26th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– 1 ask the Leader of the Government in the Senate whether it is a fact that the Government has ordered an inquiry into containerisation in Australia. If this is so, would it not cut across the projected inquiry by an all party Senate committee?
– I understand that an inter-departmental committee, which consists of departmental officers, will make an inquiry into some aspects of the containerisation system, particularly with regard to the domestic system. Honourable senators will realise that as far as private industry is concerned, at the moment there are two international consortiums which will be providing their own facilities. I noted in the Press recently that they have agreed to share these facilities. But the feeding of the three main container ports will call for some domestic arrangements in the smaller ports and for the provision of vessels to carry containers to the major ports. These aspects will be of particular interest, I understand, to the inter-departmental committee.
Honourable senators will recall that when the Senate Select Committee on the Encouragement of Australian Productions for Television - commonly referred to as the Vincent Committee - was appointed the Government had an inter-departmental committee inquiring into the same subject. Paths crossed occasionally, but at no time did the two inquiries conflict with each other. Both reports were received in due course. It is not without interest to note in today’s Press that it appears that one recommendation of the Vincent Committee, concerning the enlargement of the membership of the Australian Broadcasting Commission is coming to fruition at the moment.
– I direct a question to the Minister representing the Minister for Works. It was announced on Monday that a contract had been finalised for tha construction of a beef road in the Northern Territory. Could the Minister advise the Senate of any details in this regard?
– It is true that the Minister for Works issued a statement on Monday relating to the Top Springs-Wave Hill beef road contract. I understand that it represents the largest beef road contract yet awarded in the Northern Territory. It comprises the construction of ninety-seven miles of bitumen sealed road from Top Springs to Wave Hill at a cost of $2,657,763. The Minister for Works said that the contract had been let to Caratti and Rhodes Joint Venture of Perth. The road is due to be completed by the end of October 1968. The construction of the road, comprising gravel pavements 18 ft wide with 12 ft wide bitumen seal, would provide an all-weather road except perhaps for a few clays each year when streams were in flood. The contract included the construction of eight pre-stressed concrete bridges and 235 culverts and floodways. The Minister said the road was designed for a traffic speed of 60 miles an hour and will have gentle grades to facilitate the operation of long cattle trains. Parking bays for the cattle trains will be provided along the road at 10-mile intervals. When the road is completed it will mean that Wave Hill will be linked with Darwin by 491 miles of sealed highway.
– My question, which is somewhat similar to Senator Willesee’s question, is directed to the Minister representing the Minister for Shipping and Transport. Has the Minister seen a report in the ‘Sydney Morning Herald’ of 12th April which refers to an announcement by the Minister for Trade and Industry and the Minister for Shipping and Transport that the Government intends to undertake a complete inquiry into the facilities needed for containerisation in respect of Australia’s import and export trades? Will the Minister make a statement indicating the extent to which the inquiry will supplement or clash with the inquiry that will be conducted by the Senate Select Committee on the Container Method of Handling Cargoes? ls either or are both of these committees required for the purpose of the inquiry?
– As I understand the answer given by my leader, he has made it perfectly clear that there will not be of necessity any clash between the Senate Select Committee on the Container Method of Handling Cargoes on the one hand and a departmental inquiry on the other hand. However, as the question included some other aspects I will refer it to the Minister for Shipping and Transport for an answer. I would like to add one other point. Many departments will be involved. My own Department in particular has a very special interest in the question of containerisation. As I indicated in the Senate some months ago, a very senior officer of my Department is shortly going overseas for special studies in relation to the customs implications of containerisation.
– I ask the Minister representing the Minister for Labour and National Service: If an employer refuses to re-employ a former employee on his discharge after a period of national service training and the employer is prosecuted and fined but still refuses to re-employ the former employee, does that constitute a continuing offence? Can the Government force the employer to take the employee back? If not, what redress does the former employee have?
– The answer to the honourable senator’s question is to be found in the Act which this Parliament has passed containing provisions relating to the responsibility and liability of employers in the event of employees being called up for national service training. I do not have the provisions of that Act at my fingertips, but I suggest that the answer the honourable senator seeks will be found in that Act.
– Has the Leader of the Government in the Senate seen an article published in today’s ‘West Australian’ highlighting the cost of government subsidies on primary products? Is it not a fact that the cost to the community of tariff protection provided for secondary industries has a far greater impact on the economy than the subsidies paid on primary products? Is it considered desirable to protect only secondary industries and to reduce primary production to so-called world parity?
– I have not seen the article which the honourable senator says appeared in the “West Australian’ this morning. I do not keep quite as closely in touch with Western Australian affairs as he does. He comes from there, his interest is there and naturally he keeps in close touch with events there. Not having seen or read the article, I would not be prepared to answer the question offhand. I suggest to the honourable senator that he put his question on the notice paper. I shall see whether I can get the required information from the appropriate Minister.
– My question is directed to the Minister representing the Minister for Primary Industry. Is he aware that dairy cream is no longer the major ingredient used in the manufacture of ice cream? If this is so, will the Government prohibit ice cream manufacturers from advertising ice cream as a food?
– I am not aware whether the facts are as stated by the honourable senator. The manufacture of this product is controlled by State authorities. I shall endeavour to get the requisite information and let the honourable senator have an answer later.
– My question is addressed to the Minister for Supply. Can he inform the Senate of the extent to which Australian industry is likely to benefit from the military satellite communications agreement entered into between Australia, the United States of America and Canada?
– We cannot yet determine the degree to which Australian industry can benefit. This will be largely in its own hands. Project Mallard, to which the honourable senator refers, and which is the subject of the agreement between Canada, Australia and the United States of America, is yet in its early stages. Australian industry, quite rightly, has often stated that it does not receive sufficient advance information to enable it to prepare for what is ahead in the defence field. Tn this instance we have made strenuous endeavours to provide advance information as far as possible. In about three weeks time officers of my Department in Sydney will brief representatives of Australian industry on the possibilities of this undertaking.
– My question is directed to the Minister representing the Postmaster-General. Has the PostmasterGeneral been correctly reported as having said that in the appointment of the Chairman of the Australian Broadcasting Commission next June age would be one of the determining factors in the choice of a successor to Dr J. R. Darling? If so, are we to take it from this statement that the Government does not intend to reappoint the present Chairman? As the Minister also said that in considering the increase of the number of commissioners from seven to ten he was taking cognisance of one of the recommendations of the Vincent Select Committee on the Encouragement of Australian Productions for Television, will he be prepared also to consider the latter part of that Committee’s specific recommendation on this matter, namely, that commissioners appointed be representative of the cultural life of Australia and be either men or women of the highest reputation and experience in this field?
– The PostmasterGeneral held a Press conference on this subject yesterday. I have read in this morning’s newspapers a number of reports presenting slightly varying accounts of what was said at the conference. For this reason I suggest that it would be quite improper for the honourable senator to base conclusions on those reports. It will be better if he waits until J refer the matter to the Postmaster-General so that I may obtain precise details of what was said.
– I direct a question to the Minister representing the Minister for Primary Industry. By way of preface I point out that on 23rd February I asked whether a firm date had been determined for a meeting of Commonwealth and State fisheries authorities to devise ways and means of stopping the indiscriminate slaughter of dolphins along the Australian coastline. In view of the effluxion of time can the Minister now supply the requisite information?
– No, I cannot supply it. I shall remind the Department of Primary Industry that an answer is required.
– Is the report of the Senate Select Committee on television - now popularly known as the Vincent Committee - which was presented to the Parliament in October 1963 still under consideration by the Government or has it been finally pigeonholed and left to gather dust? Is the Minister aware that Notice of Motion No. 6 on the notice paper of the Senate in my name, seeking the appointment of a standing committee of the Senate on television is strictly in accordance with one of the recommendations of the Select Committee? Can we hope that at least this single one of the Select Committee’s recommendations will receive the nod of approval from the Government in the not too distant future?
– I think it is fair comment to say that, as the first part of the question asked by the honourable senator indicates, the Senate Select Committee on television is generally known as the Vincent Committee. It is also true to say, as I have said in answer to a question here in fairly recent times, that the Government still has that Committee’s recommendations under consideration. As to the remaining parts of the question, I think it would be better if the honourable senator were to put them on the notice paper.
– I direct a question to the Minister representing the Minister for Civil Aviation. Was Meekatharra airport closed last week as an alternate for Perth for jet operation? Did this cause Ansett-ANA to change to Electra services on Sunday night, 9th April, due to a fog risk in Perth? Has Meekatharra airport since been opened for jet operations?
– I am informed that Meekatharra airport was not available as an alternate for Perth on 7th and 8th April. This was due to the fact that the emergency power supply at the aerodrome was being overhauled as part of routine maintenance. The primary power supply was available but the Department of Civil Aviation does not allow an airport to be nominated as an alternate unless both primary and emergency power supplies are available. This overhaul of the power supply was part of the planned maintenance and the DCA staff worked overtime to have it carried out as quickly as possible. With Meekatharra unavailable as an alternate it was necessary, because of the possibility of fog on Sunday night, for the two domestic operators to use Adelaide as the alternate to Perth. This means that aircraft must carry enough fuel to return to Adelaide from Perth or that they must turn back at a point when there is still sufficient fuel to reach Adelaide. Ansett-ANA chose to operate on the basis of nominating Adelaide and using an Electra for this purpose. Trans-Australia Airlines chose to operate with a Boeing 727 using a point of no return and, the fog conditions not developing, was able to continue to Perth in the normal manner. The maintenance of the emergency power supply was completed satisfactorily by Monday and since then Meekatharra has been available as an alternate as normally.
– Does the Minister representing the Minister for External Affairs recollect that yesterday in answer to a question by Senator Sim he deplored the fact that, in Senator Sim’s language, the Government of North Vietnam had contemptuously rejected certain peace proposals of U Thant? Is the Minister aware that U Thant has now stated that a cessation of the bombing of North Vietnam by the United States of America is an essential prerequisite to peace in Vietnam? In view of the support which the Government apparently gives to U Thant’s proposals, will the Government use its good offices with the United States of America to see that the latest proposals by U Thant are not contemptuously rejected by the United States of America?
– I think the honourable senator is confusing two matters. One of them was an approach by U Thant suggesting terms which might lead to peace negotiations and to the best of my belief those terms did not involve cessation of bombing. They were, as was pointed out factually in the Senate yesterday, rejected by Radio Hanoi. We added that the settling of affairs in South Vietnam was no business of the United Nations and the approach was subsequently rejected by letter to U Thant. That is one matter. I have not seen the other statement to which the honourable senator refers, but it should not be assumed, because the Australian Government regrets that U Thant’s proposals for peace as put forward previously were rejected by Hanoi, that therefore the Australian Government supports every proposition that U Thant makes or may make.
– My question is directed to the Minister representing the Minister for National Development. I remind him that on 4th April this year I placed a question on the notice paper in respect of uranium ore reserves and tonnages held by various countries. I now ask: In the light of the fact that since 4th April the Government has announced that there shall be certain restrictions on the export of uranium ore, will he endeavour to have my question answered as soon as possible. 1 point out that because of the Government’s announcement my question assumes some importance.
– The policy decision made by the Government, was published by the Minister for National Development and I heard him answer a question or two in another place today on that matter. I shall see that the question which has been on the notice paper for some little time is referred to the Minister at once and answered as speedily as possible.
– My question is addressed to the Minister representing the Minister for Labour and National Service. In view of the professed concern of the Government about the welfare of migrants and the shocking social and unhygienic conditions which exist in the Brooklyn Hostel,
Melbourne, will the Minister direct Commonwealth Hostels Ltd to close this hostel immediately and find alternative accommodation for existing tenants?
– Without accepting the expression of opinion which prefaced the question asked by the honourable senator 1 can only say that as regards the remainder of the question I shall bring it to the notice of the Minister for Labour and National Service.
– I ask the Minister representing the Minister for Civil Aviation a question. In view of his answer to Senator Sim regarding an alternative landing ground to Perth, does this not highlight the necessity to introduce as speedily as possible Kalgoorlie as the alternative to Perth for interstate airlines?
– Quite clearly this is a technical question which I am not competent to answer. Therefore I ask the honourable senator to place it on the notice paper. I shall ask the Minister for Civil Aviation to supply a considered reply to the question.
– Will the Minister representing the Minister for Labour and National Service advise the Parliament whether the law relating to the call-up for military service of eligible migrant youths applies to migrants from all countries? If not, will he name the countries which are not covered by this law? Will the Minister advise also whether the Government has entered into agreements with any country to exempt youths from military conscription where there has previously been military training on the part of the migrant in his home land? If so, will he name the countries?
– To enable a considered answer to be given the question would need to go on notice, but 1 believe the answer can be found in statements which have been made already in the Senate. To give a preliminary answer to the honourable senator, who can then decide whether he wants additional answers privately later or whether he wants his ques tion to appear on the notice paper, I have a recollection that some countries entered into treaties with the British Government some years ago on this matter and that the laws passed by this Parliament did not apply in a way which would break those treaties. I also have a recollection that that has been stated in this Parliament. If the honourable senator wishes to have this explained more explicitly in the Senate I suggest he put the question on the notice paper.
– Is the Leader of the Government yet able to tell the Senate when the report of the Loder committee on northern development will bc made available to members of this chamber?
– 1 have had two or three inquiries on this matter and I have sent to the honourable senators concerned a letter from the Minister for National Development in another place. The report of the Loder committee is not considered to be a public document and the Government has decided that it will not at this time become a public document. However, I will send to Senator Lawrie a copy of the letter which has been sent to the other honourable senators.
– Has the Minister representing the Minister for the Interior seen the report that in a recent gallup poll 75% of the people interviewed believed that ballot papers at Federal and State elections should show the parties to which candidates belong? In view of the overwhelming number of people who support this proposal will the Minister confer with his colleague in an endeavour to have this anomaly rectified?
– From time to time we have received suggestions relating to whether the names of parties to which candidates belong should be placed on ballot papers and also to the size and shape of ballot papers. All these suggestions have been considered but, as we all know, the present system still obtains. I have no doubt that the Minister for the Interior has seen the report of this gallup poll, but just in case he has not I will bring it to his notice.
– I direct my question to the Minister representing the Minister for Health. Has he seen Douglas Brass’s column in the ‘Australian’ today in regard to medical aid to the Vietnamese? In view of the increasing need for medical attention for civilians as a result of the war in Vietnam will the Government seriously consider giving medical aid to these unfortunate people? Will the Government assist in erecting a hospital for Vietnamese civilians, such hospital to be staffed by Australians, irrespective of whether the Vietnamese are able to co-operate in such a project? I mention here that I understand the Americans have now given up the idea of insisting that any aid must be a joint venture so perhaps we will now be allowed to follow in the steps of the Americans. Will the Government consider purchasing or even borrowing from the United States a MUST hospital so that immediate relief can be given?
– I think this question comes under the heading of external aid to other countries and I therefore take it upon myself to answer the honourable senator. I have not seen the article referred to but the situation is that Australia already is providing very considerable medical aid to Vietnam. There are currently three Australian medical teams in provincial hospitals throughout that country, and in those hospitals the Australian teams represent the overwhelming bulk of the qualified medical personnel. Not only do they take direct care of the patients but they also have the added advantage of being able to take charge of training programmes for others in those hospitals. As I understand the honourable senator’s suggestion, it is that we should concentrate all our efforts in one hospital. I doubt whether that would have a better or, indeed, as good an effect as the assistance now given which represents some 25% of our total civilian aid to Vietnam.
– My question, which is addressed to the Minister representing the Minister for the Interior, refers to a gallup poll which indicated that a majority of the Australian people desire the names of political parties to be put opposite the names of candidates on ballot papers. Did not the last Federal election, in which a large number of new Government men were elected to the Parliament and a large number of Opposition members were defeated, indicate once and for all that the Australian people know, without receiving any further help, what people and what parties to vote for?
– Looking at them from our side of the fence, I thought the results of the last election were very satisfying indeed. I do not believe that members of the Government parties would want any alteration of the system. This is a matter, first of all, for the Minister for the Interior to bring before the Government and then for Government decision. The honourable senator will be informed when such a decision is made.
– I direct a question to the Leader of the Government in the Senate. Has the Premier of Queensland made an application to the Federal Government for the making available of $26m, portion by way of loan and portion by way of grant, for the construction of a dam on the Nogoa River, a tributary of the Fitzroy River, and associated irrigation works and other facilities which will use 19,000 acres in order to irrigate 51,000 acres of good arable land? If such an application has been received, what is the attitude of the Government to it and when does the Government propose to provide an answer in regard to this worthy cause?
– I believe that such a request has come from the Premier of Queensland and is in the hands of the Government at the moment. I assure the honourable senator that any request by the Premier of Queensland will be given the utmost serious consideration.
– I wish to ask another question. I am not sure whether I should direct it to the Minister representing the Postmaster-General or to the Leader of the Government in the Senate. What is the policy of the Government in relation to the position of Chairman of the Australian Broadcasting Commission being a full time job or a part time job? Has the Government considered making it a full time job? If not,why not?
– The honourable senator gave the answer in the question which he asked when he indicated that this was a matter of policy. It is not customary or consistent with the Standing Orders to deal with matters of policy at question time.
– Mr President, I strongly object to that reply. I will ask another question.
– Order! The honourable senator may ask a question, but he may not object to a reply.
– I will ask another question. This is a policy, is it not, which has been adopted in the past? Surely, if this is a policy of the Government it should have been made known to the people of Australia.
– Order! The honourable senator will ask his question.
– I am not asking about future policy; I am asking why the policy in the past was that the Chairman of the Australian Broadcasting Commission was not a full time appointee.
– Mr President,I ask for your protection. Quite clearly, the honourable senator asked a question about a matter of policy and I gave an answer strictly in accordance with the Standing Orders.
(Question No. 26)
asked the Minister for Customs and Excise, upon notice:
– The answers to the honourable senator’s questions are as follows: 1 and 2. Yes.
(Question No. 48)
asked the Minister representing the Minister for Immigration, upon notice:
– My colleague, the Minister for Immigration, has supplied the following answers to the honourable senator’s questions:
(Question No. 76)
asked the Minister representing the Postmaster-General, upon notice:
– The PostmasterGeneral has supplied the following answer to the honourable senator’s questions:
As the programme of work to be undertaken each year cannot be determined until the resources available to the Post Office for the year are known, the 1967-68 programme is not firm at this stage. Similarly, it is not practical at present to indicate the centres where automatic exchanges may be installed during 1968-69.
– On the 8 th March Senator Laught asked me the following question without notice:
Will the Minister discuss with the PostmasterGeneral the question as to when the report on the next phase of country television will be available for consideration by the Senate? Will he ascertain whether the report contains any hope for the early provision of television services in the upper Murray area and the middle and upper Eyre Peninsula area of South Australia?
The Postmaster-General has now furnished me with the following information in reply:
The Australian Broadcasting Control Board’s report on the further extension of the television services is receiving Cabinet consideration and the Postmaster-General expects to be able to make a statement in regard to it in the near future.
– On the 2nd March Senator Bishop asked me the following question:
Is the Minister representing the PostmasterGeneral aware that complaints about poor wireless and television reception continue to be made by residents of Whyalla and Port Augusta and that recently the Port Augusta Council resolved to seek the support of adjacent councils in asking for adjusted fees for this reason? Will the Department carry out reception tests on Eyre Peninsula and have regard to requests for reduced fees in poor reception areas?
The Postmaster-General has now fur nished me with the following information in reply to the honourable senator’s question:
I have discussed this matter with the Australian Broadcasting Control Board and am advised that both broadcasting and television reception in Whyalla and Port Augusta are considered satisfactory. Broadcast reception is available from commercial broadcasting stations at Port Augusta and Crystal Brook and a national broadcasting station at Port Pirie. There is also a national broadcasting station serving Port Lincoln. Satisfactory television reception is also available in Whyalla and Port Augusta from the national station ABNS Spencer Gulf North area - Port Pirie. However, any specific cases of interference should be referred to the Post Office for investigation.
The Board is aware of deficiencies in the services in the lower and western areas of the Eyre Peninsula. Some investigations into the possibilities of providing television in the Port Lincoln area have been made by the Board. These studies are still proceeding but must be related to the general question of the practicability of providing television to a considerable number of areas which do not yet receive a service from stations so far approved. Television is not a present possibility for more distant areas of sparse population such as certain parts of the Eyre Peninsula. There are also technical and economic obstacles in the way of provision of satisfactory broadcasting services to distant and sparsely populated parts and although the matter is being kept under consideration by the Board, no satisfactory solution is yet available in respect of parts of the Eyre Peninsula and a considerable number of other areas concerned. There is no provision in the relevant legislation for payment of television receiver licence fees at reduced rates in areas where service is deficient. It is for each individual to decide in the light of the service available whether he will purchase a television receiver, thereby becoming liable for the payment of an annual licence fee. As regards broadcast listeners licences, under the Act persons residing in places defined as zone 2, which generally speaking includes areas beyond 250 miles from the higher powered national broadcasting stations, may procure a licence for an annual fee of $2.80 as against the full fee of $5.50.
– 1 wish to inform the Senate that the Minister for Trade and Industry (Mr McEwen) left Australia this morning on an official visit to Europe where he will attend” the Kennedy Round negotiations at Geneva. He expects to return to Australia in approximately six weeks. During the Minister’s absence the Minister for Social Services (Mr Sinclair) will act as Minister for Trade and Industry.
– Pursuant to Standing Order No. 28a, I lay on the table my warrant nominating Senators Benn, Bull and Cormack to act as Temporary Chairmen of Committees when requested so to do by the Chairman of Committees or when the Chairman of Committees is absent.
– J inform the Senate that I have received letters from the Leader of the Government in the Senate and from the Leader of the Australian Democratic
Labor Party In the Senate advising the appointment of senators to select committees, as follows:
Select Committee on the Container Method of Handling Cargoes
Letter from the Leader of the Government in the Senate appointing Senators Branson, Cormack, Lillico and Bull.
Letter from the Leader of the Australian Democratic Labor Party appointing Senator Gair.
Select Committee on the Metric System of Weights and Measures
Letter from the Leader of the Government in the Senate appointing Senators Laught, Breen, Marriott and Prowse.
Letter from the Leader of the Australian Democratic Labor Party appointing Senator McManus.
Debate resumed from 11 April (vide page 693), on motion by Senator Anderson:
That the Bill be now read a second time.
Upon which Senator O’Byrne had moved by way of amendment:
At end of motion add “, but the Senate is of opinion that the Tariff Board needs to develop more effective means of ascertaining what are or may become economic and efficient ventures for which it recommends protection or assistance, and that the Government should take steps to ensure that the companies to which protection is given follow price, production, export and dividend policies which are in the interests of economic and efficient development, as well as of full employment and a stable and rapid rate of investment”.
– When the Senate adjourned last night I had just referred to the fact that the full implications of the decision in relation to the chemicals industry had been largely ignored by this Parliament but had been the subject of much discussion and criticism outside it. I was then going on to refer to the fact that I had expressed my own disquiet at this decision during the debate on the Address-in-Reply to the Governor-General’s Speech. During the course of my remarks this afternoon 1 shall refer further to this matter only in the context of policy. I think that over recent years there has been a change, which I welcome, in that primary producer organisations are taking a far greater interest in tariff policy. For my part I would encourage them to develop a strong and consistent voice in this matter. In this respect I applaud the recent action of the Graziers Association of New South Wales which made some very strong comments on tariff policy, and also of the Australian Wheatgrowers Federation which has produced a strong case criticising some aspects of tariff policy. Other organisations, such as the Chamber of Commerce, have consistently advocated a system of moderation regarding tariffs. This shows that there is a very strong body of opinion in Australia which is expressing disenchantment with our present policy.
Another very striking example was the resignation some four years ago of the then Chairman of the Tariff Board, Sir Leslie Melville. Although at the time the reasons for Sir Leslie’s resignation were played down, later comments by Sir Leslie have made it very clear that he was concerned at the growing threat to the independence of the Tariff Board by departmental direction and pressures. In a recent address on tariff policy to the Australian and New Zealand Association for the Advancement of Science, Sir Leslie made some very pertinent comments. I shall deal with some of them later. It is a great pity that Sir Leslie’s address has not received more attention. It certainly deserves it.
I do not want it to be thought that I am opposed to tariffs. We certainly need tariff protection for some of our industries. I do not question this. But what I question and will continue to question is the high level of protection that is being granted so freely to substantial sections of Australian industry. I believe that it is having an adverse effect on the cost structure of Australia. It is also having an effect on the efficiency of Australian industry. I do not accept the argument, which is often advanced, that the lowering of tariffs would have an adverse effect on employment. I shall deal further with that aspect a little later. Earlier I referred to the growing interference with the independence of the Tariff Board. Senator O’Byrne dealt with this matter at some length last night. An example of this was the reference of the Minister for Trade and Industry to the Board concerning the chemicals industry. I think that it is worth quoting. It reads, in part:
In the interests of achieving . . . effective and stable protection of employment and investment in the chemical and closely related industries. . . .
In view of that portion of the reference one must doubt whether the Board had a free hand in considering, for example, any weaknesses in the structure of the chemical industry. Existing investment was to be protected. If some of that investment was misdirected, 1 would have expected national advantage to have taken priority over the interests of individual companies. Misdirected investment should not be protected.
Senator O’Byrne referred to the aircooled engines inquiry and I wish also to make a passing reference to that inquiry. I do not quarrel with the contention that the Board should fake note of government policy; but the Board should be free to act within the framework of that policy. It should lay down only guide lines and should not lay down detailed policy under which the Board has to operate.
– Can the honourable senator instance a case where detailed guide lines have been laid down?
– Yes. I have cited one.
– I do not accept that that was one.
– 1 have cited it as such a case. 1 question the wisdom of the Government in this regard. That policy undoubtedly destroys the independence of the Board. I have referred to an address by Sir Leslie Melville and I would like to discuss some of the criticisms he made in that address because I believe that they are based on sound economic grounds. Sir Leslie attacked the scope of the tariffs and the fallacious arguments advanced by advocates for manufacturers in support of ever increasing import duties. He went on to say;
Instead of providing more and more protection to virtually whatever industries seek assistance, we should deliberately select for assistance only the less costly ventures.
He then proceeded to demolish the argument that there is need to protect infant industries or those industries subject to economies of scale. He said:
There are still some infant industries that need protection, but very few of the new tariffs granted today are for that purpose. Many of them are for the manufactures of existing films of great experience, often with close connections with multi-nation overseas companies. The argument for protecting infant industries could scarcely be applied to them. Protection, in expectation of economies of scale, will sometimes be justified but it would usually seem better to wait for the market to grow.
He then went’ on to speak of the need to ensure that investment of Australia’s scarce capital resources makes the greatest contribution to the growth of national income. 1 think his comments are pertinent. He said:
However, our tariff policy is diverting our scarce resources of capital into high cost industries-
And the chemical industry is one example - some of which make little contribution to the national income.
When I was speaking in the AddressinReply debate 1 mentioned that high tariffs were one of the major factors that encouraged foreign investment in Australia. Sir Leslie argued that one reason why we have to rely so heavily on overseas investment for development is the high tariffs. He said:
High tariffs provide incentives for capital inflow into the high cost industries and by so doing we tend to withhold capital from the mining and pastoral industries which, of course, are industries of greater risk, but from which in the long term returns promise to be very much greater.
He then went on to make some very pointed references - and in my view, very justifiable criticisms - with regard to the effects of tariffs on Asia. I have in mind particularly Japan, and I presume that Sir Leslie had also. I quote the following portion of his speech:
Some of our tariffs against Asian imports have now become so high that it is possible to say that they are reducing rather than increasing our standards of living.
This may be debatable. Those are rather strong words. Sir Leslie went on:
With a policy of full employment they are not needed either to provide or maintain employment. In these circumstances our tariff policy towards Asian countries is. not only unhelpful to underdeveloped countries which are trying to build up their external trade, but from our own point of view the policy is self defeating and is both imprudent and damaging to our standards of living.
I do not believe that such statements, when made by authorities like Sir Leslie Melville, can be dismissed lightly.
– The honourable senator will note that Sir Leslie did not give any specific instance.
– No. This was a general speech. However, I believe that all of us, including Ministers, can think of instances. Trade with Japan in motor vehicles is one. I find it increasingly difficult, while we ourselves are rightly exerting on other nations pressure to provide freer access to our products, particularly agricultural ones, to understand why we are adopting in relation to our manufacturing industries policies that lead to greater protection. I find these conflicting policies very difficult to reconcile and I believe that one day we shall be asked to explain them internationally.
It is often claimed - the amendment proposed by the Opposition seems to suggest that it supports this claim - that high tariffs are necessary to create and protect employment. This proposition is open to challenge, to say the least. Sir Leslie Melville, indeed, challenges it, and I think his words are worth noting. He said:
It should be noted that Australia is today one of the most highly industrialised countries in the world-
This may be surprising - with 27.5% of the work force employed in manufacturing, compared with 27.2% in the United States. Whatever economic or social benefits are to be gained by a general growth and diversification of secondary industries and employment, we must by now have gained them.
If we examine further this question of employment we find that approximately 11% of our work force is engaged in rural industry and 62% or slightly more in the tertiary industries. It has been estimated that only 13% of the 27.5% engaged in manufacturing industries is directly affected by tariff policies. So only a relatively small proportion of the work force is affected by tariffs. The increase in employment in Australia in recent years, as in the United States of America, has not been in the manufacturing industries so much as in the highly labour intensive tertiary industries. This has been a tradition of all developing countries. The decline in the number in the manufacturing industries would not prevent growth in em.ployment. Therefore, I believe that the claim that tariffs are necessary to create and maintain employment - I think this was implicit in the reference by the Minister for Customs and Excise to the chemical industry - should not be taken to be true in fact. I suggest that we should not accept it and that it should be critically analysed. I find it impossible to believe that many of the arguments that have been used in an attempt to justify high tariffs have any basis in fact. I believe it is high time that this Parliament looked very closely and very critically at our tariff policy and closely analysed many of the arguments used to support it. I. want to have a look at the chemical industry, because this provides a classical example of the new thinking on tariffs. One authority went so far as to say that the decision of the Tariff Board on the chemical industry was a new concept of tariff making in Australia. Mr Anthony Cramb, who is a tariff consultant, said:
A revolutionary new approach has been made to tariff making in Australia and already other local industries are anticipating the possibility of similar ‘ultra protective’ steps in relation to their manufacturing activities.
I am referring to the support value system. Indeed, recently there have been several Press statements by other industries which have announced that they are considering applying to the Tariff Board to gain the benefit of these ultra protective measures. A precedent has now been created and I believe that it is a dangerous precedent. I acknowledge that the chemical industry suffers disadvantages in Australia. It has a small and scattered local market, but this is true of many other industries also. The evidence to the Board and comments by the Board suggest that the industry suffers from a great deal of fragmentation. This, I think, could be reasonably regarded as misdirected investment, yet the Minister’s reference to the Board virtually directed the Board to disregard this aspect. Mr Cramb, the authority from whose remarks I have just quoted, also made the following comments which I believe have a considerable amount of validity in this matter:
Australia is internationally recognised as an economically and politically stable country and as such represents a sound investment area. In chemicals, as with motor vehicles, textiles, plastics, etc. much of the industry is overseas owned.
Furthermore, the majority of the world ‘giants’ have invested in Australian manufacturing projects thus creating an internal competitive situation which tends to excessively fragment the industry in the ‘popular’ production areas.
The competition between these huge international chemical companies for a share of the small but safe (from an investment point of view) Australian market undoubtedly seems to make more difficult the task of anyindividual operator achieving ‘economic and efficient’ production.
He went on to say:
There seems to be a distinct danger that the new protective measures could worsen this internal situation-
That is, of fragmentation: through the ‘isolation’ of the Australian industry.
If we examine the chemicals industry we find that there is a lot of truth in what Mr Cramb says. One could go on at length in criticism of this support value system. I should like to make only one further quotation front this article on tariff making in Australia in which some very pertinent points are made. Mr Cramb stated:
As mentioned previously, the support values–
These are an entirely new system in tariff making policy in Australia: are said to be based on average world prices. However, because ordinary protective duties are calculated in relation to the cost disadvantage of the Australian industry and the support values are aimed at ensuring the effectiveness of the ordinary duties, then there must be a relationship between Australian costs of production and support value. In fact, Mr Cossar in his dissenting opinion in the Tariff Board report -
Mr Cossar is a primary producers’ representative, which is worth noting: pointed out that one support value in particular was not based on the costs of the lowest cost producer in Australia who supplies a substantial proportion of the market. This would appear to be an immediate example of protection of inefficient production.
One must question this move into ultra protection for an industry such as the chemical industry which is such a substantial factor in the cost structure, particularly of our primary industries. I do not question that we require in Australia a soundly based chemical industry but I certainly question whether an industry should be encouraged to develop over an ever expanding range of products when such expansion depends on artifically raising the price level of import competition to a stage where it does not represent effective competition.
I should like to have time to cite the remarks of Sir Paul Chambers, the Chairman of Imperial Chemical Industries Ltd who, in a speech in England, was very critical of measures taken to prevent effective competition. He attacked measures taken in England. I should think that Sir Paul Chambers would be at least consistent. What he criticises in England as not allowing for effective competition also applies to his own company in this country. Because of the time factor, I mention only one further point in regard to the chemical industry. World prices for chemicals are tending to decline. Although it is true that some assurances have been given that prices in Australia will not rise, this surely is not the point. Why should the Australian consumer be at a disadvantage and not share in the trends which are taking place in other parts of the world? I have a very real and growing fear that this new trend in tariff policy will have an adverse effect on the Australian consumer and a most damaging effect on the cost structure of our primary industries, particularly of unprotected industries such as wool and fruit.
It is worth noting that the Australian primary industries today are becoming more sensitive to cost increases. This will eventually and inevitably lead to a lowering of production. This is because farming today is more capital intensive. Expenditure on clearing, pasture improvement and fertilisers forms a bigger part of the farm cost structure than it did hitherto. I pose this question: Why should the Australian wheat grower have to pay twice as much as his overseas competitor for chemical sprays? We may well ask the same question in respect of the Australian fruit grower who is a large user of chemical sprays. I have tried to deal very quickly with this large subject and to express, I hope in very strong terms, my own feelings as to the trends in tariff policy. I could go on, had I the time, to discuss the structure of the Board and the activities of the Special Advisory Authority. 1 say now only that I view with some alarm the proposals to increase the Board by X number of part time members. If we are having great difficulty in finding a permanent member with the necessary qualifications to replace Mr Gill, I do not know how we are to find twenty or more part time members with the qualifications to do an independent job on the Tariff Board. For my part, I look forward to the primary producer organisations becoming a powerful force and indeed a pressure group in Australia on tariff policy. I hope they will join with other organisations, such as the Chamber of Commerce, to provide a powerful counter to those organisations which have always brought great pressure to bear for higher tariffs. I conclude by saying that although I approve these proposals, I have very grave reservations about our tariff policy. I express again a real hope that the Parliament will from now on examine tariff policy and tariff proposals far more carefully and in much greater detail than it has done in the past.
– The Senate is discussing a tariff Bill which relates to many items and, in addition, is discussing an amendment which has been moved by the Opposition. I shall refer to the amendment later. This is an occasion when the Senate is entitled to look in retrospect at matters related to tariff legislation. For more than 100 years Australia has practised a scheme of tariff protection for its industries, principally for its secondary industries. I state that as a fact because of Senator Sim’s remarks. If we look into the matter deeply we find that prior to federation the States introduced tariff laws and cleared the way for secondary industries to be established on a profitable basis. That was an era when we had no worthwhile secondary industries. Our factories manufactured oatmeal and flour, or simple foodstuffs of that nature, but we did not have the complex secondary industries which we have today in the Commonwealth, lt was perceived by our people and parliamentarians more than 100 years ago that if Australia was to progress there would, of necessity, have to be means of manufacturing household goods, tools, machinery, clothing and foodstuffs. No-one will deny that statement.
The danger inherent in a policy which meant concentration of agricultural pursuits was evident to all. Had we gone on concentrating only on producing primary products and exporting wool and wheat to other countries, today we would have had an army of Australian peasants using the hoe and probably a wooden plough. It was 106 years ago that a Melbourne journalist contributed articles to a Melbourne newspaper pointing out the advantages to be won by creating secondary industries by tariff protection. He instituted Australia’s charter for secondary industries. After reading his articles and studying that period 106 years ago I would say that he, more than anyone else, laid the foundation of Australia’s many secondary industries. Since federation successive political parties have appreciated the wisdom of adopting tariff protection policies and have applied those policies with judgment and discretion. I say that advisedly and I say it in confrontation of the statements which I have heard uttered in the Senate this afternoon against the Tariff Board and its deliberations.
I come to a part of my address which is of great interest to the people of Australia, particularly to parents. I wish to ask the following questions of the Senate: How many migrants did we admit to Australia during 1966? How many children terminated their school studies in 1966? How many female workers were engaged in industry in 1966? How many migrants are employed now, in the fourth month of 1967? These are questions which should be answered by those who would comment adversely upon the broad operations of the Tariff Board and the Customs Act. How many children who were school leavers in 1966 have failed to find jobs for themselves in Australian industries? Is there a constant demand for female workers in Australia and did not this Government pass legislation recently to permit female Commonwealth public servants to remain in the Service after marriage? These are pertinent questions and one should give consideration to them when considering the legislation which has nurtured our secondary industries over the years. They are important questions. If the good things which we have in Australia are worth while, it is really worth our while to go back over the years and perceive for ourselves, if that is possible, what power, what force and what legislation have been responsible for creating these things. If I wished I could supply the answers.
I was surprised to learn that in Queensland this year school leavers found employment almost immediately. There are no unemployed migrants in Australia at the present time and there are now very few unemployed female workers in Australia. It does happen that intermittently females become unemployable, but generally speaking there has been a constant demand for them in industry. We now find many married ladies working in secondary industries in Australia, helping their husbands to liquidate debts on their homes and furniture and doing other things which are worth while in our society. The employment situa tion in Australia is due to a pattern of tariff protection commenced more than 100 years ago and is due also to a fair observance of the principles interwoven in that pattern. Let us consider the situation and make just a brief comparison between conditions in Australia and elsewhere. Let us compare our conditions in Australia with those in a country such as India or one of the other Asian countries and let us see how many are employed in the manufacturing industries in the two countries. I think this comparison is important when we are dealing with customs legislation. We can even compare Australia with New Zealand because, as 1 pointed out in this place on another occasion, New Zealand has an economy which is similar to ours. We Vere found at about the same time by the same gentleman. New Zealand is a rich country and Australia also is a rich country. But Australia adopted tariff protection policies early in its history and New Zealand did not. Today we are blessed with many secondary industries whereas New Zealand at this stage of her life is trying to establish them.
According to the 1961 census, the population of India is 435 million. Of that number 188 million are economically active. The number of these employed in agriculture is 131 million or 69.6% and the number employed in manufacturing industries is 20 million or 10.6%. I ask honourable senators to keep those percentages in mind because I move now to Australia. In .1961 we had 10* million people. Some 13.5% of the working population was employed in agricultural pursuits while 28% was employed in manufacturing industries. That is a high percentage for any country. A comparison of our situation with that in New Zealand indicates that we are considerably better off.
I have mentioned India. I turn now to Japan. In 1959, the last year in which a census was taken, Japan had a population of 92 million. Of the work force of 46 million, 18 million or 39.7% were employed in agricultural pursuits and 8i million or 18.4% were employed in manufacturing industries. There is no doubt that we are fortunate to have in Australia the situation I have just outlined.
I turn now to the Federal Platform Constitution and Rule’s of the Australian Labor Party. So that there will be no doubt or mistake about Labor’s policy in relation to tariff protection I shall read to the Senate from page 8 of the document.
– What edition is this?
– It is the 1965 edition but the provision has not been amended since 1963. What I am about to read was operating in 1963. Paragraph 5 is in these terms: 5 (a) Effective tariff protection of Australian industries and import embargoes in favour of Australian industries capable of supplying the home market - in each case subject to control of prices, to protection of Australian working conditions and to due efficiency in production.
Boiled down, our policy is one of effective tariff protection of Australian industries. I need go no further; that is the policy of the Australian Labor Party and I endorse it wholeheartedly.
I heard an honourable senator say this afternoon that he was most anxious that the independence of the Tariff Board should be preserved. I do not know whether he wished to imply that the degree of independence which has been enjoyed by the Tariff Board ever since it commenced functioning in 1921 has been diminishing or whether it is being destroyed. I do not think that was his implication. Let us look at it from the point of view of the ordinary man. Now and again we hear it said that a committee or some authority is non-political. It is sometimes said that a man is non-political. That is all nonsense. Every living man has a political belief of some description and no one in the community can be classed as being non-politically minded.
– But could not one be non-party political?
– One can be independent and take a middle course. One need not protrude his political opinions and beliefs all the time. One need not force them upon people or bring them into operation when dealing with any matter affecting the public, but the fact remains that every person is politically minded. Now let me deal with the independence of the Tariff Board. The Board really is comprised of public servants paid from the Consolidated Revenue Fund. I believe that they do their job conscientiously and excellently. But let us cast all the nonsense about independence to one side. Members of the Tariff Board must be conscious of government policy. They must know government policy in relation to all the matters submitted to them for inquiry and report. It would be foolhardy for a government to have a tariff board operating in its interests if that board were not cognisant of government policy. Members of the Tariff Board are men of tha world. They are wholly competent to carry out the duties allocated to them. That is why we receive such worthy reports.
I read recently about a group of primary producers expressing certain sentiments in regard to a Tariff Board report The group referred to the independence of the Board and implied that the Board’s status was being assailed. I do not think anything has ever been done to destroy the prestige of the Tariff Board. Let me indicate the situation in which members of the Tariff Board are placed. It is forty-six years since the Tariff Board first operated in Australia. I have always been curious to know how the Parliament dealt with tariff legislation prior to 1921. The Tariff Board just cannot do as it wishes; it is circumscribed. Matters are referred to it, in the first place, by tha Minister - this is called a reference - and the Board conducts an inquiry according to a certain charter. This is what the Tariff Board Act 1921 has to say: 15.- (1.) The Minister shall refer to the Board for inquiry and report the following matters:
I interpose here to point out that it is provided that the Customs Act shall be incorporated and read as one with the Tariff Board Act. It goes on:
any complaint that a manufacturer is talcing undue advantage of the protection afforded him by the Tariff, and in particular in regard to his -
The Act continues in that strain, providing, as it were, guide lines for the Tariff Board. Section 17 states:
The Board may on its own initiative inquire into and report on any of the matters referred to in sub-section (2.) of section fifteen of this Act.
So the Board is free to institute an inquiry on its own behalf.I have outlined the functions of the Board. If anyone has anything to say against the Customs Act and the Tariff Board Act he should seek an amendment of the instructions laid down statutorily for members of the Tariff Board to follow.
The Board is controlled by the Department of Trade and Industry. That is not a small department. It has in its employ officers who are just as highly qualified as any member of the Tariff Board. It is quite possible for officers of the Department to examine any report made to it by the Board and to be in a position to point out to the Minister matters with which they may not agree or on which the Board has erred. It is quite possible for them to examine a Tariff Board report and furnish a couple of pages of foolscap containing a precis of the work of the Board on one matter. The Board functions within the Department. Its reports go to the Department which is in effect a superior authority. The Board is working in a subordinate position. That is the way it should be. That is in accordance with the instructions.
So that honourable senators may see for themselves the status of the departmental officers and have an idea of their capabilities, I point out that the Department has officers with the following classifications: trade policy officer, deputy director, senior economist - if there is a senior economist there must be junior economists - tariff policy officer, commitments officer, assistant director, executive officer, assistant regional director, tariff revision officer, officer in charge, administrative officer, investigation officer, senior research officer, accountant, personnel officer, textile advisor and films and photo officer. I refer to these classifications so that my listeners will understand that the staff employed by the Department can ascertain very quickly just what a Tariff Board report contains. The classifications of some of the officers employed in the office of the Tariff Board are: chief executive officer, assistant chief executive officer, director (technical and professional services), officer in charge, tariff officer, cost accountant, investigating accountant, senior research officer and research officer. So the Board has a highly skilled staff. Then there are the members of the Tariff Board. I do not propose to mention them at all.
The information that is available to members of the Tariff Board when dealing with any subject that is referred to them by the Minister is unlimited and inexhaustible. The Department has officers of the Commercial Intelligence Service in overseas countries. They receive fairly substantial salaries. The Service has officers in Argentina, the Republic of Austria, Bahrain, Canada, Ceylon, the Mission to the European Economic Community and the Permanent Mission to the European Office of the United Nations, the Republic of France, the Federal Republic of Germany, the Kingdom of Greece, Hong Kong, India, the Republic of Indonesia, the Republic of Italy, Japan, Kenya, Lebanon, Malaysia, the Kingdom of the Netherlands, New
Zealand, Nigeria, Pakistan, Peru, the Philippines, Singapore, the Republic of South Africa, Sweden, Thailand, Trinidad and Tobago, the United Arab Republic, the United Kingdom, and the United States of America. So, if the Government legislatively did something which was wrong and which could affect imports from any of the countries I have mentioned, it would be fully conscious of what it was doing. It does not act in the dark when it is introducing legislation - at least, it should not act in the dark - because it has ample opportunity to have a report furnished to the Department by the Tariff Board thoroughly examined and a departmental report made on it, and the Tariff Board has at its disposal the information that is available from almost every country.
I have sympathy for the Minister for Customs and Excise (Senator Anderson) on some occasions. When we look at some of the Tariff Board reports we find words that are almost unpronounceable. In one report I see a word with twenty-one letters. I know that the Minister is good at pronouncing such words. I also know that sometimes he visits primary schools and gives a prize of $10 to a child who can spell a word that he pronounces. The word With twenty-one letters is ‘dichlorophenoxyacetic’. The reason I am stating this is that there is another word containing thirtyone letters. This is ‘dichlorodiphenyltrichloroethane’. That word is easy to pronounce when one knows how. What I want to point out in mentioning these words is this: Our industries now are far more complex than they were two or three years ago. Today, because of the advance of science, we must deal with great complexities. This is illustrated by the names of the chemicals involved.
I did hear somebody say today that the higher tariffs will make it harder for some primary producers in that they will be required to pay more for their liquid fertilisers. I think that this is very questionable because of the nitrogen content in liquid fertilisers. I have had good reports about the liquid fertilisers that are being used in the country at the present time. One of the fertilisers is known as ‘aqua ammonia’. It has a nitrogen content of 20.5%. Sulphate of ammonia has a nitrogen content of 21%. Urea has a nitrogen con- tent of 46%. Anhydrous ammonia has a nitrogen content of 82%. A bounty is being paid upon some of these fertilisers. The position is not so hopeless as the primary producers would indicate. Some of them have taken the stand that fertilisers are too costly now. But late last year in the Cloncurry district a deposit of phosphate was discovered. When this is opened up, 1 understand that it will last Australia for probably 100 or more years at our present rate of consumption. This is good news because this deposit will not be affected by tariffs at all. It is good to know that we have such a good stand-by for fertiliser.
There is another feature. I believe every word in the report to which I have referred. Many of us are not fully conscious of the world situation today in regard to foodstuffs. There is, as a matter of fact, a shortage of food in the world at this moment. It is not being overcome. The position is not being improved at all. As a matter of fact the prospects are that the situation will get worse. I can remember when Australia had a great carry over of wheat from one year into the next year. It is quite probable that during this year there will be no carry over at all. The United States of America only five or six years ago had such a surplus crop of wheat that it could not find storage space anywhere for it. It is now questionable whether it will have any carry over of wheat at all.
It was only a few weeks ago that we were selling wheat to South American countries. We were selling wheat to European countries. At one time Russia was a wheat exporting country. Now she is a very substantial buyer from Australia. China is in the same position. I am looking at the situation from this aspect at the moment. More may have to be paid by those who use liquid and chemical fertilisers but they will receive more for their products, perhaps. There will be a greater demand for food. If every person in the world at the present time were to be provided with three meals a day for the next two weeks, there would be an acute world shortage of food. That is what we are confronted with at the present time. As we have many acres of land which can be brought into greater production, there is a duty devolving upon Australia at the present time to put those lands into production. If we are going to do that we must do it safely. In other words, we must be able to turn to supplies of liquid fertiliser to make sure that the crop is won.
I want to finish my speaking time by referring to the amendment that was moved by Senator O’Byrne. It is a simple amendment. It would not have the effect of preventing the passage of the Bill. Our amendment provides:
That the following words be added to the motion: ‘but the Senate is of opinion that the Tariff Board needs to develop more effective means of ascertaining what are or may become economic and efficient ventures for which it recommends protection or assistance, and that the Government should take steps to ensure that the companies to which protection is given follow price, production, export and dividend policies which are in the interests of economic and efficient development, as well as of full employment and a stable and rapid rate of investment’.
Earlier, I outlined the statutory provisions that the Tariff Board must follow. It would be a very simple matter indeed to include the proposal covered by the amendment in those provisions without at all assailing the independence and the efficiency of the Tariff Board.
– I propose to direct my remarks mainly to two aspects of this matter. 1 will refer to the present practice and procedure in tariff making which I consider of vital importance to the effective working of the Tariff Board and I will also refer to the chemical industry inquiry. I intend to be somewhat critical of these two aspects but, at the same time, I completely reject the amendment put forward by the Opposition. As *e all know, the Australian Labor Party has boasted always about its policy of protecting Australian industry and the employees in Australian industry. According to Senator Benn, this is part of the policy of the Australian Labor Party. But because tariff matters have become controversial over recent months, the Australian Labor Party has attempted to make political capital of this matter. I have no doubt whatsoever that the Australian Labor Party will continue to remain a party in favour of a high level of protection. Because of the ever increasing cost structure, Government protection policies must receive, I believe, keen scrutiny and a tremendous amount of consideration now and, I am sure, for some years to come. I sincerely hope that consumers, primary industry organisations and others that are concerned with this matter will take a greater interest in it. Tariff making and the machinery used in tariff making is of vital importance to every one of us.
I refer to the recent statement in another place by the Minister for Air (Mr Howson) who is responsible for presenting Tariff Board reports. The Minister said:
The Government considers this report to be unsatisfactory, and it is not accepted. Equally divided reports with divergent views and recommendations are of little or no assistance to the Government in determining the action it should take on matters of this kind in pursuit of the overall objectives of Government policy, lt hopes it will not be faced with similar reports in the future.
Might I say that since this matter has been raised, a great deal of concern has been caused in many quarters, i am sure that many people regard this statement as a threat to the independence of the Tariff Board. Does this statement mean that the Government suggests that majorities and minorities on the Board when dealing with tariff making policy must resolve their differences and get together before placing the recommendations of the Board before the Government? I sincerely hope that it does not mean that. If the Government comes to a decision that is contrary to the majority decision, that is a political decision for which the Government must accept full responsibility. In my opinion, under no circumstances should the Government put the kind of pressure on the Tariff Board which seems to be implied in the statement that I have quoted from the Minister concerned. Those who are dependent upon overseas prices for their products and particularly those engaged in primary industry are grateful that we have men of this calibre on the Board.
I want to comment now on the proposal to build up the membership of the Tariff Board with laymen. At present this is only a proposal and there is no certainty that it will go before Cabinet. However, as I shall probably not have an opportunity to refer to this matter before lt is taken to the Cabinet, I voice my views in opposition to the proposal now. How can laymen, even with the best intentions in the world, make a worthwhile contribution to the discussions of the Tariff Board? They would sit for relatively few days each year with Tariff Board members who are experienced in tariff making. These members are very knowledgeable. How could laymen hope to make a worthwhile contribution in such circumstances? I am of opinion that on most if not all occasions the views of the experienced members of the Tariff Board would prevail and I can see no useful purpose in the proposal.
As I have said in the Senate previously I strongly subscribe to the imposition of reasonable tariffs to assist economic and efficient industry. But when protective duties are under consideration it is of the utmost importance that the Parliament provide the best machinery to enable the Tariff Board to carry out its complex task. 1 hope the Government will not proceed with the proposal to appoint laymen to engage in tariff making as members of the Tariff Board. Surely there is one person in Australia capable of filling the vacancy that exists on the Board. If nobody is willing to accept, appointment because of inadequate salaries or for some other reason the Government should consider ways and means of overcoming the problem.
I turn now to the chemical industry and the proposed new tariffs. Of the 283 items listed, 150 are to have increased protection, the tariff will be unchanged on 56 and there will be a decrease of 77. It is as well to remember that the items which are to be subject to lower duties are mostly of little significance to the Australian economy; in fact, some of those mentioned are not produced in Australia at all. One of the items on which duties are to be increased is polyethylene. The scope of the increases is wide and polyethylene will be subject to one of the highest duties. According to the Commonwealth Statistician, Australian industry used $9m worth of polyethylene in 1963. This obviously is a major item in Australian production and it is becoming more important. The protective duty on high density polyethylene is to be increased from 124% general tariff and 3% preferential tariff to 60% general and 50% preferential. Other forms of polyethylene have been on a set basis of 5.83c per lb but the duty is now quoted on a percentage basis and the rates have been set at 60% general and 50% preferential. These are big increases in anybody’s judgment.
The history of polyethylene shows falling prices both in Australia and abroad. The price of low density polyethylene has been falling in the United States of America since 1956. In June 1964 the United States price was $310 a ton in Australian currency. This means that the Australian support price as recommended by the Tariff Board is pitched at least 75% above the US price. This gives an indication of the increases in some items at least.
The aim of the Government in this context is to build up the chemical industry which naturally absorbs a considerable amount of capital. The volume of production was small when this application was before the Tariff Board and it is still small but the Government hopes to see an increase in output and because of this increase a fall in prices. I am in favour of establishing a chemical industry in Australia but we arc entitled to ask at what cost to the Australian economy this industry is to be established. We are entitled to ask also whether the anticipated lower prices will eventuate. The chemical industry is one of the greatest complexity because it is an industry in which there is a high rate of substitution. An article is put on the market this year and next year there is a substitute for it which probably does a better job.
Because of this and the low volume of throughput, in Australia, overseas companies have a distinct advantage. They have a high consumption of the product and a big throughput. This means that they can employ men of higher skill. It is only natural that the best technical and scientific knowledge can be supplied where there is a high volume of production and more capital. Overseas companies can then improve their products at a comparatively low cost. But in Australia where we have relatively low throughput, naturally we do not have as many skilled technicians and so improvement of our products is slower. These factors, combined with high cost of production, always react to the disadvantage of Australian “industry and the Australian consumer is denied the right to buy from overseas an improved product at a better price. This in itself is a deterrent to improved production.
It is one of the follies of Australian administration that we are endeavouring to become self sufficient in far too many industries. While many overseas chemical firms are reducing their prices and Australian industries are working under a high cost structure, surely these added duties are a risky venture and will prove costly to our export industries. The object of high protection is to give local manufacturers almost the total Australian market but could it not have the effect of enabling overseas industries to get behind the tariff wall with a reasonably assured income from their investment, thus causing a fragmentation of the Australian industry contrary to the policy the Australian Government is trying to follow? I know that the support prices are to be reviewed every twelve months but it seems that this will be only a limited review because of the number of items and the complexities of the industry and because there is to be a general review in 1972. This means that between the present and 1972 the chemical industry will have almost a complete monopoly.
Of course by 1972, if everything goes smoothly, the capital in this industry will probably have been trebled. With our high cost structure, higher wages and possibly shorter hours - I hope not for the sake of the Australian economy - we will find that the Australian industry, even with higher output, will be unable to match import prices. What will happen in this situation? With greatly increased capital and a vastly increased number of employees, the higher duties plus the support values will continue or increase further. With export prices falling and only a small chance of any improvement in them, one must wonder just where this high protection policy will land us.
On a population basis we in Australia have a large number of employees in secondary industries. When the Tariff Board’s report was published, 27.5% of our population was engaged in secondary industries. In the United States at that time, 27.2% of the population was engaged in secondary industries, which was a little less than in Australia’s case. The number of employees engaged in secondary industries in the other countries was falling because of improved technical knowledge and of course automation. We are regarded as one of the great exporting nations of the world. I feel that we are only making a rod for our own back. We are having difficulty in finding markets for our products yet we are not allowing buyers to establish credit in this country so that they might be able to purchase more of our products.
The Government says that it would be impracticable for the Board to advise the Government along lines that it knows are inconsistent with Government objectives and policies. But there seems to be a strong tendency for the Government to write into the reference within fairly narrow limits the kind of decision that it expects from the Board. The Board having heard evidence from the applicants, the consumers and the exporters, and having given thorough consideration to the case before them, surely the members who wish to present a minority report are within their rights in presenting that report. But it is of vital importance that they take into account the general effect that any decision might have on the overall economy of Australia. Senator Sim referred to the dissenting report of Mr Cossar. I would like to read one paragraph from the Tariff Board report which deals with this matter. It states:
Mr Cossar believes that more attention should have been paid to the consequences of rates of protection higher than reasonably necessary. These can operate to encourage unsound and uneconomic forms of development. Fragmentation of production among too many producers is an obvious example, particularly where overseas chemical manufacturers desire to preserve their Australian markets which they have previously supplied by exporting. Duty rates which are held carefully to needs of economic production tend to encourage joint ventures in production In Australia. Higher rates tend to encourage independent action, leading to too many production units and consequently higher costs than would be achieved on a more economic basis. Some other results which are encouraged by high rates of protection are installation of unreasonable excess capacity and undue persistence with outdated production processes.
Mr Cossar went on to give further views as to why he dissented from the majority report of the Board. In recent decisions where there has been a dissenting minority report, the Board members presenting that report have taken into account, as I have said, the effect that the Board’s decision might have on the economy. I hope that they will continue to take this stand and not be subjected to pressure.
I believe that the principle of support values is a very dangerous one to introduce into tariff making. Yet we find that already, as has been pointed out in the second reading speech of the Minister for Customs and Excise (Senator Anderson), the Special Advisory Authority has taken this principle into consideration in connection with a number of commodities. I believe it has been rumoured that the textile industry proposes to make an application, using this principle. The Minister for Trade and Industry (Mr McEwen) in another place said:
Here is the tariff that is necessary, but the dutypaid landed price ought not to be allowed to fall; otherwise investment and employment in this country will be wrecked.
But does the Government really recognise (hat high protection plus the support values will have the effect of driving large quantities of capital and tens of thousands of employees out of industries that would have been supplying the requirements of a prosperous rural industry? In my view, the support value principle goes a long way to giving local industry the ultimate in protection because there would be few, if any, imports and they would have a guaranteed local market.
We might ask ourselves: Are these chemical companies really unprofitable? I would draw the Senate’s attention to table No. 13 in the Tariff Board’s report. We find that in 1961 the total funds employed, including fixed assets at depreciated value, amounted to £79.2m, and in 1964 they had grown to £87m. We find that the loss on the investment in 1961, which was the first year to which I referred, was 1.4%, but it had grown to 6.8% in 1964. Therefore I think it must be agreed-
– The honourable senator referred to a loss of 1.4% in 1961 which had grown to 6.8% in 1964. I think that he would need to correct those figures.
– There was a loss of 1.4% in 1961 but it had grown to a profit of 6.8% in 1964. With the concurrence of honourable senators, I incorporate the table in ‘Hansard’.
I have not time to deal with this matter fully, but if we look at the ‘Australian’ of 17th March 1967 we find in the finance column the heading ‘New tariff policy boon to ICIANZ’ - that is Imperial Chemical Industries of Australia and New Zealand Ltd. That indicates to us that because of the Australian tariff policy these chemical firms are doing considerably better than they claim. The article states, in part:
Ian Potter and Co say that at present levels of around $1.90, the shares represent a safe investment in a high growth area.
As I have said, this indicates that these chemical industries are doing reasonably well, although they have not had this increased protection for verylong.
Before I conclude I would like to say something about a matter to which attention should be given. I refer to the revision of tariffs. In my opinion, the Board does not review existing tariffs frequently enough. I know that it is hard pressed for personnel and time. However, section 17 of the Tariff Board Act gives the Board power to review its decisions. It seems to lack the will to do this. The members of the Board do not seem very anxious to review these tariff protection policies and, as I have said, there is a lack of staff. I refer to the report of the Committee of Economic Enquiry, particularly to paragraphs 14.89 and 14.90, which read: 14.89 The more general type of review visualised in sections15 (2) and 17 of the Tariff Board
Act has been missing from Australian Tariff history. Apart from the report of the Brigden Committee and general comment in some Tariff Board annual reports, there has been little in the way of general review of the Tariff ‘ from any quarter. More should be done. It seems to us that the Board should be equipped to prepare at intervals special reports on both general and particular aspects of the Tariff. It might, for example, analyse the general competitive position of secondary industry and such matters as economies of scale and external economies to which we have referred. Reports on particular topics such as the effect of tariffs on raw-material costs would also be valuable.
Paragraph 14.90 states:
Reviews of the kind suggested cannot readily be carried out if Board members and staff are continuously involved in day-to-day hearings and reporting on particular references. Yet, the necessity that the Board analyse its experience in more general terms, divorced from current references, is vital. We suggest, therefore, that it be given an expanded research staff, which might be supplemented by commissioned work from ‘outsiders’ qualified to review Board material. At more general industry inquiries, the Board might consider inviting evidence from persons with research experience related to the industry, or specially commission research on problems which it considers important for formulating and evolving tariff-making principles.
I think those comments should be considered very seriously because many industries are at present receiving tariff protection that is outmoded and has not been reviewed by the Tariff Board for many years. In this legislation provision is made for a large increase to existing tariff protection bolstered by a guarantee of profit to the chemical industry through the price support provision. In my opinion the measure should be viewed with considerable alarm by both consumers and all exporting countries.
– At the outset I want to state that I support the amendment moved by Senator O’Byrne because it is in line with the policy of the Australian Labor Party in respect of tariffs as set out on page 8 of the Party’s policy. It states:
Effective tariff protection of Australian industries and import embargoes in favour of Australian industries capable of supplying the home market - in each case subject to control of prices, to protection of Australian working conditions and to due efficiency in production.
I think that is briefly what is stated in the amendment moved by Senator O’Byrne, which refers to economic and efficient ventures. It states that protection should be given following price, production, export and dividend policies which are in the interests of economic and efficient development, as well as of full employment and a stable and rapid Tate of investment. I support that policy because I believe the most important factor in the community today is the protection of the employment security and conditions of Australian workers. I do not wish honourable senators to infer from anything that I may say in this debate that I am departing from that belief. I intend to be critical of the tariff policy that has been adopted by the Commonwealth Government since the abandonment of import restrictions in 1961. We believe that the Government’s policy prior to 1961 was somewhat in line with the policy of the Australian Labor Party, but there has been quite a large drift away from that policy since the abandonment of import restrictions.
We believe that the policy of the Government is directed in the first instance towards the protection of profits. Because the time allowed to me is so short I shall give only one illustration to support that view, but it is not the only illustration that can be found to show that tariff protection has increased the profits of” industry. On page 8 of the ‘Financial Review’ of Friday, 17th February last, this heading appeared:
Tariff helps Nylex improve profit rate.
The report underneath the heading stated:
Nylex Corporation Ltd lifted its rate of profit growth in the second half of the year ended December 31. This would have been at least partly a result of the emergency tariff protection on vinylcoated fabric film and sheeting which suffered as a result of severe Japanese price competition in the first half of the year. Nylex (formerly Moulded Products) yesterday reported group net profit rose from $1,001,330 to $1,190,578.
The article continued:
The latest profit equals an earning rate of 12.8 per cent on capital before the ICIANZ shares were issued. This compared with 12.2 per cent on average capital for 1965 and 10.5 per cent on actual capital at December 31 1965. The latest result is after tax provision up from $606,018 to $749,149. Depreciation and lease rentals rise from $1,043,190 to $1,106,903.
I ask honourable senators to note that the tariff was imposed as an emergency measure by the Special Advisory Authority. It seems that these days the role of the Special Advisory Authority is to apply tariff protection in all cases. It cannot be denied that the Special Advisory Authority has been a godfather to industry. I cannot think of a report of the Special Advisory Authority that has not at least maintained the existing tariff or has increased it. In the large majority of cases the Authority has increased tariffs as a result of inquiries. I think I. should be fair and say that when a reference is made to the Special Advisory Authority it must report to the Government within thirty days. Therefore it does not have the time to go through all the complex operations of examining an industry to determine whether it warrants tariff protection. This policy of emergency tariff protection was envisaged as quite a good thing. In my opinion it has developed into a policy of protection of profits.
It is not to be. believed that because the Special Advisory Authority receives a reference on which it must report to the Government within thirty days, the tariffs that are applied by it are of short term duration. Other speakers in this debate have referred to the length of time taken to get a reference to the Tariff Board and to the length of time taken by the Board to conduct inquiries into complicated industries. It is conceivable that tariff protection given by the Special Advisory Authority may operate for two or three years. It is clear that a little more study is required of tariff matters. lt is also noticeable from a study of the terms of references to the Special Advisory Authority that on many occasions they are weighted in favour of the policy that the Government wishes to pursue. I do not quarrel with this, provided that the Government comes out in the open and says that the Tariff Board and the Special Advisory Authority are not acting independently but are acting in accordance with Government policy. For the Government must accept responsibility for anything that happens as a consequence of references to the Authority or the Board. The Special Advisory Authority procedure, of course, has been very helpful in this country, where manufacturing and secondary industries are developing very quickly. This procedure has prevented them from being swamped by imports from overseas and protected them from the dumping of goods made overseas; it. has saved small concerns from being squeezed out by larger ones and has shielded small enterprises from the intense competition by larger ones.
The terms of reference for the Special Advisory Authority and for the Tariff Board in respect of an inquiry into the same industry often differ. One can understand the difference, because of the time lag that occurs and because the Special Advisory Authority procedure represents only an emergency operation. The terms of reference for the Authority are reflected to some degree in the report eventually presented by the Board. This must be so, because if, following reference to the Special Advisory Authority, tariff protection is granted and it operates for two or three years while the industry concerned is allowed to develop under that protection and it is then looked at by the Tariff Board, the Board is somewhat inhibited by the fact that the industry has grown up under this protection. The Board must then consider whether, in the interests of the community, the employees and the industry as a whole, it should do away with that tariff protection and whether it would be better for the country to be without the industry rather than allow it to have tariff protection. So the decisions of the Special Advisory Authority, quickly as they are taken, in complex industries are reflected in the freedom of the Board to function within the terms of reference submitted to it.
This is part of the story, though it has not been adverted to on many occasions, and this explains why there has been so much criticism of the relations between the Board and the Government over the past two or three years. I propose to discuss some of these criticisms. First, I want to mention the resignation of Sir Leslie Melville as Chairman of the Tariff Board in 1962. He is a highly competent man. As an economist, he had been concerned with tariffs for some time. I am not prepared to say why he resigned from the Board, but the fact is that he did so. The ‘Australian Financial Review’ in its issue of 20th January of this year, published a report of observations concerning tariffs that he made when delivering what is known as the Giblin Lecture. I quote these observations in the context of what may be termed the natural markets for Australia, which exist in that part of the world to which our attention is constantly being directed and which our Prime Minister (MiHarold Holt) has just visited - South East
Asia and Asia generally. Sir Leslie Melville stated:
Some of our tariffs against Asian imports have now become so high that it is possible to say that they are reducing rather than increasing our standards of living.
With a policy of full employment they are not needed either to provide or maintain employment.
In these circumstances our tariff policy towards Asian countries is not only unhelpful to underdeveloped countries, which are trying to build up their external trade, but from our own point of view the policy is self defeating and is both imprudent and damaging to our standards of living.
Sir Leslie went on to discuss the need to protect infant industries or industries subject to economies of scale. He said:
There are still some infant industries that need protection, but very few of the new tariffs granted today are for that purpose.
Many of them are for manufactures of existing firms of great experience, often with close connections with multi-national overseas companies.
The arguments for protecting infant industries could scarcely be applied to them.
This is trenchant criticism by Sir Leslie Melville, who is well qualified by ability and experience to express these views. But the matter does not finish there. He went on to deal with a second proposition, which was stated in these terms:
Protection and development of manufacturing industry is necessary for the growth of Australia and the success of its immigration policy.
Sir Leslie said:
If this argument were limited to the policies proposed by the 1929 Tariff Committee or the general cost disability of the Vernon Committee, there would be no need to contest it.
But the argument is often used, even in official circles, to imply that more protection and a higher general level of tariffs will give a better and faster rate of growth.
There is no support for this to be found in either of the reports quoted and it is certainly false.
Higher protection may not even result in a larger manufacturing industry.
This report of Sir Leslie Melville’s lecture concluded:
But eventually some manufacturers may come to realise that excessive protection is not in their own interest, either because it raises their costs to such an extent that it is difficult for them to compete in export markets, or because through holding back increases in standards of living in Australia, it reduces the domestic demand for their output
. Sooner or later Australian manufacturers must learn that they too will prosper only in a thriving community where costs of production have not been raised so high as to inhibit expansion, and where local savings are available for promising new low cost industries.
I believe that those are very wise words. We are having gradually imposed on us a tariff structure that is not in the best interests of Australian workmen or the Australian community as a whole. These trenchant criticisms must surely be disturbing to the Government. But since that criticism was made the Government has twice rejected reports of the Board. It has also twice overruled the views of the Chairman of the Board.
The Government has also been critical of the Board for not bringing down unanimous reports. It has stated that divergent views in reports are of little assistance. Where do we go to? Is it a fact that the Government wants a tame cat Tariff Board, which will act without regard to principles? Let us remember that when the Minister for Trade and Industry (Mr McEwen) spoke in the House of Representatives on this measure he went to the trouble of stating the principles upon which the Tariff Board was to operate. Yet when we go through these we find that it is in fact a tame cat Board that the Government wants. It is not good enough for the Minister to cite principles of operation of what is supposed to be an independent Board and then say to that Board: ‘But you must be all of one voice. You must become zombies. There must be no independent thought. You must not draw different conclusions from the evidence that is placed before you.’ Much of the evidence that is placed before the Board, of course, is confidential. It is rather enlightening to have a look at the report on the oil industry and to note the amount of confidential evidence. On practically every page that one looks at one sees a note that confidential evidence has been given.
– Are the hearings not in open court?
– No. Industries must protect their industrial secrets. No-one quarrels with this very much. But to what extent is confidential evidence being adduced? To what extent is the evidence confidential? There are probably many things that are claimed to be confidential that should be given at open hearings. Nevertheless the Government has now rejected three reports of the Board, although it has not access to the confidential evidence that is given to the Board. This is supposed to be an independent Board, set up to give fair decisions on the evidence that is placed before it. On its own judgment, having heard the confidential evidence and the open evidence, and having cross examined the witnesses who have given the evidence on oath, it makes recommendations to the Government and the Government rejects them. The Government may have very good reasons for doing this but it should not lead the people to believe that there is an independent Tariff Board when it says that members of the Board should not have divergent views. This is like saying that the Conciliation and Arbitration Commission when fixing the wages of workers must make a unanimous decision and that otherwise the decision is not acceptable. This is in fact what is happening in respect of the Tariff Board.
I want to read the remarks of a man who is alleged to be an authority on tariff proposals, Mr S. W. Cramb,- a tariff consultant and advocate. He is the director of the Australia-Japan Trade Council and has operated in the tariff field for the whole of his business life and for quite a number of years he has been almost constantly active as a tariff consultant and also as an advocate at tariff inquiries. The publication from which I wish to read is the Economic Partner’ of November 1966. At the outset Mr Cramb states:
The Australian tariff system is equal, if not superior, to any other system in the world, provided basic principles are properly observed. In an economy such as ours in Australia, where a comparatively young country is endeavouring to develop and expand, protection of manufacturing industries is a fundamental necessity, provided the protection is soundly based.
I submit that since the abandonment of import licensing the policy of tariff fixation in Australia has become one of the most important administrative functions of government and 1 further submit that it is not being properly used at the present time, at least not within the principles stated by the Minister for Trade and Industry. This report, of course, deals with trade between Australia and Japan and the principles stated by Mr McEwen are published on the last two pages of it. On page 5 under the heading ‘Recommendations by the Adminis tration Department to the Appropriate Minister’, Mr Cramb has this to say:
As the Tariff Board is a tribunal which should be completely free from Government direction or influence, the terms of reference must be ‘open’ and not ‘loaded’ in any way, to enable the Board to hold an inquiry as a truly independent tribunal. There has been criticism, through the Press, of qualified terms of reference, which do not provide the Board with a completely free hand. If there is to be any direction by the Minister to the Board, it should be related to the importance of the Board’s investigations talcing into full account the important elements of tariff making, such as the desirability of protection from the economic point of view, having due regard to all affected industries, also the effects on the consumer and the possible repercussions on our trade with other countries.
These are very sound principles, but I submit they are not being applied at the present time.
There are numerous reports in financial publications about the Government’s actions, but the Government sails merrily on. Perhaps this is all part of Mr McEwen’s party’s policy of moving into metropolitan areas. Perhaps Mr McEwen wants to foster the growth of secondary industries in order that the Country Party may further its policy of moving into what might be termed fringe city areas, because of the gradual decrease of populations in the country areas and the concentration of populations in the metropolitan areas. Whenever this Parliament is not sitting, of course, Mr McEwen seems to roar like a lion about overseas investment. Although he has been in the Cabinet for a great number of years now, no effective action has been taken in respect of overseas investment and when we look at some of the industries we find there is a further policy not only of protecting profits but also of protecting overseas investment. Secondary industry overall is foreign controlled or equity controlled 25% to 30%. Tariff policy has been applied to the motor vehicle manufacturing industry which is 95% overseas owned or controlled. The bauxite and aluminium industry is 75% overseas owned and controlled. The chemical industry is 60% overseas owned or controlled and the motor vehicle parts industry is 55% overseas owned or controlled. I cite only those few examples to give an idea of the extent to which tariff policy is being used to protect overseas investment.
– But the employment is wholly Australian and the benefit of the tariff accrues merely to the employees.
– It certainly provides employment - no one quarrels with that - but it also protects the huge profits which are being made within these industries. In this chamber about twelve or eighteen months ago I had the opportunity to move for the disallowance of regulations applying tariffs to synthetic ropes used in the fishing industry. Two tariff proposals were involved. The first was to apply an increased tariff and the second was to apply an import restriction. Consequently, even if the industry with the benefit of the tariff was unable to make a profit, the users of the material produced were forced to buy the product irrespective of its quality. Within weeks of that report being approved by the Parliament one of the rope manufacturers published an annual balance sheet showing greatly increased profits.
Although we on this side of the chamber support protection, our policy provides that we protect (he employment conditions and the security of employment of people in the industry. We expect also that they should bc able to buy the goods which have been produced. We do not expect them to be priced out of the market by excessive tariff protection. We say quite frankly that if an industry comes before the Tariff Board or even before the Special Advisory Authority and asks for tariff protection, it should give an undertaking to the Board or to the Authority that, having received tariff protection to assist the industry, it will not increase the prices of commodities beyond the normal range of increases which are brought about by extraneous matters. But is this ever done? This is what the Australian Labor Party policy means when it refers to control of prices - that industries which ask for protection should not bc given protection in order to exploit the community. Of course the Country Party supports the policy of tariff protection through its leader, the Minister for Trade and Industry, and its policy does not provide for tariff protection. The policy of that Party provides for a system of bounties and by-law entry in order to, it says, minimise the effect of tariffs on the Australian consumer and manufacturing industries. Yet at all times the Leader of the Country Party supports the imposition of tariffs and, as I have tried to illustrate, supports tariffs which will provide for more profits and the protection of overseas industries.
One other quotation which I think is very important and on which I shall close my remarks is from a book ‘The Organisation of British Central Government 1914-1956’ by Chester and Wilson. This is something of which the Government should take very much notice:
There is no simple or single formula by whose application all the problems of administrative arrangement can bc solved. The structure of central government and the distribution of functions among departments is the result in any one case of the inter-play of several of a number of possible factors, all of which must be taken into account by anyone who attempts to find the best solution to any problem of administrative structure.
Sitting suspended front 5.45 to 8 p.m.
– Before the sitting was suspended I was making what I think is a very apt quotation in this context. I remind the Senate that I was reading from the book ‘The Organisation of British Central Government 1914-1956’ by Chester and Wilson and, to put the quotation in proper perspective 1 shall repeat it:
There is no simple or single formula by whose application all the problems of administrative arrangement can be solved. The structure of central government and the distribution of functions among departments is the result in any one case of the inter-play of several of a number of possible factors, all of which must be taken into account by anyone who attempts to find the best solution to any problem of administrative structure. At the same time it would be equally wrong to swing to the other extreme and to assume that there are no rules or guides to action.
It is my submission that the Government has swung, if not completely, at least partly to the other extreme in respect of the Tariff Board. Despite the fact that the guide lines for the Tariff Board have been cited by the responsible Minister - the Minister for Trade and Industry in another place - it is clear by inference and by other ways that the guide lines are being departed from.
I do not propose to go any further other than to say that the overriding factor in all of this must be the protection of the worker, the protection of the consumer and the protection of the community as a whole in economic and efficient industries.
– In speaking to the Customs Tariff Bill which, as a major item, gives effect to the resort of the Tariff Board on the chemical industry, it is my submission that the Tariff Board, by the maintenance of its independence and competence, ls the keystone of the operation of the tariff in this country. The continued independence of the Board depends upon, firstly, a proper understanding by the Government of the Board’s functions so that the Board is not subordinated to Government direction and, secondly, upon the appointment to the Board of men of no pledged viewpoint. In this respect undue recruitment from government departments may serve to give an unbalanced opinion on the Board. It is to be noted that of the last three appointments to the Board two have come from the Department of Trade and Industry and one has come from the Department of Customs and Excise. It is also important that temporary appointments should not be made. There can be no independence in this Board if there is no security of tenure.
I submit further that it is very wrong to rebuke the Board simply because, in advising this Parliament, it gives expression to a division of opinion. It will have been noticed that in the last annual report not less than three members dissented from the majority of four on very vital and fundamental matters. In the major report to which this Bill gives effect - the report on the chemical industry - two of the Board of three were in agreement and the other dissented from a particular new concept, namely, the determined price support value. It is not humourous for me to insist that the right to dissent is essential in any free country, whether in a board advising the Parliament or in the Parliament itself. The only monolithic structure in our society where dissent is abjured is the Cabinet. It is right that elsewhere the idea of scotching dissent should be anathema.
No Minister in the centre of the welter of conflicting interests, such as Australian commerce gives rise to today, has done more to preserve the integrity and confidence of the Tariff Board than has the present Minister for Trade and Industry, Mr John McEwen. I believe that everyone will pay tribute to the contribution he has made towards the maintenance of that integrity and to the ability that he has shown in the administration of his expanding functions in the” f]e0 of trade, including the maintenance of the tariff through the work of the
Tariff Board. I remind the Senate that in another place the Minister said that since July 1958 the Tariff Board had submitted 361 reports to the Government. Of that number the Government accepted 330; departed in some respects from the recommendations contained in 19; referred back 5 for further consideration and completely rejected only 7. These figures indicate that the Government, in its relationship with the Board, has shown respect for the Board’s independence despite the fact that it has not accepted every recommendation submitted by the Board. However the Government is not expected to be a rubber stamp any more than anyone else is. The fact that it rejected only 7 of 361 recommendations indicates the value the Government puts upon the Board’s submissions.
As a proper tariff making policy has grown and built a tariff wall of great dimension around the commerce of this country, and as the performance of the Tariff Board in this respect seems for the moment to have captivated the Country Party and to have evoked some criticism from the Labor Party, I think it is good that the Senate, in this conflict of hereditary roles, has shown in this debate an alertness - I refer particularly to the speeches made by Senator Sim and Senator Bull - to the trends which are evident in the operations of the Tariff Board. These expressions of disquiet follow and show some understanding of, firstly, what was stated by the Vernon Committee and, secondly, what was contained in the lecture delivered by Sir Leslie Melville to the Australia and New Zealand Association for the Advancement of Science in January 1967, to which reference was made this afternoon. I quote only one sentence which arrests attention. He said:
Whatever help is provided-
He meant by tariff - is a cost to be set against the gains of expansion and if these costs become too high they will impede our growth and lower out standards of living.
The disquiet of the honourable senators I have mentioned follows upon disquiet in the Tariff Board itself, as indicated in its last annual report. Three of its members submitted a long dissenting opinion on some matters. In the course of that opinion they said:
As secondary industry has extended . . . we have seen growing and disturbing evidence of tariff costs in certain industries adding to the costs and protective needs of others with detrimental effects on their development. 1 submit that the acuteness of the basis of that criticism becomes particularly clear when we seek to apply those general principles to our understanding of the Tariff Board report on the chemical industry, to which this Bill seeks to give legislative expression. I submit that the effect of that report and of this Bill was expressed very well in the phrase used by my colleague Senator Sim this afternoon, when he said that by advancing this new concept of support value as an adjunct to the. normal tariff we were introducing and maintaining ultra-protectionism.
Whilst I recognise that 1 have no real understanding of tariffs or experience in trade that gives me any special understanding of these matters, I have risen to speak in this debate because the report on the chemical industry introduces a new concept which is recommended to the Parliament for the first time and is a very novel idea. 1 refer to the support duty. The Board recommended by a majority of two to one that in the chemical industry the tariff on the majority of items be increased under the mode of normal tariff fixation, but that a rigid protective device be superimposed on that. What is that device? It is the oddest and most rudimentary device of price fixing - not in the sense which in 1946 was rejected decisively by the Australian electorate as a function of this Parliament and which is designed for the protection of the consumers by fixing retail prices, but in the sense of fixing prices of imports for the protection of the manufacturers of chemicals in this country.
We lake the ordinary duty and add it to imported cost. If that figure does not come near enough to the retail prices that are commonly realisable by our manufacturers on the Australian market, we add 90% of the difference to ensure a rigid level of prices of imports against which our local manufacturing industry must compete. I ask myself how in simple terms we approach the operation of this device. I will put before the Senate my understanding of it for criticism and to generate further debate. As I understand it, we take the f.o.b. price of the product in the port of origin; add the normal cost of transit and the normal cost of insurance; and then add to that the nor mal duty - that is to say, the ordinary percentage duty.
– That is c.i.f. & e.
– No, not c.i.f. & e. 1 ask honourable senators to bear with me. That means the normal cost of the product in the port of origin, plus the normal freight and the normal insurance, plus - I emphasise this - the normal duty. There is the great difference between c.i.f. & e. and this figure. Having arrived at that figure which is determined by the Tariff Board as the support value, if it falls short of the ordinary realisable prices that Australian manufacturers can gain in selling their products in Australia, the gap is called the support value differential’. Under this Bill 90% of the support value differential is added to the f.o.b. cost at the port of origin, the freight, the insurance and the normal duty in order to ensure that the sum of those costs will leave the manufacturer, in his selling operation, at no greater disadvantage as compared with the importer than 10%.
The mere statement of that system shows that it is a rigid, arbitrary one under which duties are related to costs in this country. That element is added into the protection that manufacturers in this industry are to enjoy. With the concurrence of honourable senators, 1 incorporate in Hansard three illustrations of the operation of this device.
From the copies that I have available for distribution, honourable senators will see that the first illustration shows that this device increases the duty from the normal figure of 40% to 53.9%; the second shows that this device increases the duty from the normal figure of 40% to 110.7%; and the third shows that this device increases the duty, when the product is imported in under 40 metric ton lots, from the normal figure of 25% to 64.1% and, when the product is imported in lots exceeding 40 metric tons, from the normal figure of 25% to 79.2%. In the last illustration, the immediate shock that one gets is to find that it becomes no longer any real advantage in trade to consider importing smaller quantities as against larger quantities. Therefore, this country is put to the expense of maintaining stocks here in quantities larger than are required for immediate use whereas without this requirement an advantage would be obtained by importing in lots of less than 40 metric tons.
In the understanding that I have been able to bring to this device reading the considerations that led to its recommendation, I am told that it is planned to counteract dumping and disruptive low price cutting. In the report by the Tariff Board on industrial chemicals and synthetic resins, the majority of members list a whole number of disruptive low price practices that could give one an unreal cost of imported products landed here. Time suggests to me that it is not wise to develop this point, but we may have a word or two on it during discussion of this Bill in committee.
Having recognised that these disruptive low price fixing arrangements do operate in trade to evade the tariff, I want now to ask the Senate to consider the dangers that I submit are very real in the adoption of this particular device. I suggest that in the first place it is in form an absolute protection to local industry. True it is there is a small margin of 10%, maybe, in favour of the import against the local manufacturer. But it is a very absolute and rigid form of protection. Secondly, I suggest that the incentive for improvement by local manufacturers in their costs and in the efficiency of their manufacture is diminished. There is no real pressure any longer for the local manufacturer to keep his costs down or to improve the quality of his products to attract greater sales. Thirdly, I suggest that it places a channel of insulation around the industry which practically isolates it from world competition.
As we know, the efficiency of the chemical industry depends upon large plants, huge sales and a great sustained throughput. Fourthly, I suggest that the local consumer is denied the benefits of technical advances which would come from research that overseas manufacturers are able to develop in much greater depth than we are. Of course with research and improvements in these fields overseas, one is likely to get price advantages. But we are prevented from taking the benefit of them because a duty on the basis of a support value differential closes up the gap - all except the last 10% - between the normal import cost landed in Australia and the cost of the Australian manufacture. Finally, the danger is that the chemicals that are being highly protected by the introduction of support values, when they are raw materials, will carry that cost element into other products so as to damage their prospects and, as was said in the dissenting report of the Tariff Board in its annual report, ‘adding to the costs and protective needs of others with detrimental effect upon the development of other industries.’ Tonight I content myself with calling attention to those dangers.
One of the factors put forward to persuade our acceptance of this viewpoint - it was referred to in the speech by the Minister - is that this idea will be reviewed. In saying that, the Minister is telling us what, in effect, is stated in the report by the Tariff Board on this industry at page 33 where the Board says:
Therefore, the following recommendations are made:
that the need for continuation of special duties to protect certain chemicals against disruptive low pricing and the level of such duties should be reviewed annually.
The Board continues by referring to a review in 1969 and adds:
But to my dismay, after reading the second reading speech and the recommendation of the Board, I looked in vain in this Bill to find any provision limiting the operation of this support duty to that particular period. The operation that will be given by the Bill in this form to this new device is indefinite. As Senator Bull most forcefully presented to the Senate this afternoon, an uneconomic industry employing a thousand personnel, after three years use of this device will employ 1,500 personnel and the vested resistance against any alteration of this ultra-protection will then be aggravated.
Mr President, lest it be considered that one is over-presumptious in offering these views, I take comfort from the fact that they were given expression in the dissenting report of Mr Cossar in the report by the Tariff Board on the chemical industry. He said that the high rates recommended by the reports can operate to encourage unsound and uneconomic forms of investment. He then said that he particularly disagreed with his colleagues concerning the recommendations of support values. Therefore 1 would submit that in regard to the acceptance of this new device, said to be designed to counteract disruptive low pricing practices with regard to chemical imports, we should be very chary because it contains explosive potential that may react to the great detriment of other industries. As Senator Sim mentioned this afternoon in words that particularly appeal to me this applies to the fresh fruit industry that has to use in large measure chemicals for sprays.
Also he mentioned the wheat industry which is of great importance to his State of Western Australia. That is to mention but two industries. We must see to it that this does not operate unduly to the disadvantage of industries like these. By the absorption of this artificial cost based upon this new idea of support value, we must protect the other industries that will have occasion to use these chemicals as their raw materials. I am not merely giving expression to my own immature ideas on economics: I believe I have faithfully represented the true viewpoint of the three dissentients on the Tariff Board, including one who dissented from the majority report on the chemical industry and another of no less stature in economics than Sir Leslie Melville. 1 believe I have expressed their views when I say that this proposal might well inject into the cost of chemicals sufficient weight to retard the development of other industries that we wish to see developed. It will be understood, I think, that I give a somewhat reluctant acquiescence to the passage of the Bill.
– I have risen because I heard my friend Senator Wright mention the word chemicals and immediately became interested. Of course, I have been concerned for a number of years about protection policy, not only under this Government but also under past governments. I still wonder where this policy is taking us. I believe that certainly we should have protection but I should like to know just how far protection ought to go.
In recent years and even in recent months footwear has been imported into Australia from Asia. Some have said it has been coming from China. I know that we are sending steel, wheat and wool to China although according to the Government steel and wool are not strategic materials and are not used in war. But one wonders where the importation of footwear from China will land the footwear industry of Australia. If I remember correctly the Tariff Board recommended an extra tariff on shoes and other footwear imported from China. These higher duties at least place Australian footwear manufacturers on an economic level with the Chinese manufacturers but when the importer cannot make the enormous profits he made before the duty was imposed, there is a fall in imports. Of course, the duty remains the same and in some cases, but not in all, the people pay higher prices. In the circumstances one wonders whether the Tariff Board is exercising the prerogative intended for it when the great election of 1910 was fought on the issue of protection and Andrew Fisher was returned as Prime Minister.
As Australia grows and has more imports and, thank goodness, more exports, I wonder whether the tariff is playing the part it should be playing for the benefit of the mass of the people. Or is it benefiting only those who are manufacturers for the time being or, worse still, the middle man who passes the goods on to the consuming public? In this age when we are supposed to be more educated than we were years ago I wonder whether the tariff as we apply it in Australia is carrying out its proper functions. The tariff should hot suit only one section of the people. It should be of value to all the people.
Although I believe in protection for Australian industries I think that in a country where there is an imbalance one has to consider whether the tariff is playing the part it should, not for the few but for the mass of the people. I speak of imbalance because in Australia one section of the people has to go to arbitration to get its wages measured out while the manufacturer can charge what the market will pay him. For these reasons I support the amendment, apart altogether from the fact that it was moved by my colleague Senator O’Byrne. The amendment reads in part: . . but the Senate is of opinion . . . that the Government should take steps to ensure that the companies to which protection is given follow price, production, export and dividend policies which are in the interests of economic and efficient development, as well as of full employment and a stable and rapid rate of investment.
I regret that my esteemed colleague did not include a reference to the prices structure in the amendment. I rose because of some statements made by Senator Wright who always interests me although 99 times out of 100 I violently disagree with him. His speeches are always worth hearing and I say that with sincerity. He mentioned something in which I am interested. I am interested in tariffs at times, not for myself because I have no interest in any manufacturing enterprises, but because I am interested in a lake which provides enjoy ment for many people. We have to use chemicals in that lake to get rid of the weeds. Honourable senators should not laugh because the same trouble has arisen with Lake Burley Griffin and unfortunately it will get worse. I say that because I have had some experience. I do not speak from any scientific knowledge but from practical experience.
We had tests to determine the best chemical to use to get rid of weeds from the Albert Park lake. A committee was formed which included Professor J. S. Turner, Professor of Botany and Plant Physiology at the University of Melbourne, Dr Milner and representatives of the Shell Oil Co., Imperial Chemical Industries, Commonwealth Scientific and Industrial Research Organisation and the State Rivers and Water Supply Commission of Victoria. We conducted a number of exhaustive tests on Canadian water weed .and other weeds that infest not only Albert Park lake but many others and numerous channels. Therefore these weeds are of interest to members of the Australian Country Party. We found that Aqualin was by far the most potent chemical with which to get rid of weeds. What is more, for those who have to think from the money point of view, if I remember correctly, it was one third of the price of another chemical which was manufactured in the United Kingdom. At the time when we first used this chemical, which was manufactured in the United States of America, I went along, as I always do, to the Minister of the day, made representations to him and I got the chemical in duty free. We must remember that this chemical has to be used every year. Unfortunately, the chemical has not been found that will be effective for two or three years. When we used the chemical the next year we found that we were to be charged, per medium of the importer, ‘ 7i% duty. Of course, I got to work. I might say that as a rule I meet with a fair bit of success. But on this occasion the Government said: Oh, no, you cannot import it duty free.’
Today I received a letter stating that two chemicals of which we have no knowledge have been used on the weeds. I should think that the State Rivers and Water Supply Commission which has been trying to get weeds out of the Victorian irrigation channels for years would have known something about the chemicals. These remarks are not intended to be derogatory to the head of the Department of Customs and Excise. I hope that he does not take them in that way. But I believe that those who are supposed to be experts in this field would know more about these chemicals than somebody here in Canberra who says that we should use this or that that is manufactured in Great Britain. I know that this matter does not affect the Government as far as Lake Burley Griffin is concerned because all that the Government does is to take the money out of one pocket and put it into another. At the first opportunity the Government let Reg Ansett off by not imposing $2m duty on imported aircraft. Of course, he does not take the money out of one pocket and put it in another. It is $2m in hard cash to him. For TransAustralia Airlines it would have been a cross entry. Different treatment is meted out by the Government to different people. The British aircraft is supposed to be as good as the American aircraft. Great Britain put up a fight but lost it. That is over. I am concerned about the 7i% duty that the committee, which I have the honour to lead, has to pay on chemicals. We have to raise our own money. It is not a matter of making a book entry. We do not take the money from one pocket and put it into another.
Who uses the chemicals to which I have referred? The New South Wales Water Conservation and Irrigation Commission uses it and the Victorian State Rivers and Water Supply Commission uses it. The Department of the Interior uses the chemical because it has to control weeds in Lake Burley Griffin. The committee in which I am interested also uses it. Why should the British preferential tariff be imposed on that chemical when other things are exempted? I am not here to say that one chemical is better than the other. I am concerned about the chemical in which I am interested. I think it is outrageous to impose a duty on this chemical. If you impose the British preferential tariff on any article at all, at least the British article ought to be as good. The two articles should also be comparable as to price. This is not so in this instance. Therefore, having heard Senator Wright refer to chemicals, I said: ‘Here is an opportunity for me to speak my piece.’ That is what I have done. 1 repeat that I am a very staunch protectionist, as far as this nation is concerned. But I realise that as we apply the protectionist policy it is too one sided. It is true that by the imposition of tariffs the Government is able to provide jobs, but it has no control over prices. Therefore, irrespective of whether the article that is being protected ceases to come into the country, the wheels of the machine grind so slowly that as a rule it is many months, and in some cases years, before anything happens. Whilst I praise and commend the Government for establishing a select committee on containerisation, I think that in the future it would not be a bad idea to establish another committee to look into the whole question of the tariff and how it is worked.
– How it works or how it is worked?
– 1 shall leave that to my very able friend. He would be able to answer it much better than I can. But I think it would not be a bad idea to establish such a committee. I do not think that in the long run people are getting a great advantage from tariff protection. But I could imagine what would happen in this country today if goods poured in from Japan and China where living standards and costs are low. Mechanisation is a great factor in Japan.
– There is also cheaper labour.
– I admit that. Let us hope that the living conditions in those countries increase so that they will be on a par with other countries. I believe that the tariff is a very one sided arrangement. I hope that the Minister for Customs and Excise (Senator Anderson) will not mind my speaking as I have done. I think that the committee in which I am interested has received a very raw deal. I do not think that the Government should impose this 74% British preferential tariff on the chemical which we and others use, unless it can prove conclusively to those who use the chemical that there is a British chemical that will do exactly the same work for the same price or at least close to the same price. The Government cannot do that, as far as I can see. Of course, if the Government wants to go its weary way and band out a couple of million dollars here and there, well, it is in the position in which it can do it. lt has been there for a long time and as much as I hate to think it, possibly it will bc there a little longer. But the fact is that the imposition of the 74% tariff on this chemical is not giving us a fair go. It is wrong. The Government has no principle with which to support the imposition of the tariff. I conclude by saying that the only thing I regret about the deal to which I have referred is that I shall not benefit to the extent of S2m.
– in reply - The Customs Tariff Bill now before the Senate provides for amendments to the Customs Tariff that have been introduced over a certain period of time. The debate has ranged very widely. I do not cavil at that at all. I regret only that in the short space of time allotted to me to reply 1 will not be able to give Senator Kennelly a dissertation on Australia’s responsibility in relation to the British Board of Trade and the United Kingdom-Australia Trade Agreement. Senator Kennelly is interjecting. I ask him to wait a while. He has made his speech and I would like to make mine. I wish I had time to explain to him the problems associated with obtaining a waiver from the British Board of Trade on a particular item.
The ACTING DEPUTY PRESIDENT (Senator Wedgwood) - Order! Senator Kennelly, the Minister will be heard in silence.
-I will go back to where J started and say that the matter raised by Senator Kennelly is related to Australia’s commitments under the United Kingdom- Australia Trade Agreement. A waiver has to be obtained by the British Board of Trade in the circumstances described by Senator Kennelly. Despite his excitement, I do not want him to think that the door is closed. If he believes that he has a proper case to present on an issue, he can present it at any time after I have finished my reply in this debate.
The Opposition has proposed an amendment to the Bill. The Government is not prepared to accept the amendment. Senator O’Byrne led for the Opposition in the debate and moved the amendment. He said first that the Opposition had no quarrel with any of the reports of the Tariff Board except its report on air cooled engines. Quite obviously he was under a misapprehension because air cooled engines do not come within the scope of this Bill. His speech on 6th April and his speech yesterday were built around the Tariff Board’s report on air cooled engines. A Customs Bill will be introduced in which air cooled engines will be dealt with. When it comes before the Senate the honourable senator will have an opportunity to speak on that subject.
– I drew attention to that particular report because-
– I should say again that I want to make my speech within the time allotted to me. The honourable senator based his arguments on air cooled engines to support his case, but in fact air cooled engines are not covered by this Bill. The Tariff Board’s report on air cooled engines was tabled on 5th April, the day before the honourable senator spoke in this debate.
As I read the proposed amendment, it sets out the suggestion of the Opposition for guide lines to be followed by the Tariff Board. Of course, a lot of what has been said by honourable senators on both sides of the chamber about the independence of the Tariff Board seemed to me not to accord with the statements of various members of the Board in different inquiries. It seems to me that they have not suffered from any inhibitions and that quite clearly there is no pattern of interference with the independence of the Board. I believe it is quite wrong to suggest that an attempt has been made to interfere with the traditional independence of the Tariff Board.
I felt that it was quite wrong of Senator O’Byrne to bring into the debate the name of a very senior public servant. Public servants have heavy responsibilities and a big job to do. I think it was unfair of Senator O’Byrne - and on reflection I am certain he will agree with me - to attempt to link a senior public servant’s name with the honourable senator’s arguments in the manner that he did. If the honourable senator wishes to be critical, let him be critical of the Minister for Trade and Industry (Mr McEwen) or myself as the Minister for Customs and Excise, or of any Minister. I suggest .that it is quite wrong to bring into the debate the name of an officer of a department and then to attempt to link him with the political implications inherent in the arguments used by the honourable senator.
– I think there should be more of it.
– That is a matter of judgment. My standards are different from those of the honourable senator.
– That is what the Parliament is for.
– I do not believe in bringing the names of public servants into debates. They are not in a position to defend themselves here. If the honourable senator wants to attack somebody, he should attack the Minister controlling the relevant department. The Minister is big enough and strong enough to look after himself. That is the point I want to make. We have had a good debate on the functions of the Tariff Board. I think it is proper to say that many years have passed since we have debated so fully in this chamber the various functions of the Tariff Board. I am grateful to honourable senators on both sides of the chamber for their contributions.
I come back now to the main theme of the debate, which seems to me tq. be the suggestion that an attempt has been made to interfere with the independence of the Tariff Board. In another place the Minister for Trade and Industry said that the Tariff Board has been accorded by the Government the ultimate in independence. I think that can be proved. Senator Wright cited some figures in relation to the treatment of Tariff Board reports. They are striking figures which should be referred to again by me for the purpose of getting them into the records. Since July 1958, 361 Tariff Board reports have been tabled in this House. Of those reports 198 contained recommendations to increase tariffs; 91 contained recommendations that there should be no increases in tariffs; and 72 recommended reductions in some minor degree or in part of the tariffs. Those figures prove that not every Tariff Board inquiry leads to increased tariffs; not by any means is that the case. Of the 361 reports to which I have referred, the Government adopted. 330 without any change. That is hardly a story of interference with the functions of the Tariff Board. In respect of 19 reports the Government departed from some of the recommendations of the Board; in five cases the Government for various reasons referred the matters back to the Tariff Board for further investigation. la respect of only seven reports out of the 361 did the Government not adopt the recommendations of the Tariff Board. These figures show the very great respect that the Government has for the work, the functions and the recommendations of the Tariff Board. I suggest that that situation does not need to be embellished by me. lt is traditional for a Minister, in replying in a debate of this nature, to refer to the points raised by honourable senators during the debate. Senator Sim suggested that an attempt had been made to interfere with the functions of the Tariff Board. He tried to build his case around the chemical industry reference to the Tariff Board. He quoted two lines of the Minister’s reference although the reference contains thirtyfour lines. I suggest with great respect to the honourable senator that it is not possible to appreciate the complete sense of a Minister’s reference to the Board by taking two lines of that reference out of context and reading them other than in relation to the complete pattern of the reference. I am prevented from quoting the whole of the reference because of shortage of time. I want to make the point that to achieve an understanding of the reference of the chemical industry by the Minister it is proper to read the complete reference.
Senator Sim also referred to support values. I think Senator Wright referred to something that Senator Sim said as being a new concept and then developed that argument more fully. I remind the honourable senator .that the concept of duties and related floor prices and ceiling prices is not at all a new one. Duties at rates depending on whether the true free on board price is more than a specified figure were approved by the Parliament as far back as 1954. A sliding scale of duty is not unknown to us. There is here some variation of the sliding scale duty. But I do not think it is completely accurate to talk about it as if it were a completely new concept.
I would like to make particular reference to Senator Wright’s remarks about the chemical industry, and I shall come back to them a little later. Senator Benn made what was from my standpoint a magnificent contribution to the debate. He did not argue that there had been a change in tariff policy in recent years. He apparently acknowledged that what is being done now is consistent with the behaviour and policy pattern adopted by the Tariff Board since 1921. I thought that he gave a clear picture of the functions of the Board and of the way in which it works. He certainly - at least, in my view - stated a clear case for the preservation of the Tariff Board system and for the continuance of the present conduct and performance of the Board. I think that what he said was correct. This question of free trade on the one hand and tariffs on the other has been argued right down through history. AH of us here no doubt recall learning, as children at school, of the divisions in the community in the United Kingdom, for instance, between those who favoured free trade or low tariffs and those who believed in high tariffs. It is interesting to find that in this year of grace we in the National Parliament can argue this same issue and quote the views of persons who take one side or the other on this broad question of whether we should have high protective tariffs or move towards free trade. There is nothing new in this.
I noticed that some honourable senators who have participated in this debate today made references to certain people. My comment on this is not intended to be in any way offensive. Those are known persons who have a recognised point of view which holds that we in Australia should not surround ourselves by a high tariff wall. Those who hold that view are entitled to it and honourable senators are entitled to quote the view of those persons. But these divergences of view are no new thing. They have existed since the beginning of time. 1 point out, however, that the tariff policy that we in Australia have adopted has built a strong, healthy nation in which we have success,, prosperity, work for all and a contented community. If this is a measure of tariff policy. I ask the Senate to adopt this measure when assessing the debate that we have had today on the broad tariff situation.
Senator Bull discussed the Tariff Board’s report on the chemical industry, as did Senator Wright, and I direct to him as well as to Senator Wright the comments that I am about to make on this subject, with particular reference to price support values. Senator Wright suggested that these are written into the report on the chemical industry as a principle to be adopted and one with which we shall have to live. Although I mentioned support values in my second reading speech, there is in the Bill no provision requiring that we shall have to live with them without any possibility of change. The point that I want to make here, Mr President, is that whenever the Government accepts a recommendation of the Tariff Board that the position of an industry shall be reviewed after an interval of, say, two, three, four or five years, the Minister representing the Minister for Customs and Excise in another place states, when presenting the resulting tariff proposal, that the Government has adopted the Board’s recommendation that a review be made after the interval specified. No mechanical or legislative provision other than that is ever needed. In the present instance, nothing more than this is happening. I remind the Senate that on 25th October 1966, when presenting tariff proposals arising from the adoption by the Government of recommendations made in the Tariff Board’s report on industrial chemicals and synthetic resins, the Minister for Air (Mr Howson), who represents me in the other place, said:
The Government will adopt the Board’s recommendations for a planned system of reviews. As already stated, there will be an annual-, reference covering all support values. A further reference in 1969 will call for a review of the support. value system- 1 suggest to Senator Bull and Senator Wright that here we have spelt, out in the traditional way in which these time factors are always spelt out an arrangement that there shall be an annual review, and, indeed, that in 1969 there shall be a complete review of the support value system - of all chemicals subject to bounty payments, and of those chemicals having protection in excess of 40% ad valorem, general. An overall review of all aspects of assistance to the industry will be held in 1972.
In the event of the support value system not proving to be effective, we would not have to live with it. There is provision for a review. Furthermore, the Government has made it perfectly clear that it will have a review.
Senator Cant built his case to a degree on the Special Advisory Authority procedure. He said that the Special Advisory Authority invariably proposes increases in tariff rates. I point out that this system was created to enable industry at short notice, when it considered that it was injuriously affected, to go to the Special Advisory Authority and present a short term case so that immediately relief could be given if the Authority accepted the validity of the case. When the Authority makes a recommendation the matter is referred to the Government and, simultaneously with its adopting the recommendation, the matter is referred to the Tariff Board. If one really analyses Senator Cant’s arguments, one sees that he was really criticising the establishment of the Special Advisory Authority procedure, for its function is as I have just described. In any event, how many Special Advisory Authority references were made in 1966? There were only eight and in one of the eight the Authority recommended no change in duty. I consider that Senator Cant’s arguments were based on a wrong understanding of the functions of the Special Advisory Authority. He almost went so far as to say that he wanted to go back to the days of import controls and price controls, which were inherently similar. He quoted the observations of a Sydney customs agent in his attempt to make a case for a reduction of duties. I do not suggest that he should not quote the views of the person concerned. I merely suggest that the honourable senator is quoting a person who is speaking from a different point of view in order to argue about tariff policy.
Senator Benn appeared to have some trouble with one chemical term, which contains, I think, thirty-one letters. It was dichlorodiphenyltrichloroethane. I suggest that if he thinks of it as DDT he will probably find it easier to deal with.
– ls the Minister sure that he has it right?
– I am not sure of my pronunciation, but it was as near accurate as I could get it. I now Humpback to the subject of support values in relation to the chemical industry, because this is an import ant aspect of the proposals embodied in this measure. All of the chemicals on which the Tariff Board recommended support values have a history of tariff instability due to disruptive prices of Imports. For example, during the three and a half years period between the lifting of import licensing restrictions and the date of the chemicals reference to the Tariff Board there were twenty-seven separate Tariff Board inquiries on chemicals and a further fourteen inquiries concerning temporary protection.
It cannot be said that the support values recommended in the chemicals report will lead to increased prices for the chemicals made and marketed by the chemicals industry. Insofar as the overall effect of the chemicals report is concerned, there are some increases in protection, some reductions in protection and no change over a considerable proportion of local production. On the chemicals for which the Board recommended 40% general duty, local production of the value of $8m a year was given increased protection. That was almost exactly balanced by a decrease in the protection over local production valued at $8.7m a year. There was no change In the levels of duties applying to over $20m worth of local production. So I say that one has to get the chemicals industry report in perspective if one hopes to have a proper understanding of it. Senator Wright gave an exposition of support values. I do not want to question the way in which he presented it. I think a simpler way of presenting it would be to give a simple hypothetical case which will go into the record as a hypothetical case and no more. For the purpose of giving an understanding of the application of support values I am putting it in this way. If a commodity imported from, say, the United States of America had an f.oi>. value of $32 and a duty of 25% - which would be $8 - and freight and insurance were $4, that would make a landed duty paid cost of $44. If the support value was shown at $60, the difference between the landed duty cost and the support value is $16. Therefore the support value of 90% of the differential is $14.40. That means in effect that the total duty paid would be the normal duty of $8, plus $14.40, making a total of $22.40. I want to repeat that this is a simple hypothetical case which I have put so that we can have a record of it and an understanding of its application.
The Opposition’s amendment makes reference to the term ‘economic and efficient’. If one looks at the Tariff Board’s annual report for 1958-59, one finds that chapter 2 deals with the principles and procedures of tariff making. They are there for honourable senators to read and they are a very fine exposition of the functions and principles inherent in the Tariff Board. 1 should like to take the time to read them, particularly as we are on the air. This would give a very clear picture of the task that is set for the Tariff Board but for obvious reasons I cannot do this. Therefore, with the concurrence of honourable senators I incorporate chapter 2 of that report in Hansard.
CHAPTER 2.- PRINCIPLES AND PROCEDURES IN TARIFF MAKING
In the Australian economy industrial development has generally occurred in response to numerous individual judgments of the relative profitability or expected profitability of alternative forms of business activity. Development, even within any one industry, may therefore take place a step at a time as individual business interests spread the range of their activities or set out to manufacture new products.
For instance, the textile industry in Australia has developed as a result of individual manufacturers deciding to move progressively into particular areas of production which, under the circumstances existing at the time, held the promise of profitable operations.
The tariff structure parallels, to a large degree, this more or less haphazard growth in industry, and it is unavoidable that the Tariff, at any one point of time, should contain inconsistencies the removal of which necessitates constant consideration by the Board.
This process of development by diversification, within an industry as well as by the establishment of completely new industries, means that the Board must face the prospect of an increasing volume of references dealing with tariff revision. It must be expected, also, that these references will become increasingly complex because more and more frequently issues will seldom be confined to a single industry but will spread to other industries that supply materials or use the end product for further manufacture. For example, a variation in the protection afforded a basic material creates problems in related user industries and these consequential problems are of concern to the Board.
Moreover, in the process of tariff making, individual rates existing in the Tariff at a particular time reflect the cost and competitive position of the industry at the time tariff assistance was granted. It is to be expected that the greater the range of goods protected by the Tariff, the greater will be the problem of ensuring that tariffs will be revised in accordance with variations in the protective needs of particular industries arising from changes in the relative cost position in Australia and overseas.
With the increasing tempo of industrial development and the prospect of development in the future, the time seems opportune for the Board to re-state the main factors it considers and tha procedures it follows in reaching its recommendations. Such a statement, it is hoped, will be of assistance to the various interests giving evidence before the Board as well as reiterating to Parliament what the Board understands its charter to be.
Tariff making can never be an exact science. The range of subjects referred to the Board, the problems peculiar to individual industries, the difficulties of determining comparability of competitive goods, the strengths and weaknesses pf members of the various industries, the nature and extent of competition from imports - these are some of the many factors involved in tariff making or tariff appraisal that make precise measurement impossible. Necessarily, therefore, in each of the subjects referred to it by the Minister there is a large element of judgment in the Board’s assessment of the degree of protection required by local industry.
The Board’s judgment is based on its analysis of the best available facts and its interpretation of these facts in the light of its accumulated experience. Obviously, however, the area of uncertainty will be reduced if witnesses understand the type of information required and provide it in the form best suited to the Board’s purposes.
Principles of Tariff Making
In its Annual Report for 1933, the Tariff Board set out certain general principles under which it had operated since its establishment and which, so far as they affect trade relationships with the United Kingdom, had found expression in the Ottawa Agreement in 1932 and have been substantially re-affirmed in the United Kingdom-Australia Trade Agreement of 1957.
Briefly, the provisions of the latter Agreement state that -
In accordance with these principles the Tariff Board recommends assistance, when necessary, to industries on the basis of their being economic and efficient and showing sound prospects for success.
It is sometimes suggested that the Board should elaborate on these principles by listing in full the conditions that must be present before an industry will be classed as ‘economic and efficient’. It is doubtful, however, whether such an approach would be practicable even if there were clear indications of government policy in many fields.
The actual criteria vary in importance and usefulness in each case. The conditions that are relevant in one instance may be largely inappropriate in another. The Board has found that the only reasonable approach is to make on each occasion a separate judgment based on all the relevant criteria. However, it is essential that the various interests giving evidence before the Board should attempt to demonstrate, by factual argument, whether or not the industry concerned is economic and efficient’.
In examining what constitutes economic operation, the Board considers broad questions such as the effects of protection on prices to consumers either directly, or indirectly through costs to user industries, whether the industry provides an outlet for economical exploitation of local resources, whether establishment of the industry concerned will assist in the development of other industries, the prospects of further growth of the local industry, the possibility of competing in export markets and so on. In addition, the Board considers particular aspects such as the extent of demand for the industry’s product, the proportion of the market that Australian manufacturers can supply and the acceptability of the local product to consumers - in quality, range, variety and availability.
No list of factors relating to the question of whether or not an industry should be regarded as economic could be exhaustive, but enough has been said to indicate that the Board expects an industry seeking protection to demonstrate that it is worth while and to indicate why it considers that the gains to the Australian economy from protecting the industry will offset the costs. Such arguments should be an important part of the case presented by industries requesting tariff assistance. Frequently, however, only limited evidence of a general character is given on these aspects and industries thereby fail to do justice to their claim that the industry and its production are economic. Similarly, witnesses opposed to protection sometimes do not make their opposition as effective as they could were they to direct their attention to the question of whether or not production is economic. The Board does not, as a result, receive as much assistance as it might in making its judgment on this question.
The evidence required to establish the efficiency of a local industry is of equal importance. Often A good deal of evidence is presented which is intended to show only the technical efficiency of an industry’s manufacturing processes. It is not enough, however, merely to seek .to establish technical efficiency in manufacture. Efficiency, as the Board interprets the word, involves not only efficiency in the productive processes relating to the use of materials and labour, machinery and plant, but also efficiency in such things as management, Selling, Sua. It involves not only a study of efficiency in the context of existing conditions but also under the circumstances that would exist in the future were the industry to be accorded protection. The Board considers that any approach to the measurement of efficiency must be realistic. It does not attempt to impose an absolute measure. Rather, where it is appropriate, the Board looks at levels of efficiency as established by each member of the local industry relative to Other members, relative to overseas producers and relative to other industries in Australia.
The members of the Board endeavour to acquaint themselves with the problems of industry. They are informed of the many .difficulties that arise, they visit a great many factories in the course of the year, and they are always willing to have witnesses demonstrate the problems of the industry and their bearing on requests for tariff or other assistance.
In its comparisons of efficiency, the Board is interested not only in differences as measured by costs of production, but also in other measures such as output per man-hour, and the explanations that enable k to evaluate these measures. From the financial data various management ratios can be computed and compared, e.g., earnings rates and turnover to funds employed. None of these comparisons is infallible but, considered together, they are of assistance to the Board.
Although fully aware of the difficulties involved in deciding whether or not an Industry is efficient, nevertheless, as part of its responsibility, the Board is bound, to make the necessary judgment. Witnesses could greatly assist by providing as much data as possible that will aid the Board in making its judgment.
The United Kingdom-Australia Trade Agreement of 1957 also makes special mention of infant industries and of industries that may be important for defence. The Board realizes that some industries require higher tariffs or other forms of assistance initially in order to meet, competition from larger overseas manufacturers. This principle is firmly established in tariff policy.
Procedures in Assessing Tariff Assistance
Clearly, to measure the extent of a local industry’s disadvantage, the Board requires a good deal of factual information. It is fully aware that a duty to be effective should provide the right degree of protection. If the duty is too low it will only add to costs and will fail to protect. If it is too high it will unnecessarily restrict imports and, especially when there is no internal competition, may lead to unhealthy development in local industry and foster unwarranted pricing.
In assessing assistance, however, the Board does not merely make a simple arithmetical calculation of cost and price disadvantage. There are many other things that have to be taken into account. For example, the Board must consider the extent to which any cost disadvantage would be lessened or removed by an expansion of output, any disadvantage to the Australian industry resulting from prejudice for imported products and Nom affiliations with companies overseas, any natural advantages to local industry from its nearness to the market, the profit situation of the industries seeking assistance both in relation to each other and in relation to overseas manufacturers, the extent to which the landed cost of imports reflects the overseas cost of production and whether (fie existence of the local Industries prevents excessive prices being charged on imports.
When particular types of ‘an otherwise standard range of goods under reference are not made in Australia, under certain circumstances the Board either suggests admission of these types of goons under by-law gr recommends admission under $ substantive tarin Item carrying nominal rates of duty.
The system by which the Board obtains its information is generally well established and there is no point in elaborating on it in this report.
The scope of the Board’s inquiries and the recommendations resulting from them are restricted to the actual terms of the Minister’s reference. On occasions, it is suggested by interested parties that the Board should go outside its terms of reference and make recommendations on other matters considered to have an important bearing on the subject. Although it can be appreciated that such a course may at times appear desirable, the Board considers that the only action it can take is to bring the additional matters to the attention of the Minister.
The Tariff Board Act provides that in all tariff revision matters evidence must bc taken publicly and on oath. Provision also exists in the Act for the taking of confidential evidence and a good deal of. the evidence on such matters as production costs is taken iti confidence. Confidential evidence hass obvious disadvantages arising from the fact that an opposition witness has no opportunity to comment on the information provided, and for this reason as much evidence as possible is heard in public.
Because the Board takes evidence in confidence, it is given a great deal of detailed information thai might not otherwise be obtained. Nevertheless, although the information is detailed, it is not always in a form that allows comparison or analysis. Witnesses frequently appear to neglect the important factual aspects of evidence while overstressing relatively unimportant issues. It is felt that this aspect would be greatly improved if industries kept in mind the Board’s desire to make comparisons as part of its inquiry.
The Board is satisfied that this difficulty results from misunderstanding rather than from any desire to conceal information. In the course of the year the Board and its staff have approached many interested parties to ensure that the full and detailed information it requires is in fact supplied, lt is indeed exceptional not to receive full co-operation from local industries when seeking information.
In an attempt to reduce the difficulties of obtaining comparable information, over the past year the Board has been exploring the use of questionnaires especially designed for the subject matter of a particular inquiry. In the course of preparing these questionnaires, and prior to the public inquiry, the Board, or its staff, has frequently consulted interested parties to ensure thai the information requested is relevant, is reasonably available, and is suited to the Board’s purposes.
It has not been intended that the questionnaires should take the place of detailed argument. They have been designed only to obtain basic information and to assist witnesses in preparing this information. The Board is anxious that the witnesses should appreciate the necessity for submitting their cases in the form of a detailed statement. The questionnaires are complementary to, and do not take the place of, such statements.
It is realised that complete comparability can never be achieved even by the use of special methods for obtaining information. As mentioned previously in this report, there will always be large element of judgment to be exercised in assessing tariff assistance. However, the Board wishes to eliminate, as far as possible, the bias and errors that creep into costings purely as a result of differences in costing methods, not only among Australian firms but also between Australian and overseas firms. It will never be possible completely to escape arbitrary allocations of costs. For example, allocations are unavoidable when the goods under reference form only a small part of a firm’s output. Again, estimates are necessary if a firm’s accounts are not sufficiently departmentalised to permit analysis of costs of the goods under reference. The Board’s main concern in such cases is not so much that the basis of allocation may have arbitrary aspects but that it should be made in a form that will permit comparisons between firms within the industry.
Generally speaking, the information required Is fairly readily available from the records of tha members of the industries. The main problem is to ensure that all relevant details are obtained and that they are supplied in a comparable form.
However, following discussions with Sir Alexander Fitzgerald, an approach was made to The Australian Institute of Cost Accountants. The Institute was asked to examine the Board’s various problems on costs and give whatever assistance it could.
The Institute co-operated by setting up panels of practising cost accountants in Melbourne and Sydney. Each of the panels set out the principles that could be followed in obtaining from manufacturers information on costs, prices and profits. Recent questionnaires sent out by the Board have drawn heavily on these principles.
From comments made on the questionnaires at some recent inquiries it is apparent that, at times, provision of the information required may have presented difficulties to some witnesses. It was claimed that the information required was too detailed and that firms concerned would be put to a great deal of trouble and expense to provide tha details. Efforts are constantly directed to simplifying the questionnaires by ensuring that the questions asked are only those the answers to which will directly assist the Board in arriving at its conclusions on the industry under review. In fact, most of these difficulties have been readily resolved in the past after discussion with the Board’s staff. The Board’s staff is always available to discuss these difficulties with any intending witnesses who may be in doubt concerning the information required. The Board itself would welcome constructive suggestions for improving this aspect of its work.
The question of defining the term economic and efficient’ is a difficult and complex one. The term lacks precision and does not lend itself to exact measurement. If it did, no doubt it would be possible for the Tariff Board to measure mathematically the appropriate levels of protection needed for particular industries and products. We all know that this is just not possible. Despite this lack of precision, it is nevertheless possible to form a judgment on whether particular industries are economic and efficient. In some cases, this is relatively simple. Most would agree, I think, that the Australian iron and steel industry is economic and efficient. On the other hand it is difficult to accept, at least at this stage of our industrial development, that the production in Australia of large aircraft foi which there is only a very limited market would be economic. In the more usual cases, however, the determination of what constitutes economic and efficient operation calls for sound and mature judgment and a careful analysis of all available relevant data. That is, in fact, the function of the Tariff Board and it is one of the basic reasons for the public inquiry system which has now been used in Australia for over forty years.
I want to come back to what was said in the debate from both sides of the Chamber. There is a tremendous volume of achievement over the period since the creation of the Tariff Board, which has played its part in the magnificent development that this country has had not only as a primary producing country but also, indeed, as a manufacturing and secondary industry country. During all of this time .he Tariff Board has progressively sharpened its concepts of what constitutes ‘economic and efficient’ and it has endeavoured to introduce more precision into its judgments. This is explained in chapter 2 of the Board’s 1958-59 report which I have incorporated in Hansard. The Board has discussed in some detail the principles and procedures in tariff making which it follows and the practices which influence it in making judgments on economic and efficient industries. It is implied in the Opposition’s amendment that Australia has been protecting uneconomic and inefficient industries. As the Opposition knows, we have an international trade agreement - the United Kingdom-Australia Trade Agreement - which specifically sets out an understanding that the general tariff policy is to protect only those industries which are economic and efficient. The Tariff Board is charged with the responsibility to report to the Government and advise whether industries seeking protection are economic and efficient. In each case, as has been proved here tonight, the Board’s reports, uninhibited and not interfered with, are free for this Senate, the other place and, indeed, the community at large to debate.
I therefore say that any proposition that suggests that there has been interference with the Tariff Board must surely not stand up to examination. The measurement of the effects of the tariff on the general cost level of the economy is most difficult - equally as difficult as, if not more difficult than it is to form a judgment on efficient and economic operations of a particular industry. However, this is an investigation which has been undertaken at public inquiries in Australia. I refer to the Brigden Committee’s report of 1929, which I have amongst my papers. It was called for by the then Mr S. M. Bruce. I refer also to the Vernon Committee’s report of 1965. The results of these two inquiries were summed up in the Vernon Committee’s report, which showed that more than thirty years after the Brigden Committee the total excess cost of the tariff expressed as a percentage of the gross national turnover of products and services was estimated to be 6% on the same level as that measured by the Brigden Committee. However imprecise and unsatisfactory the method of assessment of the total cost of the tariff may have been, these results indicate that more than thirty years later there has been no discernible increase in that cost as measured by those two committees separately.
I want to conclude by saying that I thank the Senate for the debate. It has been a good debate. It has not taken party lines. It has looked at the particular aspects of tariff procedures in Australia and only good can come from such a debate. The Government is not prepared to accept the amendment proposed by the Opposition. The situation that Australia finds itself in today, I think, has a very real relationship to the functioning of our tariff policy, which has up to this point of time at any rate been generally regarded as a non-party matter.
– I wish to make a personal explanation. During the course of his remarks Senator Anderson said that I had made accusations against a senior member of the Department of Trade and Industry.
– I did not use the word ‘accusations’.
– The honourable senator implied that I had attacked a senior member of the Department and that I introduced his name. I have referred to the Hansard report on this point. In the course of my remarks I quoted from a speech that was made to the Australian Industries Development Association in October by Mr Callaghan who is a senior member of the Department. By way of interjection Senator Webster said at that point:
Can you make clear what that is illustrating?
I then went on to say that it was illustrating that the new Department of Trade and Industry had set up an Office of Secondary Industry and I went on to make numerous remarks about the Office. There was no personal attack on Mr Callaghan in what I said. I merely quoted his words. To draw the conclusion that I had made a personal attack on him is quite wrong and I should like to put that straight for the record.
That the words proposed to be added (Senator O’Byrne’s amendment) be added.
The Senate divided. (The President - Senator Sir Alister
Majority . . . . 3
Question so resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time.
– I address a request to the Minister. I ask for clarification of some figures that he stated in his speech in reply. I should like a reference to the record of the Brigden Committee on The Australian Tariff - An Economic Inquiry where the figures on costs are to be found, and I should like also a reference to the report of the Committee of Economic Inquiry, known as the Vernon Committee, where a record of the total cost of the tariffs is to be found. I should like the Minister to bear in mind the request I made formerly on these Bills that either in the second reading speech or in the Bill there should be stated an estimate of the aggregate cost to trade of the proposed adjustment of duties. The Minister stated some figures in regard to the chemical industry. I am very interested in those also. I had intended to ask for them at this stage. I wish him to state them for the record because when I am considering an alteration of customs tariffs I want to know in the aggregate what the expected impost on the industry will be for a year. It is only in that way that one can make a judgment as to the effect on trade of the imposition of increased duties. That is my first request.
– Quite obviously at short notice I am not able to supply an answer to the honourable senator’s request. If he looks at the tariff proposals he will find that they include coffee, industrial chemicals and synthetic resins, vanillin and ethylvanillin, candles, clothes pegs, footwear, glassware, hollow bars, tubes and pipes of iron or steel, motor vehicles; and items dealt with by the Special Authority include butyl alcohols and butyl acetates, ethylene oxide derivatives, PVC products, metal working circular sawing machines and coated fabrics. I do not think the Angel Gabriel could give an answer as to the cost of each tariff item as easily as all that. I know that I am good, but I do not think I am that good. 1 certainly promise to put my officers to work tomorrow to try to get answers to the kind of questions the honourable senator is asking.
– Did the Minister not state in his speech in reply what he expected would be the increase and the reduction in relation to the chemical industry?
– I said that in relation to chemicals on which the Board recommended a general tariff of 40%, local production to the value of $8m a year was given increased protection. We were not talking then in terms of the amount of duty. I went on to say that this protection was almost exactly balanced by a decrease in the protection over local production valued at $8.7m a year. There was no change in the levels of duty applied to local production in excess of $20m. That is the information I gave earlier but is that the information the honourable senator is seeking?
– Tell me what it means.
– The honourable senator can place his own interpretation on it. k simply means that across the board of the chemical industry the increased duties were almost equated with the decreases. There was in fact a large volume of production - almost S20m - in relation to which there was no alteration. That is my understanding of the position.
– I gathered that that was the Minister’s understanding of the position but I was not quite clear that I had heard it correctly. I take the Minister’s restatement of the position as an indication to the Senate that his officers have estimated the cost to industry of the imposition of these charges and have said that the increases are cancelled out by reductions in a large area. Therefore, as there is no alteration I take it we are wrong in assuming that there has been an excessive increase in tariff on this industry. If I am wrong in my understanding 1 should like to be corrected. However, I will read the record and as usual I will persevere until my understanding is penetrated by the information that is forthcoming.
I pass to another matter which vexes me. The second reading speech contains the following statement:
Chemicals are divided into two broad groups, one requiring protection at rates of 40% general and 30% preferential and another at rates of 25% general and 15% preferential. The Board’s recommendation that four products-
The products are named - should be accorded a higher level of protection has been adopted.
Having regard to the spirit of the debate I want to make a quiet complaint about the Senate being treated to a statement of that description. Four products have been singled out from the general level of increases but no indication has been given of the increases which apply to them. That is not very helpful. I voice my protest only because one of my colleagues this afternoon, as I understood him. said that the increase proposed in respect of one of them was from 124% to 60%. That appeared to me to be an astonishing increase so I took the occasion again to resort to the very courteous and willing officers who advise the Minister. Incidentally, to them and to the Minister I express my acknowledgment of the help they have given me in this debate. With regard to polyethylene, the first product mentioned, I have been informed that the old duty was 124% for high density polyethylene, but the duty for other polyethylene is expressed as $0,058 per lb that the amount by which the f.o.b. price per lb is less than $0,142. To me that is simply incapable of comprehension. The officers told me that the previous general average rate for polyethylene was 45% and that ‘this has been increased to 60%. An increase of that dimension is not nearly so large as an increase from 124% to 60%.
The next product specifically mentioned is polyvinyl chloride, PVC. There we are given somewhat similar extraordinary figures. We are told that the duty on one bracket was at 80% and on another at 40%, and that the new rate for both is 60%. I will not take the trouble to state the others except to say that in relation to the third product mentioned, synthetic rubber, the increase in duty is from a bracket of 45%-50% to 60%, and in relation to the last product, vinyl acetate monomer, the duty of 60% remains unchanged. To me the statement in the second reading speech to which 1 have referred is completely meaningless. If such matters are to be submitted to the Senate I ask that they be submitted in a manner that is intelligible.
– 1 think Senator Wright’s criticism is fairly severe. The second reading speech covers twenty-six pages, and if one looks at the report relating to the chemical industry - I know that Senator Wright has a copy - one will see that it deals with a large number of chemicals. The second reading speech has not tried to spell out every variation in tariff. That would be a practical impossibility. In any case, I am sure the Senate would not want that. The honourable senator’s criticism is that we should have had more detail in relation to some of the items.
– If those four items warrant specific reference.
– The second reading speech sought to spell out a summary of the alterations to try to typify the spirit of the proposals. This is what it says:
The Board’s recommendation that four products - polyethylene, PVC, that is to say polyvinyl chloride, synthetic rubber and vinyl acetate monomer - should be accorded a higher level of protection has been adopted. All of these are vital to the economics of particular chemical complexes. Duties of 60% general and 50% preferential will apply to these products.
I know that is a broad statement and I know the honourable senator’s criticism is directed to it. In truth it would be very difficult - I think the Senate would agree with me - to write into a second reading speech on a bill validating a lot of variations in tariff proposals each change that is proposed. With the best good will in the world I say that if any honourable senator has a doubt and wants to ask a question, either during the debate or in my office later, my officers will be available to give the necessary information.
– I am concerned about the fact that 90% of the support value differential is added to the cost of a product as a support duty. The Tariff Board has told us that each support duty will be reviewed every twelve months. It recommended:
That the overall question of assistance for chemicals subject to bounty payments, to special duties to counter disruptive low. pricing, or to a level of protection in excess of 40% ad valorem General rate, be reviewed in 1969-
That the overall review of all aspects of assistance to the industry-
That is the chemical industry - be carried out in 1972.
We are told that, following that report in October last year the Minister brought down a customs tariff proposal in which he stated his intention to bring in proposals that would require references to the Board on the occasions referred to. However, we know that any reference to the Tariff Board involves time between the submission of the reference and the presentation of a report to the Parliament. I submit that in respect of an experimental type of duty such as this support value duty it is not satisfactory simply to rely upon a ministerial statement of intention. When we are passing into legislative effect a provision such as this, involving new concepts that are loaded with dangers, I suggest that we should have in the Bill a provision limiting the operation of these exceptional support value duties for a particular period.
That is the way in which trade can be safeguarded in regard to the imposition of new duties. Other parliaments commonly provide that an experimental proposal such as this shall cease to operate in, say, three years time. Then the parliament is obliged to give consideration to the proposal within that time and if it does not do so the proposal ceases to operate as against industry. I would be obliged if the Minister would say what consideration has been given to a proposition such as that and what we have in the form of an assurance that, if a ref :r.ence is submitted to the Tariff Board in 1969, in that year and not later the Board’s recommendation in relation to that reference will be submitted to the Parliament and in that year and not later the Parliament will have the opportunity to give effect to such reconsideration of this experimental concept.
– I thought I had dealt with this matter in the second reading debate; but I take the point that Senator Wright makes. He says that although there is provision for review a certain amount of time will elapse after the procedures are put into motion. I think I made the point before that there is no difference between the procedure in this instance and that in respect of other Tariff Board reports. My attention has been drawn to the Tariff Board report on coffee in which it suggested that there should be a review in two years. In accordance with that suggestion, the matter was referred back to the Board by the Department. That is the normal procedure.
In my view it would be quite wrong to assume that there will be any difference in this instance because there is a support value duty. There is provision for review in twelve months in certain circumstances, and in 1969 and 1972. I cannot add any more to what I have said. The argument that the honourable senator now puts is to this effect: ‘It is very good that there is provision for review, but that will take time’. That is inevitably so. However, 1 believe that the fact that there is provision for review is evidence of a flexibility in the mind of the Tariff Board and a flexibility in the mind of the Government in relation to tariff making.
– I wish to persevere by referring to one other aspect. I will explain it by reference to item 22 in the Ninth Schedule to the Bill. The support value in respect of trichlorophenoxyacetic acid is fixed at $2,550 per ton. I take it that that support value will operate until the Minister’s proposal for alteration, following a reference to the Tariff Board, is submitted to the House of Representatives. That means that in spite of all the efforts of Australian manufacturers to reduce costs we are to be highjacked on to a support value of $2,550 per ton as the basis on which a support duty is to be levied for the protection of the manufacturers of this glorious product. The fixity of this system and the fixity of a price for a period are unconscionable. There should be some guarantee that year by year the support value will be refixed according to the prices current in the market at the time. Who knows that according to the chemical market the figure of $2,550 per ton will not become $1,550 per ton next year? I would be most obliged if I could be told what guarantee we have of appropriate frequency of alteration of that support value and what agency is to determine it.
– If it would help the honourable senator a little, I would suggest thai be refer to the product, the name of which he found diffi cult to pronounce, as ‘2,4,5-T’. This is a very expensive commodity. The figure of $2,550 per ton indicates that, lt is expected that the support value in respect of it will remain within that figure. But who can say? I could never be called upon to stand up and make a categorical statement that every figure shown as the support value will remain constant.
– It will do so until it is altered, will it not?
– The support value will remain constant.
– Who will alter it?
– lt will be altered by reference to and examination by the Tariff Board. This matter is on all fours with the proposition about which I have been arguing with Senator Wright - not in any heated sense, I assure him - in relation to the principle of support value.
– As this matter has been raised by Senator Wright I wish to refer to 2,4,5-Tri- chlorophenoxyacetic acid and also to 2,4- Dichlorophenoxyacetic acid. Both of these are used extensively in primary industry as weedicides and as timber killers. They are very important to primary industry for the clearing and development of our lands. I am worried as to whether, if this support is to go on indefinitely, are we not tying up the price of these articles a little too long and not leaving the situation elastic enough to make it possible for primary industry to have the advantage of receiving any substantial reduction in the cost of these articles overseas. In this regard might lt not be better for our primary industry if we did not support these items to that extent? I feel that these two items are very important to the development of Australia and that they should be looked at closely.
– Again I point out that naturally if there was a movement in the price, representations would be made no doubt by people who use these commodities on the land or by various people in industry concerned with these products. Provision exists for an annual review of the matter. The Tariff Board has suggested certain figures. It has taken a tremendous amount of evidence on the matter and it would put forward these figures very cautiously-
– By a majority of two to one.
– Yes. But when the Tariff Board finishes with its observation of the principle of support value it looks at the actual presentation of the figures very, very carefully. The Tariff Board is our best adviser, lt has presented the figures that it has arrived at. If a movement occurs provision exists for an annual review.
Bill agreed to.
Bill reported without requests; report adopted.
Bill (on motion by Senator Anderson) read a third time.
Debate resumed from 5 April (vide page 536), on motion by Senator Dame Annabelle Rankin:
That the Bill be now read a second time.
– This Bill provides the legal basis for Australian citizenship and defines how such a status may be acquired or lost. Prior to 1946 all British Commonwealth countries had identical laws regarding the acquisition or loss of the common status of British subject. This system became known as the common code. Changes occurred in the British Commonwealth countries. In 1946 Canada departed from this principle. Canada introduced legislation to define what persons were Canadian citizens. As honourable senators would be aware, there were tremendous influences relating to French Canadians and British Canadians. In these circumstances, particular laws were provided for these citizens. Burma broke from the Commonwealth in 1948. At this particular time a number of other countries took similar action. I know that the Senate will be aware (hat in 1947 a conference of experts on nationality met in London. They decided to recommend to the governments of the countries represented at that conference that they adopt a new scheme which would combine separate citizenship of each country with the maintenance of the common status of British subjects. This recommendation was accepted and the governments concerned have since introduced their own citizenship laws.
The Nationality and Citizenship Bill 1967 amends sections 5, 12 and 15 of the principal Act. In effect, this legislation provides that non-British subjects who are called up for national service in this country will be eligible for citizenship after three months service regardless of their period of residence in Australia. A similar provision applies to those who volunteer for full time service in the defence forces of Australia. This Bill also provides for a person who is discharged as medically unfit for further service in the defence forces before completing three months service. The Minister for Immigration (Mr Snedden) has the power, if he takes the view that the person concerned became medically unfit by reason of his service, to declare the person eligible for citizenship.
The Bill also makes provision for a similar procedure in relation to Irish citizens. The Minister for Housing (Senator Dame Annabelle Rankin) when introducing this Bill said:
Under the Nationality and Citizenship Act 1948-1966, Irish citizens are neither British subjects nor aliens. Irish citizens were not liable to call up as British subjects but the decision to extend the call up to non-British subjects rather than to aliens means that Irish citizens now become liable.
The Bill makes a number of changes in addition to those I have already mentioned in the principal Act. As the legislation stood previously aliens who volunteered for service in the permanent forces could count four weeks of such service as equivalent to eight weeks residence in Australia for the purpose of securing Australian citizenship. These points appear to me to be the major changes in this Bill.
Mainly, the changes revolve around military service by aliens. At this point of the debate may I say unequivocally that the Australian Labor Party is opposed to the sending of Australian conscripts to serve in Vietnam. Likewise, the Australian Labor Party is just as opposed to the sending of British, non-British or alien youngsters to this theatre of war. I have spoken in this Senate on several occasions concerning this matter. I have been to Vietnam and seen exactly what is taking place there. Knowing the problems facing young people, we of the Australian Labor Party do not believe that conscripts of twenty years of age should be fighting in thisthreatre of war. As we say, it is an unwinnable war. Air Vice-Marshal Ky said during one of our interviews with him that this war could last another twenty-five years. I know that this Bill does not deal with the war itself. But the Bill does refer to people who are called up for Army service. Unfortunately, compulsory service has become the law of the country. We are aware of these facts. We strongly believe that migrants who join the services should become eligible for citizenship immediately. All people who are expected to fight for Australia should be granted Australian citizenship. Therefore, on behalf of the Australian Labor Party, I move:
That amendment represents the proposal of my Party and the proposal of the immigration committee of the ALP which is very concerned with the success of our immigration programme itself. The former Leader of the Australian Labor Party, the honourable member for Melbourne, Mr Arthur Calwell, was the architect of Australia’s immigration plan. We are anxious now and at all times to ensure the happiness of migrants. This is the desire of every Australian. It is surprising to find the Government adopting this line at this stage. On numerous occasions we have challenged proposals of this sort in both Houses of the Parliament. On 11th November 1964 Sir Robert Menzies, who was then Prime Minister, answering a question asked by a member of the Opposition on this subject replied:
I think honourable members ought to think a little more carefully about this matter before they adhere to the principle that an alien in this country should be compelled into Army service.
I cannot understand why the Government has had this change of heart. What it proposes could in effect jeopardise the great immigration programme. On 17th November 1964 the Treasurer (Mr McMahon), who was then Minister for
Labour and National Service, stated in reply to a member of his own Party:
Under the rules of international law aliens are not and should not be liable to service in the armed forces of a country other than their own without the acquiescence of their own government . . . In other words in what is called the comity of nations we accept that we should not call up aliens, and similarly other nations accept that they should not call up aliens for their fighting services . . . Equally we have the responsibility to ensure that nothing is done to interfere with our immigration programme. We want migrants and we are not prepared to offend the governments of the countries from which they come.
The Opposition believes and fears that a proposal of this nature could have just that effect upon the people of the countries from which our immigrants come. Legislation similar to the Bill before the House has been debated frequently in this Parliament. In April of last year we had before us a number of Bills relatingto migrants. They included an AliensBill, a Migration Bill and a Nationality and Citizenship Bill. Tributes were paid by members of the Government during the debates on these measures to the Opposition’s cooperation and its desire to see the immigration programme continued. The Minister in charge of the Bills said that we of the Australian Labor Party were prepared to play our part. There is no reason why we should not do so because as I said earlier it was the Australian Labor Party that introduced the scheme. We are most anxious to see it proceed without difficulty.
We believe nothing should be done to affect the great immigration programme. Last year it cost $41. 5m and it is estimated that the cost this year will be $45m. Since the scheme was introduced over two million settlers have come to Australia. Arrivals in 1965-66 numbered 145,000 and it is estimated that 148,000, including 92,000 assisted migrants will arrive this year. We have received immigrants from more than forty countries.
Most countries in eastern Europe, including Greece, have dual citizenship and this creates some problems. Only recently during the course of an inquiry I asked officers of the Department of Immigration how many of these countries had objected to their citizens being called up for national service in Australia. I was told that there were quite a number. There had been some friction with Italy and Greece but this had been overcome reasonably satisfactorily. Malta, too, is very concerned about this. The Maltese authorities object to their citizens being called up for Army service in Australia. Under the system of dual citizenship immigrants in Australia do not waive entirely their former citizenship. If they do national service here it does not necessarily relieve them of a similar duty in their own country. If they go back to their homeland they can be called upon to do national service there.
As I have said, the former Australian Prime Minister said that this matter should be looked at carefully. If he were in office today I believe a situation like this would not have developed. Under the Aliens Act aliens are required to register and to notify each September changes in employment, marital status and so on. It was estimated that the number who advised such changes in 1965 represented 81%. In 1966, following the announcement of the call up of aliens, the number fell to 63%. The Examiner’, a newspaper well known here, stated on 31st March 1966 that a London report pointed to the fact that the number of applicants for migration to Australia had dropped by 40% and it added:
Between 1st January and 25th March the number of application forms filled in was 33,557. In the same period last year the figure was 50,075 . . The British Press recently claimed that fear of being sent to Vietnam had put a lot of young Britons off going to Australia.
For the sake of the 300 or 400 immigrants who might be taken into the forces we are threatening the great immigration scheme. I am sure that on both sides of the Parliament the scheme is regarded as sacred and necessary to the development of Australia. Yet the Government is threatening the destruction of this scheme. At the Australian Citizenship Convention of 1 965 the present Prime Minister (Mr Harold Holt) who was formerly Minister for Immigration said:
We must make Australia so attractive to the new settlers that not only will they feel they belong but also that they want to belong and will have the urge to join us in a permanent association.
I do not know whether the procedures proposed in the Bill are designed exactly to do that. The Government is concerned about the dangers that confront Australia. Newspapers throughout Australia on Monday reported the proposal to build flats to attract migrants to Australia. This proposal is causing great interest but this Bill could affect the whole plan. I believe the Government is making a mistake. The Opposition believes the amendment will give greater impetus to migration. We are concerned about the defence of Australia and its development and we support the immigration programme. In a message to the Australian Citizenship Convention in 1965, the honourable member for Melbourne (Mr Calwell), then Leader of the Opposition, stated:
Our survival as a nation depends entirely on our ability to fill this continent rapidly and because of this, the immigration programme will become even more important in the future than it has in the past. Therefore, the programme and its future expansion have the fullest support of the Australian Labor Party, as they have the good will of all Australians who care about the future of their country.
The immigration programme has the full support of the Australian Labor Party. We are anxious that nothing should be done to impede the progress of this programme which is so vital to the future of Australia. We commend the amendment to the Senate because we believe a person called up for service should at least be given full citizenship rights. I believe the amendment I have moved on behalf of the Opposition should have the consideration and support of the Parliament.
– Is the amendment seconded?
– I second the amendment.
– I would like to spend a little time in dealing with the Bill and in urging the Senate to reject the Opposition’s amendment. Earlier in the debate Senator Fitzgerald said that he and the Australian Labor Party feel that the measure that we have before us tonight is - to use his own words, I think - threatening Australia’s immigration policy. I hope to show that this is not the case. The measure that is before us is designed not only to give effect to the Government’s sense of responsibility but also to encourage responsibility within the ranks of our migrants. To suggest that a person who becomes a member of the permanent forces of the Commonwealth shall become immediately eligible for Australian citizenship surely cuts across the whole policy and practice of Australian citizenship. Indeed, it is something that should be dismissed instantly and 1 hope that the Senate will do that.
Let us have a look at the Bill which is before us. The Minister for Housing (Senator Dame Annabelle Rankin), who represents the Minister for Immigration (Mr Snedden) in introducing this measure drew attention to the fact that it will give effect to what is described as a reduction of the residential qualification for citizenship of non-British subjects who are permanent residents and who are called up for national service. As the Nationality and Citizenship Act stands at the present, non-British subjects who are selected for national service have no concession in this particular matter. There is no plan for a reduced period of residence, so far as they are concerned. But now the Government seeks to amend this situation in this Bill. It proposes that a non-British person who is called up for national service shall be eligible for citizenship after three months of service with the forces. This is regardless of whatever period of residence he may have had. The Bill also provides for special circumstances, such as where a serviceman is discharged as medically unfit. If he is discharged before serving for three months and if in the opinion of the Minister his being medically unfit is due to his service, then he is eligible for citizenship. I draw attention to the reference to this matter in the Minister’s second reading speech. The relationship between the granting of citizenship and the discretionary power of the Minister is emphasised. This must always be so in any Act which refers to citizenship. The Act lays down certain guide lines in cases where we are dealing with people’s lives and their future and the Minister and the Department must exercise a degree of flexibility and discretion.
As honourable senators also know, the Bill refers to Irish citizens and the fact that a person registered must indicate his intention to continue to reside in Australia or New Guinea. The Bill also deals with persons serving in the permanent forces. However, I think that the culminating feature of the Bill is that no non-British serviceman will have to go overseas without first having embraced Australian citizenship. I believe that the Bill is not so much a migrant’s Bill as it is a citizenship Bill.
It was interesting to note that Senator Fitzgerald, in trying to advance an argument in support of his amendment, introduced a number of other matters relating to migration which had no bearing whatsoever on this question of national service. I do not go along with him in his reasoning that this provision has caused a fall, for the time being, in British inquiries regarding immigration to Australia. Indeed, from my own inquiries and observations of fairly recent date I have found that there are a number of reasons why there is a temporary falling off in inquiries by British migrants. Certainly the possibility of their being called up for national service is not one of them.
I return to the question of citizenship. I draw attention to some paragraphs, to which I shall refer only in passing, in the latest Commonwealth ‘Year Book’. They refer to citizenship and naturalisation, the matters with which the Bill deals. The first paragraph states:
The Nationality and Citizenship Act 1948 commenced on Australia Day (26 January) 1949 . . . The most significant effect of the Act was the creation for the first time of the status of ‘Australian Citizen’. In this respect the Act was complementary to citizenship legislation passed or about to be passed by other countries of the British Commonwealth. All Australian citizens, and the citizens of other countries of the British Commonwealth, are declared to be British subjects.
In listing further details about this matter the ‘Year Book’ reads as follows:
Citizenship may be acquired in the following ways: (a) by birth in Australia; (b) by birth outside Australia, of a father who is an Australian citizen … (c) by registration … (d) by naturalisation- which is the one which concerns us particularly. It is stated:
Certificates of Naturalisation as Australian citizens may be granted by the Minister to aliens who make application and can comply with requirements . . .
This Bill, in taking this a step further, is providing assistance to non-British migrants to acquire citizenship under certain circumstances - if they are called up for national service.
The matter of aliens and migration, the relationship between themandlikelihoodor otherwise of aliensbeingdraftedintomilitary service, I suppose,have been debatable subjects in all nations for as long as there have been migrants and immigration programmes. The argument has been maintained, on the one hand, as to what effect this question of aliens and national service might or might not have on any migration programme. On the other hand, it revolves around the idea that any country affording opportunity or protection for any young man expects that that young man might be expected to discharge some responsibility towards the particular country.
A brief survey of this matter of aliens and national service in other countries may be of interest in our current discussion. My research has revealed that in the United States of America a foreign national between the ages of eighteen and twentysix is required to register for service after six months’ residence and will be subject to call-up in the same way as an American citizen. He is exempt, however, if he has previously served for a period of eighteen months in the armed forces of a country such as Australia which has special links and agreements with the United States. The position in Greece is rather different. There is no obligation for foreign citizens to serve unless they are of Greek origin. But there is a fairly stringent programme of military service. It applies to young men from their twenty-first year until they reach almost fifty, which is a period of almost thirty years. There is also a long period of compulsory military service in Italy.
I have been studying some extracts from a booklet on Western German social policy. In dealing with compulsory military service, it states:
General compulsory military service has been in existence in the Federal Republic since 1956. lt obliges mcn liable to compulsory service to register for drafting and, if fit, to do service in one of the sections of the Federal Armed Forces . . .
A foreigner may also bc called up for military service, if Germans are liable to compulsory service in the native country of the foreigner . . .
So all in all, if any migrant has any doubts at all about military service in Australia, he has his remedy. He is not called up immediately he arrives here. If he wants to return to his home country, which could be any one of the countries from which migrants are coming at the moment, he could find himself drafted into national service for a longer period and even under more stringent circumstances than are pro- vided for in the present Australian legislation.
The Bill provides that no non-British migrant will be drafted for service unless he is an adult. This will provide an opportunity for these migrants to exercise adult judgment and to make up their minds whether or not they want to stay in this country. The Australian Government encourages migrants to come here and to exercise responsibility. It provides them wilh the protection and privilege of citizenship and also provides, in what I suggest is a very fair and equitable way, an opportunity for them to discharge their military responsibility to this country. 1 think it is a very good thing not only for migrants but also for Australia that matters have been worked out in this way. We live in a different part of the world from Europe and at a time in history when responsible thinking has to be given to national service and related matters. There is every need for representative numbers of the migrant community to take their share in the defence of freedom in this part of the world. In recognition of that need, provision is made for citizenship as outlined in the Bill.
I want to draw the attention of the Senate to the fact that young male migrants are not obliged to enter into national service training without any sense of protection whatsoever from the country. I refer to a recent publication by the Department of Immigration entitled ‘Good Neighbour”. On page 6 it states:
These are your rights if you are called up. NonBritish migrants who are called up will be able to apply for Australian citizenship three months after entering into national service.
Then the article lists the entitlement of migrants who are called up for national service. It states:
Migrants who are called up for national service are entitled to (he same benefits as Australian-born national servicemen. The benefits have three main objectives. They are designed to:
Protect national servicemen on obligations when they return to civilian employment.
Protect national servicemen on obligations they have entered into before they were selected for national service, and
Help them in resettlement into civilian life after service.
The protection begins from the moment a man registers for national service or in the case of a registrant whose call-up has been deferred, the date on which he receives his call-up notice.
Many of the benefits are available to all national servicemen irrespective of the circumstances under which they serve, but a few are confined to national servicemen who have undertaken special service overseas.
The civil employment of a man who registers for national service is protected by the provisions of the National Service Act and the Defence Re-establishment Act 196S.
Then follow a number of paragraphs dealing with the relationship of employers and employees. The article states:
An employer must not prevent an employee from registering for or doing national service.
An employer must not reduce his wages, dismiss him or penalise him in any way for his liability to render national service.
When a national serviceman has finished his period of service he is entitled to return to the same job provided he was in the job 30 days before he got his call-up notice. To exercise this right he must get in touch with his employer within 30 days of completing his service.
The employer must reinstate the national serviceman in a comparable position, and under conditions which would have applied if he had not been called up. This includes any increase in wages to which he would have been entitled if he had not been called up.
An employer is relieved from reinstating a national serviceman only if he satisfies a court that the national serviceman failed to re-apply for employment or it was not reasonable or practicable to reinstate him.
From what 1 have read I think honourable senators will agree that the Government at all points in calling up non-British migrants to register for national service and in providing an opportunity for them to embrace citizenship three months after entering into national service has at the same time surrounded them with measures of protection and opportunities. Surely the migrant programme must be assisted and not threatened, as Senator Fitzgerald suggested.
Naturalisation procedure has moved a long way to its present stage. This is related in a small way to the measure before the Senate. After World War I a practice was initiated and continued of gazetting the names of migrants who applied for naturalisation, produced letters of reference and advertised in newspapers. Quite an elaborate routine was followed by people seeking naturalisation. The practice was subject to abuse, as such things are. Now the Department of Immigration conducts its own inquiries and is able to satisfy itself on all security aspects. As all honourable senators are aware, elaborate naturalisation cere monies are conducted which involve both migrants and the community. I mention that because it has been suggested in relation to this legislation that a situation could arise where even the security of our defence forces and of our country is concerned. I think honourable senators can be assured that the Department of Immigration takes its duty very seriously indeed and makes sure that Australia’s security is kept in good bands.
It is pertinent to bear in mind in studying this measure that the processes to be followed mean that non-British migrants required to register for national service are now receiving and will receive all the benefits and protections enjoyed by Australia’s national servicemen and will be enabled after three months - a period in which they can make judgments and adjustments - to apply for Australian citizenship. If the Government accepted the amendment proposed by the Opposition I think a lot of trouble could result. I believe that the period of three months provided for in the Bill is necessary for a migrant to adjust to the situation. I want to emphasise that a change in pattern could result in certain parts of our migration programme -which have a very real relationship with call-up for national service.
Honourable senators will be aware that from the outset of the immigration programme many migrants came from countries recovering from World War II. Their standard of living was low and opportunities in their native countries were few. Many early migrants were refugee people who came from countries with considerably depressed standards of living when compared to the standards in Australia. They were encouraged to come to Australia by the fact that better opportunities and more of them were available to them here. Those circumstances still apply and opportunities still exist, but our migrants from Europe today come from countries where the living standards have been raised and conditions are considerably better than in the early days of our immigration programme. Opportunities to earn greater sums of money exist there now. At present we have migrants coming not from depressed areas but from areas of prosperity with higher standards of living, and where there has been international competition for their skills. That probably will be so in the future, too. A different climate now surrounds the departure of migrants to Australia and their arrival here. The position overseas has improved. The association of migrants with improved conditions and a better society, with higher standards of living and greater prosperity, means that they will have a greater sense of equality when they arrive in a new country. Equality is not a very good word to use to describe the situation, but I think honourable senators understand what I mean. I suggest that they will have a greater sense of responsibility towards their new country and their involvement with national service will take place in a quite different climate of opinion. There will be a quite different outlook both by migrants and the community. lt is worthwhile to note that in our total immigration programme a change is coming about which will be for our benefit but at the same time will not produce the degree of hardship or resentment that the Opposition would have us believe will be created. I urge the Senate to support the Bill and to reject the proposed amendment. This is not so much an immigration measure as a citizenship measure which relates to the sense of responsibility we encourage migrants to exercise towards this country. 1 hope that this Bill, when it becomes law, will promote the integration of migrants into the Australian community, for this will be to our ultimate benefit.
[10.30] - -in reply - Mr Deputy President, I would like first of all to thank the Senate for the speedy passage that it is giving this Bill. I thank all those senators who have spoken in this debate, and particularly Senator Davidson for the very thoughtful speech that he has just made. It demonstrated his very wide knowledge of the subject of immigration. This Bill, I believe, is a very important one, because it will ensure that no non-British migrant will have to go overseas in our forces without first having had an opportunity to become an Australian citizen. I believe that this is highly important and that it will be appreciated by those who will be affected by this measure. As you, Sir, well know, the Bill will make young non-British migrants eligible for citizenship after three months service, regardless of their period of residence in Australia.
Senator Fitzgerald has proposed an amendment to the motion for the second reading, as follows:
Leave out all words after ‘That’, insert ‘the Bill be withdrawn and redrafted to provide that a person who becomes a member of the permanent forces of the Commonwealth shall be immediately eligible for Australian citizenship.
I believe that in stating that the Government rejects the amendment I would serve the Senate best if I reiterated the remarks on this very point made by the Minister for Immigration (Mr Snedden), who very rightly said:
All of us have had experience of the Services and we all know that you can turn up and be attested today but whether you are a soldier prepared to undertake your responsibilities is not answered on the day of your attestation. The time of making a judgment of your responsibility in this matter is after attestion. Is it possible to restrict this to less than three months?
I agree with the Minister, who said that he was sure this was not possible. This is the reason why the period of three months has been selected. After that time has elapsed one can judge the quality of a man and determine whether he understands the responsibilities of citizenship. One of the major qualifications for citizenship is an understanding of the responsibilities of citizens of this great country. I believe that this is tremendously important That is why I consider that the Government is quite correct in deciding that citizenship shall be granted only after three months service.
Senator Fitzgerald suggested that young British men will not apply to come to Australia in view of the liability to call-up. J direct his attention to the fact that young British migrants have been liable to call-up since 1964. It seems unlikely that only from 1967 on will the liability to call-up cause a reduction in the number of applications by young British men to come to Australia. So I reject the comment made by Senator Fitzgerald. 1 pay a tribute to the young men who are serving our country so nobly at the call of duty. This measure will enable both old and new Australians, as we describe them, to continue side by side this great service to their country. I once again thank those honourable senators who have supported the Bill. I repeat that the Government rejects the Opposition’s amendment.
That the words proposed to be left out (Senator Fitzgerald’s amendment) be left out.
The Senate divided. (The President - Senator Sir Alister McMullin.)
Majority , . . . 3
Original question resolved in the affirmative.
Bill read a second time.
– I refer to clause 2, which states: the permanent forces of the Commonwealth’ means the Permanent Naval Forces, the Permanent Military Forces or the Permanent Air Force;
May I have some explanation as to how that includes national servicemen?
[10.41] -I cannot tell the honourable senator whether this is derived from another Act, but my information is that national service trainees are regarded as members of the permanent forces in the interpretation of this clause.
– I should now like to make some comment on clause 3 and clause 4. I shall deal with them together. Paragraph (b) of the proposed new sub-section (1a.) of section 12 reads: a person who has been discharged, whether before or after the commencement of this subsection, from the permanent forces of the Commonwealth, before completing three months service, as medically unfit for service or further service and who, in the opinion of the Minister, became medically unfit by reason of his service.
Substantially the same provision appears in proposed new sub-section (2aa.) of section 15, as provided by clause 4 of the Bill. So the Bill provides for the case in which a member of the Services has not completed three months service and has been discharged on the ground that in the opinion of the Minister for Immigration he became medically unfit by reason of his service. It seems to me to be wholly inappropriate that the opinion that should determine that fact should be the opinion of the Minister for Immigration. The Minister of the appropriate Service is the person who gives the discharge and, through his advisers, he has to be satisfied that a discharge is warranted on the ground of unfitness for further service. That is the opinion that should determine the matter, both from the point of view of discharge from the Service and from the point of view of entitlement to registration under clause 3 or entitlement to citizenship under clause 4.
I should think it would be completely vexatious and irritating and troublesome and wrong that a man who was taken into one of the Services and was then discharged by the relevant Service before his three months were up on the ground that he was medically unfit for further service by reason of the service that he had rendered should be dealt with in this way. The head authority in his Service is the authority that determines his discharge. If he has to go to the Minister for Immigration and satisfy him on the same subject when all of the Service documents that are available to the Minister for the Navy, the Minister for Air or the Minister for the Army are not available to the Minister for Immigration, he is In a hopeless position. It is quite inappropriate, I suggest, that the Minister for Immigration should be asked to revise or reconsider that decision. I submit that the decision of the Service Minister who gives the discharge on that ground should govern the situation for the purpose of citizenship entitlement under this Bill. I should like to know in what degree my viewpoint is erroneous.
– Senator Wright has queried whether the Minister for Immigration should be the relevant Minister to determine this matter. May I ask the Minister in association with Senator Wright whether it is not so much a matter of discharge from the Services as a matter of naturalisation. When the serviceman has received his discharge, being medically unlit, and the relevant documents are put forward, I am wondering whether it would not be for the Minister for Immigration to determine whether a stage bad been reached for the offering of naturalisation, which I should not think was in the power of the Minister for the Navy, the Minister for the Army, or the Minister for Air, Perhaps if I may join with Senator Wright in this question this matter can bc cleared up.
– I had no intention of intervening in this debate, but I think that the point that has been raised is a very material one. I cannot see why an additional problem has to be presented, after the problems that have preceded discharge have been overcome. As Senator Wright says, the Minister for Immigration would not have at his disposal the documents that would be required. There may be a perfectly justifiable answer and I have no doubt that the Minister will elucidate the point. It certainly is not clear to me. Senator Davidson raised the question of whether it might be associated with the matter of naturalisation, but I question whether that would be the overall reason for its inclusion. Let me say again that my knowledge of this Bill is not as -great as that of others who have spoken, but as I understand it the period required for naturalisation might well not have expired by the time this matter arose and that could create a further disadvantage.
I shall be interested to hear the explanation that the Minister will, I have no doubt, give us in due course. I think all honourable senators are anxiously awaiting the information from the Minister. I recognise that it is very hard for a Minister, expecially one who is handling a bill that comes under a Minister in another place, to be thoroughly au fait with all of the facets of the bill. Therefore, I apologise to the Minister for having joined in the query but nevertheless I think it is necessary- that we should raise this matter.
Senator Dame ANNABELLE RANKIN (Queensland - Minister for Housing) [10.48] - First, J should like to refer to the second reading speech which reads:
A person who, before completing three months service, is discharged as medically unfit for further service and who, in the opinion of the Minister for Immigration, has become medically unfit by reason of his service, will likewise be eligible for citizenship.
Section 40 of the Principal Act relates to the discretionary power of the Minister. He has a discretion in relation to naturalisation. It would seem to me that his wide discretionary powers relating to naturalisation arc involved in this clause of the Bill. 1 am certain that in fact this decision would be taken in consultation with the Service people who are closely associated with the person who has become medically unfit by reason of his service. I should imagine that the Service Minister would certainly decide whether discharge was to take place. However, I think we get back again to the point of the decision by the Minister for Immigration regarding a person’s naturalisation.
– It leaves the question for the Service Minister, is that the position?
– That is my understanding of it.
– I regret that it is necessary, in my view, to pursue the discussion a little further. The provision states: a person who has been discharged . . . from the permanent forces of the Commonwealth … as medically unfit for service or further service and who, in the opinion of the Minister - -
The second reading speech makes it clear that that is the opinion of the Minister for Immigration:
That is Army service, Navy service or service in the Air Force. How can the Minister for Immigration intelligently have any opinion on that subject? What we should have before us is a straight out provision which states: ‘a person who has been discharged as medically unfit for service or further service by reason of his service’. The Minister for Immigration has no basis whatever for an intelligent opinion as to whether or not the person’s medical unfitness arose by reason of his service. The people in charge of the Army, Navy or Air Force when giving that discharge would be the people competent to give an opinion on that. I think it is simply vexatious and Parkinson’s law employed in the most decayed form for a man who has been discharged as medically unfit by a Service to have to go to the Minister for Immigration and then perhaps be delayed until he has satisfied the Minister and induced in him an opinion that the reason for his discharge on the ground of medical unfitness was by reason of his service.
– When he is discharged he is furnished with a certificate of medical history.
– It would satisfy me if that were shown on his discharge or left open for him to rely upon as an objective fact. If he could prove that his discharge was given because he became medically unfit by reason of service in the Navy, Army or Air Force it would be enough, but in this provision it is committed to the opinion of a Minister who, ex hypothesi knows nothing about it and has no relevant record before him.
– But this is during the period of three months. The serviceman is under the control of the Minister for Immigration before the three months is up.
– With all respect, let me be persuaded that we are so lacking in a proper form of discipline in our Services that once a man enters the service of the Army, Navy or Air Force the Minister for Immigration would be permitted to address him. Any attitude that he took to the Minister for Immigration might be considered to be insubordination. His duty while in the Service is exclusively to the arm of the Service in which he is serving and that Service should say in the discharge whether his medical unfitness occasioning the discharge arose by reason of his service. I feel that this is a good instance of a little matter where we ought to take notice of a detail and see to it that we avoid long involved processes whereby one can wear out his life in going from one department to another endeavouring to persuade some administrative official who represents the Minister for Immigration about some fact on which another department could say yes or no immediately. It is a case where we ought to put the legislation in order, unless there is an effective explanation for not doing so.
– After reading the clause I wonder whether the practical and commonsense solution would not be to leave out the words in the opinion of the Minister’. The provision would then apply to a person who was in the Armed Forces, became medically unfit for service while in the Forces and was discharged by reason of his unfitness. Without having to consult the Minister for Immigration, he would then be able to take his discharge papers to the Department of Immigration and show the Department that he had been in the Armed Services and that during such service he became unfit for further service. His certificate of discharge would show this, and he would be able to produce his papers to the Department. I do not believe that there is any logical argument against what Senator Wright has said. As the Bill stands a person would first have to write to the Minister for Immigration. The Minister would then have to write to the Minister in charge of the Service concerned, and by the time he received a reply he would possibly be eligible for citizenship in the normal way. Is there any need for this involved process which in the outside world is commonly known as red tape? As the provision now stands it would be necessary for the discharged serviceman to go to more than one person whereas it could be done by a simple act. There are legal men in the chamber who could perhaps solve this problem, but in my view if we omitted the words ‘in the opinion of the Minister’ we would simplify things.
– We would have to remove the words ‘and who, in the opinion of the Minister, became medically unfit’. Then we would have a solution.
– 1 think we are putting a lot of unnecessary words into the provision and putting people to unnecessary trouble. If the Government intends to give credit for service, why can it not do so without putting a lot of obstacles in the way? If it is intended to give an unfit person an opportunity to be naturalised, why not make it easier for him? I hope that the Minister in charge of the Bill will take notice of what has been said, not in an attempt to score a point but in order to make the Bill more simple so that the ordinary person will know when he has his discharge which shows him to be medically unfit that he is eligible for citizenship.
– I have listened to the debate and I do not agree that this is merely a case of adding a lot of red tape. I have no doubt in the world that the reason why it is worded in this way is, as was more or less stated by Senator Kennelly, that as the serviceman receives his discharge on the ground of medical unfitness he would have proof of his service. For all I know the situation may be that a copy of his discharge and medical record in this instance would automatically be sent to the Minister.
– The provision does not say so.
– No, it does not say so, but this is a possible inference. When we are acquainted with the background of this proposal perhaps we will see that that is the simple explanation of the whole matter.
– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:
That the Chairman do now leave the chair and report to the Senate.
Question resolved in the affirmative. (The Chairman having reported accordingly)
The PRESIDENT (Senator the Hon. 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 apologise to the Senate for rising at this late hour but I want to direct attention to a matter peculiar to Western Australia. It will be remembered that some five years ago the Commonwealth Government entered into an agreement with the Western Australian Government to assist with the standardisation of the railway gauge from Kalgoorlie to Kwinana. At the time the agreement was entered into part of the programme was to place the passenger terminal of the standard gauge railway at East Perth, within two miles of the centre of the city. It is now revealed that the Commonwealth Government wants to place the passenger terminal at Midland Junction which is twelve miles from the city of Perth, ten miles further out than was originally intended. This will mean that the railway terminal will be twenty-five miles inland from the shipping terminal at Fremantle. The port of Fremantle is the western gateway to Australia but the interstate railway terminal will be twenty-five miles from it.
The proposal will mean the establishment of an expensive road system between Midland Junction and Fremantle, through or bypassing Perth. In any case the siting of the passenger terminal twelve miles from the centre of the city will cause inconvenience to interstate travellers, intrastate travellers and international travellers. It will cause greater road congestion between Midland Junction and Perth and this will lead inevitably to more road accidents.
There is not at present a great deal of train traffic between Western Australia and the eastern States but with a fast passenger service from Sydney to Perth the number of passengers will increase and consequently more passengers will be inconvenienced. The siting of the passenger terminal at Midland Junction will cause a lot of lost time in transfers and will not encourage the use of interstate transport. It is obvious that the interstate system should not end twelve miles short of the city.
At present the journey between Sydney and Perth takes 60 hours. This is based on an average speed of 40 miles an hour. But the country over which this train runs is like a billiard table and it is conceivable that in not very many years this train could be travelling at 80 to 100 miles an hour, thus reducing the time of the trip between Sydney and Perth to about 20 hours. For the movement of mails it would be almost as fast as air transport. If the passenger terminal is sited at Midland Junction the railway mail service between the eastern States and Western Australia will stop twelve miles short of the General Post Office.
– Whose decision was it to site the terminal at Midland Junction?
– lt is difficult to know. The only indication I have is that the Minister for Shipping and Transport, Mr Freeth, in reply to a question along those lines, said in Western Australia that it was not his policy to discuss matters of negotiation between two governments during the currency of those negotiations. But it is alleged in the Press that this was a decision of the Commonwealth Government.
– Has it been announced as ‘a decision?
– No, and Mr Freeth said that the negotiations may continue for another six months. 1 bring this matter to the notice of the Senate before a decision is made so that some influence may be brought to bear upon the Government and upon the responsible Minister to do something about this problem while the negotiations are going on. The movement of mail between Midland Junction and the General Post Office will create more traffic congestion. Extra mail handling will be involved and this inevitably will increase the cost of postage. Overseas mail which travels interstate by rail will stop twenty-five miles short of the ships which will carry it overseas. Ways and means will have to be found to move it that extra twenty-five miles.
– It is not an extra twenty-five miles. It is only the difference in distance between Perth ‘and Midland Junction which is additional.
– If the mail is consigned directly overseas and does not have to go into the Perth Post Office to have other mail added to it, then only that extra distance would be involved. It can be expected that when the interstate standard gauge railway comes into operation the number of passengers using it will increase. We contend that the whole policy of siting the passenger terminal at Midland Junction is short sighted.
The cost of placing the terminal at East Perth has been mentioned. Although much of the East Perth area is a declared slum area and in a very short time will have to be cleared, it would be dishonest of me to say that land resumptions would not cost more at East Perth than at Midland Junction. In order to take the line into East Perth, at least one bridge would have to be built over the Swan River and more level crossings or bridges would have to be constructed over major roads. It cannot be denied that this would involve added cost.
However, in the long run it may be very much more costly to site the passenger terminal at Midland Junction and then have to install ancillary services between there and the city of Perth and the port of Fremantle. I have been unable to obtain an official estimate of the reduction in cost achieved by siting the terminal at Midland Junction. Some public reports place it at $2m; others place it at $5m. If a ring road had to be built, it might well cost $40m or $50m. For these reasons it is considered shortsighted to try to economise at this time by not putting the terminal where it should be. I quote the following from a report of a statement by the Premier of Western Australia, Mr Brand; as published in the ‘West Australian’ of 30th March 1967:
It was a fact that the proposal to build the terminal at East Perth was in jeopardy because of the cost. The Commonwealth Government’s advisers on the project had reported that it would be cheaper to build the terminal at Midland than at East Perth. Mr Brand said he would prefer to have the terminal at East Perth. This seemed to him to be as far from the centre of Perth as it could conveniently be placed.
When these development projects are entered into, their function becomes more important than the financial question. It is true that when public money is being used it must not be squandered, but must be spent to the best advantage both in the short term and in the long term. If it costs more in the initial stages to put the passenger terminal for an interstate railway system at a particular point in order to make it more functional, it should be put at that point. There should be no cheeseparing by putting it at some other point and then having to do something else about it afterwards. I say quite frankly that, if the Commonwealth Government is not prepared to include in the railway standardisation agreement the cost of putting the passenger terminal at East Perth, it should make a special purpose grant to Western Australia so that that State will be able to afford to put the terminal whereit will be most convenient for the people and where the State Government thinks it should be put.
– I will bring the remarks that Senator Cant has made tonight to the attention of the Minister for Shipping and Transport (Mr Freeth).
Question resolved in the affirmative.
Senate adjourned at 11.15 p.m.
Cite as: Australia, Senate, Debates, 12 April 1967, viewed 22 October 2017, <http://historichansard.net/senate/1967/19670412_senate_26_s33/>.