result, it would appear, in the Government winning one and the Australian Labour Party winning the other.
Although if the Government operated as the law stands at present it would have a majority of 31 lo 29 after the election, it is casting away that advantage and is prepared to accept the position that it will have only 29 senators in a House of 60. 1 do not propose to debate that further than to say that 1 have noticed that in a number of Senate elections the Government has asked for a majority on the ground that it is vital that it should control the Senate. The Government can no longer say that. It can never use that argument any more, because it is now altering the law in such a way, I understand, as to ensure that whereas it could have had under the present law a 3 1 to 29 majority, under the amended law it. will place itself in a position of having a minority.
The Democratic Labour Party will oppose this Bill and will vote against it, because the effect of this Bill must inevitably be that in an election such as this, of the House of Representatives or the Senate, for a casual vacancy, a candidate of any party outside the major parties will not be able to be elected. Those are the facts of life. If a D.L.P. senator is elected under the proportional representation system in the future, and if he dies and the vacancy is to be filled, it is possible that the Parliament in the State from which he came will elect a D.L.P. senator for the period up till the next election. But it appears to me to be obvious that when that election comes only a representative of one of the major parties can be elec’.ed. So this Bill, in effect, is designed to ensure that in the case of casual vacancies at elections throughout the Commonwealth the candidate of the third party, the D.L.P., cannot be elected, even though that Party may have won the seat fairly and squarely at the general election. If a D.L.P. senator died and a D.L.P. representative were appointed by the Parliament of the Slate until the next election, even though he achieved a quota, or more than a quota, he would not bc elected. The seat would go to a member of the Government parties or a member of the A.L.P. My contention is that it is a rank injustice that this Bill is designed to advantage the major parties only, lt is unfair to the smaller parlies, lt is a denial of the system of proportional representation on which the Senate is supposed to be based.
– What was the position without the Bill?
– The Government has had many years during which this situation has existed. It has made no attempt to deal with the situation at all and it is entirely wrong that when it attempts to deal with the situation it does so in a way which is unjust and is opposed to the system of proportional representation. Let me cite a statement from a standard work, “ Australian Senate Practice “ by J. R. Odgers, at page 29. I ask every honorable senator to listen closely, because 1 believe that this sums up the position -
The Report ot the Select Committee on the Constitution Alteration (Avoidance of. Double Dissolution Deadlocks) Bill 1950 drew attention lo the incidence of proportional representation on the question of casual vacancies. Because of the added importance of casual vacancies as a result of proportional representation ensuring fairly evenly divided Senates, it was recommended that the constitutional provision for the filling of casual vacancies should be reviewed.
The Committee was agreed that the law should be amended to make it as nearly certain as possible that casual vacancies will always be filled by a new Senator of the same political complexion as his predecessor.
I interpolate to point out that this Bill does not do that. The quotation continues -
The most satisfactory way to ensure this, the Committee, considers, was by a provision in the law that in the event of a Senator ceasing lo hold office before the expiration of his term any voles credited to him be transferred to the next in line, according lo his ballot papers, and the candidate elected by a continuation of the count to serve until the expiration of the term, or until the election of a successor at the next election of Senators for the State, whichever first happens.
This proposal, would necessitate retaining the ballot papers from election lo election, and would lead lo the nomination by the parties of more candidates than would otherwise be the case. But much can happen in the years following an election. “ Reserve “ candidates, themselves, may dic, become Members of Parliament at subsequent elections, or even change their parly allegiance.
A simpler method would be to provide in the law that a casual vacancy be filled by the appointment by the State Executive Council, or vole of he Stale Houses, at present, but wilh a further provision that such vacancy bc filled for the unexpired term by a new Senator of the same political party as the Senator he replaces. Should an independent Senator vacate his seat, the State
Houses could bc left free to exercise their judgment. In any event -
I emphasise these words - it does seem desirable that section 15 of the Constitution should be amended so as to empower the Parliament to determine by legislation how casual vacancies should be filled. It can well be argued that the introduction of proportional representation for the Senate calls for maintaining the status quo in party representation. If a Senator is succeeded by a Senator of another party, proportional representation - which is representation of the parties proportionate to their votes - is destroyed.
Now let me quote from the report of the Committee of 1950-51 headed by Senator McKenna. The Committee was very clear on the point. It had this to say -
The Committee was agreed that the law should bc amended to make it as nearly certain as possible that casual vacancies will always be filled by a new Senator of the same political complexion as his predecessor while avoiding the recognition of political parlies either in the Constitution or Federal legislation.
As a member of the Australian Democratic Labour Party I want to say that 1 regard the system proposed in this Bill - and, if you like, the previous system - as completely unjust and opposed to the principles of proportional representation. Consider this case: At an election the candidate for my Parly obtains the quota, or near enough to it, and is elected. As the Senate is elected for a period of six years - we have a different tenure from that in the House of Representatives - 1 believe it is only fair and just, as Senator McKenna’s Committee recommended, that if a senator after election is removed from his position by death or in some other way the fairest thing obviously is for the Houses of Parliament in his own State to elect someone to fill the vacancy for the remainder of the period. If that cannot be done, the Committee has referred to the method of retaining the ballot papers and electing a candidate of the same political complexion as the senator who caused the vacancy. That is a just method.
Surely it is unjust for the Senate to say that it shall be elected by a system of proportional representation and then, in the case of casual vacancies, to take action which will ensure that the principle of proportional representation is breached. In Tasmania where they have a much better system of proportional representation than we have, that is the system under which they operate. I say, therefore, that I oppose this Bill because it will advantage the major political parties. They are given an advantage to which they are not entitled under proportional representation. If a senator of the minority or smaller party dies and if the candidate for his party at the ensuing Commonwealth wide election gains what would be, in normal circumstances, the quota, why should he be deprived of the seat? Why should it be given to a member of one of the other parties?
– That is if there are five positions to fill.
Senator McMANUS__ No. In this particular case if there were two positions to be filled the seats would go to one or other of the major parties. That is entirely wrong. 1 agree with the principles set out in the extract I read from the report of the Committee of 1950-51. It appears to be generally recognised in Australia today that when a senator dies the Parliament in the State from which he came will appoint as a senator a person of the same political party. If we want to stick to the principle of proportional representation there is no reason why that senator should not serve for the whole of the remaining term. If that were done some of the anomalies that Senator Ormonde was so concerned about the other night would be eliminated. They are continually arising and in my opinion, because they exist, are no credit to the provisions of the Electoral Act.
My Party is opposed to this Bill. We believe that it is unjust. We believe that the Government, should have taken action long ago on this matter of filling casual vacancies. According to the report of the Committee, which was composed entirely of Labour men, the indications are that the Government would have received support. 1 presume the Labour Party would not have altered its views on the matter. Seeing that attention was directed to this subject years ago, it is to me remarkable that action is taken years after the event in a way which obviously will disadvantage a certain party. The Australian Labour Party is the beneficiary of this Bill. The Democratic Labour Party is a loser and the Government is a loser.
The Government has said repeatedly at elections that it is vital to have a majority in the Senate to be able to govern the country properly. Under the present legislation the Government would obtain a 31-29 majority, lt is surely amazing that the Government is casting that away and is prepared to legislate so that it will have a minority in the Parliament to come. Never again will the Government be able to say to the people: “ Do not elect a representative of the D.L.P. because we must have control of the Senate.” By this Bill the Government obviously does not think it is very important to have control of the Senate.
Senator BRANSON (Western Australia) [8.I7J. - As a Western Australian sent here to represent the people of Western Australia in a Stales House in a Federation, I find myself in the position of opposing this Bill. This is the first time in my career in this place thai I have had to vote against the Government but I would be failing in my duly as a Western Australian if 1 did not do so. lt has been accepted throughout Australia, whether wc think it is right or wrong, that the system of proportional representation is the fair way to elect senators to a States House in a Federation. The system gives rights to the minorities about which Senator McManus has been speaking and it truly reflects the fact that the Labour Party, which has not been polling very high, and the Liberal and Country Parties which have been polling very high, will still be sending here about the correct proportion of party representatives that the Australian people want. I would not want to jeopardise that because I firmly believe it. is right that one House in the Federal system should reflect the public’s view proportionately.
At the Senate election in Western Australia at which the two deceased senators, Senator Sir Shane Paltridge and Senator Vincent, were elected the people, in their wisdom, decided that there should be two Liberals, two Labour men and one Country Party man to represent them here for six years. The electors of Western Australia made that decision. Now we have the peculiar situation of the Government, by legislation, arbitrarily telling the people of Western Australia: “ According to the system of proportional representation you were wrong. You did not want two Liberals, two Labour men and one Country Parly man. You wanted three Labour men, one Liberal and one Country Party man “.
– They will get this right when they go to the polls again.
– Of course they will, at some indefinite time in the future. 1 am interested in interjections. I welcome them. We find ourselves wilh strange bedfellows. Now we have the Labour Party supporting the Government.
– Members of the Labour Party ought to support the Government. They would be silly if they did not do so.
– For purposes of political expediency, they will support this legislation, although I believe that one of the very prominent men in the Labour Parly was responsible for the introduction of proportional representation. Members of the Labour Party are lining themselves up wilh the Government to destroy proportional representation.
– Thai is nonsense.
– lt is nol nonsense. Will the honorable senator tell me that the people of Western Australia did not elect two Labour Party senators, two Liberal Party senators and one Country Party senator? They did. Now members of the Labour Party propose to help to negate the wishes of the people of Western Australia.
Senator McManus was completely correct when he said - I repeat this - that in 17 years this Government should have done something about holding a referendum to amend the Constitution. Now, with hindsight, we all know that this situation could have arisen before. The people have elected leaders to run the nation. Surely those leaders should have looked at this matter. 1 propose to read section 15 of the Constitution. Although we all know what it says, I propose to place it on the record because many people do not know what it means. lt is very clear, lt says -
If the place of a senator becomes vacant before the expiration of his term of service, the Houses of Parliament of the Stale - not the Commonwealth -
. for which he was chosen shall, sitting and voting together, chose a person to hold the place until the expiration of the term -
I wish the framers of the Constitution had slopped there: but the section continues - . or until the election of a successor us hereinafter provided, whichever first happens.
The tragedy is that the framers of the Constitution went on past the word “ term “. The section goes on to say -
But if the Houses of Parliament of the Slate are not in session al the time when the vacancy is notified, the Governor of the Slate, with the advice of the Executive Council thereof, may appoint a person to hold the place until the expiration of fourteen days after the beginning of the next session of the Parliament of the State, or until the election of a successor, whichever first happens.
Here is the weakness in the Constitution and I believe that the people of Australia should have had a chance to correct that weakness. The next words are -
At the next general election of members of the House of Representatives-
Yet we are talking about senators - . . or at the next election of senators for the Stale, whichever first happens, a successor shall, if the term has not then expired, bc chosen to hold the place from the date of his election until the expiration of the term.
Therein lies the weakness. 1. believe that the Government can rightly be asked to explain why it did not look at. this weakness earlier. We have constitutional lawyers and we have the Attorney-General’s Department, which should have been looking at this matter. Although the Government has been in office for 17 years, exactly one month from today - on 26th November - we will hand the Opposition a Senate seat on a plate. In my view, this is frustrating the will of the electors of Western Australia at the last Senate election.
– If this had happened in South Australia, would not the position bc the same except that it would be in reverse? The Government would have received one seat on a plate.
– 1 would still disagree wilh it. Senator Toohey has given the perfect argument. He has supported my argument to the nth degree.
– Nonsense!
– I say with great respect that I am not talking nonsense. Honorable senators opposite are in a Stales House, just as I am. They should be fighting to preserve the representation of their States as the people of their States voted. They should not, as a result of the untimely death of two men, be supporting the changing of the representation in this place by an Act of Parliament.
– By the system of proportional representation.
- Senator Cohen may argue that he and his colleagues are preserving proportional representation. 1 say that they are not; they are destroying it. At the Senate election the people of Western Australia elected two Labour Party senators, two Liberal senators and one Country Party senator. The supporters of this legislation propose to change that representation for the unexpired terms by having three Labour Party senators, one Liberal Party senator and one Country Party senator.
When Senator McManus was speaking, Senator Cohen interjected: “ If we do not do this, what is the alternative?”
– I did not. I said: “ What is the present position?”
– I beg the honorable senator’s pardon. Perhaps I was ahead of him. 1 believe that the Government could have done as Senator McManus suggested. Two separate writs could have been issued. I believe that they are issued by the State Governor. After they had been issued, the Labour Party, if it had wished, could quite easily have challenged the procedure in the courts.
– Nonsense!
– The honorable senator is entitled to his opinion. I am expressing mine as a Western Australian. I am resentful of the fact that this legislation will alter a system under which the people of any of the States, in a democratic poll, elect, in accordance with their wishes, people to serve them in this Parliament. Because of these untimely deaths, not only in Western Australia but in other States-
– Two Labour senators could have died.
– That could be. 1 am not talking politics. Will honorable senators opposite please understand that clearly?
– But the honorable senator must be talking politics because in the South Australian instance the will of the people would be frustrated if his argument is correct.
– That is what I have been saying. 1 have been saying that honorable senators should not do that sort of thing. Section 15 of the Constitution should have stopped at the word “ term “. IF a Labour senator died or if J died, somebody would be appointed from our States to replace us for the unexpired portion of our term.
– What would happen if the State refused to appoint a senator of the same political colour as the one who died?
– 1 believe that that happened once in Queensland. I can be corrected if I am wrong. But the honorable senator knows as well as I do that over the years the practice has grown of the relevant State Government honouring the wishes of the people and appointing a person from the same political party as that of the deceased senator.
– Sir Thomas Playford would never have accepted that.
– I do not know that he ever had to make an appointment. If he did, Senator Toohey can stand up and tell us about it. 1 believe that what he mentioned happened only once. I believe it happened in Queensland. But that does not matter to mc in this regard. One such instance can be cited; but had I done enough research 1 probably could have recited 12 or 15 instances in which the States have followed the practice to which 1 have referred. That practice is not written in the Constitution. When the Constitution was written there were no political parties as such represented in this place. We should write that practice into the Constitution now that it has been accepted.
– That could not be done easily.
Sena:or BRANSON.- It could be done by way of referendum; that is, by saying to the people of Australia: “ Do you not think that if a senator dies he should be replaced by a person of the same political party and should hold office for the remainder of the term for which the deceased senator was elected? “
– The honorable senator would then advocate that the people vote “ no “.
– What a silly interjection! The gravamen of my charge is that this legislation is too late; that it seeks to correct something that should have been corrected a long while ago by referendum; and that when a senator dies he should be replaced by a person of the same political party who should hold office for the remainder of the term for which the deceased senator was elected. That is the reason why I intend to vote against this legislation.
S.28J. - I have heard this matter debated both here and in other places. It is an extremely interesting debate. However, let me say at the very beginning that I find it extremely difficult - in fact I find it impossible - to agree with the propositions that were put forward by senators McManus and Branson. The basic argument underlying the thesis advanced by them is that once a member of a particular political party is elected to a seat in the Senate for a term of six years, then, not the individual who is elected but the party to which he belongs, has a vested right to hold that seat for the whole of the term of six years. Let us say that Smith is elected. If he dies, that does not matter to his party because the parly has the right to fill his seat for the remainder of the six-year term.
– The Minister disagrees with that, does he?
– I disagree with that view completely, for reasons 1 will try to advance. The Constitution provides - and 1 think it is a sensible provision - that if an individual is elected to a seat in the Senate and dies, then as soon as the people have an opportunity to express their views, another election should be held for that seat. The practice has grown by convention that if a senator dies before the people have an opportunity to express their views at an election, he will be replaced by someone of the same political persuasion. By convention, he will be replaced by somebody of the same political persuasion chosen by the relevant Stale Parliament, because at that point of time the people have no chance to express their views and to indicate whether they have changed their minds since the last time they voted. But the term of the senator chosen by a Stale Parliament lasts only until another election is held and the people have an opportunity to show whether they have changed their minds. That situation applies, I suggest for a beginning, to a single vacancy. I do not think it can properly be argued - as is inherent in the arguments of Senator McManus and Senator Branson - that if a senator dies and his replacement is appointed, when the time comes for a Senate election, an election should not be held in respect of the single replacement because the Party to which that senator had belonged has a vested right to the seat which that man filled. Perhaps I could state the argument a little more precisely. If an election is to be held, it must be an election which is confined to a choice between two or three men belonging to the same party as the man who previously filled the seat, who died, and who needs to be replaced. I do not think it is tenable to suggest that in the case of a single vacancy of that kind, the Party to which that man belongs has a vested right to a six year term, if that is the term for which the man was elected, and that the people should not have a chance to express their views again when the opportunity to do so arises.
– Cross out: proportional representation.
– I would like to develop my argument in my own way. I suggest that it could be perfectly possible for a government - not this one, but a theoretical government - to be elected on a policy which it did not follow out, and on promises which it did not honour. In that case, surely it would be right that people should have an opportunity to vote for a replacement of a senator who had been elected on that policy and on those promises which had not been honoured. Or, it could bc that circumstances had radically changed in a period of, let us say, four years, after the election took place. It would be quite right and, indeed, I think necessary for the people to have an opportunity to say whether they still wanted to vote in the same way as they had voted.
– That situation arises if there is only one vacancy.
– All right. But if the principle applies to one, at least we could establish that as common ground.
– Would it apply to two?
– Let us take the first step. I believe, for the reasons I have given, that it applies to one vacancy. As 1 have said, it is inherent in what Senator McManus and Senator Branson have argued that the party to which a senator belongs has a vested right to his seat for the whole of the six year period. What is to be the position in the case of an independent who is elected to the Senate? If, by some mischance, something happened to Senator Turnbull, is it to be suggested that there should not be an election except of independents to fill that place? If that is not suggested and if it is open for all political parties to enter the election, clearly this will change the composition of the Senate before the expiration of the six year term for which the senator concerned was elected.
If it is agreed that it is a wrong principle that because a senator from a particular party is elected, that party should have a vested right to the seat for six years, then I suggest that it is wrong to seek to apply it to two vacancies, just as it is wrong to seek to apply it to one vacancy or three vacancies. Senator Branson has said - his argument was only slightly different from that of Senator McManus - that if there are two vacancies and there is one election, and the vacancies have occurred through the death or retirement of two members of the Labour Party or two members of the Liberal Party, the result of having a single election usually will be that a member of each party is elected to replace the two senators who belonged to one party. The honorable senator said that because he thinks it is wrong. Therefore, no single election should be held, he claims. Therefore the people should not have the right to choose freely the replacements for the retiring senators, but should be limited to electing two senators’ of the same political party as the retiring senators. In principle, that is precisely the same argument which Senator Branson has agreed is not a proper one in respect of one vacancy.
I could understand a little better the argument of Senator McManus, because the Democratic Labour Party is a minority party. Let us suppose that a member of the Democratic Labour Party elected to the Senate were to die or retire. The D.L.P. would be unlikely to obtain a sufficient majority to have one of its members returned at an election. That is probably true. Nevertheless, an election which is held in those circumstances is valid only until there is another Senate election, when half the Senate retires and the full chances of election of its candidates which applied when the first member of the D.L.P. was elected are repeated.
– It could be a five year term, if it were the long term.
– Let us consider the proposition which I think is a correct one. An honorable senator dies and is replaced by the choice of a State Parliament until an election is held for the House of Representatives, as one is to be held at the end of this year. Then the senator chosen by his State Parliament comes up for election. If elected, he holds his seat until a general election is held for the Senate, when he has again lo face the electors.
– But not the fellow who gels the long term.
– With great respect, I think Senator Cavanagh is wrong. Let us forget for the moment long terms and short terms; there are not many short terms now. Anybody who is elected to fill a vacancy in the Senate at the coming election will hold his seat only until a general election is held in 18 months time for half of the Senate.
– Not for in respect of Victoria or Western Australia.
– I. may be wrong on that, but I believe I am right. We ought lo be able to reach unanimity on this point, because it is a matter of fact, and one which a fleets us. lt is not vital to my argument, in any case. 1 merely wish to indicate that this is an interim arrangement until the people have a right to give expression to full proportional representation. I have very little more to say on this matter. I do not believe that Senator Branson is looking at it from a purely political point of view, and I do not think it would be right to do that. It has been suggested that in the case of Western Australia at the present time, this is giving an opportunity to the Labour Party to gain a seat which it would not have gained had there been two separate elections. I think this is quite true. But as Senator Toohey pointed out. if the same situation had occurred in South Australia, the reverse situation would have applied. One could point to the other States and say that this would happen or that would happen.
– But it should not happen.
– I am directing my remarks at this stage to the question of whether an honorable senator should allow political considerations, no matter to which political party he may belong, to sway his judgment in this argument. 1 do not say that Senator Branson suggested that, but it is the sort of thing that has been canvassed. I do not believe that we should allow political considerations to enter into the argument. In any case, what one party loses on the swings it gains on the roundabouts. I do not believe that these things should enter into our consideration of this matter.
The honorable senator said this should not happen. 1 suggest that the only reason why the honorable senator can say that this should not happen is because he believes - and this is inherent in his argument - that once somebody is elected for six years, the party to which that person belongs has a vested right to the seat to which that man was elected for the whole of the six year term.
– I believe that to be right.
– Senator Branson believes that to be right and he goes further and says: Because I believe that to be right, J am not going to give the people an opportunity to vote to elect the parly representation until the six year term is up.” I believe that to be wrong.
.- I have listened with a great deal of interest to the remarks of Senator McManus. 1 believe that he has given us some very interesting thoughts on this matter. To my way of thinking, the time is now too close to the election to change the Bill that is before us. Therefore, 1 think it is more or less compulsory for us to allow the election to be held. I believe that there is something in Senator McManus’s argument. After the election is over, the Government should have another look at this question. 1 did not propose to say a great deal more than that until I heard the views expressed by the Minister for Works (Senator Gorton). He is a very intelligent Minister, but I was rather intrigued by some of his arguments. He denies the right to select somebody from the same party or somebody of the same political thinking. He believes that the approach adopted in this Bill is the correct one.
The very basis of the constitution of this chamber is proportional representation. If we want to retain the right of proportional representation, as Senator Branson has pointed out, I think that we have to adopt a. different approach from that adopted in this Bill, lt is all very well to say that we give the people the right to select a candidate at the next election, but I think that the point of view advanced by Senator Branson is the correct one. Whenever a vacancy is filled, it should be filled for the balance of the term. I do not think it is valid to say that at the next election we must give the people the right to say whether the appointment by a particular party should be carried on. Often the very system of proportional representation, on which the Senate is elected, is destroyed because extra candidates are standing. The basis that was adopted was that five senators would be elected from each State every three years. The idea was that by electing five senators there could not be a deadlocked House as would probably be the case if six senators were elected from each State every three years. The Minister’s argument would bring this situation about and would destroy the principle of proportional representation. If a senator passed away, in all probability six senators would have to be elected at the next election, and this would mean equally divided Senate representation. The senator who was selected to take the place of the senator who had passed away would have to seek re-election in three years’ time.
I believe that if we are to have proportional representation and it is worked out on the basis of five senators being elected from each State every three years, the fairest and best method is to replace for the full term a senator who has died. Of course, the Minister for Works made great play on the case of an independent senator. He asked: “ How would you choose an independent “. He was more or less implying that it would be necessary to choose somebody from a party, but that would not be so. What is wrong with the particular State government calling for nominations from people of an independent type of thinking and selecting the person that it considered best suited for the position? That is not impossible.
– How does the honorable senator define an independent person?
– A person not attached to a party. Let us take our own parties. What do we do when we call for a replacement? Do we simply draw a name out of a hat and say: “ Bill Smith will be the one “? Of course we do not. The Labour Party and the Government Parties call for nominations and select the candidates, in the same way as an independent person could be selected by a State Government.
– Who would decide?
– The Government would, after a vote had been taken of the total number of members of the State Parliament. Lt is very easy to raise difficulties. We can put stones in the road and have to walk over them or we can put fences in front of us and have to jump over them. But if we want to find a solution to a problem we do not see things of that kind. I believe that Senator McManus’s suggestion is a good one and I think that the points enunciated by Senator Branson are worthy of a lot of consideration.
– That would mean a constitutional alteration?
– The Constitutional Review Committee set out certain recommendations in relation to this matter. The Senate select committee which was set up by a Labour Government brought in views similar to those which have been expressed here tonight, but this Government has refused to do anything about that committee’s recommendations. Why is there a revolt against these things? This is to the Government’s discredit. It should have had a look at this matter before today. We have a Bill before us and we have to do something about it quickly. But the situation has been accentuated and made more difficult by the actions of the Government of the day in getting the Senate and House of Representatives elections out of concert. Because of this and because of the vacancies that have arisen, the whole situation has become more difficult and complex.
The simple method suggested by Senator McManus and supported by Senator Branson contains a great deal of merit. The Minister said that we should replace a senator with somebody belonging to the same party. This very Government tells us when we want to exercise an independent mind on a Bill that this is a party House. But when there is an argument such as this, the Government takes exactly the contrary view. 1 think that Senator McManus’s suggestion has a lot of merit, and so has Senator Branson’s. I will not vote against the Bill because the Senate is in a dilemma at the present time. This is the last week of the sittings of the Parliament before the election, and something has to be done. The Government should have another look at this matter, lt should consider the report of the Constitutional Review Committee and also the report of the Senate select committee which was set up by a Labour Government. The Government also could take some notice of the debates that have taken place in this chamber. I feel that it could arrive at a much better solution than the one which is contained in the Bill now before the Senate.
– I wish to take up only a few minutes of the Senate’s time. Not many senators are opposing the Bill. I agree that there is a lot of value in the discussion thai has transpired and that serious consideration should be given to the method of filling casual vacancies in the Senate. The Constitution somewhat restricts what can be done. However, I am not suggesting at this point of time that the Constitution should be altered. The system of proportional representation was adopted because it was recognised that the Senate had developed from being a Slates House into more of a party House, and in order to ensure that the Senate would not be overloaded on one side or the other.
To ascertain the quota of votes that a candidate must obtain before he is successful, the total number of votes is divided by the number of candidates required plus one. When a candidate is elected, the residue of votes cast in his favour is transferred to the next candidate and’ so on, until the stage is reached where a small residue of voters is not represented in the Senate. At a general election, a member of the Australian Democratic Labour Party or an independent may need only approximately 16 per cent, of the votes to be elected. But if a casual vacancy occurs in the Senate through the resignation or death of one such senator, another member of his party or another independent could never hope to receive 51 per cent, of the votes cast at the election to till that vacancy, or even 33 per cent, should there be a double vacancy. So the 16 per cent, of the voters in a particular State who want to elect either a Democratic Labour Party candidate or an independent candidate would be deprived, in the event of a casual vacancy, of representation until such time as a general election was held and 5 candidates were elected.
The Bill now before us provides that if there is a casual vacancy for a period terminating in 1968 and if there is another casual vacancy for a period terminating in 1971, the vacancy for the period terminating in 1971 shall be filled before the other vacancy. This means that the longer term would be allocated to the candidate first elected. If a vacancy occurred soon after an election through the death or resignation of a member of the Democratic Labour Party or an independent, a member of one of the major political parties would fill that vacancy for perhaps four or five years, that is until such time as the group of voters who supported the original senator was accorded proper proportional representation. Such a result would destroy the whole purpose of the system of proportional representation. 1 do not know what is the solution to lbc problem, particularly in view of the provisions of the Constitution. I did not hear what Senator McManus had to say earlier. But it. is definitely not a solution to issue separate writs. If that were done, the strongest political party in the State concerned could fill both vacancies. Only once in South Australia since proportional representation was introduced have voters failed lo elect three Labour senators and two Liberal senators. That indicates that the Australian Labour Party received the majority of votes cast. If a casual vacancy occurred through the death or resignation of a Liberal senator from that State, with the separation of a House of Representatives general election and a Senate general election, a Labour senator would probably be appointed to fill the vacancy. This is what happened in Queensland at the last House of Representatives election. Although Senator Branson is vocal now, he was not vocal on that occasion.
– We did not have a Bill before us then. Be fair.
– The honorable senator could have spoken his mind and could have exerted some influence.
– Senator Cavanagh was not vocal then, either.
– I was bashful and shy, but since then 1 have visited the Snowy Mountains project wilh Senator Branson and my whole outlook was changed. If two vacancies occurred in South Australia because of the death or resignation of two Liberal senators, it is probable that a Labour candidate and a Liberal candidate would be elected to fill those vacancies. However, if two separate writs were issued, two Labour candidates would be elected. Obviously that does not offer a solution to the problem.
This is a vexed question, and it calls for careful consideration. As I said earlier, 1 have not found a solution to the problem. The matter is worthy of study by a select committee of the Senate. Such a committee could well ask: Does the present method destroy the whole basis of proportional representation? I think it does. Because we arc faced with an election and because of (he compulsory provisions of the Constitution, we cannot do other than support the Bill, lt so happens that the representation in Victoria will not be altered, but in Western Australia the position will be different from what it would have been if a general election for the Senate had been held. As the Minister said, what we lose on the swings we pick up on the roundabout.
As 1 said earlier, when the Constitution was drawn up the Senate was intended to bc a States House. In spite of anything we say, it has since become a party House and it was for that reason that the system of proportional representation was introduced. But until the last House of Representatives election we had never been faced with the possibility of a degree of destruction of the proportional representation system in the filling of casual vacancies. Nobody was very much concerned about the situation then, because it was the Australian Labour Party that went down. Now that the two sides are evenly divided, surely we should seek to find a solution to the problem. Surely the solution does not lie in an appointment by a State Parliament. When all is said and done, the appointment of a person belonging to the same Party as a senator who has died or resigned is only a gentleman’s agreement. But there must be the earliest appeal to the people. Whether there is a method of getting an expression from the people for an appointment consistent with that proportion of the voters who have been denied representation by the death or resignation of some senator, is a problem, as 1 said at the start, for which 1 have nol a solution. 1 entered this debate, subject to some criticism for doing so, with the object of raising a few matters which 1 think need consideration.
.- I congratulate Senator Cavanagh for withstanding criticism and for making a very thoughtful contribution to the debate. 1 remind honorable senators that the Bill we are discussing is a Bill brought in by the Government to provide that in respect of the two States i.n which two casual vacancies have occurred in the Senate since the last Federal election, namely Western Australia and Victoria, the people shall have the right to elect the persons who are to succeed the former senators, lt is fitting that one should remind oneself that the people have a responsibility, when they can, to fill the vacancies of such men as Senator Sir Shane Paltridge, Senator Vincent. Senator Harrie Wade and Senator Sandford. The Government is to be congratulated in this instance for bringing in a measure that will prevent any possibility of criticism of presenting an unfair issue at the election. Had the Government allowed the semblance of two elections to take place at once and so provided an opportunity for the dominant party in Western Australia to get two seats and the dominant party in Victoria to get two seats, it would have denied representation in a proportional way to any minority.
I think that the Government is also to be congratulated because of what we heard from the Minister for Works (Senator Gorton) tonight. He impressed upon the Senate that this House is not a house of heredity as is the House of Lords and that this whole problem arises out of the fundamental fact that this Senate is elected by the direct vote of the people. When a casual vacancy occurs the Constitution is careful to ensure that at the very first Federal election following that casual vacancy, whether it be in relation to the
House of Representatives or the Senate, the people shall decide the succession. Senator Gorton did the Senate a great service by asserting that this House was not a house of party nomination. We would belittle the place to a position lower than the House of Lords if we allowed this to become a place the members of which owed their position to party nomination.
– We are all here because we are members of political parties.
– 1 am here because 1 have been voted here. The honorable senator can examine the processes by which I got here and try to defeat them if he likes. This is a place to which the people elect their representatives and Senator Gorton expressed the truth adequately tonight. The Senate has done itself the honour of divorcing itself from rigid party viewpoints and from every party association. Let me say, without the provocation of ragged interjections, that the point that Senator Gorton made tonight wants to be underlined. This is not a House of party representation but a House of election of the people’s representatives by the people.
The Constitution provides that if a casual vacancy occurs, then until the next Federal election - be it for the House of Representatives or the Senate - a State parliament shall fill the vacancy, but at the next Federal election the people by vote shall fill the vacancy. The history related by Senator McManus only went half way. This House was debased first, not on any recognition of a party system, but upon a manipulation of the electoral legislation away back before the 1920’s, by the block voting system. That was redeemed by proportional representation. The fact is that the retention of section 15 in the Constitution, providing for a general election to fill a casual vacancy, cuts completely across the principle of proportional representation. If you are going to apply the principle of proportional representation to the election of the Senate - and my prediction is that any advocacy to change it will be confronted with such strength that it will be difficult to do so - then you have to consider a reconciliation of section 15 of the Constitution with proportional representation. The Labour select committee of 1951 came forward with the answer that Senator McManus has explained. Precisely the same exercise was undertaken by the Joint Committee on Constitutional Review which was representative of the major parties in the Parliament. The Committee was not able to have its recommendations adopted. I am reminded of the question: What do they know of England who only England know? We had a predominance of people from the northern island of Australia who knew very little about proportional representation. In Tasmania we practice it and as a matter of fact have been electing the House of Assembly by that method since 1906. On the first attempt the majority from the mainland could not be persuaded to adopt a proper solution by applying proportional representation to the provisions of section 15. That is why, with the inattention of the Government to this report for many years, we get the embroglio where we have had four deaths in two States and two other very much lamented deaths in two other States, making six deaths in all. So there is real merit in the advocacy of Senator McManus that the person who is elected, should occupy the seat for the expiration of the term and not for the period that terminates with the next Federal election. Of course, that proposition is made without a proper appreciation of the fundamentals of proportionate representation and it only half serves the purposes of proportional representation. If we are going to have proportional representation applied to casual vacancies in the Senate, the only method which accords with that principle is to recount the ballot papers for the election at which the member was elected who is no longer sitting, whether a party member of a independent, and give to any minority party his second or third preferences. Then, of course, the election is limited to people who nominated at the previous election. I wish to make only these brief comments and say that in the circumstances of this case the Government is to be congratulated for not temporising and presenting an unfair issue, or an issue which would appear to most people to be unfair. Although it is possible for one party to lose a seat in a situation such as that now existing in Western Australia, Senator Gorton did the Senate a great service by pointing out that it could well be the other way round the next time. With his sense of pursuing an argument on principle, Senator Cavanagh, too, indicated that this could be a two way business.
If is not an appropriate time to withhold the Bill altogether pending a proper solution to the problem because, in the light of the coming election, the Bill should be supported. But Senator Cavanagh has made a valuable suggestion that the filling of Senate vacancies should be the subject of an inquiry by a select committee of the Senate. Such a committee could present a report based on principle. The Government could then bring in a Bill providing a solution on principle and unrelated to any particular political predicament.
– I do not propose to speak at length because this is a simple Bill, but 1 do not know whether the distinguished honorable senator from Tasmania, Senator Wright, is so ingenuous and naive that he believes what he said about party nomination of candidates for the Senate. We all know the basis on which honorable senators are elected. Fundamentally, they are the choice of the people but of 60 senators in this chamber only one is an independent. He stood for election independently, of his own volition, and was elected to represent Tasmania. With the exception of Senator Turnbull, the independent from Tasmania, all honorable senators on both sides of the chamber bear a party tag or label. They faced the electors under that party tag or label and were elected as members of a particular political party. Whether they break away on occasion is a matter for themselves: but do not let us be so naive as to think we came to the Senate because the people chose us as individuals. We came here because we were selected by a particular party and were elected under the banner of that party. It is as well to recognise that the Senate is a party House.
It is unfortunate that there is a constitutional determination to provide that a senator shall be appointed by a State to fill a casual vacancy. For the past 20 years, the appointee has come from the party to which the deceased senator belonged. Each State has played the game in appointing a senator.
– Not always.
– With the exception that in Queensland there was a measure of difference three years ago. I am grateful to Senator Tangney for her help but I do not need it really, in Queensland, there was an attempt to determine who the party nominee would be and the Government was successful. Personally 1 disagreed with the Queensland State Government. 1 thought it should have followed the tradition of the past 20 years and accepted the party nominee. However, that is what happened. Any appointee to a casual vacancy has to face the electors at the next general election. This can upset the balance of proportional representation. Queensland is not ill represented in this Senate because we have three distinguished Labour senators as well as the representatives of certain other parties. I shall not go into that in detail. But it is unfortunate that Queensland was deprived of one representative to which a particular party was entitled on the basis of proportional representation.
I really rose to refer to a suggestion that the successor to that lovable and distinguished senator from Victoria, Charles Sandford, who died this week, has already been appointed or is in the process of being appointed, and will probably take his seat in the Senate this week. I cannot imagine more callous disregard or disrespect for a man who gave such tremendous service to ‘be Senate. I would be just as wrathful if my own party had been in government and had taken this action. I think it is a shocking, dreadful and terrible thing to consider appointing a man even before his predecessor has been buried.
– The Government was not in such a hurry to fill the vacancy caused by Senator Vincent’s death.
– Senator Vincent was a distinguished senator from Western Australia. The Government did not accept his advice on television although it was accepted all over Australia by sensible Australians. There seemed to be some slowness in nominating an appointee when Senator Vincent died. Then we had the case of the late beloved Harrie Wade of Victoria. There was a measure of dilatoriness in the appointment his successor. But in the case of Charles Sandford, there seems to be no hesitation in finding a nominee and appointing a new senator.
– That was asked for by the Leader of the Opposition in Victoria.
– I am not concerned with who asked for an appointment, lt is still the responsibility of the Government. Far be it from me to be suspicious of the intentions concerning an appointment to the vacancy caused by the death of Senator Sandford; but there was apparently some doubt in the minds of members of the Country Party and the Liberal Party in Victoria about Senator Webster’s chances when he faces the wrath or the goodwill of the electors. Now, with two senators facing the electors, one representing the Australian Labour Party and one of the Liberal Party-Country Party coalition, there can be no doubt that Senator Webster will be returned, although he is a member of the Country Party. Is that the position?
– lt might be the position, but it is not just.
– lt is not, but far be it from me to be suspicious about the Government’s intentions. I would be the last to suggest that the parties opposite are looking at this in a cold, calculating manner in their desire to retain power, although one can understand what might be the machinations of their minds. But surely there was no need for this indecent haste to appoint a senator. After all it would not matter whether a1 senator was appointed next week or the week after. 1 take it that the Government of Victoria will follow tradition and appoint a representative from the Australian Labour Party to take the place of the late beloved Charles Sandford.
– Is there any suggestion that he will not be a Labour appointee?
– No. If the honorable senator had listened intelligently and acutely, he would have heard. I said that I did not doubt that there was no intention to depart from the traditional approach over recent years. In terms of facing the wrath of the electors next year, the Government is trying to do the sensible, decent thing so as not to alienate any more support than it possibly can. It seems a shocking thing that a man is not buried-
– Order. The honorable senator cannot be permitted to discuss the affairs of the Victorian Parliament.
– With all due respect to you, Sir, I am talking about a man whose name has been mentioned in relation to nomination and who proposes to arrive in this Senate. It is only incidental that he comes from Victoria and, consequently, I am not discussing the Victorian Parliament. I am discussing the action of the Victorian Government, with due respect to you, Sir. Now, having registered my protest in relation to the indecent haste–
– Order! The honorable senator cannot discuss the Victorian Government, ‘ either, in that relationship.
– All right. 1 shall finish on this note. I condemn the Government if it proposes to do this today or tonight. I condemn its indecent haste. I am surely entitled to be somewhat suspicious about what might be the motive associated with the machinations, the Machiavellian tactics of the Liberal and Country Party Government.
– I want to make only the briefest of observations in regard to this matter. 1 take up the point raised by Senator Wood, that is, the elections being held out of context. If there is any thought or desire on the part of the Senate to rectify the position in respect of casual vacancies, I remind the Senate that I spoke at length on this question when we were dealing with the estimates for the Parliament, and I pointed out that the Government had, for political reasons of its own, put the elections of the House of Representatives and the Senate out of context. This is the main reason for the anomalies that have been brought forward by members on both sides of the Senate this evening. I am not suggesting that the bringing of the elections for the two Houses into proper context will remove all of the problems that have been raised this evening in relation to the filling of casual vacancies.
– Except long term vacancies.
– That is right. I think the Senate must accept that if we are to put our house in order in respect of the filling of casual vacancies in a fair, just and proper manner, we first must bring the two elections into context again, because to fail to do that first, or to try to bring this result about without considering it, will be no more than nonsense. The Senate should bend its thoughts, and the Government, which has the responsibility, should bend its thoughts immediately to the question of bringing the two elections together again.
– in reply - We are indebted to the Senate for the debate that has taken place this evening on a matter that is of great interest to us all. lt certainly provided food for thought for those who have not given much thought to this subject. I remind those who have nol taken part in the debate that the terms of those senators whose positions are now vacant would have expired in 1968. So in this context all are on an equal fooling. 1 acknowledge the point made by Senator Toohey, and raised also by Senator Cohen, that some of the difficulties that confront us on this occasion were brought about by the elections getting out of context. I remind honorable senators that this is no fault of the Senate. We are nol responsible for it, and wc cannot alter it. It came about through circumstances with which we are all familiar. We in the Senate feel that the sooner it is possible for simultaneous elections to be carried out again the happier we will be.
I should like to pay a tribute to the Minister for Works (Senator Gorton), because he was able to say many of the things that I would have had to say had he not said them. Therefore, this relieves me of the responsibility lo some extent. Separate elections would have to be held in each State if the law were not altered, lt is the opinion of those who are entrusted with the task of giving the Government advice that it is not possible under the present law to hold elections where there are two vacancies, unless there is an alteration. What was the alternative for the Government? It could have left the Bill in abeyance and conducted single elections, or endeavoured to do so, with advantage to itself. I agree with Senator Wright that the Government did an honest and decent thing in deciding that this Bill be brought in to provide for the elections in this manner. I agree with Senator Gorton that if we are the losers on this occasion at some other time in the future we may be the gainers. The gentlemen’s agreement that has been referred to has on the whole worked quite well. Senator Dittmer said that this was not the case in Queensland. I remind the Senate that although the Queensland Government did not accept the first nominee of the Australian Labour Party it accepted a nominee of that Party. I want to stress that, because the opposite impression may be in the minds of some people. 1 noted Senator McManus’s remarks and the reasons he gave for opposing the Bill. I point out to him that opposition to the Bill will not get him anywhere because, as he recognises, in order to obtain an alteration the Constitution would have to be amended. Therefore, this is not in the lineup of courses that are available to the Government. The legislation was put in train before the second unfortunate vacancy in Victoria. Even so, f am quite sure in my own mind it would not have made any difference at all to the decision that the Government has arrived at. Senator Gorton, at least to my mind, dispelled most of the points raised by Senator Branson. It is said that if a senator is elected for six years the party to which that senator belongs should have the right to have its nominee in the Senate for the six years.
– For the balance of the lime.
– What would happen in the case of a double dissolution? Surely in that case, this would not be so. The Bill, in my view, does maintain proportional representation.
– lt destroys it in Western Australia.
– Here is where I join issue with those who say it does not maintain proportional representation.
– It was destroyed in Queensland.
– In the honorable senator’s absence, I mentioned what happened in Queensland. Voting against the Bill will not help. It seemed to me that some confusion existed in the minds of some honorable senators as to which of two senators being elected would have the longer term if there were a long and a short term. That position does not arise in this case. If it did, the first senator to be elected would be the one elected for the longer term.
– That is under the Bill - not anywhere else.
– I think that just about covers all the points that have been raised. I do not want to detain the Senate any longer.I hope that the Senate will give this Bill a speedy passage through the Committee stage.
Question put -
Thatthe Bill be now read a secondtime.
The Senate divided. (The President - Senator Sir Alister McMullin.)
AYES: 47
NOES: 3
Majority . . . . 44
AYES
NOES
Question so resolved in the affirmative.
Bill rend a second time.
In Committee.
The Bill.
.- I will not detain the Senate very long but I thinkI should make some reference to the arguments used by Senator Gorton who, ifI interpreted rightly what he said, stated that in his opinion the determination of this matter had to be by the will of the people and that he could see no other way. Let me say that this Bill proposes to prevent the people of Western Australia from expressing their will. The two Western Australian senators who died came from the same party. If the present Act were retained there would be two separate elections and the people of Australia could, and I believe probably would, elect two senators of that same party. But the Government proposes to thwart the will of the Western Australian people because, under this Bill, the election will be held in such a way that we know that instead of two senators being elected from the same party as the party to which those who died belonged, there will be one from each of the major parties.
– Apply that in Victoria.
– I am applying it to Western Australia. I am merely saying that if Senator Gorton’s argument is correct that the Government is only seeking to ascertain the will of the people in any State, the surest way of ascertaining it is to have two separate elections. The Government does not propose to do that. Suggestions have been made from both sides of the chamber that this will work out. Honorable senators have said to those on the other side of the chamber: “ One day we will win, and one day you will win.” Their attitude has been to say: “ Is not that all right? “ But let me point out that, under this Bill, one day the Labour Party will win and one day the Government parties will win; but we will never win. This Bill is designed to prevent the Democratic Labour Party retaining for the period of six years a senatorial position to which the people have elected a member of our Party in a general election.
I know that there are among us noble spirited souls who have said tonight: “ Let us divorce this issue from politics. Let us divorce it from party considerations. Let us make it a matter of pure principle.” It is too late in the day to suggest to me, after 50 years in politics, that any political party considers electoral matters from any point of view other than pure self interest.
– Oh!
– Senator Kennelly has been in politics for a long time. He knows that it is a hard game. I cannot say what he would have done if he had been a member of a government in the same position as the present Government is in. That is not for me to say. That is only for him to say. All I can say is that I know what would have happened in those circumstances. It would not have been what is proposed in this Bill.
I do not know how the Liberal Party will explain to its tried and true supporters that it proposes to throw away an electoral system which would give it a majority of 31 to 29 in the Senate of the next Parliament, and favours a system under which it will have a minority of 29 to 31. I presume that when that happens it will be useless to appeal to honorable senators on this side of the chamber to save the Government because tonight the Government refuses to save itself. People have said that, when a senator is elected and then dies, his party should not have a vested right to his seat for the rest of his term of six years. Why is it the generally recognised practice in Australia today for the State Houses of Parliament to appoint a senator of the same party as the deceased senator? That, practice exists for one reason: The State Houses of Parliament know that that is the right thing to do. This Bill does what is the wrong thing to do.
If anybody suggests that 1 have looked at this Bill to some extent from the point of view of my Party’s interests, 1 make no apology for doing that. I am doing what every other party does. I say this to people who suggest that we have no right to fight for a seat to which one of our members has been elected, if he dies: We have to put up with a lot under the electoral system. I will not go into that question, because this is not the place to do so. However, I point out that the Party that I represent receives the voles of about one-twelfth of the Australian people-
– Too many.
– Yet in the other House, which has more than 120 members, we have no representative, and in this chamber we have two representatives. We should have 17 members of this Parliament; but under the electoral system we are given two. And now a proposition is put up which could take one of our seats from us. Senator 0”Byrne just said that we receive too many votes. He belongs to a party that claims to stand for the principle of one vote one value. 1 point out to him that, when 1 was defeated four years ago, I polled 210,000 votes; but in this chamber there were 10 senators representing the 180,000 electors of Tasmania. When I raised that matter, Senator O’Byrne said that he thoroughly agreed with that position.
– There is no validity in that argument.
– The honorable senator says that because that argument does not suit his party. I conclude by saying that in Australia today we have an electoral system that deprives one-twelfth of the people of representation in the other House, but there is never any suggestion of doing anything to remedy that injustice. All wc get is hole and corner bills, such as this one, which merely serves the interests of the major parties and are not designed in any way to give electoral justice in this country.
– I rise to speak because of a remark which Senator Gorton made and which, I believe, left with the listening public the impression that we senators were elected to this chamber as individuals. I personally cannot go along with that. Only one of us 60 senators was elected as an individual, and he is not here at the moment. I refer to Senator Turnbull. He stood as an independent. He can rightly claim that he was elected as an individual. But each and every one of the rest of us is here as a person elected by a political party. Do not let any of us - Senator Gorton included - kid ourselves about that. Senator Gorton’s personal vote may have been similar to Churchill’s. He maintained that if he received 7 per cent, of his votes in his own right he was doing remarkably well. I rose to correct that impression which was left by Senator Gorton’s remark.
I also want to align myself with what Senator Wright said when he pointed out. in a thoughtful speech, that proportional representation had come into conflict with section 15 of the Constitution. This is a matter at which we will have to have a look when we reassemble. Strangely enough, in this debate I also find myself in complete accord with what Senator Cavanagh said.
– Don’t apologise.
– I am not apologising. It is interesting to see that on a bill such as this wc can have some accord between diverse parties. I suggest that when the Senate reassembles it should look seriously at the conflict that exists between proportional representation, as a method of electing senators, and section 15 of the Constitution.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator Mckellar) read a third time.
page 1478
Debate resumed from 25th October (vide page 1408), on motion by Senator Anderson -
That the Bill be now read a second time.
.- This is a very simple Bill, although it runs to 54 pages. Its purpose is merely to alter £ s. d. references in innumerable Acts of Parliament to their decimal equivalents. It is very useful and helpful to have that much clarification in a period in which we suffer all the disabilities of having two currencies in operation at the one time. In commenting on the Bill, I need only to commend and compliment the draftsmen who have done a very worthwhile and most painstaking job in order to bring about this result. The Opposition cordially supports the measure.
Question resolved in the affirmative.
Bill read a second time.
In Committee.
– I would like to give notice that I have some amendments I wish to move. The first amendment concerns the insertion of a new clause after clause 19. If it is acceptable to the Committee, perhaps we could take the clauses 1 to 19 inclusive.
Clauses 1 to 19 - by leave - taken together, and agreed to.
Proposed new clause 20.
– 1 move -
That the following new clause be inserted in the Bill- “ 20. Section 8 of the Defence Forces Retirement Benefits Act 1966 is amended by omitting sub-section (2.).”.
Since the Statute Law Revision (Decimal Currency) Bill was prepared, it has been found that a bill to amend the Defence
Forces Retirement Benefits Act 1959-1965 will come into operation before the Statute Law Revision (Decimal Currency) Bill comes into operation. It is therefore necessary to amend the reference in the Bill to the Defence Forces Retirement Benefits Act to take account of amendments to that Act. The proposed new clause 20 would simply amend the provision in the Defence Forces Retirement Benefits Act for the citation of the principal Act as amended by that Act.
Proposed new clause agreed to.
First Schedule.
Amendment (by Senator McKellar) agreed to -
Leave out the heading “ Defence Forces Retirement Benefits Act 1959-1965 “, insert the heading “Defence Forces Retirement Benefits Act 1959- 1965, as amended by the Defence Forces Retirement Benefits Act 1966”.
First Schedule, as amended, agreed to.
Second Schedule (Citation of Acts).
Amendment (by Senator McKellar) agreed to -
Leave out “ Defence Forces Retirement Benefits Act 1959-1965”, insert “Defence Forces Retirement Benefits Act 1959-1965, as amended by the Defence Forces Retirement Benefits Act 1966 “.
Second Schedule, as amended, agreed to.
Title agreed to.
Bill reported with amendments; report adopted.
Bill (on motion by Senator McKellar) read a third time.
page 1478
Debate resumed from 19th October (vide page 1211), on motion by Senator Henty -
That the Bill be now read a second time.
– The Bill before the Senate is a vastly important one. It is long overdue, lt raises issues affecting the States which should command the attention of the Senate - the States House - for many sitting days. I take the opportunity at the outset of my remarks to congratulate the Treasurer (Mr. McMahon) upon tackling, so early in his administration, a situation which he, in the greatest understatement of his career, describes as anomalous and illogical, and upon introducing some order and logic into the National Debt Sinking Fund Act. 1 congratulate him, too, upon his approach in presenting the Bill. He has left it lie in the Parliament for some weeks so that its complexities can at least be attacked, if not overcome. In addition, he has provided, as the Treasury does with income tax bills, a most comprehensive memorandum explaining each individual clause. It is an excellent presentation. 1 was fascinated by the Bill. In my 22 years in this Parliament I have not heard the Sinking Fund debated except most incidentally. I worried into the history of the various inscribed stock acts and loan acts when matters connected with the reduction of the national debt were under consideration. I was fascinated by the debates on those acts, particularly the Loan Act (No. 24) of 1913. At that stage it had not been necessary for the Commonwealth ever to go upon the loan market. The Commonwealth was able to obtain the money it needed from the trust funds that were established. lt is very amusing now, after the lapse of time, to read the comments about the extravagant borrowings in 1913 when the total Commonwealth debt, in round figures, was only $44 million. Horror was;expressed at Government extravagance in borrowing $15.6 million over a short period. Horror was expressed at the extravagance of borrowing $5.4 million on one occasion. I comment now, by way of contrast with the then national debt of $44 million, that the national debt at 30th June for the Commonwealth was about $3,144 million; the national debt of the States was about $7,495 million, making a total of about $10,639 million. lt is clear that there has been a vast growth. My reading of the speeches reminded me of the statement by Lord Bolingbroke that nations, like people, have their infancy. The future development of this country will. I think, far surpass the wildest dreams of us all, f find it somewhat depressing to think of what our successors in 50 years lime will be saying of our approach to matters of today. J believe they will be greatly amused by the narrowness of our outlook. We are children of our time, as they will be children of their time, but at least we have the consolation that none of us will be here to hear them laugh.
I am sure they will be amused particularly by some of the things that have occurred in the field of management of our national debt. I mention four of them, very briefly. First is the unnecessarily high payments to the Superannuation Fund. Second is the inadequate contributions to providing for the redemption of overseas debt because the contributions have been assessed on a mint, par of exchange that was fixed in 1930, and all governments have worked under the old award in the past 36 years to the detriment of the sinking fund contributions on that particular type of debt. Next is the payment of sinking fund contributions on a debt which has been cancelled. I refer to a debt of $1,379 million that has been cancelled. The Government has continued year after year to pay sinking fund contributions on that debt. Lastly, there is the payment of sinking fund contributions on a debt which in fact was never incurred. Some quite amazing even if rather tragic things have happened in this particular field.
– Has the AuditorGeneral ever made any comment on that?
– No. I have found an absolute paucity of comment in the Parliament upon the operations of the Sinking Fund. In my time here, I cannot recall an adequate debate on the matter.
I leave the history of the Sinking Fund and the redemption of the national debt at this stage. Tempted as I am to embark upon discussion of it, I have not the time. But I select from that history one measure as the most important. I refer to the Commonwealth and States Financial Agreement which became operative from 1st July 1927 for ail States except New South Wales where it became operative on 1st July 1928. The Financial Agreement does not deal with the national debt of the Commonwealth. Under the National Debt Sinking Fund Act 1923-1959 which we are now amending the Commonwealth, in respect of all its own debt, has been paying a Sinking Fund contribution of 10s. per £100 to the Sinking Fund down a period of 50 years. Of course, in addition it has been paying interest.
The States’ position is now covered under the Financial Agreement of 1927. Prior to that time the Commonwealth and the Stales were competing on the loan market in
Australia with disastrous results for them all. forcing up interest rates and creating all kinds of difficulties. The late Sir Earle Page played a very prominent part in bringing about the acceptance by the States of the Financial Agreement which, as I have said, became effective in 1927. Ft contained the provision that the Commonwealth’s lack of power should be remedied by a referendum of the people. At the referendum, which was not held until 1.7th November 1928. the proposal won a favourable majority in each of the six states. A Bill to validate retrospectively the Financial Agreement went through this Parliament on 18th March 1929.
The first thing that was done under the Agreement was to set up the Australian Loan Council, comprising the Premiers of the six States and the Prime Minister, lt gave to that Council power to determine the amount of money that should be raised for both the Commonwealth and the States in each State. Defence loans required by the Commonwealth were excluded from the jurisdiction of the Loan Council for an obvious reason. The Commonwealth came to the party with the States by making various concessions. Let me interpolate here that the Agreement does not deal with Commonwealth debt. It deals really with the debt of the States. The Agreement provided that the Commonwealth should take over the whole of the debts of the States as at 30th June 1927 and accept primary responsibility to the bond holders for redemption of principal and payment of interest to them in the meantime. The net debts of the States at this stage were £638.7 million. The Commonwealth made an arrangement with the States that down a period of 50 years it would contribute £7.5 million per annum towards the interest bill incurred by the States on that debt. The States were to find the difference in interest. Sinking Fund contributions were to be paid to the National Debt Commission and into a trust fund set up in the Treasury, at the rate of 5s. per £100 per annum for 58 years in respect of that £638.7 million. The Commonwealth came in quite freely to help and said: “ We will pay an amount equivalent to half of your contribution.” So the Commonwealth contributed 2s. 6d. per annum, and the States contributed 5s. per annum, making a total of 7s. 6d. per annum over a period of 58 years. In regard lo loans that commenced from 1st July 1927, again there is provision that the States should pay into the National Debt Sinking Fund 5s. per cent, per annum by way of redemption of the debt and the Commonwealth agreed to match that obligation of the States and pay another 5s.
I have indicated to the Senate that the national debt at 30th June last was S3, 144 million for the Commonwealth and $7,495 million for the States, making a total of $.10,639 million. As regards interest, last year the Commonwealth paid $122 million in interest on its debt and the States paid $352 million, making a total interest payment of S474 million. Sinking Fund contributions on the respective debts were $17.8 million for the Commonwealth and $64.7 million for the States, making total Sinking Fund contributions of $82.5 million for the year. So that the cost for 1965-66 of servicing the national debt of the Commonwealth and the States with both principal and interest payments was $556.5 million. This is certainly a heavy drain upon Commonwealth and State Budgets and upon the taxpayers of Australia. I discard the rest of history of this matter hoping that I have laid enough foundation at least to make myself understood as I deal with this rather complex matter.
The Bill before us completely re-writes the National Debt Sinking Fund Act. lt makes many changes in the Act. I have already indicated that it deals primarily wilh the Commonwealth debt. Last year Sinking Fund contributions were $120 million. The Commonwealth, through the Treasurer, has looked at the national debt of 53,145 million and for the purpose of determining how much of that really needs Sinking Fund contributions has wiped off $2,372 million of the national debt as requiring no Sinking Fund contribution whatsoever. The national debt, under the Treasurer’s proposal in the Bill, is left at $773 million for the purpose of paying Sinking Fund contributions. That sounds like a most extraordinary provision, but there are very good reasons for what the Treasurer has done. For instance, he has discarded $682 million of debt which consists of internal treasury bills; this is money which the Commonwealth under one account owes to itself under another account. These bills are of a temporary tenure and duration only.
Down (he years it has been the practice unchanged and unchallenged to pay Sinking Fund contributions upon that amount which the Commonwealth owes to itself and which it can end merely by tearing up the loan documents. But the Commonwealth has been paying Sinking Fund contributions upon that amount, and that is one of the reasons why the Treasurer draws pointed attention to the enormously unnecessary amounts that have been paid into the Sinking Fund. That is only one of them. There is another amount of §326 million which he strikes off for redemption purposes as being debt for redemption of which other arrangements have been made. He sets all that out in his speech. He refers to loans which have been raised on behalf of Qantas Empire Airways Ltd., Trans-Australia Airlines and other loans of that type. The people who get the proceeds of those loans accept the obligation to meet both the principal and interest commitments. Very properly the Treasurer says that, when somebody else is redeeming the debt, the Commonwealth does not need to provide, out of revenue, for Sinking Fund payments under the National Debt Sinking Fund Act.
There is no need for Sinking Fund contributions in respect of the debt that is repaid by the Stales such as under the Commonwealth and State Housing Agreement. That disposes of a further sum of $1,287 million. Finally, there is a sum of §77 million which represents investments held by the Sinking Fund. The Senate may remember that in 1951-52 wool grab moneys were paid from Consolidated Revenue into the National Debt Sinking Fund. The Bill which appropriated the money provided particularly that no other amounts payable under the National Debt Sinking Fund Act were to be reduced because of the payment. Altogether a sum of $199 million was paid over to the National Debt Commission pursuant to that authority. There are still in the fund securities worth $77 million bought with that money. Because those securities were issued by the Commonwealth, the Commonwealth has actually been paying Sinking Fund contributions on that amount, which is not debt in the real sense of the term. The Treasurer very properly has said that he does not intend to take that sum into consideration in future in determining what Sinking Fund contributions are required.
It comes rather as a shock to find that the only portion of the Commonwealth debt which calls for Sinking Fund contributions is a sum of $773 million out of a total of $3,1.44 million. In future the national debt which needs to be redeemed will be looked at each year with a view to ascertaining whether it has risen above the sum of $773 million, as determined for this year, or has dropped. The Treasurer has made a very important change. Whereas over a period of 50 years the Commonwealth has been paying 10s. per centum per annum to the National Debt Commission in redemption of the debt, in future it will make contributions of 4 per cent, per annum in equal instalments over a period of 25 years. That is an exceedingly important change in principle.
– The Commonwealth will pay interest also.
– Yes. The Commonwealth pays the interest in respect of all debt. Senator Kennelly’s interjection reminds me of an interesting fact. When I noted the size of the amounts that the States were obliged to pay to the Commonwealth by way of interest, it struck me that in my perusal of Treasury documents and Budget papers I had never seen a figure representing those amounts. 1 made inquiries and in doing so caused some perplexity on the part of the Treasury officers to whom I spoke. They did not have the information at first hand. Ultimately it was ascertained that the money is not paid direct to the Treasury and into Consolidated Revenue, lt is paid by the States into the Public Account of the Commonwealth which is held with the Reserve Bank. There it is tucked away neatly in an interest suspense account. The Reserve Bank, acting as the agent of the Commonwealth, pays the interest cheques to the bond holders from that account. So we do not see in the ordinary Treasury documents the payment in by the States of the colossal sum of interest that 1 mentioned and then the payments out to the bond holders together with the payments that are made by the Commonwealth. The ultimate result is reflected in the Treasury accounts, according to the difference between the balance in the Public Account at the beginning and at the end of each year. All the intermediate transactions are lost sight of in the ordinary run of Budget accounts.
I shall refer now to what the new arrangement will cost the Commonwealth in the future. 1 have already indicated that last year the Commonwealth paid $120 million into the Sinking Fund as contributions by the Commonwealth off its own debt. The reducing of the debt to $773 million under the new arrangement will mean that the Commonwealth instead of paying $120 million, will pay only $43 million. That amount will be reduced by $12 million that will come in from repayment of advances made by the Commonwealth. Accordingly, provision is made for the payment of only approximately $30 million. That in turn is to be reduced by the amount of interest that the Fund itself gets on its own investments, leaving the Commonwealth under an obligation to pay in Sinking Fund contributions a sum of only $20,125 million as against $120 million last year. That is an extraordinary change.
We of the Opposition have no objection lo these changes. If it can be afforded, it is a good idea to pay off a debt in 25 years. One can criticise, as indeed the Treasurer did, :he accumulation up to dale of unnecessarily large amounts in the National Debt Sinking Fund. It meant unnecessarily heavy taxes being imposed on the people or alternatively the denial of finance for projects that were worthy of support. The Treasurer rather naively says that this great annual saving will make no difference in his Budget for the year. His explanation is that the great amount that will be saved is being appropriated to a trust fund known as the Loan Consolidation and Investment Reserve, where it will still be available for the two purposes set out in the Act which established that fund. Those two purposes, if you please, are debt redemption and the investment of funds pending debt redemption. On the one hand the Treasurer will achieve a saving of approximately $1.00 million in contributions from Consolidated Revenue, and then on the other hand he will neatly tuck it away in a trust account for the purpose of debt redemption. On many occasions honorable senators have heard me speak about the Loan Consolidation and Investment Reserve and its predecessors, the Strategic Stores and Investment Reserve and the Loan Redemption Reserve. I hope to be able to refer to them again at some length and, with a degree of luck, with some clarity.
Let me come back to the sum of $100 million that the Treasurer will save and which he will tuck away in the Loan Consolidation and Investment Reserve for the purpose of debt redemption. In this year at least it will be merely a case of robbing Peter to pay Paul. For this year the effect of the whole exercise that .1 have been talking about will be merely to put the Sinking Fund itself on a realistic accounting basis, with the added benefit that debt needing to be redeemed is to be paid off in 25 years instead of 50 years.
Now let me deal with some of the things that the Bill does. The current National Debt Sinking Fund Act provides that calculations in relation to overseas debt shall be at the mint par of exchange as at 1st July 1930. This, the Treasurer says very quietly, has resulted in inadequate payments lo the National Debt Sinking Fund. One has only to think of the colossal changes that have taken place between the American dollar and our pound in the meantime lo realise how hopelessly inadequate were contributions set up on the basis of exchange determined 36 years ago. lt is almost impossible to believe that governments have gone on this way for 36 years and have done nothing to correct thai completely stupid position.
The Bill proposes to give the Treasurer a discretion to determine the amount at which the rate will be fixed for determining the contributions in future. He has announced that he has decided to adopt the par rates of the International Monetary Fund as set up from time to time. It is an instance, I must point out, of utter lethargy and ineptitude to have allowed the position to drift unchallenged and unaltered down the last 1 7 years. I now come to one of the extraordinary positions to which I made reference a moment ago - that in connection with war service homes. In only one year since 1930 has money been borrowed for the purposes of financing war service homes. That was in 1951-52. In the years prior to that, money was borrowed and the War Service Homes Act provided for a trust fund. As repayments rolled in they had to be channelled to the National Debt sinking fund. That was all right up to 1930 when there had been borrowed money and redemption was required. But even when no further money was borrowed and war service funds were provided out of Consolidated Revenue, the good old Commonwealth kept on paying these repayments for war service homes into the Sinking Fund. Let me quote the Treasurer himself. He points out that the only finance advanced out of loan funds amounted to $90 million, but repayment of principal - that is to the Sinking Fund - has already reached $307 million. So the Government has paid $217 million in respect of a debt - that never existed. Honorable senators may smile, and 1 had to smile, myself, lt is literally unbelievable that this chaotic situation has been let go on by everybody including all of us who have been here for any length of time. I think that everyone of us, particularly those in this States’ House - and I will show the effect of that later on - has to accept individual responsibility for not having detected these things. There has simply been no inquiry at all, and I include myself in this to a large extent.
The next item is the Loan Consolidation and Investment Reserve contribution. We have appropriated money for that Reserve and one of the purposes is loan redemption. The Treasurer is regarded as a body corporate - the corporation sole in charge of the Trust Fund - so incorporated under section 62 B of the Audit Act. He is the custodian of that part of the Trust Fund not otherwise allocated for purposes of investment. Having a large amount of bonds on his hands which had been purchased with the moneys allocated to the Loan Consolidation and Investment Reserve, he handed these securities, to the value of $.1,357 million, over to the National Debt Commission to be destroyed. They were bonds purchased as securities and were in the hands of the Treasurer as the custodian of the Loan Consolidation and Investment Reserve. The Treasurer handed them to the National Debt Commission for destruction for the purpose of wiping out the debt. But here is the interesting point. The Treasurer, in his capacity as Treasurer rather than that of the corporation sole, kept on paying sinking fund contributions to the National Debt Commission on the cancelled debt. That too is completely unbelievable but the Treasurer acknowledged that fact himself in the course of his speech. 1 shall quote what he said -
Since the Loan Consolidation and Investment Reserve was established in 1955, it has cancelled $1,379 million Commonwealth securities, includ ing $152 million Treasury bills, bin Sinking Fund contributions are still being paid on this debt because of the lack of suitable provisions in the National Debt Sinking Fund Act.
That is the Treasurer, himself, telling us that. It does not just come out of my study of the position. All 1 can say about that very delightful activity is that it is entirely the responsibility of this Government. The Government set up the Fund itself in 1955 and it has been doing the delightful act of paying sinking fund contributions on debts which it, itself, had cancelled. There is really matter for a comic opera in all this if we were to have comic opera based on finance. The Treasurer himself acknowledges that the whole story of the Fund is chaotic, illogical and anomalous in that there has been a building up of unnecessarily high amounts. 1 now come to the State Sinking Funds where they take a break in the other direction. It is like playing for a hole on a green with many bumps. He does go in the other direction occasionally. It turns out that, under the Financial Agreement, the payments that have been made of sinking fund contributions by the States have been inadequate, since 1953-54, to meet the debts as they fell due. Instantly one would say: Why has not that position been corrected by an alteration to the financial agreement? But what has happened is that the Commonwealth has come to the rescue, and since 1953-54, has paid $330 million of its own money on behalf of the debts of the States when their sinking funds were not adequate to meet the debts as they fell dueThen the Commonwealth generosity failed it at that point and it decided in effect not to take the amount from the State debt by an adjustment of accounts between the Commonwealth and the States but to regard the transaction as a cancellation of the Commonwealth debt. In effect, they shoot $330 million of their own debts back to the States.
I repeat that even now at this stage we have no suggestion from the Treasurer that anybody is going to look at the Financial Agreement and talk to the States about what needs to be done to ensure that their Sinking Fund contributions will in fact match the amounts that have to be redeemed from time to time. I think I have said enough. I have only selected some of the choice incidents that can be found in the maladministration of the Sinking Fund. 1 think 1 have said enough to show the greatest indifference, lethargy and incompetence in allowing these circumstances to develop and to run on without action of any particular type.
– Have not all these things been mentioned in the Treasury papers and in Budgets from year to year?
– Which particular things?
– All these matters to which the honorable senator has referred. Have they been dealt with in the Budget papers?
– No. They appear to have only come to the surface with the advent of the new Treasurer.
– Have they been referred to in Auditor-General’s reports?
– 1 have not seen any reference to them.
– Surely they should have been dealt with in the AuditorGeneral’s reports.
– The AuditorGeneral’s duty is to see that Acts of Parliament are observed. If Parliament makes appropriations and passes bills which require certain things to be done it seems to me that the Auditor-General has no basis for complaint. The fault lies with this Parliament.
– Surely it is the responsibility of the Auditor-General to audit the National Debt Sinking Fund.
– He audits that Fund. There is a complete report from him presented before the end of August every year. Fortunately again I am not relying on my own research into these matters when I put them to the Senate. They are so extraordinary that I honestly believe honorable senators would think I had taken leave of my senses unless I buttressed my remarks with what the Treasurer himself has said.
I propose to direct attention to five matters before I come to what I consider the highlight of what I want to put to the Senate. Of the total Commonwealth and State debt of approximately SI 0,500 million, the amount in Australian securities is $9,134 million. The rest is overseas, lt is vastly interesting to see who holds the bonds in Australia. We find they are concentrated almost wholly in government hands or in spots where the Government has a high degree of control. I am quoting now from the Statistical Bulletin for September 1966 of the Reserve Bank of Australia. This is a very recent publication. At page 68 it deals with government securities classified by holder. Of the total of $9,134.5 million in Australian securities on issue, $3,922 million is held by banks including the Reserve Bank and $941 million is held by insurance companies. A total of $728 million is held by financial institutions which are not government institutions. Public authorities hold $1,923 million and one holder of Commonwealth securities to the tune of $1,643 million is no less an authority than the Commonwealth Government itself. In other words, in respect of these bonds it is the borrower and the lender, ft is holding bonds issued by itself worth $1,643 million.
Then we come to financial institutions. These include insurance offices, pension and provident funds, public trustees and stabilisation funds and they hold $327.9 million. The final item is companies, which means ordinary trading companies and not financial companies, and these hold only $150.6 million. Other holders are set out under four categories and these are marketing boards, farmers, non-profit organisations and “ all other “. The last named category, which includes all individual holders, is responsible for only S980.4 million out of the total of $9,134.5 million. How many individual holders there are I cannot say. It is interesting to see what a grip the Commonwealth really has upon Commonwealth bonds. It holds many itself and many more are in institutions over which it exercises control through bonking, through taxation and through the 30 per cent, deposit requirement imposed on insurance companies, trusts and the rest. One can see that the whole field of indebtedness, insofar as it is not directly in Commonwealth hands, is almost entirely under its control.
One has only to look at the activity of the Loan Consolidation and Investment Reserve to find what, has gone on there. It has exchanged some $1,713 million in bonds which it held in part for other bonds. It has been constantly going over its lists of bonds, getting rid of: the long term bonds and picking up medium term and short term bonds so that they will be ready for cancellation before they fall due. By mere exchanges between governments and those bodies that are either government owned or controlled, it is possible to play around with the debt, and regulate it. There in transactions relating to one trust fund we find $1,713 million in bonds sold or exchanged as the case may be. So we really started something when we set up the Loan Consolidation and Investment Reserve and gave it a few hundred millions to start it off. It has been able to turn that money over many times in all kinds of ways.
The next thing J want to refer to is the National Debt Sinking Fund itself. The Sinking Fund is part of the Trust Fund of the Commonwealth. The Trust Fund is dealt at page 44 of the Treasurer’s statement attached to the report of the AuditorGeneral we find that there are 129 separate trust funds. Their balances at 30th June last totalled $2,023 million. Of that $2,023 million $1,714 million is invested in government bonds or government securities. Some of it may be in treasury bills. 1 think a small proportion of it is. Of the 129 trust funds, the largest is the one that 1 have been concentrating on - Loan Consolidation and Investment Reserve. It has a balance of S807 million.
What is the reason for trust funds? It is not generally known that Section 94 of the Constitution has an interesting provision that the Parliament may provide on such basis as it deems fair for the monthly payment to the several States of all surplus revenue of the Commonwealth. The Commonwealth did in fact many years ago make monthly payments of its surplus revenues to the States. When, in 1908, it transferred money to a social welfare fund and some other funds, it was challenged by New South Wales which claimed the money belonged to the States under Section 94. The High Court of Australia held that it was proper for the Commonwealth, apart from spending actual cash, to provide for future real contingencies it saw coming up. The High Court upheld the validity of the trust funds and the Commonwealth, under all governments, has made completely sure that the States never got another chance to catch it with a surplus of any kind. The Commonwealth parks it one way or another in these trust funds and that is exactly what the Treasurer is doing with the $90 million or more he has saved this year when he cuts down the amount of our National Debt that is to attract redemption payments in future. But Section 94 is the answer to a whole lot of things. It constitutes a real grievance for the States which want to find out what is going on.
The Loan Consolidation and Investment Fund began wilh the transfer of two other funds - the Loan Redemption Fund and the Strategic Stores and Equipment Fund which as I said again and again when it was in existence, was phoney and was not being used for the purpose for which it was created. As we see now, it was never used for that purpose. The Loan Consolidation and Investment Fund really comprises money that has been paid to the Commonwealth in taxes and in charges on the people of Australia. Its investments run to $807 million at the moment. Of this, an amount of $654 million is invested in Commonwealth securities. The Commonwealth, having got the money from the trust funds, lends it to the States at interest, treats it as a normal public debt loan, and obliges the States to repay it with sinking fund payments and interest to the Commonwealth down a period of 53 years. We see what is happening from the State’s viewpoint. The Commonwealth collects taxation from the people. It pays some of the funds collected into the Loan Consolidation and Investment Account. Then, when the loan market does not find enough money to enable the States alone to carry out their works programmes, the Commonwealth lends them that money.
What happens to the States? They have to ask their people to pay their original taxes again down a 53 years period, and pay interest on the money in the meantime. In other words, for every £1 of tax collected from the people that the Commonwealth lends to the States, the States pay over 53 years at least £2.5. One has only to calculate the interest at 4 per cent, for 53 years to realise that fact. This is a heavy, undue and very selfish impost upon the States. It avoids section 94 of the Constitution in the spirit and, it may well be, in the letter, because there can be no clearer proof that the Commonwealth did not want that money for Commonwealth purposes than the fact that it lends it to the States for their purposes.
It may well be open to challenge in the High Court again if all of these trust funds and what is happening to them come under review. I should be rather interested to see what would happen if such a challenge were ever made.
In the view that I put. several courses arc open to the Commonwealth Government. 1 mention them just briefly, because 1 want to make one more point, lt could take the balance in the Loan Consolidation and Investment Account, now some §808 million, and use it to reduce the Commonwealth and State debt proportionately, just cancelling it as it cancelled the $1,357 million, but spreading the cancellation in proportion to the debts of the Commonwealth and the States, lt could cancel altogether the existing securities, wipe them right out and reduce State debts accordingly. lt could make non-repayable, interest free grants lo the States, lt could take the interest free and the interest bearing amounts that are required for the Commonwealth and the States and share them proportionately between the Commonwealth and the States.
What do the States see? They see the Commonwealth using $400 million of Consolidated Revenue with no repayment obligation and no interest obligation, for its capital works year by year. They see the Commonwealth paying off its debt in 25 years, while the States have to take 53 and 58 years. They see the inadequacy of the income tax reimbursement grants settled a year ago. Every Premier has complained. They see the people of the States pay taxes to the Commonwealth which are loaned back lo them. They see section 94 treated as a dead letter. They see taxes increased in the Slates to meet the debt charges with inflationary effect.
As I am getting near the end of my allotted time, I want to refer to what the Premiers have to say. I refer to the Budget Speech of Sir Henry Bolte in Victoria on 14th September last. He devoted the first seven pages of his speech to the type of matters about which I arn talking and he certainly criticised what has been going on, as he might well have done even from the lead I have given down the years. These are some of the extracts; I wish that I could read them all. They make music to my ears - . . me States are responsible for major and costly services, with education the key example. . . Al the same time we are involved in a system of finance which continues to load the burden of interest and other debt charges on Government loans almost exclusively on the Slates, so that the public debt of the States continues to soar while that of the Commonwealth continues to decline. . . . Much of the increase in the debt of the Slates, in fact $1,600 million for all Slates and §400 million for Victoria, is money that has been provided by the people from taxation to the Commonwealth Government and lent by it to the States at market rates of interest. Every dollar of this must be repaid to the Commonwealth by the States, and with interest added we repay from State taxation some $2i for every SI lent. The whole system is so patently crazy and loaded against the States that it is beyond comprehension how anyone can be found to defend it.
They are strong words from the Premier in a State with a government of exactly the same complexion as that of the Government in Canberra. One can feel that those words really come from his heart. We see the same thing happening in Queensland with Mr. Nicklin being most critical in his Budget Speech of the type of things that I have been talking about. 1 conclude by saying that what I have said is a shocking record of mismanagement of the Commonwealth’s own debt redemption. lt shows that unnecessary burdens have been placed on taxpayers. There has been gross unfairness to the States and a negation of the spirit of Federation, lt shows up the massive failures of the Australian loan market to the tune of some $2,000 million down the years of administration of this Government. Need I say any more than this? Whilst we are not opposing the Bill, the whole question needs to be looked al from start to finish. The whole of the Commonwealth’s financial relationship to the States needs to be turned over again, and if we make any pretence in this place of being a States’ House, here in the matters that are raised in this Bill and that are incidental to the provisions of the Bill is a very fertile field for us all to plough.
– The Senate is extremely indebted to Senator McKenna for what has been a fascinating speech. I am grateful to him, because this is a very difficult subject and one approaches it with not much understanding and a great desire to learn more about it. As 1 listened to him, I realised the extreme complexity of the issues involved and I found myself in a great measure of agreement with many of his expressions.I should like to take not the same line but a slightly different one and try to approach the matter in a more simple fashion as befits my current level of understanding. What we are really talking about is the debt obligation and the management of that obligation on behalf of the Australian people. We are proposing in this legislation to alter the measure of repayment in regard to the Commonwealth’s proportion of the debt obligations of the Australian people. Looking at the measure, it is clearer if we say that we are talking about the Australian people’s debt obligations.
As mentioned by Senator McKenna, it is proposed from now on that the Treasurer will make a yearly review of Sinking Fund activities. One could not agree more with that. It could make one wonder what has been happening all this time when one considers some of the things which are now being exposed in the discussion taking place on (his National Debt Sinking Fund. It would seem to me that this is an excellent subject for the Senate to concern itself with at least yearly from now on. One honorable senator referred to the Auditor-General’s obligations in this regard and it may be interesting to read his certificate to the 43rd annual report of the National Debt Commission for the year ended 30th June 1966. The Auditor-General’s qualifying certificate of 30th August 1966 is in these terms -
The accounts of the National Debt Commission for the year ended 30th June 1966 have been audited. In my opinion, the tables listed in paragraph 21 of the Commission’s Report present a correct view of the transactions of the National Debt Sinking Fund during the year, and the Commission has complied with the provisions of the National Debt Sinking Fund Act 1923-1959 and of the Financial Agreement.
The certificate is signed by J. K. Lawrence, who at that time was Acting AuditorGeneral of the Commonwealth. That seems to me to look rather like a pencil ticking operation. In no sense does it attempt to get to the policies and principles involved in the management of the debt and the repayment of the debt. Apparently the Government prefers to refer to these debt obligations as Government securities on issue. I shall mention various amounts because I believe this is a matter which calls for accuracy but I hope it does not turn out to be a statistical nightmare. These amounts appear in table No. 10 of the
Budget Papers for the year 1966-67 and are expressed in thousands of Australian dollars. The total debt in 1946 was $5,674,818. In 1956 it was $8,151,256 and in 1966 it was $10,639,142, so in 20 years the securities on issue from the total debt obligation have just about doubled. As honorable senators know, this money is borrowed both from the Australian people, in a most complex series of operations, and from people overseas.
The overseas debt is the one with which we should concern ourselves in particular. In 1946 the overseas debt was $1,142,354. In 1956 it was $1,268,810 and in 1966 it was $1,504,677. There is some comfort in the fact that the overseas debt has not risen very much in the 20 years. The percentage rise in the total debt obligation of the Australian people in that 20 years has been 87 per cent, but the overseas debt proportion has fallen from 20 per cent, to 14 per cent. That at least is a very useful and healthy trend.
Senator McKenna referred to the obligations and debts of both the Commonwealth and the States. He cited certain figures so I will not refer to them again except to reiterate that in 1966 the total debt of the Australian people, expressed in thousands of Australian dollars, was $10,639,142. The Commonwealth’s obligation in its own name was$3,144.519 and the States’ obligation was$7,494.623. These figures also appear in table No. 10. If we analyse this we find that the Commonwealth proportion has fallen in the 20 year period from 1946 to 1966 from 64 per cent, to 29 per cent, of the total and is lower in amounts outstanding than it was 10 and 20 years ago. On the other hand, the amounts incurred by the various States have risen three and a half times and the States’ share of the total has risen from 36 per cent, to 71 per cent.
We should not get too excited about this. We are talking about the Australian people. They are the Commonwealth. They are the people in total, and the debts to the Australian people are the total debts of the Australian people. They are incurred in the State form because the great part of the works of the Commonwealth for which money is required is in the States. That is a fundamental reason. In addition, the Commonwealth debt consists to quite an extent of debts owed for wars. These have been repaid at a fairly fast rate and the
Commonwealth’s obligation for new money debt, I am informed, is increasing at a faster rate than is that of the States. I think one can make a qualification and say that these figures are interesting and in some instances quite illuminating. 1 am sure that we, as senators, find it a most useful exercise to examine the whole of this debt obligation and management, not only the debt of the Commonwealth to which we are devoting our attention tonight, but in due course that of the States, and even beyond that into the area of local government where a large amount of money is outstanding. After all, we are the servants of all the Australian people, not one section of them, and this is the Australian people’s obligation.
The figures relating to the Commonwealth’s share of total securities on issue per head of population are of interest. They reveal that there has been a drop from $491.58 in 1946 to $271.72 in 1.966 whereas the States’ share has risen from $269.55 in 1946 to $655.19 in 1966. All this serves to illustrate the change in proportion of debt obligation, lt does not alter the fact that the obligation is the obligation of the Australian people in total. Interest movements are of consequence in this matter. They have not been referred to earlier and they may be of importance to persons following this matter and taking an interest in it. There has been an upward trend in interest rates since .1946. Table No. 13 in the Budget Papers sets this out in great detail. There have been some relevant changes which are worthy of note in the period from 1946 to 1956 and from 1956 to 1966. These are good ten year rests. The average rate of interest on securities maturing in Australia was 2.78 per cent, in 1946, 3.25 per cent, in 1956 and 4.43 per cent, in 1966. The interest burden on the overseas part of the debt was 3.63 per cent, in 1946, 3.52 per cent, in 1956 and 4.59 per cent, in 1966. Honorable senators will notice that the Australian rate has moved more steeply than has the overseas rate and now they are almost equal.
This is not the time or the place to argue the merits of cheap money or dear money but in due course an exercise could well be conducted on behalf of the Australian people as to the level of interest rates being charged on internal debt which the Australian people owe in increasing volume.
We may look at this but we cannot ignore the fact that a country like Australia with a great trading base and a great involvement must have regard to the general level of interest rates throughout the world and what has proved to be an increasingly difficult situation in money terms. I am not saying this is a good thing, but we cannot ignore the force of world interest rates.
Interest costs, I think, are expressed in terms of money as distinct from rates. They are a matter of great consequence to the Australian people. We are concerned at what it costs us to have these debts as an annual charge. Whether or not we like the costs to be passed from one hand to another does not matter very much. Because of these outstanding securities or loans the Australian people have an annual interest bill to meet, both internally and to overseas countries and people. The figures 1 am about to cite appear in table No. 12 and they relate to Government securities on issue. They are expressed in thousands of Australian dollars. In 1966 the Commonwealth’s interest liability was $122,087 whereas that of the States was $352,138 making a total of $474,225. In 1956 the Commonwealth’s liability was $120,568 and that of the States $147,812 making a total of $268,380 and I repeat that these figures are in thousands of Australian dollars. In the last 10 years the Commonwealth’s liability for interest has barely risen but that of the States has increased by nearly 140 per cent. One should remember, however, that the Commonwealth is taking an increasing share of the burden of overseas debt where the interest rates are higher and can well become higher still. So it is not entirely one-sided.
Interest rates per head of population are another way of looking at this. I am taking the trouble to quote a lot of figures because I regard this as an extremely serious matter for the Australian people. In my view, an annual examination in critical terms of total debt obligation and debt management is long overdue. Total interest liability per head of population in 1946 was $22.44, in 1956 it was $28.47 and in 1966 it was $40.98. An interesting aspect of this is that the Commonwealth component of the cost of servicing the overseas debt has not moved much at all. In 1946 it was $5.55 per capita and in 1966 it is $5.97 per capita. So the cost of overseas debt management has been kept at very low figures, lt is a tribute to the Governments of Australia during that period of time that they have managed to keep their overseas commitments at fairly low and manageable levels.
There is another point that is worth making in this broad argument about debts and obligations; that is, the extent to which the Commonwealth and the States are financing capital works out of revenue. I will not go into this matter in great depth. 1 merely say that my calculations show that in 1955-56 capital works financed out of revenue by both the Commonwealth and the States amounted to $408 million, and the comparable figure for 1965-66 was $781 million. So substantial quantities of the Australian development programme and Australian fixed asset creation are being financed out of yearly revenue. I have always supported that.
– Those are the figures for Commonwealth works, not State works, are they?
– That is not correct. The break-up of the figure for 1965-66 is as follows: Capital works and services in the Commonwealth Budget amounted to $434,053,000; State works and housing amounted to $599,070,000; making a total of $1,033,123,000; net loan raisings amounted to $251,802,000; and, when that is deducted from the total, it gives the figure of $781,321,000 for capital works financed out of revenue.
When debts lend to increase we have to think about the cost of servicing them and whether we are justified in incurring them. 1 do not want to make a long story out of what we want in the way of schools, roads, harbours, railways and so on. That is well known. Something that we can look at is the general expansion of the Australian economy. I believe that the best and most measurable indication of that is the general growth of the gross national product. This illustrates that in a country such as Australia we are justified in incurring obligations for the purposes of expansion. In 1948-49 the gross national product was $4,471 million; in 1955-56 it was $10,563 million; and in 1965-66 it was $20,519 million. There has been a tremendous increase in the gross national product. It has increased about fivefold in less than 20 years. That is full justification for the Australian people taking on burdens of debt and acquiring resources while having measurable and sensible methods of meeting their debts.
Another factor at which we should look is the cost of debt servicing. I express it in general terms in the effect that it has on our internal debt and the effect that it has on our external debt. I will try to show that we are not in a difficult position; that, in fact, our position has improved. In general terms, our interest liability on total securities outstanding at 30th June 1966 was $474.2 million compared with $167.5 million at 30th June 1946. One would look at those figures and say: “ That is a big increase.” But, expressed as a percentage of the gross national product, which is the real measure of ability to repay, the total interest liability has fallen from 5.55 per cent, in 1945-46 to 2.31 per cent, in 1965- 66. So Australia’s ability to service her total debt has increased quite substantially, relatively speaking, during the last 20 years. I will not refer to the internal debt figures in detail. Expressed as a percentage of gross national product, the interest liability on our internal debt has fallen from 4.18 per cent, in 1945-46 to 1.97 per cent, in 1965- 66. Here again there has been a substantial improvement.
Our overseas loan commitments are the ones that always worry me. One can always come to terms with his own banker if the latter is his brother. But it is not quite as easy if one’s banker is a fellow whom one has never seen before. We have to have some regard to the difference between internal debts, which we really owe to ourselves and in respect of which we can make notional calculations on repayments and interest rates, and overseas debts. We have to look at the latter very critically. We have managed to get along without very much expansion at all in our overseas loan commitments. Our total overseas debt at the end of 1965-66, as stated earlier by both Senator McKenna and myself, was $1,504.6 million. Honorable senators who are following my remarks will be interested in the various currencies in which we have overseas loan commitments. The figure for the sterling area is $822.7 million; for the
United States dollar area $550.5 million; for the Canadian dollar area $52.7 million; for the Swiss franc area $49.9 million; for the Netherlands guilder area $9.9 million; and for the German deutchmark area $18.9 million. A little more than half of the total is in the sterling area. Of course, we hold counterpart funds against those in the sterling area. We also hold counterpart funds against those in both the Canadian and United States dollar areas, in our overall overseas balances. We have substantial drawing rights from the International Monetary Fund. So we are not in any danger, in any sense of that word, in regard to our overseas debt, as far as one canjudge.
Our ability to service the interest liability on our overseas debt is also a matter of interest. I believe that a belter factor to use in this instance is the relationship to export income. Our interest liability on our overseas debt has increased from $41.4 million as at 30th June 1946 to $69.1 million as at 30th June 1966. Expressing it as a percentage of export income, it has fallen from 9.28 per cent, in 1945-46 - I must say that that is as high as 1 would want it to be - to 2.53 per cent, in 1965-66. So we see that in fairly broad terms the Australian Government has covered the situation fairly well. We have demonstrated our ability to repay our debt, to service our debt and to make very good use of the money.
Someone might ask: Why do we borrow all of this money and why do we not save more money ourselves? I do not think anyone would ask this question, but anybody who does is entitled to information. We should remind ourselves that Australia ranks among the top saving nations in the world. We are ahead of the United States, the United Kingdom, Canada and France. We are only just behind Japan. We have been saving more than 22 per cent, of our gross national product for quite a number of years. Last year the figure reached nearly 25 per cent. We, as a people, have nothing to be ashamed of in the contribution that we ourselves make by saving for our own development and growth. In our savings programme, about 70 per cent, is saved by the private sector of the economy and about 30 per cent, is saved by the public sector.
Senator McKenna referred ; I thought very well and in most interesting terms - to the altered terms of repayment of the national debt in Commonwealth hands. I agree with hin that, to say the least, it is interesting to note that this has gone on for the period of time for which it has in what can best be described as a fairly untidy operation. It is obvious that sums of money considerably in excess of those required to redeem the debt have been accumulated. This is all being set in order now. The surpluses are being adjusted. The old rate of i per cent, will now rise to 4 per cent. The existing debt and the new commitments of the Commonwealth will be extinguished in 25 years instead of the previous 50 years. All I can say about that is that I could not agree with it more. I believe that it is an excellent idea. I believe that as lime goes on the Senate and the Commonwealth generally would be doing a very good thing for the Australian people if it managed to take a lead in looking at all the debt obligations and the whole debt management position of all Australian people. We are charged with a fundamental economic responsibility. I believe that the position of the States should be considered in a genuinely co-operative and critical operation of review. . I do not think any harm could come out of that.
– How would the honorable senator go about that?
– I would suggest that next year we would have to try to call all the States together and discuss the whole problem. This is not my personal responsibility. I am speaking only as a senator. It seems to me that we cannot divorce the States from the Commonwealth or the Commonwealth from the States. If it is wise to look at the Commonwealth’s sinking fund, its debt management and its obligations and to tidy them up, surely other people who have similar obligations should be joined in this operation. After all, in the end, these obligations are those of the Australian people.
One of the interesting features of the National Debt Sinking Fund is that it is administered by an extremely competent group of people - the Treasurer, the Chief Justice of the High Court, the Secretary to the Treasury, the Governor of the Reserve
Bank, the Secretary of the AttorneyGeneral’s Department, and a financial representative of the States. Currently he is the Victorian Director of Finance. I would not want, to choose a group of people who ought to have more skill, understanding and ability in managing a national debt programme. I agree with Senator McKenna’s suggestion that we should remind ourselves that this is an obligation of all the Australian people. Wc are charged with examining these matters and with bringing them under critical review. 1 hope that this Parliament will devote more time and attention to the Sinking Fund programme.
Australia is a financially stable country with a very strong record of debt repayment and ability well demonstrated to service its debts, lt has an effective membership of various world monetary organisations and strong resources in its own right. These characteristics add to our attraction to lenders. If we wish to develop this country we must maintain our stability, continue to bc financially prudent and to attract finance from overseas for our development. We have demonstrated that we can service debts (hat we might incur in respect of development. We can make very good use of money available for national growth and a programme of development.
I am not really critical in any sense. I must say that I think it is preferable to examine Sinking Fund matters and to discover that they are very complex. 1 am very glad indeed that such matters have come up for discussion. I again express my gratitude to Senator McKenna for helping me to inform myself. This measure we are about to pass is one we should support. It adds to our strength and to the general information of monetary authorities throughout the world who may be prepared financially to assist Australia. I remind myself that this is one Commonwealth - a combination of all the States. I think we have an obligation to the Australian people to come to a greater understanding of our debt obligations as a Commonwealth, and also the obligations of all the States, and other authorities such as local government bodies who have to go to the loan market for funds in the interests of the Australian people.
Question resolved in the affirmative.
Bill read a second time.
In Committee.
The Bill.
– I have a few questions to ask. 1 would like to be informed of how often the National Debt Commission meets. I know that it is under an obligation to submit an annual report, so that it must meet to consider its report. 1 would be interested to know what scrutiny the Commission exercises over all the transactions that occur all the year round. 1 would also like to know what staff the Commission has. Does it have a staff of its own, responsible to it, or is the whole of the management of the Loan Consolidation Fund carried out by a section of the Treasury?
– As honorable senators are aware, I did not reply at the second reading stage of the debate. I would like to congratulate the honorable senators who contributed to the debate, particularly Senator McKenna. I thought he made a very valuable contribution. As we all realise, it is a very complex subject. Those of us who have been in this chamber over a period with Senator McKenna arc aware that it is a subject very dear to his heart. This was evident from the way in which he dealt with the Bill. The National Debt Commission uses the staff of the Treasury. The Commission meets once a year, usually in August.
– I cannot let the Minister’s reply pass without expressing my amazement that the National Debt Commission meets only once a year. I take it that it meets for a day - presumably no longer than a day - simply to place its imprimatur and signature on the documents presented by the Treasury. When all the illustrious people belonging to the Commission meet once a year for the purpose of signing a report which has been prepared for them in the Treasury, and without any scrutiny of all the transactions that have occurred during the year, it certainly is no wonder that the result is a chaotic mess and the illogical and anomalous situation we have heard about tonight.
– The chances are that they would not meet at all, and that the report would be sent around for them to sign.
– Even I would not be prepared to go that far. L am staggered at the answer 1 have received. The wild thought occurred to me that that might be the case, but frankly I could not bring myself to believe it. 1 think that the Committee is really as surprised as I am. Being cursed with an inquiring mind, 1 thought I would idly make the inquiry. I leave it with the comment that 1 am absolutely staggered.
.- I might ask the Minister whether the Treasury advisers heard that statement by Senator McKenna. I tried to follow the honorable senator’s speech, as much as one can when hearing for the first time information composed mainly of figures. I recall that the honorable senator said in relation to war service homes finance - which commenced at the end of the 1920’s - that there was only one instance when the Commonwealth Government resorted to loan funds. In all other instances finance was provided out of revenue. Nevertheless, the item in the National Debt Sinking Fund accounts provided for sinking fund on a figure of about, I think, $400 million.
– If the Chair will permit, I would like to say that the only loan money was $90 million.
– But. what was the item in the National Debt Sinking Fund?
– About $303 million was paid in.
– I recalled $400 million. There is a disparity between $90 million and $303 million. I wish to inform my uncomplicated mind so that I might see the daylight through one crack in this wall which is impervious at the moment to my understanding. I want to ask whether that assertion is accepted as a fact by the Treasury.
– I would like to remind Senator McKenna of the composition of the National Debt Commission. It is composed of the Treasurer, the Chief Justice of the High Court, the Secretary to the Treasury - Sir Roland Wilson, the Governor of the Reserve Bank - Dr. Coombs, the Secretary of the AttorneyGeneral’s Department, and the State representative, the Victorian Director of Finance. I do not think that we could expect the dilatory or cursory examination by those people that was implied by the honorable senator. Although the members of the Commission may meet for only one day a year, they are in constant communication with the Treasurer who, of course, is the head of the Commission. Perhaps Senator McKenna’s remarks may have been justified if the groups that I have just named consisted of men of lesser calibre. But in the circumstances I for one feel fairly confident that things will be all right. Senator Wright raised a question concerning war service homes finance. I am told that this is done in accordance with the Act of 1923. That is the only information I can give the honorable senator.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator Mckellar) read a third time.
page 1492
Debate resumed from 19th October (vide page .1212), on motion by Senator Gorton -
That the Bil] be now read a second time.
.- This is a short Bill which makes minor amendments to the Conciliation and Arbitration Act. The Opposition does not intend to oppose it, but it rather regrets that the opportunity was not taken to bring about some reforms in what we call the sanction clauses. It is almost two years since the then Minister for Labour and National Service, Mr. McMahon, introduced a bill which provided for a cooling off period. As the Minister for Works (Senator Gorton) has indicated, the main purpose of the Bill is to increase to seven the total number of judges of the Commonwealth Industrial Court. At present the Chief Judge, the Hon. J. A. Spicer, and four other judges constitute the Court, as provided for under section 89(a) of the Act.
The Minister has referred to the fact that the Chief Judge has additional duties to perform. He is now required under the
Navigation Act to conduct marine inquiries. The Minister referred to the duties which the Chief Judge performed as a Royal Commissioner in the H.M.A.S. “ Voyager “ inquiry. The Chief Judge is also required to conduct inquiries under the Air Navigation Regulations into accidents involving aircraft. Although there are these additional duties to perform, I want to mention one feature which seems to be occurring in the industrial field. I am informed that judges of the Commonwealth Industrial Court are not so occupied by their duties as they used to be. lt seems to me that this possibly could have some hearing on the amendment to the Act in 1965 which, as I have said, provided for a cooling off period. Although I cannot give the figures for the last 12 months, I note that in the period from January 1962 to the present time, 1,070 matters have been filed and heard by the Commonwealth Industrial Court and that only four or five matters are outstanding. I think it is a fact that the Industrial Court is not as active as it was previously. I would be interested to hear whether this is because of the ‘ general economic and industrial climate or whether the cooling off provision, which was inserted in section 109 of the Act in 1965, has had some effect on it. That is why in my opening remarks I said that action might have been taken to amend the Act to comply with the request of the Australian Council of Trade Unions, lt is good to see that the Commonwealth Industrial Court is not as active as it was previously. We do not want to see it particularly busy in dealing with what are called punitive matters.
The Minister has also pointed out that the judges of the Industrial Court have additional duties to perform in the Supreme Courts of the Australian Capital Territory, the Northern Territory, Norfolk island, Cocos (Keeling) Islands and Christmas Island, and that increased work in the Australian Capital Territory Supreme Court has required the appointment of an additional judge. One of the praiseworthy features of the Bill is the intention to provide for those who will act on the Trade Practices Tribunal. We have been informed that very shortly Mr. Justice Eggleston will commence duty as President of the Tribunal. We want the Tribunal to get to work as quickly as possible. In addition to Mr. Justice Eggleston, other members of the Industrial
Court and presidential members of the Commonwealth Conciliation and Arbitration Commission may be appointed as presidential members of the Trade Practices Tribunal. Some amendments are proposed in the Bill to preserve the pension rights of the members of the Court and of the Commission. Proposed new sections 10a and 103 b make provision to preserve the pension and other rights of these members. Subsection (2.) of proposed new section 103 b is the important provision. It states -
A judge who holds office as the President, or as a Deputy President, of the Trade Practices Tribunal is not qualified, while so holding office, to exercise, or to take part in the exercise of any jurisdiction of the Court under the Trade Practices Act 1965-66.
For the reasons I have stated, the Opposition does not oppose the measure. If the Minister is in a position to comment on the point I made concerning the decrease in the activities of the Commonwealth Industrial Court and the reasons for it, I would like him to do so.
– I would like to reply to the point raised by Senator Bishop, but my advisers inform mc that they have not the data which he requires.
Question resolved in the affirmative.
Bill read a second time.
In Committee.
The Bill.
.- I abstained from speaking during the second reading debate because 1 thought the Minister would make some comment upon the points raised by Senator Bishop. I rise only to say that 1 further abstain from speaking at the Committee stage, but this is not because I am persuaded that we have had placed before us all the information that underlies the purpose of this Bill nor am I in a position to assert that I accept the information that we have had placed before us as justifying the Bill. Judges have their judicial duties to perform, but their proper duties do not include acting as royal commissioners. The judicial duties in the Territories in which the judges have jurisdiction add little to the circuits that they have to cover. Those Territories, with the exception of the Northern Territory and the Australian Capital Territory, require very little in the way of judicial services. My only purpose in rising is to say that I keep an entirely open mind upon the Bill and exercise restraint in not offering objection to it.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator Gorton) read a third time.
page 1494
-(Senator Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate,I formally put the question -
That the Senate do now adjourn.
.- I think it is fitting that in the dying hours of this Parliament I should again raise an issue that I have taken up with a number of Ministers in the present Government. I refer to fauna conservation. I am prompted to rise because of two communications that I have received, one being from the Commonwealth Treasurer (Mr. McMahon). With the concurrence of honorable senators,I incorporate his letter in “ Hansard “. It reads -
Dear Senator Mulvihill,
Since my return from overseas I have been able to give some further consideration to your letter of 8th September, 1966 on the question of fauna conservation.
I appreciate that you recognise the constitutional division of responsibilities in the conservation field and there is, therefore, no need for me to dwell on this aspect. By the same token, however,I think you will agree that what you are proposing is that the Commonwealth should adopt a prime initiating role in relation to conservation, both in general terms and in relation to the problem you have mentioned in New South Wales.
Since we live in a Federation, I subscribe to the fundamental view that the identification of needs within the States is best left to State Governments. I presume that you would say, however, that State Governments are not giving a sufficiently high priority to fauna conservation when determining the application of their available funds (which include, of course, the general financial assistance grants which they receive from the Commonwealth) and that, in consequence, the Commonwealth should offer ear-marked grants specifically for this purpose.
The course you are suggesting would, inevitably, disturb relative priorities as determined by the State Government concerned and would assuredly lead to requests for comparable special purpose grants to meet expenditure in other directions where the view is held by interested parties that these warrant a higher priority. Consequently, I have grave doubts whether the Commonwealth unilaterally could or should seek to adopt the role that you are suggesting.
Be that as it may, may I conclude on the note thatI appreciate your concern with fauna conservation in Australia in general and in New South Wales in particular and that I have received your submission in the spirit in which it was tendered. 1 shall certainly bear your views in mind.
Yours sincerely, (William McMahon).
The following is the relevant paragraph -
The course you are suggesting would, inevitably, disturb relative priorities as determined by the Stale Government concerned and would assuredly lead to requests for comparable special purpose grants to meet expenditure in other directions where the view is held by interested parties that these warrant a higher priority. Consequently,I have grave doubts whether the Commonwealth unilaterally could or should seek to adopt the role that you are suggesting.
That is the core of the submission that I wish to make tonight. The Treasurer said, in effect, that he does not desire to interfere with the functions of the State in this field.
– What field is the honorable senator talking about?
– I am referring to grants for fauna conservation. I wish to make a comparison between the situation in Australia and that which exists in the United States of America. First, I remind honorable senators that recently we passed legislation which provided that gifts to the Australian Conservation Foundation would be allowable deductions for income tax purposes. No doubt honorable senators visualise that body looming as large on the Australian horizon as do the Ford Foundation and one or two similar bodies in the United States of America.
In this field there is a need for what I might refer to as creative federalism.. Despite what the Treasurer said in his letter, there is a growing public opinion that the Commonwealth Government should take the plunge in the development of fauna conservation. I have in mind a proposal that has been put forward in New South Wales for funds to be made available to purchase outright certain western land leases to establish reservations for kangaroos and wallabies. Let me give a classic illustration of the way in which Australia is getting the worst of all worlds. According to the “Newsweek” of 24th October 1966, apparently certain development has been undertaken adjacent to the Everglades National Park in Florida which has disturbed the balance of nature. The responsible authorities needed $464,000 to undertake work similar to that in New South Wales for which I have been seeking assistance from the Federal Government. The Ford Foundation stepped in with a donation which it offered on a $1 for $1 basis.
The crux of my submission tonight is that the Commonwealth Government seems to believe that it should offer an incentive to people to make gifts to the Australian Conservation Foundation and that that body in turn will bridge the gap. The fallacy in any such argument is that such foundations do not develop overnight. In the United Stales there are 23 foundations which have reserves of from $102 million to $3,870 million. As I. said a moment ago, the Government obviously has the idea thai the private sector of the community will provide the necessary assistance to enable the States to undertake fauna conservation projects. But it will take a long time for the various bodies in Australia, including the Australian Conservation Foundation, to accumulate reserves comparable to those of the United States organisation that 1 have mentioned. lt was fitting that homage should have been paid to the President of the United States last week when he was in Australia. Reference was made to what he has described as the Great Society. I did not hear the Prime Minister (Mr. Harold Holt), any of his Ministers or anybody else repudiate the sentiments that were expressed. The point I am making is that, if we are living in a similar society, we should be making funds available for the conservation of our fauna. Recently the Australian News and Information Bureau issued, principally for overseas consumption, a publication entitled “ Bush Dwellers of Australia “. The issue of that publication supports my contention that the Commonwealth Government is not remaining completely aloof in this field. Indeed, the Minister for the Interior (Mr. Anthony) has done a reasonably good job in this field in the Australian Capital Territory and the Northern Terri tory. I recall that Senator Wood returned from a visit overseas as a member of a parliamentary delegation with the impression that Australia had a bad image overseas in respect of the despoliation of the animal life that is referred to in the publication I have mentioned. Last weekend 55 delegates to the Nature Conservation Council of New South Wales unanimously adopted proposals that I had circulated in relation to this problem.
I was in the electorate of Cowper last weekend with Senator Murphy. We visited Grafton, where we were approached by a delegation consisting of members of all political parties. That delegation raised the future of marsh lands adjacent to the aerodrome at Grafton. Members of the delegation were quite concerned about developmental works and the fact that the future of certain types of Australian bears would be jeopardised. These people, some of whom were professional people, said: “ We know that the State Government can do something. But what is the Federal Government doing?” I pointed out what was being done in Florida, but I said I was not in a position to go beyond that. Senator Murphy outlined the procedure that could be followed to present petitions to the New South Wales Parliament. Perhaps I am more sceptical than he is. 1 have in my possession a letter from Mr. Lewis, the Minister for Lands in New South Wales, in -which he referred to the problem in western New South Wales and the taking over of land leases to provide reserves. He said, amongst other things -
Such a system- of- nature reserves would be a magnificent contribution to wildlife conservation in this State, but of course conflicts with other forms of land usage, and consideration of personal disaffection to landholders must receive my attention.
What that means in simple language is that, if the Government had the wherewithal to give a landowner a reasonable price for his land, agreement could be reached.
In the time at my disposal I have endeavoured to paint a picture that would indicate that Australia has problems that are identical with those experienced in the United States but that, at a time when we are talking about a similar great society for the future, the Federal Government is reluctant to take the plunge and provide assistance for the conservation of our fauna. 1 do not think I need say much more. I pay tribute to the dedication of officers like Dr. Frith of the Commonwealth Scientific and Industrial Research Organisation. I pay a tribute to Allan Strong, the chief guardian of fauna in New South Wales, field officers such as Allan Fox, and their counterparts in the other States. I wish to hammer this theme on a national basis. 1 repeat that when you get 35 delegates at a Saturday conference in a particular State carrying resolutions along these lines, and when you get a deputation that comes to you in a rural city like Grafton spontaneously raising this matter, and when you get continuous inquiries from high school pupils and about 400 requests a week to the C.S.I.R.O., this is no longer something that should be regarded as a luxury. It should not be placed in the category of bird watchers or some other peculiar cult. I say without any inhibitions whatsoever that when you look back rationally over the last five years you see the various fields of activity that the Government has moved into. In the United States, the growing burden on the Federal Government has been recognised. T think it is inevitable that this sort of thing will have to happen in Australia.
It is all very well to have illustrations of what is happening to our heritage in this particular field but what I have said is backed up by factual reports and the various surveys that have been made. If something is not done a lot of our fauna will be only a legend. In regard to the advocacy I have made in this Senate - and I certainly intend to continue it in the next year - I am fortified by the words of a Scottish Labour Member of Parliament, David Kirkwood who in his own way for quite a while fought a battle to convince the United Kingdom Government of the time - it was a Conservative Government - and the British ship owners that they were not going to back a loser when they constructed on the Clyde ships of the magnitude of the Queen Elizabeth and the Queen Mary. His words were -
The true work of the rebel is not to cause unnecessary or harmful disorder but to show the people where injustices exist and to convince them that they need not exist. When he has succeeded in doing that others will remove the injustice and claim the honour of doing so. They are welcome to it.
Mr. President, I conclude on that note. I feel confident that in the not too far dis tant future I shall see something positive emerge in this particular field.
.- I do not propose to take up the time of the chamber to any great extent, and 1 do not expect to see any frowns because I am speaking on this subject. 1 just want to say that the Senate, and the nation generally, owes a debt of gratitude to Senator Mulvihill for the manner in which he has advocated the preservation of our fauna and reserves since he has been a member of this chamber. If success eventually comes as a result of his efforts, not only this chamber, but the nation generally, should feel deeply grateful for his enthusiasm and persistence.
All 1 want to say is that J wish him success. I have always been keen on the preservation of our flora and fauna and I sincerely hope that next year when we come back, probably at an earlier hour of the evening, we might have a more lengthy and interesting debate on this topic. I just want to pay this tribute to Senator Mulvihill because many of us feel with him on this subject but few say so in actual support.
– I should also like to say that I think that there is good sense in what has been said by Senator Mulvihill and that the Senate ought to attend to it. Far more attention ought to be paid to what has been put by Senator Mulvihill in relation to the conservation our fauna and dora than has been the case. There is a tendency on the part of some honorable senators, and certainly on the part of some Ministers, to regard these matters in rather a sneering way. 1 think it would be well for the Senate to pay heed to the conservation of natural resources, our fauna and flora and of our very topography. These matters have emerged as the great questions of the age. This is not some private hobby of Senator Mulvihill or some aberration on his part; these are the great questions of the age. There is a tendency here to think that Senator Mulvihill comes in here with some private matter of his own and wastes the time of the Senate. These are very important matters, and whether Senator Gorton thinks so or not, a sneering attitude has been adopted by the Government and it is time that it ceased.
Whether Senator Mulvihill is putting forward the correct solution to the problem or not, he has al least raised the problem, lt is for us to consider this because it is a most serious problem. The situation is deteriorating rapidly so far as our fauna and flora are concerned. Some eminent scientists in Australia are concerned about the matter. They have written articles in one scientific journal after another, but the Parliament has remained supine. Nothing is being done. Because one man gets up night after night and says that something should be done, there is no necessity for us to wipe the matter aside. We ought to be paying attention to what has been said. We ought to be attending to the problem and thinking about a solution. At least one man has had the courage to stand up and tell us what the problem is. I join with Senator Mulvihill and say that something should be done about it. The Government, even in the short time that it has, ought to be prepared to recognise that this is a most serious and continuing problem for Australia.
Australia is a country that has a peculiar flora and fauna, but we have been most profligate in our treatment of it. We have destroyed many of our species. We have been recreant to our duty to the world in the preservation of these species. At the present time our species are in the process of being destroyed and nothing is being done about the matter despite the warnings of many of our most eminent people. It is tragic that not only are we not preserving our topography but that the existence of our species are at stake. If a voice is to be raised in this chamber honorable senators should at least pay due heed to it. What has been put forward by Senator Mulvihill is far more important than many of the matters that have engaged our attention in the last few days and during the last few weeks.
– I want to reply only to one point. I would not have spoken on this matter at all had not an accusation been made by Senator Murphy that Ministers have been sneering at Senator Mulvihill when he has raised this matter in the past. I should like Senator Murphy to say what Minister has ever sneered at Senator Mulvihill for raising this matter. 1 believe all Ministers have shown-
– The Minister has done a good job himself.
– All Ministers have shown that they appreciate the sincerity with which Senator Mulvihill has brought this matter forward. When Senator Murphy says 1 have done a good job myself, is he saying that I have sneered at or denigrated Senator Mulvihill’s efforts in this direction during the time he has been in the Senate?
– Yes.
– That is a complete untruth. I do not know whether he wants that statement withdrawn?
– The Minister can do what he likes. I will tell honorable senators what he has done.
– I do not believe for one moment that Senator Mulvihill himself would agree with what Senator Murphy has said. To make accusations of that sort which are completely without foundation should be beneath Senator Murphy’s dignity as a senator.
.- Since Senator Mulvihill has been in the Senate, he has presented a case for the protection of flora and fauna. This is something in which he believes implicitly. No one could doubt that he is genuine and that he merits the support of honorable senators on both sides of the Senate. I hope the Government will be influenced by Senator Mulvihill’s representations.
– All honorable senators are interested in the matter that has been raised by Senator Mulvihill, and Senator Murphy was a little off the track when he suggested that the Government was not interested. The Government has a record in this matter of which it is proud. A few years ago it totally prohibited the export of native fauna. 1 had the honour to be the instrument of this ban as Minister for Customs and Excise. There is no foundation for the charge that Ministers have sneered at the project espoused by Senator Mulvihill or that we are not interested in it. I do not know what got into Senator Murphy. The matter raised by Senator Mulvihill is very important and this is recognised by the Government. There was a racket in the export of Australian birds and animals to many parts of the world. About three-quarters of them died before they reached their destination. This racket was stopped by the Government three or four years ago.
The conservation of fauna and flora within the State boundaries is entirely a matter for the States under the Constitution. The Commonwealth Government has a responsibility within its Territories.
This year the Commonwealth’s grants to the States total$857 million. How the States spend that money is for them to say. It is not for the Commonwealth Government to say that this or that project should have priority. The States must arrive at priorities. They must determine whether they want to purchase leases. I hope they will. I hope the States will carry out this work but I say with great respect that this is not within the province of the Commonwealth Government. We cannot go into the States and tell them what they are to do.
– Section 96 gives the Commonwealth Government some power to specify how grants are spent.
– We cannot tell the States how they are to spend the money we give them. Senator Mulvihill should use his persuasive powers on the State Premiers.
The Commonwealth Government is not unsympathetic. The honorable senator mentioned assistance given to the Australian Conservation Foundation by means of deductions for income tax purposes. The honorable senator forgot to say that the Commonwealth also makes an annual grant of $20,000 to this Foundation.
Senator Murphy has made a queer noise. I presume that he does not agree with me. He thinks $20,000 is not enough, but it is recognition by the Commonwealth Government of the work of the Australian Conservation Foundation. This grant has enabled it to operate and to continue its work and so attract tax-free contributions. We do not know how much this means by way of a contribution from the Commonwealth Government in the way of loss of revenue. These things mount up. It may be a very large contribution.
I want Senator Mulvihill to know that we have taken a very keen interest in this matter. Recently we set up a National Park within the Australian Capital Territory under the Minister for the Interior (Mr. Anthony). But above all, the Government deserves credit for placing a ban on the export of Australian native fauna.
Question resolved in the affirmative.
Senate adjourned at 11.59 p.m.
Cite as: Australia, Senate, Debates, 26 October 1966, viewed 22 October 2017, <http://historichansard.net/senate/1966/19661026_senate_25_s32/>.